{"id":"830981846","date":"1995-01-02","texts":"In 1994, the good times for Washington area stocks were short-lived. They lasted only until Feb. 4, the day that the Federal Reserve began to raise interest rates. After that, and for the next 11 months, it was all downhill. By the time the turbulent year was over, almost two-thirds of Washington area stocks had lost money. The losses cut across a wide band and hurt financial, retail, biotech, telecommunications and transportation stocks. It also was the kind of year in which the relatively few winners fell into two categories companies with products or services that were in high demand and companies that, having faltered financially, were in a turnaround mode. As often happens in periods of market turmoil, the big blue-chip stocks listed in the Dow Jones industrial average and the Standard & Poor's 500 stock index fared somewhat better than the stocks of the hundreds of smaller companies in a business community that extends from Baltimore to Richmond. It was a bear market and if you look at the Dow and the S&P, it doesn't reflect what happened in the broad market, said Prabha S. Carpenter, portfolio manager of the Growth Fund of Washington, a 33 million fund that invests in three dozen local stocks. Carpenter's fund was down 9.3 percent for the year.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842617067","date":"1995-01-05","texts":"NEW YORK -- Small stocks rose in light trading as investors' tentativeness continued to prevent the market from establishing direction. Some selective bargain-hunting took place, but investors mostly reacted to news on individual issues, leaving a scattering of gains and declines. Major indexes traded in very narrow ranges. The Russell 2000 Index, which measures small-capitalization issues that trade on the Nasdaq Stock Market and the other major exchanges, inched up 0.41, or 0.17, to 247.65. The Nasdaq Composite gained 2.26, or 0.30, to finish at 745.84. The breadth of the market was positive for the day, with advancers ahead of decliners, 1,752 to 1,424, on Nasdaq total volume of 290.3 million shares, compared with the previous day's 248.7 million shares.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982165","date":"1995-01-05","texts":"The Dow Jones industrial average climbed 19.17 points to close at 3857.65, and made most of its gain in the final 30 minutes. Advancing issues outnumbered declining ones by about 3 to 2 on the New York Stock Exchange, where trading volume rose to The bond market rally that lifted stocks was triggered by revived strength in the dollar and plunging precious metals prices. The price of the Treasurys main 30-year bond advanced 2332 point, or 7.19 per 1,000 in face value. The yield fell to 7.85 percent from 7.91 percent. Traders and investors bought bonds amid a rally in the dollar to a 21-week high against the Japanese yen. Traders believed the stronger dollar could draw some foreign investors to dollar-denominated investments, which include U.S. Treasury securities. In addition, the rising U.S. currency reassured investors worried about inflation, which tends to diminish the value of fixed-income securities. 100.68late Tuesday. The dollar also changed hands in New York at 1.5593 German marks, up from 1.5562. By midday Thursday in Tokyo, the dollar was slightly lower, trading at 101.10 yen. 4.7percent against the dollar, reflecting continued weakness in Mexicos financial markets and disenchantment among many investors with its plan to bolster its troubled economy. Late in Mexico City, the dollar fetched 5.5750 pesos vs. 5.3250 Tuesday.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982389","date":"1995-01-08","texts":"First Months Performance Has Predicted the Markets Direction Accurately Many Times Before. But Will It Do So Again This Year First Months Performance Has Predicted the Markets Direction Accurately Many Times Before. But Will It Do So Again This Year mhe overall trend of the market for the past three years has been set during January. So far in 1995, January again has been a good month. NEW YORKIts nail biting time on Wall Street as the stock markets performance this month provides the January barometer that is supposed to predict whether the year on Wall Street will be good or bad. Yale Hirsch, publisher of Stock Traders Almanac, said that the month of January has proved to be an incredible forecaster of things to come for the rest of the year. Nothing beats the January Barometer, he said. Since 1950, no other indicator has predicted the annual course of the market with such accuracy.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615996","date":"1995-01-09","texts":"PITTSBURGH -- PNC Bank Corp., moving to reduce its vulnerability to rising interest rates, said it sold 1.8 billion in securities last month as part of a plan to shrink its investment portfolio by 5.9 billion by the end of 1995. The bank-holding company said it will incur a 79 million loss for the fourth quarter from the recent sale of fixed-rate securities. It also said it won't replace a further 4.1 billion in securities that mature this year, reducing its total portfolio to about 17 billion by the end of 1995 from 22.9 billion at the end of the 1994 third quarter. The move will reduce PNC's total assets by 9.4, to about 58 billion. PNC indicated last fall that it would restructure its investment portfolio after steep interest-rate increases produced heavy securities losses. At the time, PNC said it expected those losses would cut 1994 fourth-quarter earnings by 7 and 1995 earnings by about 15. PNC isn't alone in selling securities because of rising interest rates. I assume virtually everybody is, said Dennis Shea, an analyst at Morgan Stanley & Co. Most banks are, I would believe, net sellers of securities right now. They're trying to reduce their liability-sensitive positions. To further reduce vulnerability, PNC recently bought interest-rate swaps with fixed payments and interest-rate caps. The new swaps and caps will cost PNC about 70 million in 1995 if rates stay the same, said Thomas H. O'Brien, chairman, chief executive and president. If rates keep rising, the cost of the swaps and caps will drop.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982368","date":"1995-01-09","texts":"For Kim Emerson, it was a game of solitaire before work started. Ed Holt loved hearts at lunchtime. And Kevin Chisnell was wild about Minesweeper competitions with his co-workers. Concerned that some state workers were playing when they should be working, Gov. George Allen R has ordered that games be deleted from every state-owned computer. An administration memo called computer game-playing nonproductive and nonefficient and stated that time spent by employees playing such games should be considered an improper use of taxpayer funds. The memo was passed out to agency heads in mid-December but, because of the holidays, began making its way to workers only last week, raising the eyebrows of everyone from secretaries to university professors. It's getting to a level of micromanagement beyond the usual, said Robert L. Ake, a chemistry professor and chairman of the faculty senate at Old Dominion University in Norfolk. What's next Will we be asked to submit a requisition when we walk away from our desk or be asked to keep a tally of every second of our day As computers with high-resolution color screens and sound cards become ubiquitous in the U.S. workplace, managers increasingly are having to deal with issues of game-playing at work, industry specialists say.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842614176","date":"1995-01-10","texts":"NEW YORK -- Major bank stocks are down 10 since August because of the rising interest rates that skewered the bond market last year. So are they bargains now, if rates are leveling off Some investors think so, but not analyst Lawrence Vitale of Bear Stearns. In fact, in an opinion that goes against accepted wisdom in some corners of Wall Street, Mr. Vitale yesterday morning sent the firm's clients a clear, startling message This is Bank Hell, he declared. Intensified competition and continued rate increases will pummel the banks throughout 1995, Mr. Vitale warned. We believe that we are in a bear market for bank stocks, despite the continued strong industry fundamentals, he said in his commentary which actually is a summary of a report issued just before the holidays that got little attention on Wall Street. Even though bank stocks have declined to more-tempting levels, the Bear Stearns analyst added, we believe there is further downside potential as earnings weakness in 1995 becomes more visible.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830985635","date":"1995-01-10","texts":"The White House's push to contract out many federal functions presents new job opportunities for some retirement-age government workers. Although low-seniority workers are facing layoffs, some old-timers can get 25,000 exit payments, inflation-proof pensions and new careers - maybe doing their old jobs at higher salaries - with companies assuming federal chores. Talent and contacts, not necessarily in that order, are a big plus for the middle- and top-level employees who are reinventing themselves into private-sector employees. In the old days, B.C. Before Clinton, a few ex-feds found happiness with Beltway Bandit companies serving Uncle Sam. But pickings were slim except for the exceptionally talented, the lucky or those who spent their final years courting a new employer. Taxpayers pay for privatization too - but costs are hidden. In some cases, the changeovers actually improve service and save money. Federal unions fought the efforts of Presidents Nixon and Reagan to privatize. Government employment actually increased under both of them. But this time, unions have been outmaneuvered by the Clinton administration. It gave them partnership agreements - which include ringside seats as politicians carve up the bureaucracy - in return for cooperation in reinventing government. The 1995 model of the government reinvention-mobile has fewer seats for employees. And this is before the Republicans make their cuts","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617154","date":"1995-01-11","texts":"MEXICO'S economic crisis deepened as the country's stock market and currency both fell more than 6, showing that investors aren't convinced the country can return to stability soon. The crisis sent emerging-market debt securities plunging for the second straight day as traders reacted to a poor response to a Mexican debt offering, and stocks in other Latin American markets tumbled. --- The Canadian dollar continued its long slide, falling to an eight-and-a-half-year low against the U.S. dollar. The Spanish peseta plunged, as did the Italian lira and Swedish krona, as European currency markets gyrated. ---","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616780","date":"1995-01-16","texts":"SANTIAGO, Chile -- From the construction cranes dotting the skyline to the modernist paintings decorating the subway, this capital has a thriving air that seems more characteristic of a Scandinavian country than a Latin American one. But Chileans won't easily forget the steep price of today's prosperity the great currency collapse of 1982. The implosion of the Chilean peso -- which declined more than 90 in 12 months -- followed an ill-fated effort by a group of U.S.-trained economic officials to peg the currency to the dollar. In the ensuing crisis, one-quarter of Chilean workers lost their jobs, wages regressed to levels not seen in a decade, and soup kitchens provided the only sustenance for millions of the impoverished. Within the depression, however, lay the seeds of Chile's current boom. Forced to look outward for new markets, Chilean companies turned into dynamic exporters, which today sell chopsticks to Japan, wine to Europe and machinery to the U.S. Chile's success in transforming a currency bust into an export bonanza underscores a widely overlooked silver lining in the recent Mexican peso crisis The almost 35 devaluation of the peso could significantly accelerate Mexico's evolution as an export power, a process that was well under way when the country joined the North American Free Trade Agreement. But along with offering hope for Mexico, the story of Chile's painful comeback from devaluation also contains a warning Mexico will discover that sacrificing near-term domestic wealth for long-term international competitiveness places severe strain on the nation's social fabric. If Mexico's devaluation is to benefit its exports, Mexico must do what Chile did avoid an inflationary spiral, says Sebastian Edwards, chief economist for Latin America at the World Bank. That requires sacrifice.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983888","date":"1995-01-18","texts":"Federal Reserve Chairman Alan Greenspan has admitted to Congress that inflation - which he has been fighting with a series of interest rate boosts - is not really rising as fast as had been thought, that indeed the rate of inflation has been overestimated by as much as 50 percent. Because of improvements in the quality of goods and services, and other technical factors, the official Consumer Price Index may currently be overstating the true cost of living by perhaps one-half percent to 1 12 percent per year, Greenspan told the House Budget Committee last week. That means, in effect, that last year's official CPI rise - a modest 2.7 percent - was in reality between 2.2 and 1.2 percent. Quite a difference Greenspan's purpose in bringing up the overstatement of inflation in the economy was to make the valid point that various government programs, such as Social Security and military and civilian pensions, that are indexed to the cost of living have provided overgenerous cost-of-living adjustments COLAs, thus adding to the federal deficit. For example, Greenspan said, if the annual inflation adjustments to indexed programs and taxes were reduced by one percentage point - and making the admittedly strong assumption that there are no other changes in the economy - the annual level of the deficit will be lower by about 55 billion after five years, including the effects of lower debt levels.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613628","date":"1995-01-19","texts":"Stock prices finished mixed, dragged down by renewed inflation fears and the likelihood that the Federal Reserve will raise rates at the end of this month. Bond prices eased and the dollar strengthened. Stock prices staged a fierce comeback in the session's waning moments. The Dow Jones Industrial Average, down more than 20 points at mid-session, charged toward breaking even in the final minutes, ending down 1.68 at 3928.98. Broader indexes also neared their opening levels at the close. The Standard & Poor's 500-stock index fell 0.33 to 469.72, and the New York Stock Exchange Composite Index eased 0.28 to 255.97. Meanwhile, the Nasdaq Composite Index rose 0.24 to 772.38. Despite the late snap-back, analysts showed new wariness about inflationary pressures. Gold prices, often seen as a hedge against inflation, bounced higher. Spot gold in New York gained 2 to finish above 382.30 an ounce. In addition, the closely watched Knight-Ridder CRB Index rose 1.07 to 236.65. Gold is higher, oil stocks are up and the CRB Index continues to rise, said David Shulman, market strategist for Salomon Brothers. And I think at some point the bond market will look over its shoulder and see those rising prices, and they won't like it.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984614","date":"1995-01-19","texts":"D.C. Council member John Ray D-At Large said yesterday that he will introduce legislation requiring mortgage giant Fannie Mae to pay 300 million annually in District income taxes, a move that could wipe out the city's budget deficit. Ray said he decided to push the measure after a series of articles about Fannie Mae in The Washington Post prompted a flood of reaction from D.C. residents, who were outraged that the most profitable company in the city pays no local income taxes. Ray said that the articles and the public reaction caused council members to reconsider the matter and that D.C. Council Chairman David A. Clarke D asked him to introduce the bill. Until now, the council's focus amid the city's worst budget crisis ever has been on cutting costs, including slashing social services, reducing government employment and transferring control of the Lorton Correctional Complex to the federal government. The prospect of taxing Fannie Mae raises the possibility that part of the solution to the city's problems may lie in additional tax dollars. Fannie Mae, which employs 2,252 people in the District, has threatened to leave the city if any new tax is imposed because the company would be at a competitive disadvantage with its chief rival, the McLean-based Federal Home Loan Mortgage Corp. Freddie Mac. Ray said his bill would diminish Fannie Mae's incentive to move by recommending that Congress give Virginia the right to tax Freddie Mac. Fannie Mae has formidable political clout in Congress and lobbied hard to prevent the D.C. Council from publicly debating and voting on the tax issue last year. Fannie Mae believes our congressional charter serves American home buyers by preventing individual jurisdictions from raising the cost of home ownership through the imposition of local taxes, company spokesman David Jeffers said yesterday.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985188","date":"1995-01-19","texts":"has found more signs of inflation in a vibrant economy. The Fed's most recent survey of business conditions around the nation, prepared for a two-day meeting of the Fed's policy-setting Federal Open Market Committee that begins Jan. 31, found continued economic strength and more widespread signs of price pressures. who served as general counsel of the Federal Reserve Board in the mid-1970s, has emerged as the Treasury's leading candidate to become Treasury undersecretary for domestic finance, administration officials said. Except for his three-year stint at the Fed, Hawke, 61, has spent his legal career at the Washington law firm of Arnold & Porter. posted higher fourth-quarter profits fueled by higher interest income, as solid loan growth and acquisitions added to their base of assets. San Francisco-based BankAmerica said profit rose 19 percent, Minneapolis-based Norwest reported an 84 percent surge in earnings and Philadelphia-based Corestates Financial said net income was up 17 percent. Fleet said expensive reductions boosted earnings 21 percent. tapped former senator Howard H. Baker Jr. to head their lobbying effort as Congress begins rewriting federal communications laws. The Tennessee Republican was Senate majority leader in the early 1980s and served as President Reagan's chief of staff. Baker, who runs a Washington law firm, also is a former board member of AT&T. had a record year in 1994 despite continued weakness in its commercial aircraft business, with its profit up more than 200 million to 598 million. For the fourth quarter, McDonnell Douglas earned 165 million, compared with a profit of 143 million in the 1993 period.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613577","date":"1995-01-20","texts":"STOCKS SLUMPED as investors resigned themselves to the probability of another interest-rate increase. The Dow Jones Industrial Average sank 46.77 to 3882.21. Worries about interest rates and inflation also drove bond prices lower. Helping to depress markets was concern that political opposition in Congress could stall a planned rescue package for Mexico. Mexican stock prices sank 4.8 and the peso fell 2.7 against the dollar on nervousness about U.S. approval of the rescue package. --- Tele-Communications and Comcast notified regulators that they plan to complete their 1.42 billion acquisition of QVC as early as next month despite possible antitrust objections. ---","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616897","date":"1995-01-20","texts":"Last February, just before the Federal Reserve began jacking up interest rates, a U.S. Army welfare and recreation fund invested 15 million in what looked like a sure thing A two-year, triple-A-rated, U.S. government-agency note with a tempting initial yield of 4.75, well above the then-prevailing rate. But in just three months, the note's yield was reset to 0 under a complex formula, making it dead money to the investor. So far, the Army fund has taken a 7.9 paper loss on the notes, a hefty hit for a short-term note in a supposedly low-risk fund that manages cash balances for Army base golf courses and bowling alleys. This is not wonderful, frets fund manager Jeffrey Dalbey. This security, known as a structured note, wasn't issued by a penny stockbroker or a widget manufacturer. It was the Federal Home Loan Bank System, a lightly supervised, Depression-era creation, which is at the center of the gathering storm about the government's role in issuing such gimmicky and risky securities. The Army wasn't the only investor to be burned by such safe-looking securities. Structured notes issued by the Federal Home Loan Bank System and other federal agencies also played a prominent role in Orange County's bankruptcy filing last month. Similar investments blew up last year in supposedly low-risk funds run by BankAmerica Corp. and Mellon Bank Corp., among others.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981849","date":"1995-01-20","texts":"Deputy President Frederik W. de Klerk said tonight that he was viciously insulted during a cabinet debate over an amnesty for crimes committed by police and security ministers during the apartheid era of white-minority rule. The dispute over amnesty marks the first real rift in the multi-party and multiracial government that came to power under President Nelson Mandela following South Africa's historic democratic election last April. It was not seen as a coalition-breaker, however, and de Klerk stopped short of threatening to quit the government. Rumors that de Klerk might pull his former ruling National Party out of the cabinet - where it holds a deputy presidency and six of 27 ministries - raced through political and business circles today, setting off a minor tremor on the stock market. But in a speech tonight to a National Party congress, de Klerk said that while he had considered resigning in the face of a dressing down in Wednesday's cabinet meeting by Mandela, he concluded that South Africa's fragile transition to democracy demands that all major parties work together. De Klerk, who was president when Mandela was elected, said he and his party will oppose a cabinet decision that invalidated the controversial amnesty, which was granted under the de Klerk government just before last April's election. He also issued a veiled demand for an apology from Mandela, insisting that the leadership of Mandela's African National Congress take appropriate steps, without delay, to remedy the unfair, unjustified and unacceptable attack on our integrity and good faith. De Klerk and Mandela are expected to meet Friday to try to patch up what has become a badly damaged relationship.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842614083","date":"1995-01-25","texts":"Stock prices finished mixed in a featureless session as investors turned their attention to the Federal Reserve and the future path of interest rates. Bond prices eased and the dollar was mixed. The Dow Jones Industrial Average fell 4.71 to 3862.70, the average's sixth-consecutive decline. The Standard & Poor's 500stock index gained 0.05 to 465.86, the New York Stock Exchange Composite Index added 0.23 to 253.70 and the Nasdaq Composite Index rose 3.69 to 763.20. With the Fed's policy-making meeting less than one week away, interest-rate angst has infected the market. Traders reported sporadic earnings-related activity, but most trading moves were muted ahead of the Federal Open Market Committee Meeting set for Jan. 31 and Feb. 1. Most economists expect the FOMC to recommend a boost in short-term rates. People are clearly waiting on the Fed, said Alan Bond, president of Bond, Procope Capital Management. I think we may tread water going into the Fed meeting, with a modestly upward bias. Analysts added that worries about the proposed Mexican bailout package, as well as lingering uncertainty about how the Japanese earthquake might affect U.S. markets, contributed to yesterday's directionless trading.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983263","date":"1995-01-26","texts":"When Federal Reserve policymakers meet next week to decide whether economic growth is so strong that they should raise short-term interest rates once more to try to slow it down, one piece of evidence they will be looking at is what hapnened to retail sales in November and December. The sales figures reported earlier this month by the Bureau of the Census were completely at odds with what most analysts had expected and with the picture of continued rapid economic growth painted by most other recent statistics. No one quite knows whether to believe them. up only 0.2 percent in Novemberrather than the 1.2 percent it had estimated in its first report last monthand that sales dipped 0.1 percent in December. Is this the leading edge of the long-predicted slowing of growth Or is it just a temporary flattening of an upward trend After all, the retail sales numbers make up an extremely volatile series that is frequently revised by significant amounts. The chart at the right underscores just how much the figures are revised as Census moves through three monthly stages of reporting the sales on what.it calls the advance, preliminary and final bases. Even the so-called final figures are subject to later revision.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984589","date":"1995-01-26","texts":"Clinton administration officials yesterday told Congress the United States must act alone to shore up Mexico's battered economy because multilateral lending institutions such as the International Monetary Fund cannot handle the task. Treasury Secretary Robert E. Rubin and Secretary of State Warren Christopher told the House Banking Committee that Mexico is vital to U.S. interests because the slump of the Mexican economy could trigger a chain reaction, bringing the development of free-market economies throughout Latin America, Asia and Eastern Europe to a screeching halt. Rubin, Christopher and Federal Reserve Board Chairman Alan Greenspan appeared before the panel as lawmakers reviewed two drafts of loan guarantee proposals drawn up by House Banking Committee Chairman Jim Leach R-Iowa. The difficulty in rounding up the votes to pass the measure was underscored by a Los Angeles Times poll that found the rescue plan was opposed by 81 percent of the 1,353 adults questioned. Republican congressional leaders continued to press President Clinton to muster more Democratic support for the plan. Senate Majority Leader Robert J. Dole R-Kan. said he didn't hear any cheers go up from the other Democratic side of the aisle when the president urged passage of the loan guarantees in his State of the Union address Tuesday night. It is going to be difficult to pass, House Speaker Newt Gingrich R-Ga. said at his daily news conference. I think no one should underestimate how much working is going to have to go into the next week or two.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830981676","date":"1995-01-31","texts":"If Congress rejects President Clintons call to guarantee 40 billion in loans to Mexico, Mexicos economy would almost certainly fall into a deep recession, according to economists. It couid also lead to a global financial crisis as panicky investors pull out the billions they have invested in the developing world. And while the direct economic consequences to the United States would be relatively modest, the damage to the United States' prestige as a world economic leader would be severe, analysts said. Rejection of the package would undermine the importance of the United States in the world economy, said European Union Trade Commissioner Sir Leon Brittan. The prestige of the president, the Fed chairman and the leadership of both houses in Congress has been committed, said Robert Hormats, vice chairman of Goldman Sachs International. If Congress were to kill the aid package, the feeling in the rest of the world would be that we are a nation in disarray, a country incapable of addressing a crisis. ... The psychological blow would be enormous. So far, the administration has been unable to find any argument to persuade a majority in Congress to support the loan guarantees. Opponents appear to have taken the upper hand, portraying it as a bailout for millionaires on Wad Street and short-sighted economic planners in Mexico City.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613472","date":"1995-02-02","texts":"NEW YORK -- The dollar sagged yesterday, as news of a widely anticipated 0.50-percentage point rate increase by the Federal Reserve provided an excuse to take profits on Tuesday's powerful dollar rally. The dollar also was depressed by the sell-off in U.S. Treasurys that followed the Fed's action, with bond-market participants concerned that U.S. economic growth will remain buoyant and thus prompt further Fed rate boosts. The Federal Reserve decided at its policy-setting meeting yesterday to lift to 6 its Fed funds rate, or the rate banks charge each other for overnight loans. The Fed also raised to 5.25 the discount rate, or the rate at which it sells money to banks. Explaining its decision, the Fed said that despite tentative signs of some moderation in growth, economic activity has continued to advance at a substantial pace. Traders, who had amassed dollars on Tuesday with the announcement of President Clinton's new aid package for Mexico, abruptly dumped them when the Fed made its announcement. The dollar fell quickly to intraday lows of 1.5150 marks and 98.85 yen within minutes of the Fed's statement it recovered a little later in the session.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614094","date":"1995-02-02","texts":"TOKYO -- For some time, U.S. trade negotiators, hoping to cut America's trade deficit, have been pushing Japan to get its dealerships to stock more U.S. cars. Trouble is, two of Detroit's Big Three auto makers say they won't take advantage of the access even if Washington's trade negotiators win. Chrysler Corp. Chairman Robert J. Eaton says Chrysler is too busy elsewhere to mount a big push in costly Japan, despite the success of the right-hand-drive Jeep Cherokee it sells there through Honda Motor Co. We have capacity limitations, so why bother Mr. Eaton said in a recent interview. General Motors Corp. executives in Tokyo maintain that the primary obstacle in Japan isn't dealer access, but high real estate prices, something neither Japan nor the U.S. can settle through negotiation. GM -- whose most popular car in Japan, the Opel, is made in Germany -- sells cars through an independent company specializing in foreign vehicles. Ford Motor Co. is the only one of the Big Three likely to follow through if Washington extracts new access from the Japanese in trade talks set to resume in Tokyo later this month. Spurred by the introduction of right-hand-drive models, Big Three exports to Japan rose 50 in 1994 to 57,357 vehicles, including vehicles made at American-owned factories in Europe. U.S. officials say American car makers would sell far more if only given better access to Japanese consumers. Foreign car sales in Japan, they note, accounted for only 8 of the total passenger car market in 1994. We're not looking at what they American car makers are able to do now while they're handicapped, but what they could do if the system were open, says a U.S. Embassy spokesman.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616047","date":"1995-02-02","texts":"A widely expected Federal Reserve increase in short-term rates sent bond prices falling and knocked stock prices down from their highs to mixed levels. The dollar was mixed. The bond market, practically dormant through much of the morning, began churning once the Fed said at midafternoon that it had raised interest rates. But as economists read through the Federal Open Market Committee statement on the move, bond prices began to slump, especially among shorter-term issues. Some economists noted that not only did the Fed increase the federal funds rate by 0.50, but also the discount rate by the same margin. The fed funds rate is the bank overnight lending rate and the discount rate is the rate the Fed charges from its discount window. In addition to the rate boosts, the Fed termed signs of slowing as tentative and hinted that the economy remains quite vigorous, even as it raised rates for the seventh time in about one year. The language that accompanied the Fed's move, especially about inflation and capacity utilization, along with the unanimous vote, telegraphed a certain sense of concern to the bond market, said Frazier Evans, senior economist for Colonial Investment Services. In the stock market, a mild rally in cyclical issues rapidly escalated into a fierce argument between the two warring constituencies seeking control of the stock market. During the past two sessions, more than 800 million shares have traded hands as investors have wrestled with the recession question.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982289","date":"1995-02-04","texts":"Rising interest rates didn't scare first-time buyers away from the home market last year, according to a new national study. Chicago Title and Trust Co.'s telephone survey of recent buyers found that 47.1 percent were first-time buyers, compared with 46 percent in 1993. Since first-time buyers are usually the most price-sensitive, last year's 2-percentage-point jump in mortgage rates to above 9 percent for a 30-year, fixed-rate loan could logically have been expected to push them out of the market. But in an analysis of its survey results, Chicago Title speculated that because these buyers didn't have to sell their old home before buying a new one, they were in the best position early in the year to move quickly when it became obvious that rates were on the way up. As the year wore on, first-time buyers chose adjustable-rate mortgages ARMs to keep their monthly mortgage payments down, said John Pfister, vice president and marketing research manager at Chicago Title. The company, which sells title insurance, has been surveying buyers for 19 years and conducts its poll on a representative sampling of buyers in 18 major markets, including the Washington area.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613564","date":"1995-02-06","texts":"WASHINGTON -- The first significant sign that the economy is cooling emerged when the Labor Department reported that the unemployment rate rose for the first time in more than a year. The unemployment rate for January jumped 0.3 percentage point to 5.7, matching October's level. The Labor Department also reported that employers created only 134,000 jobs last month, about half the pace of previous months and the smallest gain in a year. While economists were careful to note that the new data suggest the economy is still growing, many agreed the report seems to indicate the year-long series of interest-rate rises engineered by the Federal Reserve finally have kicked in. It takes about 12 months for the rate hikes to have an effect, said Edward Yardeni, an economist at C.J. Lawrence. This is the year we'll see it happen. The financial markets rallied on the news as investors speculated that interest rates may soon stop rising. Bond prices rose the yield on the benchmark 30-year bond fell to 7.62 from 7.74. And the Dow Jones Industrial Average soared 57.87 to 3928.64.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984458","date":"1995-02-08","texts":"The productivity of American workersthe measure of the amount of goods and services produced for every hour workedincreased by 2.2 percent last year, the Labor Department reported yesterday. It was the fourth year running that the governments productivity measure was significantly above the dismal 1 percent annual gains that characterized the American economy of the 1970s and 1980s. And because economists consider productivity the key variable in determining a nations wealth, its trends are closely watched. But analysts were divided yesterday, as they have been for nearly two years, on whether the good productivity numbers suggest a new, higher plateau for the economy, or merely a natural catch-up that goes on during an economic recovery, particularly one as strong as this one. In a year in which the economy grew 5 percent, 2.2 percent productivity growth is no great shakes, said Daniel Sichel, an economist at the Brookings Institution who is one of the pessimists. Sichel said nothing hes seen so far is inconsistent with a long-term trend of 1 percent increases in productivity. economist at Lehman Brothers Inc., the New York investment bank, who credited better management and an increase in spending on computers and other equipment with a longterm boost in the productivity of workers and the competitiveness of their firms.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982315","date":"1995-02-09","texts":"The chief business of the American people is business, Calvin Coolidge famously said seven decades ago. If Silent Cal were around today, he might conclude that Bill Clinton's chief business as president has been the politics of business. From imposing trade sanctions on China to helping Mexico out of its financial jam, from fighting the budget deficit in his early presidential days of economic recovery to presenting his new, mildly reflationary budget, the president has steered a steady course of placating American business interests and seeking the financial markets' authenticating approval. No surprise there. Clinton's concern with holding the strong support he got from the business community in 1992 and steadying the markets has long been evident. But David Alan Munro writes from Laguna Beach, Calif., to put the administration's quest for approval from Wall Street in a broader, more speculative perspective. There will always be a main non-governmental entity -- for example, the Church prior to the Reformation -- from which government seeks approval or legitimacy, writes Munro, a retired history professor. That entity has been finance-capital for a long, long time. Today Munro believes that the authenticating mechanism for government and politicians is shifting from financial markets to the media, which Clinton alternately courts and assails. Caught on the cusp of this transformation and not sure which way to turn, the Clintonites are in for a rough ride in 1996, the professor notes with sympathy.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614445","date":"1995-02-10","texts":"PALM BEACH GARDENS, Fla. -- American manufacturers are barreling into 1995 like a locomotive. Their big fear that today's strength will tempt the Federal Reserve Board into slamming on the brakes too hard. As executives prepared for the winter meeting of the National Association of Manufacturers, which began here yesterday, interviews with a number of those attending the meeting reveal widespread nervousness about a possible economic slowdown beginning in the middle of this year -- but few concrete signs of it arriving yet. Indeed, conditions are so strong that some executives say they are able to raise prices on their products for the first time in several years, a possible harbinger of higher inflation. We see very strong growth, says Donald Rainville, president of Universal Dynamics Inc., a small company in Woodbridge, Va., that manufactures machinery used in making plastics. Varian Associates Inc., a Palo Alto, Calif., maker of healthcare systems, semiconductor equipment and electron devices, ended last year with record orders. At Tenneco Inc., which had fourth-quarter and full-year earnings gains of more than 50, orders for farm machinery, construction equipment and auto parts continue to be strong, while the company has advance orders for all the containers and container board it can make. Our business conditions are excellent, says Dana Mead, chairman and chief executive of Tenneco, and vice chairman of the association's board. But the association, which represents 12,000 manufacturers, doesn't expect conditions to remain that way. Gordon Richards, the association's chief economist, expects gross domestic product to grow under 3 this year, compared with 4 in 1994. With interest rates sharply higher than last year at this time, many members see a slowdown as inevitable -- beginning with the interest-rate sensitive industries like automotive and housing. Fixed-rate mortgages, for example, have risen more than two percentage points in the past year and now stand at about 9.10, a level that is beginning to discourage buyers.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615524","date":"1995-02-10","texts":"NEW YORK -- Wall Street gave a mixed response yesterday to Tele-Communications Inc.'s scaled-down plan to restructure its expansive holdings. In trading on the Nasdaq Stock Market, TCI Class A common closed at 22.50, up 50 cents, or 2.3, on volume of over five million shares, more than double its average daily share volume of 2.4 million. TCI, the nation's largest cable operator, told analysts and investors yesterday that it will press ahead with plans to distribute a new class of TCI common stock to track the performance of its programming unit, Liberty Media. The cable company also will offer to the public as much as 20 of its international business unit, TCI International, through an initial public offering of shares. Analysts and investors yesterday generally favored the strategy, but many reserved judgment until they get a clearer idea of how it is executed in the market. Separately, cable company Comcast Corp. said it and TCI have received more than 90 of the shares needed to complete their acquisition of home-shopping network QVC Inc., an accord valued at 1.42 billion. Completion of that transaction is expected to be announced today.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614588","date":"1995-02-13","texts":"Raising capital used to be a cinch for emerging-market companies, as foreign investors couldn't seem to buy enough of their stocks and bonds. Then U.S. rates skyrocketed in the last year and the Mexican peso fell, and suddenly the flush days were gone. Now, companies from Peru to Slovenia are forced to find new, more enticing ways to lure foreign money. The trend is opening some mouth-watering opportunities for investors willing to brave the risks. With public markets practically closed to emerging-markets issuers, their cost of capital has gone up tremendously, says Peter Marber, president of Wasserstein Perella Emerging Markets, a unit of the New York investment banking firm Wasserstein Perella. As a result, investors who are willing to provide that capital get a much bigger bang for their money. What's more, the fact that emerging-markets companies are obliged to seek money in private transactions, rather than on public markets, gives investors more control over risks. While the companies pay lower financing costs than they might have with bank loans or bond issues, they typically must give investors more say. Today's hard times mean portfolio investment is out and direct investment is in, says Roberto Danino, chairman of the Latin American practice group at the law firm Rogers & Wells in Washington.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614821","date":"1995-02-14","texts":"NEW YORK -- Manufacturers' outlook for near-term business conditions remains optimistic despite a decline in operating conditions in the fourth quarter, a Dun & Bradstreet Corp. survey found. Manufacturers' outlook for the rest of the year appears uncertain amid fears of rising interest rates and slowing demand for new orders, according to the D&B survey. In a separate survey, D&B found the construction industry less shaken by interest rates and considerably more confident about the near term. D&B said its January survey of 1,000 manufacturing executives shows conditions during the past three months indicate what can best be described as the beginning of the end of the current boom, Douglas P. Handler, D&B's manager of econometric analysis, said. Manufacturers, he added, are adjusting their long-term outlook in preparation for rising interest rates, slowed demand and an associated impact on unemployment levels. Despite recent reports of a booming manufacturing industry, D&B's survey showed a deterioration in operating conditions in nearly every segment within the industry during the past three months new orders and production levels both slid 10 points, to 25, while exports declined 3 points, to three. Conditions still by and large are good, Mr. Handler said, but November and December were pretty much the peak.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616510","date":"1995-02-14","texts":"WASHINGTON -- President Clinton's economic advisers say the trend in U.S. productivity growth may be improving, boosting the prospects for growth in living standards in coming years. The Economic Report of the President, released yesterday, said the growth in U.S. productivity, which is a measure of the output per hour worked, has averaged about 2 a year since 1991 -- more than twice the 1978-87 average. Some of that may reflect a rebound from the recession but even if measured from 1987, productivity has grown 1.2, up from 0.9 in the 10 previous years. There may have, indeed, been a structural change in productivity growth, said Laura Tyson, chairwoman of the president's Council of Economic Advisers. Such an increase could have positive implications for Americans' standards of living, which are ultimately determined by the productivity of American workers. But the president's economic report also points out that it may be too soon to jump to conclusions about productivity growth. For one thing, the statistics can be misleading. If the trends are computed for different periods -- 1978-86 and 1986-94 -- productivity growth averages only 1.1 in the latest period, up from 1 in the earlier period, not much of a difference. Also, recently released Labor Department data on hours worked suggest that productivity could be revised downward by one-tenth of a percentage point in 1993 and 1994. While the evidence of a slight improvement in the productivity growth trend is encouraging, it is not yet decisive, the report said, adding that two more years of data may present a clearer picture.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617328","date":"1995-02-15","texts":"Cyclicals are back Beaten down in the second half of 1994 by rising interest rates and fears of a sharp slowdown this year, economically sensitive stocks have rallied twice in the first two months of 1995. The latest recovery, which started this month, is a clear bet by some investors that the Federal Reserve will be able to engineer a soft landing, slow economic growth coupled with continued low inflation. Investors are concluding that sometime in '95, the Fed will be done tightening and that there will be a resurgence in the economy late this year or perhaps in '96, says Thomas McManus, market strategist at Morgan Stanley. Some of these cyclicals are the stocks that did the worst in '94. Weathervanes of the economy, cyclicals rally on economic recoveries but trail in recessions. The group includes paper companies, auto makers and auto-related companies, as well as capital goods and intermediate-goods suppliers. The Morgan Stanley Cyclical Index shows an upsurge in February, which comes on the heels of a sharp decline during the second half of January. The index had a steady decline in the second half of 1994, culminating in a 52-week low of 273 on Nov. 23. It then made a first run at a comeback, climbing to 305 on Jan. 15, before skidding sharply. The Federal Reserve's move to boost short-term interest rates by an additional half percentage point on Feb. 1 was widely perceived as the last tightening for the foreseeable future and just the touch needed to bring the economy gliding down gently to more sustainable growth levels.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982803","date":"1995-02-15","texts":"Retail sales are still rising but the pace has slackened in recent months in what analysts say is a sign higher interest rates are finally slowing the economy. The Commerce Department reported Retail sales are still rising but the pace has slackened in recent months in what analysts say is a sign higher interest rates are finally slowing the economy. The Commerce Department reported that sales rose in January a modest 0.2 percent for the second straight month. While they have not fallen since April, the growth rate has eased dramatically. ITT reached a tentative agreement to sell three of its financial businesses to General Electric Capital for 1.8 billion. ITT recently has been moving out of finance and increasing its entertainment holdings with purchases in the sports and gambling fields. The sale to GE Capital includes its Equipment Finance, Small Business Finance and Commercial Real Estate Services. has emerged as a hotly contested market in the Federal Communications Commissions auctions for 99 wireless telephone licenses in 51 regions. AT&T and American Portable Telecommunications, a SOURCE Consumer Reports Travel Letter survey of 450 subscribers, Nov. 1993 KRT ' tilt WASHINGTON '","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615150","date":"1995-02-17","texts":"Seeking to head off potentially harsh sanctions by the government, senior Nasdaq Stock Market officials have been huddling with Wall Street securities firms on various proposals aimed at revamping the market, according to people familiar with the situation. While the details of the proposals have not been disclosed or presented to the board of the National Association of Securities Dealers, they are believed to focus on the need to narrow trading spreads, or the difference between the bid and asked prices of individual stocks, and to improve order execution for small investors on the screen-based Nasdaq market. The NASD is a self-regulatory organization that owns and operates Nasdaq, the nation's second-largest stock market behind the New York Stock Exchange. The tentative proposals being circulated among Nasdaq firms are the first apparent effort by the NASD to respond actively to stinging criticisms leveled against the market in the past year. An academic study last May alleged price-fixing among Nasdaq market makers. Subsequently, both the Justice Department and the Securities and Exchange Commission opened investigations into Nasdaq trading practices. The NASD and member firms have denied any wrongdoing and say that dealers will be vindicated. But the proposals under discussion appear to be aimed at anticipating any regulatory changes that may be forced upon the sprawling dealer market.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982313","date":"1995-02-20","texts":"If he rode a horse, carried a spear and wore a helmet, you could call William L. Collins III a modern Don Quixote, tilting at windmills. As it is, all he wants to do is invest 10 million of a hard-earned personal fortune to bring major league baseball to the Washington area, which has been one of the true hopeless causes of the past quarter-century. And he is trying to do it in the midst of a maddening strike that has soured untold numbers of fans on the game. Entrepreneurs long to catch just good one wave in the marketplace. Collins, 44, has caught two -- cellular phones and paging services. He and his partners were on the ground floor when the first cellular telephone franchises were handed out by the Federal Communications Commission in the early 1980s. They merged two of their franchises to form Vanguard Cellular Systems Inc., now based in Greensboro, N.C., which had 190,000 subscribers along the East Coast as of September. Revenue has risen just as steadily and although growth has eaten up profits in recent years, the stock has roughly tripled in value since 1988. Collins took another flyer in 1988 into the paging industry, gambling that new frequencies made available to paging companies could provide better reception and a competitive edge.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985191","date":"1995-02-20","texts":"One of the enduring mysteries of the personal computer age is why studies continue to show no appreciable increase in personal productivity from the increasingly powerful machines on nearly everybodys desk. Heres a heretical theory part of the trouble is Microsoft Windows. Thats right. The very software designed to make computers more accessible and easier to learn and use in fact detracts from getting work done. And the reason is theres far too much choice and flexibility in configuring the software to the users persona taste. What makes Windows potentially helpful to workers is that it presents an easy way to operate a computer, and a common set of menus and commands that appear not only in Windows itself, but in the application software designed to work with Windows. So far, so good. But once you learn your way around Windows, you discover you can, with just a few clicks of your mouse, make all kinds of changes. You can, for example, change the color scheme, the icons used to represent programs, the size of the windows and their location. The list goes on. Perhaps the biggest waster of timeand moneyis the vast selection of screen savers on the market.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616841","date":"1995-02-22","texts":"Dell Computer Corp. rode strong sales of Pentium-based computers and its resurrected notebook computer line to higher-than-expected earnings of 60.3 million, or 1.36 a share, in the fourth quarter. Sales topped 1 billion in the period ended Jan. 29 as the direct marketer of computers, rocked last year with several stumbles, showed results of its turnaround. It looks really good, said Michael Dell, chairman and chief executive officer. Dell's fourth-quarter net income was more than triple the year earlier's 17.7 million, or 39 cents a share. Analysts had been expecting about 96 cents a share, according to a First Call consensus estimate. The fourth-quarter results included an extra month of international sales, a onetime boost to earnings of 10 cents a share, as Dell unified its domestic and international fiscal years.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984872","date":"1995-02-22","texts":"Stock prices ended mixed today as Wall Street waited for remarks this week by Federal Reserve Chairman Alan Greenspan before the Senate Banking Committee. The Dow Jones industrial average closed up 10.43 points at 3963.97. Declining issues slightly outnumbered advancing ones on the New York Stock Exchange trading volume fell to 308.1 million shares from Friday's 347.98 million. Financial markets were closed Monday for Presidents' Day. Broader market indicators also were mixed. The Nasdaq index ended down 2.35 points to 784.62 and the American Stock Exchange index was off 0.09 to 447.51. But the NYSE composite index edged up 0.15 to 261.98 and the Standard & Poor's 500-stock index rose 0.77 to 482.74. Traders attributed the rally in blue-chip stocks to the reversal of some of Friday's options-related selling that wiped out 34 points from the Dow average. Analysts said most investors saw few incentives to get involved ahead of congressional testimony on Wednesday by Greenspan. Traders will be looking for hints on the direction of the Fed's monetary policy.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985339","date":"1995-02-23","texts":"Stock prices posted modest gains today after Federal Reserve Chairman Alan Greenspan said the economy is slowing its torrid pace but not heading into recession. The central bank's chief also said the Fed might hold interest rates steady as the economy cools down. The Dow Jones industrial average ended up 9.08 points at 3973.05. Advancing issues led declining ones by about 5 to 4 on the New York Stock Exchange. Trading volume climbed to 339.2 million shares from 308.1 million Tuesday. Blue-chip issues made the strongest gains, but broad market indexes also moved higher. The NYSE's composite index rose 1.06 to 263.04, the Standard & Poor's 500-stock index added 2.33 to 485.07 and the Nasdaq index gained 3.31 to 787.93. The American Stock Exchange index climbed 1.07 to 448.58. Greenspan didn't say anything that upset the apple cart, so it gave us a little extra boost, said Peter Coolidge, senior equity trader at Brean Murray, Foster Securities.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983069","date":"1995-02-25","texts":"Despite solid U.S. economic growth and low inflation, the dollar yesterday fell to its lowest level in more than two years against the German mark. A combination of factors, including some that have little to do with the United States directly, have been hammering the dollar. These include the peso crisis in Mexico and an expected rise in German interest rates. Whatever the causes, the sagging dollar is beginning to ring alarm bells among top U.S. officials. The dollar's weakness promoted an unusual expression of concern this week from Federal Reserve Chairman Alan Greenspan. The Fed, Greenspan told a House Banking subcommittee, will be watching the dollar's value closely in coming months. President Clinton, at a press conference yesterday in Ottawa with Canadian Prime Minister Jean Chretien, observed, Well, the truth is that all of us have . . . something less than 100 percent control over the value of our currency. . . . I was stunned last year when the value of the American dollar went down when we were having 4 percent growth, the best economic year in 10 years, and the lowest combined inflation-unemployment rate in almost 30 years. In late New York trading, the dollar was quoted at 1.4618 marks, down from 1.4675 late Thursday, the Associated Press reported. The dollar improved slightly against the yen and was changing hands at 97.00 yen, up from 96.71. The dollar's record low against the Japanese currency was 96.12, reached Nov. 2.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615331","date":"1995-03-02","texts":"Is the 78 billion California Public Employees Retirement System, the nation's largest public retirement fund and best-known keeper of corporate rectitude, on a fling In recent weeks, the huge pension fund has been weighing an investment in DreamWorks SKG, an entertainment venture that at the moment is composed of little more than the minds and egos of three of Hollywood's best-known moguls. Now the retirement fund, known as Calpers, says it's strongly considering a 50 million real-estate venture in California with one of America's best-known basketball stars Earvin Magic Johnson. It's pretty high-leaping stuff for the once-staid keeper of police and tax collectors' pensions, whose formidable public presence to date has focused on chiding corporate chieftains for poor performance and salary grabs. Insiders at the giant retirement pool say the two proposed ventures, neither of which has been finalized, do indeed signal a change in strategy. Other investments soon will surface that will be far more centered on California than in the past, according to these people. And the lineup at Calpers itself has shifted, with new appointments to almost every top staff position.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982902","date":"1995-03-04","texts":"Wall Street stocks closed higher today as strength in technology stocks countered the impact of a fall in the dollar to a new low against the Japanese yen. The Dow Jones industrial average ended with a gain of 9.68 points at 3989.61. It finished the week down 22.13 points. In the broader market, declining issues outnumbered advancing stocks by 11 to 9 on active trading of more than 330 million shares on the New York Stock Exchange. The Nasdaq composite index, a barometer of technology stocks, rose 5.11 points to 798.79, as it approached its record-closing high of 803.93, set on March 18, 1994. But the big news of the day was the dollar, which sank to a record low against the Japanese yen despite buying of dollars by the Federal Reserve, Japan and European nations. The dollar's weakness, which was viewed as a potential source of inflation, spooked the Treasury bond market, where the benchmark 30-year bond fell 58 point or about 6.25 per 1,000 in face amount. Its yield increased to 7.53 percent from 7.48 percent late Thursday.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982033","date":"1995-03-10","texts":"Last week, Sens. Kent Conrad and Byron Dorgan managed to 1 kill the balanced budget amendment, 2 deal Republicans their first big defeat since November and 3 make Democrats the heroes of Social Security. A hat trick. How did they do it By demanding that any balanced budget amendment take Social Security off the table -- i.e., not count the current Social Security surplus in calculating the deficit -- and thus stop looting the Social Security trust fund. In my 17 years in Washington, this is the single most fraudulent argument I have heard. I don't mean politically fraudulent, which is routine in Washington and a judgment call anyway. I mean logically, demonstrably, mathematically fraudulent, a condition rare even in Washington and not a judgment call at all. Consider In 1994 Smith runs up a credit card bill of 100,000. Worried about his retirement, however, he puts his 25,000 salary into a retirement account. Come Dec. 31, Smith has two choices a He can borrow 75,000 from the bank and loot his retirement account to pay off the rest -- which Conrad-Dorgan say is unconscionable. Or b he can borrow the full 100,000 to pay off his credit card bill and keep the 25,000 retirement account sacrosanct -- which Conrad-Dorgan say is just swell and maintains a sacred trust and staves off the wolves and would have let them vote for the balanced budget amendment if only those senior-bashing Republicans had just done it their way. But a child can see that courses a and b are identical. Either way, Smith is net 75,000 in debt. The trust money in b is a fiction It consists of 25,000 additionally borrowed dollars. His retirement is exactly as insecure one way or the other. Either way, if he wants to pay himself a pension when he retires, he is going to have to borrow the money.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982055","date":"1995-03-10","texts":"The Consumer Price Index CPI was initiated by the Bureau of Labor Statistics BLS during World War I because it was needed to index wages during the rapid inflation of the period. It has been an American institution for most of this century. Like most institutions, it has been criticized on many occasions. The form of criticisra has varied, at times even being directed at the compilers of the data. For example, in 1970, Nixon aide Frederick Maiek investigated the religious identity of the senior BLS staff, presumably to test the hypothesis that ones religion affects how one would compile national statistics. But while they varied in form, the criticisms have usually been from the same perspectivethey claim the CPI goes up too fast. As the century draws to a close, the CPI is undergoing another onslaughtthis time from the Federal Reserve Board and the new House of Representatives. And the Senate Finance Committee is scheduling hearings on the subject soon, for which it has asked the BLS to provide testimony. The Federal Reserve staff apparently thinks the CPI goes up faster than it should. Its research on the subject has not been published, but Fed Chairman Alan Greenspan has said that if those upward biases were eliminated, 150 billion could be cut from the federal deficit over the next five years. That prospect is enticing to many politicians who want to cut Social Security benefits or raise income taxes, both of which are indexed by the CPI. The Federal Reserve criticisms emphasize biases that stem from the index formula the BLS uses and the way certain price changes are measured. Theory and evidence, much of it provided by BLS researchers, suggest these can be sources of upward bias. Another problem frequently alleged to impart bias is quality change measurementmaking sure that the item priced this month has the same characteristics as last month's and, when it does not, adjusting the price to reflect the quality difference.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985550","date":"1995-03-12","texts":"Mexico, for decades a key transshipment point for cocaine entering the United States, has expanded its role over the past year as a clearinghouse for worldwide drug shipments and money laundering with the active help of business leaders and government officials, U.S. and Latin American narcotics experts say. The Mexican narcotics organizations, which sprang up as franchises of the Colombian cocaine cartels, are now viewed by U.S. and Mexican authorities as independent entities that maintain business ties with other criminal organizations but are now strong enough to operate on their own. Experts say the Mexican organizations have built a financial empire using the country's booming tourist industry and stock market, converting billions of dollars in drug profits into legitimate forms of capital that are integral to Mexico's financial health. Bankers here are not discounting the possibility that the December financial crunch that led to the peso's devaluation was the result, at least in part, of a massive transfer of drug money from the country. As in Colombia, where the Medellin and Cali cartels pioneered large-scale shipments of cocaine through a combination of ruthless violence and huge bribes, the Mexican organizations depend on protection from members of government, police and the judiciary. In both countries, officials are often offered the choice of silver or lead -- money or a bullet -- allowing traffickers to build empires that often entangle the highest levels of government and law enforcement. Remarkable similarities are emerging in the pattern of corruption and violence -- including an unusually high-profile series of killings -- that has characterized Colombia for years and marks Mexico today. The former deputy attorney general, Mario Ruiz Massieu, is under arrest in the United States as authorities investigate links between him and the Gulf of Mexico drug cartel based in northern Tamaulipas state.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615847","date":"1995-03-13","texts":"NEW YORK -- The weak dollar has rattled the U.S. bond market, but many economists and money managers still believe long-term interest rates will remain steady or drop. Very little of the dollar's decline is related to the types of economic trends that bond traders wring their hands about, analysts say. In fact, one thing the foreign-exchange traders have said they feared -- a slowing U.S. economy -- is a plus for the bond market. Slower economic growth reduces inflationary pressures, which lower the value of fixed-income investments. After a wild ride on the back of the U.S. currency's fall to new post-World War II lows against the mark and the yen, the bond market has recovered to the levels occupied before the currency's slide. Despite Friday's strong employment report for February, many bond investors remain convinced that economic growth has stopped accelerating and a major slowdown isn't far off. The government reported that the unemployment rate dropped to 5.4 of the work force in February from 5.7 in January there was a jump of 318,000 in nonfarm payrolls. The yield on the Treasury's benchmark 30-year bond finished Friday's session at 7.46, compared with 7.51 late Thursday and 7.53 the previous Friday. The yield on the two-year note, meanwhile, ended last week at 6.80, compared with 6.82 late Thursday and 6.87 one week ago. During the depth of the bond market's sell-off, the yield on the 30-year bond rose as high as 7.67 and the two-year note changed hands at 7.00.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981880","date":"1995-03-13","texts":"MEXICO CITY, March 12Former president Carlos Salinas de Gor-tari, blamed by his successor for much of Mexicos economic crisis, left the country this weekend, a government official confirmed tonight after newspapers here reported the departure. One paper said he had gone into gilded exile In the United States. The official said that Salinas who was once highly popular here and widely praised abroad for his economic policiesleft Saturday in a private jet accompanied by his wife and three children. He declined to identify Salinass destination, but the newspaper Excelsior said the former president planned to spend this week in New York and Boston and that his longer-term plans were to settle for an undetermined period in Boston, where he received a PhD in economics from Harvard University. Two other publicationsLa Jornada, a leading opposition newspaper, and Proceso, a weekly magazine that came out todaysaid Salinas had reached an agreement with President Ernesto Zedillo to leave the country with his family, but a spokesman for Zedillo refused to In a nationally broadcast speech.' tonight, Zedillo himself made no mention of Salinass whereabouts but again attacked his predecessor's handling of the Mexican economy Salinas had made dear for some time that he hoped to leave Mexico and had campaigned to head the new World Trade Organization he lost that bid, however, when the Mexican economy tumbled into chaos soon after he left office.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615995","date":"1995-03-16","texts":"NEW YORK -- Stock prices eased as producer-price increases unnerved inflation-leery investors. The Dow Jones Industrial Average shed 10.38 points, or 0.26, to 4038.37. The broader indexes also declined. The Standard & Poor's 500-Stock Index dropped 1.01 to 491.88 the New York Stock Exchange Composite Index declined 0.38 to 266.15, and the Nasdaq Composite Index lost 0.86 to 807.38. The American Stock Exchange Market Value Index was one of the few major indexes to buck the overall trend, rising moderately, by 0.87 to 454.78. The Dow Jones Transportation Index lost 7.46 to 1569.37, while the Utilities Index slid 0.85 to 187.85. Volume was 309.5 million shares. Declining issues edged out advancers, 1,145 to 1,008. Analysts pointed to data on producer-level prices released in the morning by the Labor Department as a reason for the decline. Stocks followed bonds down in the morning after the release of the data but failed to rebound along with them in the early afternoon.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616492","date":"1995-03-21","texts":"Corrections & Amplifications A FEDERAL INVESTIGATION of whether the Big Three car companies' finance units have discriminated against racial minorities was reported over the weekend by the Bloomberg Business News wire service. An article yesterday said the development was first reported by the Detroit News. WSJ March 22, 1995 DETROIT -- The federal government is investigating whether the finance units of the Big Three U.S. auto companies have discriminated against racial minorities by charging them higher interest rates on car loans than whites. Chrysler Corp., Ford Motor Co. and General Motors Corp. said the investigation is being conducted by the Justice Department and the Federal Trade Commission. Ford disclosed the inquiry in documents filed with the Securities and Exchange Commission the two other car companies acknowledged the investigation in response to questions. All three denied any wrongdoing. Last year, African-Americans spent 11.7 billion on new and used cars and trucks, up from 10.2 billion in 1993, according to Target Market News, a Chicago market-research firm.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984797","date":"1995-03-22","texts":"Federal Reserve Vice Chairman Alan S. Blinder suggested reallocating government spending on economic statistics to more accurately represent various sectors of the economy. Speaking to a Commerce Department symposium on economic statistics, Blinder noted that about 15 percent of federal funds for economic statistics is used for agriculture and another 10 percent for energy and mining. In an economy in which agriculture and mining each represent only 2 percent of real GDP, I believe that we must ask whether a reallocation of funds is in order, he said. The GDP, or gross domestic product, is the total output of goods and services in the United States and the broadest measure of the nation's economic health. Blinder asserted that federal agencies are unlikely to see any big increases in their budgets for monitoring economic performance. Thus, to achieve any improvements, we must take a serious look at how funding for economic statistics is allocated, he said.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613772","date":"1995-03-24","texts":"THE DOLLAR CONTINUED to fall against the yen, touching another record low despite intervention by the Bank of Japan during Asian trading. Traders and analysts are betting the drop is far from over. Meanwhile, economists said that the lower dollar won't quickly narrow the U.S. trade gap, but ultimately the deficit will shrink if the currency remains weak. --- Mexico may be forced to raise interest rates well beyond their current levels of nearly 100 to stabilize the country's weakened currency, a central-bank official said. He said the stance is necessary to prove Mexico's commitment to stabilizing the peso. Citicorp has suspended plans to expand its retail banking business in Mexico, citing the economic turmoil there following the peso's decline. ---","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830981825","date":"1995-03-26","texts":"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. These new low down loans aren't for everyone. Theyre generally limited to people with middle incomes or who are buying medium-priced homes. Theyre 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.. Different lenders offer loans with slightly different twists. But in general, heres how the middle-income programs shape up  Loans for 3 percent down. About 1,000 lenders offer this new program, backed by Fannie Mae. In general, its 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, its 51,900. Some lenders, however, such as GE Capital Mortgage Corp., go to 115 percent of median incomes. 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-FANNIEbut wait until April to call. Then, the list will note which lenders allow 3 percent down and which still want 5 percent down.  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.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983442","date":"1995-03-29","texts":"NEW YORK, March 28Blue-chip stocks closed with small losses today1 as a sharp increase in bond interest rates snapped the Dow's three-day  string qI record highs, The Dow Jones industrial average fell 5.53 points to 4151.81, retreating from Monday's record 4157.34. The Dow.also set records on Thursday and Friday. In the broader market, declining issues slightly outnumbered advancing stocks on active trading of more than 320 million shares on the New York Stock Excliange, Some analysts said that despite the decline, the stock market had not yet lost its momentum. I don't tliink this market has turned at all, said William LeFevre, senior analyst at Ehrenkranta King Nussbaum. He said the Dow's decline was more of a rest than anything . that came out in the news, Stocks took in stride news that the Federal Reserve left short-term interest rates unchanged during a meeting today of its policy-setting Federal Open Market Committee. cation the central bank agreed with Wall Street's belief that the economy is slowing after seven rate increases since February 1994, analysts daid.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984893","date":"1995-04-03","texts":"The comments below are excerpted from published stock analyst reports on stocks of local interest. This information should not be used as the primary basis of investment decisions. Stock analysts and brokerage firms may own or actively trade stocks of the companies that they review and recommend. Brokerages also may participate in public stock offerings for those companies. Analysts routinely caution that while their information is based on sources they believe to be reliable, they cannot guarantee the accuracy of their information. Nor, they say, can they promise that their recommendations will be profitable. Brenco Inc., based in Midlothian, Va., manufactures tapered roller bearings and component parts for railroad cars. Customers include most major railroad operators, wheel shops and rail car builders in the United States, Canada, India and Mexico. The company also manufactures forged components principally for the major U.S. automakers. Its wholly-owned Rail Link Inc. subsidiary provides thirdparty contract switching services to large industrial rail users. We think the shares of Brenco represent a good value. Based on a favorable, fairly locked-in' outlook through 1996, we think the shares are undervalued. Beyond that, potential from new products adds upside possibilities. The market does not appear to recognize either the value of the core rail car business or the potential from the automotive products side of the house. Brenco is lesser known in the stock market than its main competitor, Timken Co., or its major original equipment manufacturer customers, such as Trinity Industries. This creates a good investment opportunity. . . . The rail car business is on the rebound. In 1994 the industry shipped more than 53,000 units, up almost 50 percent from 1993. The industry backlog at the end of the year stood at about 44,000 cars. The American Railway Car Institute expects shipments of 60,000 units for 1995, the biggest level of activity since 1980. Domestic rails have been on a productivity hunt for the past several years, including better asset utilization, and as a result have become more competitive with trucks for freight shipments. Market share stopped eroding and, in some instances, improved.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985527","date":"1995-04-03","texts":"At JP Foodservice, Jim Miller has a simple motto for the future of his company Don't bite off more than you can chew. Miller, chief executive of JP Foodservice Inc., a Columbia company that went public in November, is mapping out a plan for his Maryland company that involves methodical growth that would gradually expand the company's geographic base without straining its purse strings. The company used the 86 million it received from its public offering to pay down a chunk of its heavy debt load. It still has 159 million in debt, but much of that has been refinanced at lower interest rates. Analysts say that the company is poised to emerge from a string of quarterly losses caused by its high debt service. The company was a subsidiary of Sara Lee Corp. before a management-led leveraged buyout in July 1989. Today, it is considered the sixth-largest food distributor in the United States--and the largest based in the Washington area, analysts say. Company-wide, it employs 2,300 people. It distributes food products, such as canned and baked goods, produce and meats, to restaurants, hotels and cafeterias in 25 states and the District. But, unlike some food distribution companies, JP Food service deals in much more than just food. It also distributes other products, including detergents and plastic and metal utensils.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984402","date":"1995-04-05","texts":"Mills Corp., the District-based company that owns Potomac Mills and similar factory outlet shopping centers around the country, reported that operating results for the fourth quarter were flat because rising interest rates canceled out higher income from its malls. For the year, the company said, operating results were up because rents it charges in its malls rose and because it expanded Potomac Mills. Most real estate companies such as Mills report two sets of results -- standard net income and funds from operations, a measure that gauges operating results by removing the accounting effects of items such as depreciation and amortization. Mills, however, did not release standard net income figures in a way that would allow comparisons among its operating periods. For calendar 1994, a period that included four months before the company went public, funds from operations on a pro forma basis came to 54.6 million 1.66 per share, up 7 percent from 51.03 million 1.55. In the fourth quarter, the measure was 14.8 million 45 cents, compared with 14.7 million 45 cents in the pro forma period a year earlier.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982544","date":"1995-04-06","texts":"The budget ax unsheathed last week by Prince George's County Executive Wayne K. Curry cuts deeply into the criminal justice system, leaving law enforcement officials unable to do many of the things they once could, according to prosecutors, judges and police. Curry's efforts to close a 1996 budget deficit of more than 100 million would cut the Circuit Court's 7.3 million budget by nearly 1 million and the state's attorney's 5.4 budget by about 800,000. The county's chief administrative judge and top prosecutor both say that the cuts will leave the courthouse unable to provide Prince George's citizenry with a full range of services. There's absolutely no way I can operate the office on this proposed budget, said State's Attorney Jack B. Johnson. Johnson said that Curry's spending plan would require him to cut about 30 of the office's 120 employees, including lawyers, investigators and secretaries. At 90 employees -- 45 of them prosecutors -- the state's attorney's office would be smaller than it was a decade ago. The number of homicides in this county have tripled since then, and I haven't even begun to talk about attempted murder, sex abuse cases and assaults, Johnson said. I have 50 attorneys right now and I just can't go any lower than that.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985590","date":"1995-04-08","texts":"It seemed like a good idea at the time. With a booming stock market at home and robust markets abroad, Japan's cash-rich consumer-electronic makers came to the United States six years ago to marry their expertise in making entertainment hardware with Hollywood's world-dominating software. But the sum of those parts--the buzzword was synergy--has never come close to exceeding the whole, it's clear now. Instead, Japanese have learned painfully that movie and TV shows can't be cranked out like VCRs or memory chips. Matsushita Electric Industrial Co.'s sale of 80 percent of MCA Inc. to the Canadian beverage conglomerate Seagram Co., which industry sources say will be announced officially on Sunday, represents only the latest misadventure by a Japanese industrial conglomerate in American entertainment. Sony Corp. has posted huge losses on its 3.2 billion purchase of Columbia and Tri-Star Pictures in 1989. Japan Victor Co. and Pioneer Electronics Corp., two other Japanese electronics companies that made smaller investments in independent film companies, also are still waiting to see their first profits. While the individual circumstances vary, the common problem for these companies, say observers, has been the culture gap between Japan and Hollywood. As mystifying as some Americans may find Japan, they say the Japanese fundamentally misunderstood how to manage the hit-or-miss business of entertainment.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615734","date":"1995-04-14","texts":"NEW YORK -- Bonds posted solid price gains, as investors departed for the long holiday weekend with evidence that consumer spending ended the first quarter on a weak note. Meanwhile, Chrysler Corp. bonds rebounded. Prices of the auto maker's bonds had fallen Wednesday on news of financier Kirk Kerkorian's takeover bid. But bond traders yesterday cited growing skepticism in the market that Mr. Kerkorian's bid for Chrysler would succeed. Trading ended early ahead of the Easter and Passover holiday. In late activity, the price of the benchmark 30-year Treasury bond was up nearly 14 point, or nearly 2.50 for a bond with 1,000 face value, at 103 1432. Its yield stood at 7.33. The Commerce Department said retail sales rose 0.2 in March, well below the 0.5 increase many economists had expected. Also, the department revised February retail sales to a decline of 1 from an initially reported drop of 0.4. Investors embraced the news as further evidence that the economy continues to lose steam and that inflation will remain well-contained, so that the Federal Reserve isn't as likely to raise interest rates in the near future. More and more people are becoming convinced that inflation isn't a threat and that the economy is slowing, said James K. Ho, portfolio manager for John Hancock Mutual Funds, Boston.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615523","date":"1995-04-17","texts":"JAPAN PLEDGED to sweeten its plan to stimulate the economy, after an initial proposal met with criticism. Japan's finance minister said terms will be revised to increase imports and further boost spending, a victory for Rubin in his first trip overseas as Treasury secretary. Meanwhile, the dollar is seen weakening further, raising fears that higher import prices and inflation may follow. --- U.S. Shoe agreed to be acquired by Luxottica Group after the Italian eyeglass-frame maker raised its bid to about 1.3 billion from 1.12 billion. The sale of U.S. Shoe's footwear business to Nine West isn't affected. --- Some large U.S. companies have profited from the declining dollar in recent months as corporate treasurers have placed bets against it in the futures market, observers say.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983318","date":"1995-04-17","texts":"Theres a growing worry among the Clinton administration, Federal Reserve officials and top Wall Street financiers that the international money markets could trigger a major financial crisis they might not he able to control. The problem, as they see it, is the rise of what is called hot money, a multitrillion-doUar pool of capital that races around the world's stock, bond and currency markets in search of higher returns each day. In a worst-case scenario, those shifting tides of money could swiftly deepen any new government or global currency market crisis that might occur, effectively shutting down the system for handling financial transactions, such as billion-dollar currency trades, buying shares of stockeven cashing a check at the local supermarket. In the past this threat was minimal because markets were smaller, governments did not have to respond to market pressures overnight and major central banks had more clout and resources relative to private currency traders. For now, a solution to the problem is not in sight. Rather, there are efforts underway to at least make governments less vulnerable to this kind of large and instantaneous movement of money.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983942","date":"1995-04-18","texts":"Blue-chip stocks changed direction to end lower today as rising commodities prices and a jump in bond interest rates robbed stocks of early gains that were fueled by better-than-expected profits for the first quarter. The Dow Jones industrial average closed 12.80 points lower at 4195.38 after surrendering an early advance of more than 25 points. In the broader market, declining issues slightly outnumbered advancing stocks on active trading of more than 333 million shares on the New York Stock Exchange. Analysts said stock traders were worried that the dollar's continued slump and rising crude oil and precious metals prices could fuel inflation. The stock market recently has risen to all-time highs -- the last record was set Thursday when the Dow closed at 4208.18 -- on investors' expectations that the economy is heading toward a soft landing with subdued inflation and moderate growth. In late New York trading, the dollar was quoted at 82.05 Japanese yen, down from 83.33 late Friday. The dollar also was changing hands in New York at 1.3665 German marks, down from 1.3910. By midday Tuesday in Tokyo, the dollar was lower, trading at 81.68 yen.  The Standard & Poor's 500-stock composite index fell 3.10 points to 506.13, the American Stock Exchange index rose 1.15 to 473.11, the NYSE composite index dropped 1.46 to 273.54 and the Nasdaq index lost 1.82 to 830.82.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842615325","date":"1995-04-19","texts":"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. 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. 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. 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. 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.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983353","date":"1995-04-19","texts":"Former Federal Reserve Board member Andrew F. Brimmer, a highly regarded economist who has studied the District's economy and served on numerous corporate boards, has emerged as an early candidate to run the powerful new D.C. financial control board, sources familiar with the selection process said yesterday. Brimmer has the preliminary backing of federal budget director Alice M. Rivlin, who is advising President Clinton on the nominations, and Brimmer has discussed the job with Del. Eleanor Holmes Norton D-D.C., whom the president pledged to consult on his choice, sources said. The 68-year-old Harvard-educated economist is president of a District-based economic consulting firm and lives in the District. He would be excellent, said Rep. Thomas M. Davis III R-Va., chairman of the House D.C. subcommittee and author of the control board bill. It is hard to quarrel with a name like that. No final decisions have been made about who will run the board, and candidates other than Brimmer, a Democrat, remain under consideration, sources said. Rivlin, who declined to comment yesterday, has said Clinton will appoint the five-member board that will oversee the District government next month. Senior congressional and Clinton administration sources also said yesterday that several strong candidates for board seats other than chairman have surfaced. They include Terry Golden, a Republican who formerly headed the General Services Administration, and Charles O. Rossotti, a Republican business consultant.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982338","date":"1995-04-20","texts":"No matter how much Congress and President Clinton can agree to trim the federal budget deficit, as long as there is a deficit of any size, the national debt will continue to mount. With the administration projecting that the budget deficit will fall little between now and 2000, the resulting steady rise in the debt means that interest payments will continue to climb and pass the 300 billion mark at the end of the decade. Interest on the debt is becoming increasingly costly. Last year's federal budget deficit would have been a scant 200 million were it not for the 203 billion the government had to pay the public in interest. By 1997, the interest payments -- which are partially offset by interest received from the public and by interest received by government trust funds, such as those for Social Security and civil service retirees -- will be greater than defense spending. At that point, only Social Security payments will claim a greater chunk of the budget than net interest payments. The chart at the right shows the strong link between the cost of financing the debt accumulated from past deficits and the annual amount of red ink in succeeding years. Obviously, many other factors have been at work, with the deficit exceeding net interest payments in all but two of the fiscal years from 1975 to 1994. However, the message of the chart is clear The budget gap the new congressional Republican majority has vowed to close is perhaps not so much a matter of overspending today as of the decisions of past Congresses and presidents, both Republicans and Democrats, to borrow rather than balance budgets.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982882","date":"1995-04-20","texts":"If initial rhetoric from candidates in Prince William County is any indication, this year's election campaign will be dominated by personal attacks and a heated debate about the pace and quality of development in the fast-growing county. All of the supervisors but one filed for reelection by last Friday's deadline, and most face at least one challenger. Brentsville Supervisor William J. Becker, a Republican, will not be running because of health problems, and Vice Chairman Maureen S. Caddigan R-Dumfries is unopposed. Democrats and Republicans will choose their candidates during primaries June 13. Independent candidates and School Board members, who will be elected for the first time this year in nonpartisan races, have until that date to file their intention to compete in the November general election. Democrats, who have forged a working majority on the Board of Supervisors with Caddigan and Supervisor Terrence Spellane I-Coles, might be expected to gloat about their success in keeping the county fiscally sound during a recession, to herald construction of new roads and to highlight economic development projects, such as the Prince William Institute. In announcing her reelection bid, supervisors Chairman Kathleen K. Seefeldt D pointed to completion of a large segment of the Prince William Parkway, expansion of regional libraries, new parks and the successful effort to lure the American Type Culture Collection biotechnology lab to the county.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984705","date":"1995-04-23","texts":"WITH THE Senate scheduled to take up the budget this week, now is a good time for liberals to wake up to a truth they've been trying to avoid Taking a lead role in the crucial budget wars is the only way for Democrats to protect the programs and achieve the broader economic goals they claim to revere. The budget philosophy outlined by the Republicans in their first 100 days -- which cuts the safety net under the poor in order to fund tax breaks for the rich -- gives Democrats the perfect opening to offer up an alternative vision that could return them to a majority in the next election. Resorting to simple demagogy in response to the Republican plan will give conservatives precisely the excuse they need to drop the ax on poor people who don't vote for them anyway. Take it from a bleeding-heart deficit hawk who left the Clinton administration in despair The current budget outlook leaves liberals only two choices. They can pray that soaring entitlements, deficits and interest payments somehow won't affect this nation's future, and focus instead on funding other programs that appear to help people directly. Or they can recognize that the costs associated with the retirement of baby boomers combined with our low savings and investment rates mean that old liberal doctrines on entitlements and deficits must now be rethought to achieve lasting liberal goals. The Clinton administration thus far can be considered a case study of the first option and why it can't work. Recall that the president came into office rightly pledging to reverse two deficits that threatened our economy the budget deficit and the public investment deficit. The budget deficit hurts future living standards by soaking up half of our national savings -- that pool of capital comprised of what all of us save as individuals plus what businesses put aside as well. When government runs deficits, it borrows from this savings pool to pay for current spending programs, everything from social security checks to FBI salaries. This reduces the savings otherwise available for business investment that's essential for raising our productivity and income. The public investment deficit, meanwhile, refers to the dwindling resources being devoted to what essentially are investments in our long-term future, such things as basic research, roads and bridges and improved education for disadvantaged kids.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984873","date":"1995-04-24","texts":"The world economy is poised to grow at its fastest rate in seven years during 1995, the International Monetary Fund said in a survey of global economic conditions released yesterday. But that sunny forecast is clouded by the continued weakness of the dollar and lingering investor uncertainty following the collapse of the Mexican peso, fund officials warned. The fund, whose members meet here this week, offered a discouraging outlook for three of the world's largest economies, predicting a slowdown in the United States and continued difficulties for Japan and Germany as exporters in those nations struggle to cope with the sharp appreciation of their currencies against the dollar. The dollar's declines threaten to exacerbate inflationary pressures in the United States, risk weakening the expansion in Europe and could jeopardize recovery in Japan, the IMF warned in its annual World Economic Outlook. The plunging dollar is expected to dominate discussions among finance ministers and central bank presidents from the Group of Seven major industrial economies -- the United States, Japan, Germany, Britain, France, Italy and Canada -- when they gather in Washington tomorrow for spring meetings of the 179-nation IMF and the World Bank.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983875","date":"1995-04-25","texts":"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. The officer had managed simple interest rate swaps to hedge the company's vast investments, even reaping a few million dollars in profit. 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. 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. 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.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614326","date":"1995-04-26","texts":"HOECHST'S PRETAX EARNINGS JUMP Hoechst AG, a German chemical company, said group pretax profit for the first quarter jumped 94 to 984 million marks 715.7 million from a year earlier. It cited Western Europe's economic recovery, Japan's reviving industrial output and economic growth in the U.S. and in emerging markets. Hoechst told its annual meeting that it expects the favorable earnings trend to continue. The unexpected results pushed Hoechst shares up 4.70 marks, or 1.6, to 307 marks 223.28 in Frankfurt. BULL CONFIRMS REVENUE DROP Cie. des Machines Bull confirmed that its first-quarter revenue fell 10 from a year earlier -- an embarrassment only two weeks after the French computer maker launched a privatization plan with rosy financial forecasts. Bull said the decline was expected and blamed it partly on lower sales at its Zenith Data Systems unit in the U.S., a drop in licensing fees and currency fluctuations. But Bull, which will post its latest results next month, stood by its 1995 forecast for revenue growth and the first annual profit since 1988. TRADING HALTED IN HYOGO SHARES","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984668","date":"1995-04-26","texts":"The nations broadest measure of labor compensation rose only 2.9 percent in the 12 months ending last month, the Labor Department reported yesterday. It was the smallest gain ever recorded, a signal that inflation will likely remain low this year. The employment cost index, which shows changes in what employers pay for wages, salaries and benefits, had risen 3 percent in the 12 months that ended in December and 3.2 percent for the year that ended in March 1994. Some Clinton administration and Federal Reserve policymakers have expressed concern that the unemployment rate, which was 5.5 percent last month, has reached a level The subdued performance of the employment cost index suggests little upward pressure on inflation in 1995. that lias historically caused wages to begin rising more rapidly, adding to inflation pressures. So far, there is no sign of that happening. Labor costs tend to lead inflation, said Bruce Steinberg, macroeconomics manager for Merrill Lynch & Co. in New York. The subdued performance of the employment cost index suggests little upward pressure on inflation in 1995. With many other recent economic indicators pointing to slower economic growth, and now evidence that wages are not taking off, the Fed is not.likely to raise short-term interest rates again this year and could begin to lower them, several analysts said.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615062","date":"1995-04-28","texts":"CINCINNATI -- Future HealthCare Inc., plagued by accounting discrepancies, said its shares were delisted from the Nasdaq Stock Market effective yesterday. Future HealthCare said it was not in compliance with several of Nasdaq's listing requirements because of previously announced delays in filing its 1993 and 1994 financial statements. The company said recently that its revenues for 1993 and the first nine months of 1994 were overstated by about 50 because of discrepancies in its accounts receivable for the previous two years. The company also dismissed Price Waterhouse L.L.P. as its independent accountant and hired Kemper Securities Inc., a unit of Kemper Corp. as a financial adviser. For the first nine months of 1994, the company reported net income of 3 million, or 37 cents a share, on 14.4 million in revenue. For all of 1993, it reported net income of 1.8 million, or 29 cents a share, on revenue of 10.3 million. Future HealthCare said a Nasdaq listing committee rejected its request for a temporary exception, citing doubts over the company's ability to comply with the requirements in the near term.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983062","date":"1995-05-01","texts":"Despite governmental assertions that Mexico's economic crisis has bottomed out, indicators abound across the country that for Mexicans the worst may be yet to come. Officials of President Ernesto Zedillo's government acknowledge that the rosy scenario they are painting for foreign audiences -- monthly trade surpluses, a reduced current accounts deficit and improved stock market performance -- must also be viewed in the context of a bleak domestic picture. Unemployment rates are rising steeply, annual inflation is forecast at 45 to 50 percent, and street crime and scattered acts of civil disobedience are mounting -- all related to the nation's current economic strife. Although Mexico's foreign creditors are being repaid on schedule -- thanks to a U.S.-organized bailout totaling 38 billion and a sharp reversal in the trade balance -- senior Mexican officials acknowledge that much of the recovery will come at the expense of average citizens. More than 500,000 people already have lost their jobs in the economic crisis sparked by the Dec. 20 devaluation of the Mexican peso, while the national chamber of small industries, known as Canacintra, warned this week that another 250,000 will join the ranks of the unemployed before year's end. One-fifth of all Mexicans are either unemployed or underemployed, according to another national employers' association, while Social Development Secretary Carlos Rojas warned last month that 14 million of Mexico's 92 million people now live in poverty. One of the most worrisome aspects of the crisis, officials say, is that funds for severance pay for laid-off employees, normally totaling three months' salary, are beginning to run out. Mexico does not offer U.S.-style unemployment or welfare benefits, which means that by June and July, hundreds of thousands of workers displaced by the crisis will have no steady income.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614562","date":"1995-05-02","texts":"AuthorAffiliation Staff Reporter of The Wall Street Journal This is already indicated by the fact that U.S. trade officials have suggested if they apply retaliatory measures, it'll only affect about 1 billion, said William Cline, an economist with the Institute for International Economics. The direct effect would be small, he said. Though European Union and Canadian trade ministers also will be represented at the talks, the auto dispute between the U.S. and Japan is by far the marquee event of this week's quadrilateral negotiations. The huge auto-trade imbalance is called the biggest glitch in their economic relationship and so, with the dollar at historic lows against the yen and the U.S. trade deficit at record highs, the talks have gained increased relevance. U.S. officials say they will make a strong bid for settlement this week. But they insist there can't be one unless Japan agrees to a so-called voluntary plan for its auto makers to purchase more U.S. car parts. Last week, a Tokyo trade official insisted Japan won't do it. We have lots of room for negotiation and compromise in some areas, but there's no room for compromise on the voluntary plan, he said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616063","date":"1995-05-04","texts":"AuthorAffiliation Special to The Wall Street Journal As New York dealings wound down for the day, there wasn't any news of the outcome of the talks. Earlier in the day, Mr. Kantor said the discussions about autos with Mr. Hashimoto may continue later in the week, when both men will attend quadrilateral trade talks with Canada and the European Union in the Canadian ski resort of Whistler. Mr. Kantor's suggestion that auto talks will continue in Whistler quelled fears of an imminent breakdown in the negotiations and reversed the dollar's losses earlier yesterday against the yen, traders said. Earlier, the dollar had been weakened by the release of weaker-than-expected U.S. leading indicators, which provided further evidence that the economy is heading for a soft landing this year, with growth moderating and inflation under control. That hurts the dollar because it suggests the Federal Reserve is unlikely to boost interest rates any time soon. Late in New York, the dollar was at 1.3733 marks, down from 1.3777 marks late Tuesday, and at 83.65 yen, up slightly from 83.55 yen, the day before. Sterling was trading at 1.6170, up from 1.6161. Financial markets were closed Thursday in Tokyo for a public holiday.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616852","date":"1995-05-04","texts":"AuthorAffiliation Staff Reporter of The Wall Street Journal During the 1990-91 recession, when layoffs were announced almost every day, workers around the nation were angry and anxious. Their employers talked about a tough new world in which global competition and technological change required constant leanness, but most employees assumed that the layoffs would stop when the good times returned. They were wrong. While corporate profits were surging to record levels last year, the number of job cuts approached those seen at the height of the recession. Corporate profits rose 11 in 1994, after a 13 rise in 1993, according to DRIMcGraw Hill, a Lexington, Mass., economic consultant. Meanwhile, corporate America cut 516,069 jobs in 1994, according to outplacement firm Challenger, Gray & Christmas in Chicago. That is far more than in the recession year of 1990, when 316,047 jobs were eliminated, and close to the 1991 total of 555,292 jobs. Among the profitable companies now in the midst of layoffs Procter & Gamble Co., American Home Products Corp., Sara Lee Corp. and Banc One Corp.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613693","date":"1995-05-08","texts":"AuthorAffiliation Staff Reporters of The Wall Street Journal Friday's report that April unemployment jumped to 5.8 from 5.5 was viewed by some investors as a sign that the Fed may have raised interest rates so high that the economy could stall later this year. That would put heavy pressure on corporate earnings, the driver of the bull market rally that has seen stock prices post a series of new highs recently. Most economists, however, say they believe it's premature for investors to start worrying that a recession is near and say that investors may be overreacting to recent economic indicators. There's no question that in the last couple of days more and more people have begun considering that maybe the soft-landing is going to be a hard landing, says Ed Nicoski, chief market strategist at Piper Jaffray. Two days of market action doesn't offer enough evidence for a meaningful conclusion, but the thinking has certainly shifted. After a relentless six-month rally in which major averages gained nearly 20, stock prices have stumbled in the past two sessions. The declines have been relatively modest, but they come in stark contrast to a powerful bond market rally during the same two sessions. Long-term interest rates have now dropped to 7.025 as bond bulls cheer the steep slowdown reflected in recent economic data.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614487","date":"1995-05-09","texts":"AuthorAffiliation Staff Reporter of The Wall Street Journal The bulk of the market gain for 1995 has already been accomplished, warns Mr. Connolly, who has put away his rose-colored glasses now that he is a partner at money-management firm Miller Anderson & Sherrerd. Located in the Philadelphia suburb of West Conshohocken, Miller Anderson manages 31 billion, 40 of it in stocks. If investors are looking for a savvy investment in today's apparently over-heated markets, think cash, suggests Mr. Connolly, who is 51 years old. His reasoning The market is already up more than 14 this year. Corporate earnings can't go up much more, he says. His advice is to buy defensive stocks such as food, tobacco, utilities, health-care and banks, whose results don't suffer too much in a recession. Buy bonds, he says -- and build up some cash reserves. We have about 10 cash in our portfolio, Mr. Connolly says, referring to Miller Anderson's core stock portfolio of about 9 billion. That's significant because normally the portfolio is fully invested, with zero cash. Maximum cash would be 20. So that doesn't signal great fear -- it just signals caution.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984888","date":"1995-05-09","texts":"The biweekly pay stubs of federaj workers could show some more deductions after Senate and House budget cutters this week go after everything from take-home pay to health insurance premiums to the amount of inflation protection workers will have in retirement. There will be no final decisions for some time, but this is the beginning of the end of the budget process. The Senate is looking at a plan to force federal workers to pay more for health care coverage or move into less costly health maintenance organizations that would give them less control over their health care than most fee-for-service plans. The proposal, outlined here last Tuesday, would put a dollar limit on the amount Uncle Sam would contribute to workers health care premiums. That limit is now a percentagethe government pays about 72 percent of the total premium for nonpostal workers. If a dollar limit was imposed, the government would pay something like 1,500 a year of the premium for a single policyholder and 3,400 for a federal worker with a family plan. The employee would pay the rest. The Senate may try to base employees retirement benefits on the highest five-year average salary rather than the current high-three formula. That would be phased in over a two-year period, starting next year. It would mean smaller benefits for future retirees than they anticipate under the high-three system. This week, the House Budget Committee could announce some of its proposed cuts in federal personnel costs. The Washington Times says they could include limiting full retiree cost-of-living adjustments to 2 percent. Any increase in inflation above the 2 percent level would be limited to a so-called diet COLA that was less than the full rate of inflation. The Senate and the House could complete work on their versions of the budget resolution the spending blueprint by the Memorial Day recess. Final action on a compromise budget might not come until just before the August recess.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615888","date":"1995-05-10","texts":"AuthorAffiliation Staff Reporters of The Wall Street Journal I was afraid to get into this bond rally until it went past me and I missed most of it, Mr. Dakin says. Now I don't feel there is much room left in the bond market, and I think the stock market is overvalued, too. So I'm sitting and waiting. Mr. Dakin is just one of hundreds of thousands of investors confronted with the agonizing choice to jump into stocks or bonds now and hope to ride prices even higher, or to wait it out until a correction sets in and brings down prices to more reasonable levels. To jump in now is to risk buying at a peak, but to wait amid a ferocious rally is almost as unnerving. And the question isn't confined to individual investors. The problem is, where do we put the money now says Steven Leuthold, president of Leuthold Group, a money-management and consulting firm in Minneapolis. We bought the heck out of bonds when they were up at 8, but now they're down below 7 and we're thinking of taking some money off the table. And in the stock market, we see a 30 downside potential with only a 5 to the upside. It's getting tough to find good values.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982804","date":"1995-05-10","texts":"NEW YORK, May 9Blue-chip stocks reached record high ground for the 26th time this year, as investors welcomed a drop in long-term bond interest rates to the lowest level in more than a year. The Dow Jones industrial average ended with a gain of 6.91 points at 4390.78, surpassing Mondays record closing high of 4383.87. In the broader market, advancing issues outnumbered declining stocks by about 13 to 10 on the New York Stock Exchange. Some analysts said the stock markets rally was uninspiring, and they concluded that investors were mostly content in watching bond prices levitate and precious metals prices tumble. Were taking a breather with no major news, said Robert Stovall, president of StovallTwenty-First. While investors moved into stocks and bonds on expectations of lower interest rates, funds were liquidating precious metals. On New Yorks Commodity Exchange, spot gold closed 6.20 lower at 383.60 an ounce. Spot silver fell 54.6 cents to 5,448 an ounce.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614968","date":"1995-05-11","texts":"AuthorAffiliation Staff Reporter of The Wall Street Journal The survey by the nonprofit New York research and advisory concern also debunks assertions that a growing number of women yearn to return to home and hearth. Rather, 48 of women surveyed say they would choose to work even if they already had enough money to live as comfortably as they would like, unchanged from a 1981 survey. By comparison, 61 of men would choose employment under the same circumstances. In a sign that employment affects self-esteem, women who work full time are more likely to feel valued at home, the study shows. The survey of 1,502 women and 460 men funded by the Whirlpool Foundation, a nonprofit philanthropic concern in Benton Harbor, Mich., is an unusually ambitious attempt to probe women's values and goals. Among its findings -- Younger women are even more committed to keeping their responsibilities than older ones about 60 of women aged 18 through 34 say they don't want to give up any duties, compared with 56 of women aged 35 to 44 and 48 of women aged 45 to 55. -- Women see their daughters as even more deeply committed to multiple roles, with 89 saying most young girls expect to have both a family and a career or job.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615040","date":"1995-05-12","texts":"The dollar surged, driven by near panic buying as surprised traders rushed to cover big bets that the currency would decline. The dollar was buoyed by optimism about the U.S.'s budget deficit and trade gap. --- Rupert Murdoch, with the prospect of a 2 billion cash infusion from News Corp.'s partnership with MCI, is on the lookout for acquisitions, and may be studying big rivals such as Time Warner, TCI and Turner Broadcasting. --- Hilton Hotels will spin off its casino holdings. Investors, who had hoped the company would find a buyer for both its hotel and gambling operations, drove its stock sharply lower.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982096","date":"1995-05-14","texts":"WILLIAMSBURG, May 13The nations economic recovery has lasted longer than a typical expansion, and Americas corporate leaders see nothing to stop it from continuing through next year. To the leaders ot Fortune buu companies, who wrapped up three days of discussion today, the Federal Reserve under Chairman Alan Greenspan has achieved a rare feat. It has brought the economy in for a soft landingin which growth is slowed enough to keep inflation under control without dumping the country into a recession. This means the four-year-old economic recovery can keep cruising along. term outlook for the economy could be improved even further if Congress cuts federal spending but avoids the temptation to put the reductions into tax cuts that could add to the federal deficit. The executives seemed confident as they listed the evidence that suggests continued good times are ahead. A large majority of members thought monetary policy over the past year has been just about right, said Richard Rosenberg, who runs BankAmerica Corp.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983758","date":"1995-05-14","texts":"The nation's economic recovery has lasted longer than a typical expansion, and America's corporate leaders see nothing to stop it from continuing through next year. To the leaders of Fortune 500 companies, who wrapped up three days of discussion today, the Federal Reserve under Chairman Alan Greenspan has achieved a rare feat. It has brought the economy in for a soft landing -- in which growth is slowed enough to keep inflation under control without dumping the country into a recession. This means the four-year-old economic recovery can keep cruising along. The Business Council also said the long-term outlook for the economy could be improved even further if Congress cuts federal spending but avoids the temptation to put the reductions into tax cuts that could add to the federal deficit. The executives seemed confident as they listed the evidence that suggests continued good times are ahead. A large majority of members thought monetary policy over the past year has been just about right, said Richard Rosenberg, who runs BankAmerica Corp.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830983218","date":"1995-05-16","texts":"An early-retirement program set up four years ago has cost Virginia's government far more money than it saved, a new audit says, raising concern among some officials that the state may be heading down the same road this year with a round of worker buyouts. The 1991 retirement plan pared the state's work force by 3,535 employees and saved 37 million at a time when Virginia was hard-pressed to balance its budget because of the recession. But the state's independent auditor reports that so many of the jobs were refilled that savings in future years were negated. The report said that as many as two-thirds of the workers who left some of the state's largest agencies were replaced later, meaning that the state wound up paying for the positions even as its retirement system was saddled with 238 million in additional liability. The report comes at a time when Gov. George Allen R has embarked on an even more ambitious program to slash state government, not because of economic troubles but because of his belief that Virginia's bureaucracy has become too large and unwieldy. A buyout program that took effect this month will result in the voluntary departures of 5,470 employees -- about 5 percent of the state's payroll -- and Allen administration officials predicted today that the state would save 368 million during the next four years as a result.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615756","date":"1995-05-17","texts":"AuthorAffiliation Staff Reporter of The Wall Street Journal These investors can find soul mates in Texas' crop of money managers, who do the research and make the daily buy-and-sell decisions for deep-pocketed individuals who don't have the time or talents to tackle Wall Street. With the help of Russell Rusty Cooper and John Kacinski, financial consultants at Smith Barney in Dallas, Texas Journal tracked down three Texas money managers with different styles but who have chalked up decent returns over the past several years. Messrs. Cooper and Kacinski, who invest their clients' funds with numerous money managers across the country, keep tabs on the managers' varying styles and performance. With that in mind, here's a look at the investment philosophies and some of the stocks currently favored by Hourglass Capital Management, NFJ Investments and Mitchell Group. HOURGLASS CAPITAL, DALLAS","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616535","date":"1995-05-19","texts":"AuthorAffiliation Staff Reporter of The Wall Street Journal I don't buy that it's the beginning of some huge decline. The market is too high -- it's been too high for two years -- but it can stay too high for another two years, frets Michael Murphy, who publishes a short-sellers' newsletter called Overpriced Stock Service in Half Moon Bay, Calif. There is a reason that the shorts, who make money when stocks go down instead of up, aren't doing cartwheels over yesterday's move. They have bet heavily starting in early 1994 that the stock market was overheated and due for a major decline. But while the shorts have made profitable bets on certain individual situations -- there are plenty of overhyped stocks out there, after all -- the broader market hasn't plunged this year as they hoped. Yesterday's drop in the Dow Jones industrials merely trimmed the year-to-date gain in the Dow to 13.2 from what had been 15.3 through the previous day. That is still a painfully bullish gain to the shorts. Estimates of the shorts' overall declines for the year range from 2 to 10. In fact, many of the active short-sellers are currently locked in to bearish bets that have gotten worse over the months. Shortselling levels on both the New York Stock Exchange and Nasdaq Stock Market are near records, a total of 2.76 billion shares. If the market shrugs off yesterday's drop and continues its rise, the shorts may have to close out the bets by buying stock at ever-higher levels, a phenomenon that at its worst is known as a short squeeze. It is only then, say some market analysts, that the market will truly be poised for the sustained decline -- perhaps as much as 10 -- that nearly everyone expects.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982999","date":"1995-05-21","texts":"Many federal workers and retirees will pay more for health care next year if Congress adopts a Republican plan to base government premium contributions on a flat dollar amount pegged to overall inflation instead of a percentage of premiums based on faster-rising medical costs. The government share of premiums about 75 percent stays constant even when premiums go up. But the GOP plan would cap federal payments next year at about 1,500 for singles and 3,400 for families. Workers and retirees in low-cost plans could wind up paying little or nothing. But the GOP plan ties changes in the government cap to the regular consumer price index, which also may be adjusted downward. The government share now is based on a medical cost index that historically has increased much faster than the CPI. About 70 percent of enrollees would pay more unless they moved into less-costly plans that might shave benefits to hold down premiums. The change would save the government millions by passing costs on to workers and retirees. Meanwhile, the European Stars and Stripes newspaper quotes the Army surgeon general, Lt. Gen. Alcide M. LaNoue, as saying that Congress may force military personnel to pay part of their health care costs through co-payments or an enrollment fee.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982274","date":"1995-05-25","texts":"A large, unexpected drop in orders placed with manufacturers last month caused many economists to conclude yesterday that economic growth is slowing more than had been predicted and that the risk of a recession has increased. While none of those economists said they are forecasting a recession, several said the Federal Reserve may need to begin cutting interest rates in the next few months to head one off. Will there be a recession I still don't think so, but it will take Fed easing to avoid it, said Mickey Levy, chief financial economist at NationsBank Corp. in New York. The reevaluation of the economy was triggered by the Commerce Department's report that new orders for long-lasting items, such as cars, defense equipment, machinery and appliances, tumbled 4 percent last month. The decrease was the third consecutive monthly decline, the largest drop since December 1991 and far more than analysts had anticipated. The report was a bit of a shocker, said Ray Stone of Stone & McCarthy Research Associates, a financial markets research firm in Princeton, N.J. Our view of the world has changed a little bit today as a result. The downside risk to the economy is greater and the likelihood that the Fed will lower interest rates is greater, he said.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830985038","date":"1995-05-25","texts":"A large, unexpected drop in orders placed with manufacturers last month caused many economists to conclude yesterday that economic growth is slowing more than had been predicted and that the risk of a recession has increased. While none of those economists said they are forecasting a recession, several said the Federal Reserve may need to begin cutting interest rates in the next few months to head one off. Will there be a recession I still dont think so, but it will take Fed easing to avoid it, said Mickey Levy, chief financial economist at NationsBank Corp. in New York. The reevaluation of the economy was triggered by the Commerce Departments report that new orders for long-lasting items, such as cars, defense equipment, machinery and appliances, tumbled 4 percent last month. The decrease was the third consecutive monthly decline, the largest drop since December 1991 and far more than analysts had anticipated. The report was a bit of a shocker, said Ray Stone of Stone & McCarthy Research Associates, a financial markets research firm in Princeton, N.J. Our view of the world has changed a little bit today as a result. The downside risk to the economy is greater and the likelihood that the Fed will lower interest rates is greater, he said.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983183","date":"1995-05-26","texts":"President Clinton will renew most-favored-nation trade privileges for China despite frictions over human rights and other problems, said Anthony Lake, his national security adviser. The president has until June 3 to announce whether he will renew China's trade privileges. Lake said he did not expect a major fight from the Republican-led Congress on renewal of the privileges, which allow China to export its goods to the United States under the lowest possible tariffs. UUNet Technologies' stock shot up 12 in its first day of trading on the Nasdaq stock market to close at 26. The Fairfax company's 4.725 million shares were initially priced at 14 each. UUNet is one of the country's biggest providers of access to the Internet. Stocks of two other newly public technology companies -- computer software company Maxis, and chipmaker Nexgen, also soared on their first day on the market. Irwin Sonny Bloch, a longtime financial radio talk show host, was accused by federal regulators of selling unregistered securities and misleading his listeners about their value, thus defrauding investors of nearly 21 million. Bloch, 58, whose programs are heard on 170 stations, was named in a 35-count criminal case in Newark and a civil case filed by the SEC in Manhattan federal court. His lawyer, Paul Goldberger, said Bloch moved to the Dominican Republic before charges were brought, and was not guilty. Interest rates on 52-week Treasury bills fell at auction to the lowest level in more than eight months. The average discount rate was 5.54 percent, down from 5.90 percent at the last auction on April 27. The bills will carry an equivalent coupon interest rate of 5.88 percent, with each 10,000 in face value selling for 9,439.80. Office Depot of Delray Beach, Fla., the largest office supply retailer in North America, said Mark Begelman resigned as president and chief operating officer, although he will continue as a director. Chairman and CEO David Fuente will assume the additional position of president for the immediate future.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983288","date":"1995-05-27","texts":"Pg- D2 Fresh evidence of sluggish U.S. economic growth yesterday added to expectations that the Federal Reserve will cut short-term interest rates this summer, sending the dollars value, long-term interest rates and stock prices lower. Investors were reacting to the governments report that the number of people filing initial claims for unemployment benefits went up much more than expected last week and a trade groups report that sales of existing homes went down much more than expected last month. The biggest impact was on the dollar some of the currencys recent rebound against the Japanese yen and German mark was wiped out In late New York trading, it took 84.81 yen to buy a dollar, down sharply from 87.23 yen late Wednesday. And it took 1.3980 marks to buy a dollar, down from 1.4395 late Wednesdaythe largest one-day decline since September 1992. The continued weak economic data finally seems to have taken its toll on the dollar after it had remained stable for some time now, Stone & McCarthy Research Associates, a financial markets research firm, told its clients.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985308","date":"1995-06-06","texts":"International Business Machines Corp. yesterday made an unsolicited 3.3 billion offer for one of the pioneering names of the computer age, Lotus Development Corp. Analysts said the move could touch off a 1980s-style bidding war on Wall Street if other companies try to top IBM's offer. Lotus's management said it would consider the 60-a-share proposal, which is nearly double the price Lotus's shares were selling for on Friday on the Nasdaq stock market. Investors, apparently believing a sale would go through with or without Lotus management's blessing, furiously bought stock in the Cambridge, Mass.-based company. This certainly puts Lotus into play' right now, said Jeff Leopold, analyst at Boston-based research firm Yankee Group, using Wall Street's term for a company that is up for acquisition. Analysts mentioned AT&T Corp. and software companies Novell Inc. and Oracle Corp. as possible rival suitors. AT&T declined to comment. Novel and Oracle did not respond to requests for comment. Lotus's stock rose 89 percent yesterday to close at 61.44 a share, higher than the IBM offer, indicating investors' expectation of a bidding war in which the offering price would rise. IBM's stock closed at 91.37 12, down 2.50.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983755","date":"1995-06-10","texts":"A surge in producer prices that began late last year with steel and paper has shown up in the prices of finished goods, the government reported yesterday. The Labor Department found that prices for its core set of finished goods rose 0.3 percent in May for the second month running -- a pace that if continued through the year would suggest an inflation rate of nearly 4 percent. But the same report showed prices for the key materials used by manufacturers already had begun to moderate or decline, suggesting to most analysts the inflation threat was temporary. What this looks like is the end of a small inflation spike in reaction to an earlier buildup in the price of crude and intermediate materials, said Joel Popkin, a Washington economist and inflation expert. Although this spike in producer prices in May could translate into a spike in retail prices later this summer, Popkin said he expects consumer prices will end the year 3 percent above where they began, with no signs of an acceleration in the inflation rate.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985120","date":"1995-06-11","texts":"If I read it correctly, the handwriting on the wall says Enjoy the stock and bond rally while you can. The economy is slowing down, and even if we avoid a full-fledged recession, investment strategies have reached a turning point. Stocks that flourished when the economy boomed will begin to fade defensive stocks will become favorites again. In short, growth stock funds are back. I've spent several days talking to the managers of growth funds about the slowdown in the economy and what it means to their funds. By and large, they agreed that funds that invest in large consumer companies are likely to perform the best. Traditionally, these are the stocks of food, beverage and pharmaceutical companies -- makers of the products that individuals will continue to buy even when times are tough. Consumer stocks generally move back into favor when companies that are adversely affected by a weak economy -- such as steel, auto, chemical and manufacturing firms -- begin to see their profits wither. That, in turn, causes investors to leave for greener pastures -- usually for consumer stocks and their steadier profits. John D. Gillespie, manager of the 2.4 billion T. Rowe Price Growth Stock Fund, described the investment cycle. He invests in companies that increase their profit an average of 15 percent a year, he said. But, he said, that number doesn't look so good when a recession ends and steel, auto or chemical companies begin to churn out earnings increases of 50 percent to 60 percent. So investors move away. In time, however, the cycle turns, as it is doing now. The economy accelerates to the peak, he said. All the way up, the market favors value or cyclical stocks. Once the economy peaks, the tide turns and the market moves back toward my Steady-Eddie' companies growing 10 percent to 20 percent a year.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615171","date":"1995-06-14","texts":"Ask Texas business owners or executives whether they see any signs of the slowdown economists say is settling over the state, and the answer will probably be no. But then ask whether they're doing anything to prepare for a slowdown, and you'll probably get a yes. It's a question of perspectives. Businesses in most major sectors of the Texas economy say things are chugging along just fine right now. But they aren't willing to ignore predictions emanating from the likes of Federal Reserve Board Chairman Alan Greenspan that sweet could turn to sour in the coming months. Most, in fact, expect the worst. But their worst -- a moderate slowdown in economic activity from last year's frenetic expansion -- isn't so bad, especially when compared to the recession that an increasing number of economists say is possible, if unlikely. Nearly everyone agrees that Texas' economic performance today mirrors much more closely that of the nation than it did a decade ago, thanks to the state's diversification away from natural resources. As state Comptroller John Sharp puts it There's no question we are no longer economically the Republic of Texas. But, he adds, the state's rate of growth will probably outpace the nation's during the expected slowdown, just as it has during the strong expansion of recent years. Here's a sample of what Texas businesspeople are looking for in the next year or so -- with the views of a couple of economists thrown in for good measure.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616837","date":"1995-06-14","texts":"Weaker than expected retail sales figures for May blew the scent of recession back into the bond market yesterday, a worry that sparked one of the bigger one-day rallies of the past year. The price of the 30-year Treasury bond rose nearly 2 14 points to 114 132, or about 22.50 for every 1,000 bond. The yield, which moves in the opposite direction of the price, fell to 6.54. Movement in the Treasury's two year note was even more dramatic. Its price which is roughly six times more sensitive to movements than the 30-year bond, rose nearly 58 of a point, while its yield fell 31 hundredths of a percentage point to 5.61, its biggest one-day move in five years. Traders, investors and economists said the weak retail sales figures for May -- a 0.2 gain compared with expectations of 0.6 -- confirmed suspicions about the economy's weakness. Moreover, they said once again Federal Reserve Board policy makers are under pressure to cut short-term rates soon. The fundamentals are now more positive for a cut in rates than when we had the weak unemployment numbers on June 2, said Lee Quaintance, head of government bond trading at CS First Boston.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830981791","date":"1995-06-20","texts":"Interest rates fell across the board yesterday as investors and traders registered growing confidence that the Federal Reserve will cut rates at its next policymaking session, July 5 and 6. The market's expectation that the Fed will lower rates was indicated by yesterdays drop in bond yieldsthe largest of which, seven-hundredths of a percentage point, was on five-year U.S. Treasury notes. Whats more, yields on every type of Treasury security due in five years or less are now below the Fed's current 6 percent target for overnight rates. That gapbetween market rates for Treasuries and the Fed funds rate is likely to be a powerful signal to Fed Chairman Alan Greenspan that the market expects a cut. Greenspan, who said recently that he does not expect the current period of slow economic growth to turn into a recession, could provide market participants with some clues about his thinking on rates in a speech tonight before the Economic Club of New York. Following the speech, which has been scheduled for several months, he will be questioned by Wall Street economist Henry Kaufman and Martin Davis, president of Wellspring Associates. Fed governor Janet Yellen said yesterday in an interview that the market clearly is assuming the Fed will act to cut rates in the next month or two, but she would not say whether the market was right or wrong. The Fed raised short-term rates seven times in the 12 months ended in February, doubling them from 3 percent to 6 percent, in an effort to cool off an overheating economy and hold down inflation.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615551","date":"1995-06-22","texts":"WASHINGTON -- The U.S. trade deficit unexpectedly deteriorated in April, swelling to 11.37 billion from 9.79 billion in March, the Commerce Department said. The poor showing casts a bigger cloud over the economy and prompted some economists to again lower their forecast for economic growth in the current quarter, which ends next week. The chance of negative second-quarter gross domestic product rises as trade worsens, said Joseph Liro, chief economist of S.G. Warburg & Co. in New York. Gross domestic product is the value of goods and services produced in the U.S. The widening trade gap was attributed to an increase in imports of computers, cars and other consumer goods and a decline in exports of telecommunications equipment and industrial supplies. Although the trade surplus with Japan actually improved slightly -- narrowing to 5.87 billion in April from 6.14 billion the month before -- imports of new Japanese cars to the U.S. grew to 2.4 billion. That was the second-highest figure on record and a point that is certain to put additional pressure on the Clinton administration to keep a tough stance in its battle to force Japan to open its markets to American-made autos and auto parts. Washington has threatened to impose big tariffs on Japanese luxury cars starting June 28 unless an agreement with Japan is hammered out this week in Geneva. Imports of German cars also increased significantly during the month.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982050","date":"1995-06-22","texts":"The U.S. trade deficit surged to a monthly record of 11.37 billion in April as Japanese cars flooded the U.S. market ahead of possible punitive tariffs. The Clinton administration said the 16.2 percent increase in the deficit in goods and services only stiffened its resolve to impose trade sanctions against Japan next week if no agreement is reached. IBM said it received a green light from federal antitrust regulators to proceed with its 3.5 billion acquisition of Lotus. We heard from the FTC and they will not be requesting additional information from us, IBM spokesman John Iwata said. The agency's decision basically is a green light to proceed, Iwata said. IBM will now ask Lotus shareholders to approve the deal. Hoffmann-La Roche said it will make Invirase, a new AIDS drug that is still in clinical trials, available to a limited number of patients. Hoffmann also said it expects to file for FDA approval for Invirase in September, with a possible market approval expected in early 1996. Fleet Financial's 3.7 billion acquisition of Shawmut National was approved by shareholders of both companies. The stock swap transaction will make Fleet the nation's ninth-largest banking company. The federal budget deficit increased by just less than 39 billion in May, to 133.2 billion. It was up 21.5 percent from the same month a year ago, the Treasury Department said. But for the first eight months of the fiscal year, the shortfall was 19.1 percent less than for the same period in 1994.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984008","date":"1995-06-22","texts":"NEW YORK, June 21Stock prices closed mixed today as investors cashed in profits from the dizzying rise in technology shares and weighed the prospects of an interest rate cut by the Federal Reserve. The Dow Jones industrial average dropped 3.46 points, to 4547.10. But advancing issues slightly outnumbered declining ones on the New York Stock Exchange, where trading volume climbed to 398.2 million shares from The Nasdaq index, which reached a record high of 929.83 on Tuesday as technology stocks added to their recent explosive performance, ended today at 929.19, down 0.64 of a point. There is a certain amount of watch and wait ahead of quarterly earnings, said Robert von Pentz, chief investment officer at Riggs Investment Management Corp. Traders saw buying in drug and financial stocks and profit-taking in oil and technology stocks. The American Stock Exchanges computer index, which has risen 44 percent in 1995, was three points lower at 229. Among the tech stocks, Texas Instruments lost 4 to 138, Micron shed 3V to 54 and Integrated Silicon lost 4 to 53.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830985579","date":"1995-06-22","texts":"The U.S. trade deficit surged to a monthly record of 11.37 billion in April as Japanese cars flooded the U.S. market ahead of possible punitive tariffs. The Clinton administration said the 16.2 percent increase in the deficit in goods and services only stiffened its resolve to impose trade IBM said it received a green light from federal antitrust regulators to proceed with its 3.5 billion acquisition of Lotus. We heard from the FTC and they will not be requesting additional information from us, IBM spokesman John Iwata said. The agencys decision basically is a green light to proceed, Iwata said. IBM will now ask Lotus shareholders to approve the deal. Hoffmann-La Roche said it will make Invirase, a new AIDS drug that is still in clinical trials, available to a limited number of patients. Hoffmann also said it expects to file for FDA approval for Invirase in September, with a possible market approval expected in early 1996. Fleet Financials 3.7 billion acquisition of Shawmut National was approved by shareholders of both companies. The stock swap transaction will make Fleet the Sec DIGEST, DIO, CoL 3 It was up 21.5 percent from the same month a year ago, the Treasury Department said. But for the first eight months of the fiscal year, the shortfall was 19.1 percent less than for the same period in 1994.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613508","date":"1995-06-23","texts":"Adobe Systems Inc., continuing to expand its electronic-publishing franchise, agreed to buy Frame Technology Inc. in a stock swap valued at 500 million. Adobe, which also reported a 96 jump in second-quarter earnings, said the acquisition will augment its software products for creating documents and distributing them electronically. It offered 0.52 Adobe share for each Frame share, indicating a value of about 34 a share based on Adobe's closing price yesterday. The agreement was announced after the close of trading. Frame's shares closed at 26.75, up 50 cents, on the Nasdaq Stock Market, and Adobe shares rose 2.125 to 65.50. In after-market trading, however, Adobe's shares traded as low as 62, according to Jeffries & Co. Some analysts labeled the price too rich, in view of Frame's size and profitability. It looks to me that Adobe is just trying to own everything that has to do with publishing, said Russell Crabs, an analyst at Soundview Financial Group. But not everything in the publishing market has high value. Adobe, based in Mountain View, Calif., pioneered the market for desktop-publishing programs, including software called PostScript that is used in laser printers. Last year, it swapped about 450 million in stock to buy Aldus Corp. of Seattle. Most of Adobe's products work on Apple Computer Inc.'s Macintosh system or PCs that use Microsoft Corp.'s Windows operating system. Lately, the company has been pushing to make its software a standard for distributing documents over the Internet.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614986","date":"1995-06-27","texts":"NEW YORK -- You've heard of triplewitching days in the stock market, during which stocks move wildly for no fundamental reason Now, we've got the Russell Rampage. In one of the stock market's modern-day quirks, scores of small stocks such as General Magic have been momentarily rising in the past two weeks, while others Crown Books have been inexplicably falling. Such gyrations are almost certain to continue this week and to reach a climax on Friday. Why It's the annual reconstitution of the Russell 2000 index of small stocks, a once-harmless phenomenon that is becoming increasingly tricky for investors in the small-stock arena. Some 13.9 billion is run by fund managers who merely try to match the Russell 2000 -- and who thus have no choice but to jump in or out of stocks being added or delisted. What's more, other fund managers who aim to beat the Russell benchmark base many of their decisions on what is in the index. What it all means is that small stocks, which can be swayed by just a few investors, are getting hit by relative herds of buyers or sellers.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983168","date":"1995-06-27","texts":"Budget cutters, as predicted here May 17, have settled on a cost-sharing change for health insurance premiums that could hit federal employees harder than raising the retirement age or a less generous pension-setting formula. Some feds still are battling the idea of a higher retirement age, even though it's been a dead issue for some time. Others fear the pay-more-get-less pension plan part of the House tax cut bill. It would force workers to pay an additional 2.5 percent of salary to the retirement fund. It would change the formula used to compute annuities now the employee's highest three-year average salary to a high-four system in 1996 and a high-five formula for anyone retiring in 1997 or thereafter. That proposal -- which would impose a payroll surtax on federal workers to finance tax cuts for upper-income nonfederal workers -- may fizzle or be altered. It passed the House but found few friends in the Senate. The high-three to high-five plan also is up in the air. But while workers and their unions were understandably preoccupied watching proposed retirement changes, budget-cutters have agreed on a change that would have a bigger effect on feds and retirees. Under a worst-case scenario, it could have workers and retirees paying 50 percent to 75 percent of their health premiums within a few years. Currently, employees and retirees pay less than 25 percent of their premiums. That percentage remains the same even when overall premiums rise. But under a budget compromise tentatively approved by Republican congressional leaders, employees would shift to a voucher system. Workers and retirees would get a fixed amount -- adjusted each year for inflation -- to buy a health plan. Next year, for example, someone buying a single plan would get 1,535 from Uncle Sam, and an employee or retiree buying a family plan would get 3,400. Based on 1995 premiums, that is a generous split. But because the voucher would be adjusted annually based on the regular inflation rate -- rather than the much higher annual medical inflation rate -- the employee or retiree share of premiums would increase over time, while the government share would shrink.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830981784","date":"1995-06-29","texts":"If the welfare debate has a familiar ring, it's because the language of block grants, state flexibility and innovation was part of a discussion more than a decade ago about how to save on social spending. In 1981, the Reagan administration successfully pressed Congress to trim Title XX of the Social Securities Act, a program that helped focus spending on child day care, home-based nursing and other social programs. The fix Lump the money and turn it over to states as block grants with few strings attached. But instead of leading to the renaissance supporters had pictured -- with savings and improved services -- the changes reduced funding and forced localities to trim some programs, social workers now say. Welfare experts say the changes to Title XX provide one of the best parallels to reforms designed to end Aid to Families with Dependent Children. It's pretty much the purest form of block grant that people are talking about, said Michael Kharfen, U.S. Department of Health and Human Services spokesman. One of the strings cut in Title XX was the requirement that states supplement federal grants with their own money. Some states responded by curbing spending. Dropping the requirement for state supplements paralleled the effects of inflation, so while the total federal block grants rose to 2.8 billion last year, the grants' value has fallen by 58 percent since 1977, according to a House Ways and Means Committee report.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830983803","date":"1995-07-01","texts":"U.S. factory orders rose 1.4 percent in May, recovering from tliree straight declines. The Commerce Department said the increase was the largest since orders rose 2 percent in December. The department also reported that the gross domestic product, the broadest gauge oi economic strength, rose at a 2.7 percent annual rate in the first quarter this year. That is less than half the 5.1 percent booming growth in the last three months of 1994. Organization countries to work for another four weeks, tojuly 28, on an agreement to liberalize trade in banking, insurance and securities. World economic officials have worked for the past 18 months to complete an accord that would let financial service firms operate more freely in foreign countries. But hopes were dashed Thursday when the United States rejected the package as inadequate. Faced with rejection by the world's largest economy, European trade ministers scrambled for a compromise. The IMF approved about 2 billion in financial help for Mexico and held out the promise of 8.7 billion more over the next year if the nation sticks with its tough economic reform plan. Eastman Kodak's claims that Japanese rival Fuji isnt playing fan-lias the attention of the Clinton administration, which said it will begin a formal review of charges that unfair practices by Fuji in . collusion with the Japanese government have cost Kodak 5.6 billion in lost revenue over the past two decades. BellSouth will change its accounting practices to prepare for the day when it faces more competition in local telephone service, a decision that will result in a 2.7 billion charge against second-quarter earnings. BellSouth is the fourth of the seven regional Bell operating companies to make the change in accounting methods.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984578","date":"1995-07-01","texts":"When the Air Force captain was transferred to Washington from New Mexico last winter, he decided not to use old-fashioned networking -- asking friends and colleagues -- to find a real estate agent. It would have been easy, Alvarado admitted. After all, he said, Everybody knows a Realtor it's just like knowing a stockbroker. But because he and his wife, Kathy McConnell, were so unfamiliar with the area, Alvarado decided he needed extra help and attention. So he sought out USAA, a company that provides insurance and other financial services to military officers. With just one phone call, Alvarado was linked to a local realty firm and an agent. It took Alvarado and his wife one month to find the right home. A relocation consultant called Alvarado every other week to make sure he was getting all the help he needed, sending along extra material on interest rates and living costs in the District. But the best feature came at settlement Simply by using USAA to find an agent, Alvarado got 800 cash back when he settled on the 225,000 Silver Spring town house in February. We used the money to buy a nice rug to cover the hardwood floors, he said.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983329","date":"1995-07-02","texts":"After 60 years of a welfare system that breeds welfare dependency, it is all too plain that, for the most part, the problems of poor school performance, truancy and teen violence, rooted in poverty, have not been solved. Instead, they have worsened. Although it comes too little and way too late, Maryland's new welfare reform, which makes benefits temporary and contingent upon finding employment, is a welcome change. The recently released 1994 Kids Count Data Book, the sixth annual study of child well-being in the state and nation, shows how dire the situation has become. While Maryland has the sixth highest per capita income in the nation, it ranks 30th in the well-being of its children. A breakdown of the statistics shows a grim situation Maryland ranks 46th nationally in juvenile crime arrests, 42nd in children in single-parent families, 32nd in infant mortality rates, 29th in students graduating from high school, 29th in child death rate, 20th in births to single teens and 22nd in teen violent death rate. Homicide is the second leading cause of death for all 15- to 24-year-olds in the state and is the leading cause of death for African American males in this age group and has been since 1969.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613809","date":"1995-07-03","texts":"Another quarter filled with worry. Another batch of record-smashing performances. For the past two quarters the stock market has blithely ignored nervous calls for some sort of correction. Instead, prices have risen without interruption since last December, and major averages hover close to recently established record levels. The Dow Jones Industrial Average has surged an astonishing 864.99 points, or more than 23, since dipping to 3691.11 on Dec. 9. But as the third quarter opens, the same nervousness remains on Wall Street. I'm pessimistic, says Thomas McManus, market strategist at Morgan Stanley. I'd like to see a period where the stock market was going up in anticipation of an expanding economy, with consumer confidence low and the bulk of improvements in profits ahead of us. But that's not the case right now. Indeed, earnings have been unquestionably strong in the past year and have become one source of worry as the economy slows. And many analysts argue that the tremendous surge in the bond market, which has pushed yields sharply lower, gives that market little more positive room to maneuver. Many economists worry that if the Federal Reserve doesn't lower rates this week at its Federal Open Market Committee meeting, interest rates could start to inch higher, and hopes for a reacceleration in economic growth could fade.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613931","date":"1995-07-05","texts":"Investors were quick to scoop up the latest new issue of global depositary shares from Samsung Electronics Co. No wonder The South Korean chip maker is being billed as the cheapest semiconductor stock in the world. Even those fund managers who prefer to be underweighted in South Korea right now admit they're fans of Samsung Electronics, South Korea's largest producer of memory chips. Bottom up, we like Samsung Electronics, says Eric Sandlund, managing director of Prudential Portfolio Managers in Hong Kong. He says Prudential subscribed to the recent GDS offering even though he's keeping an underweighted position in the South Korean stock market overall. We like the company and it's trading at under six times prospective 1995 earnings. Even if you take the view that the semiconductor industry is near the top of the cycle . . . it looks cheap, Mr. Sandlund says. Indeed Samsung Electronics' low priceearnings ratio has analysts and investors swarming over the stock. Why pay 13 to 14 times prospective earnings for a U.S. semiconductor stock when you can buy a similar company on the other side of the world, with potentially better earnings predictability and superior economies of scale, at only one-third of the price asks Namuh Rhee, vice president at J.P. Morgan Securities in Hong Kong, in a recent report on the company.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613719","date":"1995-07-07","texts":"TOKYO -- The Bank of Japan, in a surprise announcement, said Friday it will lower the money-market interest rates it controls in an effort to boost economic growth. The central bank, in saying it would usher short-term market interest rates lower, didn't disclose a specific target. But immediately after the announcement, Japan's key short-term money-market rate was trading at 0.8, a record low. By lowering the cost of money, the move will encourage new bank lending and growth. The move, which followed an announcement by the U.S. Federal Reserve that it would lower short-term interest rates, caused stock and bond prices to surge in Japan. At the end of the morning session Friday, Japan's benchmark Nikkei 225-stock average was up 633.21 points, or 4.1, to 15,890.10. This is a big, big move, said Marshall Gittler, an analyst at Merrill Lynch & Co. in Tokyo. A surge in bond prices caused the yield on the benchmark government bond, an interest rate that falls as the bond's price rises, to hit a record low of roughly 2.5 in trading late Friday morning. The move confirms the government is concerned that Japan's economy is teetering on the brink of recession. By one measure, gross national product, Japan already fell into a recession during the first quarter of this year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615469","date":"1995-07-07","texts":"The Family and Medical Leave Act provides about 45 million workers with up to 12 weeks of unpaid, job-guaranteed leave for childbirth, adoption, their own serious illness or that of a close family member. It can also be a nifty way to skip work, as more than a few employees -- and their dismayed bosses -- have discovered. Last December, for instance, so many flight attendants called in sick for family or personal reasons that Southwest Airlines had to cancel some flights for staffing reasons for the first time in its 22-year history. Constipation forced a Chicago Transit Authority bus driver to take covered medical leave -- for six weeks. The final rules, which took effect in April, say a serious health condition can include an illness that incapacitates someone for more than three days, requires at least one visit to a health professional and leads to supervised, ongoing treatment such as a prescription drug. Thus, workers are invoking the law for relatively minor ailments, such as allergies, anxiety attacks, backaches, infected sinuses, nausea, tendonitis and hemorrhoids and vasectomies, according to several employers, unions and employment-law specialists. The FMLA has become the most powerful tool for the problem employee to avoid discharge for excessive absenteeism, says David Block, a family leave expert at the law firm of Jackson, Lewis, Schnitzler & Krupman in New York. Congress isn't unconcerned. The rise in dubious absences since the FMLA took effect is costing AT&T Corp. and other big businesses millions of dollars in lost productivity, says Marc Lampkin, a House Opportunities Committee staffer. The panel plans hearings about the law in September.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617046","date":"1995-07-07","texts":"NEW YORK -- The dollar ended mostly unchanged in New York trading yesterday, rallying only briefly against the mark after the Federal Reserve announced a cut in a key short-term interest rate. The U.S. currency rose fleetingly to an intraday high of 1.3858 marks after the central bank said it will cut its federalfunds rate 0.25 percentage point. But the dollar then swung lower, hitting an intraday low of 1.3780 marks less than 30 minutes later, as traders interpreted the Fed's move as a signal of further rate cuts ahead. This is a change in monetary policy, said Robert Near, a vice president, foreign-exchange trading, at the Bank of New York. The dollar cannot rally under this scenario, he added. In announcing a cut to 5.75 from 6 in the Fed funds rate -- the rate that banks charge one another for overnight loans -- the Fed said it moved because inflationary pressures have receded enough. Many traders took that as a signal that the Fed is likely to cut rates further to stimulate the U.S. economy. Traders said the market is now looking ahead to data on U.S. employment in June, set for release tomorrow, for clues on whether the Fed's cut was justified.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983469","date":"1995-07-07","texts":"The Federal Reserve, concerned that the economy's sluggish growth could signal a possible recession, yesterday cut short-term interest rates a quarter of a percentage point -- its first move to lower rates in nearly three years. The dramatic turn in interest rate policy was announced by the Fed's top policymaking group, the Federal Open Market Committee. It said it would cut the federal funds rate, the interest rate financial institutions charge on overnight loans to each other, to 5.75 percent from 6 percent. Several banks immediately said they would follow the Fed's lead and reduce their 9 percent prime lending rate to 8.75 percent, effective today. The reduction will benefit many small-business borrowers and consumers with home equity loans and credit card balances, whose rates typically are tied to the prime. The Fed's announcement had been anxiously awaited on Wall Street, following weeks of speculation about how the Fed would react to signs that the economy was weakening. Both stock and bond markets surged after the 215 p.m. announcement, with the Dow Jones industrial average of 30 industrial stocks gaining 48.77 points to close at a record high of 4664.00. The Fed's move to cut rates yesterday ended a cycle of tightening that began in February 1994. Over the next 12 months, the Fed raised short-term rates seven times, lifting the federal funds rates from 3 percent to 6 percent, in what Fed officials said was an effort to slow economic growth before it triggered a surge of inflation.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983063","date":"1995-07-08","texts":"In a strong signal that the U.S. economy is not slipping into a recession, the number of workers on U.S. payrolls in June rose by 215,000 and the unemployment rate declined to 5.6 percent from 5.7 percent, the Labor Department reported yesterday. Joseph Stiglitz, chairman of the president's Council of Economic Advisers, said, Although it is dangerous to read too much into data for a single month, the employment report is a welcome sign that, while too many working families are still struggling, the current economic slowdown is likely to be temporary. The report came a day after the Federal Reserve cut short-term interest rates for the first time in nearly three years. Fed officials, concerned that U.S. economic growth has slowed this year more than is needed to keep inflation in check, trimmed the central bank's target for the federal funds rate to 5.75 percent from 6 percent. That is the key interest rate financial institutions charge each other for overnight loans. The stock market, encouraged by the rise in payroll jobs, continued to rally yesterday as the Dow Jones average of 30 industrial stocks rose another 38.73 points to close at 4702.73, its third record high in as many days. The bond market, which staged a powerful rally after the Fed announced the rate cut Thursday afternoon, held on to most of those gains yesterday.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830981911","date":"1995-07-12","texts":"For an American baseball fan, watching Tuesday night's All-Star Game was simplicity itself pop a cold one, plop into the Barcalounger and power up the tube. For Japanese fans, though, watching the big game required sterner stuff. Clutching umbrellas and rain slickers on a moist, muggy morning -- the first pitch was thrown at 930 a.m., Tokyo time -- fans by the thousands gathered on sidewalks and in public squares all over Japan to watch a fuzzy image of the game on large-screen outdoor TV sets. I can't really say it's comfortable here, said Hideki Nomura, who was seated on the wet pavement outside Tokyo's Shibuya Station. But what the heck -- there's no way I would miss this game. It was worth the trouble for Nomura and other Japanese fans because the National League's starting pitcher in Arlington, Tex., was the dominant hero of Japan's pop culture right now Hideo Tornado Nomo, the Los Angeles Dodgers rookie forkballer who got his start playing for the Kintetsu Buffaloes in Japan's Pacific League. Nomo's flawless performance against American League batters in his two innings brought huge cheers from the sidewalk fans. When he left the game, one Japanese network ended its live broadcast and switched to replays of Nomo's work. As the first Japanese player ever to make it big in the U.S. major leagues, Nomo stands out as one of the few items of good news in a year that has brought recession, natural disaster and terrorist crime to this normally safe and prosperous country. It's not surprising, then, that every game Nomo pitches is televised live to a rapt audience here -- even though an American night game tends to start shortly after dawn on this side of the International Date Line.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830982026","date":"1995-07-14","texts":"Facing two investigations by federal agencies and dozens of lawsuits from disgruntled investors, the Nasdaq stock market today is scheduled to approve new rules intended to ensure that small investors are treated fairly. The reforms are supposed to answer complaints that individual investors buying and selling Nasdaq stocks sometimes do not get as good prices as big traders and stock market professionals. For more than a year, the Securities and Exchange Commission has been pressuring the National Association of Securities Dealers, which runs Nasdaq, to improve the way it handles orders from investors who want to trade at a specific price. Investors have complained that they The NASD came up with a plan for revamping its handling of transactions at specified pricesknown as limit ordersearlier this year, but withdrew it after receiving informal signals that SEC officials believed it did not'go far enough. The SEC is expected to scrutinize the new proposal, which will be presented to the NASD board at Nasdaq headquarters in Washington. Some industry sources speculated that the latest proposal also will not satisfy the SECs concerns about the operations of the booming Nasdaq market.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984306","date":"1995-07-15","texts":"NEW YORK, July 14Blue-chip stocks fell today as surprisingly strong June retail sales dimmed prospects for another interest rate cut by the Federal Reserve. But the Nasdaq index rose to set its fourth record of the week, ending just shy of the 1,000-point mark. The Dow Jones industrial average fell 18.66 to 4708.82 after recouping about half of a nearly 40-point drop. It gained 6.09 points on the week. Declining issues outnumbered advancing stocks by about 7 to 4 on the New York Stock Exchange. 387.48million Thursday. The NYSE logged its second-busiest trading week ever, as 1.9 billion shares changed hands, compared with a record 2.3 billion for the week ending Oct. 23, 1987. The Nasdaq composite index rose 5.18 points to 999.33, surpassing the previous closing high set Thursday. We had some disappointing earnings and stronger-than-expec-ted retail sales upset bonds. But stocks rebounded off lows and technology issues were very resilient, said Guy Truicko, portfolio manager at Unity Management.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830981729","date":"1995-07-16","texts":"Brooding about the cataclysm of 1914 that shattered the long peace produced by the 1815 Congress of Vienna, Henry Kissinger wonders whether the protracted stability might have contributed to disaster. For in the long interval of peace the sense of the tragic was lost. America's sense of the tragic, never strong, may have been bleached away by the sunny blink of peace peace enlivened by the gulf war since the end of the Cold War. Or so it would seem from the widespread incomprehension of the conservative Congress's determination to spend more on defense than President Clinton desires. Liberal critics say this determination reflects the reflexive militarism of the right, or traditional pork barrel politics with the defense budget. Although undoubtedly some supporters of augmented defense spending are doing the right thing for the wrong reasons, it is the right thing. But it is not actually an increase in defense spending. Rather, the administration's defense cutting -- speaking of reflexive policies -- is being slowed. The Pentagon may receive about 7 billion more than the president wants, but that will merely hold the fiscal 1996 defense decline to 1.7 percent. And fiscal 1996 will be the 11th consecutive year of real inflation-adjusted decline in defense spending. Furthermore, although conservatives are generally disposed to prune government, it is hardly a behavioral anomaly for them to favor slowing the erosion of funding for the federal government's foremost responsibility. The contrast between liberal and conservative mentalities is especially sharp regarding defense, which touches core convictions about men and nations.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615685","date":"1995-07-17","texts":"The stock market has been on a rocket ride the last seven months, gaining some 22. But is there enough fuel to keep flying this high Judging by the 5.9 billion that has flowed into equity mutual funds so far this month, there's still plenty of oomph left. And that doesn't include a vast pool of money waiting in what amounts to an untapped storage tank. Robert Adler of AMG Data Service, which provided the mutual-fund figures, says it is the largest amount of cash to come into the funds since early January, when investors put in 7 billion. The evidence suggests that interest in investing is widespread, adds Mr. Adler. He points out that of the 10 largest inflows to individual funds, six were into Fidelity funds, which have a large retail component. Money is also coming into the market through increased investments by pension funds, through company stock buybacks and individual stock buying. Pension-fund figures supplied by Employee Benefit Research Institute also show that more money has gone into stocks in the first quarter this year than in the same period last year. EBRI says 31 billion has gone into stocks in defined-benefit packages, or almost 7 more than last year, and 46 billion, or almost 10 more, in defined-contribution plans.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613740","date":"1995-07-26","texts":"WASHINGTON -- More than four years into the economic expansion, wage increases remain modest. The Labor Department said yesterday that total compensation costs rose just 2.9 in the 12 months ended in June. That's slightly less than the inflation rate of 3 during the same period. Wage and salary costs were just keeping up with inflation during the year ended in June, and benefit costs were up just 2.7, the department's employment-cost index indicated. In the second quarter, compensation costs rose 0.7, slightly more than the 0.6 gain registered in the first quarter. Compensation costs include wages or salary and benefits. There are several explanations for the sluggishness of compensation gains international competition, the decline of labor unions, health-care cost containment, companies subcontracting their extra work and automation. Manufacturing and service companies have really elected to put the squeeze on what they pay their workers, says Stephen Roach, chief economist of Morgan Stanley & Co. They've had to. The slow increase in compensation costs is all the more surprising when productivity increases are considered. Over the past few years, the trend in productivity growth has been about a half a percentage point more than it was in the 1970s or 1980s. Companies, meanwhile, have become fat with cash from the profits. Within a year of a meaningful uptick in productivity, we should see a meaningful uptick in wages, Mr. Roach says.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983518","date":"1995-07-27","texts":"To economists, GDP refers to gross domestic product, but to David Owen, GDPs are Golf-Dependent Personalities, a group to which he proudly belongs. GDPs will enjoy these two books. I have a colleague at Smith College who is at least a borderline GDP. Once in a while, I play golf with him. When I don't play with him 1 might as well have, because without provocation he meticulously describes the lughlights of his game. 1 took a risk and invited him to dinner with the provision that no golf talk be uttered. He responded that of course he could not possibly sit through a whole dinner without discussing the game, but he thought lie would be able to refrain from putting in my living room. Owen, a contributing editor of Golf Digest and a staff writer for the New Yorker, probably would not have been able to make even that commitment. He is a member of several country clubs, owns many sets of irons and woods, plays golf in the snow and indulges in practically every other golf-dependent ritual one might imagine, and still others one would never imagine. After playing the great courses of America, Owen writes that he never before could understand the appeal of a monastic life. But now he thought to himself Oh, I get it. Monks feel about God the way I feel about golf. The two words are even almost spelled the same. I suddenly had a vision of a sort of ideal community of golfers a golfing monastery, or golfastery. Owen writes well and humorously. He writes trenchantly about the questionable moral leadership of the PGA Tour, and he writes exhaustively about all the shots he has hit on the worlds most famous courses. As a casual golfer, I care little about whether Ben Hogan and Sam Snead walked on the same fairways I am playing, and I care even less about the shots that Owen played on these fairways. One recurrent theme in Owens book is that his addiction to golf has created certain tensions in his marriage. He writes If golf is, in part, a game of spouse-avoidance, should one wonder that spouses don't like it Despite the appearance that Owen plays golf 80 percent of his waking hours, he repeatedly vents resentment that having a wife and family keeps him from the game, I kept asking myself how he keeps his marriage together. It would have been a true service to","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983743","date":"1995-07-31","texts":"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. 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. 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. 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. 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.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617213","date":"1995-08-04","texts":"The nation's largest retailers reported uneven sales in July as shoppers snapped up summer apparel bargains but remained tightfisted when it came to spending on almost everything else. Clearance sales of summer clothes produced major gains for big department stores and chains, but specialty stores and off-price retailers were down sharply. And sales of furniture and other hard goods sagged as growth in consumer spending on such goods remained soft despite recent lower interest rates and upticks in newhome sales. Sales at stores open at least a year climbed 3.6 in July, according to Goldman, Sachs & Co.'s national retail-sales index, not quite matching the 4.4 growth measured in July last year. Another such index, that of Salomon Brothers Inc., registered 4 growth for the month. Analysts were left guessing when a rebound in consumer spending would arrive. Things aren't getting worse, but they're not getting better, either, said Robert Buchanan, a retail analyst at NatWest Securities Inc. The slowdown is over, but it's unclear when things will turn up. The holding pattern took a heavy toll on computer and consumer-electronics retailers, especially Best Buy Co. The Minneapolis company reported a 1 decline in same-store sales for July, compared with a 16 increase in such sales last year. Richard L. Schulze, chairman and chief executive, blamed the decline partly on chilled demand for personal computers, as consumers wait for Microsoft Corp.'s Windows 95 to be released this month before upgrading hardware.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984061","date":"1995-08-05","texts":"A lawsuit contending that traders in the Nasdaq stock market conspired to cheat customers through their methods of quoting stock prices was thrown out by a federal judge in New York. The National Association A lawsuit contending that traders in the Nasdaq stock market conspired to cheat customers through their methods of quoting stock prices was thrown out by a federal judge in New York. The National Association of Securities Dealers declared victory in the case, but lawyers suing Nasdaq said the ruling allows them to file the complaint again with more specific allegations. Della Air Lines cut round-trip fares from the United States to many European destinations up to 30 percent, sparking a round of cuts from other airlines. Delta said the sale fares are for travel between Sept. 17 and Dec. 10 to most markets in Europe. USAir, American Airlines, Trans World Airlines and Northwest Airlines also announced fare cuts. A lawsuit against Apple Computer blaming computer use for repetitive stress injuries was dismissed in mid-trial. The judge ruled that graphic designer Carolyn Brest's chief expert witness failed to provide admissible scientific evidence that Brests hand injuries were caused by an Apple computer keyboard and mouse.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613678","date":"1995-08-17","texts":"HEWLETT-PACKARD'S earnings jumped 66 in the fiscal third quarter, lifted by strong global demand for its computer products. Profit totaled 576 million, which was at the high end of expectations, and new orders were stronger than expected, indicating continuing strength. Compaq cut prices 13 to 25 on personal computers aimed at corporate customers, and H-P said it would more than match the reductions. The jockeying comes as PC makers prepare for the release of Windows 95, which is expected to spark sales. --- Housing starts rose 6.7 in July, their fourth straight advance and the biggest in 16 months, as buyers took advantage of lower mortgage rates. ---","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617181","date":"1995-08-18","texts":"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. 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. 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. 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. 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.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830981693","date":"1995-08-19","texts":"The Navy yesterday made some shareholders of little-known VSE Corp. of Alexandria very wealthy--at least on paper--and the navies of foreign nations ultimately will foot the bill. The company's shares jumped 66 percent on the Nasdaq stock market yesterday on the news that VSE won a Navy contract to maintain surplus military ships sold overseas. The work would be worth as much as 1 billion over 10 years for a dozen companies. VSE's stock opened yesterday at 16, where it has traded lately, and closed at 26.50 following the announcement of the Navy contract, whose first phase is valued at 202 million That's not bad for a firm with revenue of 66 million last year. It's been a forgotten stock, until today, perhaps said Calvin Koonce, president of Koonce Securities Inc., a brokerage in Rockville, and a member of VSE's board of directors. This is a good day. VSE's team of contractors beat seven other ventures for the contract, the Navy said, including groups led by Resource Consultants Inc. of Vienna, Columbia Research Corp. of Arlington and Bath Iron Works of Maine, whose purchase by Falls Church-based General Dynamics Corp. for 300 million was announced Thursday.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614112","date":"1995-08-23","texts":"WASHINGTON -- Thanks mostly to better-than-anticipated economic conditions, the fiscal 1995 federal budget deficit is projected to be 13 billion less than earlier projections, the Congressional Budget Office said. The CBO's new 161 billion deficit projection is roughly in line with the 160 billion projection the Clinton administration released last month for the fiscal year ending Sept 30. If it meets expectations, the deficit would be the smallest since 1989. As a percentage of the nation's total economic output, or gross domestic product, the deficit, at 2.3, would be the smallest since 1979, the CBO said. The revised figures were reported as part of the CBO's midyear economic and budget update. In keeping with previous predictions, the CBO said the deficit would begin to increase again starting next year, rising to 189 billion in fiscal 1996. The 1996 deficit projection is 21 billion lower than earlier projections. Without efforts to reduce federal spending, as have been proposed by congressional Republicans, the deficit would reach 350 billion by 2002, the CBO said. The 1995 and 1996 deficits are expected to come in lower than anticipated largely due to factors such as declining interest rates, which the CBO said are expected to be about a full percentage point lower than previously forecast. On the other hand, the CBO said, legislation adopted so far this year has scarcely affected budget totals.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982077","date":"1995-08-23","texts":"Blue-chip stocks closed modestly higher today as investors shopped for bargains after five straight sessions of losses. The Federal Reserve's decision to keep interest rates unchanged was widely expected and had little impact on stocks or bonds. The Dow Jones industrial average ended 5.64 points higher at 4620.42. In the broader market, declining issues outnumbered advancing stocks by about 6 to 5 on the New York Stock Exchange. Volume was moderate at 290 million shares, down from 303.19 million on Monday. We've entered a trading range where the bulls and the bears don't have the strength to pull themselves out, said William Raftery, technical analyst at Smith Barney. The Fed's decision to leave interest rates unchanged came amid signs that the economy is recovering from its brush with recession earlier this year. The Fed lowered rates on July 6 for the first time in nearly three years.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830981829","date":"1995-08-24","texts":"President Clinton and Republican leaders are locked in a bitter debate over whether the federal budget should be balanced in 10 years Clinton or seven years the GOP. A political train wreck looms, commentators warn, when Congress reconvenes in September. If this were a fable, a small boy would cry out about now that the emperors have no clothes. But this is Washington Mum's the word as our political leaders parade by, clad in see-through promises of balancing budgets by dates certain, creating millions of new high-wage jobs and cutting middle-class taxes. These things can be done, but not through the low-growth and fiscally timid policies the current crop of emperors pursue. They have been cowed into damage-control economics by their rapacious financial markets, their overstimulated electorates and the swift change in global trade and investment patterns. They stand naked and hope nobody notices. But the U.S. debate over the pace of budget deficit reduction exposes a basic change in the international political economy. Even the once endlessly optimistic Americans have scaled down their own expectations about how much growth their economic policies can -- and should -- deliver. They are prepared to settle for less because stock and bond markets have spooked the world's political leaders and central bankers into a collective inflation phobia.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983828","date":"1995-08-24","texts":"Per-capita personal income in the Washington area outpaced inflation last year, with D.C. income gaining the most with a 4.3 percent increase to 30,555, according to a government report released yesterday. Maryland and Virginia per-capita income rose 3.9 percent each, to 24,847 and 22,501, respectively. Nationally, Americans living in the nation's interior enjoyed the fastest growth in personal incomes last year, boosted in part by a rebound in farm income that had fallen during the 1993 Midwest floods, the Commerce Department study shows. The study released by the department's Bureau of Economic Analysis found per-capita income for the nation rose 4.3 percent in 1994, to 21,699. Inflation, as measured by a special price index for personal consumption expenditures, was 2.4 percent. In addition to those in the Plains states, residents in many of the Great Lakes states shared in the brisk per-capita income growth, due to stronger durable goods manufacturing and increased construction.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982222","date":"1995-08-25","texts":"Just when Detroit was shedding its Murder City image, Deletha Word was beaten in public and plunged off a bridge to her death Saturday. The crime has once again forced Detroit to confront its reputation as one of the nation's most dangerous, callous cities. We have just been inundated, Wayne County Prosecutor John O'Hair said of callers from out of town. This fortifies their existing impression, that . . . there is a great deal of violence and lawlessness. Detroit had the nation's No. 1 murder rate from 1985 through 1987. But the crime rate is falling -- murders in the first half of this year were down 9 percent 271 compared with 298 in the first half of 1994. The economy has improved with the auto industry's rebound, unemployment is down and Dennis Archer, a popular pro business mayor, is in office. Money magazine recently ranked Detroit 56th -- up from 295th -- in its annual best-places-to-live ranking.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984121","date":"1995-08-29","texts":"At any given time, thousands of federal workers are on official travel. Many are visiting Washington on business even as feds from here are checking up on field offices, attending conferences or conducting business somewhere else. Here's a tip for anyone who expects to be sent out of town on or about Oct. 1, the start of the new fiscal year and the time when nonessential operations may be shut down for lack of a federal budget agreement. To avoid being sleepless in Seattle, down-and-out in Ottawa or buffaloed in Buffalo, check to see if you are an excepted employee before you get on an airplane. In the event of a shutdown, federal workers will be designated one of two things excepted or nonexcepted. Excepted types would keep working -- because of the essential nature of their jobs -- and would be paid once their agency budgets are approved. Agencies have until Sept. 6 to decide which functions are essential and which employees get the excepted designation.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984699","date":"1995-08-29","texts":"Corrections A Dow Jones News Service item in Tuesday's Business Digest wrongly characterized Audi's recall of 10,800 cars worldwide. The recall does not apply to cars sold in the United States, which are equipped with a different lock system. Published 83195 Demand for consumer loans and mortgages grew sharply in the last three months and banks made it easier for businesses to borrow cash, the Federal Reserve said. The Fed said a survey of 83 banks found one-quarter of them reported higher demand for consumer installment loans and one-half said home mortgage demand had increased since May. Procter & Gamble filed a lawsuit alleging that a man selling Amway products spread rumors linking P&G to devil worship. The lawsuit accused Randy Haugen, an independent Amway distributor, of using Amway's voice mail to spread the rumors to other Amway distributors. P&G is seeking more than 50,000 from Haugen. ICF Kaiser International of Fairfax signed a four-year contract valued at about 330 million to perform environmental restoration work at federal installations for the Army Corps of Engineers in its Baltimore district. ICF also signed a five-year contract valued at about 50 million to provide environmental services to the Corps of Engineers in the Savannah district. T-bill rates fell. The discount rate on three-month Treasury bills auctioned yesterday fell to 5.34 percent from 5.43 percent last week. Rates on six-month bills fell to 5.34 percent from 5.43 percent. The actual return to investors is 5.50 percent for three-month bills, with a 10,000 bill selling for 9,865, and 5.58 percent for a six-month bill selling for 9,730. Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for changing adjustable-rate mortgages, fell to 5.81 percent last week from 5.86 percent the previous week.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830981774","date":"1995-09-01","texts":"ALTHOUGH CONSUMER INCOME ROSE 0.7 PERCENT IN JULY, SPENDING ROSE ONLY 0.2 PERCENT, INDICATING ECONOMIC SLUGGISHNESS The income of Americans rose in July more rapidly than it has in six months even as consumer spending leveled off, while plunging factory orders, due largely to auto plant shutdowns, suggested the economy has not shaken off its sluggishness.  A flurry of July data painted a Clouded picture of national economic activity at the start of the years second half. Analysts said an expected 'rebound probably will be modest but emphasized that consumers hold the key through their spending decisions. The Commerce Department reported yesterday that summertime hiring at restaurants and other retail establishments helped boost personal income 0.7 percent in Julythe biggest increase since an 0.8 percent gain in January. Service industry payrolls soared at a rate that was nearly double Junes increase.' But the Commerce Department also said spending advanced just 0.2 percent last month, the slowest pace since it was unchanged in April.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830982031","date":"1995-09-02","texts":"Stocks followed bonds sharply higher today, as investors sifted through several economic reports and decided that there is a chance the Federal Reserve will lower interest rates in the near future. The Dow Jones industrial average gained 36.98 points to close at 4647.54. The price of the Treasury's benchmark 30-year bond ended with a gain of 4.69 per 1,000 in face value in shortened pre-holiday trading. Its yield fell to 6.61 percent from 6.65 percent late Thursday. Advancing issues outnumbered declining ones by about 11 to 7 on the New York Stock Exchange. NYSE volume was relatively light in pre-holiday trading -- 255.72 million shares, down from 300.9 million Thursday. Broad market indexes lagged blue chips but managed some gains, as technology stocks turned in a mixed performance. The American Stock Exchange index rose 1.20 to 535.66, topping its closing record set on Thursday the NYSE composite index climbed 1.23 to 303.23 and the Standard & Poor's 500-stock index gained 1.96 to 563.84. But the Nasdaq index fell 0.60 to 1019.51. The market started the day slightly lower, after the Labor Department reported a surprising 0.1-percentage point drop in the nation's unemployment rate in August, to 5.6 percent.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830982468","date":"1995-09-02","texts":" JJEW YORK, Sept. 1Stocks followed bonds j sljaiply higher today, as investors sifted through several economic reports and decided that there is a chance the Federal Reserve will lower interest rates in the near future. J .The Dow Jones industrial average gained 36,98 'points to close at 4647.54. The price of the Trea- sillys benchmark 30-year bond ended with a gain of 4.69 per 1,000 in face value in shortened pre-holi-1 day trading. Its yield fell to 6.61 percent from 6.65  percent late Thursday. NYSE volume was relatively light in pre-holiday trad-1 ing255.72 million shares, down from 300.9 million 1 Thursday. '. Broad market indexes lagged blue chips but managed some gains, as technology stocks turned in a  mixed performance. The American Stock Exchange  index rose 1.20 to 535.66, topping its dosing record  set on Thursday the NYSE composite index climbed 11.23 to 303.23 and the Standard & Poors 500-stock The market started the day slightly lower, after the Labor Department reported a surprising 0.1-per-centage point drop in the nations unemployment rate in August, to 5.6 percent.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830984851","date":"1995-09-02","texts":"Federal Reserve Chairman Alan Greenspan said cuts in the budget deficit would lead to lower interest rates but would not necessarily weaken the dollar. At a conference on deficits and debt sponsored by the Kansas City Federal Reserve Bank, Greenspan said the dollar could benefit from the boosted confidence in the country's long-term inflation outlook. The auto industry's overall sales rose about 3 percent in August. General Motors posted gains in five of its seven vehicle divisions, reporting that U.S. sales of cars and light trucks were up about 7 percent from a year ago. Honda reported its best month ever, and Chrysler and Nissan also showed sales improvements from last August. Ford and Toyota did not report sales. Construction spending rose 2 percent in July, the largest gain in nearly two years. The Commerce Department said spending on residential, nonresidential and government projects totaled 529.8 billion at a seasonally adjusted annual rate, up from 519.6 billion in June. Senior U.S. District Judge Joyce Hens Green ordered that 393 million seized from the Bank of Credit and Commerce International be turned over to victims of its criminal activity. Disbursement of the funds had been held up because of a series of challenges to Green's 1992 forfeiture order the largest group of challenges was rejected recently by the Supreme Court, clearing the way for the money to be divided up. MCI and AT&T asked the FCC to block a French and a German telephone company from collectively buying 20 percent of Sprint. The Justice Department already has cleared the 4.1 billion deal, but MCI and AT&T want the FCC to stop it until France and Germany open their telecommunications markets to U.S. companies.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615230","date":"1995-09-08","texts":"NEW YORK -- The Justice Department's antitrust investigation of the Nasdaq Stock Market may not result in the neat wrap-up that the agency had sought. Executives at major Wall Street securities firms who deal on Nasdaq say they haven't taken up the Justice Department on its offer to commence settlement talks to end the federal agency's year-old investigation of the market's trading practices. On the contrary, these Nasdaq-dealing firms say they remain convinced that the Justice Department will have a hard time bringing and proving an antitrust case, and for now it's worth letting the government's investigation grind on. In making its settlement overture nearly a month ago, the Justice Department clearly had hoped the dealers would think it best to settle the matter without millions of dollars more in legal costs for both sides. But so far, at least, the major dealers disagree, partly because the Justice Department has been coy about disclosing exactly how it will prove antitrust violations. People don't know what they have, if anything, explained a Wall Street lawyer intimately familiar with the investigations. It's a big poker game, it's cat and mouse at this point, with the dealers unwilling to capitulate unless the Justice Department shows more of its hand, this person said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982623","date":"1995-09-13","texts":"The latest news about the U.S. economy is so good -- in terms of low unemployment, rebounding growth, falling inflation, declining interest rates and record stock prices -- that private analysts and government policymakers alike are cheering. Yesterday, the Labor Department added to the good news by reporting that August producer prices for finished goods fell 0.1 percent after three other similarly good months. Federal Reserve officials said the report indicates that last winter's inflation bubble, which could have derailed the economic expansion had it spread, has now burst. Both the stock and bond markets rallied on the inflation news, with the Dow Jones average of 30 industrial stocks rising 42.27 points to close at a record 4747.21. Bond prices also jumped, as interest rates on 30-year U.S. government bonds declined by nearly a tenth of a percentage point to 6.50 percent. Except for one day in June, that marks the lowest level for bond yields since early 1994. Short-term rates have also dropped recently, with yields on three-month Treasury bills down to 5.44 percent yesterday. Laurence H. Meyer, an economic forecaster based in St. Louis, said the rest of this year and 1996 could be one of the best, if not the best, late business cycle displays in the postwar period. Growth is at trend 2.5 percent, the economy is near full employment,' and inflation is modest and stable -- all features of a soft landing.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615050","date":"1995-09-19","texts":"AuthorAffiliation Staff Reporter of The Wall Street Journal Both the stock and bond markets opened with sharp declines. But a wave of afternoon buying pulled stocks off of their lows. The recovery was especially apparent in the technology sector. This group is notorious for very quick reversals, said Joseph Battipaglia, chief investment strategist at Gruntal. He pointed out that it wasn't the first time that investors have started buying tech stocks after they have fallen to a certain point. The sell-off in the tech sector looks finished, he declared. The benchmark 30-year Treasury bond fell in the morning and stayed down for the rest of the day. Analysts said there was no one single reason for the sell-off. One thing that is happening is that people are beginning to adjust down their expectations that the Federal Reserve may ease interest rates, said Mickey D. Levy, chief financial economist at NationsBank. The Fed's policy-setting committee meets on Tuesday of next week.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982706","date":"1995-09-22","texts":"Deep inside the study of the Nasdaq stock market issued this week is a revealing explanation of who really runs the nations second-largest stock market. It is not the board of directors of the National Association of Securities Dealers, which owns the market, nor the board of Nasdaq itself, but a powerful committee of traders that has largely usurped the authority of both boards, said the committee, led by former senator Warren B. Rudman R- The review turned up no instance in which the NASD board itself initiated a major policy or rule for the Nasdaq market, the panel reported. Most of those interviewed for its study characterized the Nasdaq board as having less influence than certain NASD committees ... and little if any authority over the Nasdaq market and systems. work belter for investors and corporations have been repeatedly blocked sometimes for yearsby the NASDs trading committee, made up of executives of 18 big firms that deal in Nasdaq stocks, according to the report. The Washington-based organization is facing public criticism as well as federal investigations over allegations that small investors fail to get the best prices on stocks and that conflicts of interest prevent it from operating efficiently. NASD officials deny the accusations. After studying Nasdaq since last December, Rudmans panel issued a report on Tuesday that calls for separating the operation of the Nasdaq market from the NASDs duties as a regulatory entity.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983101","date":"1995-09-26","texts":"The Securities and Exchange Commission will propose a package of new stock trading rules tomorrow that could save Nasdaq stock market investors millions of dollars a year by helping them get better prices when they buy and sell stocks. The SEC proposals would force Nasdaq to change the way it handles orders from small investors and would for the first time give the general public access to Nasdaq computer systems that Wall Street firms use to trade stocks among themselves. The board of the National Association of Securities Dealers last week issued its own plan for revamping the handling of small orders that NASD President Joseph R. Hardiman called a major step forward... for individual investors. But the NASD plan does not go as far as tile proposed SEC rules, and some of the NASDs suggestions are a rehash of earlier ideas that already have been rejected by the SEC, securities industry sources said. Nasdaq is the target of separate investigations by the SEC and the antitrust division of the Department of Justice, which are probing allegations that small investors suffer because Nasdaq's","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616085","date":"1995-09-29","texts":"The report said while below-investment-grade bonds as a percentage of capital remained flat last year, at about 46, a few large companies allocated a greater portion of cash flow to such investments, and exposure is expected to rise this year. Below-investment-grade holdings topped 80 in 1990. Insurance companies are increasing exposure to asset-backed securities. The rating company said it sees modest signs of weakening collateral. Moody's said the recovery of commercial mortgages has rekindled interest in that area but noted there's still considerable risk. Insurers continued to cut investments in collateralized mortgage obligations and other mortgage-backed securities last year. Joel S. Salomon, a Moody's analyst, said that another potentially worrisome trend is that more companies are becoming annuity writers, rather the pure insurance concerns. He noted that annuities, which are interest-sensitive, are more susceptible to money moving out. The changes aren't expected to have any significant short-term impact on either the credit ratings or earnings of insurers but could potentially weaken ratings in the medium to long term, said Patrick Finnegan, a Moody's analyst.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985090","date":"1995-09-29","texts":"With a finicky panorama camera. Maxwell Mackenzie captured such landscapes as Everts Township, Homestead II. With a finicky panorama camera. Maxwell Mackenzie captured such landscapes as Everts Township, Homestead II. early 92 took a great toll on freelance photographers. Some wound up taking second jobs to pay their bills some quit photography altogether. Happily for Maxwell MacKenzieand for the rest of us the downturn in his flourishing architectural photography business gave him the chance to pursue a lifes dream to document the poignant decay of the farmhouses, barns, churches and schoolhouses of his native Otter Tail County, Minn. The body of work he produced over the course of two yearsa massive archive of abandonmenthas just been published by Elliott & Clark of Washington. Abandonings 22.95 is one of the most beautiful and eloquent books of landscape photography I ever have seen. It also is a fascinating look at what a panorama camera can do when used by a master. As I drove the hundreds of back roads of Otter Tail County, MacKenzie writes in his preface, I felt the need to document some of what To me, this landscape and these buildingssad, empty, silent houses and falling-down barnspossess a profound beauty, not merely for their spare, simple designs and weathered boards, but as monuments to the men and women who, like my own ancestors, made long journeys and endured great hardships to reach this remote part of America and build in it a new home.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614571","date":"1995-10-02","texts":"The bull market in American stocks has given the U.S. a higher profile in the rankings of the world's largest companies and financial institutions. Based on stock-market value, 44 of the world's 100 largest companies this year are American, up from 39 last year. Though Nippon Telegraph & Telephone Corp. holds the No. 1 spot for the third year in a row, the number of Japanese representatives fell to 27 from 37 last year, reflecting in a large part the weak Tokyo stock market. General Electric Co., at No. 3, remains the largest U.S. company. It's followed by Exxon Corp. and AT&T Corp., which each climbed two spots, and Coca-Cola Co., which jumped seven places. Among companies making big moves in the rankings, no group outdid U.S. technology stocks. Intel Corp. jumped to No. 19 from No. 55, while Microsoft Corp. climbed 23 slots to No. 20. Hewlett-Packard Co. rocketed to No. 30 from No. 81. Most Japanese companies fell in this year's rankings. Toyota Motor Corp. slipped three places, to No. 7 Mitsubishi Bank Ltd., five places, to No. 10 and Dai-Ichi Kangyo Bank Ltd., six spots, to No. 18.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617096","date":"1995-10-04","texts":"MUTUAL-FUND INVESTORS may profit by procrastinating in coming weeks. Investors thinking about buying mutual-fund shares soon should be careful not to fall into a painful year-end tax trap. Stock-market mutual funds typically distribute income and capital gains to shareholders around the end of each year, usually December. If you invest in a fund shortly before such a payout, you generally will owe 1995 taxes on the entire distribution, unless, of course, you bought the shares for a tax-deferred retirement account. This year, many stock-market funds are likely to make unusually big payouts because of booming stock prices. Thus, investors need to be especially careful to check with funds about year-end distribution plans before buying, warns Stephen W. DeFilippis of West Suburban Income Tax Service in Glen Ellyn, Ill. Ask how much -- and when -- a fund expects to pay. Then consider waiting to buy until just after the record date, he says. THE SUPREME COURT declines to hear a municipal-bond case.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984309","date":"1995-10-04","texts":"Worries about upcoming third-quarter corporate profit reports continued to plague many investors today, helping send the stock market mostly lower. Several companies continued a week-long trend of issuing statements predicting lower-than-expected earnings, producing a pessimistic mood. Some observers remained upbeat, though, saying the decline was simply part of a normal, temporary reaction to a strong September rally. The Dow Jones industrial average closed 11.56 points lower at 4749.70. Declining issues outnumbered advancing ones by about 7 to 5 on the New York Stock Exchange. Big Board volume totaled 385.89 million shares, up from 304.88 million on Monday. Volume declined sharply around 1 p.m. EDT, the time of the O.J. Simpson acquittal. The NYSE's composite index gained a scant 0.01 to 312.09. The Standard & Poor's 500 stock index rose 0.62 to 582.34.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984495","date":"1995-10-05","texts":"The following is a report of how some major bills fared recently in Congress and a record of how local members of Congress voted. For-22 lAgalnst-202 The House sent the Senate a bill HR 743 giving companies leeway under federal labor law to operate employer-employee groups for addressing workplace issues and increasing productivity. The bill was supported by the Chamber of Commerce and opposed by the AFL-CIO. The 1935 National Labor Relations Act makes it an unfair labor practice for companies to financially support or dominate employee organizations. This bill eases that ban so that management and workers in nonunion shops can participate in Japanese-style problem-solving teams set up and administered by management. Critics say such teams easily can become illegal company unions. A yes vote was to pass the bill. The House rejected an amendment requiring secret-ballot elections to pick employee representatives who sit with management on workplace teams authorized by HR 743 above within the framework of the National Labor Relations Act. The elections were to replace management selection of worker representatives. The amendment was backed by labor groups and opposed by business organizations. A yes vote supported the labor-backed amendment. The House sent the Senate a bill HR 1170 making it more difficult for the federal judiciary to block a referendum approved by the voters of a state. The bill requires appeals on constitutional grounds to be heard by three U.S. judges rather than one, to prevent plaintiffs from judge shopping to find a sympathetic jurist. The bill was prompted by events in California, where Proposition 187 denying social services to Illegal immigrants was approved by voters but found unconstitutional by state and federal courts and not implemented. A yes vote was to pass the bill. The Senate sent to conference with the House a bill HR 2099 appropriating 80.9 billion In fiscal 1996 for a variety of departments and agencies. The bill cuts the Environmental Protection Agency budget by 22 percent, the Department of Housing and Urban Development by 19 percent and the National Aeronautics and Space Administration by 4 percent. Among major agencies funded by the bill, only the Department of Veterans Affairs and the National Science Foundation escape major cuts. Senators preserved the space station below but killed the administrations AmeriCorps program below. A yes vote was to pass the bill.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984959","date":"1995-10-05","texts":"The following is a report of how some major bills fared recently in Congress and a record of how local members of Congress voted. The House sent the Senate a bill HR 743 giving companies leeway under federal labor law to operate employer-employee groups for addressing workplace issues and increasing productivity. The bill was supported by the Chamber of Commerce and opposed by the AFL-CIO. The 1935 National Labor Relations Act makes it an unfair labor practice for companies to financially support or dominate employee organizations. This bill eases that ban so that management and workers in non-union shops can participate in Japanese-style problem-solving teams set up and administered by management. Critics say such teams easily can become illegal company unions. A yes vote was to pass the bill. The House rejected an amendment requiring secret-ballot elections to pick employee representatives who sit with management on workplace teams authorized by HR 743 above within the framework of the National Labor Relations Act. The elections were to replace management selection of worker representatives. The amendment was backed by labor groups and opposed by business organizations. A yes vote supported the labor-backed amendment. The House sent the Senate a bill HR 1170 making it more difficult for the federal judiciary to block a referendum approved by the voters of a state. The bill requires appeals on constitutional grounds to be heard by three U.S. judges rather than one, to prevent plaintiffs from judge shopping to find a sympathetic jurist. The bill was prompted by events in California, where Proposition 187 denying social services to illegal immigrants was approved by voters but found unconstitutional by state and federal courts and not implemented. A yes vote was to pass the bill. The Senate sent to conference with the House a bill HR 2099 appropriating 80.9 billion in fiscal 1996 for a variety of departments and agencies. The bill cuts the Environmental Protection Agency budget by 22 percent, the Department of Housing and Urban Development by 19 percent and the National Aeronautics and Space Administration by 4 percent. Among major agencies funded by the bill, only the Department of Veterans Affairs and the National Science Foundation escape major cuts. Senators preserved the space station below but killed the administration's AmeriCorps program below. A yes vote was to pass the bill.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985198","date":"1995-10-10","texts":"NEW YORK, Oct. 9Stocks feU shaiply today as the corporate earnings outlook weakened and the dollar declined. The technology-heavy Nasdaq Stock Market index tumbled 2.7 percent, falling to its lowest closing level since Aug. 2. The Dow Jones industrial average slid 42.99 points to close at 4726.22. The blue-chip barometer dropped more than 50 points early, prompting the New York Stock Exchange to re- strict program trading. The Dow pared its losses by about 20 points, but fell as much as 58 points in the afternoon before recovering somewhat. Declining issues outnumbered advancing, ones by about 13 to 5 on the New York Stock Exchange. Volume was relatively light because of the Columbus Day holiday, with 275.29 million shares changing hands on the NYSE, down from 313.63 million on Friday. Investors continued a strategy established last week of selling technology and cyclical shares and buying consumer stocks, such as those of drug companies, that could be expected to perform well even in a recession. But today, the selling extended to consumer stocks. Broad market indexes suffered more than their blue-chip counterparts. The Nasdaq index slid 27.30 to 984.74. The NYSE composite index fell 2.03 to 310.35, the Standard & Poor's 500-stock index dropped 4.12 to 578.37 and the American Stock Exchange index declined 6.06 to 527.48.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842616715","date":"1995-10-11","texts":"Robert E. Lucas Jr., a professor at the University of Chicago whose economic theories give the common man much more influence on economic policy than central planners once had, won this year's Nobel Memorial Prize in Economic Science. The Royal Swedish Academy of Sciences said yesterday that they awarded the prize to the 58-year-old economist for his insights into the difficulties of using economic policy to control the economy. The Academy called Prof. Lucas the economist who has had the greatest influence on macroeconomic research since 1970. Macroeconomics is the study of the economy as a whole. Building on ideas first developed by another economist in the 1960s, Prof. Lucas formed what came to be called a theory of rational expectations. Today, his theories underlie economic and business planning throughout much of the modern world. In essence, the rational expectations theory shows how expectations about the future influence the economic decisions made by individuals, households and companies. Using complex mathematical models, Prof. Lucas showed statistically that the average individual would anticipate -- and thus could easily undermine -- the impact of a government's economic policy.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984051","date":"1995-10-11","texts":"The stock of Dart Group, the Landover-based owner of Crown Books, Trak Auto, Total Beverage and part of Shoppers Food Warehouse, rose 11.12 12, or 13 percent, to close at 95 on the Nasdaq stock market. Investors responded to an agreement, announced after the market closed last Friday, under which outside directors of Dart would remove control of the company from the feuding Haft family. Trading had been halted until midday yesterday. CoreStates Financial and Meridian Bancorp agreed to a 3.2 billion merger. CoreStates, of Philadelphia, has 29.3 billion in assets and about 355 branches in Pennsylvania and New Jersey. Meridian, based in Reading, Pa., has 15 billion in assets and more than 300 branches in those two states and Delaware. The merged company will become the nation's 19th-largest bank, as measured by its 44.3 billion in assets. T-bill rates fell. The discount rate on three-month Treasury bills fell to 5.31 percent from 5.34 percent last week. Rates on six-month bills fell to 5.32 percent from 5.38 percent. The actual return to investors is 5.47 percent for three-month bills, with a 10,000 bill selling for 9,865.80, and 5.56 percent for a six-month bill selling for 9,731.00. Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, fell to 5.61 percent last week from 5.69 percent the previous week. A key union negotiator at USAir has resigned his union post. Pete Gauthier, chairman of the Air Line Pilots Association master executive council at USAir Group, said two recent events made it a natural time for a change in the union's leadership. Arlington-based USAir ended talks with its unions in July that would have swapped a stake in the company for 2.45 billion in wage concessions over five years. And it said last week that it has held talks with United and American airlines about a possible alliance or acquisition. Healthsouth of Birmingham, the largest U.S. provider of rehabilitation services, said it will buy Surgical Care Affiliates of Nashville, the biggest outpatient surgery firm, in a 1.2 billion stock swap. The deal extends a series of acquisitions by Healthsouth as it seeks to marry the two medical services and offer them on a nationwide scale.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616980","date":"1995-10-13","texts":"Corrections & Amplifications A TABLE accompanying a page-one article on the continuing strength of the technology sector contained outdated revenue and earnings data for some companies. A corrected table appears in today's issue. WSJ Oct. 16, 1995 Looking at the roller-coaster ride of technology stocks in the past three months, money manager Neil Hokanson is cautiously dumping shares of Cisco Systems Inc., one of the most successful technology start-ups in business history. But venture capitalist Don Valentine, looking at global demand for new technology, is hanging on to his big Cisco stake, and goes so far as to claim that selling money managers are traitors to responsible investing. No doubt about it, there is a lot of confusion about the direction of high-tech these days. A world-wide technology boom is now a decade old, and the magnitude of that boom and the wealth it has created are difficult to comprehend. Cisco, which went public just over five years ago, now has one of the highest market capitalizations on the Nasdaq Stock Market, at 18 billion. Intel Corp., the world's biggest chip maker, could well be raking in the highest corporate profits in the world within several years, outstripping Exxon Corp. Hewlett-Packard Co. and Motorola Inc., already big, are among the fastest-growing companies of any size on the planet.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983811","date":"1995-10-15","texts":"Before there was talk of a Million Man March, it was not uncommon for me to catch the eye of some other black man on the street and have one of us quickly look away to avoid misinterpretation of the glance. What a wearisome way to live, knowing that you can be shot over a twitch in your face. Then came the call, and, long before O.J. Simpson was acquitted, I began to see more and more black men smiling, a gleam in their eyes as they uttered pleasantries in tones reminiscent of the late 1960s. What's up, brotherman sure has a nicer ring than the ominous, for whom the bell tolls, What you lookin' at I am at once relieved and anxious, for I believe this transformation could not have occurred without Louis Farrakhan, head of the Nation of Islam. I have seen other black leaders try to rally us to change while expressly excluding Farrakhan, and the record of their accomplishments is not so good. In 1991, for example, the 21st Century Commission on African American Males convened an invitation only conference in Washington headed by Virginia's then-Gov. L. Douglas Wilder D. Farrakhan was not invited. The commission featured testimony before the Senate Committee on Banking, Housing and Urban Affairs from some of the most respected black scholars and politicians in America. They appealed to the conscience of the nation for help in reducing black unemployment, improving urban education and stopping inner city violence.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617262","date":"1995-10-16","texts":"WASHINGTON -- Congressional Republicans this week move a step closer to their expected showdown with President Clinton as Senate tax writers push their 245 billion package of breaks for tax-paying families, investors with capital gains and businesses. In the key decisions capping two days of private wrangling, the Republican members of the Senate Finance Committee Friday agreed that a proposed 500-a-child tax credit should be permanent, as the House and party conservatives demand, but they set lower income limits for eligible families. And the senators said lower capital-gains taxes shouldn't be retroactive to Jan. 1, as the House and Wall Street want, but should take effect for assets sold as of last Friday. The Senate package, based on House Republicans' Contract With America tax cuts, also would expand Individual Retirement Accounts, as financial interests sought slash or even wipe out the estate taxes for many family-owned small businesses and farms and provide relief to corporations that pay the alternative minimum tax. Together with the family credit and capital gains relief, those provisions and others are aimed at cutting taxes 245 billion over seven years to offset the political pain of the Republicans' spending cuts to balance the budget. The Senate Finance Committee measure also would extend some business tax breaks that have expired, chiefly a 20 credit for research costs, and create some others. It would offset the cost of those benefits by curbing tax advantages for pharmaceutical manufacturers and other companies with operations in Puerto Rico, for corporate-owned life insurance, movie studios, family-farm corporations such as Tyson Foods Inc. and others. Chairman William Roth R., Del., said the committee will meet in open session Wednesday to consider the package, which then will be added to a separate budget-balancing measure for a full Senate vote. Majority Leader Robert Dole of Kansas called it a tax package that keeps our word to the American people, and said Senate debate on the combined budget and tax measure could begin next week. But various technical and political hurdles probably will cause delays.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982210","date":"1995-10-18","texts":"The new interest in the CPIthe consumer price index, the best-known inflation indicator attests to the power of numbers. The CPI is used to adjust government benefits mainly Social Security and taxes the personal exemption, standard deduction and tax brackets. Last week, for example, the government announced that Social Security benefits will rise 2.6 percent in 1996 because the CPI has increased by 2.6 percent in the past year. The idea is to prevent inflation from invisibly eroding benefits or raising taxes. Good. But suppose the CPI overstates inflation. Then benefits will be too high and taxes too low. Presto a quick way to cut budget deficits. Just dial back the CPI adjustment. Comes now a commission of five economists who say the CPI actually does overstate inflation. In a report to the Senate Finance Committee, they conclude that the overstatement is probjibly about one percentage point a year. After then-report, Sen. Daniel Patrick Moynihan D-N.Y. enthused on the op-ed page of The Post If we were to do no more than declare that henceforth the cost of living adjustment will be CPI minus one percentage point, we would save 634 biljion Not really. Moynihan's rhetoric may be a reaction to the Clinton administrations unwillingness to do anything about indexing but fids proposal goes too far. I am not arguing that there should be no reduction in the CPI adjustment. There should be indeed, I have long contended that the CPI exaggerates inflation. Yet once Congress grasps the staggering power of apparently small changes in the index, it may overdo things. The economists one-percentage-point figure is only an educated guess. If adopted, the practical effect would be to enactslowly but surelya huge benefit reduction and tax increase that falls mostly on those with the lowest incomes. Consider first Social Security. In 1995 the average payment for a married couple is 14,160. Increased 3 percent a year, that becomes 16,416 after five years increased 2 percent annually, the amount is almost 800 less 15,635. Social Security now provides 40 percent of the income for Americans over 65, but its importance drops as incomes rise. Among the poorest fifth of the elderly, it accounts for about 80 percent of income among the richest fifth,, jts only a fifth. The tax effects are similar. In 1995 the personal exemption is 2,500 per dependent. If thats raised 3 percent a year, it becomes 2,890 after five years at 2 percent, it grows only to 2,760. The lower the exemption, the more money is subject to income tax. The difference 130 means that, for a family of four, taxable income would be 520 greater after five years. Obviously, that matters more for a family .with 25,000 of income than for one with 250,QO,9-","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615863","date":"1995-10-20","texts":"After a muddled start, the Dow Jones Industrial Average surged to a record close, boosted by the growing hopes for a seven-year balanced-budget plan. Bond prices rose and the dollar fell. The industrial Average, lower early in the session, gained 24.93 to 4802.45, setting a new record on the eighth anniversary of the 1987 stock-market crash. The Standard & Poor's 500-stock index gained 3.21 to 590.65 and the New York Stock Exchange Composite Index rose 1.10 to 315.39, both records. The Nasdaq Composite Index, hit by early profit-taking in the morning, stormed back to rise 1.84 to 1046.97, still well shy of its record close of 1067.40, set Sept. 13. Despite the record-setting day for major averages, decliners modestly edged advancers on the Big Board. In addition, investors fretful about the slowing economy and its effect on future earnings continued to pursue utility stocks and more stable growth issues at the expense of economically sensitive stocks. Analysts said Washington provided important support for yesterday's gains. Especially important, traders said, President Clinton said that the federal budget could be balanced in seven years, rather than the 10-year time frame he had previously favored.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982240","date":"1995-10-24","texts":"When it comes to technology companies, the stock markets current mania, its hard to top America Online Inc. Technology stocks are hot, up about 50 percent on average this year, but AOL is positively scalding, up about 135 percent. In fact, AOLs stock has soared more than 2,000 percent from its initial public offering, in 1992. The Vienna-based company has 35 times the customers and 20 times the revenue it had five years ago. Its the nation's biggest on-line company and is building a recognized brand. But look closely and you see that AOL is as much about accounting technology as it is about computer technology. So make sure you understand the Accounting is terribly important to AOL. The better its numbers look, the more Wall Street loves it and the easier AOL can sell new shares to raise cash to pay its bills. By my analysis, the company is running a cash deficit of about 75 million a yeara deficit it covers with money from stock sales. Thus, if AOL cant sell stock, its got big trouble. At the least, it would have to drastically scale back its expansion plans. Lennert Leader. But the point isnt that AOL violates the rulesit clearly doesnt. The point is that you can satisfy the rules and still make it incredibly difficult for investors to know whats going on. This is a particularly good time to look at AOL, because on Oct. 10 it raised about 100 million by selling new shares. AOL sold the stock even though its shares had fallen to 58.37'2 from about 72 in September, when the sale plans were announced. Most companies would have delayed the offering, waiting for the price to snap back. AOL didnt, prompting cynics to think the company really needed the money, if only because its trade accounts payable had ballooned to 85 million as of June 30 from 16 million a year earlier.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983885","date":"1995-10-24","texts":"The Justice Department today escalated a nine-month battle with the National Association of Securities Dealers NASD over release of documents about the Nasdaq Stock Market by asking a federal court here to intervene. Justice Department lawyers investigating alleged anticompetitive conduct by Nasdaq market makers accused the beleaguered and understaffed association of playing a waiting game that clearly will continue until this court compels compliance. The department said it issued a civil investigation demand on Jan. 20 for what it called a limited look at conduct among Nasdaq market makers, including possible collusion, boycotts and refusals to deal. Both the Justice Department and the Securities and Exchange Commission are trying to investigate claims that small investors suffer because Nasdaq's rules are written for the benefit of professional traders. Marc Beauchamp, a spokesman for NASD, said the association was surprised by the department's filing of the court petition because we have turned over in excess of half a million pages of documents and have met both formally and informally with the department to answer any of its concerns and questions. NASD attorney F. Joseph Warin called the action against the association, which regulates stock brokers nationwide under a congressional charter, unjustified and unnecessary. The Nasdaq Stock Market, the target of the department's investigation, is run by the NASD and handles trading in shares -- including those of many rising young computer and electronics companies -- not listed on older, larger stock markets.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985151","date":"1995-10-27","texts":"NEW YORK, Oct. 26 -- The stock market endured a sharp, if temporary, drop of nearly 86 points in the Dow Jones industrial average today and continued a week-long decline that many analysts said might signal a long-anticipated pause in the great market surge of 1995. The Dow recovered late in the day to finish at 4703.82, or 49.86 below Wednesday's closing. Since its mid-September all-time peak of 4802.45, the Dow has declined nearly 100 points, or about 2 percent. Analysts said several factors had influenced today's plunge, including fears of international instability caused by Russian President Boris Yeltsin's illness and a further drop in the Mexican peso, as well as some signs of rising consumer debt and durable goods orders. Uncertainly about the impact of budget and health care changes in Washington also had an impact, they said. It was an extraordinary confluence of negative events, some justified and some overdone, said Timothy Straus, senior vice president for institutional sales at Prudential Securities in Boston. Some analysts are predicting at least a 5 percent correction, their word for a small market decline after a long upsurge, before the end of the year. This is a gradual correcting process that began back in September, and for some stocks as far back as January, said Richard McCabe, first vice president and chief market analyst at Merrill Lynch.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984299","date":"1995-10-29","texts":"With Congress sniffing at civil service and Social Security benefits, federal workers who don't adopt a do-it-yourself savings plan may spend their golden years in a rented room dining on markdowns from the dented-can section of the supermarket. A General Accounting Office report in the works will warn that many feds no longer can count on civil service retirement benefits to provide them with an income that will even begin to maintain their current standard of living. The study, requested by Rep. Constance A. Morella R-Md. and Del. Eleanor Holmes Norton D-D.C., looks at the replacement rate of income that federal retirees can expect. Many financial planners say retirees will need replacement income ranging from 60 percent to 80 percent of their final salary to live comfortably. The idea is that retired people still eat, wear clothes, take vacations and buy cars. Most workers hired since the mid-1980s are under the new Federal Employees Retirement System, or FERS. Those hired before are under the old Civil Service Retirement System, or CSRS. CSRS provides a benefit that was indexed to inflation and based on the employee's salary and length of service. Workers retiring at 55 with 30 years of service will get a starting retirement benefit equal to just over 53 percent of their final salary. Civil service benefits are less generous under FERS because employees also qualify for Social Security. Both plans have an optional Thrift Savings Plan. It permits workers to invest pretax income in stock, bond or Treasury funds. The Treasury fund G-fund is unique. It is guaranteed by the government and has returned 7 percent to 9 percent annually since inception. Both the stock and bond funds have outperformed the G-fund over time, but both are subject to market pressures, and they are not guaranteed like the G-fund.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614734","date":"1995-10-31","texts":"Small stocks and the Nasdaq stock market closed up, boosted by strength in the technology sector. The Nasdaq Stock Market Composite Index gained 14.14, or 1.4, to 1039.69. The Russell 2000 index of small-cap issues was up 0.57, or 1.69, to 296.24, while the Standard & Poor's Small Cap 600 index added 0.81, or 0.92, to close at 114.57. Technology stocks advanced throughout the day, pushed partly by merger announcements in the education and multimedia software industry. The annual American Electronics Association conference currently being held in Monterey, Calif., has also focused investors' attention on the technology market. The Nasdaq computer index, a closely followed proxy for the technology industry, climbed 2.7, and the Morgan Stanley High-Technology 35 Index was up 3. Investors are expecting more consolidation in the software market, said Tony Cecin, director of equity trading with Piper Jaffray Inc. It may be educational software now, but it may roll over into games or entertainment next.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982163","date":"1995-11-01","texts":"An article in yesterday's Business section incorrectly described the planned composition of the boards overseeing two divisions of the National Association of Securities Dealers. The boards of the Nasdaq Stock Market and NASD Regulation Inc. each will have equal numbers of public and securities industry representatives. Published 11295 Representatives of the public will be added to the powerful panel that reviews investor complaints against stockbrokers, National Association of Securities Dealers executives said yesterday. The change in the makeup of NASD's influential National Business Conduct Committee, which also sets disciplinary policy, is one of several steps to expand public oversight of NASD and the Nasdaq Stock Market recommended recently in a extensive review of NASD by an independent panel headed by former U.S. senator Warren Rudman. The first of the restructuring proposals its staff has drafted in response to the Rudman report will be presented to NASD's board of directors on Nov. 17, NASD President Joseph Hardiman and Executive Vice President Richard Ketcham said yesterday at a meeting with Washington Post reporters and editors. The moves come in the face of public criticism and two government investigations over its dual role as the operator of the Nasdaq market and the government-designated regulator of the market and all registered stock brokers and securities professionals.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614743","date":"1995-11-02","texts":"WASHINGTON -- The Federal Reserve's latest survey of regional economic conditions found modest growth, but at a slower pace than in recent months because of weak consumer spending. For retailers, it's beginning to look a lot like a sluggish Christmas, the Fed concluded in a summary of reports collected by the 12 regional Federal Reserve banks in September and October. Sales of fall and back-to-school goods were almost uniformly disappointing or below expectations, the Fed said. Manufacturing picked up in some districts, however. The Philadelphia Fed, for example, found strong demand for electrical machinery, metals and glass products. It's not a boom, mind you, a steel production representative cautioned the Chicago Fed. Indeed, purchase orders mostly softened in the Dallas and Cleveland districts. In keeping with what analysts call a slow but steadily growing economy, construction improved slightly, and there was a firming in commercial and industrial leasing activity. Also, inflation remains under control. Wage gains were moderate, despite mostly tight labor markets, and reports of rapidly rising materials costs fell off substantially, the report said. But the reluctance of consumers to spend is keeping the slow-rolling economy from shedding its training wheels. In the Boston district, where sales in September and October fell by as much as 20 from the year-earlier period, widespread discounting is eating away at gross margins and profits, the Boston Fed said. Without any intriguing new fashion offerings, apparel sales continue to fare the worst. But the New York Fed said sales of big-ticket items such as furniture and home electronics also softened.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617094","date":"1995-11-06","texts":"CORPORATE EARNINGS rose 5 in the third quarter, but the pace of growth was the slowest in more than two years. The improvement surprised some analysts and came despite weaker sales gains and intense global competition. The trend toward slowed growth has ramifications for stock markets, which have derived considerable strength in recent periods from earnings momentum. --- Lockheed Martin plans to develop an advanced Atlas rocket to launch large commercial satellites. Separately, senior U.S. officials tentatively have approved the use of as many as 22 Ukrainian-made Zenit rockets for U.S.-built commercial satellites, supporting a venture led by Boeing. --- Unemployment fell to a remarkably low 5.5 in October, but other data in the report were more pessimistic. The figures are the latest sign that the economy is growing sluggishly with little inflation threat, analysts said.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830981893","date":"1995-11-07","texts":"Republican congressional leaders put aside the budget knife and asked the Bureau of Labor Statistics Friday whether the agency needs more money to speed research to revise the consumer price index. The CPI revision could make it easier to balance the federal budget by 2002. Many analysts, including those at BLS, say the CPIs current configuration overstates inflation, thus artificially ballooning projected budget deficits. As part of the drive to cut spending this year, the House cut BLS's requested 1996 appropriation by 30 million, to 347 million. Thats 5 million less than the agency spent last year. The full Senate has not passed its version of the bill but the Senate Appropriations Committee BLS Commissioner Katharine G. Abraham warned in a letter yesterday, responding to the leaders, that overall BLS budget reductions of the size now being considered could well force significant delays in the revision schedule and lead to deferral of other valuable research, efforts. The same thing could happen if BLS had to work under a continuing resolution, as opposed to an actual appropriation, if funding is at any level significantly below that requested for the Bureau, she said. The CPI is used to determine cost-of-living adjustments in many federal benefit programs, including Social Security, and to index some provisions of the tax code, such as the size of the personal exemption. The Congressional See CPI, C6, CoL 1","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614321","date":"1995-11-15","texts":"Tokyo stocks inched up Tuesday in lackluster dealings. London prices rose amid optimism that Britain's coming government budget could contain extensive tax cuts. Frankfurt shares climbed 1 to end near session highs on a new wave of speculation about lower German interest rates. World-wide, stock prices fell in dollar terms. The Dow Jones World Stock Index was at 126.66, down 0.08, reflecting higher markets in EuropeAfrica and AsiaPacific and lower markets in the Americas. Lodging stocks were the top gainers in the Dow Jones World Industry Groups, closing at 116.71, up 1.63, or 1.42, with Accor of France posting a 9.26 gain in local currency. Semiconductor stocks trailed at 355.65, down 13.16, or 3.57, with Micron Technology of the U.S. sliding 8.13. In Tokyo, the Nikkei 225-stock index, which fell 54.10 points Monday, added 13.05 to 17802.51, after being confined within a range of about 123 points. In trading Wednesday, the Nikkei fell 101.93 points to close the morning session at 17700.58. Tuesday's first-section volume was estimated at 297 million shares, down from 303.2 million shares a day earlier. Losers topped gainers, 516-430. The Tokyo Stock Price Index, or Topix, of all first-section issues, which slipped 3.60 points Monday, edged up 0.02 to 1420.77. Dealings were subdued partly by statements by Japan's finance minister that irrecoverable bad debts in the banking system rose to 18 trillion yen 176.6 billion as of Sept. 30 from a June estimate of between 10 trillion yen and 15 trillion yen. Meanwhile, Japan's high-technology sector seemed to have lost its ability to push the Tokyo market higher, contrary to the trend on Wall Street. And auto-sector trading was fairly light, even though some Japanese car companies posted favorable earnings and issued improved outlooks.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985082","date":"1995-11-15","texts":"When Federal Reserve policymakers meet today, they will confront numerous signs of a weakening economy that might ordinarily lead them to cut short-term interest rates. But these are hardly ordinary times, and Wall Street seems convinced the Fed won't act in the midst of the budget confrontation between President Clinton and congressional Republicans, lest it be seen as taking sides. However, recent economic statistics -- such as yesterday's report from the Commerce Department that retail sales fell 0.2 percent last month -- indicate softening growth and falling inflation. Inflation has been so tame that it appears to be running at a rate about half a percentage point lower than Fed officials predicted as recently as July. If it weren't for the budget situation, I think the Fed would make a cut now, said economist L. Douglas Lee of HSBC Washington Analysis, a financial consulting firm. But the budget stalemate could turn out to be an argument in favor of cutting rates today rather than waiting for a deal to be struck. A small rate cut, likely a quarter of a percentage point, might ease any economic concerns caused by the budget stalemate and government shutdown. One of the Fed's charges, after all, is to provide liquidity during uncertain times.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982633","date":"1995-11-16","texts":"Baltimore-Washington International Airport will play a key role in Marylands economic recovery as the state endures the loss of up to 50,000 jobs in the shrinking of federal government spending in the next several years, Gov. Parris N. Glendening told business leaders last week. Marylands economy will lose 2.8 billion to 3.5 billion in direct federal aid, 20,000 federal jobs and as many as 30,000 jobs in the private sector, Glendening told a 225-member audience from Anne Arundel, Howard and Prince Georges counties during a meeting of the BWI Business Partnership Inc. Maryland is at a crossroads of the future, Glendening said, We are trying to make the public aware of what must be done. We have to make it very, very clear that the state cannot step up and back fill those cuts. Glendening said the continued development of private ' businesses such as those tied to the airport corridor would be critical as federal cuts come in three waves. First, he said, the Washington suburbs of Montgomery and Prince Georges counties would suffer 85 to 90 per--cent of the federal job losses in Maryland. Secorid, Glen-dening said, Baltimore could expect to lose 750 million to 1 billion as federal social programs are cut. Finally, he said, the entire state would feel the ramifications of reduced state spending. 1 dont believe this is a message of gloom and doom, he said. The sky is not falling, but we are offering real solutions.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616736","date":"1995-11-21","texts":"The National Association of Securities Dealers, under pressure for the way it runs itself and the Nasdaq Stock Market, unveiled more restructuring moves that include a new NASD ombudsman to field complaints. Pledging to set new standards for regulation, NASD President Joseph Hardiman announced a structural overhaul that the board approved at a nonpublic meeting Friday. The big change is a planned reconstitution of the NASD to include separate subsidiaries for Nasdaq and for broker-dealer regulation, with much more public input to both. The NASD is a self-regulatory organization that owns and operates Nasdaq. Among the newly disclosed changes -- Creation of an Office of Investor Services. Critics have noted that despite its bureaucracy, the NASD hadn't had an office devoted to individual investors. -- Use of a professional hearing officer on all three-person panels handling contested disciplinary cases of brokers. These will be staff members of the NASD's new regulatory subsidiary, NASD Regulation Inc., or NASDR. Each panel will also include two industry representatives.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615627","date":"1995-11-22","texts":"WASHINGTON -- The share of after-tax income going to the superrich -- a percentage that soared in the go-go 1980s -- stopped rising in the recession of the early 1990s, new data fron the Congressional Budget Office show. The data indicate that the top 1 of Americans, who in 1996 will reap an average of 438,000 in after-tax income, saw their slice of U.S. income stay at about 12 from 1989 to 1992, the latest year for which such data are available. Before that, their share had skyrocketed to 12.4 in 1989 from 7.3 in 1977, the first year the CBO began collecting the data. The CBO results, analyzed by the Center on Budget and Policy Priorities, an independent liberal think tank, appeared to contradict some politicians and analysts who have said the rich are gaining at the expense of the poor. Will this alter long-held views Not likely. For one thing, the superrich stagnation occurred during a recession that hit the wealthy as well as the poor. Moreover, more-recent data suggest that the rich's share of income is rising again. Data released last month by the U.S. Census Bureau showed that the top 5 wealthiest Americans saw their share of aggregate income shoot up from 1992 to 1994, after it slipped a bit during the recession. Census data aren't as complete as CBO data, in part because they don't measure the top 1 of Americans. But the census data are more up-to-date.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617039","date":"1995-11-29","texts":"Tokyo prices climbed broadly Tuesday in heavy volume as futures strengthened and expectations grew for stocks to rack up year-end gains and for housing lenders to clear up their debt problems. London stocks ended little changed after rebounding from lows in a somewhat optimistic response to the British treasury chief's budget presentation. World-wide, stock prices rose in dollar terms. The Dow Jones World Stock Index was at 130.28, up 0.83, reflecting increases in markets in the Americas and AsiaPacific regions, and a drop in EuropeAfrica markets. Semiconductor stocks were the top gainers in the Dow Jones World Industry Groups, closing at 351.41, up 19.00, or 5.72, with Micron Technology of the U.S. posting a 12 gain in its local currency. In composite trading on the New York Stock Exchange, the gain was 13. Oil-drilling stocks trailed, at 132.84, down 2.97, or 2.19, with Nabors Industries of the U.S. sliding 3.70 in local currency. In Tokyo, the Nikkei 225-stock index, which rallied 327.91 points Monday, advanced 145.28 to 18688.42. In trading Wednesday, the Nikkei fell 109.30 points to close the morning session at 18579.12. Tuesday's first-section volume was estimated at 473 million shares, up from 384.9 million shares a day earlier. Gainers outnumbered decliners, 638-401. The Tokyo Stock Price Index, or Topix, of all first-section issues, which climbed 21.58 points Monday, rose 10.75 to 1473.69. Banking issues rallied on clearer signs that Japan's housing-loan companies could resolve their bad loans this year. Japan's government reiterated it is committed to finding a solution for mortgage lenders by Dec. 20. Japan's top banks, too, have said they would act to write off their bad loans in the fiscal second half ending March 31. The market also was cheered by Wall Street, which logged its fourth all-time high in a row on Monday. Meanwhile, the Nikkei also got a boost from big rollovers of December futures contracts into March positions.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983449","date":"1995-12-05","texts":"I don't own a single share of Shawmut National Corp., but I made 1,700 in two days last week because Shawmut was gobbled up in a merger. How did I make money on a stock I've never owned Easy. One of my biggest investments, Comerica Inc., was picked to take Shawmut's place in the Standard & Poor's 500-stock index, and indexers began buying truckloads of Comerica shares. That produced a windfall for those of us who owned the stock. Welcome to the wonderful world of indexing. S&P announced last Tuesday evening that Comerica was joining the S&P 500. Comerica officially joined the index when the stock market closed on Thursday. By then, its stock had risen 2.12 12, a nice 6 percent jump from its Tuesday close. My 800 Comerica shares -- the biggest single holding in my retirement accounts -- were thus worth 1,700 more than they were two days earlier. In all, Comerica's shares gained about a quarter-billion dollars in market value. Had Comerica's prospects improved Were its profits higher Had some divine power alleviated the problems wracking Detroit, Comerica's hometown and biggest single market Nope. By all accounts, the two-day increase stems entirely from Comerica becoming part of the index. That forced index funds and other investors with portfolios tied to the S&P 500 to buy Comerica. All these new buyers -- a total of 6.3 million shares changed hands Wednesday and Thursday, more than 15 times Comerica's normal daily trading volume -- levitated the stock. From now on, Comerica stock will be about 2 higher than it would be without the indexers. So I'm ahead even though I haven't sold my shares. I'm not telling you this tale to brag it's not as if I knew Comerica would go on the S&P 500. Rather, I want to discuss how Comerica -- pronounced Koh-MEH-rikka -- is a teeny-tiny example of how index investors can distort the prices of individual stocks. And how the S&P 500, the benchmark by which most professional investors judge their performance, is becoming distorted.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983492","date":"1995-12-06","texts":"The National Association of Securities Dealers will announce today that it has hired Mary Schapiro, chairman of the Commodity Futures Trading Commission, as its new chief regulator. Schapiro, 40, said yesterday she will leave her post in January to become the first president of NASD Regulation Inc., which will oversee the Nasdaq Stock Market and register and regulate all stock brokers and other market professionals. The post is considered crucial in the NASD's effort to restore the damage done to its reputation by two ongoing federal investigations. The NASD is transferring its regulatory responsibilities to an independent subsidiary in response to criticism that it has been so busy running the Nasdaq market that it has neglected the oversight duties it was given by Congress. The Securities and Exchange Commission has served notice that it is preparing disciplinary charges against the NASD based on allegations that Nasdaq traders take advantage of small investors. And the Justice Department has sued the NASD to get records of trading that government lawyers contend is rigged against customers. In an interview, Schapiro said she has yet to dig into the specific problems confronting the NASD. I won't know what needs to be fixed until I get there and have some realistic assessment of the organization, she said. I really believe that NASD has an important role to play and that I can help it do that more effectively.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984000","date":"1995-12-09","texts":"The economy is adding jobs so slowly, according to a report issued yesterday by tire Labor Department, that many financial analysts believe the Federal Reserve likely will soon decide to cut short-term interest rates. The report said payrolls rose by 166,000 last month, but officials at the Labor Department said that except for a couple of statistical quirks the number would have been below 100,000. Private and government employers have been adding just over 100,000 workers a month to their payrolls since August, a Wring pace less than overall growth of the labor force. Meanwhile, the nations unemployment rate ticked up to 5,6 percent last month from 5.5 percent in October, as the monthly survey of American households found fewer people with jobs and more looking but unable to find them. The November employment report confirms other data pointing to sluggish economic activity, said Bruce Steinberg, macroeconomics manager at Merrill Lynch & Co. in New York. We expect the Fed to ease policy at the Dec. 19 Federal Open Market Committee meeting. That committee is the central banks top policymaking group. It last reduced its target for overnight interest rates, to 5.75 percent from 6 percent, in July.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983539","date":"1995-12-12","texts":"Negotiators for the Machinists union and Boeing reached a tentative contract agreement to end a 67-day strike. Union leaders said they would urge striking production workers to accept the contract in a vote tomorrow. Union members walked out Oct. 6 after rejecting an initial contract offer and voted by more than 60 percent to reject a second contract offer Nov. 21. Denny's restaurants has begun sending 46 million to more than 290,000 people to settle racial bias class action lawsuits in Annapolis and San Jose, the former stemming from allegations by six black Secret Service agents assigned to guard President Clinton that they waited for service while their white colleagues received second and third helpings. The 135,997 petitioners who joined the Annapolis class action suit will collect 132.28 each. The Secret Service officers will receive 35,000 each. The Clinton administration proposed to reduce the time companies can hold workers' savings contributions after finding some employers were holding on to 401k employee pension plan contributions too long. Employers are required to turn the withheld money over to an investment plan as soon as possible, with a ceiling of 90 days. The new rule would require employers to deposit the money as quickly as they now must transfer withheld Social Security funds. The rule will be put into effect in 90 days, allowing for a comment period from affected companies, Labor Secretary Robert B. Reich said. T-bill rates rose. The discount rate on three-month Treasury bills auctioned yesterday rose to 5.30 percent from 5.29 percent the previous week. Rates on six-month bills rose to 5.20 percent from 5.19 percent. The actual return to investors is 5.46 percent for three-month bills, with a 10,000 bill selling for 9,866.00, and 5.43 percent for a six-month bill selling for 9,737.10. Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for changing adjustable-rate mortgages, fell to 5.35 percent last week from 5.39 percent the previous week. The government is missing another 20,000 in newly printed bills less than a month since 40,000 in fresh cash apparently was stolen from a shipment to a Federal Reserve Bank. Treasury Secretary Robert Rubin sent a terse memo to Larry Rolufs, director of the Bureau of Engraving and Printing, and Eljay Bowron, director of the U.S. Secret Service, saying the two apparent thefts are of great concern to me.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984038","date":"1995-12-14","texts":"Merchants, economists, bond traders, officials at the Federal Reserve -- everyone seems to be tracking the progress of Christmas sales day by day. Last Saturday wasn't too good at the mall Well, maybe that was because of bad weather in the Northeast. Consumers seem reluctant to buy Well, maybe they are just playing a game of chicken, planning to spend but waiting for worried merchants to mark down their goods. And like a sudden-death overtime, an extra weekend between Thanksgiving Day and Christmas this year could decide the game. This intense interest on the part of investors and policymakers stems, of course, from the fact that about two-thirds of everything the nation produces is bought by consumers. Their spending patterns have a major impact on the course of the economy, and right now the consumer is a forecasting question mark. One reason for that uncertainty is the sharp rise in the delinquent share of credit card accounts -- those that are 30 days or more overdue -- shown in the chart at the right. The final figure, 3.3 percent for the June-September period, was released yesterday by the American Bankers Association.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830981828","date":"1995-12-15","texts":"Journalists from 21 cities gathered in Washington in 1933 to form a labor union. The Great Depression had taken hold. Nearly 13 million people were unemployed38 percent of the non-farm labor force. That unemployment percentage today would mean 50 million people out of work. You could hire a cub reporter in Wisconsin in that era for 6 a week. On suburban papers around the country, a fairly common wage was 1 a day. In the big citiesNew York, for example75 percent of the reporters earned less than 4,000 a year. As a citizen, a workman, a human being, a Boston editor wrote, the journalist is nothing but a wage-earning servant, as impotent and unimportant ... as a mill hand. Out of these conditions the Newspaper Guild was bom. Its a different world now. I went into the business in 1947 at 25 a week. The impossible dream of the Guild at that time was a minimum wage of 100 a week for experienced reporters, editors and photographers. Today, entry level wages are not mind-boggling20,000 or so a year on average. But on the big papers, 1,000 a week as a minimum for experienced people is not uncommon, thanks largely to the Guild. And for the big hittersthe celebrities and semi-celebrities of the tradethat's a pittance. Other things have changed. In years past, the Newspaper Guild, supported by its blue-collar brothers and sistersthe printing tradescould strike and shut down newspapers as a major bargaining weapon. Today, that weapon has lost much of its sting. Computers have made most of the printing trades obsolete. Reporters and editors can set type with a keystroke. Wire services and non-union employees can fill up blank pages with news.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985500","date":"1995-12-16","texts":"NEW YORK, Dec, 15Stocks fell today as a record for trading volume that had stood since the day after the 1987 stock market crash was toppled on the New York Stock Exchange.  The unprecedented volume was tied to the so-called triple-witching expiration of stock options and futures, and to continued selling of technology issues as investors cashed in on the big gains ol the year. ' The Dow Jones industrial average traded in a harrow range all day before closing the day down 5.42 points at 5176.73. Despite the minor retreat today, the blue-chip average still gained 19.87 points for the week.  Volume on the NYSE was the heaviest in history at 653.16 million shares, topping the 608.15 million that changed hands on Oct. 20, 1987, the day after the 1987 Black Monday qrash. The exchange said its trading systems hud capacity to spare even in the peak periods if the day. ' Treasury bond prices ended mixed in quiet trading following a breakdown in federal budget negotiations and mounting uncertainty over jit Federal Reserve's next decision on interest rates. The price of the Treasurys main 30-ycar bond slipped 5-32 point, or 1.56 per 1,000 in face value. Its yield, which moves in le opposition direction, rose to 6.09 percent from 6.08 percent late Thursday.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617137","date":"1995-12-19","texts":"NEW YORK -- American Brands Inc., already a leading seller of golf balls, has agreed to acquire Cobra Golf Inc., the maker of King Cobra clubs, for 700 million. News of American Brands' agreement to pay 36 a share sent Cobra shares soaring 29, or 7.875, to 35.50 on the Nasdaq Stock Market, while American Brands shares closed down 4.9, or 2.25, to 44.125 in composite trading on the New York Stock Exchange. The combination of the maker of the Titleist golf clubs and balls and Foot-Joy gloves and shoes with the maker of oversized and graphite-shaft golf clubs ends months of speculation that American Brands planned to buy a premium club maker. Cobra or Callaway Golf Co., the maker of the Big Bertha brand, were the likely targets. Callaway was off 5, or 1, to 19 a share in Big Board composite trading. Over the past year, American Brands has been restructuring its operations, selling off its domestic tobacco and insurance units for 2.2 billion to focus on its brandname businesses. In addition to its sporting good business, American Brands products include Jim Beam and Old Grand-Dad bourbons, hardware and home improvement brands of Moen faucets and Master Locks, and Day-Timer and Swingline office products. Nonetheless, the golf business has been one of its fastest growing operations, said Thomas C. Hays, American Brands' chairman and chief executive officer, with Titleist showing superb, sustained growth over the past few years. The unit now contributes about 9, or 79.1 million, of American Brands total operating profit of 843.2 million for the first nine months.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984200","date":"1995-12-19","texts":"You can't escape Internet Insanity these days. Scarcely a week passes, it seems, without us reading, hearing or seeing a story about how some company most of us never heard of will make a gazillion dollars from the Internet, the international network that lets computers communicate with one another. The world is full of people buying Internet stocks in search of the next Microsoft Corp. But you don't need to know much about Web browsers or servers or other high-technology stuff to see that it's almost impossible for any of today's Internet stocks to be the next Microsoft. It's a question of math, not technology. Even with the sharp drops of the past three trading days, stocks of Internet companies are trading at levels I consider insanely high. If you overpay for the stock of even a very good company, it's almost impossible to make a superior long-term profit. And long-term profit is what we small nonprofessional investors should worry about. You short-term types, find a different article to read. The simplest illustration is Netscape Communications Corp., which sold stock in August at 28 a share and currently sells for almost five times as much. Netscape's backers says the company will use its World Wide Web browser technology which lets you find things on the Internet to dominate the Internet the way that Microsoft parlayed its operating system technology into domination of large parts of the PC software business. But even if Netscape ends up wildly successful, it's virtually impossible for anyone buying Netscape stock at today's prices to get a Microsoft-like return. Here's why. If you bought 100 shares of Microsoft at its initial public offering in 1986 for 2,100, you now own 1,800 shares worth 158,400 at yesterday's closing price. Call it a 75-to-1 return in just under 10 years. Netscape closed yesterday at 130.25 a share. For you to make a 75-to-1 return in less than 10 years, Netscape stock has to rise to almost 9,800 a share by the year-end of 2004. Its 40.8 million shares including stock under option, as do all the valuations in this article are valued in the stock market at around 5.3 billion. For you to buy now and make a Microsoft return, Netscape shares have to be worth almost 400 billion in less than 10 years. How much is 400 billion It's more than seven times the current value of all the shares of Wal-Mart Stores Inc. or Microsoft. About 13 Walt Disney Cos. Almost as much as General Electric Co., Exxon Corp., AT&T Corp. and Coca-Cola Co. combined. You don't need a doctorate in higher mathematics to see that's sort of unlikely.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614050","date":"1995-12-21","texts":"Anyone who listens to economists knows the U.S. economy has been doing pretty well, with productivity booming, capital spending on a tear, and cost pressures modest. This is the payback for laying off all those workers. The poor souls may be out of jobs, but look how lean and mean everyone else is. Except that now the Commerce Department has changed its mind. It has cooked up -- just what you were waiting for -- a new way of calculating the gross domestic product. Breathless as you may be for the math, it's the result that matters. The government assuming it ever reopens is about to air-brush its old GDP numbers, and in the process reverse much of the evidence for formerly well-accepted economic trends. Growth will suddenly shrink by a half percentage point a year or more. In a 7 trillion economy, that's a lot of shrinkage. What's more, the productivity revolution will vanish into some storage cellar of the Bureau of Economic Analysis, or wherever they wind up stashing the old numbers. Productivity -- output per worker -- was rising in the '90s at 2.2 a year, more than double the rate of the '70s and '80s. Under Commerce's new math, the figure for the '90s will be only 1.4 -- now nearly identical to prior eras.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616475","date":"1995-12-26","texts":"Stocks have had a jolly fine year. The Dow Jones Industrial Average is up 32.95 since the beginning of 1995, and the Standard & Poor's 500-Stock Index has risen 33.25. But the march of the averages has masked more than a few difficulties. To be blunt, several sectors of the U.S. stock market have been real dogs. Chain stores have stumbled like Marley's ghost through the entire year, with Caldor, Bradlees and Kmart all losing ground. In December alone, big companies such as Reebok, Advanced Micro Devices, Office Depot, Best Buy and Georgia-Pacific hit 52-week lows. Moreover, money managers with diversified portfolios find themselves struggling to keep pace with the blistering pace set by the major market indexes, and small stocks have been market laggards. That mixed performance raises several questions about just how strong the 1995 bull market advance has really been and leaves some analysts unimpressed. The advance this year has been somewhat narrow, says Richard McCabe, technical analyst at Merrill Lynch. Even though breadth hasn't been horrible, it really hasn't been that spectacular. Therefore, you have a handful of blue chips leading the way. In a way, this concentration of strength is almost like the early 1970s, when you had the nifty fifty' performing so strongly.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616082","date":"1996-01-02","texts":"NEW YORK -- Program trading on the New York Stock Exchange accounted for 11.3 of overall volume in 1995, or an average of 39.7 million daily shares. It was the most active year, in terms of volume, for the computer-aided trading activity that critics blame for causing artificially sharp moves in the market. But because overall volume also soared on the exchange, the percentage figure of 11.3 wasn't a record indeed, it represented a decline from last year's 11.6. The record was 11.9 in 1993. The Big Board has released program-trading data since mid-1988, in response to an outcry over the multistock trading activity and its role in the 1987 stock-market crash. Program trading is defined as the buying or selling of a group of at least 15 different stocks valued at a total of 1 million or more. The five most active program-trading firms in 1995 through the end of September, the latest numbers available, were Morgan Stanley Group Inc. First Options the U.S. unit of Japan's Nomura Securities CS First Boston, a unit of CS Holding and Salomon Inc.'s Salomon Brothers unit. The best-known form of program trading is index arbitrage, in which traders buy and sell baskets of stocks with offsetting trades of futures and options. In 1995, such trading accounted for 30.3 of overall program trading, down from nearly 39 in 1994.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616831","date":"1996-01-02","texts":"What a ride With the economy behaving in almost perfect fashion, stock prices enjoyed some of their strongest gains in years. After opening the year in a pessimistic mood, investors turned joyous as the Dow Jones Industrial Average charged through the 4000 and 5000 milestones before the end of the year. By year end, most every investor had reason to smile. The Dow, up 33.45, edged out most of the mutual funds, but even those laggards had a good year. And all these gains came with little queasiness. According to Ned Davis Research Inc., Nokomis, Fla., the Dow's biggest correction in 1995 was a record low 3.3. In addition, Ned Davis Research says the Dow, which hit its last bear market bottom in October 1990, has put in its longest run ever without a 10 correction. But the spectacular year required something akin to a razor's edge dance by the economy. The enriching combination of modest growth with good profits -- the so-called soft landing -- came about despite a great deal of cynicism that it could ever happen. Can that perfect combination continue Most analysts now say yes. Sort of. Few expect another raucous year with gains of more than 30. Instead, the bull market will have a return to normalcy, with consensus expectations hovering around a 10 return for the year. Of course, it must be noted early on that many chin-scratchers erred badly in their 1995 outlooks a year ago. The consensus expected some sort of correction in the stock market, with prices moving higher later in the year. But hardly anyone thought the Dow would cruise past 5000.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617057","date":"1996-01-04","texts":"International Paper Co. expects to take fourth-quarter pretax charges of 70 million largely to cut about 1,300 jobs and write off assets as the company refines its operations after a string of acquisitions. International Paper, which in the past year has boosted its production capacity through acquisitions in the U.S. and abroad, said the charges are part of a plan to continue to boost profit through increasing productivity and cutting costs. The Purchase, N.Y.-based company made its announcement late in the day. In New York Stock Exchange composite trading, International Paper closed at 39.25 a share, up 12.5 cents. International Paper, along with the rest of the paper industry, has benefited from more than two years of buoyant paper prices. But flattening prices and demand have left several companies lowering their profit projections. This looks like a way of tidying up, said Mark Rogers, an analyst with Prudential Securities. This is a company that has been growing rapidly through acquisitions, and when companies are in that mode, there are more opportunities to reduce costs.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983330","date":"1996-01-04","texts":"This was my 1995 I made some money in the stock market who didn't as Wall Street hit a Cal Ripken-like streak of record highs. And I graduated two children one from graduate school who have yet to find jobs that justify the tuition outlays. The Raspberry household is not exactly a microcosm of the U.S. economy, but it does serve to make a point about it It is possible to do very well and quite badly at the same time. The newest evidence is the announcement a few days ago that AT&T plans to eliminate 40,000 jobs. That cut, according to the consulting firm Challenger, Gray & Christmas Inc., puts the communications behemoth in the No. 3 spot on the Top 10 list of corporate downsizers since 1993. IBM, which cut 63,000 jobs, leads the pack, followed by Sears, with 50,000. That, any way you cut 'em, is a lot of jobs. And yet, as I say, the stock market has been roaring. Corporations have been making good money. Productivity is up. Inflation is holding steadily low, and interest rates are trending down. The economy is going great guns while people are losing their jobs hand over fist. The outlook is for more good economic news as measured by the Dow -- and for less security for workers and bleaker prospects for next year's graduates. I truly wish we didn't have to do this downsizing, AT&T's chairman, Robert Allen, told his employees. But the actions we are announcing today are absolutely essential if our businesses are to be competitive. . . . Regrettably, unlike other downsizings at AT&T, when we've been able to place people in other jobs within the company, this time we won't see as many internal opportunities because the reductions are across the board.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830985072","date":"1996-01-04","texts":"NEW YORK, Jan. 3Blue-chip stocks rose today as investors responded to concerns about the economy by seeking less risky issues. But a sell-off in technology shares sacked the Nasdaq Stock Market The Dow Jones industrial average rose 16.62 points to finish at 5194.07. Advancing issues outnumbered declining ones by nearly 5 to 3 on the New York Stock Exchange, and NYSE trading volume grew to 469.2 million shares from Tuesdays 364.3 million. Most broad-market indexes were higher, but the technology-heavy Nasdaq composite index fell 12.39 points, to 1046.26. Its a vicious, two-tier market, said Larry Wachtel, an analyst for Prudential Securities. If youre in a handful of blue chips, youre sharing in another great day. If youre in technology, youre getting whacked around. The Nasdaqs decline marked a continuation of Tuesdays sell-off in technology stocks. Semiconductor issues fell after PaineWebber downgraded five of them, saying that despite strong industry trends, those stocks have a big downside risk. Alex. Brown & Sons also downgraded three technology stocks.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830982030","date":"1996-01-06","texts":"That's the story you should have read today but won't -- because of the government shutdown that has closed virtually all of its key statistical agencies. For the first time since it started releasing monthly employment figures in the early 1950s, the Labor Department yesterday was forced to delay its scheduled report on how many new jobs were created and how many Americans were unemployed in the previous month. And officials warned that the three-week hiatus could force a delay in the release of next month's employment report as well. It's much the same story across the entire spectrum of government economic data, from durable goods orders to home sales to the monthly trade numbers. And even if employees return on Monday to their computer terminals at the three big statistical agencies, it could be at least a month before everything is back to normal in the arcane world of chain-weighting and seasonal adjustments. Labor Secretary Robert B. Reich said the shutdown will not only delay release of some statistics but somewhat reduce their reliability.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615655","date":"1996-01-08","texts":"As the scholar says, history repeats itself. At least that's what a lot of Wall Street analysts believe. Or hope. In a year that has gotten off to a shaky and uncertain beginning, historical precedence has become one of the few touchstones remaining on Wall Street. Right now analysts have only a cloudy view of what is happening, or what to expect in the next 12 to 18 months. For one thing, government economic statistics have fallen victim to the fiscal paralysis in Washington. Without these guideposts, the view deep into the year has grown very murky. Some analysts expect growth and inflation, and others anticipate recession and bad earnings. In other words, people are all over the map. There are still a lot of fears out there, says Richard Bernstein, chief quantitative analyst at Merrill Lynch. Last year, a lot of people said stock prices couldn't go higher. Now, prices are higher, and people think they can't keep going higher. Mr. Bernstein says uncertainty and fear are contributing to the widely held consensus of stock-price gains of around 10 in the coming year. Why Because, Mr. Bernstein points out, that's the historical average return for stock prices.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983599","date":"1996-01-09","texts":"J. VJ  long. Hard bargaining has slowed or halted increases in large employers costs, but federal and state costs and payments by individuals continue to escalate. In any case, competitions effects on access and quality are likely to be dire. If market forces control health-care delivery, the number of uninsured and underinsured is certain to grow as employers restrict coverage of employees and early retirees and choice of providers. Without legislative intervention, insurance companies will do more skimming. Free markets have no concern for equity, so the plight of the chronically ill, the poor and the unemployed will worsen. Unless government intervenes, most regions markets will be dominated by a few large entitiesmostly investor-owned. These typically use 15 percent to 25 percent of premiums for corporate costs and profits, inevitably limiting services. In theory, product quality in free markets is protected by informed consumer choice, but the reality of health care differs from economists abstractions.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830981720","date":"1996-01-10","texts":"Mike Synar, 45, the brash, bright and buoyant Oklahoman who represented the people of his state's 2nd District in the U.S. House of Representatives for eight terms before losing the Democratic primary for renomination in 1994, died of brain cancer Jan. 9 at his home in Washington. The cancer had been diagnosed in July 1995. Mr. Synar, a lawyer, rancher and real estate broker from a prominent ranching family in conservative northeast Oklahoma, was first elected to the House in 1978. During his years in Congress, he vigorously supported campaign finance reform, stricter gun control and environmental legislation. He also voted for higher grazing fees for cattle on public lands, and he seemed to find himself in opposition to the tobacco industry, ranchers and the gun lobbies. In the 99th Congress, Mr. Synar led the House opposition to the Gramm-Rudman plan to reduce the budget deficit, a measure favored by conservatives and thought to be immensely popular in a district such as his. After losing the fight in Congress, Mr. Synar helped start legal challenges to the plan, which helped lead to a portion of the law being declared unconstitutional. His stands were thought to be anathema to his conservative constituents, but they continued to back Mr. Synar until 1994. That year, he was upset in a primary runoff by a retired teacher, who went on to lose to Republican Tom Coburn, an obstetrician, in the general election.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614646","date":"1996-01-12","texts":"Pick the slogan Caterpillar Inc. has banned as 8,700 members of the United Auto Workers union return to their factory jobs after their bitter 17-month strike 1. Families in Solidarity, UAW. 2. Solidarity Forever. 3. Proud to be Union. Under Cat's strict new standards of conduct, slogan No. 1 is out of bounds. Nos. 2 and 3 are allowed, the company says.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983125","date":"1996-01-12","texts":"The nation's financial markets rebounded today from a two-day selling binge brought on by the stall in talks on eliminating the federal budget deficit, but analysts said they expected future trouble from the economy and the Washington debate. The Dow Jones industrial average rose 32.16 points to close at 5065.10, boosted in part by investors buying semiconductor stocks and expressing new confidence in financial service and software companies. The Dow plunged 165 points, more than 3 percent, Tuesday and Wednesday because of bad news from some technology companies and reports that the long-anticipated deficit reduction agreement in Washington might be beyond reach. Marshall Acuff, portfolio strategist at Smith Barney Inc., said it was no surprise that there would be some rebound after the pounding the markets took the last two days, but beyond that I'm not sure there is much to get excited about. Analysts cited continued indications of a sluggish economy and disappointing fourth-quarter corporate earnings reports as rough spots for traders and investors in the next several weeks. They said they expected the market would continue to bounce up and down in reaction to statements from Washington on how the budget talks are faring.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830982827","date":"1996-01-16","texts":". NEW YORK, Jan. 15Technology stocks undermined the stock market again today as mounting fears about corporate earnings clouded a quiet holiday barling session. , me Dow jones industrial average leS 17.34 points, to 1043.78. It was down almost 25 points near the dope, but rebounded slightly. In the morning, the bjud-chip average had risen more than 17 points. ., liedining issues outnumbered advancing ones by about 4 to 3 on the New York Stock Exchange, where trading volume reached about 306.2 million shares, compared with 383.4 million Friday. .With the Treasury bond market, banks and most government offices dosed for the observance of Martin Luther King Jr.s birthday, investors had little to foijus on but worries about impending earnings reports. Many of last weeks early peeks at profits for thqlast quarter of 1995 were not encouraging. In the depressed technology sector, many players began bracing for possible disappointments in this vvegks reports by industry bellwethers IBM, Intel andMicrosoft. The technology-heavy Nasdaq composite index lost 19.66 points to dose at 988.57. Technology was one of tire main sources of upside fuel for this market for almost two years, said Ralph Bloch, chief market analyst at Raymond James & Associates in St Petersburg, Fla. This weakness is so pervasive that its dearly starting to spill over into other areas.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842615829","date":"1996-01-17","texts":"Your concerns regarding the upcoming revisions of GDP Intrinsic Value column New Recipe for the GDP Leaves Sour Taste, Dec. 21 merit a response. All economists understand that we now measure goods and services using a historical read antiquated benchmark year, which overstates output. Commerce's Bureau of Economic Analysis updates this benchmark every five years to correct this tendency. It's this standard, periodic rebenchmarking that produces the imminent revisions to GDP that you find controversial. You confuse these with a new methodology that does away with the benchmark method and its attendant problems. In reality, our new method won't significantly affect the estimates of recent growth, but it will reduce the need for future rewrites of economic history. That's why it's widely supported among economists. Users will still be provided with a dollar value for GDP while getting more accurate estimates of growth rates for both GDP and its components. And your concern that GDP's components won't add up to the total is overstated. The adding up error will be a few hundredths of a percentage point. Contrast that to the revisions of half a percentage point or more that the new system will obviate. You point to a second widely known problem in the data that they don't reflect the apparent improved quality or convenience of many goods and services. Correcting for quality changes requires a good-by-good, industry-by-industry analysis. If credible numbers existed for these effects, then we'd be using them, but they don't -- yet. In fact, the first stage of the Bureau of Economic Analysis's program to make these adjustments will be released this summer. But we're limited by resources President Clinton's 1996 budget produced adequate funding for this task that was stripped on the Senate floor. In essence, you argue that fixing the first problem in our data is inappropriate unless the second is fixed as well. But the alternative -- postponing this revision until the quality measurement problem was solved -- is a bad idea. To do so, as Morgan Stanley's Steve Roach suggests, assumes that the two sources of errors in GDP estimates are offsetting in magnitude when, in truth, we don't know. In essence, postponing this revision means feeding financial markets a guess as to how our output has changed, one that would have to be revised regardless once real answers were available.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615277","date":"1996-01-25","texts":"MEXICO CITY -- The catalog of repossessed properties could come straight from the pages of the U.S. savings-and-loan debacle. Mexican banks are trying, with little success, to unload collateral from low-quality loans on everything from abandoned pig farms to luxury condominiums. But for Mexico, this is no mere S&L crisis It's much worse. Mexico's banking disaster has wounded nearly every one of the country's 18 largest banks. And while the S&L debacle cost American taxpayers the equivalent of about 3.5 of the U.S. 1991 gross domestic product, analysts at Standard & Poor's Corp. say the bill for Mexico's mistakes could total 12 of the country's 1995 economic output. The banking crisis is exacerbating Mexico's deepest recession on record, touched off a year ago by a botched devaluation of the peso. Mexican bankers are afraid to lend more money until they see signs of a recovery. Yet unless the bankers turn on the taps again, there's little chance the economy will pick up. That is troubling for the U.S. as well. If Mexico's economy stagnates further, more illegal immigrants are likely to head north. Mexico is America's third-largest trading partner. And President Clinton's financial rescue of Mexico last March -- which included billions of dollars in backstops to prevent Mexico from defaulting on short-term debt -- has deepened the U.S. stake in its economy. Less obvious than the economic consequences, but potentially more pernicious, is the damage to the cause of Mexico's free-market reform. The privatization of the banking system in the early 1990s was a key part of Mexico's effort to reverse decades of state control. But analysts now say the total cost of the bailout could soar beyond the 12 billion the government realized from its bank sales in the first place.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983008","date":"1996-01-25","texts":"Hopes of an interest rate cut by the Federal Reserve Board and sweet talk about the federal budget stalemate helped persuade investors to push the stock and bond markets up today. The Dow Jones industrial average climbed 50.57 points, to a record level of 5242.84. Bond prices also went up, in turn reducing the yield on 30-year Treasury bonds to 6.03 percent from 6.09 percent. Analysts said technology stocks did particularly well, both because they were due to rebound from heavy selling earlier in the month and because of reports that a big mutual fund, Fidelity Investments, was buying them in large amounts. Expectation of an interest rate cut dominated talk on trading floors, analysts said. Some of the new economic data show some signs of weakness in the economy, leading to speculation that the Federal Reserve may cut short-term rates at its scheduled policy meeting next week, said Richard McCabe, first vice president and chief market analyst at Merrill Lynch & Co. It's in anticipation of a rate cut, Fredric E. Russell, a money manager in Tulsa, said of today's market performance. The politicians wrangling over budget cuts have obscured the fact that the economy is sufficiently weak to warrant a rate cut.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830985514","date":"1996-02-01","texts":"Hechinger's stock jumped 24 percent, closing at 5.75 on the Nasdaq Stock Market, in response to speculation that the Landover-based home building supply chain will be acquired by Sears. Hechinger said it did not know why its stock was up both companies said they could not comment on the rumors. Netscape Communications posted better-than-expected fourth-quarter earnings, crediting strong demand for its Navigator software for browsing the Internet. The Mountain View, Calif., company earned 2.36 million, compared with a 7.46 million loss a year ago. Revenue rose to 40.6 million from 1.18 million. For the full year, it lost 3.4 million, compared with a loss of 11.9 million in 1994. Black Entertainment Television of the District will announce today an agreement with Microsoft to provide information for and about African Americans to Microsoft's on-line network, a BET executive said. The agreement gives BET, primarily a cable TV programmer, another media outlet for distributing news and entertainment. Ford's fourth-quarter profit fell 58 percent, to 660 million. For the year, earnings fell 22 percent, to 4.1 billion. The automaker was hurt by heavy new product spending in North America and losses in Europe and Brazil. Ford said it was in for two tough quarters before new cars and truck sales improve its bottom line in the second half of 1996. IBM agreed to pay 743 million for Tivoli Systems, a mid-sized software firm that helps big operations switch from mainframes to networks of smaller computers. IBM said it would pay 47.50 per share, 26 percent above Tivoli's closing price of 37.75 Tuesday. Tivoli's stock rose 9.28 18 to 47.03 18 yesterday on the Nasdaq Stock Market.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983480","date":"1996-02-02","texts":"Mayor Marion Barry said yesterday that he no longer accepts responsibility for making major spending cuts in this year's budget and urged the D.C. financial control board to hurry up and decide how it wants to reduce the city's mounting budget deficit. I've done my share, Barry said in an interview with Washington Post reporters and editors, igniting a harsh reaction from control board officials. I've done my part. It is now up to the control board. If they tell everybody what to cut, I'll tell everybody what the consequences are. Barry's comments came on a day when the city released an audit that documents continued overspending on schools and other city services apparent violations of procurement and other laws and problems with government operations, such as computers housed in condemned buildings. The mayor also missed yesterday's deadline to deliver a multi-year financial plan that he said would spell out his vision for transforming city government. Together, the events overshadowed Barry's announcement that he had lowered municipal spending during his first year in office. Control board members were angry over Barry's refusal to go beyond his current proposed cuts, which members have described as inadequate. Stephen D. Harlan, the board's vice chairman, called Barry's approach outrageous and threatened to slash the mayor's pay and personal budget. It is outrageous that the mayor would abdicate his responsibilities and not provide leadership, Harlan said. He has become irrelevant, and if he is going to turn over the keys to the city to the control board . . . I think the citizens of this city should know that.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984362","date":"1996-02-03","texts":"The D.C. financial control board, moving to exert greater authority over the District government, said yesterday that it would develop its own long-range financial plan for the city after Mayor Marion Barry missed a legal deadline Thursday for presenting a plan of his own. John W. Hill Jr., the control board's executive director, said the board had no intention of delaying its work and would begin putting together a comprehensive plan to revive the D.C. government and balance the budget. Board officials have asked the District's independent chief financial officer, Anthony A. Williams, to submit ideas for spending cuts and other changes. Barry D, who said he plans to have his document ready in two weeks, reacted angrily yesterday to accusations that he has become irrelevant and has abdicated responsibility for running the city. But the mayor's assurances that his plan was forthcoming did not satisfy the board. We are no longer waiting for the mayor, Hill said. For the first six or seven months since the control board was appointed, we have been in the position of deferring to the elected leadership for their ideas. There is tremendous respect for home rule and sensitivity to the fact that the board members were not elected. But there comes a point in time when you just can't wait any longer. At a news conference yesterday, Barry lashed out at control board Vice Chairman Stephen D. Harlan, who threatened to cut the mayor's pay and staff after the mayor said he does not plan to propose more major spending cuts this year. Barry said the board has that duty. And, he said, Harlan doesn't understand that poor members of the community cannot endure massive spending reductions that would eliminate a mounting budget deficit.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985166","date":"1996-02-03","texts":"A federal appeals court yesterday struck down an executive order by President Clinton that barred the federal government from contracting with companies that hire permanent replacements for striking workers. The three-judge panel of the U.S. Court of Appeals for the D.C. Circuit said Clinton's executive order of last March was an improper attempt to set broad labor policy and violated the National Labor Relations Act by illegally interfering with private employers' rights to hire replacements. In a 31-page opinion, Judge Laurence H. Silberman criticized the order as quite far-reaching, pointing out that it applies to all contracts of more than 100,000. Silberman emphasized that that translated into 437 billion in government purchases in 1994 alone -- 6.5 percent of the gross domestic product -- and could affect 26 million workers, nearly one-quarter of the labor force. No state or federal official or governmental entity can alter the delicate balance of bargaining and economic power that the NLRA establishes, whatever his or its purpose may be, Silberman wrote on behalf of himself and Judges David B. Sentelle and A. Raymond Randolph, all Republican appointees. Steve Bokat, vice president and general counsel for the U.S. Chamber of Commerce, described the ruling as very, very significant because it is really one of the first opinions to clearly delineate the power of the president vis-a-vis Congress and his power to regulate through the executive order.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615330","date":"1996-02-05","texts":"You almost have to laugh at the scale of the assault now being waged against Steve Forbes' flat-tax proposal. It's virtually universal -- across the media and even among his primary opponents there doesn't seem to be a shred of good to be found anywhere in the idea. We assume most intelligent voters figure there's got to be another side to something like this, but where they find the other side must sometimes seem a mystery. Probably on the Internet. It reminds us of how during the 1994 campaign, Newt Gingrich's Contract With America was universally a media laughingstock, a joke. The Republicans now control Congress. At the moment, most of the carpet-bombing against the flat tax is based on the argument that eliminating the mortgage interest deduction will tank real-estate values and hurt the middle class. Bob Dole, with the support of Governor Stephen Merrill, is trying to win the New Hampshire Republican primary with this argument. On the surface, the mortgage-deduction defenders seem to have an audience. The middle class has good cause to distrust politicians Presidents Reagan, Clinton and Bush increased the payroll tax numerous times, a shift carried largely by those who make less than 60,000. State and local taxes take 40 more out of citizens' paychecks than they did in 1960. Inflation also distorted middle America The run-up in property prices of the 1970s and 1980s erected a line between haves older homeowners who bought with 5 mortgages and have-nots late baby boomers and Generation X-ers who faced much higher prices and much higher interest rates. Amid this heavy load on after-tax family budgets, mortgage deductibility seemed to represent the main consolation. We also have a pair of DRI-McGraw Hill studies done for the National Association of Realtors that foresee a 15 decline in home values if the deduction is eliminated. In turn, this is said to lead to a doubling of home foreclosure rates. We guess the argument, then, must be that the Forbes or Armey-Shelby flat tax will make life worse for the middle class than the tax pain already imposed by the current generation of politicians.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615742","date":"1996-02-06","texts":"NEW YORK -- Shades of 1987 The New York Stock Exchange offered up a cautionary indicator yesterday, when a membership seat sold for a record 1,250,000. That breaks the previous high of 1,150,000 set a month before the October 1987 stock market crash. To some, record seat-sale prices indicate bubbling investor optimism, and a top for stock prices. History has shown that it's a contrary opinion, sentiment-type indicator, says Ralph Bloch, market strategist at Raymond James & Associates, St. Petersburg, Fla. But the timing can be very elusive. Yesterday's sale price is 19 more than the previous sale of 1,050,000 in December.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617400","date":"1996-02-06","texts":"On Jan. 31, the Federal Reserve Board announced that it was lowering the federal-funds rate and the discount rate by one-quarter of 1. In making the move, the Fed cited the moderation in economic growth and chose to ignore the warning of gold moving above 400 an ounce. As a consequence, the markets have given the Fed a very unsatisfactory grade for its latest rate cut. In the wake of this rate cut, the price of gold has pushed higher to 415 an ounce, long-term interest rates have moved higher, the yield curve has steepened, and the dollar has slipped against the mark and the yen. In other words, interest rates on bonds went up even though the cost of borrowing money fell. Bond investors said, in effect Pay me more interest to bribe me to own the bonds. A rise in the price of gold is the best signal that we have to indicate that there is diminished confidence about the future purchasing-power reliability of money. The price of gold rises when the most savvy and suspicious investors believe the Fed has become a less reliable guardian of the value of our money. Or they may believe that in our democracy the president or Congress may pressure the Fed to lower interest rates. These suspicious investors would move out of dollars and into gold if they thought that the government was leaning on the Fed to lessen its commitment to price stability. Last week's interest rate cut raises questions about whether it might have been a politically motivated deal. It was unusual that the discount rate was cut by only one-quarter of 1 -- you have to go back to 1978 to see such a small change in the discount rate -- and yet six Fed banks including all five of the banks whose presidents have an Federal Open Market Committee vote requested the move. Based on minutes from the Dec. 19 FOMC meeting, there were some members who would have preferred to leave rates unchanged and were unsure, after the rate cut at that meeting, what the direction of the next rate move would be. Where were their voices at the January meeting Remember, the term of Fed Chairman Alan Greenspan runs out March 2, only eight months before the presidential election. On Jan. 31, the Fed ignored the warning signal from the 8 rise in the price of gold above the 1995 average. The Fed effectively said that even though there is some move out of dollars into gold, it will declare inflation to be satisfactory and give another small shove toward growth. Since the discount rate announcement, the price of gold has risen 11, to 415 an ounce 30-year bonds have fallen two points in price, taking the yield up to 6.17 despite economic data that ought to have been favorable for bonds and the dollar has fallen two yen, to 105 yen. Why was the immediate response to this monetary policy change so adverse 1. The rise in the price of gold was ignored by the Fed. Standing pat or doing nothing could have achieved a great deal. The Fed could have demonstrated its concern by leaving the funds rate unchanged at 5.5. If the Fed had not ignored the signal, the suspicions that led to a preference for gold probably would have abated.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617123","date":"1996-02-08","texts":"AuthorAffiliation Staff Reporter of The Wall Street Journal The deficit in goods narrowed 1.3 billion to 12.48 billion, while the services surplus shrank, too, to 5.42 billion from 5.58 billion. The November deficit represents the fourth consecutive month in which the trade deficit narrowed, according to yesterday's Commerce Department report. Clinton administration officials quickly seized on the November improvement as evidence that America's worrisome trade deficit has finally turned around for good. Obviously, we're going in the correct direction, U.S. Trade Representative Mickey Kantor said. He and Commerce Secretary Ron Brown noted that the trade picture improved despite weak economic growth in Canada, Mexico and Japan, the major U.S. trading partners. But economists, while surprised by the narrowed deficit, cautioned that the U.S. trade picture isn't exactly radiant and the deficit isn't likely to keep shrinking in coming months. Our trading partners are probably under the same kinds of competitive pressures which we are, said Alan Levensen, an economist with UBS Securities in New York. Foreign producers, he said, are encountering sluggish U.S. demand in much the same way U.S. exporters have been plagued by weak demand abroad. We've improved so much in November that you'll see a widening after this, he predicted. The trade gap with China, which expanded most of last year, contracted in November to 2.75 billion from October's 3.63 billion. But that's not likely to ease deepening trade tensions between Washington and Beijing. Yesterday, Mr. Kantor, who has been monitoring reports that China sold nuclear weapons-related equipment to Pakistan last year, warned that the overall atmosphere between the U.S. and China does have some effect on trade issues. That includes whether the U.S. will slap more than 1 billion in trade sanctions on China if Beijing doesn't crack down on copyright violations.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615384","date":"1996-02-12","texts":"WASHINGTON -- Regions matter. That's part of the conventional wisdom about the economy, and as plain as day to most Americans. Especially in recessions, regions have mattered greatly. The past 15 years have brought a series of regional-rolling recessions the oil-patch bust, the farm crisis, the Rust Belt woes, the collapse of the bicoastal economy in the late 1980s. The good news The U.S. has been spared a simultaneous calamity on a national scale, and most of these regions have recovered. Looking ahead, though, some economists wonder whether regional blowouts are less likely in the next downturn, whenever it comes. They note that services are stable, ever-more important and everywhere. I think the economy as a whole has become more cyclically stable as the share of services in the economy has grown, says W. Michael Cox, vice president of the Federal Reserve Bank of Dallas. In addition, some once highly vulnerable states have changed the most. Texas derived nearly 20 of its economic output from oil and natural gas in the early 1980s, when its crisis struck. Today, energy-related economic activity has dropped to less than 6, thanks to diversification, primarily into high tech and services. Mr. Cox says medical services now surpass energy, albeit slightly, in its share of Texas output.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984457","date":"1996-02-13","texts":"WHX, a New York-based steelmaker, renewed its campaign to acquire defense contractor Teledyne for about 1.67 billion. Teledyne spent most of 1995 rebuffing WHX's hostile bid. WHX offered to buy the company in a transaction composed of two-thirds cash and one-third stock. General Dynamics Land Systems, a Falls Church-based builder of armored vehicles, meanwhile agreed to buy Teledyne Vehicle Systems for 55 million in cash. Land Systems said it intends to hire almost all of the 400 employees of Teledyne Vehicle Systems, a Muskegon, Mich.-based maker of combat vehicles. The semiconductor industry's most closely-watched indicator, measuring the value of new orders against shipments, fell to a nine-year low in January, signaling a sharp drop in demand for computer chips. The Semi- conductor Industry Association said that for every 100 in shipments there were only 93 in new orders. Orbital Sciences suffered a setback as Rockwell International withdrew from a joint venture to create a reusable rocket for small satellite launches. Fairfax-based Orbital's shares fell 1.25 on the news to close at 13.75, with 483,400 shares changing hands, more than double the daily average during the past three months. The agreement called for Rockwell and Orbital to each invest 50 million in the venture. The National Aeronautics and Space Administration would have invested 70 million. T-bill rates fell. The discount rate on three-month Treasury bills auctioned yesterday fell to 4.80 percent from 4.88 percent last week. Rates on six-month bills fell to 4.71 percent from 4.79 percent. The actual return to investors is 4.94 percent for three-month bills, with a 10,000 bill selling for 9,878.70, and 4.90 percent for a six-month bill selling for 9,761.90. Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for changing adjustable-rate mortgages, fell to 4.85 percent last week from 4.93 percent the previous week.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615240","date":"1996-02-14","texts":"Apple Computer Inc., struggling to turn back a tide of red ink, said it's suspending its quarterly dividend to shareholders for the first time ever and does not anticipate renewing the payout in the near future. The company also disclosed in filings with the Securities and Exchange Commission that its profit margins -- a crucial indicator of profitability -- could shrivel further from already depressed levels. It also said its access to financing is becoming tougher, adding that lenders may insist on stricter loan covenants in response to Apple's recent weak financial performance. Apple shares fell 25 cents to close at 28.125 in Nasdaq Stock Market trading yesterday. Apple has been making the quarterly dividend payouts since it first declared one in 1987 the latest payout was 12 cents a share. The suspension, disclosed in a late filing Monday with the SEC, comes after the Cupertino, Calif., computer maker reported a loss of 69 million, or 56 cents a share, for its first quarter ended Dec. 29. The suspension begins with that quarter, in which the loss resulted from a glut of unsold computers and fierce pricing wars around the world, among other factors. With sales this year falling off as a result of customer uncertainty over its future, Apple recently said it expects an operating loss during the current quarter ending March 29 to significantly exceed the loss for the prior quarter. The company also has said it expects to incur charges of at least 125 million during this quarter for costs related to restructuring. Analysts say it may take two more quarters for the company to return to profitability under its new chief executive officer, Gilbert F. Amelio, who succeeded his ousted predecessor, Michael Spindler, earlier this month.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983643","date":"1996-02-21","texts":"Charles Krauthammer rebukes the Clinton administration for supporting market-oriented reform in Russia It's Their Economy, Stupid, op-ed, Feb. 9. Some valid questions may indeed be raised about the design and efficiency of our aid program for Russia. Certainly, the rhetoric of shock therapy, irreversible change and strategic partnership, originally used to sell Russian reform to the American public was naively romantic. But Krauthammer's proposal to disengage U.S. assistance is misguided. Russia is not Cuba or North Korea. A starvation strategy of noncooperation cannot possibly work with Russia. It is too important strategically and has too many nuclear warheads. Active, constructive engagement with Russia is the only responsible option. It is also the best way to address Krauthammer's warning that Russia will follow China's nakedly authoritarian path. Engagement must be recognized for what it is. It is not a magic wand. Nor is it a marriage vow. Understood correctly, it should be a strategy of pragmatic cooperation based on expanding spheres of mutual interest. Foreign aid to the post-Communist countries, including Russia, has been a tool of U.S. foreign policy. It is a bag of tactical interventions and subventions -- know-how and cash -- to promote desirable political and economic developments. Admittedly, there is more art than science to foreign aid, but over the years we have also learned what does and does not work. For example, trying to buy elections usually backfires. Trying to impose textbook political and economic models on non-textbook conditions is unwise. Pushing radical reform while ignoring its social consequences such as unemployment also is a bad idea, especially if the unemployed get to vote. Krauthammer argues that it is simply not in our national interest to help the Russians with their economic travails. Yeltsin, the butcher of Chechnya, has turned out to be a bad guy, so why support him On the other hand, should Yeltsin lose in next June's presidential election -- a distinct possibility -- it would be better for us if his likely neo-communist successor, Gennady Zyuganov, faced a crippled economy.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616731","date":"1996-02-22","texts":"AuthorAffiliation Staff Reporter of The Wall Street Journal The Dow Jones Industrial Average gained 57.44 to 5515.97, snapping a four-session slide, and more than erasing Tuesday's 44.79-point decline. The industrial average remains more than 85 points from its record 5601.23 hit on Feb. 13. Broader measures also gained. The Nasdaq Composite Index, boosted by powerful gains in technology stocks, soared 13.61 to a record 1096.85 Standard & Poor's 500-stock index gained 7.45 to 648.10 and the New York Stock Exchange Composite Index rose 3.39 to 345.66. Traders said Mr. Greenspan sounded less-threatening to the markets in his second day of testimony before Congress. Just the day before, many traders focused on what they said were Mr. Greenspan's hints in testimony that the Fed was done cutting interest rates -- at least for a while. Though his words changed little yesterday, analysts determined that the Fed chief did indeed see significant weakness in the economy and would consider further reductions in interest rates. Shortly after Mr. Greenspan's testimony began yesterday, stock and bond prices shot higher. But the move fizzled at the conclusion of Mr. Greenspan's statements. While bonds failed to reignite, stock prices found a second wind to close the session strongly.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983236","date":"1996-02-22","texts":"Stocks advanced broadly today, breaking a four-day losing streak, as comments by Federal Reserve Chairman Alan Greenspan encouraged a decline in open-market interest rates. The Dow Jones industrial average gained 57.44 points, to 5515.97. Twice during the session, the blue-chip average was up more than 50 points, prompting the New York Stock Exchange to temporarily restrict computer-driven buy programs in an attempt to keep markets orderly. Stocks rose, along with bond prices, after Greenspan told the Senate Banking Committee that the economy has hit a soft patch but should grow moderately over the long term. Greenspan had made similar remarks to a House committee Tuesday, but the market took those comments to mean the Fed was less likely to lower short-term interest rates soon, and bond and stock prices fell sharply as a result. Greenspan's comments today were much more conciliatory toward those who are foreseeing a rate cut, said Michael LaTronica, market analyst at Gruntal Securities. He left the door open on a rate cut in March. The price of the benchmark 30-year Treasury bond rose 716 point, or 4.38 per 1,000 in face value, while its yield fell to 6.37 percent from 6.40 percent. The bond's price was off its best levels of the day near the close of stock market trading.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830981852","date":"1996-02-23","texts":"President Clinton yesterday nominated White House Budget Director Alice M. Rivlin and St. Louis economist Laurence H. Meyer to fill vacancies on the Federal Reserve Board. As expected, he also called for appointing Alan Greenspan to a third four-year term as Fed chairman. Announcing the nominations from the Oval Office, Clinton hailed Rivlin as one of our nation's foremost experts on how to keep the economy growing and lauded Meyer for the accuracy of his economic forecasts. The nominations mark the end of a long and tempestuous search for candidates for the Fed positions. Clinton earlier said he was seeking Fed appointees who would challenge the view held by many economists -- including Greenspan -- that allowing the economy to grow faster than about 2.2 percent annually would trigger a burst of price increases. But economists and investors yesterday doubted that Rivlin -- nominated for the Fed's vice chairmanship -- or Meyer would push such a debate. Many analysts described the two nominees as careful, solidly mainstream figures whose views about the economy do not diverge significantly from the majority of the Greenspan-led board. Rivlin is very judicious, said Charles Schultze, President Jimmy Carter's top economist and for years a colleague of Rivlin's at the Brookings Institution before she joined the Clinton administration in 1993. She's not going to leap before looking.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983940","date":"1996-02-28","texts":"NEW YORK, Feb. 27Growing optimism among consumers meant less optimism among investors hoping for lower interest rates, and resulted in another weak day in the stock market today as bonds continued to stumble. The Dow Jones industrial average fell 15.89 points to close at 5549.21. But that was an improvement from a decline that exceeded 55 points at mid-aftemoon. The index of blue-chip companies now has fallen two straight sessions after returning to record territory on Thursday and Friday. Broad-market indexes moved lower too, although strength in the technology sector helped limit the Nasdaq Stock Markets decline. Declining issues outnumbered advancing ones by almost 4 to 3 on the New York Stock Exchange, where volume totaled 431.3 million shares, up from Mondays 399.3 million shares. 647.24,the Nasdaq composite index declined 6.88 to 1106.17 and the American Stock Exchanges market value index slipped 1.49 to 563.86.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984501","date":"1996-02-28","texts":"iRI Ithoiigli retail sales fell last month, and producer prices rose only Hi modestly, consumer confidence was up after a sharp drop in January. Retail sales fell 0.3 percent in January, the worst showing in six months, while wholesale prices edged higher, the government reported yesterday. But the lackluster sales and price data were offset by a private survey suggesting consumer sentiment is stronger than some had feared. The Conference Board, a private research group, said that its monthly index of consumer confidence rose to 97.0 in February, rebounding from 88.4 in January. On Wall Street, stock and bond prices faltered after release of the new economic data. Several analysts said the declines reflected a growing perception among investors that the Federal Reserve intends to lower interest rates much more gradually than had been expected. Congressional Republicans seized on the sales figures as evidence of an impending slump, but many economists disputed that assessment, arguing that the data showed only a temporary downturn and predicted","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842614800","date":"1996-02-29","texts":"AuthorAffiliation Staff Reporter of The Wall Street Journal The company's niche is paging equipment, and the infrastructure needed to support it. Back in 1993, competitors were starting to consider paging out of date, and thought it might become obsolete as newer wireless technologies emerged, says Lior Bregman, an analyst with Oppenheimer & Co. But things turned out different. While everyone else was ignoring paging's potential, the industry continued to grow 20 to 30 annually, Mr. Bregman says. The company's single-minded focus has paid off in a fat market share. In the U.S. market for paging switches and transmitters, it has about 80 and 65 shares, respectively. Motorola Inc. is in second place. As Glenayre moved into paging, the company shed all its businesses outside the telecommunications industry. The strategic shift paid off immediately, boosting Glenayre's sales to 136.1 million in 1993 from just 15.6 million the prior year. As pagers have gotten cheaper and more advanced, they have become more mainstream -- appearing on the belts of money managers and in the backpacks of teenagers, as opposed to just doctors' lapels and drug dealers' pockets. And the paging market has taken off internationally as well, with new countries and overseas operators continually being added to Glenayre's customer list.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982258","date":"1996-03-01","texts":"DuPont said two of its major businesses, DuPont Nylon North America and DuPont Dacron, will cut about 1,500 employee and contractor jobs in order to boost competitiveness. DuPont said it expects to take a first-quarter charge of about 27.8 million to cover the costs of the job cuts. The SEC barred Mitchell Vazquez, a former derivatives salesman at BT Securities, from the securities and investment industries for misleading Gibson Greetings about the size of the company's losses on derivatives. Vazquez, who was also fined 50,000, entered into a settlement agreement with the SEC and the Federal Reserve without admitting or denying wrongdoing. Netscape Communications founder Marc Andreessen, along with two other company founders, told the SEC they intend to sell millions of dollars worth of stock. Analysts said that rather than a hint of bad times at the company, the executives are simply trying to collect some of their millions in paper profits. The Justice Department announced a nationwide crackdown on bankruptcy fraud that resulted in criminal charges being filed this year against 127 people in 27 states. As part of the bankruptcy fraud investigation, dubbed Operation Total Disclosure, the government used FBI undercover agents and concealed cameras for the first time. Honeywell was ordered by a federal jury in Los Angeles to pay 234 million in damages to Litton Industries for monopolizing the market for a product used in guiding commercial jetliners -- a sum that would automatically be tripled to 702 million under U.S. antitrust law. Honeywell said it would immediately appeal the decision.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985210","date":"1996-03-04","texts":"The only flaw with this formulation is that occasionally we come upon a new hardware gadget or software program that is so intriguing, so much fun, that all productive work gives way for a few hours or days months, maybe while we mess around with the new acquisition. Ive been playing with just such a new computer toyer, tool for the past few weeks. The gadget in question is the Easy Photo Reader, a smaller-than-a-breadbox desktop peripheral that does just what the name suggests It digitizes your snapshots and reads them into the computer. Once the photo is stored on diska remarkably swift process, by the wayyou can use the Easy Photo software to enhance, sharpen, manipulate and generally take advantage of the picture in all sorts of useful ways. Then you stick the enhanced photo into a letter, report, spreadsheet, presentation or whatever. desktop publishing seven or eight years ago, it has been possible to work with photographs on a PC. But it wasnt for everybody. To digitize and store a photograph took so much processor time and disk space that most users couldnt even think about trying it. Today, though, high-speed microprocessors, billion-byte hard disks, and color printers are just about standard equipment. Thus, any user with a fairly new PC can play with pictures. There are basically three ways to get photographs into your computer so that you can manipulate them and insert them into documents. You can obtain collections of photos that are already digitized for computer use. Every software store sells CD-ROM photo collections, usually with thousands of pictures in every imaginable category. You also can download photos, maps and other items from cyberspace. But this method restricts you to pictures somebody else took.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984210","date":"1996-03-05","texts":"Trafalgar House, owner of the venerable but troubled Cunard shipping line and its QE2 luxury liner, agreed to a 1.4 billion takeover by Norwegian shipping conglomerate Kvaerner. Kvaerner said it would pay for the acquisition partly by selling 1.53 billion worth of non-core assets, including the Cunard line and the QE2. Pharmacia & Upjohn, a drug manufacturer created through the merger of Swedish and U.S. companies, said it will close 40 percent of its 56 factories and research fewer drugs. The moves are intended to save the London-based company 300 million in annual expenses on top of the 500 million in cost cutting already announced. The company also said it will sell its Stockholm-based blood plasma products business. Compaq rolled out 35 new desktop personal computers and cut prices of existing models and accessories by an average of 15 percent. Digital Equipment responded to Compaq's move by cutting prices 6 percent to 26 percent on models it sells to businesses. Meanwhile, NEC jumped into the low-price fray with a product series called the PowerMate V, starting at just below 1,300 for models with Pentium 75 MHz microprocessors. And other major computer makers adopted the faster 133 MHz Intel microprocessor for laptop models in a flurry of product revisions. T-bill rates were mixed. The discount rate on three-month Treasury bills auctioned yesterday rose to 4.89 percent from 4.86 percent last week. Rates on six-month bills were 4.80 percent, unchanged from the previous week. The actual return to investors is 5.02 percent for three-month bills, with a 10,000 bill selling for 9,876.40, and 4.99 percent for a six-month bill selling for 9,757.30. Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for changing adjustable-rate mortgages, rose to 5.14 percent last week from 5.04 percent the previous week. A former defense contractor was sentenced to 21 months in prison for concealing defects in a missile launcher that authorities said hampered fighter pilots during the Persian Gulf War. Raymond Herter, 71, vice president and general manager of the now-bankrupt United Telecontrol Electronics, also was fined 40,000.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614667","date":"1996-03-07","texts":"WASHINGTON -- When the economy hit the brakes in the fourth quarter, so did productivity. Take Georgia-Pacific Corp. It shelled out 1.3 billion last year to update and expand. But sliding prices for its paper and building products forced it to slow production in a hurry late last year, stunting productivity at the Atlanta company and bringing a fourth-quarter profit gain well below expectations. Georgia-Pacific wasn't alone. The Commerce Department said productivity, or output divided by hours worked, dropped 0.5 at nonfarm U.S. businesses in the fourth quarter, compared with a 1.1 rise in the third. That means output climbed only 1.1 while hours worked surged 1.6. The numbers show that despite heavy investment in technology and tighter operations, companies have yet to achieve consistent productivity gains. For 1995 as a whole, productivity climbed 1.1, the best increase since 1992 and far above 1994's gain of 0.5. But economist Donald Ratajczak of Georgia State University still calls it so-so. He expects it to pick up to about 1.5 this year and next, as companies adjust to a slower economy and begin operating their new, more-efficient tools. When measured between the fourth quarters of 1994 and 1995, a more meaningful gauge, productivity climbed 0.8 compared with a year-to-year rise of 1.8 in the third quarter. That means it grew just under the trend, assuming the economy's potential annual growth rate is 2 and productivity is about half that and also assuming 1 labor annual labor force growth.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985205","date":"1996-03-09","texts":"An unexpected surge in employment last month paradoxically sent the stock and bond markets into a tailspin yesterday, as traders pushed aside the good news and focused instead on the likelihood that a stronger economy could mean higher interest rates. The wild day in the markets began when the Labor Department said that employers added 705,000 workers to their payrolls in February, the largest one-month gain in jobs since 1983. In addition, the nations unemployment rate dropped to 5.5 percent from 5.8 percent. President Clinton seized on the good news, which pushed him over the top of the 8 million jobs he promised the economy would create during his four-year term. It is a tribute to the hard work and the ingenuity of the American people and to our uncommon partnership that we announce officially today that the United States economy has created 8.4 million jobs in three years, and I am very proud of that, Clinton said in a campaign stop in California. differently. In a flash, expectations of slow growth, worry about the possibility of a recession and anticipation of more cuts in short-term interest ratc by the Federal Reserve were replaced by visions of an economy swiftly gaining upward momentum. That new sense of a much stronger economic outlook caused interest rates to soar, analysts said, because investors decided that the demand for credit is likely to rise, the Fed is not likely to cut short-term rates again soon and faster growth might make inflation somewhat worse.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616923","date":"1996-03-11","texts":"TOKYO -- Demand for steel in Japan this year is expected to show a moderate increase from year-earlier levels, reflecting a modest economic recovery, according to a senior industry official. But a recent decline in export volumes is expected to continue, cutting into Japan's overall crude steel output for the year, the official said. Japan's crude steel output last year totaled 101.7 million metric tons, up 3.4 from a year earlier. It was the first time in four years that output cleared 100 million tons. A metric ton is 2,204.62 pounds., But slowing global economic growth -- notably in the U.S. -- and restraints on steel imports to China will bring total steel output this year to just below the 100-million-ton benchmark, Yasuhiko Takashi, a general manager at the Japan Iron and Steel Federation, said in an interview.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615165","date":"1996-03-12","texts":"AuthorAffiliation Staff Reporter of The Wall Street Journal Canada's most populous province must reduce its chronic deficits, Mr. Harris argues, or risk being left behind as other provinces already have moved to balance their budgets. Now Mr. Harris is moving ahead with his promised 30 income-tax cut. We want to stimulate the economy with consumer spending and by rewarding initiative, he says. The revenue lost because of the tax cut will return to the government's coffers through increased spending, more jobs and more sales taxes, he believes. But is it really so simple Can the government cut taxes and reduce spending simultaneously, without triggering a recession And if the government goes along with its plans, including eliminating 13,000 public-sector jobs, will the economy create new jobs Although some economists believe the conservative government's plans are achievable, voters aren't so sure. And unlike the situation in America, where calls for lower taxes and cuts in social spending are greeted enthusiastically by large numbers of voters, liberal-minded Ontarians are in a stir.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984835","date":"1996-03-12","texts":"The stock market left investors dizzy with relief and motion sickness today as the Dow Jones industrial average soared 110.55 points, recovering two-thirds of its loss Friday. This is a bungee jumping market, said Robert H. Stovall, president of StovallTwenty-First Advisers Inc. Analysts trying to explain the sharp turnaround said Friday's 171-point plunge by the Dow resulted from misplaced panic by bond traders and hedge fund managers when the government reported an unexpected increase in jobs nationwide in February. The report was taken as a sign the economy was overheating, and bond prices fell sharply, with stocks following. By today, the analysts said, most investors had concluded the report gave a distorted view of the economy, particularly the inflation outlook, and stock and bond prices rebounded. The benchmark 30-year Treasury bond rose 1-116 points, and its yield fell to 6.62 percent from 6.72 percent late Friday. The Dow, which fell 3 percent Friday, was up 2 percent today, closing at 5581.00, just 61 points below the high it set last Tuesday. Other indicators also were higher, and 1,568 stocks rose while 879 declined.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830982772","date":"1996-03-21","texts":"In the escalating war against smoking -- a habit that has taken many more lives than all of America's wars combined -- some states are seeking compensation from tobacco companies for medical expenses for smoking-related injuries, and prosecutors are contemplating perjury and conspiracy charges against tobacco executives who testified to disbelief in the obvious -- the addictive nature of nicotine. In this war, ironies and paradoxes abound. Smokers shiver outside their workplaces, pariahs in a country the father of which was a tobacco farmer. Probably the most powerful disincentive for smoking -- peer pressure -- is also the most powerful incentive for people to start smoking. Most smokers start before age 18 and start because of peer pressure in the search for status and glamour. However, smoking now seems dumb and declasse. Cigarettes are the world's most heavily taxed consumer product. U.S. state taxes range up to Washington's 81.5 cents a pack, and in 20 industrialized nations cigarette taxes are even higher, sometimes five times higher. The ideal revenue yield from such taxes would be zero. By some calculations, the social costs of smoking in health care, lost productivity from illness and shortened lives, and fire damage about equal the sum produced by cigarette taxes plus the savings that smoking produces in the form of reduced spending for Social Security, pensions and nursing home care for smokers. If every smoker quit today, that would be a crisis for Social Security and all pension plans that incorporate actuarial assumptions about millions of smokers dying before they can receive benefits they otherwise would collect. Cigarettes generate interesting product liability litigation because cigarettes are harmful when used as intended. The fact that cigarettes are harmful has been broadly understood for several generations and today is almost universally acknowledged. The one-third of smokers who die prematurely because of smoking lose on average 20 years of life expectancy, or 29 minutes per cigarette. The consensus about this, combined with the warning labels on cigarette packs and advertising, has helped immunize tobacco companies against liability for damage their products do. Juries have spurned plaintiffs who have said they deserve recompense from tobacco companies because everyone knows smoking is harmful.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616660","date":"1996-03-22","texts":"TIJUANA, Mexico -- As Mexico enters its second year of crushing recession, at least one industry is thriving the smuggling of illegal immigrants into the U.S. Here on the mean back streets of this border town, coyotes, as smugglers are known, lurk everywhere, pitching their services to the growing numbers of Mexicans looking to sneak across the international boundary. Ironically, the smugglers' biggest enemy, the U.S. Border Patrol, is also their biggest ally these days A U.S. crackdown along its once-porous, 2,000-mile border has made the journey so difficult that more crossers are seeking expert help. This border is no longer a cakewalk, says San Diego U.S. Attorney Alan Bersin, who was appointed law-enforcement border czar last year by President Clinton. That's put a premium on the sophisticated smuggler. In the San Diego area, the world's busiest border crossing, prosecutions of smugglers tripled last year to 74. Already in the first quarter of 1996, 68 alleged smugglers have been caught in the legal net. According to border authorities, between 45 and 80 of those who enter illegally are using coyotes, almost twice the rate of previous years. The cost has jumped, too. A simple trip to Los Angeles can now cost between 400 and 600, compared with 300 two years ago. The price has gone up because of all the Border Patrol agents, says one smuggler in Tijuana, who declines to be identified. As he nurses a quart of expensive scotch, he adds that the journey to Los Angeles now leads through some incredible mountains with bears and deer.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983092","date":"1996-03-24","texts":"A major concern of the Securities and Exchange Commission for the past year has been that small investors dont always get the best price when they buy or sell stock on the Nasdao Stock Market. order goes to the trading floor and has a chance to compete with every other order for a particular stock, SEC officials argue. Despite that, the SEC reportedly is preparing to extend an experiment in trading some NYSE stocks via a Nasdaq-like computerized system in which investors buy stock from dealers instead of trading with other investors. Officials of the New York Stock Exchange are lobbying to kill the computer trading system, which competes directly with the exchange itself. The dispute involves the Cincinnati Stock Exchange, which is not an exchange in the usual sense and isn't even in Cincinnati. The Cincinnati exchange, in fact, is a computer at the Chicago Board Options Exchange, and it works pretty much like Nasdaq, electronically handling orders to buy and sell stock.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613851","date":"1996-03-25","texts":"Here they go again. In what has become a quarterly ritual of public self-flagellation, companies are taking whacks at their own profit prospects. Known as earnings pre-announcements, these warnings about imminent disappointments tend to roil the stock market in the last few weeks of each quarter. The leading edge of the current wave hit last week. Digital Equipment knocked technology stocks for a loop with its pronouncement that weak personal-computer sales are dragging its earnings below what analysts had expected for this quarter. Trucking company Ryder System followed Friday by saying winter storms and the General Motors strike would make its first-quarter results disappointing. Other companies also announced GM-related hits. More bad news is sure to follow this week as companies prepare investors for the worst. There is a strong possibility that a lot of earnings estimates are still too high, not only in terms of technology companies, but the entire cyclical sector of the economy, says Charles Pardillo, chief strategist at Cowen & Co, which joined several other brokerage firms in lowering its investment rating and earnings estimates for Digital last week. These tech stocks are acting as if there may be further problems down the road, Mr. Pardillo says. When you look at demand, we're seeing some abatement and disappointment. It seems, across the board, many analysts have been over-enthusiastic.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613865","date":"1996-03-25","texts":"WASHINGTON -- The federal government posted a budget deficit of 44.3 billion in February, wider than the 38.36 billion in red ink a year earlier, the Treasury Department said. But the first five months of fiscal 1996 looked a bit better, with the deficit shrinking to 80.8 billion from 96.1 billion in the same period a year earlier. The Clinton administration, often boasting that its programs have reduced the deficit, has forecast that the fiscal 1996 deficit will total 158 billion, down from 164 billion in the previous year, and that the country will show a surplus in 2002. February's budget gap compared with a surplus of 19.27 billion in January. The government often shows a surplus in December and January, in line with tax payment cycles. In its statement, the Treasury said receipts totaled 89.35 billion last month, compared with 82.54 billion a year earlier and 142.92 billion in January. Outlays totaled 133.64 billion last month, compared with 120.90 billion a year earlier and 123.65 billion in January. ---","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614123","date":"1996-03-25","texts":"TECHNICAL DATA ECONOMIC RELEASE PREVIOUS CONSENSUS INDICATOR PERIOD DATE ACTUAL FORECAST Consumer March Monday 97.0 99.3 Confidence Existing Home February Monday 3.71 3.80 Sales million million Durable Goods February Wednesday 0.2 0.2 Orders Initial Week to Thursday 384,000 418,000 Jobless Claims March 23","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982296","date":"1996-03-26","texts":"Sens. Byron L. Dorgan D-N.D. and Harry M. Reid D-Nev. yesterday released a preliminary study of the Federal Reserve by the General Accounting Office that urged a variety of changes at the central bank, including consideration of merging some of its 12 regional banks. The senators criticized a steady increase in Fed operating costs and the number of its employees as well as existence of surplus accounts at the regional banks that total 3.7 billion. The money should be turned over to the Treasury, they said. However, a summary of the GAO report said that the existence of the accounts holding 3.7 billion did not raise the cost of Fed operations as far as taxpayers were concerned. The regional Fed banks set aside this money as a form of protection against losses on credit that they extend to financial institutions in connection with operation of the Fed's electronic funds transfer network and for direct loans. The senators said the Fed has not lost money in its dealings with banks and therefore needs no such cash cushion. The GAO report said that if some of the surplus money was turned over to the Treasury, it would reduce the size of the federal budget deficit for that year, but that under Congressional Budget Office rules, it could not be counted as a savings that would allow the money to be spent for some other purpose.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984711","date":"1996-03-27","texts":"Members of the Senate Banking Committee greet Federal Reserve nominees Alice M. Rivlln and Laurence H. Meyer. With U.S. economic growth looking a good deal healthier than it did two months ago, Federal Reserve policymakers decided yesterday to leave short-term interest rates unchanged until they get a better reading on the outlook for later this year. The decision to make no change had been widely anticipated by investors and financial analysts, so the news had little impact on financial markets. As soon as the policymaking session was over, Fed Chairman Alan Greenspan headed to Capitol Hill. Greenspan, nominated by President Clinton for a third four-year term as head of the nations central bank, appeared before the Senate Banldng Committee, where member after member praised his record since he assumed the chairmanship in August 1987. central banker, said committee chairman Sen. Alfonse M. DAmato R-N.Y.. Economic performance during Chairman Greenspans tenure has been remarkable.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842615765","date":"1996-03-28","texts":"AuthorAffiliation Staff Reporter of The Wall Street Journal The Fed chairman also said for the first time that the explosive rise in employment last month doesn't mean the economy is growing too fast. It is possible that the February data may have exaggerated the strength of the labor market to some extent, Mr. Greenspan said. We've not seen a similar degree of strength in other labor-market indicators, such as initial claims for unemployment insurance. The March 8 jobs report jolted the markets, as investors lost hopes for further interest rate cuts and some worried that the Fed might even raise rates. Mr. Greenspan said that while some uncertainties remain, recent data have confirmed the expectation that a good bit of the economic sluggishness of late 1995 was related to inventory adjustment, as companies struggled to pare stockpiles of unsold goods. The current economic expansion seems to have exhibited staying power, despite the drag from January's severe weather, the brief government shutdown and the recent General Motors Corp. strike, he said. He also said high consumer-debt levels and other factors still might be restraining spending. But the recent data seem to indicate that those restraining influences are not so strong as to seriously jeopardize the continued expansion of the economy, Mr. Greenspan said. Economic growth, he said, should continue without fueling inflation. The latest reports of continued low inflation, he said, are reasonably encouraging, pronouncing himself pleased but never satisfied.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830985244","date":"1996-03-28","texts":"The U.S. economy has emerged from its winter soft patch and is back on solid footing, Federal Reserve Chairman Alan Greenspan said yesterday. Although not all of the uncertainties have been resolved . . . the current economic expansion seems to have exhibited staying power, Greenspan told the House Budget Committee. The most recent reports on inflation also have been reasonably encouraging. Meanwhile, the Senate Banking Committee unanimously recommended that the Senate confirm President Clinton's appointment of the Fed chairman to a third, four-year term. The Banking Committee similarly approved the nominations of White House budget director Alice M. Rivlin as vice chairman and St. Louis economist Laurence H. Meyer as a member of the Federal Reserve Board. Greenspan attributed much of the slowdown in economic growth late last year to businesses bringing their inventories in line with reduced sales expectations, which caused a drop in production. Much, but perhaps not all, of the needed inventory correction already has been accomplished, he said.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830983902","date":"1996-03-30","texts":"The Bureau of Labor Statistics announced the latest in a series of small changes in its measurement of consumer prices that will lop 0.1 percentage point off the nation's annual inflation rate. Arcane details of how the consumer price index is constructed have become politically sensitive because of their potential impact on the federal budget. Because the CPI is used to calculate cost-of-living adjustments in a number of major federal benefit programs such as Social Security, any overstatement of inflation raises spending. At the same time, because the CPI is used to adjust for inflation the personal income tax brackets and the size of the personal exemption, it also influences revenue. Fixing what the statisticians call formula bias will save the government roughly 2 billion in the first year, with the annual savings growing over time. The Clinton administration had estimated that this change would save 0.2 percentage point, taking the middle range of the BLS's earlier estimate of change, and used that higher figure in its latest budget projections. Because the change is kicking in six months earlier than planned -- it will start with the figures released in July -- the administration's estimate for 1997's budget isn't much affected. However, the difference between a 0.1 and 0.2 percentage point reduction means the budget deficit would be about 5 billion higher in 2002 if no offsetting actions were taken, an administration official said. The fix announced by the BLS focuses on a glitch in compiling the CPI that was discovered by BLS researchers two years ago. The problem arises when an item happens to be on sale when it is included in the CPI for the first time. When its price returns to the usual level, it gives an unwarranted boost to the index.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614406","date":"1996-04-08","texts":"AuthorAffiliation Staff Reporter of The Wall Street Journal Analysts say loan-application volume fell late in the quarter as interest rates and mortgage rates rose. Though the drop in volume didn't hurt first-quarter earnings, it could trip up results later this year, starting as early as the current quarter. We haven't really begun to see the impact of higher rates on originations, said David S. Dusenbury, a research analyst at CS First Boston Corp. Total originations for the industry surged to more than 200 billion during the first quarter, up from 118 billion a year earlier, the analyst said. Mortgage rates tracked interest rates lower for much of the first quarter, dropping as low as about 7 from 9 12 in January 1995. Attractive mortgage rates continued to make fixed-rate mortgages the loans of choice among home buyers, who often opt for adjustable-rate mortgages when interest rates are high. One out of every two mortgages during the quarter was a refinance-driven loan, Mr. Dusenbury said. A high number of refis translate into a high volume of fixed-rate mortgages.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615757","date":"1996-04-10","texts":"AuthorAffiliation Staff Reporter of The Wall Street Journal But why can't it A small but growing chorus of critics is beginning to question the mainstream view and ask whether economic policy makers aren't waging the wrong war. Bruised by two decades of inflation and deficits, officials here and in other industrialized countries are keeping tight rein on budget and monetary policies they are determined not to repeat past mistakes. In the process, some fear, they may also be throttling the chances of job-creating expansion around the world. This new wave of government austerity, critics argue, saps potential growth in many mature industrial economies even as those in Asia and elsewhere are soaring, heralding a historic shift in economic power. The fast-growth gang extends beyond the usual cliques of liberal economists and supply-side enthusiasts. And it extends beyond Clinton-administration officials with their eyes on the November election. Included are people from across the political spectrum, both here and abroad, plus a growing number of corporate bosses. They contend that the world economy has changed fundamentally, and they complain that central bankers, led by the Federal Reserve, respond too slowly. Low unemployment won't trigger higher prices as it once did, they say instead, global competition and corporate restructuring will keep prices down, while productivity gains will let growth flourish. Above all, the critics want central bankers to relax their tight-money policies. We have to be willing to take more risks for faster growth, says Dana Mead, chief executive of Tenneco Inc., the Houston energy giant. We can't afford not to. Jerry Jasinowski, president of the National Association of Manufacturers, says a recent survey finds an overwhelming majority of manufacturing executives calling for lower rates. High rates are choking off growth, he says. We need a more pro-growth policy coming from Washington. John F. Welch, General Electric Co.'s chief executive, says the economy can safely grow faster than its current 2 rate, and we ought to let it.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616254","date":"1996-04-11","texts":"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. 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. The rise in commodity prices has led investors to once again fear that inflationary pressures are starting to percolate along with a rebounding economy. 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. 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 78 to 78 78. Meanwhile, Aluminum Co. of America continued to lead the charge of commodity cyclical stocks, gaining 1 to 65 38, a 52-week high.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614404","date":"1996-04-12","texts":"NEW YORK -- Inflation fears, soaring commodity prices, a bleak interest-rate outlook and concerns about the technology sector combined to send the stock market on dizzying spins throughout its busiest day in almost a month. In the end, the Dow Jones Industrial Average closed at 5487.07, up just 1.09 points, while other major indexes finished lower. The session started with gains, as oversold conditions from the three-day sell-off that took 200 points off the Dow industrials sent blue chips on what looked to be a heartening rally. But once the advance faltered, waves of sell programs sent the market spiraling lower, traders said. The choppy session saw the market twice trigger the New York Stock Exchange's 50-point collar, bringing to 41 the number of times that curbs on certain program trading have kicked in this year. Jeffrey Applegate, chief market strategist at Lehman Brothers, said investors' confused, sometimes conflicting takes on the state of the economy have contributed to the volatility in the market. This lack of consensus about the strength of the economy creates opportunities to make these kinds of sharp changes in trading patterns, because there is less conviction in the trades themselves, Mr. Applegate said.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983584","date":"1996-04-12","texts":"Fannie Mae, benefiting from lower interest rates that spurred greater mortgage borrowing, reported a sharply higher first-quarter profit yesterday. me pant mortgage finance company earned 654.2 million for the first three months of 1996, up from 566.5 million for the same period a year ago. After accounting for dividends on its new preferred stock, the company earned 59 cents a share for the period, up from 52 cents. Fannie Mae, formerly known as the Federal National Mortgage Association, was able to increase its marginsthe difference between the yield on its earning assets, primarily mortgages, and its funding costs. i.The higher volume generated 61 million in additional revenue compared with last year, and net interest income climbed by 45.3 million, to 885.5 million, officials said. Fees and other income also were up, they said. District-based Fannie Mae is a congressionally chartered, stockholder-owned corporation that buys mortgages from lenders to provide additional capital to the nations housing markets.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617053","date":"1996-04-15","texts":"AuthorAffiliation Staff Reporter of The Wall Street Journal The JNF was the first charity to buy American Airlines frequent-flier miles and offer donors one mile for every dollar contributed. Donors, by a ratio of 10 to 1, opted for miles over other incentives, including T-shirts and mugs. Everyone's a mileage junkie, says Stuart Paskow, a fund-raising consultant for the JNF, which helps develop land in Israel. Frequent-flier miles, dreamed up by American 15 years ago to sell airline tickets, have burgeoned into a national addiction -- and a significant new source of income that could help tide airlines over future recessions. The metamorphosis of mileage programs, to include charities and all manner of earth-bound goods and services, is giving airlines new influence in selling stuff having nothing to do with aviation. First, there were travel partners, such as hotels, car rentals and credit cards. Now, carriers are selling miles at two cents apiece to any company -- large or small -- that wants to offer them as sales incentives. Frequent-flier miles are available from lawn services, mortgage firms, investment houses, restaurants, furniture stores and roofing companies. ABC, the television network now owned by Walt Disney Co., is studying ways to offer miles for watching TV shows. Alert consumers can get twice the miles, or more, by using mileage-awarding credit cards when patronizing mileage-awarding merchants. AMR Corp.'s American Airlines, which has the largest frequent-flier program, says 1,000 companies now buy its AAdvantage miles under an incentive miles scheme begun 17 months ago. American sold an estimated 300 million in miles last year -- 25 million of that through incentive miles, according to Randy Petersen, the publisher of InsideFlyer magazine. Though the company won't confirm the estimates, it does say that incentive miles sales should more than double this year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983085","date":"1996-04-15","texts":"When you're a shortterm investor, surfing the fickle waves of the stock market, knowing when to bail out before the Big Kahuna breaks is the skill that separates the awesome investor dudes from the Wall Street wussies. Even investors who buy stocks for the long run can learn about the importance of picking the right time to sell by studying the scorecard of Washington Investings winners and losers for the first quarter of this year. Some of the worst losers in the last three months were huge winners last year, but many savvy investors, including some corporate insiders, got out at or near the top of the . ... wave stock trading reports filed with, the Se-' curities and Exchange Commission show. . Its not only individual stockholders but . the companies themselves that try to take advantage of a big run-up in their stock price by selling shares. Take PSINet Inc., a Herndon Internet access company. PSINet is one of three local stocks that lost almost 60 percent of its value during the quarter. PSINet slid to 9.69 by the end of March from 22.88 the first of the year and closed Friday at 9.32.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830981798","date":"1996-04-16","texts":"Del. Eleanor Holmes Norton D-D.C. introduced legislation yesterday that would slash federal income taxes for D.C. residents, a move aimed at stabilizing the city's economy by keeping the middle class from moving away. Norton previously had called for elimination of federal income taxes in the city, but she said she scaled back that proposal to increase the prospect of congressional approval. While acknowledging the long odds the bill faces during this election year, Norton said the measure would slow the exodus from the city. This bill has an extraordinary psychological effect on Washingtonians of every race and every background, she said. We have to get people thinking something good can happen. Norton's D.C. Economic Recovery Act would replace the current federal income tax schedule -- with rates of up to 39.6 percent at the highest income levels -- with a flat 15 percent tax rate for D.C. residents. In addition, the bill would more than double a federal deduction known as the personal exemption. That would eliminate federal income taxes for single residents who make up to 15,000 a year, for single heads of households who make up to 25,000 and for married couples filing jointly who make up to 30,000. Deductions for mortgage interest and charitable contributions would remain in place, and D.C. residents would pay no capital gains taxes on the sale of investments in the city.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984635","date":"1996-04-16","texts":"Merger frenzy continued in the utilities field. Texas Utilities agreed to buy natural gas company Enserch for 1.7 billion, a deal that would give the electric utility new business selling gas in Texas. Texas Utilities would take over operation of Lone Star Gas, Texas's biggest gas company, and Lone Star Pipeline, which operates more than 9,200 miles of gas pipeline, while Enserch Exploration would be spun off as an independent company prior to the merger. Western Resources, meanwhile, offered to buy Kansas City Power & Light in a 1.7 billion deal aimed at breaking up a friendly merger proposed between KCPL and UtiliCorp United. Western Resources said a merger would result in a stronger company with deeper rate cuts for electric and gas customers in Missouri and Kansas. It also said the combination would not result in any layoffs. The D.C. Office of People's Counsel has asked the city's Public Service Commission to look into whether Bell Atlantic's new 411 directory assistance system is in the interest of consumers, according to People's Counsel Elizabeth A. Noel. Bell Atlantic is phasing in a new computer database that requires 411 callers to specify the city of the number they request, rather than a broad geographic region. We will address any concerns the Public Service Commission may have, a Bell Atlantic official said. T-bill rates fell. The discount rate on three-month Treasury bills auctioned yesterday fell to 4.87 percent from 5.03 percent the previous week. Rates on six-month bills fell to 5.03 percent from 5.19 percent. The actual return to investors is 5 percent for three-month bills, with a 10,000 bill selling for 9,876.90, and 5.23 percent for a six-month bill selling for 9,745.70. Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for changing adjustable-rate mortgages, rose to 5.62 percent last week from 5.48 percent the previous week. The Supreme Court agreed to decide how difficult it should be for federal regulators to win lawsuits against officers of failed federally chartered banks. The court said it will hear arguments by several former officers of City Federal Savings Bank in Bedminster, N.J., who say the government should have to prove they acted with gross negligence, not just ordinary negligence.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842614863","date":"1996-04-17","texts":"AuthorAffiliation A Wall Street Journal News Roundup Semiconductor stocks were the top gainers in the Dow Jones World Industry Groups, closing at 321.20, up 13.59, or 4.4, with Intel of the U.S. posting a 7 gain. Fishing stocks trailed at 89.04, down 3.21, or 3.5, with Nippon Suisan of Japan sliding 5.9 in local currency. In London, the Financial Times-Stock Exchange 100-share index zipped up 34.8 points to a second-consecutive record, 3825.3, which also was the intraday peak, up sharply from the session low of 3798.8. The FT 250-share index also logged its second high in a row, finishing at 4458.5, up 41.8 points. The FT 30-stock index climbed 21.2 points to 2845.3. Provisional volume was 809.3 million shares, compared with 639.6 million shares a day earlier. The London market got a boost from Wall Street's Monday rebound, positive economic data and expectations of more British corporate takeover bids. With companies posting strong earnings and raising dividends, and stocks outperforming bonds, bullishness spread among individual and institutional investors. Gains were logged across the board, paced by retailing and property issues. Fresh takeover rumors focused on the water sector. In Frankfurt, prices edged down from the previous day's record the DAX 30-stock index fell 7.56 points to 2538.38, damped by a softer dollar against the mark and mixed expectations about German corporate earnings reports. In Paris, stocks advanced, buoyed by purchases by foreign investors and by a higher opening on Wall Street. In Amsterdam, shares ended mixed to softer, supported by the bond market and positive sentiment after new highs were set a day earlier.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983003","date":"1996-04-17","texts":"The Federal Reserve Board yesterday rejected all but a few of the budget and management criticisms leveled at the central bank recently in a draft report on its operations by the General Accounting Office. In a letter sent last week to the GAO and made public yesterday, Fed Chairman Alan Greenspan said the board takes exception to the broad implication of the draft report that the Federal Reserve has not exercised appropriate budget constraint and that it has not adequately addressed the changing technological and financial environment within which it operates. We at the Federal Reserve recognize that expending taxpayers funds outside of the appropriations process places a special obligation on us to be particularly diligent in the use and application of such funds, Greenspan said. The Fed finances its operations from interest it receives on its huge holding of U.S. Treasury securities, which backs the nations paper money, and 'from services it sells to private financial institutions and the Treasury. 47.6percent from 1988 to 1994, the period covered by the GAO report. During the same period, discretionary federal spending rose only 17 percent. But Greenspan said that declining defense spending greatly affected that 17 percent figure. Non-defense discretionary spending rose 50.9 percent, he noted. Greenspan also said that part of the increase in its budget since 1988 was due to added responsibility for supervision of U.S. operations of foreign banks, a major upgrading of Fed computer systems and the need to hire highly sidlled personnel to keep up with rapid changes in private financial markets. Meanwhile, as a result of automation and a decline of check processing volumes, several hundred other jobs have","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984680","date":"1996-04-17","texts":"Technology stocks lifted the market today as strong earnings reports by chipmaker Intel and other key companies eased worries about sluggishness in the computer industry. Indexes of smaller companies, heavily weighted with technology stocks, set new records. The Dow Jones industrial average rose 27.10 points to 5620.02, skipping back above the 5600-mark again. In just four sessions, the barometer of big U.S. companies has erased two-thirds of its recent 200-point slide, which was caused by interest rate and inflation worries. Broader-market indicators made gains too, with the Nasdaq composite index rising 14.48 to 1124.92, a record close, as investors reacted to Intel's better-than-expected results for the first quarter. The Nasdaq's previous high of 1118.10 was reached April 4. Calling demand for personal computers solid, Intel also issued a modestly upbeat outlook for the current quarter. The enthusiasm generated by Intel's report was compounded by similarly strong showing in Sun Microsystems' latest earnings statement, also released after the markets closed Monday. In active Nasdaq Stock Market trading, Intel rose 4 516 to 64 78 and Sun Microsystems climbed 4 716 to 50 34. Cisco Systems rose 1 1316 to 46 18. The enthusiasm for technology issues spilled over to the NYSE, where Motorola advanced 1 18 to 58 18, Compaq Computer rose 34 to 40 12 and IBM, a Dow component, gained 1 38 to 115 12.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984465","date":"1996-04-19","texts":"Mayor Marion Barry declared a new era yesterday of cooperation with the D.C. financial control board, submitting a revised 1997 budget that makes numerous changes the board had sought and cuts the city's projected budget deficit for the year nearly in half. Barry's conciliatory gestures come just days after he and board Chairman Andrew F. Brimmer acknowledged that the District made only limited financial progress during the first year of the board, which was created last April. Barry said the two need to recommit to a better working relationship, and his words and actions yesterday emphasized cooperation. The mayor said both the control board and the city's chief financial officer, Anthony A. Williams -- with whom Barry has clashed repeatedly -- had helped him improve his budget. This process so far has demonstrated a new tone of collaboration between the administration and the financial control board, Barry D said. Their work has been in support of the philosophy and goals of my original proposal. We have worked as a team, and our goal is to produce a single product that can go forward to the D.C. council and the Congress with our joint support. Barry said it was vital for local officials and control board members to overcome remaining differences before the 5.3 billion budget is submitted to Congress this summer. He wants to borrow more than a half-billion dollars to catch up on overdue bills -- something that will be impossible unless the principals agree.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982774","date":"1996-04-25","texts":"In the dark, smoky air of a dive called the Neon Cowboy, a ramrod-straight, red-coated Mountie and his partner, a Chicago cop, stroll by the stage. As they pass the gyrating dancers, a stripper bends down provocatively and sweeps her long hair over the Mountie's face. He pretends not to notice. It's just another good-vs.-sleaze scene in the television program Due South, the buddy show on CBS in which square-jawed Canadian actor Paul Gross plays Mountie Benton Fraser, American actor David Marciano plays American detective Ray Vecchio and Toronto plays Chicago. Due South does a fair approximation of a U.S.-made TV show, but it's not one. It is the only foreign-made series running on U.S. prime-time network television. The company that makes it, Alliance Communications Corp., has high hopes of being the first foreign company to establish a major and regular presence in the U.S. entertainment market. Five years ago, we embarked on a strategy that heavily targeted U.S. networks, said Robert Lantos, Alliance's chairman and founder. A market which is 50 percent to 70 percent of global revenue should be reflected in our balance sheet. Other Canadian production companies have succeeded in getting the occasional TV movie or animated cartoon on the air south of the border. But penetrating the major networks is tough.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983519","date":"1996-04-27","texts":"Q Our house has been on the market for some time, and even though interest rates are favorable, market conditions appear to be working against us. We have to sell and have heard about a concept called creative financing. Can you explain what this means and how it works A Although creative financing probably started when the first homeowners sold their house, the modern concept began in the early 1980s, when interest rates throughout the United States skyrocketed. Lenders and sellers began looking for new kinds of mortgage financing, which would offer attractive incentives so that reluctant buyers would go forward with the sale. From the lenders perspective, one of the most creative loans was the adjustable-rate mortgage ARM. Under such a transaction, the interest rate fluctuates at regular intervals, typically once a year. Although the most common ARM is the one-year transaction, there are many varieties on this, including six-month ARMs, three-year ARMs and five-year ARMs. With any ARM, the rate will be considerably lower than the rate for a 30-year, fixed-rate loan, although the longer the term of the adjustment on the ARM the higher the interest rate will be. But this was not enough to entice buyers into the marketplace. Sellers also began to look for their own creative types of financing, and here are a number of ideas that may assist you in marketing your house. b Seller takes back first trust. Let us assume that your house is worth 250,000. If you have no mortgage on the property, you can take back all of the financing, and you in effect will be the bank. Under no circumstances can I recommend that you make more than an 80 percent loan, and in our example, you should not lend more than 200,000. That means that your buyer will have to come up with 50,000, which may be a significant deterrent. However, if you were to lend the buyer as much as 230,000, for example, you run the risk that if your buyer becomes delinquent, and you have to foreclose, the house may have depreciated in value. This is a business, not a legal, decision that only you can make.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614952","date":"1996-05-03","texts":"AuthorAffiliation Staff Reporter of The Wall Street Journal Jointly, the neighboring ports of Los Angeles and Long Beach, which make up Los Angeles Harbor, account for about 25 of all U.S. container traffic. For Los Angeles and Southern California, the commercial role is far broader. International trade is perhaps the single most important driving force in the region's economy in the 1990s, and will continue to be a driving force in the years to come, says Mark Zandi, chief economist at Regional Financial Associates Inc. in West Chester, Pa. The port has been a key part of that flow. Even during the dark days of Southern California's recession in the early 1990s, foreign trade continued to grow. In many senses, it saved us, says Jack Kyser, chief economist of Economic Development Corp., a research group in Los Angeles. There were days when I was feeling a lot of pain, and I would call someone down at the port to brighten my day. The rising tide of foreign traffic totaled 157 billion of imports and exports last year. But the seeds of labor friction were sown in this growth, shipping-industry analysts say. As more ships have arrived, trade has relied increasingly on what is now believed to be about 6,500 truckers who haul containers between the harbor and delivery points. Mostly independent owners and operators of often-battered trucks, these drivers have been a low-paid and often-pressured link in a system that moved as many as 10,000 containers a day across a few dozen miles of freeway. The drivers are a largely immigrant, Hispanic group. Their numbers have grown with cargo volume. Competition kept haul rates low. And pay has effectively further declined in many cases, shipping insiders say, as truckers, paid by the haul, have been slowed by traffic with the growing cargo volume.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617310","date":"1996-05-14","texts":"London stocks fell to their lows, after a British regulator ordered British Gas to cut its natural-gas prices. Tokyo shares slid 1.2 Monday in trading dominated by selling to unwind arbitrage positions amid caution because of rising long-term interest rates in Japan. Sao Paulo prices rallied to a 19-month high. World-wide, stock prices rose in dollar terms. The Dow Jones World Stock Index climbed 0.64 point to 140.01, reflecting higher markets in the Americas and the AsiaPacific region, excluding Japan. The EuropeAfrica region declined. Semiconductor stocks were the top gainers in the Dow Jones World Industry Groups, closing at 347.91, up 10.32, or 3.06, with Analog Devices of the U.S. posting a 7.73 gain. Gas utility stocks trailed at 87.25, down 2.51, or 2.80, with British Gas of Britain sliding 12 in local currency. In London, the Financial Times-Stock Exchange 100-share index dropped 15.2 points to 3739.2, near the intraday low of 3738.0, after notching a session peak of 3760.9. The FT 30-stock index declined 18.1 points to 2794.5. Provisional volume was 582.9 million shares, compared with 633.2 million shares on Friday. London dealings were dominated by a big sell-off of British Gas shares, which plummeted 27 pence to 228 pence 3.47, after Britain's gas-market regulator, in a move aimed at reducing consumer prices by 10, ordered the company's Transco unit to cut its prices to suppliers between 20 and 28 starting next April. British Gas said this could slash its annual revenue at least 993 million and cause it to eliminate 10,000, or 20, of its 49,000 jobs. The regulatory agency and the company are to hold talks, which could take two months, on final proposals for the curbs, and if they can't agree, British Gas vowed to take the case to the government's antitrust commission. The British Gas stock slide, which wiped almost 1.2 billion 1.82 billion off its market capitalization, knocked about 7.5 points off the FT-100 index, with an additional three points of the total drop attributed to several big companies' going ex-dividend. Many investors bowed out, awaiting today's U.S. consumer-price data and this week's earnings reports by some big British companies.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982309","date":"1996-05-14","texts":"Banks must do a better job ensuring that their customers understand the risks of investing in uninsured bank products, such as mutual funds and annuities, according to the FDIC, which unveiled initiatives designed to improve training of bank officers and bank examiners. U.S. cigarette exports totaled 728.6 million during the first two months of 1996, 7 percent more than the same time a year ago, the Agriculture Department said. Americans aged 45 to 64 are likely to boost the economy into the next century because their incomes and accumulated wealth exceed other age groups, a Conference Board report said. Average household income for those in the 45-54 age group, for example, is currently 140 percent higher than for those under 25. It was 80 percent higher in 1970. Middle-aged Americans, ages 45-54, earn 50 percent more than those in the 25-34 age bracket, up from 25 percent in 1970. T-bill rates were unchanged. The discount rate on three-month Treasury bills auctioned yesterday was 5.02 percent, the same as the previous week. The rate on six-month bills was 5.14 percent. The actual return to investors is 5.16 percent for three-month bills, with a 10,000 bill selling for 9,873.10, and 5.35 percent for a six-month bill selling for 9,740.10. Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for changing adjustable-rate mortgages, rose to 5.67 percent last week from 5.63 percent the previous week. Japan's current account surplus shrank 8.5 percent in March, to 12.03 billion, as imports continued to grow faster than exports, the Finance Ministry said. For the fiscal year ended March 31, the surplus in the current account, which measures the value of the merchandise, services and investment that flow in and out of the country, fell 24 percent, the third straight annual decline.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984179","date":"1996-05-17","texts":"Stocks struggled to a mixed finish today, weighed down by weakness in the bond market as some surprisingly strong economic readings undermined confidence about inflation and interest rates. But the Nasdaq market and other indexes that are dominated by smaller and more speculative shares outperformed the blue chips and set records again as investors hunted bargains. The Dow Jones industrial average rose 9.61 to 5635.05 as the past week's rebound continued to sputter. The barometer of 30 big U.S. companies had gained more than 28 points earlier in the day, but slid lower as bond prices fell and interest rates rose. Broader measures dominated by larger companies retreated from modest gains as the yield on the 30-year Treasury bond -- a benchmark used to determine the interest charged on many loans -- topped 6.9 percent. Bonds initially were weakened today by three reports that ran slightly counter to recent indications of moderate economic growth and modest inflation.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983479","date":"1996-05-18","texts":"8.92 billion in March as imports of ' both goods and services hit record  highs. The Commerce Department said the March deficit, was 26.8 percent higher than a revised ' February imbalance of 7.04 billion. Mobil of Fairfax and Royal DutchShell Group signed an agreement yesterday with the Peruvian government to develop one of the world's largest gas fields. The project will require the largest foreign investment in Perus history2.7 billion over 40 years. Mobil holds a 42.5 percent stake in the project. Washington Real Estate Investment Trust of Kensington acquired the Maryland Trade Center office buildings in Greenbelt from the State of California Public Employees Retirement System for 28 million. NationsBank received regulatory approval to become the first U.S. commercial bank to have a derivatives subsidiary. The May Co.'s first choice for a new distribution warehouse for Hechts department stores is an Anne Arundel County business park. The Baltimore Sun reported that the Rte. 32 Business Park in Odenton would be at least 600,000 square","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984770","date":"1996-05-21","texts":"This is report card season in classrooms and it's no different in the Annapolis office of Maryland Gov. Parris N. Glendening D, who has come up with his own grades on the steps he has taken to help the state's struggling economy. Glendening recently compiled a tally of nearly 18,000 jobs that companies and federal agencies have added or pledged to add in Maryland over the next few years. Also on the list were more than 8,000 jobs that might have left the state but have been preserved. In many cases, a loan or a tax break from his administration helped nail down the job gains, the governor declared. Even if one gives full credit to Glendening for these jobs -- and in some cases, that is a stretch -- Maryland continues to receive a needs to improve on job creation. With federal agencies and their contractors downsizing, job growth in the state is averaging less than 1 percent per year -- about 16,700 net new jobs over the past year, according to the latest count. The only reason the unemployment rate is stable is that the number of people seeking work in Maryland is growing just as slowly. There is no such thing as a quick fix for the combination of problems plaguing the state's economy, he said. In time, its assets -- a prime location along East Coast transportation routes, a large supply of scientists and engineers and some superb high-tech institutions -- will pull it through, he maintains. Unlike some of the naysayers, the doom-and-gloom people, I am an optimist, Glendening said. But while Glendening urges patience, Maryland is losing ground to neighboring states whose business, sales and personal taxes are lower than Maryland's, said Richard P. Clinch, who directs regional economic studies for the University of Baltimore's business school.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830981984","date":"1996-05-28","texts":"Fidelity's Magellan Fund is the biggest mutual fund in history. Its 56 billion of assets make it twice the size of its closest rival, and bigger than the economies of Ireland or Iraq. Magellan is not only big, but popular it has almost 4.4 million shareholders, about a third more than AT&T, the country's most widely held stock. And Magellan, which has a superb long-term record and was the launch pad for financial superstar Peter Lynch, is by far the best brand name in the fund biz. Magellan is the only fund in the country that the average person in America has heard of, says Kurt Brouwer, a San Francisco mutual fund consultant. But last week, Magellan manager Jeffrey Vinik announced that he's not only quitting the fund but is leaving Fidelity to set up his own money management company. Fidelity Investments is installing its third Magellan manager in less than six years by contrast, Lynch ran the fund for 13 years. What's going on here Why has Magellan begun to devour managers at a rate seen only in professional sports And more important, do you want to put your money into Magellan If your money is there now, should you leave it in I don't think Magellan's problem is Vinik, who was chewed up and spat out by the job in less than four years. Or his predecessor, Morris Smith, who lasted only 25 months. But rather, as I wrote in March, I think the problem is Magellan itself. The fund is so big and its profile is so high that I doubt it's sufficiently nimble to outperform the stock market by enough of a margin to be worth it. If Magellan isn't going to be a star, who needs it You can buy a boring, low-cost index fund instead. Should you wait to see how Magellan's new manager, Robert Stansky, performs Isn't he one of Fidelity's brightest stars Yes, but if you look at the fund's post-Lynch record, you see a disturbing trend. The legendary Lynch outperformed the Standard & Poor's 500-stock index by a whopping 13.6 percentage points a year. But his tenure began when Magellan was a private fund with only 6 million in assets. When he quit, the fund had 14 billion. Smith outperformed the S&P by 3.6 points, and the fund had 20.6 billion when he left. Vinik beat the S&P by less than a point, and the fund has 56 billion. See a pattern here To be fair, Vinik was going gangbusters until last fall through Sept. 11, 1995, to be exact. Until then, he had outperformed the S&P by 7.5 points a year, according to Morningstar Inc., a mutual fund research firm. Since September, he has underperformed the S&P by 20 points. That's right, 20 points. He was an amazingly good 31st out of 363 growth funds during his up period, and an amazingly awful 812th out of 820 since then. In hindsight, we can see that one of the reasons Vinik did so well at first was that he guessed right on technology stocks, and his continuing, massive purchases drove their price up, enhancing his performance. But when he began selling, it drove down prices, hurting his performance as he continued to unload. Also, having guessed right on the techies, he guessed wrong by buying bonds, which have been stinko performers. This isn't investing, its gambling.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982242","date":"1996-05-28","texts":"After years of skyrocketing increases, national health care spending rose only 6.4 percent in 1994, the slowest growth rate recorded in more than three decades, the Medicare Office of National Health Statistics reported yesterday. The figures, published in the magazine Health Affairs, show that health spending by all public and private sources totaled 949.4 billion in calendar year 1994, the latest year for which data have been calculated, or 3,510 for each person in the United States. From 1988 to 1992 the nation experienced double-digit and near-double-digit increases in health spending each year. The rate eased to 7 percent in 1993 and the growth rate now has fallen again to 6.4 percent. Despite the small 1994 rise, U.S. health spending still makes up a higher proportion of gross domestic product than any other developed nation's, 13.7 percent in 1994. Authors Katharine Levit, Helen Lazenby and Lekha Sivarajan said the slow rate of increase appears to stem from employers switching coverage for their workers from conventional fee-for-service plans to health maintenance organizations and other managed-care plans that often charge less. Low inflation also is a contributing factor. The new figures appear to support the arguments of health analysts like Gail Wilensky, who chairs the Congressional Physician Payment Review Commission, and GOP members of Congress, like Rep. Nancy L. Johnson R-Conn., who believe that increasing competition in the health industry is squeezing waste and holding down cost growth.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830984439","date":"1996-05-30","texts":"The nineteenth century poet, Sam Walter Foss, called for Men to match my mountains. That's out now. Voters are looking for a man to fix their potholes. Character doesn't count any more. A Washington Post-ABC poll shows that to 77 percent of the electorate, it isn't the highest personal character that matters. Mount Rushmore is all very well, but we're talking meat and potatoes here character is caviar. They are talking about someone who understands the problems of people like you. The Republicans cannot believe that all the virtue has been driven out of the electorate. They are sure that if they touch the right button, Americans will come to their senses and vote for Bob Dole. They believe that Bill Clinton's biography is a gold mine in terms of potential negatives that will kill his candidacy. That is surely what the president's 1992 rivals thought. His baggage -- Whitewater, Gennifer Flowers, the draft -- would rob him of nomination and election. But from those first snowy days in New Hampshire, the verdict was as strong as it was surprising. Some said they would have preferred a more upright man and faithful husband, but could not let those considerations be decisive. They imposed a kind of vision test. They were looking for a man who saw what they saw -- foreclosures, bankruptcies, failures, vacant houses, idle factories -- in a word, recession. George Bush, the squire among the peasants, tried to accentuate the positive, get people to be patient with a global economy, marvel in the pleasure of having Arnold Schwarzenegger in their midst. He was grandfatherly, gracious and the lion of the Persian Gulf War. But they were looking for something else, a grasp of reality.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830981667","date":"1996-06-03","texts":"Federal workers who would like to retire but don't qualify for decent pensions got a political reality check last week. The House slammed the door on an innovative National Security Agency plan to enhance early retirement. The NSA, eager to replace some its not-so-old cold warriors, wanted to offer some of them six-figure exit bonuses to take the sting out of early departure into an uncertain job market. Had the NSA succeeded, other agencies that are downsizing or reinventing themselves would have asked Congress for similar authority to encourage early-outs. The typical civil servant retires at age 61. To get unreduced benefits based on salary, age and service time, civil servants must be age 55 with 30 years of service, 60 with 20 years of service or 62 with five years of service. The percentage of final salary they get as an annuity is based on service time, and annuities are indexed to inflation. But early retirees age 50 with 20 years of service or at any age with 25 years pay a price. Annuities are reduced 2 percent for each year the retiree is younger than 55. That's why fewer than 3 percent of feds offered early-outs take them. The NSA thought it had found a unique way out. The agency wanted to provide a golden parachute for early retirees. Many NSA employees, because of their super-secret jobs and specialized skills, couldn't get decent-paying jobs in the private sector because their resumes for security reasons would look rather skimpy for 20 or 30 years of work. Many NSA specialists were recruited very young. Some reached high-paying jobs early and are well short of 55. The NSA proposed a system whereby it would compute how much early retirement the 2 percent penalty would cost the early retirees and then, in a special, one-time-only offer, pay them a lump sum representing the lifetime pension reduction they would take. Officials estimated that the payments would average 80,000 to 90,000 but that for some employees the amounts would have been much, much higher. Some agencies objected to the NSA proposal buried in an intelligence reform bill on the ground that they wouldn't be able to offer it to their employees. Officials of the House Government Oversight Subcommittee on the Civil Service, which has jurisdiction over federal employee benefits such as retirement, went ballistic when they learned of the NSA's effort. Many rank-and-file feds wished the NSA well. They figured that they might get something out of it, perhaps a waiver of the 2 percent reduction, if the super-secret agency was successful. But Congress balked, saying it would be costly to the retirement system and set an expensive precedent. That means early retirement still is available to most federal agencies through Sept. 30 but the 2 percent penalty still applies.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615853","date":"1996-06-05","texts":"Eighteen months after a wrong-way bet on interest rates led to 1.7 billion in losses, California's Orange County is emerging from historic bankruptcy proceedings with fewer delays and less economic pain than many had feared. Not only has the county's business climate improved dramatically despite going through the nation's largest municipal bankruptcy, but investors today are expected to snap up nearly 900 million of new debt being issued by the county. How was the crisis solved so quickly And what lessons does it hold for fiscally struggling county and city governments nationwide According to county officials and advisers, the speedy resolution was a combination of luck, innovative financing, hard-nosed bargaining with creditors and state legislation that allowed the nation's fifth most-populous county to avoid the gloomy scenario predicted a few months ago. The roughly 880 million note and bond sale will hit the market just as Wall Street underwriters are hungry for business and investors are eager to buy riskier, lower-rated securities, which carry relatively high yields. Indeed, underwriters have been waging all-out war to win business and maintain their share of the market. People are tripping over each other to do deals, said Joseph M. Giglio Jr., chairman of Apogee Research Inc., a financial consulting firm. Said Mr. Giglio, a former municipal-bond investment banker The industry is in a stage where you have 20 sharks trying to feed off one small trout. Everyone is desperate for product.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983464","date":"1996-06-06","texts":"The bond market took a dive last week after several Federal Reserve policymakers were reported as hinting that the economy is growing so strongly that short-term interest rates ought to be raised soon. Senior analysts at several major Wall Street firms advised their traders that the uniformity of views in the reports was so striking that the statements undoubtedly were the result of a coordinated effort. Central bank officials were signaling financial markets that higher rates were on the way, the analysts said. There may be some flaws in that analysis Several of the policymakers disavowed what they were reported to have said and they added that their statements were not coordinated. In interviews, several Fed officials said they expect economic growth to slow to a sustainable pace of around 2 percent in the second half of this year, with the risks about evenly balanced that growth will be somewhat higher or somewhat lower than that. That view hardly suggests a stampede to raise rates, particularly given the current inflation picture. The chart at the right shows how the Fed has slowed real economic growth to keep inflation low and also suggests that there is relatively little inflationary momentum that would require urgent Fed attention.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830982060","date":"1996-06-12","texts":"President Clintons nominees to the Federal Reserve Boardall of whom had appeared to be shoo-ins for Senate confirmationare now getting tangled in a web of election-year politics. Republican senators yesterday for the first time expressed reservations about confirming the nomination of White House budget director Alice M. Rivlin for one of the two open seats on the Fed board. Meanwhile, Senate Democratic leaders said yesterday they still have no deal to move the nominations to a floor vote. Sen. Tom Harkin D-fowa and others have held up the nominations because they want a full three-day debate over Fed policy, which they believe is restricting the nation's economic growth. Laurence H. Meyer, the St. Louis economist nominated for the other open Fed board seat, has rearranged his financial affairs, including negotiating the sale of his economic forecasting firm, and has expressed his concern about the delay to the White House. Administration officials have been unsuccessful so far in getting Congress to set a date for a confirmation vote for either nominee and for the reconfirmation of Fed Chairman Alan Greenspan. Rivlins confirmation was questioned during the Republican senators' weekly luncheon yesterday. The lawmakers are angered over Clintons latest budget proposal, which asks for increased spending on some politically popular programs this year while proposing steep cuts in the same programs that take effect only after the election.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830983671","date":"1996-06-13","texts":"Yet another Washington area Internet company -- Digex Inc. of Beltsville -- is jumping into the stock market. Yesterday it filed plans to raise 55 million by selling its first shares to the public. Digex said in documents submitted to the Securities and Exchange Commission that it will sell an undetermined number of shares to finance expanding its computer network, attracting more customers and acquiring smaller Internet companies. The offering is being underwritten by Salomon Brothers Inc. and Montgomery Securities Corp. We believe that we are just at the beginning of this industry, although there has already been rapid growth, said Digex Chief Executive Christopher McCleary. Many other Internet companies, which provide customers with links to the worldwide network of computers, have gone public over the last year. They include major national players such as UUNet Technologies Inc. of Fairfax and PSINet Inc. of Herndon. The prices of those stocks have rocketed up and down this year as major competitors enter the market and the industry changes rapidly.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616437","date":"1996-06-14","texts":"NEW YORK -- Employment in the securities industry is poised to smash a record set just before the 1987 stock-market crash. In what some say could be yet another sign that the stock market is nearing a top, the number of brokers, traders, investment bankers, analysts and others in the securities industry stood at nearly 257,000 at the end of the first quarter, just 2 shy of the record 262,173 set in September 1987 -- and up 22 from the recent low in 1990, according to the Securities Industry Association, a trade group. The 1987 crash brought Wall Street's then-record hiring levels to a screeching halt, of course. Securities firms, scrambling to cut costs amid declining business, let go 52,000 employees from September 1987 to year-end 1990. Since then, gun-shy Wall Street executives have taken pains to prevent a bulk-up in hiring that would lead to the kind of painful boom-and-bust cycle that has characterized the Street throughout its history. Some say the Street hasn't learned its lesson. You have to be nervous about the buildup, says Dean Eberling, an analyst at Prudential Securities Inc. I think people are looking at their business and saying it is subtlely different this time -- but this is a business that is transaction sensitive. And when the volume of deals or trades plummet, so will head count, Mr. Eberling predicts.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982086","date":"1996-06-14","texts":"Stocks slipped again today, even as interest rates backed away from 13-month highs, reflecting persistent inflation worries and a negative outlook for the computer industry that dragged down computer stocks. The Dow Jones industrial average fell 10.34 points, to 5657.95, rebounding from a midday loss of 28 points as interest rates began to ease. The Dow, a barometer of 30 big U.S. companies, has fallen every day this week, but the total decline of less than 40 points demonstrates investor confusion about signals on inflation and interest rates. Bond prices, which had slid the past four sessions in the aftermath of Friday's strong employment report, drew some early strength from a report showing that retail sales rose 0.8 percent, to 205.5 billion in May, which was slightly below analysts' projections. But the bond market worsened by midday, sending interest rates higher and stocks lower, reflecting worries about an upward revision in the April sales tally and concerns that May's advance was robust regardless of projections. The price of the Treasury's main 30-year bond rose 34 point, or 7.50 per 1,000 in face value. Its yield fell to 7.12 percent from 7.19 percent late Wednesday, which was the highest level since early May 1995.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830983829","date":"1996-06-15","texts":"Volkswagen said it will accept that U.S. courts have jurisdiction over the company's legal dispute with General Motors. The companies have been arguing since 1992, when GM's worldwide chief of purchasing, Jose Ignacio Lopez, defected to Volkswagen. GM accused Lopez of taking trade secrets with him. America Online of Vienna and Netscape Communications will jointly offer a media deal that enables advertisers to reach the combined audiences of AOL and Netscape's popular Web site. Industrial production rose for a second straight month in May and businesses showed signs of rebuilding depleted inventories, a move that could mean even greater output and more jobs. The Federal Reserve said output at the nation's factories, mines and utilities rose 0.7 percent in May after an identical advance a month earlier. The Commerce Department said business inventories rose 0.4 percent in April after shrinking 0.3 percent the previous month. House Minority Leader Richard A. Gephardt D-Mo. for the first time opposed renewing China's most-favored-nation status, a trade designation that makes it easier for China to sell goods in this country. The shift puts Gephardt in opposition to the Clinton administration. Debate on Alan Greenspan's nomination to serve a third term as Fed chairman was adjourned in the Senate until June 20, when a vote will be taken on confirmation of him and two other Fed nominees. The EEOC said it will meet with Texaco after finding that the oil company discriminated against some black employees. Spencer H. Lewis Jr., district director of the Equal Employment Opportunity Commission, made the finding in a letter dated June 6. A company spokeswoman said Texaco disagreed with the findings. Texas Instruments-Acer plans to indefinitely delay expanding its Taiwan semiconductor wafer plant in the wake of slowing demand and falling prices for computer chips. The joint venture between Texas Instruments and Taiwanese computer giant Acer will put off the installation of a second eight-inch wafer facility, which was expected to produce 16-megabit dynamic random access memory, or DRAM, chips beginning in early 1997.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984392","date":"1996-06-16","texts":"Ford Motor Co. went public in 1956, raising 650 million in what was then the largest stock offering in history Ten million shares were sold, and my grandfather bought me oneme, a 9-year-old kid who knew nothing about the stock market but would team. more. Through stock splits, my one share of Ford has become 16 shares. My grandfathers gift, which cost about 60, is now worth 560. It could have been worth more than 2,000 if I had reinvested the quarterly dividends in more shares of Ford instead of squander ing them on baseball cards and movie tickets. But the money isn't the main point. It was a wonderful gift that I haven't forgotten. My own experience with Ford is one reason I suggest giving shares of stockor mutual fundsas presents for young people graduating from high school or college or getting married or having a significant birthday. Gifts of stock should always come with an admonition, a note to the recipient that says, Promise you wont sell this stock for at least 20 years. Youll be tempted at times, but youll be glad you kept it two distinctly different approaches a Buy young, exciting growth companies. This is the strategy recommended by Standard & Poor's Corp., the research and ratings firm, in an article titled Stocks for Different Times of Your Life in See GLASSMAN, DO, CoL 3  Not meaningful  NOTE S&P's highest rating for stocks is five stars SOURCE Standard & Poor's Investor's Monthlyi the S&P newsletter, Investors Monthly. Stocks for singles and young mar-rieds, says S&P, generally have stronger growth potential and therefore carry higher PE price-to-eam-ings multiples and offer little or no current income.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614042","date":"1996-06-17","texts":"Investors may be talking bearish, but they're still walking bullish. During the past two months, the level of negative sentiment -- at least as articulated by the assorted seers and chin-scratchers on Wall Street -- has grown noticeably. Strategists bullish throughout 1995's impressive stock market run have grown increasingly skittish about the market's prospects for the rest of this year. Among the reasons bearishness is so in vogue speculative movement among small stocks and an overly aggressive investor lust for initial public offerings of any kind. But at the same time, even as the talk grows more pessimistic, the folks with the hard cash continue to remain, well, fairly bullish. Mutual fund cash inflows are powerfully strong. Cash levels among institutional investors are stuck at aggressively low levels. Money managers, while nervously talking about rising interest rates and stretched valuations, continue to deploy new assets into the stock market. And analysts' estimates for 1996 earnings for Standard & Poor's 500-stock index companies have risen in four of the past five weeks, according to IBES International Inc., a research firm in New York. People are talking a lot about being more nervous, but I sure don't see it reflected in the stock prices, says Barbara Marcin, senior equity portfolio manager at Citibank Global Asset Management. Part of the problem is that people are afraid of being out of the market. Though investors are talking more pessimistically, the one thing we've learned during the past year and a half is that being in cash is not the place to be. Yes, holding cash can be deadly, which might explain why it's easier to try to call a market top than it is to move investments to reflect such sentiment. Jeffrey Vinik, late of Fidelity's Magellan Fund, learned the hard way that playing defense in this market can be immensely unrewarding. And many of the most outspoken and nervous bears concede that they have felt nervous and bearish for a long time.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983979","date":"1996-06-17","texts":"For investors who have champagne taste in stocks, but only a beer budget, what's wrong with buying beer stocks Nothing at all, say the experts. The stock market has marked down the price of most beer stocks this year from their former heady levels, making them affordable buys. Two Virginia investment firms recently have issued research reports suggesting that their clients sample some of the new microbrewery stocks. Ryan, Lee & Co. in McLean recommends Frederick Brewing Co. in Frederick, Md., the maker of Blue Ridge Beer. Wheat First Butcher Singer Inc. in Richmond studied four other microbreweries and expects three of them to outperform the market the Boston Beer Co., best known for its Samuel Adams brand Redhook Ale Brewery Inc. of Seattle, maker of Redhook Ale and Pete's Brewing Co. of Palo Alto, Calif., home of Pete's Wicked Ale.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983903","date":"1996-06-21","texts":"Federal Reserve Chairman Alan Greenspan was confirmed to a third, four-year term yesterday on a Senate vote of 91 to 7, the latter all Democrats complaining that interest rates are too high. White House budget director Alice M. Rivlin also was confirmed both to a 14-year term on the Feds board and to a four-year term as vice chairman. However, that vote, 57 to 41, was much closer than anticipated as Sen. Christopher S. Bond R-Mo. led a group of Republicans who were unhappy about what they see as Rivlins failure to provide them full details about some future-year spending cuts included in the latest budget submitted by President Clinton. Many close observers of the Fed expect no noticeable change in monetary policy as a result of the addition of Rivlin and Meyer, both of whom agreed at their confirmation hearing that the central banks primary job is to keep inflation under control.-But they both also agreed the Fed should pursue policies that keep unemployment as low as it can be consistent with holding down inflation. Sen. Tom Harkin D-Iowa had held up consideration of the nominations, which were approved more than two months ago by the Senate Banking Committee, until he and a few colleagues were given parts of three days in which to lay out their case against Greenspan during a discussion on the Senate floor. Harkin argued that the Fed under Greenspan has consistently kept interest rates too high to allow the economy to grow as fast as it can without causing inflation to surge.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983202","date":"1996-06-25","texts":"One of Wall Street's favorite expressions is The trend is your friend. What this catchy little saying means, of course, is that if you divine the direction the financial markets are taking, you should go with the flow and make money. The only problem, though, is that riding the waves of financial fashion is a lot easier said than done, as the financial trendsurfers who have been loading up on smallish technology stocks are finding out. Until recently, lots of investors thought this particular wave had a long way to go. Weren't computers and the Internet the coming things Who wanted to listen to those boring skeptics who thought that a company should actually show a profit before being valued at billions of dollars in the stock market Surprise In the past few weeks, lots of tech stocks have turned from Endless Summer, the famous surfing movie whose stars found the perfect wave, into the Surfaris' Wipeout. The Nasdaq index, heavily weighted toward technology, closed yesterday at 1182.90, down 5.3 percent from its high on June 5. That may not sound like much, but it's the equivalent of the Dow Jones industrial average falling nearly 300 points. But that drop is a mere bag o' shells, as W.C. Fields used to say, compared with what's happened to some individual stocks that have been thoroughly drilled lately. A few examples America Online Inc., the world's biggest online services company, closed yesterday at 42.12 12 a share, down almost 40 percent from its May 7 high of 70. Iomega Corp., which makes a dandy new computer disk drive, closed at 29.37 12, down 46 percent from its high on May 22. Lycos and Excite, which make search engines to help folks navigate the Internet, are down 48 percent and 52 percent, respectively, from their peak prices in April.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616215","date":"1996-07-02","texts":"NEW YORK -- The dollar ended global trading yesterday down slightly against the mark and yen as traders avoided taking big dollar positions in a potentially volatile week, broken by a U.S. holiday. This week will include the U.S. Federal Reserve's monetary policy meeting today and tomorrow, Russian elections, also tomorrow, and the release on Friday of U.S. jobs data for June. All three events are potential market movers. Thursday is U.S. Independence Day, a national holiday. Yesterday, traders bought the British pound, which hit a six-month high against the dollar late in global trading and gained significantly against the mark and yen. Sterling hit an intraday high of 1.5594 the prior time it was higher was Jan. 2, 1996, when it reached an intraday high of 1.5600. Traders said sterling rose due to strong economic data released yesterday, making it less likely that the Bank of England will trim base rates tomorrow, and a large late-day sterling purchase. Expectations of a U.K. rate cut have been eliminated in the past several days and weeks, said a dealer at a large Swiss bank in New York. So those who had been selling sterling based on that expectation of a cut are having to buy it back.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615811","date":"1996-07-05","texts":"WASHINGTON -- Despite continuing signs of economic momentum, the Federal Reserve still isn't convinced that growth is so strong that it is straining capacity and threatening higher inflation. After a two-day meeting that ended Wednesday, the Fed's policy-making committee voted to leave short-term interest rates unchanged. Whether it tightens rates at its next policy session Aug. 20 -- as many economists expect -- depends on what signals the economy sends on prices and growth in the next few weeks. There just wasn't enough evidence yet, said Chris Varvares, an economist with Macroeconomic Advisers, a St. Louis forecasting firm. Core prices are still decelerating, and there are clear signs that the burst of strength in the second quarter will slow to a more sustainable level during the second half. Over the next six weeks, the Fed will get critical new economic data, beginning this morning with new payroll and unemployment numbers. Also due soon are consumer and wholesale prices, retail sales, wages and the first estimate of total second-quarter growth. Many economists expect that number to exceed a 4 annual rate, compared with 2.2 in the first quarter -- well above the level thought to be sustainable without higher inflation, given today's tight labor markets. In their deliberations, Fed policy makers had to look ahead into next year and would have tightened rates if they saw a clear threat of unsustainable growth leading to rising inflation. One factor that may have helped forestall a rate increase was the rising value of the dollar compared with the yen and mark, a rise that will brake the economy by cooling the booming export sector.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982941","date":"1996-07-06","texts":"With the nation's economy running hotter than expected this summer, the jobless rate dropped to a six-year low of 5.3 percent last month and employers added nearly a quarter-million workers to their payrolls, the Labor Department reported yesterday. The surprisingly strong jobs numbers, coupled with a sharp rise in hourly wages for the month, were applauded by the White House as a sign of buoyant economic growth. We have the most solid American economy in a generation, and it's good news when America can have high job growth, strong investment and low inflation, President Clinton told reporters. Ten million payroll jobs have been added since he took office. Investors, who can be alarmed by economic news that they consider too good, took a dimmer view of the labor report. Fearful that the unrelenting strong growth would cause the Federal Reserve to raise short-term interest rates as early as next week to keep the economy from overheating, investors launched a selling spree in yesterday's holiday-shortened trading session, sending stocks and bonds sharply lower. The Dow Jones average of 30 industrial stocks dropped 114.88 points, or slightly more than 2 percent, to close at 5588.14. Meanwhile, yields on 30-year U.S. Treasury bonds, which rise when bond prices fall, shot up by a quarter of a percentage point to 7.18 percent, the highest level in more than a year.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984054","date":"1996-07-10","texts":"Early this year a tremor shook the Federal Reserve Boards headquarters on Constitution Avenue All four of the Fed's then-governors met with Chairman Alan Greenspan to insist that they be told what he and the staff were doing about a wide range of international economic matters, including contacts with foreign central banks. The four board members were not complaining about policy. Rather, they were frustrated that no one was keeping them adequately informed about the staffs activities, including discussions with the Treasury Department and research on internation- al financial issues. Two of the four also grumbled later about being excluded from the staffs preparation of domestic economic forecasts. Such complaints almost never surface at the central bank. Powerful chairmen have run the show for at least the last half century, with the staff as their strong right arm. Each governor, as board members are called, has one vote on policy matters, as does the chairman. But traditionally the chairman speaks for the institution and opposition to his view is not a small matter. Historically, the lines of power at the Fed have been so .clear that some years ago a departing senior staff member said he never had an interest in","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615856","date":"1996-07-11","texts":"NEW YORK -- In its third acquisition in two weeks, GT Interactive Software Corp. purchased Humongous Entertainment Inc., one of the country's leading children's software publishers, for stock valued at 76 million. The sale, which closed yesterday, involved the exchange of four million shares of GT Interactive stock valued 19 each, for all of Humongous's closely held stock. In Nasdaq Stock Market trading, GT's shares fell 50 cents to close at 19. GT's move comes as the CD-ROM industry churns out more titles than retailers can promote and market. Andrew Gregor, senior vice president of GT Interactive, said he expects the industry to go through a major consolidation period, one that will result in six or seven major companies dominating at least 80 of the industry within a few years. The model is the record or film studio business, said Mr. Gregor. Content will always be very important, but there is a lot of content out there. What distinguishes a successful company is the ability to distribute product. Mr. Gregor estimated there are more than 15,000 CD-ROM titles for sale today, although the average mass merchant has room to stock 300. GT Interactive, which went public last December, made its mark in the multimedia field as the distributor of Doom, one of the country's most successful CD-ROM action titles. Since then, the company has established itself as a software publisher, primarily of entertainment games created by other companies.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615492","date":"1996-07-12","texts":"NEW YORK -- Yesterday's plunge in the stock market, which left some of the market's best-known names with steep losses, came on the seventh-highest volume in New York Stock Exchange history. The Dow Jones Industrial Average sank 83.11, or 1.48, to 5520.54. At its low for the session, the average had given up 133 points, its steepest decline on a point basis since March 8, when the industrials fell by as much as 225 points intraday. Hewlett-Packard plunged 10 58 to 78 38, a loss of nearly 12, on the fallout from the computer maker's announcement late Wednesday that its fiscal third-quarter results would suffer because of slower-than-expected order growth. Coming just a day after shares of Motorola sank 13, the earnings woes left blue-chip technology stocks, and the rest of the market, badly bruised. Motorola on Tuesday said its results were worse than Wall Street was expecting. Intel lost 3 38 to 69 12, Microsoft dropped 5 to 114 12, Computer Associates fell 3 14 to 65 14, and Cisco Systems sank 3 18 to 54 34.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981875","date":"1996-07-13","texts":"Lower interest rates and some bargain hunting helped steady the stock market today as most indexes reversed course and averted a continuation of Thursday's big slide. Growing pessimism about corporate earnings and inflation prevented a big rebound for the second time this week. The Dow Jones industrial average fell 9.98 to 5510.56, having recovered from a midday drop that threatened to give the blue-chip average its third loss of more than 50 points in six sessions. Some broad indexes rose, but the beleaguered Nasdaq Stock Market failed to erase all of the day's losses as investors worried about where technology and speculative shares might bottom out. Bond prices were bolstered by government reports showing wholesale prices rose a moderate 0.2 percent in June while retail sales fell for the second time in three months.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616305","date":"1996-07-15","texts":"Who's afraid of Saddam Hussein The stock market was, in 1990. Iraq's invasion of Kuwait, and concern about the Iraqi leader's unpredictable behavior, helped spark a 21 decline in the Dow Jones Industrial Average. The Saddam Hussein bear market began six years ago this month. Although unusually swift, the decline met the classic definition of a bear market a 20 decline in major stock indexes. The average had been knocking on the door of the 3000 mark that summer. It stopped a fraction of a point away, with twin peaks of 2999.75 on July 16 and July 17. Then, prices began to slide, ending with an Oct. 11 low of 2365.10. Iraq invaded Kuwait Aug. 2, and much of the damage in the stock market took place in mid-August, after President Bush had said the invasion cannot stand, but before it was clear what America would do. Fear that the U.S. might get involved in a prolonged war, or that Mr. Hussein might deploy chemical or biological weapons, helped to spook stocks. As it turned out, the war was quick and resulted in an overwhelming U.S. victory. On Jan. 17, 1991, after hostilities actually began and the results looked good for U.S. forces, the Dow industrials soared 114 points.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616761","date":"1996-07-16","texts":"NEW YORK -- A surge in demand for marks and a falling U.S. stock market sent the dollar into a sharp decline against the German currency and the yen yesterday, traders said. The Dow Jones Industrial Average fell just over 160 points -- its third fall in a row. The U.S. bond market also was in the doldrums. The mark's advance was most prominent against the lira, Sweden's krona and Spain's peseta. Traders said the sense -- mainly a delayed reaction to a Dutch interest-rate rise Friday -- that German official rates have bottomed out sent investors fleeing from currencies of European countries with higher interest rates. The perception in the market is that German rates have hit bottom, said Kevin Lawrie, chief dealer at Mellon Bank in Pittsburgh. That takes away the attractiveness of other high-yielding currencies, he added. Some market participants also said comments by Alexandre Lamfalussy, president of the European Monetary Institute, or EMI, supported the mark. The EMI is the precursor to the future European central bank.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983336","date":"1996-07-16","texts":"Merger-related job cuts were down 31 percent in the first six months of 1996 compared with the first half of 1995, said Challenger, Gray & Christmas. The Illinois-based employee placement firm said 23,424 jobs were eliminated as a result of two or more companies merging during the first six months of this year. Airbus Industrie received a multibillion-dollar order from General Electric's GE Capital Aviation Services leasing subsidiary. GE ordered 45 jets from the European aircraft consortium and took an option on 45 more. The GE unit said the order would exceed 2.5 billion based on published prices, but industry sources said it would have been able to command a big discount due to the size of the deal. Airbus declined to comment on the price. Business inventories edged down 0.1 percent in May, to a seasonally adjusted 983.3 billion, while sales rose for a fourth straight month, the Commerce Department said. Many analysts had expected the slight decline but say many businesses are beginning to rebuild their stockpiles to meet an anticipated increase in demand. Sales rose 0.7 percent, to a seasonally adjusted 717.4 billion, from 712.3 billion in April. Two brokerages reported improved quarterly results, helped by a boom in stock trading. Donaldson, Lufkin & Jenrette Securities' profit more than doubled, to 97 million. PaineWebber earned 92.2 million, compared with a 90.5 million loss a year ago that largely was due to a one-time after-tax charge of 126 million to settle allegations that the firm misled investors in limited partnerships. Motorola, which last week reported disappointing earnings, announced its first layoffs in more than a decade 145 workers at its semiconductor facilities in Austin. It's due to the continuing decline in our business, said Dan Rogers, director of public affairs for Motorola's semiconductor products unit. The total industry is in an economic downturn.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615706","date":"1996-07-18","texts":"The lurching stock market may make consumers queasy, but it's going to take more than that to make them sick enough to trigger an economic downturn. Think back to 1987. Then, the stock market's plunge was much more severe in percentage terms than any of the dips in the past few days. Still, outside of the financial sector, the economy didn't feel any ripple effects until around mid-1989, notes Donald Fine, chief market analyst for Chase Asset Management. The 1987 market plunge was steeper than any of the market slides that have coincided with recessions in the past few decades. And many economists believe that, to hurt the economy, today's market would have to suffer consistent and considerably worse drops than it has shown recently. Even then, Mr. Fine says, only at some future point would it damage consumer spending and other economic sectors. In the high-technology sector, where the recent drop has been severe, tumbling stock prices are a reflection of worsening industry performance, said Kenneth R. French, professor of finance at the Yale School of Management. Still, a continued stock price plunge in that sector, he said, might reduce its access to venture capital and inhibit initial public offerings. In general, however, the wider economy is largely insulated from the stock market's volatility. True, more little guys have their money in the stock market today. According Federal Reserve numbers cited by James Poterba, professor of economics at the Massachusetts Institute of Technology, 38.4 of all U.S.households held some kind of stock in 1992, the latest year for which data are available, up from 33.2 in 1983. But one-third of the 8.4 trillion in corporate public and private equity is tied up in IRAs, 401ks and other retirement accounts, according to 1995 data from the Fed and Investment Company Institute.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613857","date":"1996-07-19","texts":"GREENSPAN SUGGESTED that progress against inflation may be drawing to a close, but stopped short of saying policy makers will have to raise interest rates. The Fed chairman said 1996 so far has been a good year for the economy, but that it would begin to slow down in the second half. He said the Fed will be in a state of heightened surveillance for signs of higher inflation in weeks ahead. Stocks and bonds rallied on his testimony. The benchmark bond's price rose nearly 1 14 points, pushing the yield back below 7. The Dow Jones industrials rose 87.30 to 5464.18, and the Nasdaq gained 23.17 to 1109.82. --- AT&T showed significantly lower calling volume and revenue growth in the second quarter, though its overall net income rose by 10. The company's shares fell 4 to 54.125. Lucent posted strong quarterly revenue growth, but profit was cut by the high cost of splitting from AT&T.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984343","date":"1996-07-22","texts":"Tom Blair, founder and chairman of United Payers and United Providers, a Rockville-based health care financing company, was just one day away from the company's initial public stock offering when his investment bankers delivered the bad news on July 1. With the market in a skid, you're not going to get as much as you want for your stock, the bankers bluntly told Blair and his partners. They gave them a choice Postpone the offering for several months or cut the price. Instead of asking 13 a share for the stock as planned, the company cut the price to 11 and on July 2 sold 2.4 million shares. The offering raised 26 million in capital for the company, known as Up and Up, which helps insurance companies provide medical services at lower costs by prepaying hospitals. If the same number of shares had been sold at 13, Up and Up would have raised an additional 5 million, and could have raised even more if the stock had been issued for the 15 to 17 price projected when the issue was planned during the spring stock market boom. Whether it's called a correction, a sell-off or the beginning of the end of the longest bull market in history, this summer's stock market slump, which is hitting tech stocks particularly hard, is costing entrepreneurial Washington companies -- even if, like Up and Up, they are not in technology sectors -- millions of dollars. The Nasdaq Composite Index -- which consists of the stocks of many of the area's and the nation's fastest-growing companies -- closed at 1,096.68 Friday, down 12.2 percent from its peak this year of 1,249.14 on June 5. The Washington Business High-Technology Index, which includes the stocks of 56 publicly traded tech companies in the region, closed Friday at 23.2, compared with 28.7 on May 1.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613710","date":"1996-07-26","texts":"When Armand Arabian stepped down as an associate justice of the California Supreme Court earlier this year, many fellow judges were taken aback. Oversize ads in legal newspapers carried his picture and trumpeted that the Arabian Knight would now work as a mediator and arbitrator for the American Arbitration Association. In interviews, he bragged about having a special telephone number to receive an onslaught of calls. If you want justice in the southland of Los Angeles, you wire 213-ARABIAN and you got me, he declared. In the staid judicial world, many decried what they saw as an affront to the dignity of the bench. They were also astonished by reports of the lucrative deal the retired justice had cut with the AAA, the nation's oldest provider of private justice. But the marketing of 61-year-old Justice Arabian ratcheted up what has become an intense battle among the AAA and its rivals to snag judges and the money they generate. We're in the merchandise business, says Milton Adler, secretary-treasurer of Judicate of Philadelphia, an East Coast competitor. Judges are like our inventory. Though retired judges around the country now resolve legal battles out of court, nowhere is the competition for them as intense as in California, where the practice took hold 17 years ago and has become more and more widespread. Cutbacks in court funding in recent years and the state's three-strikes sentencing law have created long waits for civil trials and unprecedented demand for court alternatives, especially mediation. I call it the Full Employment Act for Retired Judges, Justice Arabian says.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983472","date":"1996-07-26","texts":"NEW YORK, July 25An encouraging profit report by IBM helped jump-start the technology sector and the rest at the stock market today, spurring the broadest advance since last week's tumble. The Dow Jones industrial average rose 67.32 points, to 5422.01, with more .than half of the blue-chip barometer's advance coming from IBM. HIM's profit report also helped the technology-laden Nasdaq market break out of a steep, four-session slump. Other broad market measures posted strong gams, and advancing issues out-iBimfered declining ones 13 to 7 on the New York Stock Exchange as trading volume fell to 405.4 mOlirni shares from 463 million Wednesday. IBM has a psychological aura, said Robert Froehlich, chief investment strategist at Van Kampen American Capital in Oakbrook Terrace, 111. A good, move by IBM gives a psychological hit to the market As expected, IBM reported a decline in second-quarter earnings as sales growth slowed due to lower chip prices ffld unfavorable currency exchange ra-thos. Ikrt excluding the impact of foreign eatenge market gyrations, IBMs sales grew faster than expected, and its profit was sdQ slightly higher than expected.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614437","date":"1996-07-29","texts":"Try talking about the stock market without mentioning the Dow Jones Industrial Average It is a little like talking about the weather without mentioning the temperature. It wasn't always that way. For the first 25 years or so of its existence, the industrial average was mostly absent from headlines in the financial press. In the late 19th century and early 20th century, investors focused mainly on the action of individual stock issues rather than the market as a whole. When they did look at market averages, they were more likely to look at railroad stocks, the blue chips of the day, than at industrial stocks, which were considered speculations. It was in the Roaring '20s that many investors first became intimately acquainted with the industrial average. That was when masses of average citizens began buying stocks by the bundle. Their enthusiasm carried the industrial average from around 100 in 1924 to nearly 400 by mid-1929. Then, the crash of 1929 thrust the Dow industrials to true prominence. Investors were hungry for a way to gauge the overall damage, so the Dow industrials made front-page headlines.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614662","date":"1996-07-31","texts":"MIAMI -- Even wealthy, fugitive bankers get the blues. Bankers might be thought to have souls of glass and hearts of stone, but we are human beings, says Gustavo Gomez Lopez in a telephone call from an undisclosed location in Europe. A Venezuelan judge wants to extradite Mr. Gomez Lopez, 44 years old, back to Caracas, where he is wanted on charges of fraud connected to the spectacular failure of Banco Latino, the country's second-largest bank. Like most of Banco Latino's directors and top officials, Mr. Gomez Lopez, the bank's former chairman, hurriedly left Venezuela weeks before an arrest warrant was issued for him after the bank's collapse in January 1994. The bank's failure sparked a run on Venezuela's currency that plunged the nation into its worst economic crisis. Since then, Mr. Gomez Lopez has been followed abroad by a grab-bag of presidents, top executives and directors from the 17 banks that eventually tanked in the financial panic that followed the government's 83-day closing of Banco Latino. Ultimately, Venezuelan judges issued arrest warrants for 322 bankers and leading businessmen blamed for the debacle that cost the Venezuelan government some 7 billion. About half of those facing arrest warrants have scattered into exile of varying degrees of comfort in London, Madrid, and other European capitals, and a good number settled in the U.S. Many are in the Miami area, less than three hours from Caracas by jet and a long-favored playground for Venezuelans.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617078","date":"1996-07-31","texts":"Morgan Stanley's market strategist Byron Wien is looking pretty good so far on his April prediction that the Dow Jones Industrial Average would begin a 1,000-point decline this year. So far, the Dow industrials have fallen 296 points from their May peak. Now a respected rival has come forward with almost a mirror-image prediction. Edward Kerschner, PaineWebber's market strategist, has just told his firm's clients that the Dow industrials will rise about 1,000 points in the next 18 months. Wall Street gurus often shroud their predictions in enough mist that they later can claim they were right, no matter what happens. And lately, bold market predictions have been a bit rare. But Mr. Wien and Mr. Kerschner are being unusually blunt and explicit with their 1,000-point bets. For investors, a lot rides on whose reasoning is more compelling. Mr. Kerschner maintains that inflation is licked, and that interest rates are in a gradual but dramatic downtrend that will take yields on long-term bonds all the way down to 5 by the end of 2001, from about 7 today. Low interest rates make very healthy fertilizer for stock-market rallies. Mr. Wien's bearish stance stems from his belief that the economy will be stronger than most people expect. As companies clamor for money, he says, interest rates will rise, poisoning the stock market. He also says that various technical market indicators are flashing red. The 1,000 points, in all honesty, was picked for its drama, he says. But I'm not backing off -- even though the market has rebounded by 132 points since mid-July.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983451","date":"1996-08-02","texts":"The economy grew at a robust annual rate of 4.2 percent this spring, the government reported yesterday, as consumers went on a buying spree, retailers restocked shelves, and governments loosened their purse strings. It was the best quarterly performance for the economy in two years and a sharp turnaround from the lackluster growth rate of 0.3 percent last fall. This just confirms that the economy is basically in good shape, declared Stephen Roach, chief economist with the investment house of Morgan Stanley & Co. The rapid expansion during April, May and June also was achieved without triggering any acceleration in price inflation -- a fact that cheered Wall Street. The Dow Jones industrial average jumped more than 65 points while interest rates on the benchmark 30-year U.S. Treasury bond fell to 6.83 Details, Page F2. This latest report on the gross domestic product -- the government's broadest economic gauge -- will be the last until just before the November election. Immediately it became grist for the presidential race.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842615101","date":"1996-08-05","texts":"WASHINGTON -- Somewhat subdued job growth and declining hourly wages in July offered the clearest signs yet that the economy is throttling down from the second quarter's torrid pace. The financial markets exhaled on Friday, quickly concluding that the Labor Department's benign employment report takes the pressure off the Federal Reserve to raise interest rates at its policy meeting Aug. 20. Stock and bond markets rallied, with the Dow Jones Industrial Average surging 85.08 points, to 5679.83, while the price of the 30-year Treasury bond jumped 1 18 points, pushing down the yield to nearly 6.73. Fed Chairman Alan Greenspan told Congress two weeks ago that policy makers were ready to tighten credit to head off inflation unless signs of a slowdown became evident soon. Just in time, that evidence is emerging. The economy added 193,000 jobs in July, much more tame than June's huge gain of 220,000. The unemployment rate rose only a tenth of a percentage point to 5.4 of the work force in July, and Fed officials said they're still concerned about labor-market tightness and the prospect that rising wages could drive prices higher. Yet they also said there's scant evidence of this indeed, the employment report showed average hourly earnings retreated by two cents after shooting up nine cents in June. With inflation stable, the Fed is increasingly likely to stay on the sidelines. The report did much to allay a lot of those fears about an overheating economy, said economist Ken Mayland of KeyCorp in Cleveland. It makes a good case that things are simmering down some.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615763","date":"1996-08-06","texts":"DOLE OUTLINED his plan for tax cuts, saying he is now the agent of change. The speech kicked off his campaign for the fall. Expected this week is his choice for vice president, followed by his nomination at the GOP convention next week. Dole said enactment of his package of 548 billion in cuts over six years was just a matter of presidential will, and that the cuts could lead to a new, unspecified tax system. The plan would balloon the deficit, raise interest rates and weaken the economy, Clinton said. In San Diego, abortion foes managed to water down a Dole-backed tolerance plank in the Republican platform. The plank no longer uses the word abortion. --- Israel's Netanyahu said he is prepared to begin negotiations with Syria to settle all outstanding matters between the two Mideast foes. The prime minister, on a visit to Jordan, said he has sent a proposal to Damascus through the U.S., but gave no details. His remarks indicated he is willing to go beyond a limited deal on Lebanon.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614583","date":"1996-08-08","texts":"THE SEC MADE FINAL its settlement with the NASD to prevent abuses in the Nasdaq Stock Market. The settlement is a blow to Nasdaq, which has been dominated for years by a few big brokerage firms and market makers. The SEC and the NASD's new regulators may work more closely together on discipline cases. --- A Fed survey found that economic growth has eased in recent weeks, giving Federal Reserve policy makers another reason for leaving interest rates unchanged when they meet Aug. 20. --- Freeport-McMoRan said it plans to buy fertilizer producer Arcadian for 1.06 billion in stock. Some Arcadian shareholders said the price offered by the mineral concern is too low.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983928","date":"1996-08-11","texts":"Bf you cheer when the economy fades, youre probably a bond investor. Slower growth means fewer fears that price inflation will increase. Interest rates will probably fall, which means that band prices will rise. When you think about buying bonds, you may have bond mutual funds at the front of your mindespecially if you own mutual funds that invest in stocks. Owning a bond fund seems like a logical extension. But funds arent always the best choice, especially for investors whose stomachs knot every time the market drops. Depending on your needs, you might be better off with individual bonds. Bond prices can be volatile. In 1994 and 1995, the market price of long-term bonds maturities of 20 years or more fluctuated, up and down, by more than 20 percent Prices fall whenever interest rates go up. In the past, that has sometimes shocked inexperienced investors, who grabbed what was left of their money and ran. They might not have done so had they owned individual bonds. If you can hold to maturity, its safer than any bond fund can be.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615831","date":"1996-08-12","texts":"The heat applied last week by the Securities and Exchange Commission to the Nasdaq Stock Market is reigniting some criticism that the market needs a much stronger overhaul than what the SEC wants. The SEC last week brought a disciplinary case against the National Association of Securities Dealers, the parent and self-regulator of the Nasdaq Stock Market, for failing to clamp down on dealers who engaged in anticompetitive, anti-investor behavior. The SEC said NASD failed to stop some dealers from keeping artificially wide the spread between the prices at which they offer to buy and sell stocks failed to keep dealers from reporting trades late -- a practice that obscures the true market for certain stocks failed to discipline dealers who refused to honor their quoted prices to investors and failed to halt market makers who coordinated with other dealers to set prices for their own advantage instead of for that of customers. Nasdaq market makers have engaged in a variety of abusive practices to suppress competition and mislead customers, the SEC wrote in its extensive report, which capped two years of investigation into practices on the market. The NASD settled the case without admitting or denying wrongdoing and agreed to some 14 reforms, including ponying up 100 million over five years to increase its surveillance of dealers and strengthen its rules.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615200","date":"1996-08-16","texts":"Circon Corp. is circling the wagons, rejecting U.S. Surgical Corp.'s unsolicited 230 million takeover bid and installing a so-called poison-pill shareholder rights plan. Circon, a Santa Barbara, Calif., maker of surgical products, said it wasn't for sale and that the offer of 18 a share was inadequate in the opinion of its financial adviser, Bear Stearns & Co. Shares of Circon yesterday fell 62.5 cents to 17.125 in Nasdaq Stock Market trading, after jumping to over 19 following the tender offer, announced on Aug. 2. Circon shares were trading under 9 in late July, and U.S. Surgical points out that the offer was an 83 premium over the average closing price of the stock for the 10-day period prior to the bid. Yesterday, U.S. Surgical rose 37.5 cents to 35.75 in composite trading on the New York Stock Exchange. The shareholder rights plan effectively stops U.S. Surgical, a Norwalk, Conn., maker of surgical instruments, from acquiring 15 or more of the company by making it prohibitively expensive through the issuance of shares at a discount. U.S. Surgical purchased about 8 of the shares of Circon before announcing its bid. Company insiders and former executives own a significant stake in Circon.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985582","date":"1996-08-16","texts":"The federal budget deficit will plummet this year to 116 billion, according to a revised Congressional Budget Office forecast issued yesterday, marking the fourth consecutive year of declining deficits and the smallest annual revenue shortfall since Ronald Reagan took office in 1981. CBO's new estimate is virtually the same as one released late last month by the White House Office of Management and Budget and provides the Clinton administration with additional election-year grist for asserting that its anti-deficit and economic policies are working. Its good news for the country, and it shows how important it is that we continue to use conservative economic assumptions and have all new tax cut and spending proposals paid for with specific savings, said Gene Sperling, a White House economics adviser. In an indirect shot at Republican presidential nominee Robert J. Doles call for a 15-percent reduction in personal income tax rates, Sperling added that its also important that we not return to the supply-side wishful thinking that led to deficits escalating in the 1980s. The deficit, which ballooned in the 1980s and early 1990s, gradually began to decline during President Clinton's administration, from 255 billion in 1993 to 203 billion in 1994 to 164 billion in 1995. As recently as three months ago, the CBO, Congresss official budget But the combination of an improving economy and declining unemployment produced an unanticipated 22 billion revenue surge and a dramatic improvement in the deficit picture, analysts said. At the same time, projected government spending for the year is down by 7 billion from previous CBO estimates.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984369","date":"1996-08-21","texts":"NEW YORK, Aug. 20Heavy industrial shares rose today as the Federal Reserve confirmed expectations it wouldn't try to slow the economy with higher interest rates. But the widely anticipated decisionalready employed as a catalyst for several recent ralliesleft the rest of the stock market mixed and little changed in another sluggish summer session. The Dow Jones industrial average rose 21.82 points to close at 5721.26. It was the third straight gain for the blue-chip measure, which has crept back within striking distance of its all-time high of 5778.00, reached May 22. The Dow was led upward by such companies as chemical maker DuPont and aluminum producer Alcoa, which suffer tire most when borrowing becomes more expensive, slowing spending on bigger purchases such as cars and houses. But stable-demand consumer stocks such as Procter & Gamble and Merck, which had benefited most from the economic uncertainties confronting investors, were the Dows weakest issues. And the Standard & Poors 500-stock index of large companies, which usually moves in sync with the Dow, slipped 0.89 to 665.69, pressured by its heavier weighting with consumer-related businesses.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830984692","date":"1996-08-22","texts":"America West is adding 56 employees, including mechanics, after a federal inspection raised questions about its maintenance procedures, federal regulators said. While some problems were found, the airline has made corrections and meets all federal requirements, a Federal Aviation Administration official said. He said the FAA acted because of changes in the way the airline was handling maintenance. America West laid off 400 mechanics in December and hired outside contractors to do the work. The federal deficit doubled to 27.1 billion in July from year-ago levels, but was headed down for the full 1996 fiscal year, the Treasury Department said. Several unusual factors whittled the year-ago deficit, including a change in the timing of some military and other spending, and a one-time revenue boost from the sale of broadcast licenses. Analysts said the long-term trend for the deficit remained positive. Citicorp Securities, the investment banking unit of Citicorp, was fined 25,000 and ordered to surrender 300,000 by the National Association of Securities Dealers. The firm failed to ensure that 19 brokers completed computer-based regulatory training under NASD's continuing education requirements, NASD said. The 300,000 covers what Citicorp paid the 19 brokers during periods in which they shouldn't have been allowed to work because of the infractions, the NASD said. Citicorp, which agreed to the settlement, called its infractions an oversight. Kmart earned 34 million in the second quarter, compared with a year-ago loss of 54 million. The year-earlier results included a 76 million charge for closing stores and discontinuing other operations apart from that, Kmart would have earned 22 million. After 13 consecutive quarters of losses or lower earnings, the discount retailer said sales had improved and costs declined in the quarter ended July 31. Charles E. Smith Residential Realty's executive vice president and chief financial officer, Anthony J. LoPinto, has resigned by mutual agreement, the company said. It has nothing to do with any financial reporting issues of the company or any financial impact on the company, said Ernest A. Gerardi, the Arlington company's president and chief operating officer. Charles R. Hagen, vice president and corporate controller, was named acting chief financial officer.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985180","date":"1996-08-27","texts":"Oaid jarrotrs career has turned the corner, with a win in the Southern 5QQ at Darlington S.C. this weokend earning him a major payday. Not long ago, Dale Jarrett did not know whether he would need to head for NASCARs late-sea-son unemployment line. Now, as the 1996 stock car racing season heads into its final turn, Jarretts only concerns are about what he will winnot what he might lose. Less than a year removed from wondering what car he would be driving, Jarrett is in position to become only the second driver ever to win a 1 million bonus for winning three of stock car racings four crown jewels. That does not include Jarrett's victory in the prestigious Brickyard 400 earlier this montha race many drivers consider the sport's second biggest of the year. Jarrett can eam the bonus by winning Sundays Southern 500 at Darlington S.C. Raceway. After three somewhat successful seasons driving for former Washington Redskins coach  Joe Gibbs, Jarrett jumped at the chance to join Robert Yates Rac- ing before the start of the '95  season to fill in for injured Ernie Irvan. When Jarrett struggled with one of the best teams in the business and Irvan returned late in the season from near-fatal injuries, Jarretts future was in limbo. Like many other drivers . with one-year contracts, Jarrett was expendable. But Yates,.regarded as one of the sports premier owners, decided to begin a second team, and he retained Jarrett to drive it with another one-year contract for the 1996 season. After finishing 13th in the Winston Cup series standings with Irvans crew, he was given a rookie crew chief, new sponsor and brand new crep. Another average start to the-season and Jarrett easily could have been released from his contract, as a handful of drivers are each year.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984721","date":"1996-08-29","texts":"The Securities and Exchange Commission yesterday approved a far-reaching package of trading rules for the Nasdaq Stock Market intended to guarantee that small investors get just as good a deal as professional traders when they buy and sell stocks. If the rules work as planned, individual investors could save a few pennies a share on many Nasdaq tradespennies that could add up to millions of dollars on much of the 1.2 billion shares traded on Nasdaq last year. The computerized Nasdaq system, headquartered in Wasliington, has grown to rival the New York Stock Exchange as the nation's biggest stock market, listing such prominent companies as Microsoft Corp. and MCI Communications Corp. But it has been criticized by the SEC, the Justice Department and academic researchers for trading practices that favor professionals over small investors. Earlier this month, the SEC censured the National Association of Securities Dealers Inc., owner of Nasdaq, for permitting unfair trading practices, and it has been working on regulations to curb such abuses for more than a year. These rules will fundamentally change practices in the securities industry,'' said SEC Chairman Arthur Levitt Jr., who initiated the agency's drive to change Nasdaq.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830981785","date":"1996-09-03","texts":"JACKSON HOLE, Wyo.Over the past 15 years, the Federal Reserve has driven U.S. inflation down from double-digit territory to under But few Americans seem troubled by the continuing modest rise in prices, except occasionally when the price of something jumps dramatically, as gasoline did earlier this year. So the natural question is, should the Fed try to squeeze the economy harder to achieve its goal countries and a few developing ones as well, the question is being asked in a variety of ways around the world. At a conference sponsored by the Kansas City Federal Reserve Bank here last week, dozens of central bankers, economists and financial market analysts almost all said the answer is yes. The fundamental reason to pursue long-run price stability is that as has long been argued by central bankers and is increasingly accepted by academic economistsinflation is economically and socially costly, said Stanley Fischer, first deputy managing director of the International Monetary Fund. means reasonably low inflation, typically 1 percent to 3 percent per year, not zero inflation, he added. Having some inflation can make it easier to achieve needed adjustments in the economy, such as allowing inflation-adjusted wages to decline without cutting actual pay-checks and giving central banks room to push inflation-adjusted interest rates below zero to stimulate an economy.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983208","date":"1996-09-05","texts":"Throughout its history, the United Auto Workers union has turned to Ford Motor Co. for innovative help at the bargaining table. This year is no exception. The decision by the UAW's leadership to pick Ford as the target company in this year's contract negotiations with the auto industry's Big Three reflects a long-standing belief within the union that Ford is the most innovative of the companies when it comes to labor relations. Ernest Lofton, the UAW vice president in charge of the Ford negotiations, often has noted that the union has turned to Ford when there's a principle involved. In 1949, it was Ford that agreed to set up the industry's first pension program for UAW members. Six years later, the union again turned to Ford to create the industry's first Supplemental Unemployment Benefits program. And in 1987, Ford agreed to the job security program, known as Guaranteed Employment Numbers, that provided continuous employment for UAW members who otherwise might have been laid off during the life of the contract. The decision to pick Ford also was based, in part, on the fact that UAW President Stephen Yokich and Peter Pestillo, Ford's executive vice president for corporate relations, have an extraordinarily close relationship. The two men still regularly play golf together, a practice they began years ago when Yokich was head of the union's Ford Department.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985051","date":"1996-09-06","texts":"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. 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. 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. 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. 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.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613501","date":"1996-09-09","texts":"NEW YORK -- It's time to call a halt to the bond market's infatuation with the monthly employment data and look further afield for new ways to detect wage inflation. That's the argument advanced by growing numbers of economists and market participants, as Americans continue to find jobs at a steady clip and the unemployment rate drops sharply. Weary of the bond-market gyrations touched off by each monthly employment report, they have embarked on a quest for new clues about inflation. Some are even putting their faith in anecdotal evidence instead of the sometimes confounding signals from the statistical data. The employment numbers are becoming increasingly less relevant as the numbers of people finding jobs has grown, argues Nancy Kimelman, chief economist at Technical Data in Boston. Frankly, there aren't that many people left to hire. . . . A gain of 300,000 in today's labor market is the equivalent of what would have been a massive gain of 700,000 jobs four years ago. The reason, Ms. Kimelman says, is that as the rate at which Americans find new jobs has leveled off at around 230,000 a month, the unemployment rate continues to fall and average hourly earnings continue to climb. Indeed, Friday's report showed that average hourly earnings rose six cents in August to 11.87, the highest level seen since December 1990, and the unemployment rate dropped to 5.1. Those factors helped cap the Treasury market's relief rally, touched off when traders saw that the overall job growth was within expected bounds. The fixation on the big' overall number of new jobs isn't sane, says one trader, disgruntled after a day of fielding more calls than he says he gets in an average week, all from clients seeking insight into a single figure.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617183","date":"1996-09-09","texts":"First in a Series MILLBURN, N.J. -- If there is an Everyman for the '90s, perhaps it is someone like Joe Smith, a mild-mannered marketing man who works for a big business that is owned by a bigger business. Mr. Smith is off-hours but pursuing his true calling, exhorting a rapt audience at the public library here. It is the sort of place -- with its folding chairs, cinder-block walls and mural of an 18th Century town meeting -- where the citizenry once might have gathered to debate a momentous public issue, like school busing or the atomic bomb. Mr. Smith, in fact, is describing the wonders of a most fashionable civic endeavor -- investing in the stock market and, specifically, doing so through investment clubs. His own club has performed like a lion, and it is with no trace of irony that Mr. Smith tells a few dozen mostly neophytes, You're going to be learning how to do what Peter Lynch did at Magellan. Perhaps the listeners would recoil at the notion that they could imitate Michael Jordan or Luciano Pavarotti, but Mr. Lynch, who ran Fidelity Investments' Magellan Fund for 13 years, is apparently within their grasp. Between 1977 and 1990, Mr. Lynch earned a cumulative return of 2,703, compared with 574 for the Standard & Poor's 500 stock index. This belief, or something similar, is stirring ordinary investors across the land. Much as the 1980s were the decade of deal-making Henry Kravises, the '90s may go down as the time of Joe and Jane Smiths. Ordinary Americans have embraced the stock market -- it may be said that they are the stock market -- as never before. Roughly four of every 10 adults now, in at least a small way, are invested in the stock market. This is a seismic shift in the 1960s, the figure was only two in 10.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616014","date":"1996-09-11","texts":"When Ahron and Bonnie Kliger's home was damaged by a 1994 earthquake in Northridge, Calif., the Woodland Hills couple expected their homeowners insurance to cover the cost of repairs -- about 90,000. But they wound up in a dispute with their insurance company and had to turn to an unexpected lender the U.S. Small Business Administration. Best known for guaranteeing small-business loans and offering advice to entrepreneurs, the SBA is sharply increasing its lending to homeowners, such as the Kligers, through its Office of Disaster Assistance. Today, the home-loan portion of the SBA's disaster-loan portfolio exceeds 3.14 billion, more than double its level three years ago. In contrast, the business loans in the portfolio total 3.45 billion, a 47 increase in three years. SBA officials attribute the explosion in home lending to Mother Nature. Since 1993, disasters such as the Northridge earthquake, floods in the Middle West and Hurricane Andrew in Florida have created an unprecedented, concentrated demand for the low-interest loans administered by the SBA. The interest rates are about 4 annually for business owners and individual borrowers. In many of the latest disasters, homeowners and renters were hit disproportionately hard, prompting huge waves of lending to individual borrowers, says Bernard Kulik, an SBA associate administrator who oversees the disaster office. After Hurricane Andrew swept through Florida in 1992, nearly 16,000 homeowners and renters there borrowed a total of 252.7 million. Businesses in the state borrowed 217.2 million. One reason for the high homeowner use I would say that businesses pay more attention to insurance than homeowners do, Mr. Kulik says. Officials at the agency stress that the loan program isn't a giveaway It estimates that 35 to 45 of all loan applicants are rejected because of credit problems, failure to provide sufficient information or other reasons. Homeowners generally can borrow no more than 200,000 to restore their homes to original condition. In addition, homeowners and renters can qualify for as much as 40,000 to replace personal property.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615937","date":"1996-09-16","texts":"Only a month ago, analysts were warning that the French franc was heading into another crisis. The currency was weakening, unions were threatening a wave of strikes and the government's still-undisclosed 1997 budget was being dismissed as unrealistic. Now, two days before the government formally unveils its budget, the blistering attack on the franc is nowhere in sight. Moreover, most analysts now say it probably won't ever come. The mark ended European trading Friday at 3.4115 francs, down sharply from highs a week earlier of around 3.43 francs. It's all over, says Graham McDevitt, senior bond strategist with Paribas Capital Markets in London and one of those who had been betting on a brutal autumn. To be sure, foreign-exchange-market sentiment can swing just as abruptly in the other direction. Were the U.S. dollar to suddenly weaken, the franc could fall against the mark, analysts say. Or a unilateral slowdown in the French economy could result in fiscal holes that are just too big for markets -- and politicians -- to ignore.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982177","date":"1996-09-20","texts":"Darcy Bradbury, assistant treasury secretary for financial markets, will resign early in October to return to the private sector. Bradbury advises Treasury Secretary Robert E. Rubin and other senior officials on federal debt management. She also projects the government's short- and long-term borrowing needs, helps set Treasury auction rules and the types of securities to be sold. A Treasury official said Bradbury, a former investment banker who lives with her husband and two sons in New York, will pursue opportunities on Wall Street. No replacement has yet been named but Roger Anderson, deputy assistant secretary for federal finance, will assume her duties. Chrysler Chief Executive Robert Eaton said he expected the company's next labor contract with the United Auto Workers to have more in common with Ford's UAW pact than with Chrysler's own recent agreement with the Canadian Auto Workers union. Its tentative agreement with the CAW limits the automaker's ability to eliminate jobs through shifting work to outside suppliers. General Magic, an Internet software producer, said that Marc Porat plans to step down as chief executive, and Robert Kelsch has resigned as president. The Sunnyvale, Calif.-based company said the functions of president, CEO and chairman will be combined into a single position, which will be immediately filled by Steve Markman, who had been executive vice president and general manager of the Novell products group. Mortgage rates fell this week. A Federal Home Loan Mortgage Corp. survey showed the interest rate on 30-year fixed-rate mortgages fell to 8.14 percent this week from 8.28 percent last week. Rates on 15-year fixed mortgages fell to 7.64 percent from 7.81 percent, and the average initial rate on adjustable-rate loans fell to 5.83 percent from 5.90 percent. Treasury Secretary Robert E. Rubin announced a new task force to guide the government in supporting and regulating the revolution in electronic money smart cards, debit cards, electronic benefits transfer and other services. The panel will include members of Treasury, the Federal Reserve, the FDIC and the FTC. Rubin compared the industry's changes to when the agricultural age ended and the industrial age began.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614902","date":"1996-09-23","texts":"NEW YORK -- Merrill Lynch & Co. is pondering a move that would rankle the brokerage industry the nation's largest securities firm is thinking of starting to offer its own index funds to small investors sometime next year. Merrill officials caution that the firm hasn't decided whether to take this course with index funds, which are structured to mirror the performance of popular stock-market benchmarks, such as the Standard & Poor's 500. Index funds, which simply try to match the market rather than beat it, run counter to the brokerage-firm thinking that fund investors crave active money management to protect their savings amid market slumps. But people with knowledge of Merrill's intentions say the big brokerage house's asset-management subsidiary, Merrill Lynch Asset Management, is considering the launch of several index-funds to its wrap-account customers in 1997. The possibility was described in a recent internal memo on how the asset-management unit can increase its business in the year ahead, people with knowledge of the move say. Brokerage-house wrap accounts are so called because all the fees are wrapped into one levy, typically 1 to 3 of assets every year. By charging such fees, a brokerage house might seem to be undermining a major draw for investors in index funds, namely, that their costs are extremely low. But there's no doubt that index funds have been much in demand recently. The nation's second-largest mutual-fund company, Vanguard Group of Valley Forge, Pa., has been selling index funds like hotcakes and beating a lot of the actively managed competition in performance this year. It represents a real sea change in the industry's attitude toward index products for Merrill even to consider such a move, says Burton Greenwald, a Philadelphia mutual-fund consultant. Everyone has been reluctant to push them. If Merrill Lynch, given its sheer size, will offer them, others are likely to follow.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615378","date":"1996-09-23","texts":"As we write, the money is even on whether the Fed's Open Market Committee will choose to push up the Fed funds rate at its meeting tomorrow, or perhaps after the election in November. With unemployment at a seven-year low of 5.1, the Street's priests are warning that higher inflation is around the corner unless the economy makes the autumnal sacrifice of a pre-emptive rate hike. Such thinking of course has long traditions among central bankers. Back in the 1960s, William McChesney Martin Jr. used to describe the Fed's job as that of the sourpuss who removes the punchbowl just as the party gets going. The Fed chairman himself practiced what he described Faced with inflation of a whopping 1.5, Martin led the Fed's board in hiking the discount rate a steep 150-basis points over 18 months during the spending build-up for Vietnam. Given that inflation is now closer than it has been in decades to the levels of Martin's tenure, it's hard to think of a good reason for tightening money except for taking away the punchbowl. Of course, it's also currently faddish to talk of minimum unemployment levels, or to drop the unlovely acronym of NAIRU -- the non-accelerating inflation rate of unemployment. But the notion of some kind of grand trade off between inflation and a slowdown flies in the face of the experience of recent decades. We learned, or should have, that it is possible to at once suffer both evils the stagflation of the 1970s, or neither the relatively low inflation, high growth 1980s. The signs we like to look at show a picture of growth pushing forward absent inflation. The Dow Jones Spot Commodity Index, which seeks to measure the pressures in the commodities markets, stands at 146 vs. 151 a year ago. Stripped of volatile oil and food prices, most commodities measures are down from a year ago. Brian Wesbury of the Chicago bond firm Griffin, Kubik notes that the Fed funds rate is still higher than overall economic growth as measured by Gross Domestic Product, a sign that the central bank is not stimulating the economy. The dollar is gaining against the mark, yen and the currencies of other important trading partners such as Canada. As for gold, after punching across the 400 border this spring -- the monthly average for February was 404 -- it is now bumping around at 382. The dollar is buying more gold than it was nine months back, a sign that there is scarcely a need to wring inflation from the greenback.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983476","date":"1996-09-23","texts":"The FBI has been called in to help the Federal Reserve investigate the source of a leak that eight of 12 Fed banks have recommended an increase in a key interest rate, according to sources familiar with the inquiry. The Fed late last week asked the Justice Department for help in finding the origin of the leak, sources said, and the FBI was assigned to the task. The decision to pursue an investigation with the help of the Justice Department was an indication of how seriously top Fed officials viewed the leak. The request to involve the FBI also appears to confirm the accuracy of the leak, which came in the form of a Reuter news service report. The story caused bond prices to fall and interest rates to jump as analysts and investors concluded that Fed policymakers were more likely than the analysts and investors had thought to raise short-term rates. Fed spokesman Joseph R. Coyne declined to comment on any aspect of an investigation or even to confirm such an inquiry was in progress. Someone privy to such inside information as the requests to raise rates could use it to make investments that might rise in value when it became public or after the Fed had acted. Alternatively, a number of analysts said, a Fed official might have provided the facts to a reporter in hopes of affecting the outcome of tomorrows meeting of the central bank's top policymaking group, the Federal Open Market Committee.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982390","date":"1996-09-24","texts":"NEW YORK, Sept. 23The Dotv Jones industrial average rallied from a 50-point deficit to finish in record territory today, as some traders bet the Federal Reserve would not raise interest rates at its policy meeting Tuesday. But broad market indexes finished lower. The Dow average finished up 6.28 points, at 5894.74, surpassing its record closing high of 5889.68 set last Monday. But the Standard & Poors and NYSE composites failed to break records set Friday. 0.26 to 365.51, from its record 365.77, while the S&P 500-stock index declined 0.55 to 686.48. 'Die Nasdaq composite index fell 8.22 to 1211.47, and the American Stock Exchange index dropped 1.58 to 563.62. The Dow dropped as much as 53 points early in the day, pared its losses throughout the morning to around 30 points, then shot liigher around 2 p.m. on the tails of a strong rally in bond prices that reflected traders jockeying for position the day before the Fed meeting. The price of the governments main 30-year bond recovered from an early deficit to end 732 point higher or about 2.19 per 1,000 in face amount. Its yield, which moves in the opposite direction, ehsed to 7.02 percent from 7.04 percent late Friday.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830981876","date":"1996-09-25","texts":"Robert J. Dole issued an unusual campaign rebuke today, telling critics who have portrayed President Clinton as a poll-driven politician of no principle that they have misunderstood a man with a deep commitment -- to liberalism. Some say that Bill Clinton will take any position, say anything as a matter of political convenience, Dole told the Economic Club of Detroit in a luncheon speech earlier today. But the record of his first term shows a very different story. This is a man with a commitment to a very specific view of government. The Republican presidential nominee then took aim at some of the most controversial aspects of Clinton's first two years in office, including his ill-fated economic stimulus package, the tax increase he pushed through a Democratic-controlled Congress and the failed attempt to overhaul the nation's health care system. These are not actions of a finger-in-the-wind politician that's waiting for the polls, Dole said. These are the actions of an old-style, dyed-in-the-wool, big-spending liberal committed to a government that spends and spends and taxes and taxes. These are the actions of someone who -- once the spotlight of the campaign has been turned off -- will take every opportunity to increase the size of government even as he decreases the size of your wallet. The Clinton campaign responded that Clinton has cut the size of the executive branch since taking office and reduced the federal deficit by 60 percent. The truth is, despite Dole's negative attacks, the economy is on the right track, said Clinton campaign press secretary Joe Lockhart.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614585","date":"1996-09-26","texts":"Companies going global in a big way are learning to think small when it comes to their headquarters. Gone are the armies of workers in downtown skyscrapers -- and vanishing quickly is the idea of a headquarters as the nerve center of a company. Under pressure to cut costs and eliminate redundancies, executives are abandoning lavish digs for simpler spaces, slashing many jobs and outsourcing others. At the same time, many companies are giving overseas operations leeway to make big policy decisions that used to be reserved for the home office. The brains of the organization aren't only where the head is, says Christopher Bartlett, a Harvard Business School professor. The smarts are located all over the world, and the challenge nowadays is finding the best ways to connect them. In this new climate, just what makes for a good home base Landmark buildings in the company's founding city don't cut the mustard anymore, according to corporate-relocation experts. A global company must be close to its major markets, with easy access to an international airport. It doesn't hurt to have access to a multilingual local population -- not to mention one rich with executive talent. Indeed, getting out of the hometown may be an advantage for many established companies. Citicorp Chairman John Reed, fearing his executives are too caught up in the comings and goings of New York's financial community, has threatened publicly to pull the company headquarters out of New York. Says a Citicorp spokesman If you're caught up with seeing customers and visiting with people hung up in the business, it lowers your vision to what's happening right now. But what you need is to be thinking 10 years out.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982436","date":"1996-09-26","texts":"When it comes to default risk, U.S. Treasury securities are about the safest investments around. But default is not the only risk for bond investors. In the past 20 years, inflation has eaten away at these seemingly safe investments, often leaving bondholders with little but crumbs in the end. Starting in January, the Treasury will offer 10-year inflation protection notes whose value is designed to rise with inflation, thus guaranteeing investors a real rate of return on their money. Treasury Secretary Robert E. Rubin said the securities offer Americans a way to save that fully protects their investments against inflation. Treasury officials said the notes, modeled on inflation-indexed securities offered in Canada, will be sold in denominations of 1,000. The concept will likely be expanded to other maturities, perhaps up to 30 years, later in 1997. Rep. Bill Archer R-Tex., chairman of the House Ways and Means Committee, which writes tax law, urged the Treasury to delay introducing the notes, which he said will make it harder for policymakers to predict what the government's future obligations will be.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983505","date":"1996-09-27","texts":"Household income rose for the first time in six years while the proportion of Americans living below the poverty line fell last year, the Census Bureau reported yesterday. Among African Americans and the elderly, poverty rates were the lowest on record. 2.7percent last year to 34,076, after being adjusted for inflation. Over the same period, the poverty rate declined from 14.5 percent to 13.8 percent and the number of poor fell by 1.6 million, the largest decrease in 27 years. The news is remarkably good, said President Clinton, who quickly, claimed the numbers as proof of the nation's economic health. .. It is clear that we are moving on the right track. Although the U.S. economy emerged from recession more than four years ago, the benefits from the economic recovery had largely eluded not only the poor but even the average familywith most of the gains concentrated in the upper income brackets.,. But in 1995, the benefits of economic growth were spread widely.-through the economyin nearly all See INCOME, A22,CoLl","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842617197","date":"1996-10-01","texts":"WASHINGTON -- The economy keeps percolating along at a steady clip, a series of new statistics released yesterday suggest. New-home sales in August jumped 4.7 from July's strong level and hit the highest annual rate in more than a decade, the Commerce Department said. Separately, the agency reported that personal spending and personal income each rose a healthy 0.6 in August, following minuscule increases in July. Most economists still expect the economy's growth rate for the third quarter, which will be announced later this month, was slower than the torrid 4.7 pace in the second quarter. But a raft of buoyant economic reports, including yesterday's figures, is encouraging some analysts to temper their predictions of a downturn. The momentum is quite healthy, said Sung Won Sohn, chief economist at Norwest Corp. in Minneapolis. People were probably underestimating the strength of the third quarter. A clearer picture of the economy's vitality will emerge today, with the announcement of two closely watched monthly indexes. The National Association of Purchasing Management will release its survey of the manufacturing sector, and the Conference Board will publish its index of leading economic indicators.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981990","date":"1996-10-01","texts":"A late burst of profit-taking and other quarter-ending portfolio shifts cut into a broad advance today, but some stock measures edged high enough to set records. The Dow Jones industrial average was up 9.25 points at 5882.17 at the close, having retreated from a 30-point gain that would have broken last Monday's record of 5894.74. Most broad measures withstood the late selling to end the day higher. Much of the session's volatility was attributed to last-minute positioning by money managers trying to put a shine on their quarter-ending reports to investors. There's a lot of money moving around, but a pretty nice tone, said Andrew M. Brooks, vice president in charge of equity trading at T. Rowe Price Associates in Baltimore. The Standard & Poor's 500-stock index and the New York Stock Exchange composite index reached record highs. But the Nasdaq Stock Market pulled lower as investors secured profits from the technology sector, which bounced back to life in September after lagging the rebound from July's rout.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616942","date":"1996-10-03","texts":"When was the first inflation-indexed bond on free soil In the Revolutionary War, inflation was rampant. Massachusetts soldiers complained that by the time they got their pay to their families, it had depreciated by seven-eighths. Beset with calls for just pay by barefoot troops and alarmed by reports of desertions, the Massachusetts Legislature made economic news. In 1780, it enacted a law to pay soldiers 6 interest-bearing notes indexed to inflation in the state's currency. No price index existed, but the Bay State slapped one together Both Principal and Interest to be paid in the then current Money of said State, in a greater or less Sum, according as Five Bushels of Corn, Sixty-eight Pounds and four-seventh Parts of a Pound of Beef, Ten Pounds of Sheeps Wool, and Sixteen Pounds of Sole Leather shall then cost . . . . Duly issued, the notes carried engravings by Paul Revere. Several wars and inflationary bouts later, economist Willard Fisher observed of this episode Once it is recognized that money is variable in value, there is no halting the quest for a stable standard. The idea has been kicked around in this country and adopted in others, including England. Come January, the U.S. Treasury will issue 10-year notes engraved by Bob Rubin and pegged to the consumer price index. Unlike rebel Massachusetts, the U.S. today doesn't suffer from high inflation, or even desertions. The value of its money, whether measured by the CPI or sole leather, has been calmingly stable.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983049","date":"1996-10-03","texts":"Thermidor, the name of the month in the French Revolutionary Calendar in which Robespierre fell and the Reign of Terror ended, has become the name by which historians denote an era of waning revolutionary ardor. Conservative critics of the 104th Congress complain that it went directly from the ancien regime to Thermidor, without any intervening revolution. The deflation of their aspirations is symbolized by Newt Gingrich brandishing buckets in which ice had been delivered to congressional offices since before the invention of refrigeration. The Commerce and Education departments may not be finished, but ice deliveries are, so there. Some depressed conservatives -- one of them calls the 104th the Bush administration in drag -- may think that the end of the 104th was in its beginning, in its opening day hoopla, which included, among much else, a children's party featuring the Mighty Morphin Power Rangers and Newt Gingrich. Back then it was hard to have any Washington gathering of two or more without having the speaker speak, and at the children's party he stuffed into the wee minds this explanation of the event's Larger Meaning We wanted the Power Rangers here because they're multiethnic role models in which women and men play equally strong roles. There has been too much blather, much of it from Gingrich, who has paid dearly for his refusal to heed the advice given to him -- early and often -- that he ration the portions of himself that he serves to the public. Still, measuring the 104th against history rather than its own rhetoric, it was a remarkably consequential Congress. Intelligent people differ concerning the prudence of the 104th's most important act -- repeal of a 60-year-old entitlement to welfare. But the repeal ranks with the 1981 tax cuts, Medicare, the 1964 and 1965 Civil Rights Acts and the Taft-Hartley Act as one of the most momentous legislative acts of the past six decades.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982753","date":"1996-10-04","texts":"The stock market's record-setting advance paused today, pulling most indexes lower as investors waited to see whether Friday's employment report justifies an optimistic outlook on inflation and interest rates. The Dow Jones industrial average, which closed at new highs on Tuesday and Wednesday, slipped 1.12 to 5932.85 after trading slightly lower for most of the day. The session was characterized as a natural pause in the market's recovery, highlighted by a 750-point rebound in the Dow, from July's decline. Today was a timeout. The market has done well in recent days, so it deserves a rest, and we have this employment report in front of us, said A. Marshall Acuff Jr., market strategist at Smith Barney. The monthly employment reading has jolted the financial markets repeatedly this year with indications of rising payroll costs that could prompt manufacturers to raise prices. But many economists expect the September data to provide further evidence that economic growth is slowing enough to keep inflation under control without higher interest rates.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985428","date":"1996-10-05","texts":"In a key sign that U.S. economic growth is slowing, payroll employment unexpectedly dipped by 40,000 jobs last month while the unemployment rate rose slightly to 5.2 percent, the Labor Department reported yesterday. The report sparked a strong rally in the stock and bond markets as financial analysts concluded the new figures made it less likely that the Federal Reserve would need to raise short-term interest rates to cool off the economy and keep inflation under control. The Dow Jones average of 30 industrial stocks rose 60.01 points to close at a record 5992.86. Bond prices, meanwhile, rose by more than 10 per 1,000 in face value as yields on 30-year U.S. Treasury securities skidded to 6.74 percent. Over the past month, as evidence of slower growth began to mount and the Fed continued to leave short-term rates alone, interest rates have dropped by more than a half percentage point on some securities. Analysts said the labor report was strong evidence that economic growth in the July-to-September period slowed noticeably, probably to a 1.5 percent or 2 percent annual rate, after a surge in the spring.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615149","date":"1996-10-09","texts":"GEORGETOWN -- Early on the morning of Aug. 13, twenty-one agents with the U.S. Immigration and Naturalization Service blocked the entrance to the Sun City retirement community here and began arresting construction workers as they arrived on the job. Immigration officials say the roadblock and a sweep through the site a week later netted more than 300 undocumented workers, more than a third of the total number employed to build homes in the fast-growing community. Even those contractors who didn't have employees taken in the raid felt the impact, if only temporarily. It slowed down the building process for a couple of days, says Don Carrington, a vice president at D.R. Kidd Co., a roofing contractor in Austin. The raids and others across the Austin area at the time yielded more than 1,100 arrests -- part of a nationwide crackdown on illegal immigrants in the workplace. Indeed, the raids in Central Texas, with its booming economy and an unemployment rate less than half the national average, spotlight the irony of the growing debate over federal immigration policy While Congress passed late last month a bill that, among other things, makes it easier to deport illegal immigrants, economic necessity has already made immigrants, both legal and illegal, an integral part of the Texas economy. These days, restaurants, landscapers, janitorial services and other businesses that account for large numbers of low-wage, low-skill jobs in Texas could scarcely operate without a ready supply of immigrant workers, documented and otherwise. Other industries -- notably, many construction trades -- have grown so dependent on immigrant labor that there is a serious dearth of skilled workers to take their place. We're not honest in the sense that we need that labor, says Bill Gilmer, chief economist at the Federal Reserve Bank in Houston. There's no question that we can stop illegal immigration, but we have not chosen that route. Adds Charles Foster, an immigration lawyer in Houston If you could theoretically pick up all the illegal workers in the state of Texas, it would be devastating. It would have an immediate, drastic impact on a lot of businesses.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983748","date":"1996-10-10","texts":"In a region that lost most of its hometown banks during a devastating recession six years ago, Crestar Banks William C. Harris remained in many ways a LuamatnuaL hanker... Harris, who headed Crestar's operations in the Washington-Baltimore area, came here in 1984 to direct the Richmond-based fold expansion into Washington and Maryland before his death Tuesday of complications following an emergency appendectomy. His death removes one of the business communitys chief advocates for the District as it struggles to address continuing economic problems. Although Harris recently had shifted his focus toward Baltimore, as Crestar increased its presence in Maryland, he remained vitally engaged with the District. I larris had argued before many audiences that even with the suburbs' burgeoning wealth, the Washington area could not completely succeed if its core city fell further and further behind. One of the things he absolutely understood was that the whole region had to act together. If one of its parts was nick, it hail to attend to it,","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984315","date":"1996-10-12","texts":"Nine months ago, President Clinton declared before a packed House chamber that the era of big government is over. In his television ads, however, Clinton has touted his support for the Education Department, Medicare, student loans, school anti-drug programs, Social Security, gun control, job training, border patrols, federally subsidized police, government-mandated family leave, health care portability rules, a higher minimum wage, childhood vaccinations, unemployment benefits, tobacco advertising rules and tuition tax credits. Equally important, the ads have assailed Robert J. Dole -- or, as the spots often put it, DoleGingrich -- for opposing these federal programs and initiatives. Americans are against government in the abstract but are quite supportive of it in the particular, said Thomas Mann, a policy analyst at the Brookings Institution. Clinton is relying on the public insistence that some of the things that government does are worthy activities. Many Americans believe government is incompetent and a mess and too wasteful, but there's also the fear of losing something they hold dear. Bill Knapp, a Clinton media adviser, said the defense of government programs in the president's ads is balanced by an emphasis on the new welfare reform law and success in cutting the budget deficit. And Clinton can claim credit for reducing the federal work force.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616092","date":"1996-10-14","texts":"WASHINGTON -- Inflation remained tame last month while consumers started showing a bit more spending enthusiasm after a listless summer. Friday's official economic reports seemed to confirm the growing consensus that price pressures remain in check despite tight labor markets, while the economy is growing at a modest pace. The bottom line is that this still looks like the best-of-all-worlds economy, said Edward Yardeni, economist at Deutsche Morgan Grenfell. We're still seeing respectable spending by consumers and at the same time we have very moderate inflation. Producer prices, which manufacturers and other producers charge distributors and retailers, rose just 0.2 in September, compared with a modest 0.3 increase in August, the Labor Department said. For the third quarter, wholesale prices for finished goods rose at a 2.2 annual rate, compared with 1.9 in the second quarter. The September consumer price index, which measures prices that retailers and distributors charge consumers, will be released on Wednesday. We've had capacity increases and slowing demand, said J.A. Parsons, executive vice president of Willamette Industries Inc., a Portland, Ore., maker of corrugated containers. Willamette actually cut prices about 8 in the third quarter, helping push profit down despite a 6 increase in sales.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830985470","date":"1996-10-14","texts":"When Alan W. White went to work for the government in 1984, he was put in the wrong federal retirement system. The mistake, discovered earlier this year, could cost him thousands of dollars annually in pension benefits. Barry Schrum also learned this year that he was in the wrong pension plan. He then sold his home to make a lump-sum payment of about 34,000 into his new retirement plan, but that, too, turned out to be bad advice. Instead, he will be allowed to make up the missed contributions over eight years. What you thought you had, you wake up and you don't have anymore, Schrum said. It's an absolute nightmare. The mistakes that have left White and Schrum feeling anxious about their future financial security stem from the mid-1980s, when Congress decided to stop enrollment in the government's generous pension program and put new hires into a retirement program anchored by Social Security and a 401k-type stock market investment plan. The transition ran from 1984 to 1987 as Congress rewrote laws, a period when the government hired about 350,000 new workers. Federal agencies made a number of errors in handling employee personnel records during the transition, but Office of Personnel Management OPM retirement experts think most of the errors have been discovered and fixed.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830981884","date":"1996-10-16","texts":"The Securities and Exchange Commission yesterday halted trading in the stock of Novatek International Inc., a Columbia firm that earlier this year got out of the business of building steel and concrete houses and started selling medical supplies in South America. The SEC said it is reviewing the accuracy of financial statements and press releases issued by the company about its new venture. In recent months, Novatek has issued statements announcing that it obtained contracts with government agencies in Argentina, Brazil and Chile to buy millions of dollars worth of screening tests for AIDS, cholera and other diseases. Anthony Sebro, corporate secretary of Novatek, would not comment yesterday, but said the firm planned to issue a statement. The statement had not been received at press time. The SEC took action in conjunction with the National Association of Securities Dealers, which on Friday temporarily suspended trading of Novatek shares on the Nasdaq Stock Market. NASD did not say why it took the action. When trading was halted by NASD Friday, Novatek's stock was trading for 9 a share, double the price at which it was first sold to the public in April 1995. The company sold only 750,000 shares in its first offering, but has since issued millions of additional shares to buy its medical supply business and pay debts.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615111","date":"1996-10-17","texts":"PARIS -- In a move that creates a new French defense giant and transforms South Korea's Daewoo Group into a global consumer-electronics leader, the French government decided to sell Thomson SA to France's Lagardere Groupe and its ally, Daewoo. The deal marks a milestone for Europe's defense business, which is struggling to consolidate, and came as a surprise to those who had bet that Thomson would go to rival bidder Alcatel-Alsthom SA. The merger of Lagardere's Matra defense division with Thomson's defense arm, Thomson-CSF, will more than double its size in the defense sector and create the second-biggest weapon-systems group in the world, behind Lockheed Martin Corp. of the U.S. It also has important ramifications in the U.S., where Thomson's consumer-electronics arm, Thomson Multimedia, is the largest single seller of TV sets, with a 20.5 market share, through the RCA and GE brands it controls. As part of the transaction, Daewoo Electronics will buy Thomson Multimedia from Lagardere for an undisclosed price. Thomson Multimedia has bled red ink, and its sale could jeopardize some of its 6,000 jobs in the U.S., although Daewoo said it has no immediate plans to reorganize the operations. Daewoo said it will rely on existing management in Paris and outside Indianapolis, where the U.S. operations are based. However, Daewoo Electronics Chairman Bae Soon Hoon said he believes Daewoo's cost-cutting know-how will reverse recent losses at Thomson Multimedia. North America represents 64 of Thomson Multimedia's sales. Though the sale of Thomson had set off a furious behind-the-scenes lobbying effort by both Lagardere and Alcatel, the company is by no means a prize. In fact, the government is selling Thomson for a symbolic sum of one French franc and will inject 11 billion francs 2.1 billion into the group before its sale to partially wipe out debts of 25 billion francs. Indeed, Thomson is in such dismal shape that shares of Alcatel, France's telecommunications giant, rose 2.4 in Paris stock-market trading on the news that its bid failed. Trading in Lagardere and Thomson-CSF was suspended yesterday.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615235","date":"1996-10-21","texts":"The economy was perking along and paper prices were hitting record highs early last year as Union Camp Corp. began reaping the benefits of a grand expansion plan. Four years earlier it had installed some of the biggest, newest machines to increase its capacity by one third. The orders were rolling in. There was only one problem Other paper companies had the same idea. As the supply of container-board -- the basic material for packaging crates -- overwhelmed demand, prices plummeted to 350 a ton from 520. Everyone wanted to maximize their new investments, says Stuart Howell, Union Camp's head of strategic planning. There were too many big dogs at the same dish. He is hoping the pricing trend will reverse with the Oct. 1 posting of a 30-a-ton increase. But, he adds, it's too early to tell if it will stick. Far from unique, the supply-and-demand mismatch that has pushed down prices in the paper industry has become a problem for a number of American industries as evidence grows that companies have invested too heavily in new plant and equipment. The trend already has thrust some companies into cutthroat pricing battles to keep their own production lines running at a good clip. Others in such areas as steel and rubber are bracing for more competition from new plants due to be fired up next year and beyond. While such pricing pressure is good news for consumers, it is likely to eat into the heady profits many companies are currently enjoying. And if the economy weakens, the capacity growth in many other industries could prompt another round of belt tightening.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983223","date":"1996-10-22","texts":"Once again, its time to talk about the stock market. The reason, of course, is that last week Wall Streets most sacred icon, the Dow Jones industrial average, broke through yet another barrier, closing above 6000. This came less than 11 months after the market broke 5000, and less than 20 months after it broke 4000. Be still, my heart. For despite the hoopla surrounding this pseudo-event, there arc lessons here some new, some old. The new one is that you snouiun t pay very muc attention to the Dow, which is a crummy measure of the stock market even though everyone uses it, including me. The old lesson is that you shouldnt let any number ending in three zeros determine what you do, no matter what assorted pundits and experts tell you. After all, its your money, your life, your investment decisions. That said, a 6000 Dow raises the same questions people asked when the Dow hit 4000 and 5000. If you're not in the market, is it too late to join the fun If youre in, should you get out just in case the market has peaked Will the next thousand-point mark the Dow hits be 7000 or 5000 No one knows, least of all those of us at Newsweek. Were the people who put a bear on the cover 2400 points ago. But heres some advice, anyway, before we move on to something more interestingwhy its wrong to deify the Dow. Point one Yes, sooner or later the market will fall sharply, despite stocks having defied history and logic by rising almost continually since October 1990. Point two For heavens sake, dont chase hot stocks or hot mutual funds unless youre prepared to lose your shirt. Trend-surfing is fun, but sooner or later, you miss the wave and get wiped. Point three Please, please, please dont take the Dow too seriously. If the Dow hadn't already been around for 100 years, no one would create it now. To be sure, very smart people tend the average and try to keep it up to date. Over the years they've modernized the Dow by leavening its portfolio of heavy industrials with such non-industrials as Coca-Cola Co., Walt Disney Co. and McDonalds Corp. Still, the averages built-in flaws make it subject to weird and random movements. And that brings us to the main and final point. The Dow can tell you which way the market is going, but it's a crude tool. Obsessing about small moveslike whether 6000 says something that 5900 didntis like using a cleaver to perform open-heart surgery.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984815","date":"1996-10-26","texts":"Kinder, gentler Canada used to allow high school dropouts onto the public dole, let workers quit their jobs at will and collect unemployment, and give senior citizens an extra few thousand dollars a year regardless of their income or wealth. As for that long-regretted tattoo, the country's system of national health care would pay to have it scrubbed away. It became an article of national faith, even identity, that there would be a government program to help any Canadian in need, and even some who weren't. A product of the country's booming economy and liberal politics during the 1960s, the feeling was that we were getting rich . . . and that we should share, said William Watson, an associate professor of economics at McGill University in Montreal. Canadians regarded themselves as more egalitarian. That is part of our official ideology. No more. Saddled with debt that far outpaced economic growth, Canadian federal and provincial governments over the last five years have renegotiated -- some say broken -- the nation's vaunted social contract. And perhaps more significantly, the public so far appears to have gone along. Prime Minister Jean Chretien has made budget balancing the hallmark of his Liberal Party government, and opened a party convention this week with a strong lead over the opposition parties.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984273","date":"1996-10-30","texts":"The stock and bond markets staged strong rallies yesterday after the Labor Department reported that employers' labor costs rose slowly in the July-September period, a sign that inflation is likely to remain low. The Labor Department's employment cost index, or ECI, rose 0.6 percent in the third quarter, significantly below the 0.8 percent increases posted in the first and second quarters. The ECI covers employers' costs for fringe benefits as well as wages and salaries, and is widely regarded by many analysts and policymakers as the best available measure of changes in labor costs. Bond prices rose sharply on the news because many investors and analysts had expected that the tight labor markets in many parts of the country would cause a jump in labor costs. Had that occurred, it might have added to inflationary pressures throughout the economy and caused the Federal Reserve to raise short-term interest rates to keep those pressures under control. Bottom line, this was just flat out a low-inflation report, said economist Ed Hyman at International Strategy and Investment Group Inc. in New York. This seems almost too good to believe. . . . We've missed the inflation bullet. Yields on 30-year U.S. Treasury bonds fell to 6.68 percent from 6.83 percent and their prices, which go up when yields go down, rose almost 20 per 1,000 bond.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982579","date":"1996-10-31","texts":"Blue-chip stocks edged lower today because of what investors felt were mixed economic signals on the threat of inflation. The Dow Jones industrial average fell 13.79 points to close at 5993.23 after having been up 21 points early in the day. Broader measures also retreated, following bond prices, which fell back after an opening advance that briefly brought long-term interest rates toward their lowest levels in nearly seven months. But the technology-laden Nasdaq Stock Market posted modest gains as investors looked for bargains after several days of profit-taking in leading computer-related shares. Stocks started the day rising with bond prices, which extended Tuesday's rally after the Commerce Department reported that economic growth slowed dramatically during the third quarter and that consumer spending dipped to its weakest pace in five years. But bonds slipped after a subsequent report showed some stronger-than-expected activity in home sales toward the end of the third quarter. The price of the Treasury's benchmark 30-year bond fell 516 points, or 3.125 per 1,000 face value. The yield rose to 6.70 percent from 6.68 percent late Tuesday. Many analysts interpreted the news of a modest 2.2 percent increase in third-quarter gross domestic product as confirmation that business activities have slowed enough to contain worrisome inflation indications, such as rising payroll costs, a key factor in determining a product's price.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982547","date":"1996-11-01","texts":"Consumers held spending in check in September and diverted some of their higher earnings into savings, the government said yesterday, adding to signs of slow but steady economic growth ahead. The report reflected the sluggish consumer spending for the third quarter as a whole that contributed to slower economic growth in the period, as reported Wednesday. Analysts said that while consumer spending was likely to pick up in the current quarter -- leading to a reasonably strong Christmas sales season -- the economy overall would probably remain in low gear. Consumer spending on goods and services rose a scant 0.1 percent to a seasonally adjusted annual rate of 5.18 trillion in September, after a 0.5 percent advance in August, the Commerce Department said. Incomes from wages, salaries and other sources grew 0.6 percent, to a 6.54 trillion rate, after a 0.5 percent August increase.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985203","date":"1996-11-02","texts":"The last major economic report due before Election Djy showed the economy moving ahead smoothly with low undnj-ployment and little inflation pressure. The Labor Department reported yesterday that the nations jobless rate remained steady at 5.2 percent in October while employers boosted their payrolls by another 210,000 workers. That brought to 10.7 million the number of payroll jobs added since President Clinton took office in January 1993. This is another set of numbers that is an incumbent politicians dream, said Robert Dederick, an economic consultant for Northern Trust Co. in Chicago. We have comfortable growth but not so rapid as to trigger inflation concerns.  Earlier this week the Commerce Department saidtile economy grew at a 2.2 percent pace, after adjusting for inflation, in the JuIy-to-September period, down from a 4.7 percent rate in the second quarter of the year. In Santa Barbara, Calif., Clinton told a rally, It is time for my opponent and those on the other side to stop all this doom and gloom talk about America. In spite of what he wants you to think, when it comes to the economy, the sky is not falling.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830984072","date":"1996-11-03","texts":"The Clinton bandwagon may not make it north of the Arctic Circle, where Republicans appear to have insulated themselves from forces prevailing in the Lower 48. Sen. Ted Stevens R, who would chair Appropriations if the GOP keeps its majority, is breezing to a fifth term over former Anchorage school board member Theresa Obermeyer D. They brought the GOP convention to San Diego, they followed Gov. Pete Wilson's prescription to pound away on crime, immigration and affirmative action, they campaigned the state long and hard, but Dole and Kemp have not been able to shake Clinton's grip on this richest electoral prize. Clinton has benefited from an economic recovery that -- in California at least -- was not visible before he became president, a cultural affinity for Hollywood and the pleasure-seekers up and down the coast, and four years of careful ministration to California needs, whether it be earthquake relief or a bailout of a flat-broke hospital system. Two public polls last week put Clinton 12 to 18 points up and he was confident enough of having put it away that he cut short his final swing to work in other states. A dozen House seats are in play, slightly more of them Republican, but in the end there may be few changes. Most prominent on the endangered species list is 16-term Rep. George Brown D, a perennial target who this year faces an even tougher opponent in Superior Court Judge Linda Wilde R. Brown, 76, did not help his chances when he remarked in a debate on education I imagine Linda, because she is a lady, is afraid of math. He is still trying to dig himself out of that one. Two other Democrats have serious challenges from the same opponents who came close to defeating them in 1994. Rep. Jane Harman D was taken into a recount by Susan Brooks R, a local government official in Rancho Palos Verdes. Harman has a limitless bank account and is probably strong enough to stave off Brooks again. House Democratic Caucus Chairman Vic Fazio is in a rematch with real estate broker Tim LeFever R, who came within 7,000 votes last time. LeFever was one of the Republicans who used an ad on the death penalty in which he morphed his opponent's face into that of Richard Allen Davis, murderer of Polly Klaas. Rep. Cal Dooley D, who represents a conservative district near Bakersfield, always has a battle, this time with Assemblyman Trice Harvey R.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830984473","date":"1996-11-03","texts":"Republican presidential nominee Robert J. Dole often tells the story of how his family survived the Depression by moving into the basement of their modest Russell, Kan., home and renting out the rest of the house to wealthy oilmen. Win or lose in his bid for the White House, America can be assured that Dole won't be returning to that dreary childhood tableau. After a lifetime spent as a public servant, the former Senate majority leader has managed to squirrel away a million-dollar nest egg that would be the envy of most retirees. Indeed, last year he and his wife, Elizabeth, reported total income of 583,869, putting them in the top 1 percent of Americans. A review of Dole's personal finances shows that this man of humble origins, who inherited nothing, spent his entire life in government and never invested in the stock market, has built a comfortable net worth in a quintessentially Washington way through a steady flow of speaking fees paid to him by special interest groups. Indeed, during his three decades in Congress, Dole took in some 1.7 million in honoraria, more than any other member of either the House or the Senate. All of what Dole did over the years was legal, and because of restrictions on how much honoraria members could keep, he passed on more than half of what he made to charity. But at a time when the influence of money on politics is drawing increased public scrutiny, Dole's financial transformation makes clear why those in position to reform the process have been so reluctant to change it.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615305","date":"1996-11-13","texts":"As the Dow Jones Industrial Average climbed to its fifth consecutive record, other stock-market indexes were shaken by profit-taking ahead of important economic data to be released this week. But the prospect of a nasty surprise from producer or consumer price data didn't rattle bond investors, who sent bond prices up and yields -- which move in the opposite direction of prices -- down to levels not seen in eight months. The Dow edged 10.44 higher to 6266.04, while the broader Standard & Poor's 500-stock index dropped 2.31 to 729.56. Despite a report released late Monday showing that demand for computer chips grew more rapidly than expected in October, profit-taking drove tech stocks lower late yesterday. That pushed the Nasdaq Composite Index down 6.14 to 1256.53. It was a very strange day, said Jack Baker, managing director of stock trading for Furman Selz. The bond market looked like it was never going to quit, but selling in the stock futures pit weighed on the stock market. Traders said the selling appeared to come from Salomon Brothers. Salomon declined to comment. But the bond market generated most of the fireworks, as the yield on the bellwether 30-year bond fell below the psychologically important 6.5 level to 6.44.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830981727","date":"1996-11-18","texts":"It's time to say goodbye to a pair of Washington area companies that were pioneers in emerging technologies that have matured into major industries. Capitol Multimedia Inc. of Bethesda, which made compact disc software for the very first CD-ROM home entertainment system, is closing its headquarters here and moving to Boston. Once a hot Washington stock, the company's shares sank to a record low last week after Capitol Multimedia reported another big write-off that left investors whimpering. In contrast, Penril DataComm Networks Inc. of Gaithersburg, a maker of modems since the days when people asked, What's a modem, will go out with a bang today after reinventing itself as a new venture called Access Beyond. Penril shares -- which were up 25 cents to 16.75 a share Friday, the highest price in years -- are scheduled to trade on the Nasdaq Stock Market for the last time this morning. By afternoon, former Penril stockholders will own shares in Access Beyond, trading as ACCB on the Nasdaq, and Bay Networks Inc. BAY on the New York Stock Exchange, a California company that is buying Penril's modem business. When Penril began making modems nearly 20 years ago, executives had to explain that the word was shorthand for modulator-demodulator and a modem was a black box that allowed computers to communicate over telephone lines.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613655","date":"1996-11-25","texts":"WASHINGTON -- The federal government opened its new fiscal year with a much bigger deficit than a year earlier, when it was operating on a reduced, temporary budget. The total budget deficit widened last month to 40.26 billion from 22.58 billion a year earlier, when the government faced shutdowns and budgetary stalemates. The deficit is the amount by which expenditures exceed receipts. In its monthly statement, the Treasury said receipts totaled 99.95 billion in October, compared with 95.67 billion a year earlier and 157.67 billion in September. Outlays totaled 140.21 billion last month, compared with 118.25 billion a year earlier and 122.24 billion in September. The October budget gap compared with a revised surplus of 35.43 billion in September. Separately, the Labor Department said the U.S. import price index, excluding fuels, fell 0.3 in October, marking the fifth monthly decrease for the index in the past six months. Import prices for nonpetroleum industrial supplies and materials, automotive vehicles, consumer goods and capital goods also posted modest declines in October. Only the index for foods, feed and beverages edged higher in the month, rising 0.1. Overall, import prices rose 0.4 in October, bolstered by a 6.1 jump in petroleum prices after a 7.4 gain in September. Over the last 12 months, prices for imported petroleum have risen 37.6.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984387","date":"1996-11-28","texts":"Wall Street has given lots of people plenty to celebrate the last few weeks. A Dow Jones industrial average at stratospheric levels. Twelve 'record closes in 16 sessionsa bull istock.market that makes Spains running of the bulls look like a side-. walk stroll. But few investors could feel as - flush as three teenagers from Montgomery County, whose one-week profits include three 25,000 college scholarships for producing ah innovative stock-market simulation site on the World Wide Web. The scene Monday night at a Washington hotel was as lively as a New York trading floor as Derek Goldstein, Michael Schulman and Jason Yang were awarded the grand prize in a national Internet competition. The Churchill High School students bested more than 1,000 teamssome as young as seventh gradethat designed Web pages for ThinkQuest, a contest sponsored See CHURCHILL, C5, CoL 6 Clockwise from top, Churchill High teacher Gary Smith and students Jason tlj Yang, Derek Goldstein and Michael Schulman. The teenagers won 25,000-4 scholarships for their stock-market simulation site on the Web.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983212","date":"1996-11-30","texts":"Consumer spending rebounded in October, n possible sign that Americans are ready to spend during the Christmas season after a summer lull. The Commerce Department reported yesterday that personal consump-. tion spending rose by 0,5 percent last month, following a lackluster 0.1 percent advance in September. The bigger-than-expected increase translated into a rise of 27.5 billion at an annual rate. The bulk of that gain 20.7 billionoccurred in purchases of services, led by increased spending to pay for home insurance, telephone bills, recreation and accountant fees. Economists are closely watching consumer spending for signs that the economy may regain some vigor after a slow July-September quarter. At that time, gross domestic product advanced at only a 2 percent annual rate, far below the strong 4.7 percent page during the second quarter. Spending by consumers fuels two-thirds of national economic activity, and most econoifiists who look for a stronger fourth quarter anticipate brisker shopping in the vital holiday Wall Street has been pushed to re-, cord llighs because of the summer economic slowdown, believing that the Federal Reserve will not need to raise interest rates to dampen an overheated economy.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616896","date":"1996-12-04","texts":"In one of the stock market's more abrupt declines in recent months, a late-day, 30-minute selling frenzy sent the Dow Jones Industrial Average to a loss of 79.01 points, or 1.21. The decline, to a finish of 6442.69, was the seventh-biggest for the Dow industrials this year -- and the sharpest since July 15, when the index dropped 161.05. Blue-chip stocks bore the brunt of the selling, but by the time the dust settled, the broader Standard & Poor's 500-stock index had fallen 8.28 points, or 1.09. While the percentage move alone wasn't alarming by historic proportions, the sudden shift in the market's direction and sentiment after weeks of bullishness and continued records left uneasy traders bracing for today. They noted that futures contracts on the S&P 500 index continued to fall in after-hours electronic trading. This is certainly setting up as the first real correction we've seen since the market's recovery from its summer doldrums, said Jon Olesky, managing director and head of block trading at Morgan Stanley. He further noted that this does not have the feel of a one-day event.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614367","date":"1996-12-06","texts":"AuthorAffiliation A Wall Street Journal News Roundup Office-equipment stocks were the top gainers in the Dow Jones World Industry Groups, closing at 184.71, up 7.29, or 4.1, with Ricoh of Japan posting a 7.4 gain in local currency. Specialty-retailing stocks trailed at 132.62, down 1.50, or 1.1, with Circuit City Stores of the U.S. sliding 3.8. In Tokyo, the Nikkei 225-stock index, which edged up 29.35 points Wednesday, climbed 283.99 to 20943.90. On Friday, the Nikkei lost 306.55 points to close the morning session at 20637.35. Thursday's first-section volume was estimated at 340 million shares, up from 277.6 million shares a day earlier. Rising issues widely outnumbered falling issues, 739 to 342. The Tokyo Stock Price Index, or Topix, of all first-section issues advanced 15.40 points to 1551.76. Tokyo sectors chalking up strong gains included electronics, precision machinery, autos and pharmaceuticals, after Japan on Tuesday reported supportive data on Japan's gross domestic product for the quarter ended Sept. 30, though many investors remained unconvinced about momentum for economic recovery. The bourse also was helped by arbitrage-linked dealings by Japanese pension funds that bought stock-index futures. Foreign investors stepped up their buying after the U.S. dollar fell against the yen. Foreign funds had sold recently to avoid exchange-rate losses from a strong dollar. In London, the Financial Times-Stock Exchange 100-share index added 6.0 points to 4051.2, down from the session peak of 4076.0, though cushioned from the intraday low of 4043.8. The FT 30-stock index eased 2.0 points to 2797.1. Provisional volume was 818.6 million shares, compared with 653.6 million shares a day earlier.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983924","date":"1996-12-10","texts":"NEW YORK, Dec. 9Investors thumbed their noses today at Federal Reserve Board Chairman Alan Greenspans warning of market inflation, pushing prices to the highest one-day gain in a month. The Dow Jones industrial average jumped 82 points to close at 6463.94, wiping out all remaining losses from Fridays brief panic, when investors feared Greenspan was threatening to raise interest rates. The Nasdaq Stock Market, fueled by heavy buying of Microsoft and Intel shares, displayed even more disdain for the chairman. It jumped 28.59 points, or 2.22 percent, which Bloomberg Business News said was its biggest percentage gain since Aug. 2. Analysts used an assortment of verbs to describe the contempt the market showed for Greenspans fear that overpriced stocks might lead to overpriced consumer goods and then an economic slump like that suffered by the Japanese. Greenspan was dissed, they said. He was scorned. He was ignored. K.Miller, a portfolio manager at Trevor Stewart Burton and Jacobsen Inc. Pleasing economic data and a robust bond market made it impossible to resist stock buys, she said.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984340","date":"1996-12-11","texts":"The U.S. trade deficit surged to 48 billion from July through September, the worst quarterly performance in history, as American exports fell for the first time in three years. The U.S. current account is the broadest measure of foreign trade, tracking not only sales of goods but also services, investment flows and foreign aid. The trade performance reflected a small increase of 0.7 percent in merchandise imports, which rose to 201.5 billion during the third quarter. At the same time, U.S. merchandise exports fell 2.1 percent to 149.9 billion, marking the first quarterly setback in U.S. merchandise ex- Also yesterday, a new survey showed that purchasing managers are more optimistic about the economy than they were a year ago, seeing no discernible inflation and a modest increase in employment next year. Seventy-one percent of managers who buy supplies for U.S. manufacturers expect business to improve, the National Association of Purchasing Management said yesterday in a semiannual forecast.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617060","date":"1996-12-12","texts":"NEW YORK -- Currency traders took their cue again from falling U.S. stock and bond markets and sold the dollar against most major currencies. Analysts cited Wall Street Journal articles which fanned fears that foreign investors and U.S. mutual funds might cut back on the huge amount of money they've put into U.S. asset markets. Also, early in Asian trading Wednesday, the Australian dollar dove immediately after the Reserve Bank of Australia surprised markets by cutting the key cash rate to 6 from 6.5, citing an improved inflation outlook and a strengthening currency. After its initial fall, the Australian dollar stabilized just above 79 U.S. cents for the rest of the global trading day. Traders sold U.S. dollars in Asia and Europe, reflecting worries that U.S. stock markets would open with a plunge. When prices did indeed fall sharply in early New York Stock Exchange trading, New York traders continued to sell the U.S. dollar. By the end of the global trading day, it was down more than one pfennig and almost half a yen. The suggestions that investors might pull away from U.S. assets coincide with fear that stocks are flying too high, said David Munro, economist at High Frequency Economics in Valhalla, N.Y. But with a strong U.S. economy, it's hard to make much of a case for a depreciation or loss in the dollar, he said.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982068","date":"1996-12-13","texts":"NEW YORK, Dec. 12Stock prices were pounded today in the biggest one-day drop for blue-chips since a July rout. Nervous investors opted to take profits despite fresh indications that the economy is growing moderately and inflation is in check. The Dow Jones industrial average fell 98.81 points to close at 6303.71, the biggest one-day point loss since the 161.05-point plunge July 15 at the depths of a sell-off. The index of 30 blue-chip stocks has now fallen 3.7 percent, or 244 points, since reaching a record 6547.79 on Nov. 25. But the Dow still is up more than 23 percent since the year began. Stocks started the day higher, with the Dow up as much as 34 points, after three encouraging economic reports, but the rally was over in the first hour. Declining issues led advancing ones by 4 to 3 on the New York Stock Exchange. Volume was heavy at 492.9 million shares, down from Wednesday's","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830981889","date":"1996-12-25","texts":"NEW YORK, Dec. 24The .stock market sent investors home for Christmas on a happy note today, thanks largely to a rebound in bellwether technology shares. In an abbreviated pre-holiday session, the Dow Jones industrial average rose 33.83 points to close at 6522.85, moving within 25 points of Nov. 25's all-time best close at 6547.79. It was the. sixth straight winning session for the '  barometer of 30 big U.S. companies. The Dow is up more than 1,400 points, or nearly 27.5 percent, so far this year, with just four trading days left. The technology-laden Nasdaq Stock Market shot higher over the last half hour of trading today, as bargain hunters bid up some computer-related issues that had fallen due to profit-taking,' in the previous two sessions.  ,  A few stocks got hit hard yesterday and theyve rebounded a bit, but its not anything to brag about, said Don Hays, director of investment strategy at Wheat First Butcher Singer Inc., in Richmond. Aside from technology,, he said, there was no group personality. It was just a mixed bag. Analysts attributed much of the ses sions positive tone to seasonal influences and the fight, pre-holiday trading.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614371","date":"1997-01-03","texts":"They're here. After years of debate, tax-free medical savings accounts for the self-employed and people who work for small businesses finally arrived on New Year's Day. Under a four-year pilot program, more than one million people could use MSAs to pay for routine health-care expenses in connection with special, high-deductible health-insurance policies. Money contributed to the accounts by workers or their employers would be used to pay for medical expenses until the deductible has been met and the insurance policies begin to pay. MSAs also offer a potential new way for some people to boost their savings because money that isn't used for medical expenses can continue to grow tax-deferred. Some insurers and banks are already pitching the accounts as a vehicle for long-term investing. In addition to supersafe cash or money-market accounts, they are offering mutual funds and, in some cases, individual stocks and bonds. The companies say they want to offer people investments with competitive returns in a tax-sheltered environment similar to an individual retirement account.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617456","date":"1997-01-03","texts":"WASHINGTON -- Manufacturing bounced back in December while prices in that sector rose to the highest levels in a year and a half, rekindling fears of inflation. A closely watched index of manufacturing strength, compiled monthly by the National Association of Purchasing Management, rose to 54.0 last month from 52.7 in November -- the best performance since June. A reading of more than 50 generally signals that manufacturing is expanding. A figure below 50 indicates manufacturing contraction. As part of its survey of purchasing managers, the association also asks about prices, and this index surged to 51.5 in December from 45.9 in November, reversing two consecutive monthly decreases. The stock and bond markets, which have been nervously scrutinizing economic data lately for any signs of inflation, tumbled on the news. The Dow Jones Industrial Average fell nearly 100 points in early trading before recovering to end the day at 6442.49, down 5.78. The 30-year Treasury bond finished 1 632 lower, a loss of 11.875 for a bond with a 1,000 face value the bond's yield -- which moves in the opposite direction of price -- rose to 6.73 from 6.64. Norbert Ore, who directed the survey, dismissed the inflation fears as exaggerated, saying the report indicates more of a firming of prices than an escalation. This is only the third month in 1996 that we had higher prices reported, he added. I don't think at this point you can establish a trend.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614860","date":"1997-01-07","texts":"ROLLS-ROYCE UNIT, EDS SET DEAL The industrial power unit of Rolls-Royce PLC of Britain, an aircraft-engine maker, signed a 10-year alliance with Electronic Data Systems Corp. of the U.S. EDS will buy Rolls-Royce computing and information-technology equipment for an undisclosed price. Rolls-Royce in turn will pay EDS 300 million 506 million to develop technical business applications to help improve Industrial Power Group results, initially at U.S. and Canadian operations and later world-wide. VENDEX TO BECOME TEMP GIANT Vendex International NV of the Netherlands agreed to acquire BIS SA of France, a temporary-employment company, for 2.5 billion francs 472.3 million. Vendex will become the world's No. 3 temporary-help concern by buying 60 of BIS from its late founder's family for 490 francs 92.56 a share. It will offer to buy the rest at the same price on the Paris stock market, where suspended BIS shares last traded at 533 francs. Vendex also plans to split its retail and business-services lines. VEBACOM TO BUY CABLE FIRM","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616150","date":"1997-01-10","texts":"AuthorAffiliation Staff Reporter of The Wall Street Journal A still weaker yen would prompt foreign investors to accelerate their sell-off of Japanese securities, and a weaker yen would further hurt U.S. industrial competitiveness. And it isn't just the dollar's climb against the yen that they expect to stall. Paul Meggyesi, a senior currency strategist at Deutsche Morgan Grenfell in London, contends that pessimism about the German economy is overdone and estimates that during the next month or so the dollar will creep only a little higher to 1.58 or 1.59 marks. And while he acknowledges that the yen is the pariah currency at the moment, he says that we are entering the final quarter of the Japanese fiscal year when capital flows tend to be unpredictable. Stephen Lewis, chief economist at London Bond Broking Co., a division of Monument Derivatives Ltd., doubts the dollar will climb to 120 yen, 3.2 above current levels. Looking ahead to the Feb. 8 meeting of finance ministers and central bankers from the world's seven major industrial powers, he says fears that the Group of Seven will resort to concerted intervention to stabilize currencies will be enough to prevent any sharp moves between now and then. Late in New York trading yesterday, the dollar stood at 116.40 yen and 1.5776 marks, up from 115.75 yen and 1.5744 marks late Wednesday. The pound rose to 1.6961 from 1.6880 a day earlier. In Tokyo early Friday, the dollar was trading at 116.43 yen and at 1.5764 marks.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614187","date":"1997-01-14","texts":"Since the 1980s, the key question about the U.S. budget deficit has been not whether it would be reduced but whether this would be accomplished by spending reductions or tax increases. Similarly, today the question about entitlements is not whether Medicare or Social Security will be fixed but whether these repairs will involve reduced benefits and enhanced efficiency or will instead entail more taxes. In general, the success and permanence of fiscal adjustments depend on their form, especially on whether governments restrain the growth of outlays. The idea that the form of a fiscal adjustment matters more than the amount is the theme of a recent International Monetary Fund study by Alberto Alesina and Roberto Perotti, Fiscal Adjustment in OECD Countries Composition and Macroeconomic Effects. The authors examined the experience with budget-deficit reduction in 20 major developed countries in the Organization of Economic Cooperation and Development from 1960 to 1994. In 62 of the 378 annual observations the study considered, the government was conducting a fiscal adjustment, defined as a reduction in the cyclically adjusted budget deficit by at least 1.5 of GDP. However, only about one-quarter of these adjustments were successful three years later -- successful meaning that the fall in the fiscal deficit was sustained or that the cumulated reduction in the ratio of the public debt to GDP was at least five percentage points. Examples of successes were Ireland and Sweden in the late 1980s and Denmark in the mid-1980s. The United States made the success list only for 1976. The interesting finding in the Alesina-Perotti study is that a plan's success or failure depends on the composition of the reform. For one thing, the successful cases concentrated much more on spending reductions than on revenue increases. In the successes, 73 of the deficit reduction involved spending less, whereas for the failures, only 44 took this form. The composition of the spending cuts also differed markedly. In the successes, 51 of the spending decreases were in transfers and government wages, while 20 was in public investment. For the failures, only 17 of the reduced spending was on transfers and government wages, whereas a striking 63 was in public investment. Referring to the successful reform model as type 1, the authors write, The reason why type 1 adjustments were successful is that they tackle the two items of the budget, government wages and welfare programs, which have the strongest tendency to automatically increase. In contrast, in the typical unsuccessful effort, described as type 2, the focus on cuts in public investment reveals a short-term outlook with no lasting commitment to fiscal discipline.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616171","date":"1997-01-15","texts":"NEW YORK -- Sparked by tame inflation news and bolstered by the strength of the technology sector, small-capitalization and Nasdaq Stock Market issues jumped to records. Still, while the Russell 2000 small-cap stock index hit its third record in the past four sessions, the small-cap market continues to underperform the broad market and blue-chip sector. Computer-related stocks were one of the strongest industry groups. But echoing the overall market, larger tech stocks outperformed smaller ones. That's been the case since July, said Stephen Cohen, director of technology research at First Albany. In July, when the marketwide plunge took its severest toll on small-caps, many investors were taught the Roach Motel lesson about small-cap stocks They're easy to get into but tough to get out of. The Russell 2000 rose 1.67, or 0.46, to a record 367.52. The Nasdaq Composite Index, at a record 1346.36, was up 15.45, or 1.16.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985134","date":"1997-01-15","texts":"The best thing we could do with last weeks report from the Advisory Council on Social Security is to forget it. The report brims with bad ideas from ail along the political spectrum. Nohe'of the three proposals to invest vast amounts of Social Security funds ultimately trillions of dollars in the stock market is worth adopting. All would nationalize the stock market more than privatizing Social Sqfjffttywith unpredictable and, possibly, damaging consequences. And all obscure the central issue posed by an aging America. Its generational justice How much burden should the old place on the middle-aged and the young, whose taxes mainly pay for government retirement benefits Sooner or later, cuts in Social Security and Medicare are unavoidable, because the alternativeshuge tax increases or peacetime budget deficitsare worse and probably politicals'.unacceptable. In general, we know what tgg,raise retirement ages, tax Social Securi-tybenefits fully, shift Medicare toward managed care and correct Social Security benefits for an overstatement of inflation in. the consumer price index. Changes need to be made, gradually so that today's retirees are only modestly affected and larger shifts such as higher retirement ages occur with ample warning. Siphoning huge amounts of Social Security funds into the stock market wont erase the budgetary pressures. In practice, the government cant pre-fund much of its future costs of the baby-boom generations retirement, even though thats the vague promise of all three council proposals. The costs are simply too large. To see why, consider spending projections for Social Security, Medicare and that part of Medicaid that pays for nursing-home care. All provide benefits for the elderly, and all are affected by the same aging trends. Common sense suggests they should be considered as a wholeand not as unrelated parts. Together, these programs now account for nearly 40 percent of non-interest federal spending they're already squeezing other important federal activities, from basic research to national parks. But the situation dramatically worsens in the next century, as baby boomers retire. In 1995 these programs cost about 7 percent of national income gross domestic product. By 2025 they will cost unless changes are madeabout 13 percent, projects the Congressional Budget Office. Paying for them would require staggering tax increases 20 percent to 50 percent, depending on assumptions or budget deficits. The projected increase for Social Security alone 1.3 percent of GDP by 2025 might easily be absorbed. The combined increases of all three programs, led by Medicare up 3.5 percent, aren't. The Advisory Councils failure to consider the combined costathough defensible in terms of its legal chartermake its report a poor guide for the future. Even for Social Security, its proposals dont make sense, The idea is that if we save more now, we won't have to pay more later. Though true, this is misleading. To save more now, we have to consume less. Compulsory saving in stocks requires either tax increases or cuts in government spending. Two of the three plans each mandating stock accounts for individualsadmit this. They would raise the existing","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983532","date":"1997-01-16","texts":"Students, faculty members and alumni of the University of the District of Columbia rallied yesterday to denounce cuts planned by UDC's new acting president to close a 16.2 million budget deficit, and they challenged the city's political leaders to find more money to save the beleaguered school. Marching several miles from the UDC campus on upper Connecticut Avenue to the White House and then to the downtown Martin Luther King Memorial Library, UDC supporters said that their fight to save the school was in the tradition of King's civil rights struggle and that they would not let King's dream -- or their school -- die. Dr. King is looking down on us, and he is smiling today, said Jack Johnson, head of the Graduate Student Government Association, who called on students to fight together to heighten public awareness of how important the school is to thousands of D.C. residents. The march and rally on King's birthday, which drew more than 150 people, were planned as the school faces the most severe crisis in its 20-year history. City appropriations have been cut more than 50 percent since 1991, and the university was put on warning by its accrediting agency last summer. Acting President Julius F. Nimmons Jr. has proposed eliminating the deficit by firing 125 faculty and 130 non-faculty employees and imposing furloughs of six to nine days. The faculty reduction plan calls for the heaviest cuts in the English and Mathematics departments, where 80 percent of the courses are remedial.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984707","date":"1997-01-19","texts":"firts a safe bet we'll never see I another two years in tire stock tJ. market like 1995 and 1996. jYou just dont make 30 percent rback-to-back. But why not try for a triple firts a safe bet we'll never see I another two years in tire stock tJ. market like 1995 and 1996. jYou just dont make 30 percent rback-to-back. But why not try for a triple f  In 1995,1 started compiling an annual list of 10 stocks for the year fahead, culling selections from the .choices of folks whose opinions 1 .Value. That year, the list returned 31.4 percent, compared with 34.4  percent for the Standard & Poor's  500-stock index. Last year's list did even better, returning 32.0 percent, compared with 29.3 percent for the S&P. These figures assume that dividends were rein-'Vested.,The year ends, in all cases, oh Jan. 16. Not only did our lists prove you can make lots of money in the stock market, they cohfirmed an axiom of academic research You usually need to own no more than 10 stocks to come close to duplicating the market averages, as long as the companies are in different businesses. .'The 1996 portfolio performed Tike most its size a few big win-nfers, a few big losers and bunch in the middle. Seagate Technology Inc.,ihe hard-drive maker, was up -100 percent Schlumberger Ltd., - the oilfield services company, rose  75 percent. Losers were Eskimo Pie Corp. and Hanson PLC, the huge British conglomerate. betical order, with a few warnings First, I dont believe in owning stocks for only a year, and, while weU examine the results in January 1998, they should be considered long-term holdings. Second, these tips are those of other analysts.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613637","date":"1997-01-20","texts":"CARACAS, Venezuela -- Just after the Mexican currency crisis broke in late 1994, Latin American borrowers had trouble finding anyone to lend them money even for a month or two. Now investors are scrambling to buy billions of dollars of Latin corporate bonds, some of which won't come due for 100 years. They are betting the region will snap out of a wave of recessions that have plagued it since the currency crisis. These lenders are counting on economic growth that will make it easy for companies to offer billions of dollars of new debt. Mexico's payment last week of the last part of its 13.5 billion emergency loan from the U.S. is likely to boost investor confidence in the region even more. Last Friday U.S. pension funds, mutual funds and insurance companies, among others, snapped up an eye-popping 650 million bond offering from Empresa Nacional de Electricidad SA, or Endesa, Chile's largest electric utility. The bond sale included 200 million of 100-year bonds, the first from Latin America. Demand was so strong for the investment-grade offering that it was increased from an original size of 580 million, says Bill Rogers, a vice president of debt capital markets at Chase Securities Inc., a subsidiary of Chase Manhattan Corp. The Endesa offering is just the latest sign of investor eagerness to lend to Latin companies, which sold a record 19 billion of bonds last year, according to IFR Securities Data Co.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984429","date":"1997-01-23","texts":"Federal workers have seven working days to make what could be two of the key decisions of their careers whether to join the thrift savings plan and where to invest the money. Joining the plan is a no-brainer. Just do it. Deciding where to invest takes more thought. For many young workers, the right long-term investment could mean a million extra dollars to spend in retirement. Experts say that savings plan accounts will produce half of the retirement income of workers covered by the Federal Employees Retirement System. Employees who miss the Jan. 31 deadline to join the plan will have to wait until the end of the year for the next open season. That's a lot of investing time and potential earnings to lose. They can, however, move existing funds from one account to another every month. Feds don't need a session with Alan Greenspan to understand the thrift savings plan, but it can be confusing. Marjorie Mitchell, a Defense Department worker, would like a simple explanation of the funds. Here it is, along with each fund's track record since 1988  Treasury fund. The G-fund has no risk, in the sense that it is guaranteed by the government. It is invested in Treasury securities with a guaranteed monthly rate. The problem is that the G-fund or any investment, for that matter may not generate enough income to allow the investor to keep well ahead of inflation. In 1988 and 1989, the G-fund returned 8.8 percent 1990, 8.9 percent 1991, 8.15 percent 1992, 7.23 percent 1993, 6.14 percent 1994, 7.2 percent 1995, 7.03 percent and last year, 6.66 percent.  Bond fund. The F-fund tracks the Lehman Brothers Aggregate Bond Index. As with stocks, bonds go up and down. In 1988, the F-fund returned 3.6 percent 1989, 13.8 percent 1990, 8 percent 1991, 15.7 percent 1992, 7.2 percent and 1993, 9.5 percent. In 1994, the fund lost 2.96 percent in 1995, it returned 18.31 percent and last year, it returned 3.66 percent.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616990","date":"1997-01-28","texts":"For the fourth trading session in a row, rising interest rates pressured stock prices, bringing the losses in the Dow Jones Industrial Average since last week's record to more than 223 points, or 3.24. The dollar climbed. The industrial average reversed some of its early losses to end the day at 6660.69, down 35.79, compared with the record 6883.90 set last Tuesday. International Business Machines continued to lead the index downward, falling 4 34 to 145 34. The selling spilled over into other technology stocks, helping push the tech-heavy Nasdaq Composite Index down 11.02 to 1352.81. The broader market also suffered Standard & Poor's 500-stock index dropped 5.50 to 765.02. The only common theme is that the stocks people were buying eagerly, they're now selling eagerly, said Mike Driscoll, block trader at Smith Barney. For instance, General Electric, until last week a favorite on many shopping lists, continues to slip. GE fell 1 12 to 100 38. While the volume of selling appeared to slacken, with a relatively tame 445.5 million shares changing hands on the New York Stock Exchange, Mr. Driscoll said substantial additional selling was seen in the Chicago stock-futures trading pits. Uncertainty about interest rates may be keeping buyers of both stocks and bonds sidelined until crucial economic data are released this week, traders believe. And as the rising yield on the 30-year Treasury bond again approaches 7, Bill Kirby, co-head of government securities trading at Prudential Securities, says some investors are beginning to talk about moving some assets from stocks to bonds.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617306","date":"1997-01-28","texts":"The National Association of Securities Dealers is expected today to name longtime Wall Street executive and former U.S. energy director Frank G. Zarb as president and chief executive. The appointment caps a longer-than-expected search for a leader of the NASD, during which several candidates declined to be considered for the high-profile but much-altered post. Mr. Zarb, identified as the leading candidate for the post two weeks ago, succeeds Joseph R. Hardiman, who is retiring Friday after 10 years at the helm. The NASD is the parent of the Nasdaq Stock Market, the main market for small stocks, though also home for such big-capitalization stocks as Microsoft and Intel. Late yesterday, the NASD board was expected to vote in favor of Mr. Zarb's appointment and announce the decision at today's board meeting at the Inn at Spanish Bay in Pebble Beach, Calif. Mr. Zarb, 61 years old, is the departing chairman of Alexander & Alexander Services, an insurance-brokerage firm that is being acquired by Aon. He was formerly chairman at Travelers Group's Smith Barney Inc. a vice chairman at Travelers and was President Ford's energy director from 1974 to 1977.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984103","date":"1997-01-29","texts":"Frank G. Zarb, a Wall Street executive who served in the Nixon and Ford administrations, was appointed yesterday to head the National Association of Securities Dealers, which oversees the second-largest U.S. stock market. Zarb's appointment, which was expected, should lead to improved relations between the NASD and the Securities and Exchange Commission, whose chairman, Arthur Levitt Jr., was a partner of Zarb in a brokerage firm. Zarb's son is an SEC attorney. The NASD is in the midst of a restructuring imposed by the SEC after regulators found that the association failed to adequately supervise the Nasdaq Stock Market and protect the interests of investors. In a telephone news conference, Zarb declined to outline specific goals for the NASD. He did, however, emphasize the importance of investor protection. Confidence that markets are fair and right and balanced is essential to any growing market, he said. He pledged to stay as long as it takes to regain investor confidence in the NASD.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617443","date":"1997-01-30","texts":"NKK TO REOPEN LINE IN JAPAN NKK Corp., a Japanese steel giant, said it would reopen a blast furnace in Hiroshima next year to meet growing Asian demand. This fueled speculation that as the yen weakened against the dollar, NKK was retreating from a policy of cutting staff, selling assets and moving output overseas in response to a record-high yen, high operating costs and a glut in world steel capacity. But NKK said that the speculation was ill-founded and that its revamp would continue as part of a long-term strategy to preserve its price advantage in global competition. RUSSIAN BUSINESS ROW RESOLVED Two months after a U.S. businessman was murdered in Russia, a legal dispute with his joint-venture partners was resolved. Swedish arbitrators stripped Americom Business Centers, which had been headed by Oklahoma entrepreneur Paul Tatum, of its rights to manage the center in Moscow's Radisson Slavyanskaya Hotel, and ordered it to pay the venture 2.6 million in damages. Mr. Tatum was gunned down outside the hotel in November. Police have no suspects. TOTAL'S NET INCOME JUMPS","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985354","date":"1997-01-30","texts":"George W. Mitchell, 92, a former governor and vice chairman of the Fed-prdhRescrve Board and an early advo- George W. Mitchell, 92, a former governor and vice chairman of the Fed-prdhRescrve Board and an early advo- ferp and he lectured widely during the 196Ps and 1970 on his vision of a cBeckless, cashless society. Until 1990, he was a consultant to the Federal Reserve on electronic funds transfer . systems. public finance, Mr. Mitchell carpe to Washington from the Federal Reserve Bank of Chicago, where he had served forilO years as vice president in charge of research. During that time, he also  was an associate economist of the Fed-i era Reserve Open Market Committee, the body with power to tighten or loosen credit, and lie was said to have been 1one of only a few dozen economists with He was a member of the Open Market Committee during his 16 years as a governor of the Federal Reserve Board. I Earlier, Mr. Mitchell had been Illinois state director of finance during the governorship of Adlai E. Stevenson, who j was the unsuccessful Democratic presidential nominee in 1952 and 1956. Mr.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616035","date":"1997-01-31","texts":"FUND-RAISING FLAPS roil the administration even as Clinton backs overhaul. Clinton himself is slated to speak at fund-raisers in Washington, New York and Los Angeles for the Democratic Senate campaign committee. Despite new DNC restrictions, the autonomous Senate group will welcome donations from foreign-owned subsidiaries and noncitizen residents. In his State of the Union speech Tuesday, Clinton is expected to call for passing a campaign-reform bill by summer. About 68 of Americans in a new Wall Street JournalNBC News poll say politics is more influenced by special-interest money than 20 years ago. A plurality faults both parties. A GOP governors' dinner on Monday is expected to raise 3 million. Labor-secretary nominee Alexis Herman takes heat for Clinton coffee klatches with donors, but most were arranged by the political staff headed by Douglas Sosnik. The saying around the White House, according to cybersatirist Bob Hirschfeld That and a grand will get you a cup of coffee. FIX SOCIAL SECURITY but go slow on putting funds in stocks, many say.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984133","date":"1997-02-04","texts":"The chairman of Microsoft Corp., the world's richest private citizen, is easily the most sought-after celebrity at the World Economic Forum, the annual Alpine summit of the world's corporate and governmental elite. Forget Israeli Prime Minister Binyamin Netanyahu, forget Russian Premier Viktor Chernomyrdin, forget South African President Nelson Mandela, among the dimmer stars here. Tonight, in fact, Gates appeared on a panel just before Mandela was scheduled to speak. The jam-packed audience of 1,100 was asked to stay for Mandela's speech on AIDS even so, a sizable handful of guys in suits departed after Gates finished. They were replaced by new listeners, but the message was clear Hill Gates was, at least for this crowd, an equal draw with the president of an important country. It's been like that for two days. When Gates, 41. held a press conference, the seats were filled 15 minutes before the session began and reporters were spilling out the door. His book, The Road Ahead, is one of the top sellers at the bookstore here, even though it was first published in 1995. One young conference staffer has been heard boasting she had gotten Gates's autograph. In Europe, where unemployment is high and innovation rare, Gates is perceived as someone who has all the answers. He is very different from the typical European businessman, said Robert Hormats, vice chairman of Goldman Sachs International. He embodies the European desire to catch up on the technological revolution.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613937","date":"1997-02-06","texts":"Technology shares dived yesterday after Intel Corp.'s stock was downgraded by two analysts who cited its recent sharp appreciation in price. The downgrades were all investors needed to sell Intel, which many saw as a soaring stock that had gotten ahead of itself. Intel swooned 4.6, tumbling 7.50 to 157.25 in Nasdaq Stock Market trading. With technology stocks trading on momentum as waves of new investors recently poured in, all it took was a couple of blips of negative news to trigger broadbased profit-taking, analysts said. Today was mindless, said Roger McNamee, partner at technology investment firm Integral Capital Partners in Menlo Park, Calif. Tech-stock investors fluctuate from euphoria to blind panic, and right now we're in the blind panic mode. In his opinion, these stocks are a lot better buy today than they were yesterday. The technology-heavy Nasdaq Composite Index fell 25.31 points, or 1.84, to 1348.44.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985106","date":"1997-02-06","texts":". Federal Reserve officials decided jjssterday to leave short-term interest rates unchanged, despite recently strong economic growth, because of the persistence of low inflation. i It has now been more than a year isince the Fed last changed its target for .fates, but with inflation under control ,apd tiie economy performing well, Fed ..Chairman Alan Greenspan and other .policymakers have been content not to tinker. Many financial analysts said it is talso likely that no changes will be made .at the next meeting on March 25. ,. As is usual when there is no change in policy, Fed spokesman Joseph R. -jCoyne simply announced the meeting Jiad ended with no further explanation. c The Feds decision, coming at the end of a Iwoslay policymaking session, .also undoubtedly was influenced by the Jjact that, most recent economic siatis-j.tics have been pointing toward some r.cooling alter a surge in growth late last year, analysts said. p At a similartMHlay session a year flago, most- of the officials forecasts .Crlli-d -for growth of a bit ntoreihau 2 tjjercent from the fourth quarter of 199.5 do the -fourth uarter of last year. Last week the Commerce Department eai-.liatttl the actual increase at 3.-I ier-.iOenl, with growth hitting an annual rate fit 4.7 percant'inttie final three months of the year. However, according to various price indexes linked to those growth figures, inflation declined last year despite the faster economic pace. At a confirmation hearing yesterday on her nomination to be chairman of the presidents Council of Economic Advisers, Fed Board member Janet L. Yelien told the Senate Banking Committee, Throughout our long expansion, inflation lias remained low and fallen by most broad measures and investment in plant and equipmentthe driving force of this expansionhas grown at a phenomenal pace,","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615642","date":"1997-02-07","texts":"In the first three quarters of 1996, Canada's unemployment rate averaged 9.6, while the U.S. rate was only 5.4. In fact, every year since 1981, Canada's unemployment rate has exceeded the U.S. rate. The gap averaged 2.1 percentage points between 1981 and 1989, and has risen to an average of 3.8 percentage points in the 1990s. This widening gap worries many Canadian politicians and citizens. The highest annual U.S. unemployment rate since 1941 was 9.7 in 1982, during the depths of the 1981-82 recession. But Canada is not in a recession. Although growth is slow, real output between 1989 and 1996 grew an average of 1.5 per year. So why is unemployment so much higher in Canada than in the U.S. One cause, you might suspect, lies in how the Canadian and U.S. governments measure unemployment. In Canada, passive job searchers, those who look for a job only by consulting the want ads, are counted as unemployed. In the U.S., you have to be actively searching to be classified as unemployed. But this definitional difference, according to economist Jay Zagorsky of the Center for Human Resource Research at Ohio State University, can account for only 0.7 percentage points of the 4.2-point difference. Also, many U.S. residents who might be counted as unemployed under the Canadian definition are in prison. The much higher U.S. incarceration rate, though, still can account for only about 0.2 percentage points of the 4.2-point gap. Moreover, notes Andrew Sharpe of the Ottawa-based Centre for the Study of Living Standards, if you count as half-unemployed part-time workers who would rather work full-time, the difference between Canadian and U.S. unemployment rates widens by about 1.5 percentage points. An obvious suspect when trying to explain high unemployment is a country's system of unemployment insurance. The more valuable the benefits, the longer they last and the easier they are to qualify for, the greater the unemployment rate, all other things equal. The reason People have an incentive to stay unemployed and to be very choosy about the jobs they will accept when they are subsidized to stay at home. Canada's unemployment insurance system became much more expensive in 1972 when Pierre Trudeau's government increased the benefits' value and duration, and decreased the period required to qualify.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982767","date":"1997-02-11","texts":"Premium chocolatespopular In the relatively affluent D.C. areaInclude elaborately designed candy for specific holidays. The presidents Council of Economic Advisers, in its annual report released yesterday, lauded the nations current combination of low unemployment and low inflation and said that it could continue more or less indefinitely. If the council's analysis is correct, it would mean that the Federal Reserve might be able to leave short-term interest rates at their current level for a long time to come, barring some sort of outside shock to the economy. Those rates have been unchanged for more than a year as the economy has experienced healthy growth accompanied by either stable or falling inflation. Federal Reserve Chairman Alan Greenspan has expressed concern that keeping the nations jobless rate as low as it has been for the past year could sooner or later The key point, the council said, is that the unemployment rate associated with a stable inflation rateknown to economists as the non-accelerating inflation rate of unemployment, or NA1RUhas come down substantially since the 1980s.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613871","date":"1997-02-12","texts":"Just two trading days after the world's seven major industrial countries signaled they wanted to slow the surging dollar and see less-volatile currency markets, traders rebelled. Before retreating on profit-taking, the greenback climbed to 1.6810 marks -- its highest level since May 1994 -- on an unconfirmed report that German policy makers would welcome a stronger dollar. In congressional testimony, Treasury Secretary Robert Rubin said the dollar had come back into a normal range and corrected itself after earlier misalignments. He also said he believed a strong dollar had contributed to low U.S. inflation and stable growth. Traders said the dollar dipped following his remarks and then rallied when they realized it wasn't headed any lower. Mr. Rubin cautioned yesterday that he wouldn't comment publicly about what he called the behavior of financial markets, but reiterated that the dollar shouldn't be used as a tool in U.S. trade policy. Asked about Japan's economic woes, the Treasury secretary said that the U.S. has concerns about the nation's low growth rates for the past four or five years. But he added that we aren't concerned about a systemic financial crisis in Japan.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613612","date":"1997-02-13","texts":"NEW YORK -- The dollar ended global trading yesterday higher against most major currencies as traders nervously tested central bankers' threshold of pain. The dollar rallied to an intraday high of 1.6932 marks and 1.4522 Swiss francs, levels unseen since April 1994 when the U.S. currency traded at 1.6935 marks and at 1.4525 Swiss francs, as traders sought to discern just how high central banks would be comfortable with the dollar trading. After being knocked off a 34-month high against the mark when the Bundesbank denied that it wants the dollar to move higher, the U.S. currency later claimed a 34-month high against the Swiss franc when the Swiss government said it considers a weak Swiss franc as one way to help cure untenable unemployment. The dollar gave up one yen and two pfennigs when the Bundesbank sharply denied a news service report Tuesday citing unnamed sources as saying the central bank would welcome a dollar advance to 1.7000-1.7100 marks over time. There is definitely no such opinion on the wish for a higher dollar, a Bundesbank spokesman said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614315","date":"1997-02-13","texts":"Tokyo stocks racked up a 1.3 gain Wednesday, bolstered by a stronger U.S. dollar against the yen and more indications that the Japanese government will support ailing banks. The London market ended mixed, its early gains erased by a sharp drop in British unemployment. Frankfurt equities jumped to their eighth consecutive record. Amsterdam, Mexico City and Sydney shares all extended their record-setting streaks. World-wide, stock prices rose in dollar terms. The Dow Jones World Stock Index was at 150.35, up 1.33, reflecting higher markets in the Americas and AsiaPacific and declines in EuropeAfrica. Semiconductor stocks were the top gainers in the Dow Jones Global Industry Groups, closing at 555.53, up 22.37, or 4.20, with Applied Materials of the U.S. posting a 15.51 gain. Trucking stocks trailed at 82.39, down 1.08, or 1.29, with Arnold Industries of the U.S. sliding 9.84. In Tokyo, the Nikkei 225-stock index climbed 228.79 points to 18409.96, after advancing 314.13 points Monday the market was closed Tuesday for a national holiday. On Thursday, the Nikkei surged 343.18 points to close the morning session at 18753.14. Wednesday's first-section volume was estimated at 457 million shares, up from 340.5 million shares on Monday. Losers narrowly topped gainers, 552-523. The Tokyo Stock Price Index, or Topix, of all first-section issues gained 13.54 points, or 1, to 1368.43. The head of Japan's ruling Liberal Democratic Party said the government was prepared to use tax funds to help commercial banks in an emergency this followed the finance minister's Monday remarks, also suggesting government support for the banks. Positive sentiment prompted buying to cut losses in short sales of stock that had been borrowed in hopes of a price drop that would allow its replacement at a profit. With the dollar up against the yen in Tokyo, Japanese public pension funds bought export-oriented real estate issues, which soared 2.1, while foreign investors snapped up high-technology blue chips the electronics sector zipped up 1.9.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615897","date":"1997-02-18","texts":"WASHINGTON -- Inflation news couldn't be much more soothing. Wholesale prices unexpectedly fell 0.3 in January, after a 0.6 jump in December, the Labor Department said. Stripping out the volatile food and energy sectors, the producer price index was flat in January after inching up 0.1 the month before. Extremely well-behaved, said economist Marilyn Schaja of Donaldson, Lufkin & Jenrette, New York. The scary monster of recent inflation reports -- energy prices -- has been tamed those prices slipped 0.2 after three consecutive months of sharp acceleration. Given recent declines in crude oil and natural-gas prices, energy prices should come down further in coming months, analysts said. The food index dropped 1.0, having risen sharply several months earlier when poor weather threatened many crops. A few scattered red flags popped up, however. Prices of crude goods such as aluminum and copper shot up 5.2, and even without food and energy jumped 2.0. If those goods cost more money, often the products they're used to make will eventually cost more, too. Recall that in 1994, inflation showed up in the pipeline well ahead of the increases that eventually appeared in finished goods, warned economist Christopher Low of HSBC Markets Inc., New York. Don't get complacent. But Ms. Schaja of DLJ said analysis indicates a weak relationship between crude-goods prices and finished-goods prices, so very little of that increase should filter through. Also, industrial-material prices have already started coming back down this month, so the January increase likely will be reversed in coming months. Finally, Ms. Schaja noted that year-over-year core crude prices fell 3.7. Meanwhile, prices of intermediate goods, or semifinished products like yarn and lumber, rose only 0.2 the core index for intermediate goods was up just 0.1.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985280","date":"1997-02-20","texts":"Fueled by record imports in December, the U.S. trade deficit rose to 114.23 billion in 1996, the highest level in eight years, the Commerce Department reported yesterday. The trade gap was one of the few blots on a generally sterling U.S. economic performance, combining low unemployment with low inflation, and it shows no sign of going away soon. The data released yesterday, which show the deficit widening by 30 percent in December, suggest that imports will outstrip exports by even greater amounts in months to come, analysts said, because the rise in the dollars value on world currency markets has made U.S. . goods more expensive com-  pared with foreign-made products. Were going to be looking -at another year or two of  pretty horrendous trade defi- . cits, said Nariman Behra-vesh, chief international Seo TRADE, C2,CoH i Behravesh and other economists stressed, however, that the trade imbalance is much less worrisome than it was in the mid-1980s, when many American industries were reeling amid a flood of cheap, high-quality goods made overseas.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616294","date":"1997-02-26","texts":"Led by discounter Wal-Mart Stores Inc., whose fiscal fourth-quarter net income climbed 16, several retailers reported earnings that beat analysts' estimates, giving the stock market hope that stores are poised for a strong 1997. While Wal-Mart's earnings reflect a solid sales gain and tighter cost controls, Limited Inc. and its 83-owned Intimate Brands Inc. unit said growth in their specialty, nonapparel chains helped results. Dillard Department Stores Inc.'s results were less impressive, but it said it intends to buy back up to 300 million of its Class A shares. Despite a somewhat weaker-than-anticipated Christmas, retailers were able to maintain control over inventory and expenses and that resulted in better-than-anticipated numbers, said Jeffrey Feiner, retail analyst at Salomon Brothers Inc. The reports lifted the retailers' stocks yesterday, with Wal-Mart climbing 7.1, or 1.75, to close at 26.375 and Dillard gaining 5.8, or 1.625, to close at 29.75 in New York Stock Exchange composite trading. Limited rose 50 cents, closing at 18.50, while Intimate Brands closed unchanged at 18.875. For the quarter ended Jan. 31, Wal-Mart said it had net income of 1.1 billion, or 48 cents a share, up from 942 million, or 41 cents a share, a year before. A 19 increase in operating earnings at its Sam's Club unit, as well as profit in the international division and continued healthy returns at the combined food-and-general merchandise supercenters, all contributed to the gain, the company said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617439","date":"1997-02-27","texts":"GREENSPAN MADE it clear he is inching closer to boosting interest rates. In congressional testimony, the Fed chief also showed increasing uneasiness about the stock market's ebullience. The Dow Jones industrials quickly fell more than 100 points on the remarks, but recovered to close at 6983.18, down 55.03. Bond prices also declined, but the dollar surged. --- 3Com agreed to buy modem maker U.S. Robotics in a stock deal valued at 6.6 billion, the second-largest technology acquisition ever. Analysts called the deal a bold attempt by 3Com, a network-equipment maker, to challenge Cisco, the leader in that market. --- CPC plans to spin off its corn-refining business to focus on its much-larger packaged-food business. The stock of the parent of Hellmann's and Skippy jumped 2.75 to 84.75.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616163","date":"1997-02-28","texts":"Alan Greenspan seems to think investors aren't worrying enough about stock- market risk these days. But some Wall Street experts say Mr. Greenspan may be worrying too much about the risks. They maintain that there are some very good reasons why the so-called risk premium that investors expect to receive when they put money into stocks has been shrinking in recent years. Academics usually define the equity risk premium as the extra return investors demand for holding stocks instead of less-risky government bonds. Although the premium can be measured a number of ways, most experts agree that it has declined substantially in recent years, contributing to the stock market's climb to its highest prices relative to earnings in decades. In testimony to Congress Wednesday, Mr. Greenspan, the Federal Reserve chairman, said investors' optimism about strong profits has led to lower risk premiums in the stock and bond markets and warned of unwarranted expectations. But William Dudley, director of U.S. economic research at Goldman Sachs, argues that longer-lasting, less-volatile business cycles have led to more stable and predictable corporate profits and declining volatility in stock prices relative to bond prices.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830985006","date":"1997-03-02","texts":"These last few years, investors in hotel stocks have been as happy as an economy traveler bumped up to the penthouse suite. Profits margins have soared, stock returns have beaten the standard indexes and a flurry of merger deals have kept up excitement. But these investors are a wary group. They know the lodging industry, as its practitioners call it, has had a boom-and-bust rhythm that would suggest this is the time to get out. Coming out of the recession of the early 1990s, hotel managers filled empty rooms without any need to spend money on new buildings, but construction now is on the upsurge and may cut into profits. Timothy R. Stives, a managing director at CoreStates Investment Advisors Inc. in Philadelphia, shed his hotel stocks some time ago. I don't want to buy when the supply of rooms is growing faster than the demand, he said. John J. Rohs and Steven M. Pinsk of Schroder Wertheim & Co. also advised caution. Our investment viewpoint is that the easy money' has been made in this group overall, they said. But one lesson of the latest merger activity, such as Hilton Hotel Corp.'s 6.5 billion bid for Sheraton owner ITT Corp. or Marriott International Inc.'s effort to buy the Renaissance Hotel Group for 947 million, is that the higher end of the industry still appears to have growth potential, even if the middle and lower ends have lost steam.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982416","date":"1997-03-03","texts":"Why would Alan Greenspan, observing an American economy that in the eyes of most investors seems almost too good to be true, consciously cause a loss of more tjian 150 points and more than 100 billion in the stock market The answer appears to be that Chairman Greenspan and the other members of the Federal Reserve Board of Governors look askance at a buoyant stock market. Consultant Jude Wanniski, long an admirer of the chairman, told his clients last week Tor all his qualities, Alan Greenspan still has embedded in him strands of.thinking that are oddly elitist in their distrust of markets. That distrust does not seem shared by elected representatives of the people either on Capitol Hill or in the White House. But Greenspan need not answer to anybody or even disclose what he is thinking. He is truly a master of the universe, with ultimate economic power over millions of people around the globe. Greenspan is unmatched throughout Fed history in popularity and untouch-ability. Named to head the central bank by the last three presidents two Republicans and one Democrat, he gets credit for the current stable economy. Mistakes in his long tenure there including an unfortunate comment about dollar devaluation immediately preceding the 1987 stock market crash have been erased from the public consciousness. Greenspan effectively is immune not only from systemic checks and balances under the Federal Reserve Act but from political restraints imposed on past chairmen, even his powerful and imperious predecessor, Paul Volcker. A bipartisan congressional coalition, led by the unlikely combination of Republican Rep. Jack Kemp and Democratic Sen. Robert Byrd, challenged Volckers tight-monev regimen. Volcker ultimately was forced to change policy when four Republican-appointed Fed governors rebelled.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984499","date":"1997-03-05","texts":"Federal Reserve Chairman Alan Greenspan yesterday strongly supported creation of a presidentially appointed commission to set the size of annual cost-of-living adjustments in Social Security, other federal benefits and income taxes, an idea that appears to be gaining political momentum. Greenspan, testifying before the House Budget Committee, said there is almost a 100 percent probability that we are overcompensating the average Social Security recipient for increases in the cost of living. That's happening, he said, because the consumer price index, which is used to determine the size of the annual adjustment, overstates increases in the true cost of living. President Clinton, acting on the advice of his top economic advisers, who met Monday to discuss the issue, directed them to explore the concept of an independent commission with congressional leaders. The president could make a decision by the end of the week on whether to move forward on the politically charged idea, which would reduce future increases in Social Security and many other benefit programs, as well as make taxes higher than they otherwise would be. Senate Majority Leader Trent Lott R-Miss. called last week for an independent commission, and White House budget director Franklin D. Raines has expressed support for a panel to improve the accuracy of federal cost-of-living adjustments. Greenspan's backing, along with research by Fed economists that supports the finding that the CPI overstates inflation, gives added credibility to the commission concept and might make it easier for lawmakers to support a change in the way in which federal programs are indexed for inflation.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982942","date":"1997-03-07","texts":" NEW YORK, March 6Stock prices turned mostly lower today, and bond market interest rates rose, reflecting worries about Friday's report on February employment and more signs that the economy may be growing fast enough to rekindle inflation. The Dow Jones industrial average fell 1.15 points to close at 6944.70. The blue-chip barometer, which gained 93 points Wednesday, surrendered an early 42-point advance, but withstood much of the afternoons selling as investors clung to big companies that are considered less volatile. Bellwether technology stocks suffered the sharpest losses, faltering after several sessions of recovery from recent profit-taking in the sector. Stocks started the day higher, but later declined, along with bond prices, due to jitters about Friday mornings reading on payroll and wage levels, a key force behind production costs and inflation. Heightening anxieties were reports that orders to U.S. factories rose at an unexpected level in January and that the number of first-time claims for jobless benefits fell to an eight-year low last week. Other recent signs of economic strength have fueled fears the Federal Reserve will soon raise its key lending rates to slow things down before inflation has a' chance to accelerate. Last week, Greenspan warned that the central bank would not hesitate to raise rates preemptively.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615580","date":"1997-03-10","texts":"WASHINGTON -- The economy continued to sizzle last month, but cast off few sparks indicating overheating. The latest evidence of vigor Payrolls swelled by 339,000 in February, the biggest one-month jump since May, the Labor Department said. The first major official statistical portrait for the month also showed that the unemployment rate slipped 0.1 point to 5.3 -- putting it below 5.5 for the ninth month in a row. In a separate report, the Federal Reserve said consumer credit rose at an 8.4 annual rate in January, the biggest jump since August. The rise, which included a sharp boost in credit-card use, seems to confirm recent reports of growing household spending and consumer confidence. Financial markets rallied on the employment data. The Dow Jones Industrial Average rose 56.19, or 0.81, to 7000.89, Friday, while the 30-year Treasury bond rose 2632 point, pushing the yield down to 6.81. Most economists -- from Fed Chairman Alan Greenspan on down -- believe that the booming economy, especially the strong labor market, will eventually push up wages and then ignite inflation. And with Mr. Greenspan having told Congress earlier in the week that he continues to remain vigilant for any warning signs that might force him to boost interest rates later this month, the markets were examining the tiniest details of Friday's releases for any glimpse of inflation.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617427","date":"1997-03-10","texts":"RJR Nabisco Holdings Corp. boosted the wholesale prices of most of its cigarette brands by about 4, raising the retail per-pack price by an estimated four to five cents. Analysts said the company appeared to be capitalizing on the steadily growing demand for premium cigarettes in an attempt to improve its earnings performance. Tobacco companies have raised prices periodically over the past few years RJR, following the industry, raised prices by the same increment in April 1996. Cigarette prices are still below 1993 levels, when Philip Morris Cos. slashed the price of its premium brands on a day that came to be known as Marlboro Friday. RJR spokeswoman Maura Ellis said the New York food and tobacco holding company announced late Thursday that effective immediately it was raising its price to wholesalers by 2 for 1000 cigarettes for Camel, Winston and all other principal brands except Century, which was raised by 1.60 for 1000. That increase also amounts to about four cents a pack because the packs have additional cigarettes. She attributed the rise to the increased cost of doing business. Philip Morris, of New York, and Brown & Williamson Tobacco Corp., a subsidiary of B.A.T Industries PLC of Britain, declined to comment on their rival's pricing move. Analysts offered mixed predictions on the likelihood that Philip Morris, the market leader, would respond by raising prices right away, and said Brown & Williamson may wait to act after Philip Morris. People close to the industry said the Loews Corp.'s Lorillard Inc. subsidiary and Liggett, a unit of Brooke Group Ltd., responded by also increasing their prices by 2 for 1000. Officials at both companies couldn't be reached for comment Sunday.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613814","date":"1997-03-14","texts":"PARIS -- The recent uproar over a Renault SA plant closing in Belgium may be only the beginning. Thousands more jobs may have to be cut if such industries as autos, telecommunications and banking are to become as efficient in France and Germany as they are in the U.S. and Japan, according to an analysis of Europe's two largest economies. The McKinsey & Co. review suggests that government regulations in France and Germany have slowed economic growth, increased unemployment and have often backfired -- failing to create even the social benefits regulators intended. To an extent, the report states the obvious High minimum wages, state regulations and stunted capital markets have retarded growth rates on both sides of the Rhine. The report also suggests that in some cases, worse things are yet to come. The auto sector, it says, is suffering because French and German barriers on the number of Japanese cars imported into their domestic markets have delayed necessary restructuring.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614258","date":"1997-03-17","texts":"Care to guess what has been the highest-flying of the larger technology stocks in the past year It isn't Intel, Microsoft or even Iomega. Of stocks with more than 1 billion in market value, the biggest percentage gainer is Dell Computer, a company that does nothing more complicated than assemble computers and mail them to customers. In the past 12 months, Dell's stock price has more than quadrupled. Intel is up 146, Microsoft has doubled, and data-storage darling Iomega, after a dramatic rise and fall, is up 55. As many tech stocks have sagged in the past few weeks, Dell has proved surprisingly robust, losing just 7.4 off its Feb. 26 high. It closed Friday at 70 18, down 2 18. What explains Dell's startling stock-market success Two things -- one good and another more worrisome. The good news is that Dell has been firing on all cylinders amid strong double-digit unit growth for world-wide personal computer sales. Dell's once-controversial formula -- skipping middlemen by selling direct, and building machines only once they are ordered -- has become the envy of the industry.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615718","date":"1997-03-21","texts":"NEW YORK -- Investors bought 30-year bonds and sold shorter-dated Treasury securities yesterday as Wall Street became more convinced that the Federal Reserve will raise interest rates next week. The catalyst was fresh congressional testimony from Federal Reserve Board Chairman Alan Greenspan, who reiterated his view that monetary policy should be pre-emptive to keep inflation in check. In trading yesterday, the price of the bellwether 30-year bond was up 1232 point, or 3.75 for a bond with 1,000 face value, at 95 2532. Its yield fell to 6.95 from 6.98 late Wednesday, as bond yields move in the opposite direction of prices. Yet yields of shorter-dated bills and notes generally rose. The two-year note's yield, for example, climbed to 6.24 from 6.20. Mr. Greenspan credited low inflation with sustaining the nation's economic expansion, adding that these types of results are why we stressed in our monetary policy testimony the importance of acting promptly -- ideally pre-emptively -- to keep inflation low over the immediate term and to promote price stability over time. The Fed chairman delivered a similar message to Congress in mid-February. His comments yesterday bolstered the majority view that the Federal Open Market Committee on Tuesday will raise the Federal Funds target rate to 5.50 from 5.25, where it has stood since January 1996. Economists at several Wall Street firms were moved to drop their forecasts for no rate change and instead predict a tightening.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614306","date":"1997-03-24","texts":"NEW YORK -- While the Good Friday holiday in many countries makes this trading week a bit shorter already, to most market players it may as well have only one day Tuesday. Analysts say that all currency movements this week will revolve around what comes out of the Federal Reserve's Federal Open Market Committee meeting tomorrow, when the group meets to decide whether to crank up U.S. interest rates. The market is largely convinced that the Fed will act to block potential inflationary pressure by raising the federal-funds target rate a quarter-point. If so, the dollar will benefit, analysts say. But even if the Fed holds rates where they are, the market will still hope for higher rates by the next FOMC meeting on May 20, so the dollar won't lose too much ground, said John Rothfield, international economist at NationsBank in Chicago. The federal-funds rate, the overnight rate at which banks lend to one another, stands at 5.25. Higher interest rates tend to help the dollar because they make assets denominated in dollars more attractive to investors.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985092","date":"1997-03-27","texts":"Fairfax Countys economy was in solid shape last year, as unemployment was low, office vacancies were down and more than 100 businesses relocated, expanded or started up in the county, according to an economic report card issued this week. Fairfax County is truly one of the worlds premier business locations, said Patricia M. Woolsey, chairman of the Fairfax County Economic Development Authority. In the last fiscal year, the office space vacancy rate dropped to 6.9 percent, down from more than 18 percent in 1990 and the lowest since 1983. Among the more than 100 new or expanding companies was Nextel Communications Inc., which moved to McLean last year with 300 employees. Raytheon expanded its operations in Springfield, adding 100 employees, as did Hughes Information Technology and Hughes Training, adding a combined 190 See NOTEBOOK, Page 7, CoL 4 Reproduced with permission of the copyriit owner. Further reproduction prohibited without permission.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616947","date":"1997-04-04","texts":"DETROIT -- Ford Motor Co. posted a 2.6 decline in March sales from its strong year-earlier results, while Toyota Motor Corp. had its best March ever, with a 5 increase in U.S. light-vehicle sales. Overall, March vehicle sales, buoyed by robust results from Toyota, General Motors Corp. and a host of smaller auto makers, surged to their highest seasonal level since last August. Some economists are predicting the sales numbers may be a factor in prompting the Federal Reserve to consider another interest-rate increase. Sales of cars and light trucks in March totaled 1,388,790, 1.3 more than last March's strong sales and equivalent to a seasonally adjusted rate of more than 15.7 million vehicles a year, based on the Commerce Department's revised factors. The results were clearly driven by torrid sales of light trucks, particularly sport-utility vehicles. Truck sales in March hit an all-time high. Led by Toyota, Japanese auto makers are mounting their most aggressive push in the U.S. market in years, helped by a weak yen and a number of new models. Toyota sold a whopping 100,000 of its redesigned Camry sedans in the first quarter, a company record for a three-month period. Its market share rose to 8.7 in the first quarter compared with 7.3 during the same period last year. As a whole, Japanese auto makers saw their share of the U.S. light-vehicle market swell to 24.3 in the first quarter, up from 22.4 a year ago. At the same time, the Big Three U.S. auto makers lost market share, slipping to 71.7 from last year's 74.1. European auto makers saw market-share gains.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983340","date":"1997-04-05","texts":"The strong U.S. economy kept churning out jobs and lifting wages last month, pushing the nation's unemployment rate down to 5.2 percent, the Labor Department reported yesterday. While workers obviously are benefiting from all the added jobs and higher wages, the report only heightened concerns among some investors, analysts and government policymakers that the pace of economic growth may be spurring inflation. On that basis, Wall Street initially interpreted the economic numbers negatively, sending the most widely watched measure of stocks down nearly 72 points early in the day. But the market rallied later, with small company stocks and those of many technology companies showing particular strength. The widely watched Dow Jones industrial average of 30 blue-chip stocks closed at 6526.07, up almost 49 points from Thursday Details on Page H2. It had shed about 400 points in the previous five sessions. Some analysts said yesterday's wage figures suggest that inflation already may be accelerating -- although the numbers themselves so far give no hint of it. The Federal Reserve raised short-term interest rates last week by a quarter-percentage point in an effort to head off a rise in inflation. Rising interest rates slow economic growth by making it more expensive for businesses and consumers to borrow money. A number of analysts said yesterday's report suggests the Fed is likely to increase rates again at its next policymaking session May 20.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983858","date":"1997-04-06","texts":"Investing in the U.S. health care industry nowadays is like surviving a mortar attack during an earthquake just as a typhoon hits. The competition is so brutal, the cost pressures so unforgiving and the regulatory atmosphere so unpredictable, nobody can fathom what's coming -- even if the stock market calms down. The first lesson, industry officials say, is that health care stocks don't rise and fall in tandem. Instead, there are dozens of sub-sectors with conflicting interests in the business of managed care -- the buzzword for insurers' attempts to limit health costs by controlling services. Investors seeking quick riches in health care had better think again, mutual fund research company Morningstar Inc. said in a February report. There is no longer a single, largely synchronized, health care industry. The emergence of managed care has not only changed medical care as Americans knew it, but also provided a minefield of investment opportunities. Take ColumbiaHCA Healthcare Corp., the biggest U.S. medical care firm. For years Wall Street rewarded the Nashville-based company, which barely caught its breath while snapping up 1,000 hospitals, clinics and home health providers across the nation. The firm's stock rose 350 percent in four years. The logic of Columbia's prosperity is inarguable, industry officials said. One of the biggest causes of medical inflation is the 40 percent vacancy rate for hospital beds, and Columbia solves it by buying numerous hospitals in a region, then shutting a couple. Columbia fills the bill for health insurers wanting to streamline operations by dealing with as few health care providers as possible.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984552","date":"1997-04-08","texts":"NEW YORK April 7-Profits surged 23.3 percent at the Fortune 500 companies in 1996, as low interest rates and benign inflation helped fatten the wealth of CorporateAmeri-cas mightiest businesses. It was the fourth straight year of strong profit gains among companies ranked in Fortunes annual listing, released today. The surge in profitto nearly 300 billion for the 500 companieswas in percentage terms far greater than worker income gains and other measures of economic health. The profit growth is widely viewed as an unsustainable trend that already has begun to show signs of faltering, partly reflected in the recent pullback in the roaring stock market. Investors are increasingly concerned that the Federal Reserve has only started to nudge interest rates upward, which raises the cost of doing business and discourages people from spending money. Exxon Corp., the nations biggest oil company, had the biggest profit among the 500 in 1996 7.5 billion.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830982065","date":"1997-04-13","texts":"The 61-year-old government attorney wants to have 1 million by the time he retires in a few years and the only way he figures he can get there on his 60,000 annual salary is to buy stocks. Lots of them. Sometimes even using borrowed money. That strategy worked well for Frandsen until these past few weeks. The Dow Jones industrial average of blue-chip stocks has fallen 9.8 percent in one month and, like millions of Americans who rode the equity boom up, Frandsen is facing what may become the first substantial decline in stock prices since 1990. If the whole market heads south, I'll be wiped out, Frandsen said flatly Friday after the Dow dropped nearly 150 points, erasing its gain for the year. But the Gaithersburg man is sitting tight, even though all of his 260,000-plus retirement portfolio is invested in stocks. In the midst of such turbulence, it's not easy to heed the standard advice of financial planners Stay calm and think long-term like Frandsen, but also ignore the daily stock tables and build a diversified portfolio that includes stocks as well as bonds and cash. Several planners said, however, that they have been reminding clients to do just that during this downturn. Investors need to implement a well-designed, prudent, well-diversified portfolio, said H. Lynn Hopewell, a financial planner at Monitor Group Inc. in Fairfax. That way, when the market boogies up and down, it doesn't matter.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616518","date":"1997-04-16","texts":"BOSNIA AGREES ON CURRENCY BOARD The U.S. said leaders of Bosnia-Herzegovina agreed on basic terms of a currency board -- essentially a central bank -- including creation of a fully convertible Bosnian marka. The U.S. brokered the deal with Bosnia's collective presidency to foster stability in trade and business transactions. The marka will be convertible at a 1-to-1 rate with the German mark, and will be backed by multilateral lending agencies and donor countries. Under a 1995 peace accord, the currency board is to operate for six years, headed by a French national. EU NATIONS FAULTED FOR TRICKS . . . The precursor to the European Central Bank scolded European Union governments for using trick accounting methods to cut budget deficits. European Monetary Institute President Alexandre Lamfalussy said such moves will be scrutinized in 1998 for EU countries to qualify for monetary union on Jan. 1, 1999. But he also said economic unification is likely to start on time, distancing himself from Germany's insistence on strict compliance. . . . AND GERMANY MAY FALL SHORT","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616191","date":"1997-04-18","texts":"WASHINGTON -- The U.S. trade deficit in goods and services narrowed sharply to 10.4 billion in February from 12.67 billion a month earlier, as soaring civilian-aircraft sales propelled exports to a record level. The figures reflected a healthy U.S. economy. But analysts expect the gap to widen in the months ahead, with export sales slowing. February exports rose to a record 73.46 billion from 70.65 billion a month earlier. Imports rose more slowly, to less than 84 billion from 83.31 billion in January. Early yesterday, the Commerce Department reported the February deficit at 11.59 billion but changed its numbers in the evening after rechecking the figures. It said that data-reporting errors at several ports of entry caused a 1.1 billion overcount when tallying crude-oil imports for the month. After seasonal adjustments, it added, the February deficit was recalculated at 10.4 billion. The department said a complete revision of the figures will be released today. Even the relatively small rise in imports prompted many economists to scale back their optimistic estimates of gross-domestic-product growth for the first quarter. Surprisingly strong reports on consumer spending and industrial production had led to a consensus number for the first quarter of 4.5 growth, said Chris Varvares, an economist with Macroeconomic Advisors in St. Louis, well above the strong 3.8 growth in the fourth quarter. The trade numbers, he said could knock anywhere from 0.75 to 1.25 percentage points off first-quarter GDP estimates.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616846","date":"1997-04-22","texts":"If President Clinton gets his way, next year's tax season could bring a bit of relief to middle-class families coping with crushing college bills. But the proposed 1,500 tax credit for parents of college freshmen and sophomores would be contingent on grades Students would have to have a B-minus average to be eligible. And that provision is stirring surprising concern in higher-education circles. I suspect it would be the end of any effort to control grade inflation, says Thomas Bickel, registrar of Dartmouth College in Hanover, N.H. Though tying financial aid to academic achievement is hardly new, colleges are accustomed to setting their own rules. Most insist that scholarship students remain in good standing, and that means different things on different campuses. If the Clinton plan is approved by Congress, it could pressure professors to raise grades in certain circumstances, administrators fear. And if so, it would further muddy what has already become a very muddy situation. Hardly anyone disputes that overall grades have drifted up since the 1960s. In a national survey of college students, Arthur Levine, now president of Teachers College at Columbia University, found that 26 reported better than A-minus averages in 1993, compared with 7 in 1969. Averages of C or below fell to 9 from 25. Undergraduate grades have become so suspect that graduate schools now give more weight to applicants' standardized-test scores and personal recommendations.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983978","date":"1997-04-23","texts":"n apparent White House-congressional budget agreement could mean smaller inflation raises for federal civilian retirees or smaller future pension benefits for people still on the payroll. Budget watchers believe that the White House and Republican congressional leaders have reached tentative agreement on a five-year budget to reduce federal retirement costs. If thats true, it means that only the 6.2 billion in savings proposed by President Clinton will be sought. The dollar amount of those proposed savings may be scored at 6.8 billion by the Congressional Budget Office. Agreement is good news, up to a point. Earlier, federal unions had predicted that Republicans would pile their own cuts on top of the cuts proposed by the president. Under the White House plan, retirement costs would be reduced three ways Cost-of-living adjustments for federal retirees would be delayed from January to April in each of the next five years. The National Association of Retired Federal Employees says such a delay amounts to a 25 percent COLA cut. COLAs for military retirees and people getting Social Security would not be affected. a Payroll deduction contributions to the retirement fund would be increased by half a percent of salary for federal workers.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984075","date":"1997-04-29","texts":"Senate Majority Leader Trent Lott R-Miss. yesterday ruled out a proposal to reduce the Social Security cost-of-living adjustment as part of a balanced budget deal with the White House, charging that President Clinton had failed to provide sufficient public support for the controversial approach. Lott's comments caught Senate Budget Committee Chairman Pete V. Domenici R-N.M., one of the chief negotiators, by surprise and seemingly cut off what Domenici and others considered a promising avenue to a budget deal. I haven't had a chance to talk to Trent Lott about this . . . but I think that abandoning it is a mistake because I believe to fix the American budget you ought to have an accurate measure of inflation, Domenici said last night. In an interview with CBS News over the weekend, the president appeared to be moving in Lott's direction when he said, I think there ought to be a cost-of-living adjustment to correct what many economists say is an exaggeration in the consumer price index, the government's chief inflationary gauge. But Clinton said he would not accept an arbitrary political fix and stopped short of endorsing a plan that Lott favors and that Republican and Democratic negotiators have discussed to save 70 billion over the next five years by reducing the COLA by four-tenths of a percentage point. Lott told reporters yesterday that Clinton's weekend statement wasn't bold enough and that he would not ask Senate Republicans to walk the plank by supporting a COLA reduction when neither the White House nor Democrats and House Republicans were willing to back it. Last week, House Speaker Newt Gingrich R-Ga. told the White House a COLA change as part of a budget deal was unacceptable.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615573","date":"1997-04-30","texts":"London shares advanced 1 in active trading, getting a late boost from U.S. economic data that eased inflation fears and gave many other European financial markets a lift. The Madrid and Brussels bourses scored all-time highs. Tokyo's stock market was closed Tuesday for a Japanese holiday. In early trading Wednesday, the Nikkei 225-stock index surged 307.83 points to 18,978.20 following Tuesday's rally in U.S. markets. World-wide, stock prices rose in dollar terms. The Dow Jones World Stock Index was at 149.34, up 2.46, reflecting higher markets in the Americas and Europe and lower markets in AsiaPacific sectors. Computer stocks were the top gainers in the Dow Jones Global Industry Groups, closing at 195.88, up 7.56, or 4.01, with EMC of the U.S. posting a 7.01 gain. Casino stocks trailed at 186.63, down 1.75, or 0.93, with Magnum of Malaysia dropping 3.38. In London, the Financial Times-Stock Exchange 100-share index climbed 43.5 points to 4433.2, a half-point from the intraday high and up sharply from the session low of 4395.4. The FT 250-stock index rose 10.8 points to 4507.0. Provisional volume was 865.7 million shares, compared with 622.8 million shares a day earlier.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981737","date":"1997-05-01","texts":"NEW YORK, April 30-Stock prices pushed higher today, as investors chose to interpret the report that the nations economy grew at a super-strong 5.6 percent in the first quarter as good news rather than fearing it would touch off inflation. The second day of a powerful two-day rally in stocks lifted the Dow Jones industrial average back above 7000, as it rose 46.96 points to 7008.99. The blue-chip average has re- covered almost entirely from the swoon it suffered from mid-March through mid-April, when it dropped 9.8 percent. Broader stock market indexes rose too, as did bond prices, helped along by hopes that a balanced budget deal was within sight. The yield on the 30-year bellwether Treasury bond was nudged down to 6.95 percent from 6.98 per-centTuesday. The long bonds price rose 3.44 per 1,000 in face value. Theres been a valuation shift, said Timothy Strauss, manager of equity research sales at Jefferies & Co., a brokerage firm. People had geared up for rates on gov- eminent bonds to go the other way and the prevailing thought was this week's numbers would be bad tor inflation. Now theyre rebalancing.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983204","date":"1997-05-03","texts":"A strong surge of job growth in the Washington suburbs pushed the region's unemployment rate down to 3.4 percent in March from 3.7 percent a month earlier, area employment officials reported yesterday. The unemployment rate in the Washington suburbs fell to 2.9 percent from 3.2 percent in February as an additional 14,800 workers found jobs at technology companies, construction sites, hotels, stores and offices. The figures for the region, which are not adjusted for seasonal fluctuations, remain far below the comparable national unemployment rate of 5.5 percent in March. A springtime economic pickup gave a boost to the District, as well, providing jobs for an additional 4,000 D.C. residents in March compared with February. Although the D.C. unemployment rate rose to 7.8 percent in March from 7.4 percent in February after seasonal adjustments, the March figure is the lowest for that month since the 1990-1991 recession. Employment in District businesses rose by about 1,500 jobs over the past year but government downsizing lowered the city's total work force, including commuters, to 617,300 in March -- 12,000 fewer than a year ago. The only unfavorable sign in the March figures was a sharp 11 percent decline in permits for housing construction in the Washington area, according to Regis J. Sheehan & Associates in McLean. Economists believe that higher mortgage rates may have begun slowing the housing market, but they generally predict that higher rates are not likely to noticeably affect the region's economy until this summer or fall.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984533","date":"1997-05-03","texts":" The remarkable U.S. economic expansion entered its seventh year last month in a state that seemed to tnany experts and ordinary Americans almost too good to be ttue an economy that had been growing at its highest rate in a decade, wages outpacing low inflation and a jobless rate continuing to fall. Todays employment report also shows that inflationary forces remain in check, said White House economist Janet L. Yellen. With earnings growth at 3.6 percent over the last 12 months, we are well within that lucky range where workers are receiving well-deserved real wage increases, but there are still no signs of inflationary pressures. Reflecting this happy state of affairs, the University of Michigans measure of consumer sentiment last Economists continue to be surprised by how well the economy has performed and how this late in a period of expansion, growth could reach a 5.6 percent annual rateas it was reported earlier this week to have done in the first three months of this yearwithout causing inflation to surge. If I had told my colleagues three or four years ago that as of today, we would have flat or declining inflation indicators and unemployment edging under 5 percent, they would SeeECONOMY,A12,CoLl have said, You are smoking pot, and not for medical reasons,'  said economist Charles L. Schultze of the Brookings Institution.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842614788","date":"1997-05-05","texts":"Rest Stop A recent medical study shows that short daily naps raise individual productivity. -- news item Doctors now say That a nap everyday Will revitalize you and me.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614004","date":"1997-05-08","texts":"Easy come, easy go. Stocks surrendered almost all of the gains that carried them to records Monday and Tuesday, buckling under the pressure of sinking bond prices and program-driven stock sales. The dollar fell. The Dow Jones Industrial Average tumbled 139.67 points, or 1.93, to 7085.65. That puts the average almost exactly at its previous record of 7085.16 on March 11, before a Federal Reserve interest-rate increase touched off a nearly 700-point, 9.8 pullback. The Dow industrials subsequently rallied more than 800 points, capped with a 143.29-point jump Monday to a record, driven by euphoria over a budget deal, tumbling bond yields and an expected capital-gains-tax cut. Yesterday, the market was threatened with having both props kicked out from under it. Poor bidding at a 10-year Treasury-note auction and troubling labor-cost data sent the 30-year bond price down 2932, or 9.06 per 1,000 bond, driving its yield up to 6.96 from 6.89. Then after the stock market closed yesterday, the heads of Congress's taxwriting committees set yesterday as the effective date of any capital-gains-tax cut enacted as part of the budget plan agreed to with President Clinton. That means the cut would apply to sales and exchanges occurring on or after May 7, 1997.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616422","date":"1997-05-12","texts":"If bull markets climb a wall of worry, this one's scaling up a sheer rock face. As the Dow Jones Industrial Average recovered from a month-long sell-off to set a new record last week, it caught a lot of investors betting the wrong way. Sentiment indicators show that professional advisers have been deeply pessimistic since the rally began, which means it might have further to run, some say. When the industrial average hit 6391.69 April 11, 9.8 below its March 11 high, bears outnumbered bulls among advisory services 41 to 35 in the weekly survey of Investors Intelligence, a newsletter. The balance of them expected a correction. The bullish reading slipped to 32, a 2 13-year low and even by Friday, with the Dow Jones industrials up 98 points on the week and 778 points from the recent low, bears still led bulls 39 to 36. A few weeks ago, at the end of a horrible week, I talked to other portfolio managers on the train, says Edward Petner, president of fund manager Lynch & Mayer. They were all depressed, shaking their heads, a lot of gallows humor, comments like This is the worst week of my career,' and no one had the courage to buy anything. That unbridled pessimism and illiquidity made conditions perfect for a snapback, says Mr. Petner, although he was surprised by its strength. I guess the rally still has legs because there is still a reasonable amount of skepticism out there.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984164","date":"1997-05-21","texts":"Are you a supervisor or manager looking for a way to boost productivity in your department Management consultant Matt Weinstein, author of the book Managing lo Have Fun, would suggest you find ways to inject a big dose of fun into your work environment. Weinstein, founder of Playfair Inc. in Berkeley, California, contends that introducing more fun Into a work setting can benefit the bottom line by boosting employee morale, loyalty, and productivity. What keeps people motivated, in large part, is a nurturing environment, says Weinstein. Before we ask employees to deliver service with a smile, we first have to ask ourselves, 'Are we giving them something to smile about1 Weinstein contends that employees who have more fun at work convey their enthusiasm to customers, creating better service and customer relationships, and more sales as a result. People like to do business with people who like to do business, he asserts. Karen Donnalley, inside sales executivegeneral business for IBM's North America Sales Center in Atlanta, agrees. Donnalley, who has injected fun into her sales environment with such activities as Crazy Sock Day, Crazy Hat Day, and a recent 'Ocho de Mayo' Celebration, says, I believe happy employees to The Washington Post project their job satisfaction on the telephone to customers. I see a direct correlation between the fun activities we do and the production and revenues that are subsequently produced. The telecommunications company Sprint has firsthand experience with the bottom line benefits of fun too. On February 27th of this year, the 3,000 employees of Sprint's Business Division, including those based in Vienna, Va., participated in National Fun at Work Day, an event sponsored by Weinstein's Playfair Inc. For the event, Sprint employees formed 12-25 person teams, each of which was given a disposable camera. Each team then had to pick 10-15 cliches from a list of 20, and create photographic representations of those phrases in just 90 minutes.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614245","date":"1997-05-22","texts":"TOKYO -- Japan's stock market slid 2.4 Wednesday, ignoring what should have been good news -- a weaker yen -- and focusing instead on fears that the Bank of Japan may soon increase interest rates. The Nikkei 225-stock index lost 490.85 points to 19841.98. That followed a 156.92-month. In trading Thursday, the Nikkei fell 138.61 points to close the morning session at 19703.37. Wednesday's first-section volume was estimated at 430 million shares, down from 437.3 million shares Tuesday. Losers overwhelmed gainers, 886-245. The Tokyo Stock Price Index, or Topix, of all first-section issues tumbled 27.57 points, or 1.8, to 1475.99. Stocks dropped even as the dollar rose to 114.35 yen in late Tokyo trading from 112.55 a day earlier. Normally, a drop in the yen is good news for Japanese stocks, because if that weakness persists, it can make Japanese goods less expensive in dollar terms overseas. Investors are keen to see a slightly weaker yen these days, after its surge against the dollar only three weeks ago, the dollar traded at 127.37 yen. But Tokyo investors Wednesday were paying more attention to rumors that Japanese interest rates might soon risesomething that could hurt Japanese stocks by attracting money into fixed-income instruments and by raising borrowing costs for Japanese companies. The banking sector lost 2.1 to foreign selling. Securities firms shed 1.9. A Japanese news report Tuesday said Toshihiko Fukui, vice governor of Japan's central bank, was not uncomfortable with a suggestion by Japan's trade unions that interest rates should rise. Stocks fell on the report, despite the announcement by the Bank of Japan later in the day that Mr. Fukui had merely shown understanding for the request, while emphasizing the need for a cautious approach.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616620","date":"1997-05-22","texts":"Marissa Verson, owner of Interactive Public Relations Inc. in San Francisco, kept losing her employees to larger rivals. Frustrated, she revamped her benefits package late last year to include more vacation time for her 25 employees, a profit-sharing program and even weekly shiatsu massages. She says the result has been a sharp improvement in the employee-retention rate of the company, which serves mostly Internet-related firms. The economy dictates the competitive landscape, Ms. Verson says. It's as hard to find people in my field as it is in computer programming. We have headhunters calling day and night. Ms. Verson's complaint -- and solution -- is being echoed at small businesses across the country. While most small firms offer pared-down health-care or pension programs, some companies now say the nation's low unemployment rate is creating intense pressure to change. In industries or regions where the labor market is particularly tight -- such as high-tech and the Midwest, respectively -- companies increasingly say they have to improve their benefits in order to compete with large companies. We have people who came out of companies like Lotus or Digital, says Tony Friscia, president of Advanced Manufacturing Research Inc., a Boston consulting firm. They're used to having all these benefits -- family dental coverage, eye care, disability. They don't want to just walk away from that.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982022","date":"1997-05-25","texts":"If there was any doubt about who is the most influential official in Washington, this past week settled it. No, it is not President Clinton or Speaker of the House New Gingrich or Senate Majority Leader Trent Lott. The honor has to go to the unelected chairman of the Federal Reserve Board, Alan Greepspan. ' Clinton, Gingrich and Lott, standing together for once, were barely able to turn back amendments that would have derailed their fragile budget resolution, prevailing by shaky two-vote margins in both the House and Senate. But they were unable to pass a final version of the budget before the Memorial Day break. Greenspan, acting with the custom,- ry concurrence of his central bank colleagues, decided in one afternoon to let the economy go on growing, rathe- than applying the brakes with ano'her boost in interest rates. Main Street and Wall Street cheered Greenspans move. The country mostly ignored the budget machinations, while noting with contempt that partisan finger-pointing prevented Washington from agreeing even on emergency aid for Midwest flood victims. Looking more broadly at the positions of the four men only confirms the power that Greenspan has come to exert in the system. At the start of this year, Lott looked to be the new force in Washington. He showed his legislative skills in the final months of the 1996 session, after Majority Leader Bob Dole turned over the office to Lott and left for the presidential campaign trail. Lotts hand was strengthened by the voters in November, when Republicans added two seats to their Senate majority.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616362","date":"1997-05-28","texts":"A proposal to make some foreign sugar producers chip in for the cost of Everglades restoration is drawing interest from officials in the Clinton administration. Under the plan, rights to sell cheap, tariff-exempt sugar to the U.S. would be auctioned to foreign sugar producers. Currently, those rights are granted free to some 40 nations. Boosters say the auction proposal could sharply reduce the taxpayers' burden for the wilderness restoration in the Everglades, which some say may cost 3 billion to 5 billion over the next two decades. A draft report done in May 1996 by the President's Council of Economic Advisers estimates that such auctions could have raised 300 million to 400 million since 1990 at the rate of sugar imports during that period. It's something we're taking seriously and plan to discuss with others in the administration, says one White House environmental official, who asked not to be identified. Administration officials say the auctions could be authorized by an order from President Clinton, without a congressional vote. Nevertheless, they're hoping that some key legislators, such as Florida's Democratic Sen. Bob Graham, will give their support. Sen. Graham, who has backed the idea of Everglades restoration, but not at the expense of domestic cane growers, couldn't be reached to comment. However, an aide says the senator's staff has been studying the plan and submitted a list of 20 questions about the auction idea to lobbyists in Washington representing the Orlando-based Everglades Trust, an environmental group. Its politcal arm, Save Our Everglades, led last year's unsuccessful fight for an amendment to the Florida Constitution that would have put a tax of one penny a pound on sugar produced in this state, in order to pay for the South Florida wilderness project.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616142","date":"1997-05-29","texts":"The Nasdaq Stock Market, the nation's second-largest stock market after the New York Stock Exchange in market capitalization, expects to start allowing all of its stocks to be traded in 116-point increments starting Monday. The change, while expected, is a milestone in the evolution of the markets -- and may, at least theoretically, lead to better prices for small investors. The Securities and Exchange Commission's market-regulation division Tuesday evening approved the rule proposal, which Nasdaq submitted to the federal regulator April 10. The New York Stock Exchange, meanwhile, has so far steadfastly stuck to quoting in 18-point increments, though many market observers expect that will have to change once its competitors switch to sixteenths. Currently, when Nasdaq dealers move their stock prices up or down, they change them in minimum ticks of 18 of a point, or 12.5 cents at a time. Thus far, only quotes for stocks that are priced at 10 or under are moved up or down in smaller increments, some as low as 132, or 3.125 cents. Lowering the tick size for all Nasdaq stocks to 116 of a dollar, or 6.25 cents a share, could improve prices for individuals who will have the chance to buy for less or sell for more when investing in Nasdaq stocks -- from the market's giants like Intel and Microsoft, to the thousands of tiny stocks on the market. The reason is that spreads between the best possible price at which an investor can buy a stock and the price at which they can sell are likely to shrink.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983270","date":"1997-05-31","texts":"The U.S. economy grewinthefirst three months of this'year at a faster rate than earlier estimated, but a senior Federal Reserve official said that since then growth clearly is starting to slow down. The Commerce Department yesterday raised its estimate of first-quarter growth to a 5.8 percent annual ratefile highest in more than a decadefrom the 5.6 percent rate first calculated. Growth is measured by the change in the nations gross domestic productthe total value of goods and services produced adjusted for inflation. The regularly scheduled revision was based on information not available when the first estimate was made last month. Coming at a time of low unemployment, the unusually rapid growth sparked concerns that it could cause an increase in inflation. Even though there was no sign that had happened yet, Fed policymakers raised shortterm interest rates in March to cool off the economy a bit and keep inflation from worsening. At a subsequent meeting last week. Fed officials, believing that growth is tapering off, chose not to raise rates again. William J. McDonough, president of the New York Federal Reserve Bank, told reporters in Toronto yesterday, The data for the second quarter thus far indicate that the economy clearly is starting to slow down. Meanwhile, in a separate report, the Commerce Department provided what analysts said is added evidence of that slowing. Sales of new homes fell in April, after rising 2 percent in March. The April figure was close to the selling pace of the final three months of last year..","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984825","date":"1997-06-02","texts":"Federal officials are confident that the government can absorb 10,000 new workers from the welfare rolls without disrupting regular personnel operations and office routines or harming the quality of government work. Even members of Congress who often are skeptical of social engineering programs, especially in government, express little concern that this effort will do any harm. But some rank-and-file federal workers, not to mention ex-feds who were downsized into the unemployment ranks, are less than happy about the White House's welfare-to-work program. The program will hardly be noticeable in most federal agencies. The Census Bureau will take the largest number of the welfare-to-work hires about 40 percent of the total hires, with the Defense Department hiring most of the rest. Most of the new hires will go into temporary jobs outside the regular civil service system. They will do basic office work and will be paid at Grade 1, or about 13,500 a year. Agencies also expect that they will have to provide low- or no-cost day care and transit subsidies. Career officials in several agencies say they have been instructed to be upbeat about the plan, which is supposed to prompt private industry to hire many thousands more from the welfare rolls. The idea is to get some people off welfare and pay them while they pick up basic office skills and develop work habits that could lead to full-time jobs in private industry. It is yet to be determined how many welfare recipients -- if any -- will be hired by officials who developed the program.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982353","date":"1997-06-03","texts":"FRANCE TODAY has the highest unemployment rate among leading industrialized nations. The triumph of the leftist opposition in Sunday's election reflects voters understandable ahxiety about this state of affairs. Unfortunately, the winners program, if carried out, is likely to make the problem worse. ' Conservative French President Jacques Chirac gambled when he called early elections, hoping for a parliament that would support him during the remaining five years of his term. Instead, his conservative allies lost badly to the Socialist and Communist parties. Now Mr. Chirac will uncomfortably share power with a leftist government led by a Socialist prime minister, Lionel Jospin. -As in any election, diverse factors of personality, tactics and policy played their parts. But the chief issue was one that confronts the United States and every other nation as well how to balance the needs and desires of each countrys population with the harsh rigors of economic globalization. In todays world, technology and capital are increasingly mobile businesses can set up shop wherever profits will be greatest. Not only can  hey businesses that pass up opportunitiesout of loyalty to their home communities or countries, lor example, or by order of home governments may soon be passed by. Thus, nations find their own political possibilities limited if they set taxes high to fund a generous social safety net, businesses will move away, shrinking the tax base and requiring even higher taxes. France has one of the highest tax rates around public spending accounts for more than of half its total economy, compared with about one-third in the United States. Government employs one-quarter of all workers, compared with one in seven in the United States. Nationalization of industry does guarantee that some jobs stay in France, and generous benefitsearly retirement ages, for exampleare lovely for those with jobs. But both discourage private job creation the unemployment rate in France is nearly 13 percent and growing.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982445","date":"1997-06-03","texts":"Although the manufacturing sector was strong last month, other measures, such as personal income, indicated a slower economy.  Americans'income growth slowed ... to a crawl in April, but a surprisingly strong manufacturing rebound in May raised fears the U.S. economy may return to a pace likely to aggra-0, vate inflation. Personal incomes rose just 0.1 percent, the smallest increase in six months, the Commerce Department ' said yesterday. With less money earned, spending growth slowed as - well, also edging up 0.1 percent.  slowed sharply as the second quarter began, after racing at a breakneck speed during the first three months  of the year. A separate Commerce Depart-. ment report showed construction ..n spending in April fell 1 percent, the fhst decline of the year.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614785","date":"1997-06-04","texts":"An occasional look at commercial real-estate ventures on the Internet A NEW Internet company called American Real Estate Exchange Inc. is making an ambitious promise to real-estate investors. Our goal is to make buying commercial real estate more like investing in the stock market, where all the information you need is reported in one place, through a site on the World Wide Web, says Thomas C. Lewis, senior vice president of the closely held Bethesda, Md., company. American Real Estate Exchange, or Amrex, plans to officially launch its site this summer, although portions are already accessible at httpwww.amrex.com. How will it work Enter a zip code or a county and Amrex does due diligence on properties in the area. The Web site displays charts of trends in local demographics property-tax assessment records information on local construction a history of recent sales of buildings in the area a list of environmental risks and summaries of relevant news stories about the area. Most of that information, which Amrex licenses from a variety of other sources, won't be available until the summer. For now, the site consists primarily of an archive of abstracts of previously published real-estate and environmental news, organized by subject and location, as well as a directory of real-estate investment trusts and publicly traded companies heavily involved in real estate.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615173","date":"1997-06-06","texts":"ALL FLIGHTS are local in a political debate over new U.S.-London routes. Lawmakers vie for Heathrow Airport routes suggested for six U.S. carriers by the General Accounting Office under the proposed American Airlines-British Airways alliance. Ohio Sen. DeWine's office complains Cleveland is excluded. New Jersey Sen. Torricelli wants more flights from Newark. My concern is places like Portland, says Oregon Sen. Wyden. The GAO plan appears to be an effort to appease the deal's foes, and it may, says Ben Hirst of Northwest Airlines. The GAO allocates a Charlotte, N.C., route sought by South Carolina Sen. Hollings. Transportation Department officials gripe that the GAO undermines U.S. negotiations with the British by listing only 23 new round trips to London the agency seeks 31. A year after announcing the proposed alliance, what grade would American Airlines Chief Robert Crandall give DOT for its negotiations An F', he says. TODAY'S JOBLESS REPORT will be a key to Fed rate-rise thinking.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983308","date":"1997-06-07","texts":"Unemployment rates fell throughout the Washington region in April as employers strained to fill their needs for technology workers and other employees, District and federal labor department reports showed yesterday. The low jobless rates demonstrated a widespread demand for workers. Regionwide, only 3.3 percent of adults seeking work were unemployed in April, down from 3.4 percent in March and 3.6 percent in April a year ago. The unemployment rate in the suburbs dropped from 3 percent in March to 2.9 percent in April, according to D.C. Department of Employment Services data that are not adjusted for seasonal work patterns. The District's jobless rate sank to 7.2 percent in April from 7.8 percent the month before, including seasonal adjustments. But employment in the region grew by only 1.8 percent over the 12 months ending in April, a clear measure of the difficulty employers are having finding workers, economists said. By far, the strongest job growth over the year was in high-tech categories, prompting some analysts to wonder how long technology companies can continue to lead the economy ahead.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982245","date":"1997-06-09","texts":"Most advertising on the World Wide Web these days isn't much different from what you find on television, radio and even roadside billboards. Advertisers can select Web sites like they would TV channels or radio stations, but after that, it's one size fits all. Everyone gets bombarded with the same pitch. Nobody who runs a Web business wants it that way. In theory, the Web is the ultimate tool for targeting specific ads to specific people. Unlike other media, every bit of information that shows up on your computer screen when you're on the Web is sent directly to you by specific Web sites. Web ads could be like, well . . . junk mail. Just as catalogues from fly-fishing equipment companies tend to show up at the homes of people who stayed in hotels in fly-fishing country, ads appearing on the screen would be targeted to the viewer's interests. Doing so, however, isn't simple. Determining just who is visiting a particular Web site -- and what their interests are -- is the number one frustration for many marketers. One way is to offer people a trade a free service in exchange for personal data about themselves, which they type into a screen form -- age, sex, hobbies, what appliances they own, whether they traveled in the past six months, etc. Then, when they use the service, the system knows who they are and displays ads matching their interests.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615927","date":"1997-06-10","texts":"DETROIT -- The economy is so good in Michigan and Ohio that these two states, once symbols of the Rust Belt's struggles, are fighting across state lines to recruit workers and ease growing labor shortages. Michigan, facing its lowest unemployment rate in almost 30 years, at 4.4, is doing the once unimaginable. The state is spending 50,000 to advertise in national newspapers to attract people back to the place from which thousands fled in the early 1980s when unemployment skyrocketed past 15. One private company alone says it has about 1,000 openings. On behalf of hundreds of companies looking for skilled workers ranging from engineers and computer analysts to construction workers, the five-week campaign is essentially a huge help-wanted ad for the state. The ad, touted by Gov. John Engler's administration as proof of Michigan's economic comeback, comes complete with a list of fringe benefits, including affordable housing, 11,000 inland lakes and the nation's highest number of golf courses. Likely to be added soon Home of the Stanley Cup Champions, after Detroit's beloved Red Wings won the title Saturday night. The ads are being placed only in cold-weather climates because Michigan officials doubt they are going to attract many workers from California or Florida to brave the state's winters. These are 50,000-to-100,000-a-year jobs that are going unfilled, says Jim Tobin, a spokesman for the Michigan Employment Security Agency. A lot of people, particularly on the East Coast, don't appreciate the high quality of life here. We are asking people to pick up and move. But the ads are running straight into a similar campaign by some cities in Ohio. Businesses in Ohio are touting job openings, symphony, and ballet in national magazines like BYTE, and are flooding the nation's job fairs with glossy brochures in a campaign already exceeding 20,000. One task force recently came to Detroit to try to lure workers south across the state line.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983104","date":"1997-06-14","texts":"While welfare cases in Maryland continue to decline dramatically, the caseload in Prince George's County increased by more than 800 people during the first four months of this year, according to state figures. Prince George's, which has the second-largest caseload in Maryland, has lagged far behind the state in reducing its rolls and was Maryland's only jurisdiction to show an increase so far this year. Since January 1995, Maryland has cut its statewide caseload by 30 percent, while Prince George's has shown a 16 percent reduction, to 27,300 welfare recipients. Baltimore has reduced its caseload by 25,000 people, or 24 percent, despite a higher unemployment rate. Kim Rhim, a consultant hired by Prince George's to review the training of caseworkers and managers, said many workers do not understand the new welfare policies, communicate seldom with managers and have not been trained to perform their new duty of helping people find jobs. Employees said that things are changing so quickly that they sometimes get information from the clients, said Rhim, executive director of Training Source Inc., which also does training and job placement. The average employee is frustrated, overworked and overwhelmed. A lot of caseworkers are processing people as though welfare will be around forever. Rhim said management must make more of an effort to talk directly to employees about changes, instead of passing along written information -- without explanation -- about new policies. And Rhim said employees need immediate training on how to steer potential welfare recipients into jobs. The newest part of their job is to talk about jobs, and they don't know how to do it, she said. As a result, some employees are doing business as usual.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842614649","date":"1997-06-16","texts":"The market for newly public companies is off the critical list, but it isn't exactly ready to run a marathon. Earlier this spring, the market for initial public offerings was virtually on life support. April was the slowest month for newly public companies since January 1995 Only 30 new companies issued stock to the public, raising 1.6 billion, according to Securities Data Co. By contrast, October, the busiest month in recent history, saw 105 companies raise 6.2 billion in initial offerings. Scores of issues that had been expected to price in April or May were postponed, either officially or unofficially, as underwriters hunkered down to wait until small-stock investors' eroding portfolios turned up and they were willing to look at new deals again. That moment seemed to have finally arrived when the small-cap market started to heat up at the tail end of April and investors made headlines again on some hot deals. Now many underwriting firms have bulging pipelines, the result of months of prospecting for IPO candidates rather than executing deals. Securities Data reports that there are 184 deals awaiting execution, for 6.5 billion, a significant increase over earlier in the quarter. But the enthusiasm may be premature. Unlike previous IPO rallies, many of the most talked-about recent deals have been the larger names, such as Hertz, the car-rental spinoff of Ford Motor. Hertz was priced in late April at 24 a share and closed Friday at 34 on the New York Stock Exchange.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615446","date":"1997-06-19","texts":"Corrections & Amplifications MORGAN GUARANTY TRUST Co. expects the Federal Reserve to raise short-term interest rates by an additional half percentage point this year and by a quarter point early next year. An article yesterday incorrectly said Morgan anticipates a quarter-point increase by the Fed this year and again in early 1998. WSJ June 20, 1997 WASHINGTON -- The Federal Reserve's latest survey of regional economic conditions found pockets of weakness and evidence of capacity constraints restraining growth in some industries in May and early June. The widespread signs that economic growth has slowed in the second quarter while inflation has remained remarkably tranquil suggest that the Fed again will hold short-term interest rates steady when officials convene July 1 and 2. With weak retail sales and negative producer prices, the market now believes Chairman Alan Greenspan would need the nerves of a kamikaze pilot to raise rates in July, quips analyst Ralph Peters of Aeltus Investment Management in Hartford, Conn.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985215","date":"1997-06-19","texts":"In his critique of grade inflation, Prof. James B. Twitchell op-ed, June 4 toils to account for the failure of teachers, parents and administrators to evaluate a students work instead of just measuring it to determine a grade. All seem to have succumbed to the defect a character of Oscar Wilde once described as knowing the price of everything but the value of nothing. Parents rejoice in their offsprings straight A's but pay no attention to misspellings, punctuation and barbaric use of language. When they reward faculty, administrators often count items of published research rather than read and judge the contents. Teachers give multiple-choice tests that assess mastery of trivia rather than understanding. Administrators abet the process by making grading as crude as possible. At the University of Maryland in College Park, where I taught English for 25 years, management regularly resisted the refinement of adding pluses and minuses to grades to distinguish among at least three levels of any letter say, a B-, a B and a B. Any good teacher knows that students who fall under any one letter are not identical with one another. For that matter, computer grading ought to allow the return to numerical evaluation, where a conscientious instructor could assign, say, a 90 to a minimally A student and a 97 to a superior one. Prof. Twitchell also does not focus on the tendency of mechanical, simplified, high grading to favor the interests of everyone except students. I used to tell my students that their grades, good, bad or indifferent, could not justly reflect their capacity, that only a written evaluation might do that and that few responsible persons, including themselves, were likely to accept a 3.5 grade point average or 4.0average at face value. I always offered to write a reference that would elaborate on their unique strengths and qualities. Prof. Twitchells lament about the passing of the F is a vestigial symptom of the impulse to use grades as punishment. Students who fail to absorb anything in a course should receive no credit or grade for it. Why stigmatize them with a label of failure","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983960","date":"1997-06-20","texts":"The answer, so far, is the federal thrift savings plan. The 17.07 percent rate is the average annual return for the C-fund stock index since it became available to investors in 1988. During the same period, the average return for the F-fund bond index was 8.28 percent. The super-safe no market ups and downs G-fund, invested in Treasury securities, had a return of 7.55 percent. Those numbers, compiled by Dennis M. Gurtz, a Bethesda- based financial planner, are important since feds are in the midst of their open-enrollment season for the savings plan. They have until the end of July to join the plan or redirect where their future payroll-deducted investments will go. Past performance doesn't indicate what a stock, bond or Treasury fund will do in the future, but it clearly shows where it has been. And the C-fund, despite the ups and downs of the stock market, has been on a long-term roll riding the bull market. In calendar 1996, the C-fund returned 22.85 percent. In 1995, its return was 37.41 percent. In 1994 when many people bailed out, it returned only 1.33 percent. For the same three years, the F-fund returns were 3.66 percent, 18.31 percent and minus 2.9 percent. The G-fund track record was 6.76 percent in 1996, 7.03 percent in 1995 and 7.22 percent in 1994. Gurtz said the year-to-date returns for the funds are 15.40 percent for the C-fund, 1.86 percent for the F-fund and 2.83 percent for the G-fund. The C-fund was up 6.07 percent for the month of May, and the June numbers -- so far -- look equally good.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614578","date":"1997-06-23","texts":"Earlier this month an ad appeared in this newspaper entitled Declaration of Independence End Corporate Welfare. It was signed by 61 top Silicon Valley executives, including me. In calling for government to end corporate pork-barrel politics, we were taking a moral stand. The first Americans hated taxes the Constitution limited government and, originally, banned levies on personal income. For the first two centuries of our nation, the common man became better off more quickly than any other time in history. Per capita U.S. gross domestic product grew to 28,540 in 1996 from just 919 in 1996 dollars in 1776. Mankind took 30,000 years to get to 919, but only 220 more years to reach 28,540. But today the American Dream is being eroded. Since 1976 annual GDP growth per capita expressed as a 20-year rolling average has steadily declined, to 1.5 from 2.5. Why In part because federal, state and local taxes now consume a whopping 35 of our national output. Current peacetime spending is higher than the 29 peak during World War I the all-time record was 49 during World War II. American companies should lead in the reduction of destructive government spending. Eliminating corporate welfare is a moral imperative We should not be asking senior citizens and the poor to tighten their belts while our government is, actually subsidizes the sale of American chardonnay to the French. Taxing and spending to support U.S. industry creates a vicious circle. With corporate taxes high, companies lobby for give-backs to remain competitive. Congress faces extreme pressure to bring home the pork to home-state corporations. That requires even higher taxes -- and the circle continues. Corporate subsidies are often known by euphemisms such as government investments or government-industry partnerships. Such Washington-speak notwithstanding, Americans are compelled to pay for silly programs like the proposal by the Commerce Department's Advanced Technology Program to genetically re-engineer cotton, making its fibers more like polyester. Technology subsidies to corporations are sold using technobabble to camouflage unjustifiable investments, which typically fall into four categories","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984422","date":"1997-06-24","texts":"NEW YORK, June 23Stock prices slipped off their lofty perch today when comments by Japans prime minister spooked the U.S. bond market and sent interest rates higher. The Dow Jones industrial average, which started the day at a record level, lost 192.25 points, its second-biggest point drop ever. The market is priced for perfection, said Douglas Cliggott, U.S. equity strategist at J.P. Morgan Securities Inc. in New York. Any news that comes in and bounces it in the other direction can move it pretty fast The Dow average of 30 blue-chip stocks dropped 2.5 percent to 7604.26, in active trading, with much of that loss coming in the last 90 minutes of the session. Todays setback follows a powerful rally that had lifted the Dow 6.3 percent in the past three weeks. Several market analysts had warned that stock prices were due for a pullback, and some said today that Prime Minister Ryu taro Hashi-motos comments gave investors an excuse to sell. There have been a lot of smiling faces on Wall Street, but everyones very concerned about val-Sec STOCKS, A8, Cot. 1 Rations, said Hugh Johnson, chief investment strategist at First Albany Corp., an Albany, N.Y., brokerage firm.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616172","date":"1997-06-26","texts":"Corrections & Amplifications ELECTRONIC DATA SYSTEMS Corp. reported a profit, not a loss, in the first quarter of 1997. It was incorrectly reported on page R7 of the Global Investing report yesterday that the company reported a loss. WSJ June 27, 1997 Think global. Go global. Sounds simple. But a small number of brokerage firms and investors are beginning to rethink precisely what that means. Instead of determining how much they want to allocate to the U.S. stock market, how much to foreign bonds and so on, they believe it's time to look at investment strategies from a more integrated global perspective. In other words, don't split investments among countries as a whole, using overseas markets to gamble on dizzying gains or to hedge against U.S. losses. The new strategy Pour money into the companies that dominate their industries on a global scale, regardless of their location or how many eggs you have in one country's basket. Theoretically, since these companies have world-wide reach, a downtick in any one market won't hit them as hard. If investors in the U.S. aren't buying, for example, overseas investors will buoy the stock. Or if the U.S. economy enters a slump, the company's global power will let it expand operations elsewhere to recoup the losses.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613526","date":"1997-07-01","texts":"WASHINGTON -- New home sales shot up 7.1 in May, the Commerce Department reported, indicating that the housing market is gaining momentum again after slowing down the month before. The Commerce Department said new homes sold at a seasonally adjusted annual rate of 825,000 in May, nearly reversing the 8.1 decline in April. Analysts have been astonished by home buyers' resilience. In its daily commentary about the economy, securities firm Donaldson, Lufkin & Jenrette Inc. told clients that the home-sales report indicates that the housing sector is strong, although it may have plateaued. For months now, analysts have been declaring that housing has hit its peak. Yet it keeps on thriving. Mortgage rates remain favorable, and consumers are definitely in good shape. What can you say said economist Gary Ciminero of Independent Economic Advisory in Providence, R.I. We're seeing the results of record-high confidence levels, robust employment and good income growth. After buying homes, consumers usually turn around and spend more money on appliances, furniture and the like, continuing to propel economic growth.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614336","date":"1997-07-03","texts":"WASHINGTON -- The Federal Reserve left its key short-term interest rate unchanged, confirming that its fears of imminent inflation have subsided. But economists are divided over whether the central bank will still have to tighten monetary policy in the coming months to damp growth. Yesterday's meeting of the Federal Open Market Committee was the second consecutive time that Fed officials chose to leave monetary policy alone after pushing through a controversial quarter-point increase in the federal-funds rate in March. The Fed's target for the federal-funds rate, or the rate at which banks lend to each other overnight, remains at 5 12. Although the inaction was widely anticipated, the stock market rallied after the decision was disclosed. The Dow Jones Industrial Average, down nearly 20 points just before the 215 p.m. announcement, ended the day up 73.05 points to close at 7795.38. The benchmark 30-year Treasury bond gained 1232, or about 3.75 for a 1,000 bond, to close at 98 2732. The yield fell to 6.71 from 6.73. The Fed's decision to keep interest rates at current levels stems from two recent economic developments. First, numerous signs indicate that economic growth in the second quarter slowed from the red-hot 5.9 pace of the first period. Just yesterday, for example, the Commerce Department reported that factory orders fell 0.7 in May, reversing a 1.4 jump in April. The second trend giving comfort to the Fed has been inflation's moderation, despite strong growth earlier in the year and an unemployment rate below 5 -- a level most mainstream economists consider likely to trigger higher wages and prices.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981823","date":"1997-07-10","texts":"Equity analysts struck a philosophical note today when the stock market put on the brakes and rolled backward after the Dow Jones industrial average approached the 8000 mark. The Dow closed at 7842.43, down 119.88 points, after drawing within 10 points of 8000 early in the day. Much of that final loss came in the closing hour of trading. I don't see anything fundamentally wrong, said Peter Canello, one of two U.S. investment strategists at Morgan Stanley, Dean Witter, Discover. The bond market is steady. The inflation outlook is terrific. It's just nervousness . . . an attack of eight thousanditis. We were within 10 points of 8000 and were swamped with profit-taking. . . . My guess is we'll get through 8000 in the near future and I suspect we'll feel better once we do it, he said. Canello and others pointed out that a 100-point or more rise or fall in today's market is not what it used to be. The 119-point drop constituted only a 1.5 percent decline in value.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615239","date":"1997-07-15","texts":"ST. PAUL, Minn. -- Minnesota Mining & Manufacturing Co.'s chairman and chief executive sees a U.S. economy that is slowing slightly but still has the fuel for reasonable growth. Inflation is essentially mute, raw-materials costs are steady and I don't think we're going to see any negative numbers domestically any time soon, Livio D. Desi DeSimone said. The company's internal forecast is for domestic economic growth of about 2 in the second half. Characterizing the U.S. economy as stratified, Mr. DeSimone said in an interview that the company expects some laggard areas to perk up in coming months. They won't have to do a whole lot better in construction and automotive to have an improvement, he said, adding that I think the health-care industry might do a little better. The company is a major supplier of abrasives and fasteners to the automotive and construction industries and sells a wide range of items to the medical community. Because it does business in so many sectors of the economy, 3M sometimes is considered a bellwether for American industry. Still, nearly 55 of its 14.2 billion in 1996 sales were overseas, and Mr. DeSimone called the impact of foreign exchange on earnings the single biggest hit we have. In the first quarter, currency translation reduced net income by five cents a share, to 99 cents, or 410 million, on sales of 3.7 billion.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984984","date":"1997-07-15","texts":"NEW YORK, July 14Big-name computer stocks drove the Nasdaq market to a record close for the eighth straight session today, but broader stock market indexes ended nearly unchanged after an early foray toward new highs. The Dow Jones industrial average rose 1.16 points to close at 7922.98 after erasing a 61-point deficit in the last half-hour of trading. The Dow turned lower in the afternoon alter surrendering a 29-point gain that put the blue-chip barometer within 50 of the 8000 mark. The technology-oriented Nasdaq composite index rose 21.26 points, to 1523.88, giving it an eight-session gain of 85 points, or nearly 6 percent Microsoft which reports on its second-quarter profits on Thursday, jumped 6-316 to 135-1516, and Dell Computer rose 47e to 14254 on top of Friday's 9-point surge to lead Mondays Nasdaq advance. On the New York Stock Exchange, meanwhile, Hewlett-Packard rose 4-116, to 65-116, as the Dows biggest gainer, and Compaq Computer rose 4, to 12814.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830985050","date":"1997-07-16","texts":"NEW YORK, July 15A late surge carried the Dow Jones industrial average within 25 points of the 8000 mark today, and the Nasdaq Stock Markets rally continued after another strong profit report from a leading technology company. The 30-stock Dow average rose 52.73 points to close at 7975.71, erasing a 44-ptlnt afternoon deficit to beat last Tuesdays record finish of 7962.31. The Nasdaq composite index closed at-a'record high for the ninth consecu-thie'session as bellwether technology shares surged again after a stronger-than-'expectcd second-quarter earnings statement by Texas Instruments. Despite the daylong strength in technology shares, stocks were mostly lower until midaltemoon, when bond market interest rates eased after a report alleviated mild concerns that consumer activity was picking up at an inflationary pace. The recovery in bonds was far less pronounced, however, than the ensuing rebound in the stock market I would have drought investorsl would wait until after eamings-reporting season to see what happens and react accordingly. But its off to the races again, said Robert Streed, senior investment adviser at Northern Trust in Chicago. The stock market has a positive bias. Advancing issues outnumbered declining ones by a lO-to-9 margin on the New York Stock Exchange, where vol-","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983072","date":"1997-07-19","texts":"The Labor Department reported yesterday that the consumer price index rose 0.1 percent for the fourth consecutive month in June, as declines in energy and apparel prices largely offset increases in housing, medical care and entertainment prices. Over the first half of the year, the CPI rose at a 1.4 percent annual rate, the smallest rise for the first half of a year since 1986 when oil prices collapsed. Trying to find inflation in this economy is like trying to find a flea on a furry dog. Every once in a while he scratches, but it is hard to see the flea, said Ken Mayland, chief economist at KeyCorp Inc., a bank holding company in Cleveland. Meanwhile, the Federal Reserve said industrial production, the output of the nation's factories, mines and utilities, rose a moderate 0.3 percent last month, an increase analysts said posed no threat of inflation in the prices charged by firms in that part of the economy. The news sparked rallies in both the stock and bond markets. The Dow Jones industrials average rose 63.17 points, to close at a record 8038.88. The price of a 30-year U.S. Treasury bond rose 8.75 per 1,000 face value as its yield, which goes down when the price goes up, fell to 6.47 percent from 6.54 percent Tuesday.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984438","date":"1997-07-19","texts":"Stock prices retreated today as bouts of profit-taking and nerves sent the Dow Jones industrial average down 130.31 points to 7890.46. Although traders said today's drop did not signal a major shift in market sentiment, the blue-chip average slipped below the 8000 milestone it had first reached in giddy trading Wednesday, and gave up its gains for the week. On top of the past couple of weeks we've had, I can't complain about today, said John T. Wilson, who manages 5 billion for State Street Research in Boston, including the firm's flagship 1.8 billion State Street Research Investment Trust. Bond prices dropped in morning trading, setting the downward tone for stocks. Mickey Levy, chief economist at NationsBanc Capital Markets in New York, said that although new economic reports showed increases in both consumer confidence and the U.S. trade deficit, he believed the sell-off was simply sparked by profit-taking. The yield on the Treasury's 30-year benchmark bond rose to 6.53 percent from 6.49 percent on Thursday, while its price fell 5.31 per 1,000 in face value.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983159","date":"1997-07-22","texts":"How does the Pentagon allow the industry consolidation to continue while preserving competition to avoid price gouging When President Eisenhower warned the nation in 1961 about the power of the military industrial complex, Pentagon spending accounted for more than 40 percent of the federal budget and about 8 percent of gross domestic product. Today the Defense Departments budget has shrunk to under 15 percent of federal outlays and 3 percent of GDP. And without a Cold War mission for the military, the numbers will continue to dwindle, creating greater pressure to get the best value for the defense dollar. At one time the Pentagon counted on competition among prime defense contractors to foster innovation and keep prices in line. But this months flurry of corporate dealmaking shows just how difficult that is going to be in the future. The 14 billion Boeing-McDonnell Douglas merger, which the Federal Trade Commission approved July 1, and Lockheed Martins 11.6 billion deal with Northrop Grumman, unveiled luly 3, come as the era of mega-merg-na by prime contractors is ending. The lext phasecorporate marriages of suppliersis typified by Raytheons &2.9billion purchase of Texas Instru-nents defense unit, which the Justice Department okayed July 2. It poses a difficult dilemma for the entagon How does it allow the indus-ry consolidation to continue while pre-ierving competition to avoid price 'ouging The smaller corps of prime ontractors means the Pentagon must ely on competition among subcontrac-ors for that protection. But with sup-iliers also joining hands that safeguard vill be much less reliable. Moreover, some industry analysts ear that Lockheed Martin's 9 billion uirchase last year of Loral Corp., an Jectronics systems subcontractor, will ggravate matters if it prompts more rime contractors to buy suppliers and ben favor their in-house units. The","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984824","date":"1997-07-22","texts":"Families are flocking to Orlando to celebrate Disney World's 25th anniversary. Others are packing planes to Italy and France. And so many tourists are heading to New York City that it's no easy task to find a hotel room there. Even compared with last summer's extremely busy travel season, early signs this summer show consumers are hitting the road in larger numbers and paying higher prices, travel agents and other industry experts say. The strong U.S. economy is fueling the travel boom With low inflation and solid economic growth, consumers feel like they've got money to spend. You've really got a favorable set of circumstances for consumer spending generally, said Joel Prakken, an economist and chairman of Macroeconomics Advisers in St. Louis. You've got strong gains in employment and people have jobs that haven't had them for a while or at all. The first thing they have to do is feed, house and clothe themselves. Eventually, when those needs are met, they can think about things like travel. Today's travelers are often people like Marty and John McGran of McLean, who recently returned with their three children from a 14-day tour of Italy. The McGrans, who usually vacation at the beach, decided to take the trip so that the kids could see the country in which their mother studied as an exchange student 25 years ago. Last year, the family took a trip to London, but paid for it mostly by using frequent-flier miles. This year, the couple paid the entire bill. For the McGrans, the experience was well worth the price. It just seemed like a good time to do it, said Marty McGran. We decided last year that the window of oppportunity to travel as an entire family -- especially where the oldest would want to go -- was fairly small. It was something that we really wanted to do.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613707","date":"1997-07-23","texts":"GREENSPAN GAVE NO HINT that an increase in interest rates is imminent, buoying the financial markets. In congressional testimony, the Federal Reserve chairman hailed the current state of the economy as exceptional and welcomed the recent slowing of economic growth. Stocks soared in reaction to the remarks, with the Dow Jones industrials climbing 154.93 points to 8061.65. Bond prices took off as well, with the yield on the Treasury's bellwether bond falling to its lowest point since early December. The dollar finished mixed. --- Boeing is close to winning European approval for its 14 billion acquisition of McDonnell Douglas after offering four key concessions. An agreement is viewed as likely to be announced today, averting a major trans-Atlantic trade conflict. ---","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615289","date":"1997-07-23","texts":"For the second quarter in a row, Texas companies raised more than 10 billion through debt and equity offerings. The second-quarter total of 10.97 billion was up 3 from the first-quarter figure and 22 from the same period in 1996, according to figures compiled by Securities Data Corp. of Newark, N.J., and provided by Chas. P. Young, a Houston financial printer. Once again, debt accounted for the bulk of the money raised. With interest rates stable and still enticingly low, Texas firms scurried to issue more than 7.9 billion in bonds, a 10 increase from the first quarter and more than double the 3.5 billion issued during last year's second quarter. With its April 9 issue of 2.5 billion of notes and debentures in six deals, J.C. Penney Co. issued more debt than any other Texas company in the second quarter. Interest rates on those bonds ranged from 6.95 to 8.13. Another series of large debt offerings came from Irving-based Associates Corp. of North America, a financial-services concern, which issued 1.51 billion in bonds, including a pair of 500 million senior-note deals. The fastest-growing sector, in terms of the value of deals, was initial public offerings, with 13 companies taking the plunge, led by Santa Fe International Corp., a Dallas provider of construction services, and Hanover Compressor Co., a Houston provider of equipment-rental services. Santa Fe's 798 million offering of 28 million common shares accounted for nearly two-thirds of the 1.29 billion in second-quarter IPOs. By comparison, during the first quarter, only eight Texas companies went public, raising 219 million in capital. The smallest IPO this time NEI Webworld Inc., a Dallas publisher with a 5.5 million offering.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615835","date":"1997-07-25","texts":"Corrections & Amplifications ROBERT CEMOVICH is Booz Allen & Hamilton Inc.'s chief land adviser in Moldova. In a page-one article Friday about the tiny country, his name was incorrectly given as Robert Cemowitz. WSJ July 29, 1997 NISPORIN, Moldova -- In a cool gray room, a dozen men watch their hostess, Elena Rabu, enter with a plate of steaming mamalinga, a local cornbread. Setting down the plate, she eyes the American at her table and whispers to her son, Is he the one who got us our land Vasilie Rabu nods, and the woman smiles, showing off three silver false teeth. At the far end of the table, Vincent Morabito, a short, wiry 53-year-old, raises a glass of red wine in toast. There's reason to celebrate. A few months before, he broke up his first collective farm, securing for the Rabus and thousands of others in this former Soviet state a few acres of land. Mr. Morabito cries out the traditional salute, Narok and, following local custom, drains his glass in one gulp. Impressed, one of the men shouts, Morabito, you are practically a Moldovan.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984583","date":"1997-07-25","texts":"Americans who consider themselves immune from giddy optimism or blind faith are having the strangest thought these days They believe, devoutly, in the Long Boom, the Conquest of the Business Cycle, the Triumph Over Inflation, the Dawn of a New Era. You need all those capital letters to capture what a big deal this new faith isand how it could transform almost everything else were debating. You know something special is happening when Alan Greenspan, the chairman of the Federal Reserve Board and the Boom Faiths Doubting Thomas, starts sounding like a qualified optimist. Last December, it took only two words from Greenspan, irrational exuberance, to bring the stock market crashing down, albeit temporarily. This week, in testimony before a congressional committee, Greenspan whom many in the financial markets believe to be infalliblestill declined to embrace the new faith. But he did something impor-  His careful words will be parsed with - great care by financial theologians We do not now know, nor do I suspect can anyone know, whether current developments are part of a once-or-twice-in-a-century phenomenon that will carry productivity trends nationally and globally to a new higher track, or whether we are merely observing some unusual variations within the context of an otherwise generally conventional business cycle expansion. But is the key word here unusual or conventional Lets start by giving the new faith its due The last big recession took place 15 years ago. We haven't had sustained growth with almost no inflation since the 1960s. Older American industries have become more productive. The United States leads in the new high-tech and communications sectors. Consumer confidence is going up. And theres that stock market.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842614157","date":"1997-07-31","texts":"The continuing rally in Treasury bonds drove stocks to new highs. The Dow Jones Industrial Average jumped 80.36 points to a record 8254.89 while Standard & Poor's 500-stock index rose 10 points to a record 952.29. The Nasdaq Composite Index surged 15.73 to a record 1588.05 as technology stocks shook off their recent malaise. With the yield on the Treasury's benchmark 30-year bond falling to 6.322, the lowest level this year, stock-market investors were ebullient. The bond's price rose 2532 point, or 7.81 for each 1,000 in face amount, to 103 2932. When the bond market is happy, the stock market is ecstatic, says Bill Meehan, a market analyst at Prudential Securities. Further interest-rate declines may follow today's release of data on second-quarter gross domestic product. The market consensus calls for an annualized gain of 1.9, a far cry from the torrid pace of economic growth seen in the first quarter, when GDP soared at an annualized 5.9 pace. Any figure falling below that consensus estimate could trigger another sharp rally in both stocks and bonds, traders say.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983386","date":"1997-08-02","texts":"NEW YORK Aug. 1Inflation jitters resurfaced today, causing stock prices to fall sharply in early trading. But by the end of die session, stocks had suffered only modest losses as investors remained confident enough about the economy to use the sell-off as just another buying opportunity. The Dow Jones industrial average tumbled nearly 120 points this morning and remained sharply lower most of the day, but rallied during the final hour, closing with a loss of just 28.57 at 8194.04. Even with the drop, the Dow gained 80.60 for the week and is still up 27 percent for the year. Broader-stock indicators repaired much of the early damage inflicted after an unsetding report onjuly manufacturing activity by the National Association of Purchasing Management Computer-related shares withstood much of the day's selling pressure, and the late rebound pushed the technology-heavy Nasdaq composite index into positive territory for its third straight record close. The monthly survey of factory executives said manufacturing activity accelerated to the highest level in almost three years during July, undermining a widespread belief that economic growth will remain moderate enough to keep infla-don in check.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983723","date":"1997-08-02","texts":"The U.S. economy continued to create jobs last month as the unemployment rate fell to 4.8 percent, although wages did not rise, the Labor Department reported yesterday. The July rate represented a dip from 5 percent in June, but matched the May level, which was the lowest in 24 years. Joblessness among blacks remained more than twice that of whites, but the black unemployment rate nevertheless fell by a full percentage point to 9.4 percent last month, its lowest level in 19 years. Employers added 316,000 workers to their payrolls, considerably more than analysts had expected, with the biggest gains in the transportation, health and business services and wholesale and retail trade industries. The number of manufacturing jobs dipped by 5,000, tire department said. However, some details of the report suggested considerably less strength in the economy than implied by the drop in the jobless rate from June's level and tire large rise in payroll jobs, analysts said.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984504","date":"1997-08-02","texts":"The D.C. government paid several hundred cafeteria workers and other nonprofessional school employees more'than 1 million in unemployment 'benefits last summer without D.C. Council approval and now faces angry, protests from workers who. counted on getting the same money this year. Phillip A. Feaster, president of Teamsters Union Local 639, said he was trying to arrange food donations . for some of his members while seeking a-hearing with the D.C. Department 6f Employment Services on the matter. No other city or state gives unemployment checks to school employ-. ces during summer vacation, but Congress said in 1991 that the District .could give the money to non-professional workers if it wished. Thp council soured on the program find did not renew it in 1996, after 'auditors reported that 294 workers had defrauded the city by continuing to collect unemployment checks after returning to work in the fall. The money went out after a ruling by the citys Department of Employ-ment'.Services, according to Frank 1 Orlando, associate director of un-j employment compensation for that i department. Orlando said his office ruled that the cafeteria workers were entitled to the payments because school officials had begun to discuss hiring a private food service company, which meant the workers were no longer assured of jobs in the fall.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617165","date":"1997-08-04","texts":"GREENSBORO, N.C. -- Walking by the railroad tracks, a nattily dressed 74-year-old man turns and stares defiantly at an approaching headlight. A black Norfolk Southern Corp. locomotive thunders in his direction. Moments before it passes him, he steps aside -- reluctantly. Trespassers, Walker Rucker says, hissing at the 130-ton locomotive. Mr. Rucker, a part owner of these tracks, is making his mark by standing in the way of a railroad. For more than two years, he has managed to stop Norfolk Southern from renewing its lease on a crucial, 317-mile stretch of track. His one-man crusade has featured a proxy fight, a lawsuit and statewide mailings. Norfolk Southern, which recently acquired 58 of Conrail Inc. for 5.9 billion, is trying to rewrite the map of American rail freight by creating the first-ever seamless rail connection between the bright lights of New York and the green fields of the Deep South. Its chairman, David Goode, has launched his own personal appeal to North Carolinians. In a speech to business leaders in Charlotte earlier this year, he said it would be a real tragedy for the state if Norfolk removed its trains, which he said it would do if the lease isn't renewed. The track in dispute -- stretching from Charlotte, through Greensboro and Raleigh, to Morehead City on the coast -- is owned by North Carolina Railroad Co. The railroad was founded by Mr. Rucker's great-great-grandfather and former North Carolina governor, John Motely Morehead.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985486","date":"1997-08-09","texts":"7.4percent in the Washington area this week, their lowest level in 18 months, and lending experts said they expect rates to remain at or below 8 percent for the rest of the year. Mortgage applications are running pretty high now, which tells me we'll continue to have a healthy mortgage market through the summer and into the fall, said David Lereah, chief economist at the Mortgage Bankers Association of America, a trade group. My near-term forecast nationally is for rates to range between 7.25 and 7.75 in August and September, he said. My longterm forecast is to expect rates to move between 7.75 and 8 from October through December. Because of competition among lenders here, rates traditionally have been slightly lower in the Washington area. They have reached the lowest level since February 1996, when the average was 7.17 percent, according to HSH Associates of Butler, N.J., which conducts weekly surveys of 2,500 lenders throughout the United States. During the past 18 months, rates here have hugged 8 percent, with a peak at 8.33 percent in June 1996. Across the nation the average rate is 7.6 percent, generated by a wave of bright economic news, strong housing sales and vibrant consumer confidence, HSH said. This also is the lowest rate since February 1996, when it reached 7.33 percent.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617425","date":"1997-08-22","texts":"WASHINGTON -- The Federal Reserve Board proposed new capital guidelines for banks that would give a boost to the market for asset-backed securities. The Fed yesterday also approved a rule eliminating most of the restrictions, or firewalls, separating the activities of banks and their affiliates that underwrite and deal in securities. The capital guidelines are designed to spell out more clearly the amount of capital banks must hold when they sell securities backed by loans but, under the recourse agreement with the buyer, retain part of the risk of loss. Asset-backed securities are formed by pooling groups of assets, such as small-business loans, and packaging them into securities for resale in the secondary market. The proposal would provide the biggest break to banks that sell triple-A rated asset-backed securities. Currently, banks that sell those instruments are assessed an 8 capital charge on the security's full value. Under the proposed guidelines, the 8 charge would be applied to 20 of the value of their stake in the security, for an effective 1.6 capital requirement, the Fed said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614248","date":"1997-09-02","texts":"NEW YORK -- Mutual-fund managers can rejoice. For only the second time in the past 12 months, actively managed stock funds finished the month ahead of funds pegged to one of the market's most widely followed indexes. After trailing the Standard & Poor's 500-stock index for most of the past year, actively managed funds weathered the recent tumult in the stock market better than index funds. And they did it largely by benefiting from many of the same factors that have hindered them in the past year. It may not be much to brag about, however, because actively managed funds actually just posted smaller losses than index funds. According to Lipper Analytical Services Inc., domestic equity funds, excluding S&P 500 funds, posted an average loss of 1.65 between the end of July and Aug. 28. Index funds lost 5.19 on average. The S&P, meanwhile, dropped 5.17. Gus Sauter, managing director at index-fund proponent Vanguard Group, acknowledges that the climate has changed in the stock market. The environment we've experienced over the last couple of months has made it a little easier for the active manager when compared to the S&P, says Mr. Sauter, who heads the index-fund group at Vanguard. It's not that it's a terrible story for the S&P, it's more that it's moved down to the middle of the pack. Using S&P 500 funds as a benchmark, passive funds have been one of the poorer investments over the past four weeks, instead of one of the better ones, as they had been for quite some time, says Michael Lipper, president of Lipper Analytical Inc.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983867","date":"1997-09-02","texts":"With the economy strong and the balanced-budget fight behind them, Democrats and Republicans find themselves groping for economic issues to argue about when they return to Washington this week. Part of the problem, strategists from both parties acknowledge, is that economic issues simply don't stir voter passions when times are so good when inflation is subdued, the jobless rate has fallen to a three-decade low and the stock market remains buoyant. Indeed, many economic policy entrepreneurs say they are writing off the next two years and instead are concentrating on ideas that will resonate in the 2000 presidential campaign. Equally vexing, however, is that policy proposals being debated in both political camps seem as likely to highlight intra-party differences as to draw clear distinctions between Republicans and Democrats. White House economic advisers, reflecting President Clinton's interest in securing his legacy, are pondering long-term challenges -- how to boost productivity through improvements in education, for example, or how to ensure lasting solvency for federal entitlement programs such as Medicare and Social Security. It's one of those rare moments when you have a chance to step back and reflect on your fundamental priorities, said Gene Sperling, chairman of Clinton's National Economic Council. But some congressional Democrats have more immediate concerns. Liberals, including Sen. Edward M. Kennedy D-Mass., favor a return to traditional Democratic themes such as raising the minimum wage and urge more aggressive action by the government to close the gap between rich and poor.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842616134","date":"1997-09-03","texts":"Now that Zale is no longer on the rocks, is it ready to shine again Part of the answer will be found in the jewelry retailer's year-end earnings release, expected today. Zale's chief executive promises the company will post a profit for the fiscal fourth quarter ended July 31, something it hasn't done in the four years since it emerged from Chapter 11 bankruptcy protection. The company earns most of its profits during the Christmas rush in December. And solid earnings would be just the latest sign that the retailer is poised to recapture the market share it started losing a decade ago due to ineffective management and overwhelming debt. Consider that just three years ago, annual sales volume at Zale's stores averaged 737,000. Today, volume averages more than 1 million, with same-store sales up 5.5 for fiscal 1997 compared with the prior year. In addition, productivity is up. Since 1994, Dallas-based Zale has renovated two-thirds of its stores, adding 50 more counter space at those locations. Selling, general and administrative expenses now eat only 38 of sales, down from 44 in 1994. Moreover, by 2000, Zale expects to have increased the number of outlets run by its three major jewelry units to 1,350 from 1,068. They continue to be ahead of the plan when it comes to building the business, says Lynn Detrick, an analyst at the Houston securities firm Williams MacKay Jordan & Co, who rates the stock a buy.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984249","date":"1997-09-03","texts":"A burst of stock buying pushed the Dow Jones industrial average up a record 257.36 points, erasing in just one day nearly half the decline suffered by the Dow last month. The Dow closed at 7879.78 in heavy trading. Though the Dow's gain was a record in point terms, the percentage gain of 3.38 percent was well below the record post-World War II gain of 10.1 percent posted Oct. 21, 1987. There was heavy money flowing into the market today, said Richard Cripps, director of equity marketing at Legg Mason Inc., a Baltimore brokerage firm. Today's market surge confounded the fears of bearish investors who worried that the big, multinational companies that make up the Dow average -- which has doubled in the past three years -- were finally due for a significant fall. The average had lost 7.71 percent of its value since its peak on Aug. 6 at 8259.31. But analysts said it was too soon to say if today's action signaled the beginning of a new leg up for the bull market. Rather, several analysts expect big-company stocks to hover in a narrow trading range, at least until economists get a better fix on whether Federal Reserve Board policymakers will decide to raise short-term interest rates when they meet on Sept. 30.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984604","date":"1997-09-05","texts":"Rep. Henry B. Gonzalez, the feisty Texas Democrat who dedicated much of his career to a crusade for change at the powerful Federal Reserve Bank said yesterday he would retire when Congress finishes its business this year. The ' 81year-old congressman from SanAntonio, who was hospitalized ih 'late July for extreme fatigue and congestion, cited his health and the advice of his family and doctors for his decision. After being in political contests for almost half a century, I have run my last political race he said in a statement His move will mean that Gov. George W. Bush R must call a special election to fill the seat for the second half of the 105th Congress. Gonzalez, a 35-year veteran of the House Banking Committee who was first elected to the House in 1961, became chairman of the body in 1989 and later served as the panels ranking minority member when the Republicans took over Congress in 1994. He is the third most senior Democrat in the House.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615475","date":"1997-09-08","texts":"NEW YORK -- Small was beautiful in August as microcap stock funds picked up steam and posted the best returns among domestic equity funds. However, investors may not want to build their hopes too high for microcap funds, which typically invest in companies with market capitalizations of less than 300 million. Observers say the sector's gains weren't so much the result of increased buying of microcap stocks, but rather a lack of selling as the rest of the stock market headed lower. According to Lipper Analytical Services Inc., microcap funds provided investors with a 5.54 return in August. And while that was the smallest monthly gain for the group since April, it topped all other categories of equity funds during August. The closest sector was small-cap funds, which posted a 1.83 gain for the month. Funds that had been the big winners all year -- funds tied to the Standard & Poor's 500-stock index -- were the big losers among domestic stock funds in August, dropping 5.59. Over the past 13 weeks, microcap stocks are well ahead of all other domestic equity funds, with a nearly 19 gain since June 6. S&P 500 funds are up 10.66 in the same period. Growth funds, which tend to invest in larger companies, are up 12.21.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983313","date":"1997-09-12","texts":"At first glance, the insulation material factory in this mid-sized city doesn't look noteworthy drab buildings, yellow plastic sheets rolling off assembly lines, mounds of coal lying beside generators. But the Star Insulation Materials Joint Stock Co. is supposed to be a model for China's future. Four and a half years ago, it changed from a state-owned enterprise to one owned by its employees, and to hear company chairman Dou Baorong describe it, it was as though a magic wand were waved over the place. Output increased seven-fold, productivity tripled, tax payments rose 12-fold and profits soared 16-fold. The old system made workers lazy, said Dou, who now owns 8.4 percent of the company and gets a chunk of the profits in addition to his salary. Ni Shaobo, assistant to the general manager, added Before, it was the company that answered for it if performance was bad. Now it's all of us who answer for it. Star Insulation is just one of hundreds of Chinese companies that have experimented with different forms of ownership, moving off the government dole and seeking more commercially viable footing. At the Chinese Communist Party congress that starts today, China's rulers are expected to endorse these companies as models for thousands of state-owned enterprises around the country, giving a push to a massive privatization process that so far has been regarded as experimental. Quite possibly, the world's largest privatization is going on right now in China, said Barry Naughton, a University of California at San Diego economist who specializes in China. It makes former British prime minister Margaret Thatcher's privatization efforts look small more people work for Chinese state companies than live in all of Britain.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830981847","date":"1997-09-13","texts":"The U.S. economy continued to hum along last month as consumers stepped up their spending at the nation's retail outlets, particularly at auto dealers, while inflation remained under tight control, according to two government reports released yesterday. The Commerce Department said retail sales rose 0,4 percent, to 213.7 billion, the third monthly gain in a row. However, that was a smaller increase than in June or July, which was revised upward in yesterdays report to show a 0.9 percent gain for July, and was consistent with an overall pattern of moderate, noninflationary economic growth, a number of analysts said. Meanwhile, the Labor Department said prices charged by producers when they first sell a completed item rose 0.3 percent last month after an unprecedented string of seven straight monthly declines. The increase, which followed a cumulative drop of almost 2 percent in the producer price index in thejanuary-July period, was largely the result of a jump in energy prices, some of which have already been reversed. Over the past 12 months, producer prices for finished goods were down 0.2 percent Excluding volatile food and Economists at Donaldson, Lufkin & Jenrette Corp., a New York brokerage firm, called it another phenomenal inflation report. The increases in both sales and prices were smaller than many financial analysts had expected and the reports triggered a rally in the bond market as investors apparently decided the figures made it less likely that the Federal Reserve would raise interest rates in coming weeks. The valuejof a 30-year U.S. Treasury bond rose 12.81 per 1,000 face value as its yield, which goes down when its price goes up, fplljo' 6.58 percent from 6.69 percent ThtirS-day.v'j.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830982357","date":"1997-09-14","texts":"House leaders are weighing a plan to raise lawmakers' salaries without a direct vote on the politically sensitive question when the House considers the spending bill covering congressional pay in the next two weeks, according to congressional officials familiar with the matter. The leaders also would like to find a way to ease the House ban on all gifts to lawmakers and their aides, but have yet to settle on a plan, the officials said. Lawmakers have not had a raise in their salaries -- which now stand at 133,600 for a rank-and-file member -- since 1993 and have voted annually to cancel the cost-of-living adjustment to which they are entitled under the law. Congressional leaders have higher salaries, with House Speaker Newt Gingrich R-Ga. getting 171,500. The House version of the bill funding the Treasury Department and general government operations is headed to the House floor without any provision exempting lawmakers from the automatic 2.8 percent inflation adjustment that is to go to federal employees in the spending year beginning Oct. 1. Under a plan receiving serious consideration, House leaders would use a routine parliamentary procedure to block -- without a vote -- any attempt to add an exemption for lawmakers, the officials said. That would avoid lawmakers having to go on record as making a politically difficult vote on the question, although they still would have to vote to pass the overall bill.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983617","date":"1997-09-15","texts":"Shares of Cel-Sci Corp. of Alexandria hit 5 for the first time since March last week after the company got a patent for its AIDS diagnosis system and reported positive results from an early test of a prostate cancer treatment. Traded on the Nasdaq Stock Market under the symbol HIV, Cel-Sci stock ended the week at 4.62 12 a share, up 37 percent from 3.37 12 a week ago. The AIDS test kit for which a patent was granted is used to measure antibodies to the AIDS virus and is part of a research program seeking a vaccine against the disease. Working on other aspects of the body's immune system, Cel-Sci said its drug showed promise in treating prostate cancer patients who are not responding to other therapies. The Washington Post Bloomberg Index of stocks in the District, Maryland and Virginia ended the week at a new high of 142.86. The Index was up 2.2 points for the week and now has gained 25.7 percent so far this year.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984096","date":"1997-09-16","texts":"NEW YORK, Sept. 15A sell-off in technology shares, triggered by an announcement of delays in the rollout of Microsofts Windows 98 software, undermined a rising stock market today as sentiment turned bearish in the final hour of trading. The Dow Jones industrial average finished 21.83 points lower at 7721.14, erasing a nearly 52-point gain from earlier in the day. Broad market indexes also weakened late in the day. In the last hour or so, Microsoft fell and that had a negative impact on the entire tech sector and then on much of the market, said Brian Belski, a technical analyst at Dain Bosworth Inc. in Minneapolis. Microsoft shares started the day lower because of assertions in a Barrons article that the software giants stock was overvalued and that fire company may have a hard time dominating the industry in the ftiture. But the big decline came at midafternoon, when Microsoft said its Windows 98 software will come out three months later than expected. Microsoftfell 7, to 130-1116, on the news. Other technology stocks also slumped, including Intel, down 2-316 at 92-116, and Cisco Systems, down 214 at 69, both on the Nasdaq Stock Market IBM fell 114, to 96, on the New York Stock Exchange.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616458","date":"1997-09-18","texts":"AT&T PLANS TO FRANCHISE its name for the first time to wireless and local phone companies, breaking with its tradition of keeping tight control over its network assets. The plan could allow AT&T to hold down its capital spending, saving billions of dollars over several years. The strategy could also help determine whether Vice Chairman Zeglis will win the top job at the telecom giant. --- Clinton asked Congress to toughen the proposed tobacco accord by passing legislation to counter teen smoking by raising cigarette prices by as much as 1.50 a pack over 10 years. Philip Morris said its U.S. tobacco chief will retire, as regulatory pressures are forcing the industry to focus on operational issues over marketing. ---","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615447","date":"1997-09-19","texts":"WASHINGTON -- The U.S. trade deficit ballooned to 10.3 billion in July, a 25 jump over June, reflecting substantial increases in deficits with Japan and China. The deficit with Japan rose to 5.2 billion, the largest gap in about two years and a 27 increase over June. U.S. exports to Japan declined by 478 million to 5.3 billion from the prior month, while imports from Japan increased by 629 million to 10.5 billion. About half the import surge reflected higher auto shipments from Japan. While auto makers complain about Japanese barriers to their products, much of the gap reflects the weakness of the Japanese yen, which makes Japan's auto exports less expensive in the U.S. The trade deficit with China increased 9 to 4.7 billion in July. Most significantly, U.S. exports to China rose a meager 4 in the first seven months of 1997, to 6.9 billion, from a year earlier, while imports galloped ahead by 25 to 32.8 billion. That bleak pattern of trade -- surging imports, nearly flat exports -- undermines the Clinton administration's contention that expanding ties with China will boost jobs in the U.S. Commerce Secretary William Daley is heading to China in two weeks and says he will make it a top priority to press Beijing to open markets. Despite vast trade deficits since 1993, U.S. economic growth has accelerated over that time, reducing the trade numbers' economic significance. Even though the deficits diminish the gross domestic product, other factors keep the economy growing. For instance, imports put pressure on domestic companies to innovate, eventually increasing domestic output and restraining price increases for consumers. However, the trade deficit has broad political implications, especially when increases in imports harm powerful U.S. industries. For that reason, the escalating deficit with Japan is increasing Clinton-administration pressure on Tokyo to open its markets further to imports and restrain exports.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615033","date":"1997-09-22","texts":"The bond vigilantes are acting a lot less vigilant these days. There was a time, following the inflation crisis of the early 1980s, when the bond market, regardless of the Federal Reserve's policy, worked to keep a lid on bond prices just to be sure the economy didn't get too steamy. Whenever there were signs that the pace of growth was picking up, the so-called vigilantes would rush to sell, driving interest rates higher and acting as a brake on the economy. But if last week was any indication, a new era may be upon us. The market is soaring. The yield on the benchmark 30-year bond plummeted to 6.37 from 6.69 in just the past six trading days. Behind it all is a conviction among bond investors and traders that the Federal Reserve won't raise interest rates until inflation actually shows signs of picking up, and recent figures demonstrate that isn't happening, and probably won't, for at least a while. Overall, of course, that's good for bonds. But it portends more volatility, and, somewhere down the road, perhaps some brutally painful losses.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830985629","date":"1997-09-26","texts":"That's the value of an estimated 30 million of the newly redesigned S50 bills it has sitting in bank vaults around tile country. The bills are among the first that came off the presses at theBureauof Engraving an d Printing this year. But after Federal Reserve officials spotted a minor printing flaw on the bills, the Fed said it may not place them in circulation. The,errorsaid to be visible to the naked eyeconsists of gapsinthetinyconcentriclines behind the enlarged portrait of President Ulysses S. Grant on the bills. Those lines are among the anti-counterfeiting devices designers at the bureau have worked into anew scries of high-tech currency that the Treasury Department is introducing. This series of fine lines is very difficult to reproduce with color copiers, computer scanners and other traditional printing technologies, theTreasury Department said when the first of tlie redesigned currencythe 100 billwas introduced in late 1995. Bureau spokesman Larry Felix said such flaws as the broken lines are notunusual in other bills. But since the new 50 bill is supposed to represent the best currency printing in tlie world, officials at the Fed are reluctant to introduce a bill with an obvious flaw. Some dont look too bad, said Fed spokesman Joseph R. Coyne. He said banking officials want to study the error longer before deciding whether to release tlie bills.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614351","date":"1997-09-29","texts":"In what could emerge as a blow to the fledgling market for inflation-protected securities, Lehman Brothers announced on Friday that it will remove the Treasury Department's inflation-indexed securities from its broadly-followed index of bond products. The move will take place on Jan. 1. Inclusion in the index had encouraged many fixed-income money managers to allocate funds to inflation-linked Treasurys, and the securities saw weakness on Friday. Instead, the securities firm will establish a new index for global inflation-linked securities starting in October. Lehman Brothers Inc. is a unit of Lehman Brothers Holdings Inc. The move makes sense the question is why they put it in the index in the first place because it's a different class of security, said John Brynjolfsson, portfolio manager for PIMCO's Real Return Bond Fund.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984282","date":"1997-10-04","texts":"Single-family homes sold at a seasonally adjusted annual rate of 800,000, down from 818,000 in July, the Commerce Department said this week. The August decline was somewhat larger than expected. Most economists had predicted a drop of less than 1 percent. Still, sales had risen 0.4 percent in July and 6.7 percent in June, and August marked the 20th consecutive month of sales above the 700,000 level, the longest such string since 1978-79. During the first eight months of the year, sales ran 6 percent ahead of the same period of 1996. The supply of new homes for sale -- 284,000 in August -- was the slimmest in four years and was enough to last just 4.4 months at the current sales rate. It's the eighth consecutive month that the nation had a new-home supply that would last less than five months, the longest stretch since 1971. That could be an incentive to builders to continue a healthy construction pace. Economists said strong income and job growth have made buyers confident they can handle mortgage payments. And declining mortgage rates are making the payments more affordable.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984040","date":"1997-10-05","texts":"More than 1 out of every 7 the federal government spent in the last year went to pay interest on the 3.8 trillion national debt, which has doubled in less than a dozen years. Now that President Clinton and Congress have agreed to balance the federal budget, some economic analysts say they should consider running budget surpluses to pay down the debt -- the accumulated total of past annual deficits -- and to reduce the government's interest bill, which reached 245 billion in fiscal 1997, which ended Tuesday. The mounting interest payments compounded the difficulty Clinton and Congress had in reaching an agreement to balance the budget, forcing them to squeeze other popular programs harder than they would have had to otherwise. Meanwhile, for a variety of reasons, federal spending, other than for interest, has dropped to 17.2 percent of the gross domestic product -- the total value of the nation's output of goods and services. That is the lowest level since 1966. One compelling reason for paying down part of the federal debt is that it would lead to lower interest rates for consumers, businesses and the government, some economists argue. Running a surplus in coming years equal to about 1 percent of GDP could trim long-term interest rates by anywhere from a third to three-quarters of a percentage point, according to estimates by different experts. That, in turn, would lower the government's interest payments on the debt by billions of dollars each year.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984237","date":"1997-10-05","texts":"When Cuba spiraled into an economic crisis after the collapse of the Soviet Bloc in the early 1990s, an ambitious project to renovate Old Havana, the dilapidated core of this nation's cultural heritage, appeared to be moribund. As the government realigned its priorities to salvage a political system that for decades had relied on billions of dollars in aid from its Communist allies, vital restoration of the old Spanish port settlement came to a virtual standstill. Clusters of brittle colonial-era edifices, such as cathedrals and monuments, continued to decay. Some collapsed, particularly during heavy tropical downpours. Today, the revitalization of Old Havana is thriving as a largely self-sufficient enterprise that underscores Cuba's ability to attract badly needed hard currency, albeit not without feeling the sting of punitive measures imposed by the United States. The success of the reconstruction plan stems from a series of recent economic and political reforms that, among other things, decentralized control of the project, giving the agency that oversees it, the city historian's office, greater independence from the state's inefficient bureaucracy and the ability to raise financing through free market means without having to rely on scarce government resources. Administered by a special company established by the historian's office, the funds come mostly from profits earned by restaurants, cafes, hotels and other businesses in the historical quarter that have become part of Cuba's flourishing tourism industry.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614962","date":"1997-10-09","texts":"Federal Reserve Chairman Alan Greenspan dealt a punch to stock markets across Europe and Latin America when he took aim at the booming U.S. economy and called its performance unsustainable. Mr. Greenspan's comments, which raised fears of higher U.S. interest rates and a correction in U.S. stocks, came towards the end of the trading day in Europe, where it erased earlier gains. London closed down 0.8, Paris fell 1.3, while Germany tumbled 1 in electronic trading. Latin American markets followed Wall Street's direction, with Mexico shedding 1.1, Argentina 1.4 and Brazil 0.4 But Asian markets, which closed before Mr. Greenspan's congressional testimony, ended mixed, with Tokyo adding 0.6, helped by a 4 billion initial offering by railway stock J.R. Tokai. World-wide, stocks fell in dollar terms. The Dow Jones World Stock Index fell 0.47, or 0.27, to 175.99. In LONDON, the market initially rallied on the back of Wall Street's rise on Tuesday. But Mr. Greenspan's remarks sent the London market into reverse and the FTSE 100 index, which had been up 40 points, closed down 43.5 points, or 0.8, at 5262.1. Before the market changed course, investors had been snapping up insurance stocks, encouraged by a spate of positive reports on the industry.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613833","date":"1997-10-13","texts":"NEW YORK -- Currency traders may be in for a bumpy ride this week as serious questions about interest rates, European Union and global trade bombard the market. Market participants face a host of U.S. economic indicators that hold clues on the outlook for U.S. interest rates. What's more, Italy's chances of participating in Europe's single currency plan from the start hang in the balance as the country tries to put together a temporary government that can pass its 1998 budget. Meantime, U.S.-Japanese trade tensions have resurfaced in force, beating the dollar back below 120.00 yen. Late Friday in New York the dollar was quoted at 1.7485 marks, up from 1.7435 marks late Thursday in New York. The U.S. currency also was quoted at 119.85 yen, down from 121.14 yen. Sterling fell to 1.6215 from 1.6244. About noon Monday in Tokyo, the dollar was trading at 120.23 yen and at 1.7508 marks. There isn't a market trend at this point. It's more just a matter of being reactive, said Scott Pardee, a senior adviser at Yamaichi International America in New York. The renewed expectation of higher rates in the U.S. should lend some support to the dollar, especially if data on prices, sales and production slated for release this week provide Federal Reserve Board Chairman Alan Greenspan with ammunition to follow up on his intimations of higher rates.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616819","date":"1997-10-14","texts":"Kristen Boyer, a bank vice president accustomed to spreadsheets and interest rates, is inspecting the new paint job on James Metzgar's pickup in his backyard in rural Pike County, Ohio. Jim's Pick 'Em Up and Recovery, the lettering on the bright blue truck reads. It really looks nice, the banker assures Mr. Metzgar, raising her voice above the barking of his dog, a black chow tied to a nearby tree. It's an unlikely spot to find a business lender, but Ms. Boyer is a banker who operates in a realm where poverty policy converges with commerce. She serves on the board of the Pike County Community Action Committee, a close-knit group of bankers and community leaders that helps poor people gain a toehold in the working world. The committee evaluates microloan applications to start tiny new businesses, and provides follow-up advice and training to help them along. Many borrowers are like Mr. Metzgar-struggling to leave the welfare rolls, but unable to find a job. These are basically character loans, says Ms. Boyer. The notion that small loans, in the hands of poor people, can make a huge difference had its genesis in Bangladesh and other underdeveloped countries, where groups of villagers extended tiny loans to one another to start cottage industries. The first microenterprise programs spread to the U.S. in the mid-1980s, often targeting women and minority entrepreneurs. Since then, the small-bite approach to poverty has become increasingly popular, as states take greater control of their welfare programs.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982529","date":"1997-10-22","texts":"Anyone who knows history is bound to doubt the new economy. The phrase signifies that the U.S. economy has transformed itself and, as a result, we have entered an everlasting boom. It thrives on new technology and intense competition, which have suppressed inflation. Well, we've been through these phrases and phases before. In the 1920s, we had the new era it preceded the Great Depression in 1933, unemployment was 25 percent. In the 1960s, we had the new economics it preceded the worst peacetime inflation in U.S. history peaking at 12.3 percent in 1974 and 13.3 percent in 1979. To recall this history is not to suggest an economic catastrophe lurks. But the precedents ought to inspire humility and caution in prophecy. We cannot see the future or, quite often, even understand the present. By the numbers, it's hard to argue that the economy's performance is superior to anything in the past. The current economic expansion is now in its 79th month. But there have been two longer expansions since World War II the 106-month expansion from February 1961 to December 1969, and the 92-month expansion from November 1982 to July 1990. The explosion in computing power and the Internet are impressive but we have often had impressive bursts of new technology. In the 1950s and 1960s, direct long-distance dialing became virtually universal before, operators had to complete all long-distance calls. In 1959, commercial jet travel began on domestic routes. In the 1950s and 1960s, railroads switched from steam locomotives to diesels. Construction of the Interstate Highway System authorized by Congress in 1956 sped truck transportation. All these changes generated big efficiency gains. Indeed, government productivity statistics -- measuring output per worker hour -- show far larger increases in the 1950s and 1960s than now. Between 1948 and 1965, productivity rose at an annual rate of 3 percent since 1990, annual gains average less than one percent. It's argued that the statistics miss many real-world gains. This may be true, because a service economy is harder to measure than a goods economy a ton of steel is easier to count than a bundle of health services. But do the statistics undercount by two-thirds as necessary to match the gains of the 1950s and 1960s Though possible, that seems unlikely. None of this denies that the economy has done well and, in some respects, better than expected. The central puzzle is tame inflation. In the past year, the consumer price index is up only 2.2 percent, which is lower than the 3.3 percent rise for all of 1996. Again, it's worth noting that this performance -- though excellent -- is hardly unprecedented. Between 1952 and 1965, inflation averaged 1.3 percent annually, with only two years 1956 and 1957 above 2 percent. And after the 1981-82 recession, inflation -- though higher than now -- stayed around 4 percent. Only in 1989 4.6 percent and 1990 6.1 percent did it rise sharply.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985517","date":"1997-10-24","texts":"Q The Dow Jones industrial average and just about every stock market around the world plunged yesterday in response to financial turmoil in Hong Kong. How can that be happening A Think of it this way Hie crash in Hong Kongs stock market is a dramatic indication of how serious Asias economic problems areand investors are starting to wake up to the potential implications of Asia's troubles for the U.S. and global economy. A Nobody knows for sure, but most economists believe the region will undergo a pronounced slowdown as a result of sharp declines in stock markets and currencies that began in Thailand last May. Not only are millions of Asian stockholders poorer than before, but a lot of Asian companies are curbing their expansion plans because of the grave difficulties they face in repaying heavy foreign debts. So the region's 8 percent annual growth rate of the past few years might fall by half or even more in 1998 and 1999, according to recent forecasts, with Thailand undergoing a possible recession. A Asia's dynamism has been a major factor fueling global prosperity. Growth in Asia accounted for roughly half of the world's growth last year, according to Nariman Behravesh, chief international economist at DRIMcGraw-Hill Inc.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616270","date":"1997-10-27","texts":"WASHINGTON -- The U.S. economy is expanding at better than a 3 clip. The pool of workers sitting on the sidelines is evaporating. Unions finally are showing signs of life. Wage and benefit costs may be turning up. Boeing Co. can't make planes fast enough. The nation's railroads can't make timely deliveries. Business executives appear dangerously euphoric and, at least until last week, so did stock-market investors. What more will it take for Alan Greenspan to pull the interest-rate trigger A lot, apparently. There is little doubt Federal Reserve officials would fall in line if Mr. Greenspan opened their Nov. 12 meeting by calling for higher rates, a step he hasn't taken since March. The published summary of the Fed's August meeting, the most recent available, is full of fretting about the risks of rising inflation. Other Fed officials caution that when things look too good to be true, they probably are. The economy's performance over the last year or so-the extraordinary combination of above-trend growth, exceptionally tight labor markets, but continued low inflation-has been much more favorable than I and many others expected, Alfred Broaddus, president of the Federal Reserve Bank of Richmond, Va., said the other day. Speaking strictly for myself, I am doubtful it can continue indefinitely. All this is irrelevant if the stock market crashes. The Fed flooded the economy with credit after the 1987 crash and surely would do so again.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982944","date":"1997-10-28","texts":"By all accounts, Catherine B. Dunlevy helped turn a small, nonprofit company into a national leader in the booming business of providing college students with tuition money. From her Washington and Herndon offices, Dunlevy oversees a firm that has lent 1.5 billion to 250,000 students since it was founded 11 years ago. The company has been profitable for Dunlevy. As chairman and chief executive of EduCap Inc., she makes almost 600,000 annually, drives a company-leased Mercedes, rents a company-owned luxurious town house and racked up nearly 100,000 in business expenses in one year recently. Six-figure salaries and executive perks were nonexistent when EduCap -- known until recently as University Support Services -- was founded by a local Catholic priest to make loans to struggling students. Exempted from federal taxes, its avowed charitable purpose was -- and still is -- to help make education affordable for American families, according to the firm's promotional materials. But over the years, the company has fallen out of favor with some college financial aid officers who assert that its mission now seems to be not just making loans but also making money to support extravagant salaries and administrative costs. In 1992, it plunked down 462,000 to buy the town house that Dunlevy now rents. Its top officers also hold stock in a for-profit company that draws almost all its business from EduCap without competitive bidding. Experts ask the same question of EduCap that surrounds the multilayered federally guaranteed student loan programs If costs were kept down, couldn't interest rates for students be lower They also question whether, given the growing number of for-profit companies offering alternative loans, EduCap should still enjoy tax-exempt status.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985285","date":"1997-10-28","texts":"A witches' brew of events, from growing turmoil in markets in Southeast Asia to an overvalued U.S. market and fund managers trying to lock in profits, wreaked havoc on Wall Street yesterday. We've got a global market swoon going on here, said Bruce Steinberg, a Merrill Lynch & Co. economist, of the 7.2 percent drop in the Dow Jones industrial average, which closed at 7161.15. Asia hit a wall. And that transmits to the rest of the world. It's a one-way market right now -- and that way is down, said Steve Roach, a Morgan Stanley Group Inc. economist. We're in a mini-panic. There aren't a lot of natural forces of stability. But economists were quick to caution that the panic was not justified by activity in global markets. Events in Asia mean that growth is slowing, but not that it's stopping, Steinberg said. The worry here has been that growth was too fast. Roach, who just returned from two weeks in Asia, said the importance of events there to U.S. markets has been overblown. The numbers show that if there's a real slump in Asia, our GDP gross domestic product will be off one-fourth of a percentage point, he said. Some analysts have argued for months that the prices of U.S. stocks were overvalued compared with their earnings, and that the market wouldn't sustain them. After yesterday's plunge, they said that many companies' values were close to where they should be.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842614637","date":"1997-10-29","texts":"Corrections & Amplifications A STOCKBROKER quoted in a Marketplace page article Wednesday on New York City's reaction to this week's stock-market gyrations was misidentified as Ray Itel. His name is Ray Idec. WSJ Oct. 31, 1997 NEW YORK -- On Monday, as the stock market plunged, a media-industry analyst who had been on the prowl for a 900,000, six-room Manhattan co-op apartment got cold feet. On Monday afternoon he called back and said that he and his wife had definitely changed their minds, recalls real-estate broker Barbara Corcoran of Manhattan's Corcoran Group. They're now looking for a smaller apartment, under 500,000. Here in the world's biggest financial center, the week's extraordinary market activity sent ripples everywhere -- from cigar bars to penthouse apartments to Madison Avenue boutiques to the hushed sanctums of the New York Public Library. The lesson, palpable everywhere Much of the city's prosperity is directly linked to Wall Street wealth that can disappear and reappear in a flash. Although the securities and commodities industries account for only 5 of the city's private-sector employment, they pump out a whopping 18 of private-sector payroll -- 23 billion last year, says John Wieting, regional commissioner of the federal Bureau of Labor Statistics. That's up from 13, and 11 billion, at the time of the 1987 crash.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983453","date":"1997-10-29","texts":"It so, you better get moving. Stores In the District report they're busy hiring. With unemployment low and the economy booming, District retailers expecting a strong shopping season intend to have holiday staff hired and trained no later than Thanksgiving, when the holiday shopping season tra ditionatiy begins. We try to begin in early October and have everyone trained by Thanksgiving, said Wes Pollard, operations manager at the FAO Schwarz store at Georgetown Park. Mark Albrecht, Britches of Georgetowne vice president tor human resources, said he kicked off his hiring campaign last weekend. By the time Thanksgiving arrives, he expects to bulk up the staff at the chain's 126 stores by 50 percent For the holiday season, said Albrecht, We hire in a very big way. What are retailers looking for in holiday hires A lot of our customers are tourists and the best salespeople are the ones who can listen the best,' said Pollard. An outgoing personality is also important. We need some perky, upbeat, fun-loving people, added Pollard. If you have the personality of a rock, it's just not going to work. uepenaaoiiny counis too. u s critical mat saies to serve customers.  Ihe consumer is so In tune with associates show up on time and work the shiftscustomerservice,hesaid.Findingcandidateswho At Britches, Albrecht said, We cater our hiring to our customers. Albrecht says experience has shown that Britches' customers, who are already fans of the company's merchandise, make the most enthusiastic sales associates, and in selling, he noted, enthusiasm counts. Hire the personality, train the skills, said Albrecht. Customers who work for the company appreciate the 30 percent discount on merchandise as much as the take home pay, he added.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615392","date":"1997-10-30","texts":"NEW YORK -- Wall Street's failure to repeat Tuesday's stellar performance kicked the dollar lower against most major currencies. It gained against the yen, however, as congressional testimony by Alan Greenspan, Federal Reserve chairman, raised fresh fears that Japan will suffer some fallout from Southeast Asia's financial crisis. The dollar's performance was closely tied to that of U.S. equities yesterday, as it has been for the past week. So enthusiasm for the U.S. currency was dampened when the Dow Jones Industrial Average picked up a meager 8.35 points. Disappointed investors had hoped that Tuesday's unprecedented 337-point rally marked the beginning of a longer-term recovery. The currency market is still very sensitive to the gyrations in the Dow, said Dennis Pettit, vice president, foreign exchange, at Long-Term Credit Bank of Japan. Wall Street's rebound on Tuesday helped restore some confidence in Asia's jittery stock markets on Wednesday but traders said a large cloud still hangs over the region and over other emerging markets in Latin America.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616487","date":"1997-10-30","texts":"PhyCor Inc., in a move that would bring together the nation's two biggest physician-management companies, said it agreed to acquire MedPartners Inc. in a stock swap valued at about 6.98 billion, plus the assumption of about 1.2 billion in debt. PhyCor, which will issue about 236 million shares in connection with the merger, agreed to swap 1.18 shares of its common stock for each of the 200 million fully diluted shares outstanding of MedPartners. The transaction was disclosed after markets closed yesterday. On the Nasdaq Stock Market, shares of PhyCor, based in Nashville, Tenn., closed at 29.5625, up 62.5 cents. In composite trading on the New York Stock Exchange, shares of MedPartners, based in Birmingham, Ala., closed at 31, up 5.625. This creates the most compelling physicians' organization in the country, said Joseph C. Hutts, chairman, president and chief executive officer of PhyCor, who will hold those titles at the combined company. It will give doctors the tools and resources to differentiate care and the strength to stand as an equal with large hospitals and HMOs. At the same time, Mr. Hutts added, the combined company expects economies of scale that will enable it to squeeze costs. He didn't offer specifics.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615518","date":"1997-10-31","texts":"Asia's hopes of a quick recovery from market turmoil are clouded by an economic storm little seen since the Great Depression, a downward price spiral that is ravaging the region's economies. The storm is deflation, or falling prices. Deflation has short-term advantages -- helping keep consumer prices down, for example, or reducing Asia's real-estate and stock-market bubbles. But prolonged deflation can drag an economy to a halt, and some economists fear Asia has entered the worst deflationary period since the 1930s. There's a risk of an Asian recession that becomes a world recession, says Chen Zhao, editor of China Analyst, who follows Asian price trends. Asia is big enough now to influence world prices, and the direction is down. Federal Reserve Chairman Alan Greenspan doesn't see deflation hitting the U.S., saying that it is inflation, not deflation, which is the crucial element which serves as the major threat to this expansion. How far prices fall will determine whether the current economic slump ends up looking like a speed bump or a brick wall on the road to prosperity. So far, deflation in tradable goods has contributed to Japan's economic problems, China and South Korea's sagging growth, Southeast Asia's currency devaluations, and Hong Kong's stock-market panic, economists say.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982763","date":"1997-11-01","texts":"Mortgage rates fell this week to the lowest level in 20 months in a side effect of the seesawing stock market. The decline in the average rate on 30-year fixed-rate mortgages to 7.21 percent from 7.35 percent a week earlier brought the average to its lowest level since the week ended Feb. 15, 1996, Freddie Mac, the mortgage-funding company, reported. It was the biggest drop in six weeks. Mortgage rates this week keyed off the U.S. Treasury securities market, where rates fell as investors snapped up bonds in a flight to quality. Before stock market turmoil spread around the world from Southeast Asia, economists were predicting mortgage rates would drift up in the last part of the year. Thirty-year mortgage rates hit a peak for the year so far of 8.18 percent in early April, after the Federal Reserve last tightened monetary policy.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616593","date":"1997-11-03","texts":"Will the debacle in Southeast Asia undercut the remarkable growth in U.S. corporate profits Maybe, maybe not. But it's that very uncertainty that appears to have played a big role in the stock market's tumble. The third quarter was another strong one for corporate America, and so far the implosion of Hong Kong's stock market and Asian economic turmoil have produced no surge in estimate-cutting. But Asia has created enormous uncertainty about which companies will be hurt, which will benefit, and by how much, and that, analysts say, is undermining the confidence in profit growth that explained the high, and rising, price-to-earnings multiples investors were willing to assign to stocks. Investors have beaten down valuations in the past two weeks because of uncertainty about the earnings estimates they are using, rather than as a result of lower estimates themselves, strategists at Smith Barney Inc. said in a Friday report. The markets' violent reaction to problems in a region which represents just 3 of overall U.S. gross domestic product reflects equities' vulnerability to any question about the sources of future earnings growth. Says Smith Barney strategist John MacNeil, More of what's happening is psychological We don't know what will happen, so we'll discount the worst case.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614764","date":"1997-11-04","texts":"The federal budget surpluses now projected for the coming years provide an unprecedented political opportunity for fundamental reform of Social Security. That reform would cut taxes now for every working person while laying the foundation for a more secure retirement. First some budget facts. Lower defense spending, limits on the growth of nondefense outlays, and the surging tax revenue that has resulted from strong economic growth have combined to cut the budget deficit for the 1997 fiscal year, which ended in September, to only 22 billion -- about 0.25 of gross domestic product. The Congressional Budget Office projected earlier this year that the budget would be in surplus by 2002 and would remain there for the rest of the decade. The strong growth and high tax receipts of the past few months are now likely to require a revised budget forecast that accelerates the surplus, probably to the current fiscal year. A decade of budget surpluses would be a welcome change after decades of budget deficits. Surpluses would automatically shrink the national debt, which has grown to nearly 4 trillion. A smaller national debt would mean lower future taxes to meet government interest payments. Budget surpluses would also automatically raise the national saving rate. That would finance increased investment in plant and equipment, raising productivity and real wages. And the higher national saving rate would make the U.S. less dependent on capital inflows from abroad. But despite these desirable effects of potential budget surpluses, Congress and the Clinton administration are unlikely to let them last very long. That's because while there is broad public support for the goal of a balanced budget, there isn't broad support for running budget surpluses in order to shrink the national debt. So Washington is already talking about new spending initiatives and special-interest tax breaks that would eliminate those surpluses. Fortunately, there is a better alternative that should have enough popular support to make it politically viable using the projected surpluses to fund a system of mandatory Personal Retirement Accounts modeled on the very successful and widely used 401k plans. A system of PRAs would achieve the same gain in national saving that budget surpluses would. It would also have the popular appeal of a personal tax cut and yet the long-term benefit of more reliable retirement income with lower future taxes.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613970","date":"1997-11-05","texts":"NEW YORK -- As much as everyone would like to see an endless economic expansion, there are some unmistakable signs that the business cycle may finally be entering its downward phase. No, Asia's currency troubles of recent months are not one of them. Most economists figure the cause and effects of the turmoil in the currency markets may have a modest negative impact on the U.S. economy but won't derail the expansion -- now six and a half years old and the third longest on record. More troublesome, they say, is that for the first time since the end of the last recession in early 1991, businesses are borrowing faster than consumers. The longer this trend persists, economists believe, the greater the chances for a supplydemand imbalance that leaves too many goods and services for too few buyers. The risk to the economy now is overproduction, of everything from bagels to athletic shoes to sports utility vehicles, says Merrill Lynch & Co. chief investment strategist Charles Clough. He is concerned that the unusually high debt burden consumers are carrying has finally prompted them to rein in spending. And the combination of weak sales and strong factory output spells trouble for the economy, he said. And the potential for a glut could increase, says Mr. Clough, if countries in Southeast Asia decide to solve their financial and economic woes by speeding up production and dumping their output in the U.S.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617022","date":"1997-11-06","texts":"A number of prominent Wall Street economists are cutting their estimates for U.S. economic growth in 1998, in part because of the turmoil in Southeast Asia but also due to some domestic concerns. The new estimates -- most still predicting moderate growth, yet trimming the growth rate by 0.5 percentage point or even more -- are based on a growing belief that U.S. exports to Asia will decline as economic growth there slows. In addition, there's a concern that U.S. consumer spending is weakening even as corporations and retailers continue to expand. Most of the revisions have come in the past week, following a sharp decline in many world markets, and despite a sharp rebound on Wall Street and elsewhere. The downward revisions to gross domestic product-the government's primary barometer of economic growthcame from economists at Chase Manhattan Bank Corp., Donaldson, Lufkin & Jenrette Securities Corp., Aubrey G. Lanston & Co., Merrill Lynch & Co., ISI Group and several others. The size of their revisions were unusually large, even for market-oriented economists who react quickly to changing economic news. Chase Manhattan, the nation's largest banking concern, raised eyebrows when it told clients Tuesday that it revised its 1998 forecast to between 1 and 1.5 from 1.5 to 2. The bank's chief economist, John Lipsky, began his special report, Reassessing Risks to the 1998 Outlook, by saying even though relative calm has returned to global financial markets, he felt it would be premature to presume that this chapter is closed. Although Mr. Lipsky's sentiments were echoed by many other economists on Wall Street, academic and corporate economists are taking a more sanguine view of the economy. The monthly consensus forecast due next week from Blue Chip Economic Indicators, an Alexandria, Va., firm that collects the forecasts of about 50 economists and calculates a consensus, is not likely to show much change, if any, from its early October consensus. The Blue Chip consensus forecast published last month called for growth of 2.5 in 1998, down from an expected 3.6 in 1997. Mr. Lipsky, ISI Group, DLJ and many other Wall Street firms don't participate in the Blue Chip survey.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614383","date":"1997-11-12","texts":"Talk about putting the cart before the horse. Most biotechnology companies in the start-up phase stick generally to the business of trying to gain Federal Drug Administration approval for their drugs. But Miravant Medical Technologies, an obscure biotech company in Santa Barbara, Calif., which is developing a light0activated treatment for breast and skin cancer, is taking a different approach. Before it has even developed a commercially available product, not to mention gaining FDA approval for its light treatment, Miravant has launched a corporate advertising campaign, running two-page spreads in recent weeks in prominent financial magazines and newspapers, including The Wall Street Journal. The ads, which also herald a change in the company's name from PDT Inc., announced Sept. 10, are clearly designed to grab Wall Street's attention. We don't expect a corporate name change to get the attention of investors, said one. Would a breakthrough in medical technology suffice","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616129","date":"1997-11-12","texts":"After their recent wild ride in the world's stock markets, investors set a more cautious tone pending a meeting today at which the Federal Open Market Committee will decide whether to raise U.S. interest rates. Market moves were more subdued while volumes in many of the markets were lower than in recent weeks. Tokyo kicked off the trading day with a 1.1 rally while Hong Kong, which has lately been the cause of much world market turbulence, edged up 0.1 as fears of a run on bank deposits subsided. However, the Tokyo and Hong Kong markets were sharply lower in early trading Wednesday. European markets ended mostly a touch lower in muted trading, with London down 0.3 on domestic inflation concerns and Frankfurt 0.6 lower in floor trading. While the key Latin American markets registered declines, with Brazil down 3.3, Argentina down 1.3 and Mexico down 0.4, some traders attributed those moves to low trading volumes as well, as fewer investors ventured in before today's meeting of the Federal Open Market Committee to consider interest-rate levels. The Dow Jones World Stock Index rose 0.08 points to 162.22. In LONDON, the FTSE 100 index ended 0.3 lower at 4793.7 after recouping some of its earlier losses. The release of higher-than-expected retail price data in the morning sent stock prices lower and ignited fears that the Bank of England may need to raise interest rates again.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982974","date":"1997-11-15","texts":"Alter a summer surge, consumer spending at the nations retail outlets dipped in September and again last month, the government reported yesterday, and analysts said the decline is an indication that the rapid economic growth of the past year is cooling off The Commerce Department said that a sharp decline in auto sales caused overall retail sales to fall 0.2 percent in October to a seasonally adjusted 213.7 billion as new-car purchases dropped 2 percent September retail sales were revised downward yesterday to show a 0.1 percent decline instead of the 0.3 percent increase originally reported. Meanwhile, a separate report from the Labor Department said that producer prices for finished goods increased 0.1 percent in October following a 0.5 percent rise in September. Excluding volatile food and energy prices, the producer price index was flat in October after rising 0.4 percent in September. Despites the increases the Labor Department found in finished goods pricesthose are the prices charged by producers when they first sell a completed itemanalysts said inflation remains well under control, especially so for manufactured products. Over the past 12 months, for instance, the PPI is down 0.2 percent while the core portion of the index, which doesn't include food and energy goods, was up only 0.3 percent. Even though the two monthly declines in retail sales were small, they left the level of sales lower than their average during the July-September period. With consumer spending, which includes goods and services not sold through retailers, accounting for roughly two-thirds of the gross domestic product, analysts said that recent weakness points to a potentially significant slowdown in economic growth in the final three monthsofthis year.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842615073","date":"1997-11-17","texts":"NEW YORK -- Wall Street's public image has improved greatly over the past year, but it still has a long way to go to win the love of Main Street, a new survey indicates. Four out of five people surveyed last month by Louis Harris & Associates agreed that Wall Street generally benefits the nation. The 80 positive response was up sharply from the 70 who held that view in a similar Harris poll last year. But some other findings indicate many Americans still think of the big banks, brokerage firms and other financial institutions that make up Wall Street as a kingdom populated by large numbers of ethical pygmies. For example, a majority of those surveyed agreed that most people on Wall Street would be willing to break the law if they believed they could make a lot of money and get away with it. A majority also agreed that Wall Street is dominated by greed and selfishness. On the bright side, fewer people subscribed to either of these opinions than only a year ago. And the majority of those surveyed also believe that Wall Streeters generally are just as honest and moral as other people.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615764","date":"1997-11-18","texts":"What goes up must come down. What goes down must bounce back. As stock prices move higher and lower, many investors cling to the belief that any stock-market suffering will ultimately be rewarded. That's why they hang on to losing stocks and buy on market dips. More important, this belief gives investors the tenacity to invest for the long haul. There's a tendency to believe that good times will follow bad and bad times will follow good, says Steven Thorley, a finance professor at Brigham Young University's Marriott School of Management. It's a notion of fairness. But does the stock market really work this way At issue is mean reversion, the idea that there is a some sort of average to which share prices tend to return. Just as trees don't grow to the sky and the meek are supposed to inherit the earth, so there's a conviction that neither good markets nor bad markets can go on for too long. It's not surprising that investors want to believe in reversion to the mean, because it makes the stock market seem less fickle. But it also means we could be in for some rough times.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983254","date":"1997-11-19","texts":"Will the world slump asks a recent issue of the Economist. It's a good question without a good answer. All that can be said is that the economic crisis that began quietly in Thailand in July has now spread to much of Asia -- including Japan, Korea and Hong Kong -- and moved on to Brazil and even Russia. It could snowball into a broader economic downturn that would drag much of the world with it. Will it The prevailing view is no. Federal Reserve Chairman Alan Greenspan told Congress last week that Asia's problems, though serious, won't trigger a U.S. recession. The Economist also doubts a global slump. But optimism needs to be tempered, because the optimists have -- so far -- been wrong. The crisis is already worse than they expected, and plenty could still go wrong. Banking crises across Asia are a possibility. Another bad omen the decision of the Mercosur trading bloc Brazil, Argentina, Uruguay and Paraguay to raise tariffs 25 percent. This could signal a protectionist spiral that would depress world trade. The best that can be expected is that the crisis harms only a handful of countries. For them, economic growth drops sharply. Consider new estimates from Nariman Behravesh, chief global forecaster for Standard & Poor's DRI. The table below contrasts his forecasts before and after Asia's latest stock market and currency declines in late October and early November. Japan stumbles because its exports to Asia falter. And other countries are overextended. What we're seeing today is the tail end of the capital flow cycle, says economist Carmen Reinhart of the University of Maryland. In the 1990s, these countries have received massive foreign investment. Too much money flowed too quickly. First, foreign capital mostly dollars was converted into local currencies. Bad loans were made, bad projects were financed. Next, local consumers and companies converted some local currency back into foreign exchange to buy imports. Trade deficits swelled. Everyone's a genius in a boom, says Reinhart. And now the boom is over. Countries must curb trade deficits because they no longer receive the foreign capital needed to gorge on imports. Interest rates go up to slow spending. Brazil raised tariffs to choke imports. Other countries let their currencies depreciate this makes imports more expensive and exports less expensive. Yet, Behravesh doesn't expect the world economy to slump. He's cut his 1998 forecast for global growth only slightly, from 2.9 to 2.5 percent. Though the United States and Europe lose some exports, their economies continue to expand. Most developed countries escape the crisis.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983274","date":"1997-11-25","texts":"Dell Computer said third-quarter profit rose 71 percent, to 248 million, amid surging demand for its business and consumer machines. The Round Rock, Tex.-based company, the largest seller of computers by mail, said sales rose 58 percent, to 3.19 billion, from 2.02 billion. The results surpassed the expectations of financial analysts surveyed by First Call, but were released after the close of financial markets. Before the results, Dell stock fell 4.4 percent, or 3.62 12, to 79.75, amid a sharp retreat on the Nasdaq Stock Market. Williams Cos. said it agreed to buy Mapco, the biggest U.S. pipeline system moving propane and butane, for 3.4 billion in stock and assumed debt. Williams, one of the largest natural gas pipeline companies in the United States, will give 46.15 in stock for each Mapco share, or 42 percent more than Mapco's average price over the past three months. Williams will pay out 2.65 billion in stock and assume 750 million in debt. The Justice Department said it was investigating whether established airlines engaged in predatory airfare pricing by undercutting smaller carriers at some airports. We are looking at the issue of hub dominance and new entrants in several areas, Assistant Attorney General Joel I. Klein, head of the antitrust division, said in Washington. Klein would not comment on which airlines were under investigation. Hollinger International is selling more than 160 newspapers in 11 states, or about 40 percent of its U.S. community newspaper group, to a buyout firm for 310 million. The company, whose newspapers include the Chicago Sun-Times and the Daily Telegraph of London, said the sales to Los Angeles-based Leonard Green & Partners will help pay for its recent acquisition of the Post-Tribune in Gary, Ind. Telemundo Group, a Spanish-language television network, is being acquired for about 440 million by investors including financier Leon Black. The investment group consists of Sony Pictures Entertainment, Liberty Media Group, Black's Apollo Management and the investment firm Bastion Capital Fund. Black also is chairman of Telemundo and owns about 35 percent of the Miami-based network, which owns seven stations in the United States and Puerto Rico and sells programming to about 70 affiliates.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613590","date":"1997-11-28","texts":"The Postal Service and Wall Street will remain open on Friday, Dec. 26, despite President Clinton's order giving federal workers the day off. There's a longstanding tradition of giving federal workers a four-day weekend when Christmas falls on a Thursday. In 1986, the last time it happened, the Postal Service also continued working. Other federal employees may also be required to work for reasons of national security, defense or other public need. Banks are likely to be open on Dec. 26 as usual, because the Federal Reserve banks around the country will be open, as will their clearing banks, according to the Federal Reserve Board in Washington. The Federal Reserve Board itself, the policy-making entity in Washington, will be closed, said Joseph Clyne, assistant to the board. Mr. Clyne said the Federal Reserve will be issuing the required weekly condition statement regarding federal reserve banks that day. The New York Stock Exchange also will continue with its planned operations that day, closing early at 1 p.m. EST, a spokesman said. The Nasdaq Stock Market, which tends to mirror the schedule of the Big Board, also plans a 1 p.m. closing, as does the American Stock Exchange.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614645","date":"1997-11-28","texts":"NEW YORK -- Blue-chip stocks were moderately lower on Wednesday, while the broad market edged higher in choppy preholiday trading. While trading activity was lighter than usual, it was good volume for the day before Thanksgiving, said James Herrick, managing director of trading at Robert W. Baird. After being closed yesterday for Thanksgiving, the stock market will shut early today, at 1 p.m. EST. The Dow Jones Industrial Average fell 14.17, or 0.18, to 7794.78. Standard & Poor's 500-stock index rose 0.82, or 0.09, to 951.64. Banks were among the day's biggest winners. Bank of New York rose 1 18 to 53 18, BankBoston gained 1 1316 to 88 34, and Firstar jumped 2 316 to 39 916. However, First Chicago NBD, which Tuesday was sharply higher on takeover speculation, said it isn't in talks with Banc One, which was named as its suitor, and its stock slid 1516 to 78 18. Banc One was down 316 to 51 516.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615110","date":"1997-12-01","texts":"Here is something investors haven't heard for a while Coca-Cola stock is cheap. Calling a megacapitalization blue chip trading at 38 times earnings cheap is heresy to many investors. But the fact that many strategists and even some conservative investors can now make that argument shows how the lowest interest rates in nearly two years are transforming the stock-valuation landscape. Standard & Poor's 500-stock index trades at 23.54 times the past 12 months' earnings, not far from a record. The Dow Jones Industrial Average, which rose 28.35 to 7823.13 on Friday, is at 20.10 times earnings. Yet some strategists argue the combination of falling interest rates and still-robust earnings forecasts suggests stocks are a better value than they have been in a long time, including many high PE blue chips like Coke. Again, this may be a surprise to investors still jittery after the Oct. 27 stock plunge and the gyrations in global markets since then. And the same lower-rate scenario that supports the bullish argument also makes the stock market more vulnerable to higher rates than it has been in some time. But here is the bullish case Lower interest rates raise the present value of a company's future earnings. That is because an investor puts a higher price on future earnings if he or she will earn less in competing investments, like bonds. Furthermore, the effect accelerates the lower rates go. A drop in bond yields from 7 to 6 boosts valuations far more than the drop from 8 to 7, a dynamic long understood by bond investors but not widely appreciated by stock investors.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616662","date":"1997-12-02","texts":"MOSCOW -- Russia's central bank raised interest rates for the second time in less than a month, giving up efforts to shore up its slumping currency and bond markets with direct intervention. The move came late in the day as the International Monetary Fund and World Bank seemed set to step in with nearly 2 billion in loans by year end. A senior U.S. administration official suggested yesterday that more IMF assistance could be made available if Russia improved its tax collection record. That would make it possible for the IMF to help them through any problems they might have, Deputy Treasury Secretary Lawrence Summers said. The World Bank is going to provide about 800 million in the next several months, he added, as part of its important support of ongoing structural reform in Russia. And German Chancellor Helmut Kohl Sunday pledged to help Russia win more financial support. Early yesterday, the Russian central bank sharply raised its daily intervention limit for the dollar. The ruble recorded its sharpest one-day drop this year, falling to the central bank's limit of 5,963 rubles per dollar from 5,931 Friday. Government bond prices also plunged. Yields surged to 35 to 45-the highest levels in a year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616617","date":"1997-12-03","texts":"Rereading old predictions can be disheartening for many economists. But occasionally they can find a nugget of accuracy in forecasts that largely seem to have gone awry. Ask Bernard Weinstein. The economist recently looked back at the rosy forecasts of the 1980 Commission of the Future of the South, a group of the region's business, political and educational leaders. The group studied 14 states from Virginia and Texas in an attempt to track and project demographic trends to help plan for education needs, as well as economic and infrastructure development. Among the task force's particularly bold predictions Southerners would finally make as much money as the rest of Americans by the year 2000. Although it isn't turning out that way for most of the South, Mr. Weinstein told a September symposium at the University of North Carolina at Greensboro, Florida is on track to making his prediction come true there. Indeed, the Sunshine State's per-capita income of 24,104 rose a solid four percentage points to 99 of the national average, and Mr. Weinstein says it may well catch up by about the start of the millennium. Meanwhile, for the South as a whole, per-capita income in the 14 states surveyed rose one percentage point to 90 of the U.S. average. At the same time, the South's cost of living increasingly parallels the nation's, so lower costs are less likely to offset lower income.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984353","date":"1997-12-03","texts":"NEW YORK, Dec. 2-Federal Reserve Chairman Alan Greenspan tonight urged developing nations to move as quickly as possible to reform their banking systems, which he called the weaker links in our international financial system. In a speech delivered to the Economic Club of New York, Greenspan laid much of the blame for the current financial turmoil in several Asian nations on the way in which their governments failed to adequately regulate and supervise their banking systems, while at the same time directing banks to provide loans to favored borrowers. What is wrong with policythat is, politically drivenloans Potentially nothing if they were made to firms to finance expansions that just happened to coincide with a rise in consumer or business or overseas demand for their newly produced products, the Fed chairman said. Unfortunately, this is often not the case, he said. Policy loans, in too many instances, foster misuse of resources, unprofitable expansions, losses, and eventually loan defaults. Huge losses on those and other types of loans, particularly those used to finance new real estate ventures, have crippled the banking See GREENSPAN, BX4, Col. 1","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985143","date":"1997-12-04","texts":"The financial turmoil in several Asian countries has begun to have a direct impact on the U.S. economy in the form of reduced orders for manufactured goods and agricultural products and additional competition from imports, according to the Federal Reserve. That finding turned up in the Fed's latest nationwide survey of economic conditions, the results of which were released yesterday. So far, however, the impact is small, and the survey found a continued moderate pace of economic growth nationwide since the previous survey in October. The surveys are done eight times a year by the Fed's 12 regional banks as part of the preparation for the central bank's policymaking sessions. Many financial analysts expect Fed policymakers to make no change in short-term interest rates when they meet next, on Dec. 16. In addition to the current lack of inflation pressure, forecasters predict that a rising trade deficit with the troubled Asian nations will trim half a percentage point or more off U.S. economic growth next year, probably shaving it to about 2 percent to 2.5 percent. That ought to reduce concerns of Fed officials that the economy might overheat in 1998, analysts said. Surveyors for the Boston, Philadelphia, Cleveland, Dallas and San Francisco Federal Reserve banks all found that demand for U.S. goods by Asian importers is weakening.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616526","date":"1997-12-05","texts":"I would like to thank Messrs. Culver, Scott and Hawn Letters to the Editor, Nov. 10 for the opportunity to correct several of their common misunderstandings about fuel grade ethanol. Dave Culver, in his concern over the projected production cost of ethanol, makes no mention of the true costs of imported oil. When externalities such as environmental and health costs, the loss of domestic jobs and basic industries, the trade deficit, commitments of military resources to ensure the free flow of oil from the Middle East and threats to our energy and national security are included, the true cost of imports even now exceeds 100bbl, according to the General Accounting Office. Mr. Culver is off by a factor of almost 10 in his claim that Vehicles that consume a 10 mixture of gasohol' typically see a 20 loss in fuel mileage. Between 2 and 4 is correct. He is a bit closer in his description of E-85 vehicles. At this time, they experience about a 20 reduction in range compared to gasoline. That will improve with higher compression ratio engines allowed by ethanol's 113 octane. He is just flat wrong about fires and fuel system incompatibility with ethanol. John W. Scott is correct in warning that the production of ethanol and other biofuels from feed grains and oilseeds, from agriculture and forestry residues, fast growing trees and grasses and well as from urban biomass heading for the dump, must ensure environmental integrity from the dirt to the tailpipe. The sloshing down the river of 15 gallons of top soil for every gallon of ethanol simply does not occur with modern, environmentally sound farming practices including crop rotation, conservation tillage, planting and harvesting, filter strips and the scientific use of agricultural chemicals. As the nation commercializes the conversion of ethanol and other biofuels from cellulosic biomass, the planting of grasses and trees on erodible land will bring increasing levels of top soil to farm lands, a process already well under way. Richard G. Hawn needs to visit Brazil to verify his claims of poor-running cars and double-the-size gas tanks. Essentially all cars in Brazil run on ethanol, either in blends of 22 ethanol78 gasoline or 99 ethanol a little touch of denaturant to keep the imbibers away. They run well and the public is pleased. The fuel tanks are about 20 larger than they would be if straight gasoline were used. He is right about the Btu content of ethanol being lower than gasoline -- 76,000 Btu compared with about 119,000 for gasoline. But he neglected to mention that the increased thermal efficiency of ethanol when combusted and its much higher octane permits engine designs that will almost remove the Btu advantage of gasoline. He also failed to mention that air quality in San Paulo Brazil, with a population of 14 million, is better than in Los Angeles, New York City or Houston Texas. There are, of course, externalities in this observation -- and I will show mine when the oil companies show theirs.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984882","date":"1997-12-06","texts":"NEW YORK, Dec. 5-Stocks rallied today, setting records forthe first time in nearly two months, as a surprisingly strong economic report eased worries about weak profits instead of spurring the usual attack of inflation jitters. The Dow Jones industrial average rose 98,97 to 8149.13,just llOpoints shy of its alltime best dose of 8259.31 on Aug. 6. But the highlight of the rally was the return to record levels by the Standard & Poor's 509stock index and the New York Stock Exchange composite index. The two broad-market measures closed at record highs for the first time since Oct 7, a few weeks before Wall Street succumbed to a global sell-off caused by an economic crisis in Asia. For the week, the Dow gained 326 points, or more than 4 percent giving it a 26 percent gain for 1997 with less than a month to go. The S&P 500 and the NYSE composite are both up more than 30 percent this year. Click on this symbol on The Washington Post's Internet site at httpwww. washingtonpost.com to find ment said the nations unemployment rate sank to a 24-year low of 4.6 percent in November as employers added 404,000 workers to their payrolls, nearly double what analysts had expected. The report did, in feet, unnerve the inflation-sensitive bond market, but stock investors were heartened by the notion that an economy strong enough to create so many jobs might also be","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830982402","date":"1997-12-08","texts":"Last month, as economic turmoil in Asia threatened to spread to South Korea and Japan, Federal Reserve Chairman Alan Greenspan and Deputy Treasury Secretary Lawrence H. Summers rushed to Capitol Hill to explain why it was happening and what could be done to stop iL Around the world, financial markets waited nervously for their testimony. But for an hour, the two men sat silently as members of the House Banking Committee lectured Last month, as economic turmoil in Asia threatened to spread to South Korea and Japan, Federal Reserve Chairman Alan Greenspan and Deputy Treasury Secretary Lawrence H. Summers rushed to Capitol Hill to explain why it was happening and what could be done to stop iL Around the world, financial markets waited nervously for their testimony. But for an hour, the two men sat silently as members of the House Banking Committee lectured them about human rights violations in Indonesia, the declining wages of blue-collar workers and the folly of using money from U.S. taxpayers to bail out foreign countries that were stealing American jobs. When they finally got a chance to speak, Greenspan and Summers pleaded with committee members to increase the U.S. contribution to the International Monetary Fund as the best way to contain the Asian contagion. But their pleas fell on deaf ears Congress adjourned for a two-month holiday after stripping the new IMF money from This episode is the latest illustration of what many observers view as a retreat from the internationalist consensus that has governed U.S. economic policy for 50 years. No longer, it seems, is there an unchallenged belief that Americans are better off when their economy is open and their government assumes the burdens of leadership in world affairs. The recent defeat of fast track trade authority in Congress was the most dramat-See GLOBAL, A14, Col. 1","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615276","date":"1997-12-12","texts":"For giant disk-drive maker Seagate Technology Inc., there has been no shortage of ripple effects from the economic crises coursing through Asia. The hard part has been figuring out whether the news is bad or good. Consider In October, the world's biggest drive maker took a 63 million charge because of a badly timed hedging bet on the plunging currencies of Thailand and Malaysia, where Seagate has many of its plants. While the charge was a shock for shareholders, there was also an upside The currency declines that triggered it also meant lower manufacturing costs for Seagate, the biggest private employer in those two countries. That bit of good news, though, was quickly offset by bad news in South Korea, where a weakening won gave Seagate's competitors like Samsung Group the chance to cut their prices. Panic time Not so fast. Because of the same South Korean crisis, the likes of Samsung are facing a credit crunch that appears likely to curb their ability to expand operations. That's potentially a big plus for Seagate, because the company is struggling with an industrywide glut of disk drives. But a scarcity of credit is also bad news, of course, since consumers and corporations in South Korea and the rest of Asia will be buying fewer personal computers, in which most of Seagate's drives are used. Confused Join the crowd. U.S. investors are clearly alarmed about the fate of America's highflying high-technology multinationals, and are threatening to stampede out of the sector. The tech-laden Nasdaq Stock Market has sunk nearly 5 this week. Such behavior isn't completely irrational, because the net effect of the Asian turmoil is bound to be negative, at least in the short term. Japan and the Asia-Pacific region, excluding China, represent about a quarter of the global economy, and their collective growth rate may go from robust to nil next year. More than a third of America's 150 billion of high-tech exports go to the region, and the sales of the units of U.S. companies located there dwarf those exports.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614045","date":"1997-12-17","texts":"This may come as a surprise to those of you who have bought anything in Connecticut recently, but The state is a pretty affordable place to live. How can that be After all, prices in Connecticut for everything from utilities to groceries and health care are 22 higher than the nationwide average, according to an index compiled by the latest edition of the Connecticut Economy, a quarterly publication from the University of Connecticut. Only Massachusetts and Alaska have higher cost-of-living indexes, says economist Steven Lanza, managing editor of the review. But, Mr. Lanza says, that only tells part of the story. Prices by themselves are meaningless. They're high here, low there, but what does that really tell you Mr. Lanza says. You have to look at purchasing power. According to the U.S. Commerce Department's most recent figures, Connecticut leads the nation in per-capita personal income. At 33,875 a year, income is 39 above the national average. So prices are relatively high here, Mr. Lanza says, but incomes are higher still.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615169","date":"1997-12-17","texts":"NEW YORK -- Favorable inflation data and the Federal Reserve's decision to keep interest rates unchanged helped the Treasury market edge higher in listless, range-bound trading. Because much of the positive news was already priced into the market, Treasurys didn't react with much enthusiasm to news that buttressed the market's already strong fundamentals. The bellwether 30-year bond rose 532, or 1.5625 for a bond with a 1,000 face value, at 102 732. The bond's yield, which moves in the opposite direction of its price, fell to 5.956 from 5.967. Shorter-term securities moved little, however. The two-year note, for example, fell 132, or 0.313. Few market participants were surprised when the Fed's Open Market Committee elected not to change monetary policy during its last policy meeting of the year, keeping the fed funds target rate at 5.50. The decision was expected because the Fed had provided the market with no indication that it was contemplating a rate change, and because a rate increase would likely have handicapped still-struggling Asian economies.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616484","date":"1997-12-17","texts":"Spine-Tech Inc., which makes surgical implants to treat spinal disorders, agreed to be acquired by Switzerland's Sulzer Medica Ltd. for 595 million. The boards of both companies approved Sulzer Medica's bid of 52 a share, which represents a 14 premium over Monday's closing price for Minneapolis-based Spine-Tech. In trading yesterday on the Nasdaq Stock Market, Spine-Tech shares rose 6, or 13, to 51.50. Analysts played down prospects of a rival bidder emerging to challenge Sulzer Medica, a publicly traded unit of engineering giant Sulzer AG. They said Spine-Tech's sales and marketing efforts should receive a sizable boost from the deal. Spine-Tech is one of a handful of companies pioneering a minimally invasive surgical implant to treat degenerative disorders of the spine. The procedure, which employs hollow titanium tubes as a biological scaffold, is less arduous for patients than traditional surgical treatment and also requires briefer hospitalization -- a powerful argument to cost-conscious health-care providers. Spine-Tech faces competition from U.S. Surgical Corp.'s Surgical Dynamics unit, which currently markets its Ray Threaded fusion cage, and from SofamorDanek Group Inc., which recently was denied U.S. approval for its spinal-cage product. Analysts expect the Sofamor product to eventually get marketing clearance.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616293","date":"1997-12-18","texts":"CLINTON IS POISED to extend the June deadline for U.S. troops' mission in Bosnia. The president is expected to discard the idea of an exit date and list criteria to be met before the international force can go home. Privately, U.S. officials concede troops may have to stay several years. There are now 8,500 U.S. troops in Bosnia, and, in one scenario, 7,000 would stay. There have been no combat casualties and voter opposition is muted, but the extension issue provokes anger in Congress. Many drugs donated in the Balkan war were unusable, and a New England Journal of Medicine study says donors dump outdated supplies on the U.N. --- The budget deficit is shrinking faster than had been projected, and the fiscal '98 shortfall could be as much as 30 billion less than the 58 billion forecast, according to soon-to-be-released administration and congressional estimates. Clinton aides are already drawing up scenarios for using any fiscal '99 surplus.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982903","date":"1997-12-20","texts":"South Korea's newly elected president, Kim Dae Jung, fought a losing battle today to bolster the confidence of financial markets, which fell sharply amid fears that he will bend to labor unions and other domestic political pressures rather than instituting tough economic reform measures. Despite repeated assurances from Kim and his aides, who said the president-elect intends to comply fully with economic reform guidelines set by the International Monetary Fund IMF, the South Korean stock market dropped 5.1 percent and the South Korean currency, the won, fell as much as 11 percent before closing down 4.5 percent. It will take all the wisdom we have to restore the economic situation, said Kim's chief of staff, Jay Yoo. It will take some time. We'll work together with foreign investors and the IMF. I don't know how long it will take. Traders and business leaders said they were worried because Kim initially balked at the terms of the IMF's 57 billion bailout of South Korea, even though he later muted his criticism and declared his full support for the guidelines. On his first day as president-elect, Kim tried hard to dispel doubts about his determination to tackle South Korea's tough economic problems that include a weak banking system, inefficient industrial conglomerates and a foreign debt crisis threatening to strangle the world's 11th-largest economy.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615412","date":"1997-12-22","texts":"OAKLAND, Calif. -- Kaiser Permanente Chairman David Lawrence has had a productive year in managed care He has negotiated three major mergers, increased his health plan's membership 15 to almost nine million people and led a high-profile industry coalition to improve consumer safeguards. But asked whether he is having fun, Dr. Lawrence has a one-word answer No. Kaiser, the industry's giant, now expects a loss of 50 million or more this year. Credit-rating agencies are downgrading its debt. Big employers are annoyed with its plans to raise rates next year. In Texas, it paid a 1 million penalty to settle charges of skimping on coverage. And in the biggest personal jolt, Dr. Lawrence says, Kaiser's nurses have picketed his home in a campaign to fight job cuts, harassing my wife and frightening my daughter. The honchos at other health-maintenance organizations aren't having much fun, either. Just when HMOs seemed to offer an answer to the intractable problems of soaring health-care costs, the bottom fell out. Some of the industry's biggest names are racking up losses, grappling with unexpected rises in medical bills, struggling to absorb costly mergers and squirming under a backlash from consumers, doctors and politicians. Wall Street is fearful and unhappy. On Thursday, shares of Aetna Inc. tumbled more than 10 after the chief financial officer of its core unit suddenly resigned amid problems in digesting the 8.9 billion acquisition of an HMO giant, U.S. Healthcare. Oxford Health Plans Inc. has lost more than 75 of its stock-market value since late October, and its operating losses in the past six months could top 200 million. PacifiCare Health Systems Inc., a big California HMO, is taking a pretax charge of 145 million related to losses on an acquisition its stock is down more than 20 since Thanksgiving. Cigna Corp. and Prudential Insurance Co. are having HMO problems, too.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613927","date":"1997-12-23","texts":"Stock prices regained some ground following Friday's losses, as the bond-market rally gathered steam and sent interest rates to four-year lows. The Dow Jones Industrial Average erased more than two-thirds of Friday's drop of 90.21 points, rising 63.02 to 7819.31, despite another day of Asian declines. Still, while the market ended in positive territory, it wasn't a smooth ride. Midway through the day, most benchmarks slumped into negative territory as more investors took advantage of the early-morning gains to sell and take profits. With the interest-rate environment stable to improving, there's no question that the focus continues to shift to earnings, said Warren Epstein, trading head at Richard A. Rosenblatt in New York. The interest-rate picture remains the most benign in many years. Yesterday, the 30-year bellwether Treasury rose 1832, or 5.625 per 1,000 bond, to yield 5.87, the lowest level since October 1993. The rally was fueled in part by the latest slump in Asian stock markets. Rates move in the opposite direction to bond prices.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983824","date":"1997-12-26","texts":"You say you've got a handle on the Asian economic crisis and the 1998 congressional races but remain consumed by a feeling of emptiness And you learned more than you wanted to this year about the Mir space station and Princess Diana but less than you need to about the rest of the world Fear not. Here, boiled down from wire dispatches, was the real news of 1997. OSLO -- A Norwegian court ruled that beer-spitting members of a faux-hillbilly band were engaging in legitimate artistic expression. APPLETON, Wis. -- A woman sued her former psychiatrist for malpractice, claiming he convinced her she had 120 personalities -- and then charged her insurance company for group therapy. HANOI -- A drop in the price of python meat caused economic difficulties in Vietnam's southern province of Ca Mau. NICOSIA, Cyprus -- British Royal Marines were barred from training on Cyprus after police found three of them sitting naked outside a pub singing God Save the Queen.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985391","date":"1997-12-26","texts":"As a strong economy continues to drive down the federal deficit, pressure is building in both parties to recast last summers balanced budget deal to make room for additional tax cuts and domestic spending to gain advantage in the 1998 midterm elections. Although the White House has decided against offering any major proposals to cut or simplify taxes in President Clintons State of the Union address next month and forthcoming budget, a senior administration official said this week all that could change if the deficit picture continues to improve. Were not ruling out further steps in tax reform or changes later in the year, said Gene Sperling, head of the White House National Economic Council Well look at a number of things, but as always the key issue is how you would pay for it and whether it meets the presidents guidelines for fairness. Republicans, for their part, have resisted until now efforts to change the budget agreement to allow for more spending for highways and GOP priorities. But with the economy continuing to improveand the election campaign soon upon themHouse Speaker Newt Gingrich R-Ga. and other leaders have begun speculating how they might spend future surpluses. - , Congress and the Clinton administration have plenty of ideas for more spending and tax reliefincluding elimination of the marriage penalty for couples who file jointly arid jre-duction in die burden of the payroll taxin the event the government finds itself within striking distance of a surplus in the coming months.'.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985469","date":"1997-12-28","texts":"For people who always like to have something to worry about, here's the trendy new worry for 1998. Price deflation. What would happen to businesses, jobs and the stock market if average consumer prices dropped The answer Things could be just fine. Obsessive brooders should exercise their worry beads over something else. The consumer price index CPI falls when enough businesses cut the prices on things they sell, or when prices decline sharply for a couple of major items within the index. The 12-month inflation rate is running at 1.8 percent. Prices rose modestly for most goods and services, but energy and automobiles showed declines. This kind of selective price cutting goes on all the time without hurting the economy, says Irwin Kellner, president of Kellner Economic Advisers in Port Washington, N.Y.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842615285","date":"1997-12-30","texts":"NEW YORK -- U.S. Treasurys posted modest losses yesterday as investors made some last-minute portfolio adjustments before the end of the year. Elsewhere in trading, South Korean bonds continued to improve, as U.S. banks appear poised to roll over short-term Korean debt obligations and as some fund managers bought Korean debt issues. Late yesterday, the benchmark 30-year U.S. Treasury bond was off 932 point, or 2.81 for a bond with 1,000 face value, at 102 2432. Its yield rose to 5.92 from 5.90 at Friday's market close, as bond yields move the opposite way as prices. The day's declines took place on low volume and were driven by year-end portfolio adjustment, not a significant change in market sentiment, traders said. Illiquid conditions exaggerated price movements in the bond market, some added. Also working against bonds, stock prices jumped, with the Dow Jones Industrial Average ending up 113.10 points.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617288","date":"1997-12-30","texts":"The housing market is about to close one of the best sales years ever. But 1998's housing market may lack some of this year's zing. Yesterday, the National Association of Realtors said sales of existing homes in November fell less than 1 to a seasonally adjusted rate of 4.38 million homes, compared with 4.39 million in October and 4.06 million in November 1996. Barring unexpectedly bleak results for December, the trade group expects total 1997 existing-home sales to top 4.2 million, the highest number since the group began tracking sales in 1968 and above last year's 4.09 million. Meanwhile, the group estimates that the median sale price of existing homes will have risen 4.9 during 1997, more than double the inflation rate. Half of all homes sell for above the median price, while half sell for less. The surge has surprised analysts, who at the beginning of 1997 were expecting home sales to slip a bit. But a strong economy boosted employment levels and consumer confidence, and mortgage rates were consistently low. Fat gains in the stock market also made Americans more willing to spend more money on a big purchase like a home. Perhaps most important, the American population has moved into prime home-buying age groups. Today's baby boomers are now between the ages of 33 and 51 years old. At the younger end of that spectrum, homeowners typically buy a first home or sell a smaller first home to trade up to a house with enough room for their growing families. At the older end, empty-nesters are inclined to sell their big homes and buy smaller but fancier homes near the golf course.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983711","date":"1997-12-30","texts":"A 910 million settlement of an investor class action lawsuit alleging that 30 brokerage firms conspired to rig prices on the Nasdaq Stock Market has been given preliminary approval by a federal judge. In New York, U.S. District Judge Robert Sweet allowed attorneys in the case to place newspaper advertisements notifying investors of their eligibility to collect money under the settlement. The judge is expected to hold another hearing next year before deciding whether to give the settlement final approval. Sales of existing homes edged 0.2 percent lower in November from a record level the month before, a trade group said. Existing single-family homes sold at a seasonally adjusted annual rate of 4.38 million units last month, down from 4.39 million units in October, the National Association of Realtors said. The drop was the result of declines in the Northeast and Midwest. The Justice Department sued to block Alcoa's 250 million purchase of Reynolds Metals' aluminum mill and other property in Alabama. The department, in a suit filed in federal court in Alabama, alleged that the acquisition would lead to higher prices for aluminum used to make beverage cans. It noted that Alcoa doesn't plan to reopen a Muscle Shoals aluminum rolling mill that Reynolds will close before selling the plant to Alcoa. Richmond-based Reynolds said its legal team will review its options before it comments further. Alcoa officials were not available for comment. Bethlehem Steel, unable to turn its coke plant in Bethlehem, Pa., into a profitable operation, said it intends to close the plant by March 31. The nation's second-biggest steelmaker said it would try to sell the plant, which employs 800 workers, but that no buyers have emerged. Coke is used in making steel. Shaw Industries, a carpet manufacturer and retailing giant, said it plans to close 100 stores in a move affecting 600 employees. Shaw has about 24,000 employees. The Dalton, Ga.-based company said it would take a special fourth-quarter charge of 36.3 million -- roughly 17 cents a share, or 22.8 million after taxes -- to cover the costs.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984857","date":"1997-12-30","texts":"For the past 15 years, one huge, looming menace has dominated American public policy the federal deficit Fear of the deficit has deterred Democrats from launching big new programs and Republicans from securing big new tax cuts. Now all that has changed. The deficit which only five years ago amounted to a record 290 biffion, has suddenly disappeared, and Washington is about to become a very different place possibly a more dangerous one. The deficit applied constraints that made major policy changes almost impossible. Incrementalism ruled, and thats been a good thing. As the growth of government has slowed, the growth of the private sector has accelerated, and the nation has become more prosperous. In a kind of ironic feedback loop, that prosperity has led to increased tax revenues, which have brought down the deficit and led us to 1998, the Year of the Surplus. And so, in this new Washington, for the the first time since the Vietnam War, theres money to spend. Potentially a lot of  money. The figures are astonishing but at . this point only dimly comprehended by a  public thats been bombarded fdr years  with deficit-fighting rhetoric, much of it phony.. Take a look. In fiscal year 1997, which ended on Sept 30, the budget deficit was just 23 billion. While the budget resolution for fiscal 1998 projected a deficit of 90 billion, the latest estimate of the Congressional Budget Office CBO is for a deficit of 57 billion.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830982348","date":"1997-12-31","texts":"NEW YORK, Dec. 30A vibrant economy and plentiful jobs boosted Americans' confidence in their financial situation to a 28-year high this month despite the volatile stock market, a New York business research group said today. The Conference Board said its index of consumer confidence jumped to 134.5 for December from a revised 128.1 in November. It was the highest reading since June 1969, when the index stood at 137.9. Consumers expect... favorable conditions to continue, and they're not picking up anything in the work force or in their communities or in business conditions that's signaling anything negative is in the works, said Lynn Franco, associate director of the Conference Buard's Consumer Research Center. Nearly 41 percent of the 5,000 households surveyed rated jobs as plentiful' this month, up from 36.4 percent last month. In addition, fewer respondents said jobs had become more difficult to obtain. That positive sentiment lifted consumers appraisals of both their current situation and their expectations for the future, Franco said. The present-conditions index climbed to 161.7 from 156.8, while the expectations measure rose to","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614781","date":"1998-01-02","texts":"Ahh, holiday memories. Festive lights and tree trimmings. Hearty feasts. The spirit of giving. Shopping. Spending. Credit-card receipts. Mountains of debt. As happens every year, seasonal cheer went out with a bang on New Year's Day as many consumers sobered up to the reality of having spent more than they had intended to during the holidays. Indeed, overspending between Thanksgiving and New Year's has become so customary that even before the holidays, a Gallup Poll commissioned by Bank Rate Monitor newsletter, North Palm Beach, Fla., found consumers were expecting it would take five to six months to pay off their holiday credit-card bills. Grousing by retailers about lackluster sales suggests that many shoppers did exercise at least some restraint. But digging out from under the holiday bills may still be more painful than many consumers might think because of changes in the credit-card business.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981666","date":"1998-01-04","texts":"One secessionist says succinctly Name another city that has a mountain range running through it. And geography is but one reason why the two-fifths of this city that sprawls north of the Santa Monica Mountains may try to do what 11 states attempted in the 1860s and 13 colonies did in 1776 declare independence. Tom McClintock, a state assemblyman, is to the San Fernando Valley's secession what John Calhoun was to the South's -- the most trenchant theorist The ultimate check on an abusive or dysfunctional government is the ability of people to walk away from it. When McClintock was a high school student in White Plains, N.Y., he came home one day to find his mother in tears over her taxes. Thus was made a young conservative and a California family The ability to walk away from a dysfunctional government is what brought my family out here. Now he is 41 and determined to midwife the birth of what would be the nation's sixth largest city. Los Angeles would drop to third, behind New York and Chicago, and ahead of Houston and Philadelphia. Sliced off of Los Angeles, the valley would be the nation's second most affluent city of more than one million. Today its per capita income is 19,021, second only to San Francisco's 19,695. In the rest of Los Angeles the figure is 14,668. The valley is 4 percent African American, 8 percent Asian American and has a large Latino population. Spanish is spoken in a quarter of all homes, and 38 percent of adults are foreign born. Los Angeles, McClintock says, grew like the old Soviet Union, by gobbling up contiguous communities, such as Hollywood and many others. It used its ownership of water rights to lure communities into an imperial city. The result is a city of 467 square miles, large enough to hold St. Louis, Milwaukee, Cleveland, Minneapolis, San Francisco, Boston and Pittsburgh, with room remaining for Manhattan. Another result, says McClintock, is a city where local government is not local.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830982641","date":"1998-01-06","texts":"The American Academy of Pediatrics recommendation about breast-feeding duration has not changed so dramatically as was suggested by What's Good for the Baby May Guilt-Trip the Mother Second Opinion, December 9. Previously, they recommended breast-feed to one year currently, they say breast-feed to at least one year. They present a solid body of evidence supporting the vital importance of breast-feeding to women's and children's health, and its potential impact on health care costs, the environment, maternal job satisfaction and productivity. The column missed the forest the vast improvements in women's lives when this country becomes a truly breast-feeding society for the trees the temporary difficulties some women may face in the process. As a family physician who believes physicians have a responsibility to provide people with accurate and current data from which they can make informed health decisions, I believe that withholding vital information to spare people feelings of guilt or failure is patronizing at best, negligent at worst. Prospective parents need correct information about the crucial infant feeding decision. The AAP has provided it. Let's hope this gives parents the impetus to choose breast-feeding in a decidedly bottle-feeding culture. Alicia Dermet Clinical Assistant Professor, Department of Family Medicine, UMDNJ-Robert Wood Johnson Medical School Old Bridge, N.J. Instead of criticizing the Academy of Pediatrics, you should be applauding them and supporting their efforts to educate not only their members but individual families and the business community in this country. Where is your article about the policy statement and what it actually says Where are your articles about how we as a society could begin to achieve this goal You could fill a column every week about breast-feeding and how mothers, whether working outside the home or not, are successfully breast-feeding their babies. You could do exposes about how hospitals and health care professionals often sabotage new mothers' efforts to breast-feed their babies. You could write about the many hospitals who do get new mothers off to a good start and employers who provide support to allow new mothers to breast-feed even though they work outside the home.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984240","date":"1998-01-06","texts":"Bowater, the largest U.S. maker of newsprint, confirmed it is in talks to buy a stake in Halla Pulp & Paper's newsprint mill in Korea, as it seeks a low-priced investment amid economic turmoil in Asia. Halla's parent, Halla Group, was declared bankrupt by its creditors on Dec. 6 after it failed to repay 215 million of debt. Chrysler doesn't expect to increase the price of its cars and trucks in 1998 or 1999, continuing last year's trend of little or no price hikes. There's no opportunity for pricing in this market, Chairman and Chief Executive Robert Eaton said in an interview at the North American International Auto Show in Detroit. The only way you're going to maintain or increase your margins is through cutting costs. Investors closed out 1997 on a strong note as inflows into equity mutual funds were robust. Stock mutual funds took in 1.4 billion in new cash for the two days ending Dec. 31. That's up from inflows of 883 million for the prior two-day period ending Dec. 29. U.S. stock funds pulled in more than 1 billion in the period, with growth mutual funds getting the lion's share of the new cash at 483 million. The riskier aggressive growth funds attracted 389 million, while the more conservative growth and income funds netted 159 million. Spending on construction fell sharply in November but economists are predicting low interest rates will keep it from slipping much in 1998. The 0.9 percent decline to a seasonally adjusted annual rate of 609 billion was the worst in 11 months, the Commerce Department said. An increase in spending on housing wasn't enough to offset a large decrease in nonresidential commercial construction and a small one in government building. Bethlehem Steel boosted its offer for Coatesville, Pa., steelmaker Lukens by 20 percent in a takeover battle for the nation's oldest continuously operated steel firm. The 30-a-share offer, with a total value of 740 million, tops an all-cash, unsolicited bid of 28 a share made Dec. 22 by Allegheny Teledyne, a Pittsburgh conglomerate.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616772","date":"1998-01-08","texts":"PhyCor Inc. and MedPartners Inc. called off their proposed 6.25 billion merger, blaming significant operational and strategic differences. At the same time, MedPartners said it expects to take two large charges in the fourth quarter and possibly to report a quarterly loss from continuing operations. From the beginning, the planned combination of the two large physician management companies -- which stunned Wall Street when it was announced last October -- was greeted with skepticism by the Street. Almost immediately, the stock prices of both companies began to falter as analysts suggested that uniting the disparate cultures would be difficult. Yesterday, PhyCor, Nashville, Tenn., rose 12.5 cents to 26.50 in Nasdaq Stock Market trading. MedPartners, Birmingham, Ala., fell 76.5625 cents to 18.1719 in composite Big Board trading. The merger plans were called off after the market closed. The merged company, which would have brought together the nation's two largest physician-management companies, would have had affiliations with about 35,000 doctors, or 5 of the country's physicians, and would have generated annual revenue of about 8 billion. Last fall, the companies heralded the deal as a way to put doctors on a level playing field with hospitals and health-maintenance organizations. Cost savings from economies of scale were also expected. Nevertheless, the differences proved insurmountable. Each company takes a much different approach to business in a number of key areas, including information systems, development, and operations, Joseph C. Hutts, PhyCor's chairman, president and chief executive officer, said in a statement. In an interview, Mr. Hutts said the deal unraveled over about a week's time. He declined to specify the differences that led to the dissolution. He said the two companies agreed not to elaborate beyond the prepared statement. The differences were quite significant, Larry House, MedPartners chairman and CEO, said in an interview. He also declined to elaborate, saying only that the clashes involved the business operations and the corporate cultures.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982257","date":"1998-01-08","texts":"A top official at the Japanese Finance Ministry met yesterday with officials from the Treasury Department and the Federal Reserve, fueling speculation in global markets that Tokyo is seeking a multinational effort to brake a surge in the U.S. dollar that is threatening prospects for recovery in Asia's battered economies. In international currency markets yesterday, the dollar fell 3 yen from an earlier 5 12-year high of 134.25 yen per dollar as traders braced for the possibility that officials in the U.S. and Europe might join Japan in a coordinated effort to stem the dollar's rise by selling greenbacks. The yen stabilized in trading today in Tokyo, changing hands by late afternoon at 132.30 yen to the dollar, but there was no signal from Treasury that U.S. officials were contemplating market action. Many analysts and investors concluded that U.S. officials were insisting on bolder economic reforms from the Japanese government aimed at boosting growth in Japan, as the price of U.S. help in halting the dollar's climb. I have got to believe that the U.S. is saying, Yes, we can help, but that's only possible if you make some basic changes in your policies. Otherwise, we'd just be whistling in the wind,'  said C. Fred Bergsten, director of the Washington-based Institute for International Economics, who said Japanese officials have good reason to fear the prospect of their currency in free fall, much like those afflicting other Asian currencies. A standoff between the United States and Japan would be likely to exacerbate Asia's financial crisis, which took yet another turn for the worse yesterday as stock markets and currencies across the region declined sharply, led by a 6 percent plunge in Hong Kong's Hang Seng index that was followed by another 5 percent fall in early trading today Story, Page C2.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614572","date":"1998-01-09","texts":"For homeowners, these are the best of times. The economy has been expanding for 27 consecutive quarters. Over the past year, the stock market peaked and consumer confidence reached its highest level in 28 years. Mortgage interest and unemployment rates are the lowest they have been in decades. Real wages -- at least for the better-off -- are rising, and government coffers are overflowing. Even crime rates are down. So it is only natural that home sales are breaking records and prices are beating inflation. That's the conclusion of the latest Home Price Forecast, prepared for The Wall Street Journal by the economic research firm Case Shiller Weiss Inc. of Cambridge, Mass. The forecast reflects actual price changes in 10 of the largest metropolitan areas from August 1996 to August 1997 and projects figures to January 1999. Not everyone feels like celebrating, however. In Chicago, where the economists predict the lowest price rises of the 10 metro areas, home prices are just keeping pace with inflation and houses are languishing on the market. I've lowered my price 10,000, and there still have been no offers, says retired publisher Frank Albergo, whose 2,000-square-foot, turreted Norman-style home has been on the market for more than a year. It is currently listed at 239,000. San Francisco, by contrast, is expected to remain the country's hottest and the most expensive housing market. Susan Sparks, a researcher at the University of California at Berkeley, expects a quick sale of her 2,046-square-foot tract home, recently listed for 205,000. She says 15 homes in her development have sold in the past six months, some for their full listing price in two weeks or less.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983992","date":"1998-01-09","texts":"I'm 26 and met my boyfriend in 1994 through mutual friends. We began to see each other regularly, and the relationship developed into an intense one where we did a majority of our activities together. After two years we moved in together. The first few weeks were like a honeymoon, but his unemployment and some of the closeness we had developed was smothering both of us. We broke up and he moved out. We maintained some contact afterward, but each of us dated other people and sometimes talked with the other about struggles with those relationships. After nine months and two conversations about it we decided to give it another shot. We have entered couples' therapy, and have begun our new involvement at a slow and thoughtful pace with a pretty good understanding of the issues around which we clash. I am excited about the direction we are heading in, and wanted you to receive something from a Generation Xer who has her head on straight. -- H.A. I was with you till the couples' therapy part. Do you really want to be part of a pair that needs help with the dating phase Courtship is supposed to be a fun, carefree time spent getting to know someone to see if there is enough love and compatibility for a life commitment. Carefree because your mind is clearest before you become encumbered by kids, mortgages and other responsibilities to each other, and fun because it will be tough to weather a war if you don't enjoy each other at peace. Call it a trial period with appetizers. You guys, on the other hand, have not only analyzed fun onto the endangered species list, but you weathered your one crisis -- his unemployment, which in the early twenties isn't even that huge -- by busting up. I know you're proud of how things worked out by finding fault, I feel as if I just backed over your dog. But therapy should be a last resort, and then only for already-married couples who by definition have a pressing reason to make things work. You're 26 You're single You have years to find someone who clicks without professional intervention.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982596","date":"1998-01-15","texts":"The School Board on Tuesday night approved a 186.4 million operating budget for fiscal 1999 -- an increase of more than 33 million over the 1998 spending plan -- then said the county supervisors have an obligation to adopt the budget in full. Board members acknowledged that the budget is a substantial increase, but they said growth, inflation and the stunting effects of the supervisors' past budget cuts, have made it necessary. School Superintendent Edgar B. Hatrick III has said that in the last eight years, the supervisors have given the schools 62.3 million less than requested. The Board of Supervisors could have funded every dollar of the School Board's approved budget within the eventually adopted tax rate and still produced a surplus, said School Board member Edward J. Kiley Mercer. Instead, they reduced it by 64 million and put us under the inflation curve. If that happens again this year, then some people in this county ought to be ashamed of themselves. The School Board made a few minor changes, involving teachers' salaries, to Hatrick's initial 185.5 million proposal, bumping up costs an additional 900,000. The board also approved a 214.9 million operating budget for fiscal 2000, 300,000 less than Hatrick's proposal.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982677","date":"1998-01-15","texts":"With Asian financial markets in turmoil, Europe in an economic funk and the price of just about everything falling around the world, it seems everyone wants to have and hold dollars. In recent weeks, there have been reports of Russian housewives stuffing greenbacks into glass jars and secretaries in Singapore switching their savings accounts into dollars at local branches of Citicorp and American Express. Thai chambermaids have taken to pleading with hotel guests for tips in dollars, not baht. Big financial players have also jumped into the act. Treasurers of giant corporations are scrambling to convert overseas profits back into dollars before they erode further in value. And central bankers in Argentina, Belgium, Canada, Australia and even Switzerland have been selling off gold reserves in favor of dollars and U.S. Treasury bonds. All this demand for greenbacks has driven up the value of the dollar against most other currencies. In the past six months, the dollar has risen 4 percent against the German mark, 15 percent against the Japanese yen, 70 percent against the Thai baht, 90 percent against the Korean won and 195 percent against the poor Indonesian rupiah. To a large degree, the dollar's ascent reflects flight from the economic problems in Asia to the relative safety offered by the U.S. economy and its financial markets. Were it not for the stabilizing influence provided by the dollar, economists say the damage from the crisis could have been even greater.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616311","date":"1998-01-16","texts":"Stock-market indexes posted sharp declines in the final hour of trading yesterday, although traders and investors described the slide as the natural outcome of three straight days of gains. The market has just run out of steam for a little while, said Bob Basel, head of listed stock trading at Salomon Smith Barney. There's nothing worrying in what we're seeing here. The Dow Jones Industrial Average slid 92.92 points to 7691.77. Resilient technology stocks buoyed the Nasdaq Composite Index, which retreated only 1.70 points to 1547.06. The 7 decline in Hong Kong's Hang Seng stock index overnight ensured that the trading day in North America began on a sour note. It also revived fears that even if U.S. companies with exposure to Asian markets post better-than-expected earnings for the fourth quarter, they may not be as lucky in the first half of 1998. Indeed, Eastman Kodak reported stronger operating earnings for the fourth quarter, but warned of a slowdown in the first quarter, thanks to the strength in the U.S. dollar and growing competition. Buying by institutional investors such as mutual-fund managers, responsible for much of the 204.27-point advance in the Dow in the first three days of the week, was hard to spot yesterday, traders said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616723","date":"1998-01-16","texts":"Leaving a recent meeting with AT&T's new chief, C. Michael Armstrong, at the company's Basking Ridge, N.J., base of operations, cable magnate John Malone turned to an aide and said, I've met every AT&T chairman since 1964, and this is the first one that gets it. It appears Wall Street is feeling the same vibes. Since tapping Mr. Armstrong, the former chief executive of Hughes Electronics, to be its new chairman in October, AT&T has seen its stock price rocket 44, giving Ma Bell a stock-market value of 105 billion and a more valuable currency for doing deals. But what has Mr. Armstrong, a onetime senior executive of International Business Machines who pushed Hughes into the satellite-TV business, done to warrant all the investor enthusiasm Not much, at least not publicly. AT&T still faces the fight of its life in the coming year in everything from local-phone services to the Internet, which means its current stock runup may be short-lived. Some of the most prominent analysts who follow the stock are witholding their endorsements. Jack Grubman of Salomon Smith Barney and Daniel Reingold of Merrill Lynch & Co. have set neutral and hold ratings, respectively. Under Mr. Armstrong, AT&T still faces the same challenges that sat like an elephant on its stock price under his predecessor, Robert E. Allen Jr.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984791","date":"1998-01-20","texts":"Like People and Vogue, Outlaw Biker magazine provides ample photographic coverage of parties. Unlike People and Vogue, Outlaw Biker covers the kind of parties where the men ceremonially lynch Japanese motorcycles and the women exhibit their joie de vivre by stripping off their T-shirts and showing their breasts. Outlaw Biker is immature, antisocial, obscene and very funny. We keep it raunchy, righteous and real for ya, proclaims a house ad, which promises subscribers the wildest parties, the hottest bikes, the finest women, the dirtiest jokes. Outlaw Biker is the best of a genre of magazines that includes Biker, Easyriders, Iron Horse and others. These aren't motorcycle mags, they're biker mags. There's a big difference. Motorcycle magazines are about motorcycles -- their frames, their spark plugs, their airflow. Biker mags are lifestyle publications for men whose lifestyles revolve around fast bikes, loose women, baroque tattoos, knuckle-busting jobs, unemployment checks, probation officers, lots of beer and God knows what other mind-altering substances. Here's what the lifestyle of a biker is all about -- the fun, the broads, the bikes and the parties, proclaims the latest issue of Biker as it asks readers to send in photos of their bikes, their parties and their womenfolk. We're popping the rubber band off the bankroll and paying out 20 for every shot we use. These magazines are not for the squeamish or the politically correct. They're fun, though, if you're willing to take them in the spirit in which they're offered -- a spirit captured in their subtitles. Easyriders bills itself as Entertainment for Adult Bikers -- and rehab survivors. Biker says it's the publication For Dissenting Adults Only.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983050","date":"1998-01-25","texts":"Why ask whether Prince William County residents would pay a higher tax if the money went directly to schools They voted down the car tax, of which a substantial portion goes to schools. It seems that the majority in this county are more concerned with their short-term financial well-being than with the long-term well-being of our children. Throwing money at the schools isn't going to solve any problems, anyway. The ineffectiveness of schools has very little to do with funding the problem is that the entire setup is heavily flawed. Children are not evolutionarily prepared for sitting long hours in desks while teachers try to impart knowledge upon them. What they mostly learn is how to give the teacher what she wants in order to make the grade. If, as so many experts say, children's education hinges on parental involvement, then the county should focus on encouraging that. The ultimate example of parental involvement in education is home schooling, which is proven to be highly effective for children with a wide variety of needs, interests and abilities. We should stop throwing money at the education problem and encourage greater parental involvement. SHIRLEE SEABORNE Woodbridge In a 1997 Washington Post survey, some 62 percent of all Prince William County residents said they would vote for a meals tax if the funds were dedicated to education.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614769","date":"1998-01-26","texts":"MEXICO CITY -- Few observers expect the presence of a new governor at the Bank of Mexico to bring about a change in the central bank's monetary policy, to be released Monday. The policy outline will be the first for Governor Guillermo Ortiz, the former finance minister who took up the post Jan. 1 following the retirement of Miguel Mancera. As in 1997, the monetary policy in 1998 is expected to leave the peso floating freely against the U.S. dollar while keeping a lid on money supply to hold inflation to the government's budgeted goal of 12 for the year. We are leaning toward a tight policy to avoid a balance-of-payments imbalance, Javier Murcia, director of economics for Latin America at Credit Suisse First Boston said of his expectations. Mexican economic consultant Jonathan Heath also believes policy will vary little from 1997, with one difference. Hopefully, there will be a mention of a contingency program, on the assumption that the current-account deficit erodes more than expected, he said. The government has projected a current-account deficit of from 6 billion to 7 billion for 1997, based on an increase in imports as consumer demand recovers. The deficit stood at 4 billion at the end of the third quarter.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985377","date":"1998-01-27","texts":"Marcus M. Griffith Sr., 73, a Hyattsville area manufacturer of hair-care products who was a member of the board of the National Association of Manufacturers and president of the D.C. Chamber of Commerce, died of a heart attack Jan. 24 at Fort Washington Hospital. He lived in Fort Washington. Mr. Griffith was a graduate of American University. He had been a businessman in the Washington area since the 1950s, and his firm, The Hairlox Co., distributes products internationally. He was a native of British Guyana who came to the United States in 1949. He worked initially as a cosmetics company salesman in New York and then for Fuller Products in Chicago and Baltimore. He began his own company, Beauty Queen, in Washington in 1955 and expanded it into a chain of salons the next year. He also was founder of a consortium, Community Distributing Services, which serviced drugstores. Mr. Griffith was a founder and treasurer of the American Health and Beauty Aids Institute and a member of the D.C. Unemployment Compensation Board and its study commission, the Small Business Council of the U.S. Chamber of Commerce, the Export Council and the membership committee of Jesse Jackson's Leadership Conference. In addition, he was a member of Calvary Episcopal Church in Washington","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842617050","date":"1998-01-30","texts":"WASHINGTON -- President Clinton's proposal to use budget surpluses to salvage Social Security got a big boost yesterday as Federal Reserve Chairman Alan Greenspan endorsed the plan. The prospect of a sustained budget surplus is a very useful platform to finally get to a point where the Social Security problem is something which is truly resolvable, Mr. Greenspan told the Senate Budget Committee. That may not be the case a number of years from now, he warned, adding that it would be a real tragedy if we failed to employ this particular platform as the beginning of the solution to this problem. Meanwhile, Deputy Treasury Secretary Lawrence Summers said yesterday that simply transferring projected federal surpluses into the Social Security Trust Fund, one of several options expected to come under consideration in the coming debate over reforming the retirement system, would delay the fund's depletion by 10 years. Offering a preview of administration budget estimates to be released next week, Mr. Summers said surpluses will be projected to be at least 1 trillion over the next 10 years. Every 100 billion transferred into the Social Security fund would extend its life by one year, he said. Though Mr. Greenspan has no direct role in the budget process, his tremendous credibility on Capitol Hill has made him an influential voice in such debates in recent years. His remarks were particularly striking in putting Social Security above tax cuts in his menu of priorities, placing him in conflict with many congressional Republicans who are pushing to return projected surpluses to taxpayers.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983546","date":"1998-02-08","texts":"Fearful of what an Asian meltdown, the president's domestic problems or some other crisis may do to your 401k retirement fund Federal workers investing in the thrift savings plan can always retreat to one of the safest, most exclusive investment options the G-fund, guaranteed by Uncle Sam and not available to other investors. If this 25.2 billion federal puppy goes belly up, all of us feds and nonfeds alike will be battling at the nearest city dump for food and clothing. No matter what the stock or bond markets do, the G-fund never has a bad day. Its guaranteed rate of return is set monthly by the Treasury Department. So far it has outpaced inflation the goal of long-term investing, although it has not done as well as the higher-risk C-fund stock index. Money in the G-fund will be invested at 5.75 percent this month. Last month, the rate was 6.00 percent. In November and December, it was 6.125 percent.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613494","date":"1998-02-09","texts":"WASHINGTON -- The spate of new jobs created by American companies last month casts doubt over the conventional wisdom that the economy is slowing. Most analysts have argued that the Asian financial crisis was beginning to rein in the galloping U.S. economy to a more manageable trot. But in the government's first official look at January economic activity, the Labor Department said Friday that nonfarm businesses added 358,000 workers to their payrolls. That was slightly more than were generated in December's robust job market and well above the healthy 267,000 average monthly rise through 1997. The employment report also showed how the rising economic tide is lifting more and more boats, with joblessness falling sharply even among high-school dropouts. For the first time, the Labor Department started reporting employment data by level of education, and said the unemployment rate for people without high-school diplomas fell to 7.2 last month from 8.9 a year earlier. Even so, the numbers confirmed that education still matters a lot the unemployment rate for college graduates was a minuscule 1.9 last month, down from 2.1 a year earlier. The department had been collecting these figures in the past, but not posting them. The January unemployment rate for all workers stayed at the same 4.7 of the work force reported in December. The low jobless level continued to give workers more bargaining power, as average hourly earnings rose by four cents, to 12.51. During the past year, wages rose 3.8, or about twice the inflation rate. The figures are adjusted for seasonal factors. In contrast, other data released recently indicate some sort of economic slowdown. The monthly survey of manufacturers' purchasing managers released last week showed some decline in business, as did the government's report on factory orders in December. Consumer confidence is reported to have dropped sharply in January. Anecdotal evidence -- such as disappointing profit reports and job cuts at blue-chip companies -- has added to the perception of softening. Policymakers have assumed some easing from last year's torrid growth rate was imminent. That was a big reason the Federal Reserve kept interest rates steady last week.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984472","date":"1998-02-09","texts":"ASIA'S CURRENCIES have stabilized, and stock markets are bouncing back. The U.S. economy continues to roll, with 358,000 jobs created last month as wages rise, unemployment remains low and the Dow Jones average forges ahead. Maybe, a member of Congress might think, the Asian financial storm has blown past. Maybe we don't have to give the International Monetary Fund all those billions the Clinton administration is pressing for. If only it were so. Unfortunately, on many levels, it is too soon to relax. For millions of workers and their families in Indonesia, Thailand, South Korea and elsewhere, trouble is just beginning. Even if their nations' currencies and stock markets have bottomed out, the consequences of rising unemployment, slowed economic growth and declining standards of living have yet to unfold. To some extent, such consequences are unavoidable. But Americans have more than a humanitarian interest in mitigating Asia's pain. So far, the economic impact on the United States has been, if anything, beneficial, as Asia's crisis dampens inflationary pressure here. But in the coming months the impact is likely to be less positive, as competitive pressures threaten some American jobs. And if the economic crisis worsens and provokes ethnic riots in Indonesia and social instability elsewhere, the national security and economic impact on the United States could be adverse in the extreme. Moreover, the financial situation remains precarious. This is especially so in Indonesia, where the dictatorial President Suharto refuses to recognize the need for more democracy or to prepare the ground for a political transition. Democratic South Korea is in far better shape, thanks to the earnestness and skill with which President-elect Kim Dae Jung has devoted himself to far-reaching economic reform. But even South Korea remains vulnerable to shifts in fickle and sometimes irrational international financial flows. So do nations not yet infected, or barely infected, by the Asian contagion, from China to Hong Kong to Russia to Brazil. Any one of these developing nations, or all of them, could be tripped up by a congressional refusal to support the IMF. Critics attack the IMF, the international organization leading the financial rescues of Asia's economies, on two grounds. Some accept its importance but cite the mistakes it has made. It has made mistakes, and it does need to be more open in its functioning. But the reforms it's promoting this time around -- for less corruption and cronyism, greater openness, reliable unemployment insurance and more -- will promote democracy and social welfare if faithfully implemented.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982922","date":"1998-02-11","texts":"The annual report of the president's Council of Economic Advisers released yesterday begins not with cautious assessment but a sweeping celebratory declaration The past year saw the nation's economy turn in its best performance in a generation. The report ticked off the now-familiar figures for strong economic growth -- the rapid rise in jobs, the drop in unemployment to a 24-year low and a decline in core inflation to the lowest level since the mid-1960s. The economy is remarkably free of the symptoms that often presage an economic downturn -- such as an increase in inflation, an accumulation of inventories or evidence of financial imbalance, the council members wrote in the report. Only in the administration's forecast for the next three years does the CEA turn cautiously conservative. Like many private-sector economists, those at the CEA believe that some special factors, such as the huge run-up in the stock market, helped push inflation-adjusted economic growth to 3.2 percent in 1996 and 3.9 percent last year. As the impact of those forces wanes, so, too, will the nation's growth rate, which is forecast to drop to 2 percent this year and stay there for 1999 and 2000. We have had an utterly exceptional rate of growth, which has reduced unemployment to a level at or below that regarded as full employment by many economists, CEA Chairman Janet L. Yellen told reporters. Our forecast is sufficient to keep the economy operating in that full-employment range.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830982087","date":"1998-02-14","texts":"Corrections The mortgage brokerage operated by Carrie and John Staples was incorrectly identified in a Feb. 14 article on refinancing in the Real Estate section. Published 022898 The recent crush of homeowners wanting to refinance their mortgages has left Carrie and John Staples, a husband-and-wife mortgage brokerage team, practically imprisoned in their Great Falls home-based office. Ever since interest rates began dipping last month to their lowest levels in a quarter century, the Stapleses have had to start working at 5 a.m. -- sometimes 4 a.m. when they're really behind -- and not stopping until 6 p.m. when hunger sets in. It's pretty ridiculous, said Carrie Staples, 53, between copying loan documents and returning a borrower's telephone call as a fax machine spewed out the latest interest rates offered by lenders. I'm going from person to person. We're backed up on phone calls and we're trying to catch up all the time, said John Staples, 53, still wearing the sweat pants he slept in the night before. It's getting pretty rough.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616493","date":"1998-02-17","texts":"LONDON -- For investors looking abroad these days, the tune is Jack be nimble, Jack be quick. Choose a money manager who can make the right stock pick. Performance data on international portfolio managers indicate that when investing outside the U.S., lately it has been more profitable to go with so-called active managers who are free to pick and choose among individual stock markets and stocks rather than merely mimic an overall index. Last year, U.S. pension funds that invest in foreign stocks posted a median 6.7 return, compared with a 1.9 total return price appreciation plus dividends paid for the benchmark Morgan Stanley Capital International Europe Australasia Far East EAFE index of 21 major overseas markets, according to InterSec Research Corp. of Stamford, Conn. Active managers have beaten the index in seven of the past 10 years, InterSec says. The trend held last year for mutual funds as well. The average return of 410 actively managed international mutual funds tracked by Lipper Analytical Services was 5.7. These results might make some investors sneer, compared with last year's 31 rise in the U.S. market, as measured by Standard & Poor's 500-stock index, the third consecutive year of outsize U.S. stock returns.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614480","date":"1998-02-18","texts":"Institutional money managers are targeting the hedge-fund business as a fee-rich growth area that can also help retain promising talent. Leading the pack Alliance Capital Management LP, the money-management company whose family of hedge funds already has 1.3 billion under management -- and is gunning for 2 billion by year end. Hedge funds are private investment partnerships for qualified wealthy investors that often use borrowed funds to boost returns from bets on stocks, bonds, commodities or currencies. Because hedge funds aren't subject to Securities and Exchange Commission regulations, they offer the individual investor some investment choices he or she can't get in mutual funds, namely the option to profit from stock-market declines by selling borrowed shares short. For investment companies, though, hedge funds present the constant threat that carefully groomed talent will be drained away. The lure hedge funds' usual annual charge of 1 on assets under management, plus a 20 cut of gains for the top dog whether performance tops the benchmarks or not. In recent years, a weed patch of fresh hedge funds has sprouted as a result One estimate puts total assets in such funds at 370 billion, in 3,000 funds. This raises the question of who will manage the big money in the future, wrote Byron Wien, U.S. investment strategist at Morgan Stanley Dean Witter, in a report published this week that cited those estimates.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614411","date":"1998-02-19","texts":"JAKARTA, Indonesia -- Officials of the International Monetary Fund here and in Washington held out hope of defusing a high-profile confrontation with President Suharto over the wisdom of adopting a currency board in Indonesia. IMF officials are now talking hopefully about an agreement in principle that would allow Mr. Suharto to save face by keeping the currency-board option alive but delaying implementation of it until banking-sector and debt issues can be addressed. That could take at least six months, a near-eternity in the current crisis. A currency board would take over the role of the central bank in strengthening Indonesia's currency, which has lost 73 of its value since last summer. Under a board, an approach used in Argentina and Hong Kong, a government pledges to buy its currency at a fixed rate against a designated foreign currency, in this case the U.S. dollar, and to hold enough foreign reserves to back all its currency in circulation. The IMF, the U.S. and other donor countries have argued strongly against a currency board for Indonesia, saying it would do more harm to the economy than good unless banking and other economic reforms were fully in place. It is important to show that the currency board is something we could work for together in the future, a senior IMF official here said Wednesday.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983739","date":"1998-02-21","texts":"Builders broke ground on new houses at a slightly slower pace in January, the Commerce Department said this week, but permit applications for future construction hit an eight-year high, a sign of a vigorous housing sector. Total starts fell 0.3 percent to a seasonally adjusted annual rate of 1.534 million in January after a steeply revised 1 percent gain to 1.538 million in December, the department said. January was the fifth consecutive month in which starts exceeded the 1.5 million a year. The January housing starts data reveal that the combination of low interest rates and extraordinarily good weather have provided a strong vaccination for the housing sector from the effects of the Asian currency crisis, said economist Elliott Platt of Donaldson, Lufkin and Jenrette Securities Corp. in New York. The January strength was concentrated in the single-family home market, where starts climbed 7 percent to an annual rate of 1.196 million -- the highest level since 1.231 million last February. That followed a 4.2 percent decline in December. Construction of apartments, by contrast, fell 19.5 percent last month to 338,000 after rising 18 percent in December.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830982444","date":"1998-02-22","texts":"Japan found itself uncomfortably in the spotlight today as top officials from the other industrialized countries declared that Tokyo had not done enough to stimulate its economy and help lift its Asian neighbors out of their economic crisis. Emerging from a daylong conference around the corner from Buckingham Palace, finance ministers and central bankers from the Group of Seven nations said that additional tax cuts and public-works spending would be necessary for Japan to recover from its seven-year economic slump. The broadly shared view coming out of our meeting was that it was important for the rest of Asia that Japan once again have strong economic growth, said U.S. Treasury Secretary Robert E. Rubin. But Tokyo's new finance minister, Hikaru Matsunaga, adopted a defiant stance following the meeting, where he told his Western counterparts that a recently announced package of financial reforms and limited tax cuts for businesses and investors had not been given a fair hearing nor sufficient time to work. I do think the measures that have been taken so far are not too small, said Matsunaga, who emphasized that his government has no plans to announce any further steps.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985093","date":"1998-02-22","texts":"Most of the time, Hylda Perry can be found scurrying around the Columbia offices of Norwest Corp.'s trust division, troubleshooting the financial company's computer systems. But at least once a day, Perry sits down at her computer and dials up the Internet to check the price of Norwest stock. And Perry's interest in the stock of the Minneapolis-based company has spread to a new-found desire for information on the way markets operate. Since 1996, Perry and most of Norwest's other 57,000 employees have received options to buy Norwest shares. An option is the right to buy a share of stock at a preset price at a specified time in the future. If the market price of the stock rises above the price of exercising the option, the option holder pockets a profit. Norwest's share price quickly surpassed the 60 price of exercising the options -- giving Perry a chance to make a 2,700 profit -- but she isn't selling, because the stock is still hitting new highs. Also, Norwest granted another round of options last year, with a potential upside of more than 11,000. We can cash out or sell them off, but you don't have to do a thing, Perry said. I'm holding on to mine for a while, to make more money.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614079","date":"1998-02-25","texts":"New York City, which has spent most of the past decade in the rating-agency doghouse, received a big boost as a major credit-rating company upgraded nearly 28 billion of city debt. The upgrade to A3 from Baa1 by Moody's Investors Service Inc. was certainly good news for scores of investors who own city debt, either through mutual funds or by holding individual bonds. Both the current rating and the old one are investment grade, but the one-notch upgrade could mean that more mutual funds and other institutional investors will buy city debt. Many institutions are restricted by their own rules in the amount of debt they can own in the B-rated category, where New York City had been. Moody's action, which applied to the city's general-obligation bond, was the first upgrade for such bonds since 1988, during former Mayor Edward Koch's administration and just before the city entered a deep recession. In fact, less than three years ago Standard & Poor's Ratings Group, the other big ratings house, downgraded city bonds to BBB-plus from A-minus. Market analysts said that city debt prices were largely unchanged by the news, but could improve in the days and weeks to come as more investors decide to buy New York debt again. Like Moody's, Standard & Poor's is seeing the city in a different light, and officials there said they are considering an upgrade of city bonds after New York releases its new budget. Can investors sleep tight knowing the rating agencies are keeping close tabs on the city's fiscal health If you own city debt, you may want to study up on the last time bond raters said the city's finances were improving. In November 1987, Standard & Poor's upgraded city bonds just weeks after the stock market's crash the market's tailspin caused massive layoffs on Wall Street, a citywide recession and, eventually, lower bond prices. Market participants said S&P didn't anticipate then how seriously New York City would be hurt by the crash.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984638","date":"1998-02-26","texts":"Since peaking in the second term of Ronald Reagan's presidency, spending on weapons by the Pentagon has been on a steady decline. In real terms, adjusted for inflation, spending on production of planes, ships, tanks and ammunition has fallen 70 percent since 1985. This year, though, the Clinton administration is trying to reverse that slide, asking Congress in the president's recently released budget for the first real increase in defense procurement in 13 years. As the chart at the right shows, this reversal comes as the overall defense budget -- which includes spending for operations, maintenance and personnel in addition to weaponry -- is barely rising. When adjusted for inflation, it actually shows a 1 percent decline. It's certainly fair to say the deep cuts in procurement over the past 10 years are over, said Steven M. Kosiak, budget analyst at the Center for Strategic and Budgetary Assessments in Washington. President Clinton's budget seeks 48.7 billion for new weaponry in fiscal 1999, up nearly 9 percent from 44.8 billion in the current year's budget. By 2000, the plan calls for 54.1 billion in procurement spending, and the number rises to 63.5 billion by 2003. The spending shift can be attributed to the need to modernize many of the military's older weapons as well as the administration's desire to begin production of some 21st-century programs.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614428","date":"1998-02-27","texts":"NEW YORK -- Bouts of selling drove the bond market moderately lower, but not out of its recent trading range. Remarks this week by Federal Reserve Chairman Alan Greenspan had a lingering effect, as investors grapple with uncertain prospects for U.S. growth and monetary policy. People love to sell markets when that happens, said Dennis Hynes, managing director at R.W. Pressprich & Co. However, there's been no real damage to the market, he added. In yesterday's trading, the price of the benchmark 30-year Treasury bond was down 1532 point, or 4.6875, for each 1,000 in face value, to 102 1032. Its yield, which moves in the opposite direction of its price, rose to 5.948 from 5.915. Treasurys traded lower early in the session as a decline in bond futures pulled the entire Treasurys market lower. Although prices recovered somewhat by afternoon, they never climbed into positive territory. Traders said Treasurys later faced pressure as Cummins Engine Co. sold a 765 million offering. Large new corporatedebt issues can affect Treasurys for various reasons among them, underwriters of corporate issues often sell Treasurys to hedge against broad market declines during the underwriting process.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983209","date":"1998-02-28","texts":"Japan has given a clear response to U.S. demands that it stimulate its domestic economy yes, no, maybe so. Take today, for example. First came the news reports this morning that the Japanese government was considering tax cuts. Then, later in the day, Prime Minister Ryutaro Hashimoto backtracked slightly, ambiguously urging caution on the tax cut issue. Japan's chief government spokesman, Kanezo Muraoka, also spoke up, saying Japan would pursue both economic stimulus and fiscal reform. Most economists say that these goals are contradictory. The government will have to spend money to stimulate Japan's economy quickly, but is also planning to cut spending to meet fiscal reform goals. Today's mixed signals are just the latest in a litany of vague and often contradictory statements about economic programs made by Japanese officials since last weekend's Group of Seven finance ministers meeting in London, where Japan was pressured to boost its economy. For example, some officials are vigorously trying to jawbone stock prices higher, setting a target of 18,000 on the Nikkei 225-stock index by March 31. The date is important because that's the end of Japanese banks' fiscal years, and they may have to report dramatically lower values on their stock market holdings if prices don't rise.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615298","date":"1998-03-03","texts":"OTTAWA -- Canada's gross domestic product rose 3.8 in 1997, led by strong exports to the U.S. and a big increase in business spending on machinery and equipment, said Statistics Canada, a government agency. Last year was the sixth consecutive year to show a rise in Canada's GDP, the total value of the nation's output of goods and services. The 1997 result almost matched last year's U.S. GDP growth of 3.9. Canada's robust expansion is expected to continue. In a recent survey of economists, the average forecast was for 3.5 Canadian GDP growth in 1998 and 2.9 in 1999. Prime Minister Jean Chretien, in a speech yesterday, said low interest rates, improved consumer and business confidence and booming exports have revived the Canadian economy. He also hailed a federal budget projection that in the current fiscal year ending March 31, the Canadian government will show its first balanced budget in almost 30 years. Mr. Chretien is expected to underscore his country's fiscal and economic achievements in a luncheon speech today to the Economic Club of New York. Canada's latest economic indicators were well received on financial markets. The Toronto Stock Exchange's 300-share composite index closed up 20.61 points, or 0.3, at 7113.10 yesterday. The Canadian dollar rose to 70.51 U.S. cents from 70.23 U.S. cents Friday.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615864","date":"1998-03-03","texts":"Annualized interest rates on certain investments as reported by the Federal Reserve Board on a weekly-average basis Feb. 27, Feb. 20, 1998 1998 Treasury bills 90 day-a 5.16 5.06 Commrcl paper Non-Fin., 90 day-a 5.44 5.42","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616918","date":"1998-03-03","texts":"MERRIMACK, N.H. -- Unitrode Corp. said it agreed to acquire Benchmarq Microelectronics Inc. of Dallas in a deal valued at about 145.5 million at yesterday's share price in a merger of two makers of specialized semiconductors. Under terms of the agreement, Unitrode will exchange one share for each of Benchmarq's eight million shares outstanding. In Nasdaq Stock Market trading, Benchmarq shares rose 87.5 cents to 17.125. In New York Stock Exchange composite trading, Unitrode stock fell 62.5 cents to 18.1875. Terms of the deal will be adjusted if Unitrode shares fall below 16 or rise above 24, and not more than 1.33 million Unitrode shares will be issued as part of the deal, subject to approval by holders of each company's stock. Unitrode specializes in semiconductors that manage power use in computers. Benchmarq's specialty is battery-management systems that lets users gauge remaining power in their portable computers and cellular phones. Robert J. Richardson, president and chief executive officer of Unitrode, will become chairman and CEO of the combined companies. Alan R. Schuele, president and CEO of Benchmarq, will become president and chief operating officer.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615574","date":"1998-03-04","texts":"Winners -- Bryan-College Station The metropolitan area records the state's lowest unemployment rate in January, at 2, according to the Texas Workforce Commission. -- Nostalgia Southwest Texas State University says it will restore the Kyle childhood home of Pulitzer Prize-winning short-story writer Katherine Anne Porter. -- Pithiness Paul Engler, a plaintiff in the Oprah Winfrey case, sums up the talk-show host's victory by saying, It's very difficult to fight a celebrity. Losers","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615503","date":"1998-03-05","texts":"An alarmist consensus is emerging among economic forecasters and commentators that the U.S. trade deficit in 1998 and 1999 will soar, surge and reach extreme levels. Prudent observers should treat this consensus, like others arrived at by economic forecasters, with a healthy degree of skepticism. As the Nobel Prize-winning economist Paul Samuelson once noted, Economists have correctly predicted nine of the last five recessions. In the present case, even if the forecast of a soaring U.S. trade deficit were closer to the mark than it is likely to be, its limited significance would not warrant the alarm that commentators are sounding. The reason is that the trade deficit is one of the least significant indicators of the economy's vitality and health as Walter Wriston and I explained on this page last June 19. In any event, the consensus view that the trade deficit -- to be more precise, the current-account deficit, which measures the excess of payments for imports of goods and services including capital services over earnings from the corresponding exports -- will soar is based on several seemingly persuasive arguments. First, U.S. markets will experience a flood of cheap exports from Asia following the depreciation of many Asian currencies by more than 50 in the past year, and of the Japanese yen by more than 25 in the past two years. Second, so the argument runs, U.S. exports to Asia, which represented about 25 of global U.S. exports, will decline sharply for a number of reasons stemming from Asia's financial turmoil the severe setback to economic growth in Korea and Southeast Asia continued stagnation in Japan the appreciated U.S. dollar, which makes U.S. exports more expensive to foreign buyers the depleted holdings of dollar assets in the Asian countries apart from Japan, China, Hong Kong and Taiwan and the austerity imposed on the Asian countries by the International Monetary Fund.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613945","date":"1998-03-06","texts":"Corrections & Amplifications A TABLE accompanying an article on Friday's Home Front page incorrectly referred to the time frame for data on home appreciation. The correct time frame is the period from the first quarter of 1995 to the fourth quarter of 1997. In that period, home values in Modesto, Calif., rose 1.8, while home values rose 2.2 in Stockton, Calif., and 2.5 in Vallejo, Calif. The table incorrectly stated that home values in those areas fell last year. WSJ March 9, 1998 This may seem like a flashback, but it isn't. Burt Reynolds is a movie star again. Your friends are wearing Lacoste. And your home is showing significant appreciation. Home values rose 4.9 in 1997, well above the nation's average inflation rate of 1.7, according to an index that tracks repeat home sales compiled by mortgage buyers Freddie Mac and Fannie Mae. That means U.S. home prices have climbed faster than inflation for three straight years. The country hasn't seen such good news on the housing front since the late 1980s. Perhaps the biggest surprise in the index was the gain posted by Flint, Mich., a gritty factory town of about 430,000 whose economic woes were chronicled in the quirky 1989 documentary Roger & Me. With auto makers hiring again, Flint's housing prices jumped 25 last year. The median home price in Flint was 102,845, up 64 from 1990.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984182","date":"1998-03-08","texts":"The District government has made such a dramatic financial turnaround that city officials are considering a tax cut and projecting hundreds of millions of dollars of budget surpluses for the next five years. After years of deficits, the upbeat projections indicate that the city's recently announced 185.9 million surplus for 1997 was not a one-time achievement. Instead, it marked a turning point in the city's rebound from the depths of a financial crisis that may enable local leaders to cut taxes, officials said. D.C. financial control board Chairman Andrew F. Brimmer said the city's finances have improved so substantially that both residents and businesses may get a tax cut later this year. Rather than amassing large surpluses and having money in the bank, Brimmer said, part of the surpluses could be used to fund a tax reduction that would make the city a more attractive place to live and work. Brimmer said the details of a tax cut would have to be determined through serious discussions involving the D.C. Council and Mayor Marion Barry, who also has said he favors cutting taxes. The taxpayers in the District ought to look forward to a tax reduction, Brimmer said. The capacity is there.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617330","date":"1998-03-09","texts":"Transportation companies are jacking up prices for the first time in a decade as the strong economy is filling trucks, ships and trains with more goods than they can handle. Shipping companies have notified corporate customers that freight -- moving charges this year -- which total about 450 billion annually -- will rise between 5 and 10 for some cargoes. Costs for package-hauling are also creeping upward. The U.S. Postal Service hopes to raise rates on its Priority Mail expedited service this year to 3.20 for a letter from 3.00, twice as big an increase as its last price boost in 1995. And giant United Parcel Service of America Inc. brought its commercial ground-transportation prices up 3.6 last month, partially to pay for its hefty new labor settlement with the Teamsters. Already, a wide range of shippers, from chemical concerns to farmers, are noticing the shift. The drugstore giant Walgreen Co. says trucking companies just told it about a planned 5 rate hike, no small sum for a company that spends about 100 million a year on trucking. You do your best in bargaining them down, says Tom Stedman, director of corporate transportation. The price increases are coming at a time when overall inflation in the U.S. has been tame. The consumer price index, the nation's broadest measure of consumer price inflation, rose just 1.7 in 1997. And with commodity prices falling and inexpensive imports flooding into the country because of Asia's currency crisis, few economists believe rising transportation costs are enough to re-ignite inflation. But if those deflationary extras disappear, economists see cause for concern. At the very least, they say, corporate profits could suffer.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982271","date":"1998-03-10","texts":"Southern Californians seem happier than ever these days, and it has nothing to do with the bright sunshine that has replaced this winter's miserable rains. It is even more important than that They can fill their beloved cars with gasoline for under 1 a gallon. The same is true across the country, including the Washington area, where motorists are pulling up to the pumps and happily rediscovering the good old days as the price of gasoline, adjusted for inflation, is selling for less than the long-forgotten 25 cents a gallon it used to fetch in the early 1960s. But here in the biggest gasoline market in the nation, with notoriously long commutes over a vast freeway network, cheaper gasoline is particularly good news. I haven't seen these prices since cigarettes were 98 cents a pack, exulted Marcus Ware. Ware, 30, commutes 150 miles a day round trip from the inland desert suburb of Lancaster to his job at a credit card company here. He figures the weekly gasoline bill for his two cars has dropped from 150 to 85. Coley Sohn, a 28-year-old professional dog walker from Venice, said My friends make fun of me, but I really get excited when I see 91 cents a gallon. I feel like I have to pull over and fill up. I'm very superstitious, so I feel like if the gas prices are good, then everything will be good. And Nels Israelson, 39, an ecologically conscious photographer who regularly escapes to his cabin near Mount Baldy, in San Bernardino County, was filling up his mud-splattered Land Rover while complaining what lower gasoline prices might mean for the environment.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983718","date":"1998-03-12","texts":"As Washington policymakers fret over the worsening economic crisis in Indonesia and new signs appear that President Suharto may be ready to jettison an international rescue package, the Clinton administration is preparing to host a more low-key Southeast Asian leader whose quiet style and determined commitment to reform have won him widespread popularity at home and plaudits abroad. When Thailand turned to Chuan Leekpai to take over the premiership last November, the country was the epicenter of the Asian economic meltdown. Its currency, the baht, was in free fall, the stock market was plummeting, the banking and finance system was a shambles and a hapless government gave the widespread impression that Thailand was in a collective state of denial, unable or unwilling to institute a badly needed but painful restructuring of the economy. In just four months, Chuan and his widely respected team of economic technocrats have turned that perception around. He bluntly warns of even tougher times ahead, but he is unwavering in his public determination to implement the stringent reforms demanded by the International Monetary Fund. As a result, Chuan is riding an unprecedented wave of popularity, with a 73 percent approval rating, according to one recent survey. And that, in turn, has helped boost the confidence of Thailand's foreign bankers and investors. The thing that we love is the consistency factor, said Douglas M. Logan, managing director of CitiCapital Ltd., the investment arm of Citicorp. There's not a lot of flip-flopping on policy. He said, We will follow the IMF reforms,' and they've done that.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614777","date":"1998-03-13","texts":"President Clinton and his allies in Congress are calling for another increase in the minimum wage. But they should consider the experience of small-business owners like me, who struggled through the last increase. I own and manage a small cafe. I have had as many as 16 employees I now have nine. Most of them are teenagers the rest, working mothers. Before the last increase I wrote letters to the president and my congressmen. I explained that the mandated wage increase was only the tip of the iceberg. To maintain the wage increment for senior employees, I would have to raise their wages above the new minimum. My monthly payroll would increase by 570 -- and that didn't include the payroll taxes for Social Security, Medicare, unemployment insurance and workman's compensation. For my efforts I received nicely worded form letters about the benefits of the wage increase. When the increase passed, I had to reduce staffing hours. Result I am working harder to earn my money. I already worked six days a week, every week. The staffing cutbacks increased my workload by 15 hours a week. I also cut back on outside services, so I am now mopping my own floors two weeks each month and doing all my own accounting, the weekly laundry and as many of the repairs as I can. When Mr. Clinton signed the wage increase into law, he had by his side a minimum-wage worker who stated that now she did not have to choose between paying her electric bill or her gas bill. The same evening, our local news interviewed a woman who said she would now be able to buy her daughter a compact disk player for graduation. I do not begrudge either of these women their good fortune. But business owners work hard too, and we also have to make tough choices. I suffer from several chronic illnesses, and the wage increase has forced me to cut back on medical care. Money for minimum wage increases has to come from somewhere. Mr. Clinton's proposed increase would raise my annual payroll by 7,200, forcing me to close my doors. To the politicians I say this You have the power to destroy the American Dream for thousands of small-business owners. If you pass another increase in the minimum wage, you can tell the teenagers and working mothers I employ why they no longer have jobs. Then try asking for their votes.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985260","date":"1998-03-13","texts":"Computer Learning Centers Inc., the Fairfax-based computer and networking training company, said yesterday that strong enrollment increases boosted earnings more than 50 percent in its latest fiscal year. The news sent the company's stock price up after several days of declines. The company reported that earnings rose to 9.6 million 56 cents a share on a diluted basis in its 1998 fiscal year ended Jan. 31, compared with 5.6 million 37 cents in fiscal 1997. The earnings report, which had been anticipated by market analysts, helped lift CLC's stock price to 21.71 78 on the Nasdaq Stock Market, up 1.98-716. The gain followed a two-day sell-off by investors and speculators at the beginning of the week that slashed the company's share price by 46 percent. Traders began dumping CLC stock Tuesday after the Illinois attorney general announced a lawsuit alleging that CLC misrepresented course offerings and employment prospects to students in its Schaumburg, Ill., school -- one of 25 it operates across the country. The company has denied the allegations. Analysts who follow the company said the strong earnings report does not foreshadow a big rebound in the company's stock price because of the lingering concerns raised by the Illinois investigation.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983952","date":"1998-03-14","texts":"The planned takeover by the National Association of Securities Dealers of the American Stock Exchange has its roots in failed merger talks held last summer, according to industry and other sources familiar with the talks. Only after NASD Chairman Frank Zarb and Amex Chairman Richard Syron gave up on an overly ambitious attempt to combine the two markets did the veteran Wall Street executives find a more successful path -- to maintain the Amex as a separate exchange from the Nasdaq Stock Market, the sources said. Under the current proposal, hatched during a chance meeting at an industry function in November in Boca Raton, Fla., the Amex would live on as a separate subsidiary, and companies would choose whether to list their shares on the Amex or the Nasdaq. The initial collapse and subsequent revival of the negotiations between Zarb and Syron demonstrates the importance of the deal to both men and the securities markets they run. Zarb realized he needed a merger to better mount a global challenge to the mighty New York Stock Exchange, the biggest and most prestigious in the world. Syron decided that the Amex was not a viable market for the 21st century.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617295","date":"1998-03-18","texts":"WASHINGTON -- Federal Reserve Board Chairman Alan Greenspan, splitting with Treasury Secretary Robert Rubin, said he backs a financial-services bill being pushed by the Republican leadership in the House. Mr. Greenspan's endorsement, expressed in a letter to House Banking Committee Chairman James Leach R., Iowa, came one day after a top Treasury Department official criticized the bill as a backward step for the banking industry. The Fed chief, however, said passage of the bill would be an historic achievement that would update the increasingly antiquated laws that constrain the development and competitiveness of our financial system. Mr. Greenspan said the bill would remove obsolete barriers that prevent banks, securities and insurance companies from merging. The bill would require any bank that affiliates with other firms to do so within a holding company, over which the Fed would have regulatory authority. The Treasury Department believes that a national bank should be able to conduct any new securities and insurance activities through an affiliate of the bank itself. That corporate structure falls under the regulatory jurisdiction of the Office of the Comptroller of the Currency, an arm of the Treasury Department. In a letter to House Speaker Newt Gingrich R., Ga. released earlier this week, Mr. Rubin said flatly that we oppose this bill and would not recommend its enactment.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984416","date":"1998-03-18","texts":"Reading recent congressional testimony by Federal Reserve chairman Alan Greenspan, I had a scary thought He doesn't know any more than I do. By this, I don't mean to compare myself with Greenspan. He's forgotten more about the economy than I'll ever know. Beyond that, the Fed has a staff of 228 economists and is constantly briefed by companies, banks and governments about individual markets and industries. What's sobering is that despite these advantages, Greenspan still seems genuinely baffled by the economy's dazzling performance and its future direction. Precisely. The old adage now seems to apply If you're not confused, you don't understand the situation. On the one hand, the U.S. economy is booming beyond belief. In the past year it has created 3.1 million jobs the unemployment rate 4.6 percent in February hasn't been lower since March 1970. Measured inflation is declining. In the past year the consumer price index has risen only 1.6 percent. Consumer optimism is at lofty heights the Conference Board's confidence index touched 138 in February 1985 equals 100, a level not seen since the late 1960s. On the other hand, the news from Asia isn't getting better. China's economy is slowing Japan may slip into a recession a drop in output. Indonesia and the International Monetary Fund are in a virtual state of war. Including China and India, Asia represents about 30 percent of the world economy. Yet its troubles haven't spoiled American spending or spirits. One explanation is that the benefits of the crisis have come before the costs. The biggest benefit has been lower interest rates, which have triggered a surge in mortgage refinancings. Frightened by Asia's problems, global investors shifted funds into U.S. bonds and mortgage securities. Bond prices rose interest rates dropped. Investors accepted lower interest rates in exchange for more safety. In early 1997, interest rates on 30-year fixed-rate mortgages averaged almost 8 percent in 1998 they've hovered around 7 percent. Economist David Lereah of the Mortgage Bankers Association estimates the resulting explosion of mortgage refinancings will total about 400 billion in 1998. On a 120,000 loan, someone going from 8 percent to 7 percent would save nearly 1,000 a year. Lower rates have also sustained a high level of home buying and selling. For 1998, Lereah expects 4.24 million existing homes to be sold, a record. Americans are moving into more appealing homes and, in the process, doing a lot of redecorating and renovating. The second big benefit from Asia has been the plunge in oil prices. Since early 1997 they've dropped from 25 a barrel to 15. The United States now consumes 6.8 billion barrels of oil a year, says economist Michael Canes of the American Petroleum Institute. At the lower prices, consumers would save almost 70 billion. Average gasoline prices have dropped to about 1 a gallon from 1.20 a year ago they could go lower. Part of the gain is a wealth transfer from U.S. oil producers to U.S. consumers, but the gain on our imports -- half our oil use -- is pure windfall. Asia's crisis has cut demand, and the cartel OPEC is falling apart, Canes says. Countries violate their OPEC quotas. Supply rises, demand softens prices fall.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985310","date":"1998-03-19","texts":"Under the Humphrey-Hawkins Act passed two decades ago, the Federal Reserve is required to set targets for growth of the nation's money supply and explain twice yearly to Congress whether it has hit the targets, and if not, why not. In a time of high and rising inflation in the late 1970s, the hope was that the Fed would squeeze money growth, and in the process squeeze out inflation. That's because monetarist economists believed there are strong links between growth of the money supply and growth in the nation's gross domestic product. For a number of years beginning in 1979, the Fed focused tightly on money as it sought to reduce inflation. But then the links between money and current-dollar GDP became highly uncertain in the wake of sweeping changes in U.S. financial markets. As a result, the Fed now announces benchmark ranges for money growth rather than targets, and focuses on controlling overnight interest rates to stabilize the economy. The Shadow Open Market Committee, peopled by monetarists, this week complained the central bank ought to pay more attention to money growth, and warned that if it isn't curbed by interest rate increases there will be a resurgence of inflation. The chart at the right shows part of what the Shadow group is worried about The measure of money known as M2 grew faster last year than the 1 percent to 5 percent range established at the start of the year. The Fed set a similar range for this year, and so far M2 has increased so rapidly as to stay above the upper limit.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614386","date":"1998-03-20","texts":"BUENOS AIRES -- Last year, television viewers here saw an extraordinary commercial. It had close-ups of rear ends and toilet seats. Ariel, Ariel, Ariel, an announcer chanted. Procter & Gamble Co. was mortified. For more than a year, it had been preparing to launch its Ariel laundry detergent in Argentina. Suddenly, an ad was telling all Buenos Aires that Ariel' is synonymous with toilet seats. The spots were advertising an obscure toilet-seat maker, Ariel del Plata SA, which, P&G learned, has ties to its big rival, Unilever Group. Locked in a global brawl with the AngloDutch conglomerate, P&G is convinced that the ad campaign was a calculated smear. But P&G's response was out-of-character The mighty multinational complained to regulators. In fact, P&G is becoming the biggest corporate whistle-blower south of the border. A latecomer to Latin America, the consumer-goods giant is scrawny in the region and is using a blossoming antitrust climate to help it catch up by filing lawsuits and snitching to antitrust cops. Although businesses around the world routinely seek to gain advantage over competitors by appealing to regulators, the scope and intensity of P&G's efforts to use Latin America's regulatory system to improve its competitive status are extraordinary. The maker of Tide, Crest and Pampers employs more than two dozen lawyers in Latin America, with fully one-third of their time devoted to exposing practices it considers prejudicial. It has systematically collected regulatory rulings from mature markets in the U.S. and Europe and turned them over as suggested precedents to guide Latin American regulators trying to interpret newly enacted antitrust laws. It also has funneled reams of data to trustbusters to show how competitors' practices might harm consumers. It is very, very insistent, says Manuel Sandoval, an official of Mexico's Federal Commission on Competition. Even their chairman of the board came to visit us.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983722","date":"1998-03-20","texts":"The Asian financial crisis began to exert a serious drag on U.S. exports in January, according to a Commerce Department report issued yesterday. The lower exports helped drive the United States' trade deficit for that month to a record 12 billion. The downturn in sales of American goods to Asia, which economists have anticipated ever since the region's financial markets collapsed last fall, has manifested itself up to now mainly in anecdotes about individual U.S. firms losing business. But with yesterday's report it's undeniable that the effect of the crisis is in the data, said David Hensley, an economist with Salomon Smith Barney in New York. Hensley cited exports to South Korea, which plunged to 1.096 billion in January from 1.680 billion the previous month. The level is all the way down to 1993 levels, so we've essentially given back in a few months about four years of export growth, he said. Commerce Secretary William Daley agreed with that diagnosis, saying the crisis has taken its toll on our exports. Excluding Japan and China, sales of U.S. goods in Pacific Rim countries fell about 10 percent, Daley noted, while imports from those countries rose about 7 percent, apparently because of rising demand for goods that have become cheaper due to falling Asian currencies.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842615060","date":"1998-03-23","texts":"Feast or famine. That's the way it is when investors seek information on small-capitalization stocks. Usually there is nothing but company-produced legal documents, often not enough to form a full, solid opinion about a small company. But occasionally, when ardent fans come head-to-head with short sellers seeking to profit when a highflier plummets, there can be information overload. That's the case with Actrade International, a New York-based export and financial-services company. Actrade shares have taken a wild ride in the past year on the Nasdaq Stock Market. The price surged to a 52-week intraday high of 30 on Nov. 28, dropping, after two brief rallies, to a recent low of 10 12. It has since rebounded to nearly 15 intraday, closing Friday down 38 at 12 58. Volume has at times hit more than one million shares a day -- all without a single analyst at a major brokerage firm covering the stock. Actrade's activity stems from a crossfire of views on the company's prospects, most of which have been expressed in thousands of messages posted on the Internet. Actrade demonstrates vividly how the World Wide Web increasingly is being used to help -- and confuse -- investors. As the stock has moved strongly up and down, on-line bulls and bears have responded by posting a wide array of fact, exaggeration, and fiction. Bulls, many of whom got attracted to the stock's strong earnings growth and coverage in publications like Individual Investor magazine, have predicted untempered growth rates or a buyout of Actrade.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983525","date":"1998-03-23","texts":"Emboldened by a strong economy, local and state lawmakers in Maryland have been setting aside money for extra school funding and other popular programs. They also are laying the groundwork for a less popular cause politicians' pay raises. The pay increases are set to go into effect after the November elections, when political analysts expect large numbers of incumbents to be returned to office. In some cases, the salary bumps are scheduled to exceed the projected 2.3 percent annual rate of inflation. In recent weeks, the Howard and Anne Arundel county councils have approved raises for top elected officials, of 10 to 20 percent over the next four years. Bills to raise commissioners' pay in three Southern Maryland counties by as much as 20 percent are pending in the General Assembly. The Montgomery County Council, which along with the Prince George's County Council receives annual cost-of-living raises even during recessions, is mulling whether to appoint a salary review commission to examine pay scales further. At the state level, lawmakers in Annapolis will not have to vote on legislation that would push their salaries to more than 30,000 a year for the first time. The bill will pass automatically unless members vote to reject it, meaning there would be no record of a vote for raises that could be used against lawmakers in November. Lawmakers offer a range of explanations for the increases. In several jurisdictions, some say, local elected officials are trying to compensate for the lack of any raise for almost eight years. Others point out that serving in a part-time legislature makes it difficult for many members to pursue private business interests that could supplement the salaries.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615915","date":"1998-03-25","texts":"Surging supply and static demand usually don't bode well for bond prices. So why are many analysts pounding the table for muni bonds Falling interest rates and the economy's impressive growth have cleared the way for a torrent of new municipal bonds in the past year. Through Monday, 59.3 billion of new muni bonds were sold this year, up 62 from the 36.7 billion peddled during the year-earlier period, according to Securities Data Co. The amounts exclude securities maturing in less than one year. Issuance last year was 221.4 billion, up from 185 billion in 1996. Both new issues and refundings of previous deals have climbed, and volume should top 240 billion this year. In short, the supply has been massive, says George Friedlander, Salomon Smith Barney's municipal-bond strategist. Meanwhile, the inexorable climb of the stock market and super-slim bond yields have reduced demand from individual investors for muni bonds despite their tax-free status. Although interest has picked up in recent weeks, prices of muni bonds remain low compared with comparable Treasury issues. Munis have certainly done lousy this month, though short- and intermediatebonds have held up OK, says William Stevens of Montgomery Asset Management. Still, many market participants say munis could represent the best bargains in the bond market. They say new bond issuance should begin to slow in the coming months, due to limitations on how many times issuers can replace outstanding bonds with new bonds. New bond issuance also should slow because many issuers have already come to market in recent months and won't be back again for some time.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982407","date":"1998-03-28","texts":"Addressing a meeting of University of Virginia administrators, students and faculty members, professor W. Dean Harman conceded today that he isn't sure how to grade his students. But knowing that many professors at other colleges aren't so picky about awarding A's, Harman said, he feels inclined to relax his own standards. Otherwise, his students would be at a disadvantage when they compete with undergraduates from other colleges for admission to graduate school, he said. I feel pressure to inflate grades so students aren't punished for taking a challenging course, Harman said. His comments were part of a university forum on grade inflation, an issue that universities across the country are trying to address. The meeting, attended by about 50 people, was organized by the dean of the College of Arts and Sciences, Melvyn P. Leffler, who said he wanted to give professors and students an outlet to discuss the problem candidly. U-Va. and many other universities say that students' grades keep rising. At U-Va., the grade-point average for all undergraduates is now 3.18, compared with 3.09 in 1989.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984528","date":"1998-03-29","texts":"Lately, readers have been asking whether it's time to sell. No wonder they're worried. From Jan. 12 to March 24, a space of just 12 weeks, the Dow Jones industrial average rose 17 percent. For the year, Pfizer Inc. is up 28 percent Ford Motor Co., 31 percent Fidelity Select Telecommunications Fund, 29 percent. Why not simply take a breather You're not greedy. With the market this high, it's bound to fall and you can buy back later, right Wrong. There may be reasons occasionally to sell stocks, but the overvaluation of the stock market -- alleged or actual -- is not one of them. I'll get to the right reasons for selling below, but first a tougher question than whether to sell whether to buy. . . . The date was May 28, 1995. The place was this very column. With the market up 20 percent in the past 12 months and acting giddy at such a high altitude, we asked if this might not be a good time to wait -- rather than purchase more shares of stock. Our suggestion Buy. At the time the Dow Jones industrial average stood at 4369. Since then, with dividends included, it has returned 112 percent.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842615104","date":"1998-04-01","texts":"NEW YORK -- A big drop in interest rates triggered a wave of corporate bond refinancings that powered Wall Street investment banks to a record quarter of stock and bond sales. But disclosed fees, or the money that Wall Street investment banks earn from underwriting new stocks and bonds, fell far short of a record, largely because the bulk of the quarter's financings were bond issues that typically reap far slimmer fees than stock offerings. The volume of domestic stock and bond financings jumped 63 to 472.7 billion during the first quarter, up from 290.7 billion in the same period last year, smashing the previous record of 372.5 billion set in last year's third quarter, according to Securities Data Co., a Newark, N.J. concern that tracks corporate-finance activity. If Wall Street investment banks keep up the breakneck pace, total stock and bond volumes could approach the 2 trillion mark this year, far eclipsing the record of 1.3 trillion underwritten in 1997. It's been raining deals all quarter, said Mark Seigel, head of global debt syndicate at Morgan Stanley Dean Witter & Co., one of Wall Street's biggest underwriters. Our new-issue desk has felt like a war zone. Behind the first-quarter boom was falling interest rates and a flight to quality precipitated by the Asian stock sell-off.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981758","date":"1998-04-06","texts":"The Washington area's high-stepping economy could conceivably be tripped up in a variety of ways -- a stock market slide, a new Persian Gulf crisis, Asia's financial flu. That one could do it, if evidence of dangerous deterioration in the 36-year-old I-95 drawbridge between Alexandria and Prince George's County forces engineers to close it to truck traffic before a replacement has been built. More than a conduit for commuters and interstate 18-wheelers, the Wilson Bridge is a critical link between the region's primary storehouses -- the warehouse and shipping complexes around Springfield and Landover. As House and Senate members struggle over whether to fund a new bridge in the mammoth national transportation bill they are drafting, it's worth a look at the consequences of life in a temporarily Wilson-less world. The first shock would be impassable commuting gridlock, said David Keever, a consultant on the new Wilson Bridge project. On the opposite side of the city, the American Legion Memorial Bridge over the Potomac between Montgomery and Fairfax counties would look like a heart attack victim if many of the 175,000 cars and trucks that now use the Wilson Bridge daily go the other way around the Beltway instead. The American Legion bridge already sags with more than 200,000 vehicle crossings daily.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615253","date":"1998-04-09","texts":"It seems that Fortune 500 executives are poor students of history. Have they ever heard liberte, egalite, fraternite They must be begging for guillotine. Leave the CEOs alone They work hard to get where they are, they deserve the high salaries. They work long hours, are away from home many nights, travel a lot. Put up with a lot of unhappy, unskilled and unappreciative people. No raise for us little guys for three years and the management all got bonuses and 15 raises. Do you think they will still get the same quality work from the lower ranks It is time for the management to give respect and thanks to the ones that work for them. I'm still mad today at AT&T, and have been considering different ways of reprisal for some time. It's time for an Economic Injustice' tax. Since it is the shareholders that reward CEOs for layoffs, I think the remedy is to tax shareholders a flat fee per share every time a company lays off a certain percentage of its labor force. There should also be levies for outsourcing, and moving jobs offshore. I noticed you didn't mention what any of the mucky-mucks at the AFL-CIO pay themselves.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616462","date":"1998-04-09","texts":"South Korea's efforts to engineer an economic recovery received a shot in the arm yesterday when global investors turned out in droves to participate in the country's landmark 4 billion bond sale. In addition to paving the way for more South Korean corporate bonds, the sale is expected to set the stage for billions of dollars in Asian bonds in the months ahead. Searching for high-yielding bonds in an age of near-record-low bond yields, investors from around the globe showed strong demand for yesterday's two-part deal. Seoul sold 1 billion of five-year notes at a yield of 8.953, or 3.45 percentage points above comparable U.S. Treasurys. Some 3 billion of 10-year securities were sold at a yield of 9.084, or 3.55 percentage points above Treasurys. Seoul was able to sell the bonds at a yield just below the level expected several days ago, underscoring strong demand for the bonds despite last week's downgrade of Japan's debt outlook by Moody's Investors Service Inc. The bond sale was underwritten by Goldman, Sachs & Co. and Salomon Smith Barney Inc.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985532","date":"1998-04-12","texts":"As the Dow Jones industrial average hurtles toward 10,000, putting journalists in a quandary about whether to use a comma, investors are pouring more and more money into mutual funds -- a record 37.5 billion in net new cash in March. In 1980, fund investments totaled 100 billion in 12 million accounts today, 5 trillion in 170 million accounts. Still, the majority of Americans have exactly zero dollars invested in the stock market. Some of them simply don't have the money, but many others are confused and scared, and don't know where to begin. They think they need special expertise, and they worry about being burned by unscrupulous brokers or stock manipulators. That's a shame, considering how easy it has become to own stocks and how fair and efficient our markets are. The best way to get into the stock market is to buy shares in an equity mutual fund, which is a portfolio of stocks chosen by a professional manager. When you own a share in a fund, you own pieces of all the stocks in the portfolio. While I think it's a good idea to own three or four funds, it's possible -- even prudent -- to own just one. But which fund That is this week's question, both for investment novices and for more seasoned mavens who want to ponder an interesting intellectual question. Here is what I want in just-one-fund relatively low risk broad exposure to stocks, including at least a few international ones strong, consistent performance and a seasoned manager. I'd like to beat the market, but with few unsettling dips. The ideal fund would not be too big. New research from Morningstar Mutual Funds shows that returns decline as oversized large-cap funds but, curiously, not small-cap funds grow to behemoths. Also, expenses should be reasonable, and turnover which boosts tax bills should be relatively low. One of the few funds that meets these criteria is Dreyfus Disciplined Stock 1-800-645-6561, which has two of my favorite words in its title. The manager, Bert Mullins, has been running the fund since it began 10 years ago under the aegis of Mellon Bank Corp., a conservative Pittsburgh-based institution that merged recently with Dreyfus. Mellon had only a few funds, which were excellent but poorly marketed. Dreyfus had lots of funds, many of which were not stellar performers but were brilliantly sold. It was a match made in Wall Street heaven.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842615867","date":"1998-04-15","texts":"COBLESKILL, N.Y. -- Here in rural upstate New York, Tom Putnam heads an increasingly endangered species in the booming mutual-fund business an independent fund company that wants to stay that way. Mr. Putnam is chairman, chief executive officer and portfolio manager of Fenimore Asset Management, which runs FAM Funds, a family of two mutual funds with about 380 million in assets. The company, named after author James Fenimore Cooper, traces its roots back to the early 1970s, when Mr. Putnam's father sold the family textile business and invested the proceeds in the stock market. Having survived almost 25 years, the company managed private money before opening the first of two mutual funds in 1987 Mr. Putnam says he's laying the groundwork to survive solo the next 25 years, and hopefully longer -- despite a growing consensus that small fund companies can't make it on their own in the highly competitive mutual-fund business. Recently, mutual funds have been a hot commodity in the takeover game. They're commanding billion-dollar price tags amid an unprecedented wave of consolidation, spurred in large part by the theory on Wall Street that fund companies will need to gain size and name recognition to attract the attention of an increasingly fund-savvy investing public. The fund merger wave began several years ago and now even the most independent fund proprietors -- such as Dick Strong of the Strong Funds -- are for the first time weighing their options. It is no coincidence that Goldman, Sachs & Co. -- one of the biggest investment-bank players in mutual-fund merger business -- is set to release a new study this week to support a somewhat self-serving theory that smallto midsize fund firms must consolidate in order to remain competitive.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983849","date":"1998-04-18","texts":"To find concrete evidence of the nation's worker shortage, one need venture no farther than the neighborhood grocery store. Or the convenience store. Or the closest mall. There's hardly a retail outlet in the Washington area that doesn't have a help-wanted sign hanging in the window, advertising a problem only too evident to shoppers whenever they need sales help or encounter an employee confounded by the cash register. The booming economy and historically low unemployment rates have created recruitment woes for all kinds of businesses, but the hiring headache is especially acute for the retail industry, where the void can be painfully visible to customers. Though the shortage exists nationwide, Washington area retailers are feeling an especially painful pinch. Not only does the retail industry have huge staffing requirements, it's near the bottom of the worker food chain, offering some of the most mundane and lowest-paying jobs. The result is that retailing is losing many potential employees to technology companies and other businesses, which are experiencing their own employee shortages and can lure workers with more money, better benefits and more interesting work. The tech companies are being more creative in who they're willing to hire, taking people and training them in technical skills. Before, these people might not have been able to find work anywhere else besides retailing, said Bruce Van Kleeck, vice president of member services for the National Retail Federation.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615097","date":"1998-04-21","texts":"K-Tel International Inc., long known for peddling music on late-night television, has another hit on its hands K-Tel stock. Early last week, the company's shares changed hands at less than 7 a share. But with word spreading of the company's plans to sell music on-line, K-Tel shares have marched steadily higher. After gaining more than 22 last week, K-Tel shares were up another 12.9375, or 45, yesterday in Nasdaq Stock Market trading, closing at 41.625. Before the company's announcement less than two weeks ago of its plan to sell music over the Internet, K-Tel had so little attention that its shares didn't even trade on some days. With just 4.1 million shares outstanding, K-Tel's market capitalization has gone from about 30 million to 170 million in a week. Yesterday, the stock's volume was an astonishing 14.2 million shares, or more than three times the number of shares outstanding. Analysts said traders who had sold K-Tel shares short, betting on a decline in the stock price, were among the buyers in recent days. All this for a company that in its year ended June 30, posted net income of 3.2 million, or 81 cents a share, on sales of 75.5 million.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984874","date":"1998-04-21","texts":"Enthusiasm about a new treatment for sexual impotence drove the shares of Pfizer Inc. to an all-time high in brisk trading yesterday. At day's end, it ranked as the top U.S. drug company in stock market value, passing Merck & Co. Analysts variously estimated that doctors are writing 15,000 to 40,000 new prescriptions a day for Viagra, Pfizer's 10-a-dose pill against impotence. Even if the lower number is correct, Viagra could turn out to be one of the most successful product launches in pharmaceutical history. Viagra was licensed by the U.S. Food and Drug Administration on March 27, and has been on pharmacy shelves in most parts of the country for about a week. Most previous treatments involved creams, implants or injections. Urologists and other doctors who treat impotence say that men who have never talked about their problem are coming out of the woodwork to demand the pill. They're calling in on a daily basis, said Harold Bondy, an Arlington urologist who has already written about 20 prescriptions. They basically have heard about the tablet and they want to try it. Positive news about Viagra's sales drove Pfizer's stock price to a record 113.75 in trading on the New York Stock Exchange yesterday, though by the close the stock had fallen a bit, to 113.37 12. That was a jump of nearly 8 percent from Friday's close.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614264","date":"1998-04-22","texts":"NEW YORK -- Bond prices fell as the surge of corporate-bond issuance continued, led by the largest U.S. corporate global-bond offering to date. The bond sales siphoned interest from Treasurys and raised fears among some investors that savvy corporations are selling bonds ahead of rising interest rates. The bellwether 30-year Treasury bond fell 1232, or 3.75 for a bond with 1,000 face value, to 102 1132. The bond's yield, which moves in the opposite direction of its price, rose to 5.95. A much-awaited bond deal went off without a hitch. Ford Motor Credit Co. sold a 3.25 billion two-part global offering, the largest such deal to date. In all, about 5.4 billion of corporate bonds were sold. The Ford deal, underwritten by joint lead managers Salomon Smith Barney Inc. and Bear, Stearns & Co., was increased to 3.25 billion from 2.5 billion because of strong investor demand. There was overwhelming demand globally, with a fairly higher component of European interest than we've seen in the past, and smaller interest from Asia, said Paul Young, a senior syndicate official at Salomon Smith Barney. The deal validates the large-global-benchmark concept, that investors like these large benchmarks.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616135","date":"1998-04-23","texts":"Technology companies ruled the stock market again, driving the Nasdaq Composite Index to its fourth consecutive record even as the Dow Jones Industrial Average fell back. Bonds fell, the dollar was mixed and Standard & Poor's 500-stock index also hit a fourth straight record. The Dow industrials closed at 9176.72, down 8.22. The index's decline was caused by International Business Machines, which fell 3 14 to 114 34 as investors sold after a six-point gain Tuesday. Each 1 Big Board move in a Dow industrials component means four points to the index. The Nasdaq Composite gained 13.74, or 0.7, to 1917.61 in only the second time Nasdaq volume surpassed one billion shares. The S&P 500 rose 3.87 to 1130.54. Technology stocks were powered in part by anticipation, which proved justified, that Microsoft's earnings announcement after the New York close would beat analysts' latest expectations. Intel also continued its gains, based on hopes of a stronger second half, and it pulled semiconductor and personal-computer stocks with it. Bank of New York's unsolicited bid for Mellon Bank helped to propel financial stocks, but it didn't create as much broad excitement as had previous news of other, friendly, bank mergers. Travelers Group, Chase Manhattan, American Express and J.P. Morgan all gained, but Citicorp and Merrill Lynch both fell.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613561","date":"1998-04-29","texts":"WASHINGTON -- The robust economy has postponed the day of reckoning for Social Security's solvency by three years, until 2032, according to new estimates from the program's trustees. And, at least in the near term, last year's balanced-budget law has greatly improved the outlook for Medicare, the federal health program for 38 million elderly and disabled people. It should stay solvent until 2008, seven years longer than the trustees projected last April, largely because the balanced-budget law lowers Medicare spending by 115 billion in the next five years. The Social Security trust fund, which pays retirement and other benefits to 44 million Americans each month, had been expected to go broke in 2029 as Americans live longer and the baby boom retires. But the strength in the U.S. economy has almost single-handedly bought the system another three years, said Treasury Secretary Robert Rubin, a trustee. The six trustees -- two private citizens and four government officials -- oversee the financial operations of the Social Security and Medicare trust funds and report on them to Congress each year. The trustees expect lower inflation and unemployment rates, higher productivity and inflation-adjusted wage gains and a smaller decline in average hours worked in the next 10 years than they had projected in last year's report. The rosier outlook reflects both the economy's recent superlative performance and expectations about the near future. With more Americans working, payroll taxes paid to support Social Security are expected to rise more than previously thought. And with lower price inflation, yearly cost-of-living raises to retirees will likely be smaller. As a result, the size of Social Security's projected 75-year deficit declined slightly to 2.19 of taxable payroll from the 2.23 projected last year. And the balanced-budget agreement halved Medicare's projected 75-year deficit to about 2 of taxable payroll. The trustees' updated projections still are more conservative than the most optimistic observers They expect the U.S. economy to grow about 2 a year on average in the next decade, about fourtenths of a percentage point slower than in the past decade.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830985248","date":"1998-04-29","texts":"U.S. businesses are likely to spend at least 50 billion fixing Year 2000 computer glitches, a Federal Reserve official said yesterday, providing the federal government's first official estimate of such costs. The massive effort to reprogram millions of computers to recognize dates in the new millennium and, therefore, continue to function, could trim U.S. economic growth by a tenth of a percentage point in each of the next two years, he added. The problem is real and serious, Federal Reserve Board Governor Edward W. Kelley Jr. told a Senate committee, saying the total worldwide repair bill could top 300 billion. Kelley's projections bolster earlier forecasts by corporate analysts. Millions of computers -- some of which are central to running financial markets, air traffic control systems and even elevators in office buildings -- cannot distinguish between the year 1900 and the year 2000 because an old programming practice expressed years as two digits. Unless they are repaired, these systems will process the year 2000 as 00, and the computer will think it's somehow been transported back to 1900, which could cause it to shut down or turn out erroneous data. As the year 2000 gets closer, this bug is attracting high-level attention in both government offices and corporate boardrooms. The Securities and Exchange Commission is now requiring companies with publicly traded shares to disclose how much they're spending to fix the problem and how far along they are. Businesses have started to question readiness of their suppliers and distributors, while headhunting firms have started to offer lucrative signing bonuses for increasingly scarce programmers. And yesterday, the Senate took the unusual step of establishing a committee solely to press for rapid work on the issue.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982834","date":"1998-04-30","texts":"Investment gurus have pounded that message into the heads of ordinary Americans in recent years, inspiring them to plunge into the market in record numbers. Now the notion that stocks generate much higher long-term returns than other investments is propelling another momentous shift in public sentiment, which may also end up channeling hundreds of billions of dollars to Wall Street -- from the Social Security program. On one side of the debate is an alliance of conservative Republicans, moderate Democrats and free-market economists who champion privatizing Social Security -- hitching its fortunes to the stock market and possibly transferring back to workers responsibility for managing a portion of what the government now collects in Social Security payroll taxes. The privatizers view their idea as an obvious and relatively painless way to steady the program's shaky finances. In making their case, the privatizers often brandish data of the sort displayed in the chart at the right. The graph, prepared by analysts at the Chicago-based investment firm of Ibbotson Associates, compares the performance of an index of large corporate stocks with that of 30-year government bonds since 1925, just prior to the Great Depression. The graph uses rolling averages -- each year's figure indicates the average rate of return over the preceding 30-year period. After adjustment for inflation, Treasury bonds -- the only asset held by the Social Security trust fund -- achieved an average annual return of 3.1 percent over that period. Stocks, by contrast, reaped an average return of 6.4 percent.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614312","date":"1998-05-01","texts":"Infoseek Corp. appears to be the leading contender in a closely watched contest to create a new search engine for Netscape Communications Corp.'s popular Web site, people familiar with the matter said. A Netscape spokeswoman said the Mountain View, Calif., company hadn't made a definitive choice and that discussions continue with a wide range of Internet players. But the people familiar with the situation said the software company is in serious negotiations with Infoseek over a deal that would create a search service using Netscape's brand and tie the two companies together in other ways. Netscape could garner more than 25 million a year from Infoseek, own parts of Infoseek's technology and perhaps take an equity position in the company, they said. Word about a potential deal drove Infoseek's shares up 4.1 in heavy trading. The stock rose 1.3125 to 33.625 in Nasdaq Stock Market trading, while Netscape closed on Nasdaq at 27.3125, down 87.5 cents. But other potential deals remain in the offing. Netscape is still in talks with companies such as Excite Inc., Lycos Corp. and Inktomi Corp. about the role each could play in the reconfiguration of its Netcenter site, ranging from providing information to licensing software tools to paying multimillion-dollar fees for links to their sites from Netcenter, these people said. Not everyone is still talking, though. Executives at the Internet's top search and directory company, Yahoo Inc., have said they are unlikely to do any work for hire for Netscape and may not even purchase a position on Netcenter's search page, which Yahoo has done for several years.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616228","date":"1998-05-01","texts":"NEW YORK -- Benign inflation data and soothing comments by Federal Reserve officials sparked the biggest one-day rally in the bond market in over six months, as investors regained their confidence that inflation will remain quiescent and the Fed will hold off on an interest-rate increase, at least for the next month. In late trading, the benchmark 30-year bond was up 1 2432, or 17.50 for a bond with 1,000 face value, at 102 1232. The yield, which moves in the opposite direction from the price, fell back through the 6 barrier that was crossed during Monday's rout, to trade at 5.944. Two-year notes rose 832 to yield 5.558, more than making up for Monday's loss of 632. The economic numbers caught people leaning the wrong way, said Barbara Kenworthy, who manages almost 9 billion in fixed-income assets at Prudential Investments. They take pressure off the Fed for a rate increase in May and a lot of the pressure off for a July move, though they'll have to see more data. The market's rally came on heavy trading, underscoring the marked shift in sentiment on the part of investors who earlier this week were counting down to an increase in interest rates. In all, 111.1 billion of Treasurys were traded, according to GovPx Inc., the second-busiest day of the year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616439","date":"1998-05-01","texts":"Since the outbreak of the Asian financial crisis, it has been open season for attacks on the International Monetary Fund. We have been told that the prospect of IMF bailouts caused the crisis and that the IMF's existence, if continued unchanged, will result in many more financial disruptions. Distinguished former cabinet officials, writing on this page, have asked Who Needs the IMF And this newspaper has added its editorial voice to the chorus. Here's a more balanced perspective In a globalized economy, everyone needs the IMF. Without the IMF, the world economy would not become an idealized fantasy of perfectly liquid, completely informed, totally unregulated capital markets. Investors and lenders would still make decisions on the basis of imperfect information, and they would have to take into account the absence of an international lender of last resort. This would be a serious, perhaps devastating, defect. In fact, we got a good sense of life without the IMF in the 1920s and 1930s. The results included widespread competitive devaluation and trade wars in response to balance-of-payments problems, followed by a plunge into global depression and world war. Without a guarantor of international liquidity, many good loans would not be made. Fundamentally sound private investment projects in emerging markets can be dragged down by decisions external to the businesses involved. Even prudent government policies can be waylaid by unforeseeable shocks. Either way, fundamentally good investments will run into temporary liquidity problems. In a world of flexible exchange rates, such temporary problems can be magnified by accompanying drops in the value of the domestic currency. IMF programs finance the adjustment necessary to give these countries and firms time to let their fundamentals pay off. Thus, the IMF is the sovereign nations' credit union. It imposes strict conditions on countries' policies for bridge loans to get through hard times. Only a multilateral institution like the IMF could exert the discipline required without causing an unacceptable affront to a country's sovereignty. The benefits to the borrowing nation are that the adjustment program will be less painful and any resulting contraction less severe. The benefits to the lending countries are not only the availability of those credits to themselves, if and when they need them as even the U.S. has, but a smaller contraction of world demand associated with the borrowing country's adjustment. Some have claimed that these IMF conditions have been misapplied in the Asian crisis, demanding either too much austerity or unjustified structural reform. But IMF conditionality is highly pragmatic. Since the current crisis was not caused in large part by macroeconomic policies, but by financial fragility and lack of transparency, the conditions were designed to respond to those causes. The fund has been ready to renegotiate its programs and to loosen austerity such as the inflation target for South Korea as matters stabilized. There always is room for improvement in individual IMF programs. But attacks on the basic idea of IMF conditionality are thoroughly misguided.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982170","date":"1998-05-01","texts":"Before I take your questions, I'd like to make a few comments on a couple of matters that I believe are essential to the strength of America in the 21st century. Five years ago, we started a new economic course for a new economy, a combined strategy of fiscal discipline, expanded trade, increased investment in education, science, technology and our people. Today, we received more good news that that strategy is working. The latest economic report shows that in the first quarter of 1998, our economy grew at 4.2 percent. Wages are rising, while inflation remains low. This expansion is not fueled by big government deficits, but by booming business investment. In the first quarter, unemployment was the lowest in 28 years, inflation the lowest in 30 years, consumer confidence at its highest level in 30 years. For five years in a row now, our economy has been rated the most competitive in the world. We are living in an American economic renaissance in which opportunity is abundant. Communities are getting stronger. Families are more secure and more prosperous. But we cannot allow the hum of our growing prosperity to lull us into complacency. As estimates of the possible budget surplus expand, so too do suggestions that we immediately commit to spending that surplus on tax cuts and new spending.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982768","date":"1998-05-02","texts":"The Clinton administration, worried that political upheaval in Indonesia could wreck the country's international economic rescue, is warning the government of President Suharto to show restraint in dealing with student demonstrations and other forms of dissent. But administration officials said that despite mounting criticism of the Suharto regime's human rights practices, they are not threatening to cut off Indonesia's 43 billion bailout led by the International Monetary Fund. Depriving the country of desperately needed cash, they argue, would only deepen its economic crisis and increase the chances of social turmoil and bloodshed. The IMF is expected to approve another 1 billion installment for Indonesia on Monday. Administration and IMF officials said that last-minute negotiations are continuing but that Indonesian authorities, after balking for months, appear to be complying with IMF demands for economic reforms, including the dismantling of monopolies run by the president's relatives and cronies. Behind the flurry of maneuvers lies the administration's anxiety about keeping the situation in Indonesia, the world's fourth most populous country, from spinning out of control. Indonesia's financial condition remains extremely fragile, with its currency deeply depressed, inflation soaring and joblessness spreading. An outbreak of social chaos in Indonesia could spook investors in neighboring countries and cause the Asian financial crisis to worsen, U.S. and IMF officials fear. Moreover, the Indonesian archipelago straddles major shipping lanes, and civil strife there could disrupt global commerce.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984784","date":"1998-05-02","texts":"The Dow Jones industrial average closed today just 37 points shy of its all-time high, capping a roller-coaster week that tested the market's resilience to renewed fears over higher interest rates. Interest rate worries, which sent investors fleeing from stocks Monday, began to subside as new batches of economic data made it increasingly likely the Federal Reserve would not feel compelled to raise rates at a scheduled meeting next month. A key business gauge released today offered more signs of muted inflation. The average of 30 blue-chip stocks jumped 83.70 points, or 0.9 percent, to 9147.07, a day after soaring 112 points on the first batch of good inflation news. For the week, it was up 82.45 points. Today's close put the Dow back within just 37 points of its record close at 9184.94, set on April 21. You have had two major shifts in psychology, going from bullish to bearish on Monday, and back to bullish with the economic statistics on Thursday, and the bond market acting better, said James Volk, co-director of institutional trading at D.A. Davidson & Co. The National Association of Purchasing Management said today its closely watched purchasing managers' index fell to 52.9 percent last month from 54.8 percent in March, hinting at a slowing economy. But the report also said that prices paid by manufacturers kept declining, offering further heartening signs of subdued inflation.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984602","date":"1998-05-03","texts":"Our story so far The Dow Jones industrial average triples including dividends in five years. Newsweek puts a muscular bull on its cover. The Economist of April 18 counters with a picture of a balloon, the headline, America's Bubble Economy, and the message that the stock market is headed for a crash, imminently. The Dow Jones industrial average falls 103 points from April 20 to 24 -- only the second weekly decline since Jan. 9. Then, on Monday, after news that the Federal Reserve Board might raise interest rates, the Dow drops 147 points. Looks like trouble, and the newspapers are full of stories about analysts predicting a slide. But later in the week, the Dow bounces back by more than 200 points after reports that economic growth is strong and inflation nowhere in sight -- except perhaps in the stock market itself. All the blather about the stock market being too high or too low, about bulls and bears, about the latest GDP and CPI -- it's extraneous noise. Certainly, you should be alert to specific opportunities in individual stocks, and the economy and inflation sometimes influence the chances of, say, auto stocks or bank stocks that might be depressed. But what investors need to remember about the market as a whole are the simple things In the short run stocks are wildly volatile, but in the long run they are no more risky than Treasury bonds and money market funds. If you need your money in the next seven years, you have no business putting a significant portion of your wealth in the stock market. If you can keep your money working for the long term, it makes sense to be in with both feet -- as long as you can sleep at night.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842613785","date":"1998-05-06","texts":"WASHINGTON -- The Conference Board's index of leading indicators moved up slightly in March, signaling that U.S. economic expansion probably will continue vigorously through 1998. Michael D. Boldin, director of business-cycle research at the New York business-research organization, said the economic omens point to continued strong growth in gross domestic product in the months ahead. It looks like above 3 is not impossible for the whole year, Mr. Boldin said. Last week, the government reported that the economy expanded in the first quarter at an annualized rate of 4.2, but few economists believe that pace is sustainable through the rest of the year. The leading-indicators index, considered a reasonable predictor of turning points in the economy, measured 105.2, up from 105 in February. The March increase came largely from two of the 10 components that make up the index stock prices and money supply. Both of those measures reflect the strength of financial markets and are considered fairly reliable indicators of the strength of future economic growth, not just of whether the economy will stay out of recession. Other increases were seen in orders to manufacturers for consumer goods and a measure of suppliers' delivery times. Declines were seen in big-ticket orders to manufacturers, excluding defense contracts.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614026","date":"1998-05-06","texts":"A chorus of inflation-related worries pushed down stocks, bonds and the dollar, knocking back the Dow Jones Industrial Average from Monday's record. Traders said the declines didn't focus on one particular area. The industrial average lost 45.09, or 0.49, to close at 9147.57, nearly canceling out all of Monday's 45.59-point gain. The Nasdaq Composite Index lost 13.95 to 1864.91 and Standard & Poor's 500-stock index fell 6.57 to 1115.50. The bellwether 30-year Treasury bond fell 2332, or 7.18 per 1,000 bond, to push up its yield to 5.98, again approaching the closely watched 6 level. Traders blamed the broad-based declines on worries that the Federal Reserve might be preparing to raise interest rates at its next monetary-policy meeting May 19. Volume was relatively light as many investors chose to stay out of the market. Inflation worries focused first on April's employment numbers, due to be announced Friday. If those indicate strong gains, some people fear, it could push the Fed to act. Then word spread that Fed Chairman Alan Greenspan was scheduled to meet President Clinton and Treasury Secretary Robert Rubin yesterday afternoon. The White House said the meeting was on the economy, not interest rates, but speculation spread that they might be laying the groundwork for a rate boost.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617080","date":"1998-05-06","texts":"CHRYSLER AND DAIMLER-BENZ are in talks about a merger, or even an acquisition of Chrysler by Germany-based Daimler, say people familiar with the talks. A combination, which could value the U.S. auto maker at more than 35 billion, would reshape the world-wide auto industry, creating a company with an estimated 130 billion in annual revenue. --- Robert Rubin urged investors to use more rigor' in evaluating the stock market's level, though the Treasury secretary didn't comment on whether the market is overvalued. Stocks, bonds and the dollar fell amid interest-rate worries. The Dow Jones industrials dropped 45.09 points to 9147.57. Rubin's comments that Japan shouldn't rely on a weakening yen for growth pressured the dollar. ---","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982053","date":"1998-05-07","texts":"Good economies make good politics. That's what Gov. Parris N. Glendening is finding as he stumps the state, touting rosy revenue and employment statistics while his opponents grumble and try to change the subject. Last week in Baltimore, Glendening D spoke before hundreds of people at the 14th annual Small Business Awards Breakfast. He briefly highlighted his administration's accomplishments, then added a bit of news Maryland's unemployment rate had fallen to 4.6 percent, the lowest level in years and somewhat below the national average of 5 percent. Unemployment was down in every single jurisdiction in this state, the governor said. Sitting seven seats to Glendening's left at the head table was Baltimore Mayor Kurt L. Schmoke D, who last month defected from the governor's camp and endorsed a rival for the Democratic gubernatorial nomination. And quietly sitting at another table, nearly lost in the huge hotel ballroom, was that very candidate Harford County Executive Eileen M. Rehrmann. Schmoke followed Glendening at the microphone and noted that Rehrmann and a few other elected officials were in the audience. He also praised the state economy and added This breakfast is also a tribute to our country. As Schmoke walked back to his chair, Glendening rose and shook his hand. The two men spoke quietly as the program continued, then parted with big smiles.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842616791","date":"1998-05-08","texts":"Are the giddy heights, and recent volatility, of stock prices making you a bit woozy You're not the only one. This week alone, two financial-services giants, Merrill Lynch and Vanguard Group, urged customers in separate mailings to consider bonds as a less-volatile alternative to stocks. The recommendations by Merrill and mutual-fund firm Vanguard appear to reflect widespread concern about the potential for a stock-market downturn that could follow a big increase in stock holdings by households and mutual funds held mainly by individual investors. Merrill noted that the share of financial assets in stocks held by individuals rose from 28 at the end of 1990 to 54 at the end of 1997. In contrast, Merrill said, the share for bonds shrank to 19 from 26 in the same period. And in a newsletter customers received this week, Vanguard's fixed-income chief, Ian MacKinnon, noted that bonds' returns are historically less volatile than those of stocks.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984035","date":"1998-05-13","texts":"A New York bank, founded 75 years ago by garment workers who couldn't get credit from traditional banks, is opening its first branch in the District, targeting unions and their members. But workers who are looking for the union label will have to venture into an unfamiliar territory -- along the city's highbrow corporate corridor, downtown's K Street. Amalgamated Bank, the nation's only bank solely owned by a union, will begin taking new customers today at 1825 K St. NW, its first branch outside New York City. The labor movement is changing and we're changing with it, said Jay Mazur, chairman of the bank, which is owned by the Union of Needletrades, Industrial and Textile Employees. Founded in 1923 by the then-Amalgamated Clothing and Textile Workers Union, the bank built a reputation in New York City for providing some of the lowest interest rates on loans and also paying some of the highest rates on money-market accounts. Bank officials say they hope to continue that trend, by offering free checking accounts with no minimum balance. Bank officials said many of their customers are not union members.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616850","date":"1998-05-14","texts":"Asian stock markets and currencies plunged as antigovernment demonstrations in the Indonesian capital grew violent for the second consecutive day, sparking fears of wider social unrest and increasing political tension in Indonesia. The Indonesian stock market tumbled 6.6, but stocks dropped 24.4 in U.S. dollar terms as the Indonesian rupiah nose-dived again. In Singapore, stocks fell 4.9, Malaysia dropped 3.7, and Hong Kong plummeted 3.8. Adding to investors' concerns about Asia, news that India had conducted more nuclear tests caused panic selling in Bombay, where the stock market dropped 4.1. However, the Japanese stock market edged up 0.1, while South Korea, which had plunged in recent days on concerns about its financial system, gained 1.3. What we're seeing now are the social costs of last year's capital-markets crisis, especially in Indonesia, says Christopher Turner, managing director of independent financial consultancy I.D.E.A. in New York. We're going into one of those periods where the markets get the bit between their teeth, and we're telling investors to take cover. Nevertheless, a report in the Jakarta Post quoting Indonesia's President Suharto as saying he is willing to step down if his people no longer trust him helped send many markets higher as trading resumed in Asia Thursday. In Jakarta, the stock market was up 2.2 in early dealings Malaysia was 1.2 higher and Hong Kong had gained 0.7. Tokyo closed the morning session up 0.2, while South Korea was up 2.8 at midday.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982754","date":"1998-05-15","texts":"Trailing in the polls with election day just four months away, Chancellor Helmut Kohl received a much-needed boost today from President Clinton, who heaped praise on Europe's longest-serving leader during a tour that had all the appearances of a political campaign. After celebrating one of the defining moments of the Cold War by marking the 50th anniversary of the Berlin Airlift, at Tempelhof Airport, Clinton escorted Kohl aboard Air Force One for a short flight to Eisenach, a town in the former Communist part of eastern Germany where they toured a modern car plant built by General Motors Corp. Clinton's visit was the first by a U.S. president to eastern Germany, and it was welcomed by Kohl, who lags far behind his Social Democratic rival, Gerhard Schroeder. In the 1994 election, Kohl's support among eastern voters helped him stage a dramatic comeback against Rudolf Scharping, a lackluster Social Democratic candidate. But this year, with unemployment in the east well over 20 percent, Kohl has become deeply unpopular and his Christian Democratic party's standing has plummeted in the polls. Tossing his arm around the burly chancellor at every opportunity, Clinton sought to revive public esteem among eastern German voters for the man who linked them with the West with the reunification of Germany in 1990. Thanks in no small measure to the leadership of your chancellor, Germany today is one nation, in harmony with its neighbors, Clinton told a packed town square, as a beaming Kohl reveled in the praise of his foreign guest. During a foreign policy address Wednesday at Berlin's Schauspielhaus, a famous opera house located on what was once the Communist side of the Berlin Wall, Clinton extolled Kohl's record as chancellor for the past 16 years in terms that sounded like either an endorsement or a political eulogy.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615738","date":"1998-05-19","texts":"For at least 30 years the U.S. has had, or at least professed, one fiscal policy Reduce the deficit, ideally to zero, preferably within five years. I was never crazy about this policy. I never attached significance to the number zero. The only thing one could say about zero was that it was 100 billion less than 100 billion and 100 billion more than negative 100 billion. This becomes obvious if you think of all the different plausible ways there are to define and measure budget surpluses and deficits. In the early Reagan years, when the deficit was large, I was not among those most eager to reduce it. Although I believed that the deficit was retarding growth by absorbing private saving that would have been productively invested, I thought that we were a very rich country and had more important things to do than speed up growth. I was a strong supporter of the defense buildup and feared that the deficit argument would be used to restrain it. Grand Goal in Sight I changed my mind recently as the deficit declined this year, the grand goal of zero seems finally achieved. In fact, I came to believe that balancing the budget was not enough and that we needed to get to a surplus. What changed my mind was the ever-clearer prospect that we would run huge deficits in the 21st century as baby boomers claimed their retirement and Medicare benefits. Although I was not one who wanted to maximize future growth, I would not like to see the growth of per capita income turn negative, and I was afraid that would happen if the federal deficit was so large as to absorb all private saving.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982074","date":"1998-05-20","texts":"CACI International Inc. of Arlington yesterday said it plans to acquire QuesTech Inc., a Falls Church-based defense contractor, for about 42 million as part of efforts to expand its information security business. CACI, which provides software and support services mostly to U.S. government agencies, said it will pay 18.38 for each outstanding share of QuesTech, a premium of 27 percent over the company's Monday stock price of 14.50 on the Nasdaq Stock Market. The acquisition includes about 35 million in cash and 7 million in assumed debt. News of the planned acquisition sent QuesTech shares climbing to 16.87 12 yesterday, up 2.37 12. CACI shares closed at 21.31 14, up 81 14 cents, on the Nasdaq. The acquisition, which does not include QuesTech's packaging division, has been approved by QuesTech's board of directors and awaits shareholder and regulatory approval. CACI's chief financial officer, James Allen, said he expects the sale to close in three to four months. The combined company would have annual revenue of about 350 million, with more than 4,000 employees in the United States and abroad. CACI has sought to expand into the information security market and gain a foothold in the U.S. intelligence community. In January, the company appointed Thomas McDermott, a former deputy director for information systems security at the National Security Agency, to head its information security operations. The QuesTech acquisition will bolster CACI's cache of security clearances and expand the pool of government contracts on which CACI can bid, Allen said.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616480","date":"1998-05-21","texts":"Is Dell Computer Corp. unstoppable The company again blew by its competitors in the personal-computer business in its fiscal first quarter, continuing the tremendous sales and profit growth that has pushed its stock to six times its value at the start of 1997. In revenue, the company just passed International Business Machines Corp.'s PC division to become the world's second-largest PC seller. Of course, the company has a way to go to catch market leader Compaq Computer Corp., which is twice Dell's size and growing larger by acquiring Digital Equipment Corp. But Dell, more than any other PC company, is in a position to take advantage of the forces now shaping the industry accelerating declines in component prices, the pulling together of service and hardware, and close contact with customers. Dell's top competitors -- Compaq, IBM and Hewlett-Packard Co. -- are trying to streamline themselves to match Dell's build-to-order and direct-selling efficiencies. But, says Charles Wolf, PC analyst at Credit Suisse First Boston, The playing field is not getting more level. It's getting more tilted in favor of Dell. Despite its first-quarter strength and a bullish outlook for its second period, Dell's stock fell 2.8438 to 91.75 in Nasdaq Stock Market trading. Technology stocks broadly fell after poor results and a sour outlook from chip maker Analog Devices Inc. In addition, investors had built up inflated earnings expectations, anticipating Dell might beat forecasted profit of 42 cents a share by as much as five cents. Instead, Dell on Tuesday said it earned 44 cents a diluted share, or 305 million, in the quarter ended May 3. Revenue grew 52 to 3.92 billion.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985571","date":"1998-05-21","texts":"The following is a report of how some major bills fared recently in Congress and a record of how local members of Congress voted. NV means Not Voting. BANKING For-214Against-213 The House passed a bill enabling banks, insurance companies and brokerages to combine into holding companies, for the purpose of entering each other's business. The bill removes barriers such as the 1933 Glass-Steagall Act and the 1956 Bank Holding Company Act that prevent most forms of direct competition among major segments of the money industry. It changes government regulation by giving the Federal Reserve Board authority to oversee the new financial conglomerates. The Fed thus would become the chief regulator of national banks and their non-banking affiliates, replacing the Comptroller of the Currency in the Treasury Department as the main overseer of banks. Agencies such as the Securities and Exchange Commission and state insurance examiners would continue to regulate specific financial services. A yes vote was to pass the bill. .... YES ... NO ... NV MARYLAND Bartlett R ..X Cardin D ............X Ehrlich R ...X Gilchrest R .X Hoyer D .............X Cummings D...........X Morella R ...X Wynn D ..............X VIRGINIA Davis R .............X Moran D .....X Wolf R ......X Bateman R ................. X Bliley R ....X RELIGIOUS PERSECUTION For-375Against-41 The House passed a bill to penalize countries that engage in religious persecution. The bill creates a State Department office to monitor governments that regularly imprison, torture, kill and otherwise harm people on the basis of their faith. Targeted countries automatically would lose U.S. economic and military assistance except humanitarian aid as well as U.S. support in the International Monetary Fund. They also would be denied exports that could be used for torture. Victims would receive the highest U.S. immigration priority. A yes vote was to pass the bill.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616110","date":"1998-05-22","texts":"EDINA, Minn. -- Early in the morning of April 6, Wall Street got a wake-up call it won't soon forget. The news that Citicorp and Travelers Group Inc. had agreed to merge in a 70 billion deal knocked many stockbrokers off their feet. When they recovered, many headed for the phones, calling their clients with short-term trading strategies to capitalize on the news. But not Noah Eisenberg. Mr. Eisenberg, a 16-year veteran broker with Dain Rauscher Corp. here, didn't even get to his suburban office until a half-hour before the stock market opened. Fresh from his usual 6 a.m. workout at a local health club, he found just five messages on his voice mail. None were from frantic customers who had heard about the Citicorp-Travelers merger. In fact, he didn't execute a single trade all day. A few years ago I would have been much more attuned to this, the 47-year-old broker says, pointing to a nearby television set blaring news of the deal. I would have had dozens of ideas of stocks I could sell. Now, it's just not that relevant to my business. That is because Mr. Eisenberg's business has undergone a fundamental shift during the past year and a half. Instead of playing the role of a traditional stockbroker -- picking individual stocks and charging his customers commissions each time they make a transaction -- he serves as more of an asset-gathering middleman.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981887","date":"1998-05-22","texts":"Federal Reserve Chairman Alan Greenspan said yesterday that economic conditions in several hard-hit Asian nations have deteriorated in recent weeks and the fallout is only now just being felt by the U.S. economy. Greenspan, testifying along with Treasury Secretary Robert E. Rubin and Agriculture Secretary Dan Glickman before the House Agriculture Committee, said that part of the progress several nations made early this year in stabilizing their economies has been reversed. Until the situation fully stabilizes, we can't really have confidence that the Asian problems won't spread further through the world financial system, he said. Concern about the potential for such a contagion effect, and the increasing drag from the Asian situation on U.S. economic growth, are among the reasons the Fed hasn't raised interest rates this year to head off any possible acceleration of inflation. Fed policymakers last met Tuesday and left rates unchanged. At a March 31 Fed policymaking session, minutes of which were released yesterday, the uncertainty of the ultimate extent of retarding effects for the financial turmoil in Asia was among the reasons given by officials for not raising rates at that time. According to the minutes, the Fed policymakers expressed worry that rapid U.S. economic growth and tight labor markets would eventually lead to higher inflation if they persist. But most of the officials saw little urgency to tighten policy at this meeting, the minutes said. . . . The economy might well continue to accommodate relative robust economic growth and a high level of resource use meaning very low unemployment for an extended period without a rise in inflation.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982967","date":"1998-05-24","texts":"Bonni McKeown says that the proposed Corridor H highway through West Virginia is a bad idea Close to Home, May 10. She argues that it is unnecessary to the local economy, will trash the environment and is a pork-barrel project of Sen. Robert C. Byrd D-W. Va. and a few businessmen. She is wrong on all counts. West Virginia has the third-highest unemployment rate and the second-lowest per capita income among the 50 states. Further, the six counties through which Corridor H will pass have a higher unemployment rate and a lower per capita income than West Virginia as a whole. Nearby counties, which also would be affected by the new road, have similarly dismal statistics. The 18-county region of 325,000 people has one of the poorest performing economies in a poorly performing state. The answer is the improved access for business that only Corridor H can provide. Improving existing two-lane roads, as McKeown suggests, won't work. Industries look for four-lane roads. In addition, the cost of the road improvements that she suggests would come close to equaling the cost of Corridor H. Building the corridor also would reduce the need for improvements to the state's two-land roads because it would divert traffic from them. As to the argument about trashing the environment In much of West Virginia now, the only jobs are in coal mining, timbering and other extractive industries. Corridor H would encourage a diversified economy, to the benefit of the environment.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983648","date":"1998-05-24","texts":"It is no surprise that Patrick Buchanan has chosen to begin his next campaign for president with a book that blames free trade for all of America's problems. What is surprising is how ordinary, even restrained The Great Betrayal is. For the most part it is no worse than -- indeed is largely based on -- the sort of thing you can read all the time in the Atlantic, the National Interest, and other respectable journals. If Buchanan is prone to logical whoppers, garbled statistics, and warped history, he is no different from many other people who imagine themselves well informed -- although he is unusual in regarding the rising number of working women as a key barometer of America's decline, and perhaps also in concluding that imports, by driving down wages and thus forcing women into the labor force, have directly caused broken homes . . . delinquency, vandalism, crime. Let's get the economics over with quickly. Buchanan believes that thanks to free trade America is squandering its capital abroad that thanks to imports, bank loans, foreign aid, and U.S. defense expenditures overseas, too much of the seed corn of the U.S. economy is now being exported all over the world. Never mind the details though he gets many of them wrong Underlying this whole worldview is an almost ridiculous conceptual confusion. Apparently neither Buchanan nor his fairly extensive brain trust has noticed that the United States is a net importer, not exporter, of capital -- that we are able to run a trade deficit precisely because foreigners are investing more in the United States than we are investing abroad. This is not abstract theory It is a matter of unarguable arithmetic. Once you realize that capital is flowing into the United States, not out of it, just about everything else in Buchanan's argument falls apart -- unless you somehow think that when an American company builds a factory in Mexico, that counts, but when a German company builds a factory here it doesn't. Anyway, it is clear that Buchanan has little patience for close economic analysis His chapters on the subject have a dutiful feel, and one suspects that if he wrote them at all he did little more than transcribe extensive notes prepared by other people. What Buchanan loves -- and I think this is genuine -- is political history. Most of the book is, in fact, not about modern economics but about 19th-century political debates over U.S. trade policy. It has often been said that Buchanan wants to turn the clock back this book certainly reveals him as a man who loves our past, with a passion that verges on the -- gulp -- scholarly. But he does not love all of America's past. In fact, reading the book I found myself wondering where a rather large chunk of our history went -- namely, the great postwar boom. His book skips without a pause from the Trade Agreements Act of 1934, which he correctly identifies as the beginning of our long move toward free trade, to the economic difficulties of the later 1970s. Yet his own chart of U.S. tariff history shows that the great bulk of America's move from protectionism to free trade took place between 1934 and 1960, even though he chooses inexplicably to consider the relatively small tariff reductions since 1967 as defining the free trade era. And surely the prolonged era of unprecedented growth that took place as tariffs declined should at the very least count as evidence that liberalizing trade does not always produce evil effects. Indeed, most people who bemoan the current state of the nation look to the economy of the '50s and '60s as exemplifying the kind of broadly spread prosperity we would like to recapture. Yet Buchanan prefers to pretend that the whole period never happened. What he wants to restore, instead, is the pre-New Deal American economy -- an economy that achieved impressive growth although he may have forgotten that this growth was fueled in large part by massive immigration but also produced widespread misery and vast inequality. Perhaps he loves the distant past too much to find any virtue in times within living memory, or perhaps he dislikes the welfare state too much to acknowledge that Franklin Roosevelt's legacy could have had any positive side. Or perhaps, just perhaps, Buchanan is less populist than he claims to be He may put social justice in his subtitle, but he actually seems to long for the good old days when the gap between rich and poor was even wider than it is today.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984338","date":"1998-05-24","texts":"Not even the Wizard of Oz slid as swiftly from apparent invincibility to apparent impotence as Indonesia's President Suharto. Now his demise seems readily explainable, as these things always are in retrospect. When his economic miracle morphed into economic crisis, Asia's longest-reigning dictator lost the legitimacy that had masked or excused his regime's many failings while allowing him to buy off potential foes. And when he was forced to kowtow so visibly to the IMF to ensure his nation's survival, he lost the aura of inevitable power that had kept so many of his voiceless subjects living in fear. So what is striking now, in retrospect, is not Suharto's fall -- not the apparently frail old man who emerged with trembling voice from behind the Wizard's curtain -- but rather how, up until the very last moment, the outside world doubted and disparaged Indonesia's People Power. Indonesia was not ready for democracy, was the consensus that only Indonesians chose to ignore Suharto could not fall. Why so many held so misguided a view for so long is worth examining now because many of the same voices can be heard again, touting stability over democratic change. The Clinton administration, to its credit, is no longer among them President Clinton quickly recognized Suharto's resignation as only the first step of a necessary process of democratic change. But many others seem ready to send the unruly students home. Enough upheaval for now, is their message let's get back to the business of healing a crippled economy -- even though Suharto's repressive system remains, so far, unchanged. Their logic is the same as when they were explaining why Suharto could not be replaced. Indonesia is too poor, and its economy too damaged, to manage a political transition now. The opposition is too fragmented, without ideology or program, united only in its disgust for the nepotism and corruption of the Suharto regime. There is no single opposition leader with the stature to unite a nation of so many islands, religions and ethnic groups. Mix in the absence of viable political parties and civic institutions after 32 years of stifling dictatorial rule. Recall the lack of democratic tradition in a country that has experienced only two transitions in the past half-century, both violent. Add a Javanese culture of patrimonial rule, communal values and mystical respect for power wielded from above.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985272","date":"1998-05-28","texts":"A fresh wave of selling swamped overseas financial markets yesterday, as investors worried that the Asian economic crisis is worsening anew and that Russia is nearing the brink of default on its foreign debts. The plunge in stock prices hit financial centers from Hong Kong to Frankfurt to Johannesburg, evoking memories of the globe-girdling flight of capital that devastated markets last fall. Yesterday's sell-off initially hit U.S. stocks, too, with the Dow Jones industrial average down as much as 175 points at midday before rebounding to close down just 27 points. Among the hard-hit markets yesterday were Hong Kong, where the main stock index fell 5.3 percent Indonesia, where stocks tumbled 3.9 percent and Frankfurt, where share prices skidded about 3 percent. In Eastern Europe, which is closely tied economically to Russia, Polish share prices fell 3 percent to a four-month low and Hungarian stock prices dropped 3.4 percent to the lowest level since December. In early trading today in Asia, market indexes were mixed. South Korea's key stock index rose 4.2 percent, Japan's gained 1.4 percent and Hong Kong's was up fractionally. Singapore, Malaysia and Indonesia markets were lower. The darkest storm cloud hangs over Russia, whose main stock index plummeted another 10.5 percent yesterday, bringing its losses this month to 40 percent. In response, the Russian government tripled short-term interest rates yesterday to 150 percent in a desperate attempt to make investments in the country more attractive and keep the ruble stable. Details, Page A30.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830981951","date":"1998-05-29","texts":"The era of budget surpluses dawns, and the pilfering has already begun. Congress has just passed a huge transportation bill that busts the ceilings established by the balanced budget agreement just last year. And President Clinton, for his part, already has signed a bill containing a half-billion dollars of supplemental spending to pay for our Bosnia deployment. This not only broke Clinton's own pledge to save every penny of the surplus for Social Security. By blatantly abusing the loophole for emergencies the Bosnia deployment is already three years old and open-ended, it mocked the deficit reduction rule enshrined in the budget agreements of 1990, 1993 and 1997 that all new spending must be offset by cuts elsewhere. We are now enjoying a glorious and unique economic moment. We have the lowest peacetime unemployment since 1957. There is no inflation. Clinton has just announced a 39 billion budget surplus for 1998. The Congressional Budget Office estimates that it might run as high as 63 billion. How do we keep from frittering away the current bounty Government cannot save its extra money by squirreling it away in a safe-deposit box. But it can do the equivalent by paying down the national debt, now a hefty 4 trillion. But how do you make politicians put away a surplus A little history. In 1968, in order to pay for the war in Vietnam and pretty up the numbers of a surging budget deficit, President Johnson arbitrarily decided to include Social Security in the budget. Social Security was then, as now, taking in more money every year from workers than it pays out to old folks. It helped LBJ produce balanced books.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985269","date":"1998-05-30","texts":"Russia might seem a dubious candidate for an international financial bailout, given its chronic failure to stabilize its economy despite repeated dollops of foreign aid. Yet compared with an economic collapse in, say, Indonesia or South Korea, the prospect of a meltdown in Russia is far more frightening to U.S. officials and international economic policymakers. Therein lies the dilemma confronting the Clinton administration and the International Monetary Fund as Russia undergoes one of the most serious bouts of financial turmoil in its recent history. The Russian stock market fell 15.1 percent last week, and is now worth about half what it was at the start of the year. The crisis has aroused alarm that Russia could default on its 145 billion debt to foreigners unless it receives billions of dollars in fresh loans. To critics of Russia's policies, providing such assistance looks like a classic example of throwing good money after bad. But the alternative may be a plunge in the value of the ruble that would devastate the nation's economy, kill public support for the reform program of President Boris Yeltsin and risk social chaos in the world's second-largest nuclear power. As a result, few analysts doubt that the international community will come to Russia's rescue again if the crisis intensifies. The odds are high that Russia will end up back in financial trouble even if it gets new loans, but nobody's going to let Russia go down the tubes, said Clifford Gaddy, an expert in the Russian economy at the Brookings Institution. It's always going to be bailed out somehow. The Russians have 30,000 nuclear weapons, and that's 30,000 reasons why they won't be allowed to go under.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984574","date":"1998-05-31","texts":"WARNING Most of the hot companies touted by business writers are likely to cool off or fizzle in the next few years. I was reminded of this sad fact last week when shares of Manugistics Group Inc., a Rockville software firm, fell by half after the company said it would report a quarterly loss. Manugistics was among a dozen companies I had identified four years ago on The Washington Post's front page as a gazelle -- that species of fleet-footed firm that was reshaping the American business landscape and generating most of the economy's gains in jobs and productivity. There was Molten Metal Technology Inc., a Massachusetts firm that recycles hazardous wastes by dipping them in vats of hot metal. Now it's out of cash, in bankruptcy court and facing congressional investigation of its ties to Vice President Gore. And Discovery Zone Inc., the franchised fun center that grew too fast -- and is now just emerging from bankruptcy court protection as a smaller, private company. And Boston Chicken Inc., the home-cooked-meal chain that earlier this month reported a 312 million quarterly loss and the departure of its two founders. On Friday, the company's auditors warned that there was substantial doubt Boston Chicken could survive as a going concern.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613552","date":"1998-06-03","texts":"After a 20-year absence, Ford Motor Co. is back in Thailand. Considering the country's economy, this isn't the perfect time to plunge back in. But, armed with some aggressive -- and risky-financing strategies, Ford is gaining strength in a difficult market. The world's No. 2 auto maker, which left Thailand in the '70s to focus on the U.S. market, returned about two years ago -- before the Asian economic crisis hit -- and now is seeking to become a market leader committed to offering auto loans to Thais when rivals can't or won't. Credit for auto loans is tight and sales have plummeted 75 since a currency devaluation walloped the country's economy last year. Ford is raising the stakes for itself by offering U.S.-style come-ons, including 0 interest. It's a big gamble, considering that the government has closed dozens of finance companies because of debt problems. Industry experts warn that Ford risks high default and repossession rates and a price war as wounded competitors match low interest rates. But price and financing are the main reasons people are buying right now, not brands or resale value, says Siriluk Aroondechachai, who took over her father's Ford dealership two years ago. Ms. Siriluk, through Ford's finance subsidiary, Primus Leasing Co., can offer a menu of financing options, including once-yearly payments for Thai farmers that coincide with sugar-cane harvests in northeastern Thailand, where she runs her dealership. During March, Ms. Siriluk, a 25-year-old with a degree in economics from Baylor University in Texas, sold 60 trucks in Thailand-enough to make some U.S. dealers envious.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613690","date":"1998-06-03","texts":"According to conventional wisdom among economists and policy makers, Americans do not save enough. The suggested remedies include tax incentives for saving and policies ensuring that government programs, such as Social Security, do not discourage saving. But Americans save more than many believe, and in any case, future generations will be better off than the current ones even if saving does not increase. It is true that by official measures, U.S. net national saving has been low, by both historical and international standards. For a decade at least, the high measured saving rates in Japan were cited to explain why Japanese economic growth was so much greater than the U.S.'s. Japan still has a higher saving rate, but its growth has stopped. Most developed economies would be envious of the U.S.'s 4 economic growth rate and its unemployment rate of less than 5. It seems a bad bargain to change places with Japan, or any of the other nations with purportedly higher saving rates. But by appropriate measures, the U.S. saving rate is not really so low. The official measure of net national saving begins with gross saving, which has been rising. Gross saving reached 17.3 of gross domestic product in 1997. To calculate the net saving, usually viewed as national saving, one must subtract depreciation or consumption of fixed capital. This brings the rate of net national saving down to 555 billion, or 6.5 of GDP. That 555 billion would add about 2.8 to the current net stock of tangible capital, public and private. Thus it implies a growth in capital somewhat higher than commonly forecast long-run growth rate of the economy. Even this net rate might not be an adequate measure of growth in a period of rapid technological advance. The depreciated capital might be replaced by more productive new capital, so that even without adding to the measure of net capital stock the capacity for growth would increase. A better perspective could be gained by looking at real gross domestic investment, private and public. That total, financed in part by foreign net investment equal to 2 of our GDP, comes to 19.5 of GDP. This higher real percentage reflects the falling price of much investment, particularly in computers relatively more investment goods than consumption goods are being bought for each dollar. The net real domestic investment of 592 billion 1992 dollars in 1997 was thus 8.2 of real GDP, suggesting that real capital stock was growing even more rapidly relative to real output.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616236","date":"1998-06-04","texts":"Textron Inc. is considering a sale of its Avco Financial Services unit as a part of a strategic review of the big consumer-lending concern. Based on its receivables outstanding of 7.73 billion and recent prices paid for similar companies, Avco Financial could be valued at about 4 billion. A sale of that scale would be the largest strategic move in the history of Textron, a conglomerate based in Providence, R.I., that makes Cessna airplanes and Bell helicopters and has other operations in automotive and industrial-fastener manufacturing. People familiar with Textron's deliberations say that the company could decide to keep Avco after the review, but has been tempted by prices paid for other consumer loan companies recently, and has hired investment bankers Goldman, Sachs & Co. and J.P. Morgan to hunt for bidders. Other possibilities would be a partial or total sale to another company or a partial stock offering. A sale of Avco would likely be followed by stepped-up acquisitions by Textron, which has purchased over 30 companies since 1992. The company has followed a strategy of add-on purchases that expand its current business lines. Textron Financial Corp., which lends money to buyers to finance purchases of Textron's manufactured goods and is the company's other major financial-services segment, isn't on the block or part of the strategic review. Avco's loans are typically made for used cars, appliances and goods purchased on installment at interest rates above prevailing bank rates. Avco also makes real-estate secured loans and underwrites insurance.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617237","date":"1998-06-08","texts":"WASHINGTON -- Last month's robust job gains signal that economic growth in the second quarter -- even amid a trade-damping Asian financial crisis -- might not be slowing as much as economists previously believed. The unemployment rate stayed at its 28-year low of 4.3 of the work force in May, suggesting that April's drop was no aberration. The economy added 296,000 jobs in May, the Labor Department said. For the past six months, job gains have averaged 257,000 a month and the labor market has been taut. Wage gains were also healthy during May. Average hourly earnings for nonsupervisory workers increased four cents to a seasonally adjusted 12.73. Average weekly earnings increased 0.9 to 441.73. Average weekly earnings and average hourly earnings have both risen 4.3 during the past year -- without many signs of inflationary pressures. The economy, though slowing from the 4.8 gross-domestic-product growth rate posted in the first quarter, still continues to generate jobs. Certainly, the Asian financial crisis has had an effect. The manufacturing sector has slowed its rate of growth in the second quarter, and manufacturing jobs declined 26,000 last month, the third drop in the past four months. Those declines, however, were offset by the brisk-paced service sector, which accounted for all of May's job gains. Business services, retail trade and financial sectors all boosted their payrolls in May. This shows that overall we can weather shifts in the economy, said Labor Secretary Alexis Herman, who used the manufacturing fall-off to underscore the importance of the International Monetary Fund's proposed Asian relief package. We need to support it to keep the Asian situation from worsening, Ms. Herman said.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615970","date":"1998-06-10","texts":"FRANKFURT -- German Chancellor Helmut Kohl may get plenty of pre-election mileage from May's positive unemployment numbers, but they aren't likely to result in an increase in interest rates by the Bundesbank, analysts said. Though the 60,000 decline in May's seasonally adjusted jobless numbers was good news and was evidence that the German economy was gaining steam, it was accompanied by a report that industrial output fell a seasonally adjusted 0.6 in April from March. The jobless figures were leaked prior to yesterday's official release. As early as Friday, Mr. Kohl cheered the numbers, saying the unemployment rate declined to 10.9 in May from 11.4 in April. Economists, however, dismissed the notion of inflationary dangers and any calls for the German central bank to raise rates pre-emptively at today's policy-setting central bank council. They said the link between employment and inflation in the U.S. doesn't apply in Germany, because the rate of unemployment in the U.S. is much lower than in Germany, and close to its so-called natural rate, where it poses inflationary pressure. The German unemployment numbers don't pose any kind of inflationary danger, said Hans-Joerg Naumer, economist at Societe Generale in Frankfurt. On the contrary, we'd be happy if the labor force were close to being used to full capacity.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614694","date":"1998-06-11","texts":"The U.S. bond market and the dollar soared amid weak Asian markets and reassuring comments from Federal Reserve Chairman Alan Greenspan, but U.S. stocks declined, in a turbulent day for global investors. After initially gaining on Mr. Greenspan's hint that an interest-rate increase isn't imminent, the Dow Jones Industrial Average closed down 78.22, or 0.86, at 8971.70. Several earnings warnings drove down major technology stocks, and the technology-heavy Nasdaq Composite Index fell 27.51, or 1.53, to 1773.25. The broad Standard & Poor's 500-stock index fell 6.13, or 0.55, to 1112.28. Several traders said Asian investors were shifting money out of U.S. stocks and into Treasury bonds as Asian stock markets tumbled yesterday. The declines were sparked partly by rumors -- that China might devalue its currency, for example, or that a big Japanese oil company was about to go bankrupt. The continuing flight to quality moved more money into dollarbased financial instruments and pushed the dollar to yet another seven-year high of 141.49 yen, up from 140.22 yen. As if that weren't enough to push up bonds, Mr. Greenspan's comments reassured traders that interest rates aren't likely to rise soon, making existing bonds look more attractive. The 30-year bellwether Treasury bond rallied 1 832, or 12.50 per 1,000 bond, pulling the yield back to 5.697, the lowest yield since January. There was a lot of cash on the sidelines waiting to see how this bond market was going to break, said Scott Graham, head government bond trader at Prudential Securities. Once the rally started, cash flooded in, he noted.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984727","date":"1998-06-12","texts":"New fears about Asia's economic crisis sent shivers through Wall Street today as investors fled stocks on concerns that the woes overseas will erode corporate profits in the United States. In one of the sharpest slides of the year, the Dow Jones industrial average fell 159.93 points, or 1.8 percent, to 8811.77, while the broader Standard & Poor's 500-stock index declined 17.70 points, or 1.6 percent, to 1094.58. At the same time, the price of 30-year Treasury bond rose, pushing the yield down from 5.70 late Wednesday to 5.65 percent, the lowest level since the government began regular sales of the long bond in 1977. Analysts and money managers blamed Wall Street's skittishness on news that the Japanese yen had slipped to eight-year lows relative to the dollar, a sign that Asia's onetime economic dynamo may be far from emerging from its economic slump. Some investors believe South Korea, China and other struggling nations will be forced devalue their own currencies to remain competitive when selling their products in the United States. That would put them at risk of defaulting on loans from Japan, hurt the market for U.S. products and erode corporate profits here, money managers said. It's all kind of a vicious cycle of impact, said Henry Herrmann, chief investment officer at Waddell & Reed Financial Services in Overland Park, Kan. My heartburn has been going up. There's a lot of concern that, basically, all of Southeast Asia could default on loans to Japanese banks, said Jeffrey Tyler, senior portfolio manager for American Century funds. Japanese banks can't afford the strain.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982584","date":"1998-06-14","texts":"Corporate profits have been getting a boost recently from a surprising source -- the surging stock market's effect on the value of corporate pension funds. These pension plans, once a drag on earnings, are boosting the financial performance of many of the country's best-known companies. The pension-fund bubble stems from the arcane accounting rules that govern the more than 1 trillion in private pensions. Under those rules, companies make assumptions about how much they will earn on their pension assets, how much they will have to pay out to future retirees and the future level of interest rates. But what has been happening during the long bull market is that those assumptions have proved too conservative -- and the funds have swollen far beyond expectations as stock market returns have outpaced historical trends. The excess, filtered through many layers of accounting, is dribbling down to the bottom line. And that's giving an extra boost to corporate profits at a time when earnings are being squeezed from lack of pricing power and rising wage pressures. Some companies are siphoning off some of the pension surplus to pay for other corporate needs, such as early-retirement plans, retiree health benefits and even merger financing. For many businesses, the gain is twofold Their plans are so flush they are being spared from having to make new annual contributions, and they are earning income from the excess that has built up throughout the stock market's rise.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983613","date":"1998-06-14","texts":"The Asian economic flu is no longer afflicting the region's Little Tigers alone, and it's looking a lot scarier as a result. Until recently, the financial crisis that started in Thailand last summer and spread to Indonesia and South Korea was striking only at countries with relatively small economies. But now, much more important nations are coming under financial strain -- and the risks to the global economy are rising commensurately. While the United States is well situated to minimize damage and avert recession, the historic brisk economy that the country is enjoying right now faces a far more uncertain future as the financial turmoil begins to engulf bigger victims. In Japan, the world's second-largest economy, the yen and the stock market have gone into a tailspin in recent days amid a slew of bad news capped by a government report Friday confirming that a recession is underway. In China, fears are mounting that slowing economic growth will force the government to devalue the nation's currency in an attempt to make its products cheaper abroad and ring up more export sales. Fears that that was about to happen helped send currencies and stock prices tumbling last week in developing countries all over the world that compete with cheap Chinese products.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617015","date":"1998-06-15","texts":"The tactic didn't do much for Beatrice or Borden, but now North America's biggest food company is trying to get more bang for its advertising buck by packing a variety of its grocery products into a single commercial pitch. Kraft Foods this fall will launch an unusual, new 50 million umbrella campaign, stuffing an array of food items such as Kool-Aid, Philadelphia cream cheese, Post cereal and Tombstone frozen pizza into a single television spot or Sunday circular. The idea is for Kraft to create an image that transcends its products, rather like Nike and Disney, says Robert A. Eckert, a former Oscar Mayer president who became Kraft's president and chief executive officer last October. No matter what you see from Disney, you know it will be family entertainment, he says. It might work for mice, but what about cheese Do people care whether Miracle Whip and Crystal Light are connected I am not so sure, says Kevin Keller, author of a textbook on building brand loyalty. He thinks such campaigns can help keep shoppers loyal if they already favor Kraft but might fail to draw new consumers. The ads, still under development at J. Walter Thompson in Chicago, will show a real Mom with a real Gramps and Lil' Sis, gabbing about how food helps them relate to one another. The touchy-feely message Kraft gets the importance of family values, and makes the kind of food that families with values eat. Kraft spent about 800 million last year to advertise its 50-plus major individual brands, from Jell-O Smile more to Oscar Mayer Just Whistle. This year, it plans to increase that figure by about 5. And all of our brands will contribute to the new umbrella campaign, Mr. Eckert says.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617455","date":"1998-06-16","texts":"NEW YORK -- Treasurys surged again as Asian financial turmoil continued to make the haven of U.S. government debt very appealing. Meanwhile, other sectors of the bond market lagged behind Treasurys, with investment-grade corporate debt turning in a notably weak performance. The benchmark 30-year Treasury bond was up 1 732 point late yesterday, or 12.1875 for a bond with 1,000 face value, at 107 2332. Its yield, which moves in the opposite direction from its price, fell to 5.579 from 5.664 late Friday. With an absence of market-moving news, traders said the bulk of yesterday's advance in Treasurys was powered by overseas investors fleeing plunging Asian and domestic equities for the safety of U.S. government bonds. The persistent ascent of the dollar against the yen continued to make dollar-denominated assets attractive. International investors want maximum exposure to U.S. Treasurys, said Chris Fitzmaurice, head of government trading at Salomon Smith Barney. They can't get enough.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982613","date":"1998-06-16","texts":"Japan is in crisis, according to financial and political leaders in the United States and just about everywhere else. But here at crisis central, there are few signs that Japanese Prime Minister Ryutaro Hashimoto is working feverishly on a rescue plan. Rather, he plays down the economic mess and focuses optimistically on how Japanese are in the enviable position of having piles of personal savings. On Sunday, Hashimoto gave a major speech and revealed that indeed he is worried, but his fretting was directed at nuclear testing and the fact that Japanese women are having fewer and fewer babies. At the end of last week, as the Japanese yen fell far and fast, causing every Asian stock market to sag, Hashimoto jumped on a plane and went campaigning for his party. A key reason Hashimoto seems to be distracted from Japan's and the rest of Asia's economic woes is next month's national election. On July 12, for the first time in nine years, his Liberal Democratic Party has a chance of capturing a majority in the upper house of parliament. If it succeeds, it will not have to appease and accommodate coalition parties. This is no small thing, and Hashimoto's supporters argue that, with a freer hand in parliament, he could act more swiftly on tough economic measures.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614840","date":"1998-06-18","texts":"McDonald's Corp., cutting jobs for the first time in its 43-year history, said it will eliminate about 525 employees, or 23 of its home-office work force, over the next 18 months. The cuts, intended to shrink overhead and bureaucracy while increasing productivity, will affect quite a few in McDonald's 171-person U.S.-based officer corps along with lower-level workers, a company spokesman said. Some international-area employees also will leave the fast-food company. Saying it was still calculating the cost and potential savings of the downsizing, McDonald's put off disclosing the financial impact until it releases second-quarter earnings next month. Several Wall Street analysts contacted yesterday had only rough estimates on a potential charge, ranging from 20 million to several times that. The job cuts come as the Oak Brook, Ill., concern seeks to regain sales and profit momentum, particularly in the U.S., after two years of lackluster results. In one of his first announcements since being named president and chief executive officer-elect, Jack M. Greenberg said it is necessary to make these changes to refocus and realign with our restaurants and . . . bring home-office resources closer to them. Although the company said it was reducing its headquarters staff by 525 positions, about 100 of those posts are already vacant.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615628","date":"1998-06-22","texts":"NEW YORK -- Investors stung by the 16 decline in SLM Holding Corp.'s stock since April 9 may get a chance to recoup their losses soon, but they'll need the federal government's cooperation -- and that is far from certain. Shares of SLM Holding, also known as Sallie Mae, began sliding over a government plan to price interest rates on federally guaranteed student loans off 10-year Treasury notes instead of 90-day Treasury bills, in effect cutting rates to one of their lowest points in 17 years. That was good news for students, but sacrilege to Sallie Mae and other lenders. Observers estimated that the changes would cost the industry at least 260 million a year, and Sallie Mae's stock has taken a hit on the prospect, falling to below 38 this last week from a 52-week high of 49.25 in April. Sallie Mae and other student lenders breathed a sigh of relief earlier this month when the government approved a temporary measure that prevents the lower rate from cutting too deeply into their profit margins. The three-month plan continues to price student loans off the 90-day T-bill but lowers the interest rate formula and provides a subsidy for lenders. But a debate is now brewing over whether the temporary fix should be extended for five years. According to the Department of Education, this long-term compromise proposal would cost taxpayers 2.4 billion.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983027","date":"1998-06-23","texts":"Conceding that the Asian economic crisis has had a more severe impact here than first expected, Hong Kong's leaders today said the territory was heading into a recession, and they unveiled a stimulus package aimed at reviving the economy and stemming a huge downward slide in property prices. Chief Executive Tung Chee-hwa, who announced the stimulus package in a television address to the territory's 7 million residents, said the regional economic meltdown that began a year ago has proven more devastating than anything we had known before. The effects of the turmoil are more serious and far-reaching than we have anticipated, Tung said. He cited high interest rates, a debilitating credit crunch, the highest unemployment rate in 15 years, collapsing stock and property markets and a tourist industry he said was shrinking. All Hong Kong assets have been devalued and shrunk to a large extent within a few months, Tung said in his most somber assessment yet of the territory's economic straits. Every sign points to the fact that negative economic growth will likely continue in the second quarter. The unemployment rate will probably continue to rise, and the economic situation for the second half of the year is hardly optimistic. Tung's bleak analysis, and the announcement of the stimulus package, was yet another sign of the depth and severity of the regionwide meltdown. Once touted as a miracle model of growth and development, East Asia has in the course of just 12 months come to be identified as a region with millions of new unemployed people, bankrupt banks, piles of bad debt and a fraying social fabric. Hong Kong was once thought to be an island of financial stability amid the regional turmoil. Its currency is firmly pegged to the U.S. dollar, so the territory avoided the round of devaluations that swept through Asia last year. Its banks are generally considered healthier than elsewhere. And its now-departed British colonialists left behind an effective legal system and a professional civil service that have largely spared Hong Kong from the problems of corruption and nepotism that are common across the region. Today, however, Tung conceded that some of the current problems can also be attributed to the internal factors in our own economy. He said the spiraling land prices, high wages and high inflation of recent years had created a bubble economy.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616725","date":"1998-06-24","texts":"WORCESTER, Mass. -- For years, bankruptcy lawyer Paul Daley jokingly advised his Boston clients to get a phone booth in Worcester if they ever had to seek protection from creditors. That way, they would have an address here and be able to file through the U.S. Bankruptcy Court in Worcester, before Judge James F. Queenan Jr., a man whose reputation for debtor-friendly decisions has helped to draw cases from Boston and even other states. During the recession-induced bankruptcy boom of the late 1980s and early 1990s, Judge Queenan's court served as Chapter 11 Heaven, and since he was the only bankruptcy judge sitting in the western district of Massachusetts, petitioners who filed in Worcester had 100 certainty of drawing him. Then came Judge Henry J. Boroff. And bankruptcy lawyers say nothing has been 100 certain since. Brought in by an overworked Judge Queenan four years ago, Judge Boroff has gradually gained a reputation as being hard on debtors -- becoming, in effect, the anti-Queenan. While both judges are perceived as being fair and intelligent, says Joseph H. Baldiga, a bankruptcy specialist with Mirick O'Connell in Worcester, the perception is that Judge Boroff may not be as debtor-friendly.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615549","date":"1998-06-25","texts":"AUTO SUPPLIERS suffer margin erosion, despite higher sales. Profit margins of the companies that supply parts to auto makers slid to 6.5 last year from a peak of 8.2 in 1995, says Automotive Consulting Group Inc., Ann Arbor, Mich. Still, suppliers are beating Ford and GM's margins of less than 5. The consultant studied the performance of 51 publicly traded suppliers from 1992 through 1997 -- a period when sales more than doubled as auto makers vastly expanded outsourcing of parts, systems and research and development. So why are vendors suffering An R&D burden means suppliers spend a lot more money before they make money, says Dennis Virag, president. That, plus a push for lower-priced parts, has pressured profits. Chris Quilty, an analyst with Raymond James & Associates, St. Petersburg, Fla., agrees some vendors have been squeezed. Air bags, for instance, went from a high-margin, high-tech product to a lowercost commodity. Both men say vendors who can innovate will continue to thrive. The UAW strike against GM may hurt suppliers now, but it could help them later if it leads to more outsourcing. GUN SAFETY' is advanced in one deft promotional shot by a safe company.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615554","date":"1998-06-26","texts":"JAKARTA, Indonesia -- The International Monetary Fund's revised pact with Indonesia to restart lending of 43 billion in assistance will allow Jakarta greater social spending and a budget deficit of 8.5 of gross domestic product for the fiscal year ending March 31, 1999. This deficit will be wholly financed by foreign borrowings and will, subsequently, require additional funds of at least 4 billion from outside sources, the IMF's top man in Jakarta, Hubert Neiss, said. But he stressed that these funds were urgently required to head off an economic emergency in the world's fourth-most-populous nation. Production and exports have been disrupted, unemployment is increasing, the banks are paralyzed, and food prices are rising, Mr. Neiss said. It's no wonder the rupiah rate has depreciated. Deputy U.S. Treasury Secretary Lawrence Summers hailed the new pact between Jakarta and suggested the U.S. will help Indonesia get the money it needs both from international financial institutions and other countries he wasn't specific. The success of the IMF program, he added, depends on Indonesia's ability to sustain both economic and political reforms. Financial analysts voiced surprise at the economic assumptions under which the IMF and Indonesia calculated this latest pact. The rupiah is targeted to end the year at 10,000 against the U.S. dollar, substantially stronger than its Thursday close of 14,700. However, many currency analysts fear that the rupiah could weaken in the months ahead, given social and political concerns. All of this raises the possibility that Indonesia's budget deficit could actually exceed the target of 8.5 of GDP. The government will probably have only two options to cover a bigger deficit, analysts say the seeking of even more international assistance or the restructuring of sovereign debt. Either way, one Jakarta-based diplomat said It looks like we the international community will be asked to cough up again.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616421","date":"1998-06-29","texts":"It has been nearly a year since Thailand devalued the baht, setting off worldwide market drops -- and what a ride it has been. Most Asian portfolio managers would probably prefer to put the past 12 months well behind them, if they haven't quit their jobs already and decided to sail around the world instead. And pity the small investor, avidly checking up on the performance of his Asian mutual funds over breakfast only to find that day after day, Asian markets suffered staggering declines. Since July 2, 1997 when Thailand let the baht float, Asian currencies and stock markets have crumbled, jolting emerging markets from Brazil to Russia. Even the European and U.S. stock markets have felt the heat from Asia's plunge, though both markets have been resilient. So what's an investor to do now Steer clear of Asia, lighten up on U.S. holdings, and load up on European stocks, say the experts. Big and liquid is beautiful, says Leila Heckman, managing director of global asset allocation at Salomon Smith Barney in New York.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615775","date":"1998-06-30","texts":"HANOI, Vietnam -- In a further sign of the grim business climate here, some of Vietnam's early-bird investors are flocking home. These investors represent that first wave of daring foreigners who jumped in when Vietnam first began opening its market in the early 1990s. They were once willing to spend the most money and take the biggest risks in the fledgling market, but after three or more years of losses, many are running out of patience. People are tired of waiting for economic reforms that come too little, too late, said Fred Burke, an investment lawyer at U.S. law firm Baker & McKenzie in Ho Chi Minh City. The first investors' departure spells yet another setback for Vietnam's economic development. Vietnam depends heavily on foreign venture capital to support a current account strained by hefty trade deficits. With very few resources of its own, the country depends heavily on foreign capital to fuel growth. According to ING Baring Securities Ltd.'s May report, foreign direct investment accounts for 8 to 9 of gross domestic product, and 17 to 18 of total export earnings. For the first six months of this year, however, total foreign investment dropped 20 in pledged capital, compared with the year-earlier period, according to government figures. Last year, foreign-direct-investment pledges dropped more than 50 from 1996. Economists fear the decline may be even more dramatic than the official numbers suggest.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981988","date":"1998-07-02","texts":"From the commercial bustle of Shanghai to the renowned natural beauty of this city, President Clinton devoted two of the closing days of his China tour to a campaign aimed at persuading the Chinese that robust economic growth does not have to come at the expense of their country's fragile environment. Clinton spent Wednesday touting China's recent moves toward market economics, including a tour of the Shanghai stock market and a luncheon with young entrepreneurs. But his generally ebullient remarks were tempered by a dire warning about the damaging effects that China's industrialization is having on air, water, and food quality. Clinton continued to develop his environmental theme here in Guilin, where the Li River and the unusual limestone formations that jut up out of the valley floor create a striking natural tableau that has been memorialized for centuries in Chinese art. Cooling himself in sweltering heat with a colorful Chinese fan -- he called it an energy-efficient air conditioner -- Clinton told Guilin residents today China has a unique opportunity, because you are developing rapidly but later in time than other countries, to avoid making the same mistakes we have made. In the speech, Clinton announced a number of initiatives that will provide U.S. assistance to an incipient Chinese anti-pollution movement.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613747","date":"1998-07-06","texts":"Shares of Theragenics Corp. plunged 36 Thursday after an analyst raised doubts about prospects for the maker of medical radiological devices. Theragenics executives, as well as other analysts, disputed the analyst's position. Nevertheless, Theragenics shares fell in Nasdaq Stock Market trading to close at 14.813, down 8.188. The selloff began after analyst Parice C. Halbert of Dain Rauscher Inc. in Minneapolis, cut earnings estimates for Theragenics and two other companies involved in brachytherapy. In that technique, radiological seeds are implanted in cancerous tumors, allowing patients to be given much higher doses of radiation than in traditional treatments. The treatment is most often used for prostate cancer. Shares of the other companies mentioned, Mentor Corp. and North American Scientific, also fell in Nasdaq trading yesterday. Mentor closed at 22.75, down 1.375, or 5.7. North American fell 25 to 14.25, down 4.75.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984855","date":"1998-07-06","texts":"Bill Evans is a lobbyist who usually divides his time between Georgia and Washington. But last week he ventured clear across the country just so he could get an audience with the man some people were calling the pope of Congress. He joined a small group of thousand-dollar donors at the celebrity hangout Jimmy's Restaurant to spend a few minutes with Bob Livingston R-La., chairman of the powerful House Appropriations Committee. When his moment came, Evans asked Livingston whether he could help resolve a dispute between his client, a paint manufacturer, and the Environmental Protection Agency over paint fumes. Evans walked away with the name of Livingston's staff director, James W. Will Dyer. We might be able to accommodate him with some language, Livingston said in an interview later. He meant that he might be able to insert some wording to solve Evans's problem in one of the annual spending bills he controls. For Livingston, the encounter was no different from what happens routinely in the hallways and reception rooms of Congress, where he answers supplicants by promising to examine their specific requests for legislative remedies. The significance was the setting. Bob Livingston, one of the Hill's consummate inside players, has taken his show on the road. Although he was on the verge of retiring from politics four months ago, the 21-year House veteran has now assembled a national fund-raising drive with the short-term goal of raising money for Republican candidates -- and the long-term goal of propelling himself into the speaker's chair.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985337","date":"1998-07-06","texts":"Over the past three months investors would have been better off putting their cash in a money market fund or municipal bonds than investing in the average Washington area stock. Though conventional wisdom contends that the longest bull market in U.S. history is still thundering ahead, ambling would be a more descriptive verb when it came to the second-quarter performance of stocks of companies based in the District, Maryland and Virginia. The share price of the average regional company gained just 1.1 percent in the past quarter as measured by the Washington Post-Bloomberg Regional Stock Index. That was the poorest quarterly performance in a year, a dramatic slowdown from the average stock's 12 percent run-up in the first three months of the year. With money market accounts and tax-exempt bonds yielding an average 5 percent to 6 percent annually, local investors who parked their money came out ahead of those who ran with the bulls. Amid the plodding performance of regional stocks as a group, however, a handful of highflying Maryland and Virginia technology stocks were among the top performers on the New York Stock Exchange and the Nasdaq Stock Market. They include","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842616588","date":"1998-07-08","texts":"Is Amazon.com worth more than Barnes & Noble and Borders Group combined Some investors yesterday were questioning how much higher the valuation for the Internet bookseller could keep going. The stock yesterday dropped 17 38, or 12.5, to 122 18, after a sharp climb that left some market watchers agape. Even with yesterday's drop, Amazon.com is up a tidy 164 since June 8, the day before many of the Internet stocks started climbing in the wake of the seal of approval stamped on Web-related firms by the first of two important big-media investments in the group, an infusion in CNET by General Electric's NBC division. Post-tumble, Amazon.com's stock-market value still stands at 5.7 billion -- by itself nearly as much as the combined market value of Barnes & Noble at 2.95 billion and Borders Group at 2.94 billion, the two biggest chains of booksellers with actual brick-and-mortar bookstores. On Monday, Amazon.com's was actually greater than the other two combined. Indeed, Amazon.com isn't currently generating profits, and the 663 million in 1999 revenue estimated by Prudential Securities is less than one-tenth that of its two rivals. Prudential estimates Barnes & Noble will post 1999 revenue of 3.7 billion, and Borders will register 3.1 billion.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615207","date":"1998-07-14","texts":"Nearly six years after the Food and Drug Administration banned silicone breast-implants, breast-augmentation is back. In just the past two years, the number of breast-implant procedures has soared nearly 40, according to a member survey by the American Society of Plastic and Reconstructive Surgeons. Some surgeons credit a booming stock market, others the enduring popularity of the bosomy TV show Baywatch. Whatever the cause, more than 120,000 women in this country last year went under the knife to increase the size of their breasts for cosmetic purposes, the society says. At its peak around 1990, breast augmentation was the No. 1 form of cosmetic surgery, with about 125,000 to 150,000 procedures performed annually in the U.S., according to implant manufacturer Inamed Corp., of Las Vegas, one of two companies in the U.S. that still make breast implants. But then came questions about whether silicone implants might somehow trigger diseases such as lupus, arthritis or even cancer. In 1992, the year the FDA ban went into effect, the number of breast-implant procedures plummeted to 32,000. Although silicone breast-implants are still banned for cosmetic purposes in the U.S., some of the safety concerns surrounding them have been put to rest. In fact, even in this country, silicone is used for penile and testicular implants. Still, plastic surgeons and implant makers are touting breast implants filled with saline-water as a safer, more natural and more comfortable alternative to silicone. Saline implants now are used in more than 90 of all breast-enlargement procedures. It isn't as if saline-implant surgery is risk-free Common complications can include deflation of the implant, hardening of the scar tissue around the breast, and decreased sensation of the breast. After surgery, there may be bleeding, pain and infection. There may also be complications from anesthesia, including death.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613696","date":"1998-07-16","texts":"Strong gains by the U.S. stock market on Tuesday helped to propel European and Asian stocks higher yesterday, pushing the Dow Jones World Stock Index up 0.43 point, or 0.22, to 199.78. Several European markets set highs, including London, up 0.8 Germany, up 0.1 the Netherlands, up 0.3 Finland, up 1.2 and Sweden, up 0.9. France, which was closed Monday and Tuesday, played catch-up with the rest of Europe and jumped 2.1, while Italy rose 0.4 and Switzerland slid 0.3. In Asia, Japanese stocks rose 0.8 and gave some support to other markets in the region, with Hong Kong up 3.4, South Korea up 2.2 and Taiwan up 1.1. Russia continued its rally with a 3.8 rise in the wake of the financial package assembled earlier in the week by the International Monetary Fund. South Africa rose 2. European markets rose 0.7 as measured by the Dow Jones Stoxx Index of 665 European companies, which closed up 2.00 points at 311.57.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984046","date":"1998-07-16","texts":"General Motors Corp. is suffering through its worst strike in nearly three decades because it says it must win increased productivity from its workers. A new report released here today provided fresh ammunition for the company's case by showing just how far the nation's biggest automaker trails its North American rivals. GM loses an average of 104 per vehicle on every car and truck it produces in North America, compared with an average of 1,520 earned by Ford Motor Co. and 1,336 earned by Chrysler Corp., according to an annual report published by Harbour and Associates Inc., an independent management consulting and automotive research firm in Troy, Mich. Looked at another way, GM would have to cut its annual labor and benefit costs by an average of 4,439 per vehicle to match North America's most efficient producer, Nissan Motor Co. in Smyrna, Tenn. GM also would have to eliminate 54,915 workers from its production payrolls, according to the Harbour report. The Harbour report is anxiously awaited every year by auto industry executives who want to see how their companies stack up against rivals in the crucial North American market. GM officials made little effort to sugarcoat the news about their bad report card, acknowledging that it shows the company needs to improve its performance. Ford executives were ecstatic with the report, handing out laudatory press releases at today's news conference. The report showed that their company beat the domestic competition in 1997 assembly plant productivity, posting four of the top 10 car assembly plants and eight of the top 10 truck assembly plants.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613638","date":"1998-07-17","texts":"WASHINGTON -- The Senate approved a 57 billion-plus agriculture spending bill that would restore money for President Clinton's food-safety initiative and provide 500 million in emergency aid for hardpressed farmers. The Midwest and Texas are two likely beneficiaries of the farm aid, which sailed through on a voice vote and the endorsement of the White House. After days of pounding by Democrats on a growing economic crisis in the Farm Belt, Republican senators appeared to have little will to resist. Even on the food-safety initiative, the GOP split almost evenly in support of the White House's position. Sen. Thad Cochran R., Miss., the bill's manager, joined in backing the amendment, adding 66 million for the food-safety program. Most of the money would go to programs within the Food and Drug Administration, and together with what was already in the bill, the White House will get a total of 68 million, or about three-quarters of its request. Final Senate passage last night came as the House narrowly approved a 26.6 billion Treasury bill after a seesaw battle driven by partisan politics -- and the always divisive issue of abortion. Attached to the measure is a precedent-setting provision requiring that health-insurance plans for federal employees provide contraceptive coverage. Antiabortionists have attached similar riders to ban abortion coverage, and the new provision is a major victory for women's rights groups. Beyond the abortion debate, the proposal touches on the issue of gender discrimination in health insurance. Young single women are often forced to bear the price of birth control, and if the contraceptives requirement is enacted for federal-employee health plans, it could have an influence on the entire health-insurance industry.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981692","date":"1998-07-18","texts":"The average interest rates on 30-year fixed-rate mortgages rose slightly this week, Freddie Mac reported. Thirty-year mortgages were up to an average 6.94 percent from 6.91 percent last week, while one-year adjustable-rate mortgages rose to an average 5.64 percent from 5.60 percent, Freddie Mac said. Fifteen-year fixed-rate mortgages were unchanged from last week at an average 6.60 percent, Freddie Mac said. Fifteen-year mortgage rates have not been lower since an average of 6.59 percent in the week of Feb. 20. A year ago the 30-year rate averaged 7.47 percent, the 15-year 7.01 percent and the ARM 5.55 percent. Mortgage interest rates are comparable to the low levels we experienced in 1993, Robert Van Order, chief economist for Freddie Mac, said in a statement.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615319","date":"1998-07-21","texts":"Soaring computer-networking and Internet stocks pushed the Nasdaq Composite Index to its ninth consecutive record, but blue-chip stocks slipped amid worries about Federal Reserve Chairman Alan Greenspan's congressional testimony, which starts today. The Dow Jones Industrial Average, which had hit its latest record on Friday, declined 42.22, or 0.45, to 9295.75. The broader Standard & Poor's 500-stock index slipped 2.65, or 0.22, from Friday's record to 1184.10 in quiet trading. The Nasdaq composite, however, rose 5.49, or 0.27, to 2014.25 on gains by companies such as Yahoo and Cisco Systems, even though Microsoft, Intel and Dell Computer fell. Bonds gained the dollar was mixed. Many investors hope the Fed chairman today and tomorrow will hint that he is pulling back to a neutral position on interest rates, softening the Fed's current bias toward raising rates. Some economists even think that, with economic growth apparently slowing, the Fed could cut rates later this year, helping stocks and bonds. The 30-year Treasury bond gained 1732, or 5.31 per 1,000 bond, cutting the yield to 5.707. Bullish comments from two prominent Wall Street investment strategists didn't overcome sour news from several fronts. McDonald's warned of a difficult second half, while union members at General Motors' Saturn unit voted to strike, and soft oil prices hurt Exxon.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982185","date":"1998-07-21","texts":"IBM said its second-quarter earnings rose less than 1 percent, to 1.46 billion, from a year earlier as revenue fell slightly. It blamed price cuts on personal computers, weak demand for mainframes and declining sales in Asia. Still, the per-share earnings of 1.50 beat analysts' estimates by a penny. McDonald's profit dropped 47 percent to 233.8 million in the second quarter largely because of the cost of installing a new food preparation system in restaurants nationally. Without the 350 million charge for the new system and for home office layoffs, profit would have risen 7 percent to 468.8 million. Fairchild Semiconductor, whose chips are the building blocks for electrical components in everything from toasters to cars, said it plans to fire about 200 workers because of the worldwide slowdown in the electronics industry. Closely held Fairchild, spun off last year from National Semiconductor, said it plans to trim payroll costs by 10 percent. The company employs about 7,000 workers worldwide, and the 200 being dismissed are based in the United States. The company also plans to reduce the payroll through attrition and cutbacks in contracted services. T-bill rates were mixed. The discount rate on three-month Treasury bills auctioned yesterday fell to 4.950 percent from 4.980 percent the previous week. Rates on six-month bills rose to 5.045 percent from 5.025 percent. The actual return to investors is 5.081 percent for three-month bills, with a 10,000 bill selling for 9,874.90, and 5.250 percent for a six-month bill selling for 9,744.90. Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for changing adjustable-rate mortgages, rose to 5.36 percent last week from 5.34 percent the previous week. SPX is buying General Signal, a maker of industrial and electrical controls, for about 2 billion. SPX, an automotive supply and parts company, said it will pay 45 per share in cash and stock for the larger General Signal, which is based in Stamford, Conn. Muskegon, Mich.-based SPX also will assume about 335 million in General Signal's debt.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984881","date":"1998-07-21","texts":"Technology shares boosted the Nasdaq market today to a ninth straight record, but many stocks fell amid profit-taking before this week's report to Congress by Federal Reserve Chairman Alan Greenspan. The Dow Jones industrial average fell 42.22 to 9295.75 after retreating from an early 30-point foray into record terrain. McDonald's fell 2-1116 to 70-916 as the Dow's weakest component after the company met Wall Street forecasts with its second-quarter profit report but issued a cautious outlook for the second half of 1998. Most broad-market indexes also pulled back after Friday's record-setting advance, but the Nasdaq composite rose 5.49 to a record 2104.25, extending this year's gain to 28.3 percent. Cisco Systems rose 3-716 to 103-316 to lead the Nasdaq advance. Elsewhere in the technology group, IBM rose 1-1316 to 122 and Hewlett-Packard rose 1-1116 to 61 12, helping cushion the Dow's decline. After today's close, IBM reported a 1.45 billion second-quarter profit, surpassing most projections.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614934","date":"1998-07-22","texts":"The U.S. economy has hit a bump. In the first quarter of 1998 it grew at an annualized rate of 5.4. The final second quarter numbers aren't in yet, but it appears the economy contracted by as much as 1 or 2. Even granting that the first-quarter figures were buoyed with inventory accumulation that was worked off in the second quarter, this reversal of fortunes is remarkable. Asia is the culprit. The continent is in an economic tailspin. Japan has had virtually no growth for six or seven years and is now officially in a recession. South Korea, Indonesia, Thailand, and Malaysia are all in serious trouble brought on by corruption, cronyism and fraud. Curiously, China remains relatively stable because it avoided the excesses of debt that ultimately ruined the other Asian economies. Why does this matter to us The Commerce Department reported that the U.S. trade deficit hit a record of 15.7 billion in May. As President Clinton noted at a news conference last Friday, almost the entire increase in the trade deficit is due to the Asian economic troubles. The higher deficit may not matter much in the long run but in the short-term it forces U.S. companies to make costly production adjustments. Firms that manufacture widgets, both for export and to compete against foreign-made widgets in the U.S., will find themselves temporarily overstocked and will have to decrease production accordingly. The trade deficit is likely to keep growing. If experience is any guide, many Asian businesses will do anything to keep their plants open, including dumping goods by selling at below market price in any market that can absorb them. Perhaps the only reason we haven't seen this dumping yet is that, because the Asian crises originated in their financial markets, export financing has been hard to come by. International trade has boosted the U.S. economy for years, but now it is an economic drag and will remain so for some time to come. As Asian economies falter, foreign demand for U.S. goods and services falls. And as imports rise, U.S. companies find the competition tougher at home.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830985267","date":"1998-07-23","texts":"The following is a report of how some major bills fared recently in Congress and a record of how local members of Congress voted. NV means Not Voting. CONGRESSIONAL PAY For-79Against-342 The House rejected a pay raise for members of Congress. The vote occurred during debate on a Treasury Department spending bill for fiscal 1999. The bill prohibits a cost-of-living adjustment for members. Without the ban, a cost-of-living adjustment linked to 1998 inflation would take effect automatically early next year. The amendment rejected by this vote sought to remove the ban. Rank-and-file House members and senators are paid 136,700 annually, with leaders receiving more. A yes vote supported a pay raise for members of Congress. CAMPAIGN ADS For-201Against-219 The House refused to weaken the leading campaign finance bill before the House, a measure sponsored by Reps. Christopher Shays R-Conn. and Martin T. Meehan D-Mass.. At issue was Shays-Meehan language that would begin federal regulation of political advertising, including TV and radio attack ads, that interest groups sponsor to help or hurt a specific candidate. Shays-Meehan would bring these issue advocacy ads under the spending and disclosure requirements that govern the candidates' own ads. With this vote, the House defeated an amendment that sought to soften the proposed new curbs on independently financed issue ads. ABORTION For-276Against-150 The House passed a bill making it a federal crime to transport a minor to another state for an abortion, in order to avoid parental consent or notification laws in the girl's home state. The bill does not apply when the abortion is necessary to save the girl's life, and it exempts parents from prosecution. A yes vote was to pass the bill. GUN DEALERS For-122Against-301 The House rejected an amendment to prevent 2 million from being paid to gun importers as compensation for inventory they lost when President Clinton recently banned the importation of certain assault weapons. The weapons were in transit to the U.S. dealers at the time of the April 6, 1998, ban. This vote occurred during debate on the Treasury Department's fiscal 1999 spending bill. The amendment sought to transfer the 2 million to the hiring of more agents at the Bureau of Alcohol, Tobacco, and Firearms ATF, a Treasury agency that enforces gun laws. A yes vote was to spend 2 million on ATF agents rather than to compensate certain gun importers for loss of property.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616479","date":"1998-07-29","texts":"Money or power In the spate of megadeals announced this year, ranging from banking to pharmaceutical deals, there has been a common theme The smaller company gets either a premium price or its chief executive officer gets broad power-sharing arrangements in the combined company. But not both. As GTE Corp. investors found out this week, their company's executives got power, but shareholders got no premium in the 52.55 billion merger accord with Bell Atlantic Corp. GTE's shares, which closed Friday at 57.9375, are down 8.4 since news broke that it would accept a stock valuation that was below where its shares were trading. The 1.22 shares of Bell Atlantic that GTE shareholders will receive for each GTE share were valued at 55.13 as of Monday morning, and 54.06 as of the close of trading yesterday. Yesterday, GTE shares closed at 53.0625, down 2.6875, in New York Stock Exchange composite trading, and Bell Atlantic closed at 44.3125, down 68.75 cents.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615153","date":"1998-07-31","texts":"Harry Johnson, one of the top Canadian economists of this century, used to say that most things about economics are simple the problem is to recognize simplicity when you see it. This principle needs to be applied in explaining why the Canadian dollar has been dropping like a rock. The mystery here is that the Bank of Canada seems to be doing everything right, producing exemplary consumer price performance. But the loonie -- named for the loon on the face of the dollar coin -- hovers at 1.50 to the U.S. dollar instead of the 1.25 to the U.S. dollar that a consumer price-based measure of Purchasing Power Parity PPP, or the relative purchasing power of the two currencies, would suggest. The reward for monetary discipline should have been a strong Canadian dollar. Instead the legacy of inflation fighting by former central bank governor John Crow is a currency that seems to have no bottom. But while the Bank of Canada sticks to a strict anti-inflation diet, the Canadian government continues to consume a large share of the fruits of the country's productive capacity through a punishingly high tax rate. And this explains much of the loonie's loss of value. Some have argued that it is incorrect to measure PPP using the different changes in consumer prices between the U.S. and Canada. Producer prices are the main reflectors of international competitiveness, and if that measure of inflation is used the Canadian dollar's plight is slightly less puzzling. However, another argument has been advanced by WorldInvest International of London and Vancouver. It argues the PPP based on unit labor costs in manufacturing should be used to discover the Canadian dollar's theoretical value. WorldInvest notes that during the last 20 years unit labor costs have risen 109 in Canada versus 57 in the U.S. Correspondingly, the unit labor cost PPP of the U.S. dollar has moved from C1.08 to C1.40.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614420","date":"1998-08-05","texts":"Should someone who's giving away 46 million be getting this much grief For the past few weeks, Vermont Gov. Howard Dean has been putting thousands of checks in the mail to help homeowners pay their property taxes. But his critics are complaining, charging him with everything from misrepresenting the source of the money to trying to buy votes. Mr. Dean, in response, has accused one group of mud slinging at its worst. Is it any surprise that the culprit here is Act 60, the state's divisive education-funding law The prebate program is just the latest battlefield in the continuing war over Act 60. Like all elements of Act 60, the prebates are painfully complex. The law, passed in 1996, created Vermont's first statewide property tax, intended to provide more level funding for education across towns with widely varying property values and tax rates.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981677","date":"1998-08-08","texts":"General Electric Capital will give refunds totaling at least 60 million to Montgomery Ward customers who were illegally targeted to repay their credit card debts even though they had filed for bankruptcy protection, the Federal Trade Commission said. Along with the FTC agreement, GE Capital settled a class action lawsuit and entered a consent judgment with attorneys general for all 50 states. Consumer credit rose by 6.7 billion in June to 1.256 trillion as auto loans advanced and credit-card borrowing staged a rebound, Federal Reserve figures showed. Analysts had expected an increase of 3.5 billion for June. The gain was the biggest since a 7.5 billion increase in March. Economists watch the Fed's consumer credit statistics because it helps them gauge changes in consumer spending. A jury in Los Angeles awarded 760.6 million in punitive damages to 38 former employees who claimed they were harmed by toxic chemicals while building the stealth fighter for Lockheed Martin. The judgment against Exxon, Unocal, Ashland, Shell Oil and DuPont, but not Lockheed, follows a compensatory damages verdict last week in which the workers won 25.4 million. Blacks, Hispanics and American Indians are being turned down for home mortgage loans more often than whites at every income level, according to a survey of 7,925 banks, thrifts and credit unions by the Federal Financial Institutions Examination Council. NAACP President Kweisi Mfume said he and Rep. Joseph P. Kennedy II D-Mass. will request a Justice Department investigation of bank lending practices. Kennedy and other lawmakers also asked top banking regulators to overhaul their rating system for banks under community-lending laws. Two major airlines confirmed they are increasing fares by 4 percent on selected non-business flights. Delta Air Lines said the rate increase will apply to many, but not all, of its leisure tickets. Continental Airlines said it would match the fare increase in all of its domestic markets. Airline analysts said AMR Corp., owner of American Airlines, and American Eagle, also raised prices 4 percent, but company officials were not immediately available to confirm or deny it.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983383","date":"1998-08-10","texts":"Wealth Two swallows don't make a consensus, of course, but scarcely a week after Jesse Jackson's Wall Street Project was in the news, the National Urban League launched a major push for black economic power. Jackson's not-yet-fleshed-out idea is for black Americans to acquire stock in national and local corporations, thereby giving black America an insider's view -- and an insider's influence -- on the workings of the commercial marketplace. The Urban League's equally inchoate notion is that it's time for black Americans to begin working at closing the wealth gap that can be expressed in this shorthand fashion Black household income, according to one recent survey, is about 62 cents for every dollar earned by white households. When it comes to wealth, however, the black share is about 8 cents on the dollar. The wealth data expose far deeper inequalities than the income gap, Melvin L. Oliver and Thomas M. Shapiro wrote in the essay that was the basis for discussion at the Urban League's recent convention in Philadelphia. Half of all white households have at least 6,999 in a net financial assets NFA nest egg, whereas nearly two-thirds of all black households have zero or negative NFA. A couple of things worth noting The essay is the lead article in the league's 1998 edition of The State of Black America, an annual report that used to focus on how awful things were for black people and how white racism was to blame.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616041","date":"1998-08-11","texts":"EUROPE Romania Mulls Delaying Key Sale, Raising Concerns After making a broad commitment to move ahead quickly with the sale of hundreds of state-owned companies, Romania is now signaling that the auction for a 35 stake in RomTelecom could be delayed by weeks or even months. While such a delay wouldn't ordinarily be a big deal, postponement of the sale of the phone monopoly in the former communist country could make foreign investors uneasy. That's because the process is being closely watched by international financial institutions as an indication that Bucharest is serious about its commitment to reforming the economy.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613732","date":"1998-08-14","texts":"The volatile stock market may provide all the risk that most investors can stomach, but some Wall Street investment banks are making much more daring bets pumping venture capital into fledgling Internet companies whose initial public offerings may be years away. Traditionally, Wall Street's leaders have avoided venture investing, leaving it to specialized boutiques that raise money from universities, wealthy individuals and others. But with many venture funds lately earning 50 or more a year, securities industry heavyweights such as Goldman, Sachs & Co. and Morgan Stanley Dean Witter & Co. are pushing their capital into venture investments ranging from biotechnology to telecommunications. Some of the most hectic action involves tiny, money-losing Internet enterprises that investment bankers hope will be the next Yahoo Inc. or Amazon.com Inc. Executives of closely held Internet companies are watching this stampede with delight. In May, Ross Garber, chairman of Vignette Corp., came to New York to raise 7 million of venture-capital equity for his Austin, Texas, Internet-software company. After huddling with Goldman, Morgan Stanley and three other firms, Mr. Garber realized his sights were too low. We ended up raising 14.3 million, including 10 million from the investment banks, and we could have gone much higher, Mr. Garber says. I had bankers calling me at home on weekends, threatening my future livelihood if I didn't let them in for a bigger stake.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613770","date":"1998-08-14","texts":"WASHINGTON -- The American shopper, the economy's chief engine these days, kept spending at a decent clip last month, though the General Motors Corp. strike damped overall retail sales. Sales for all retailers fell 0.4 in July from June, adjusting for seasonal factors but not for inflation, the Commerce Department reported yesterday. That was the worst performance in more than a year, and reversed a modest 0.1 rise in June. But the weakness was almost entirely at auto dealerships, which saw sales plunge 3 for the month, following a 0.6 rise in June. Analysts blamed the drop largely on the now-ended GM walkout Excluding cars, retailers saw a decent 0.5 rise in business, more than making up for June's 0.1 decline in noncar sales. Consumers' spending predilections have taken on a heightened importance in keeping the economic expansion going, as the Asian crisis has forced a slowdown in manufacturing and threatened to curb business investment. Despite daily news of Asia's deterioration, though, American consumer confidence remains high. The consumer is continuing to carry the load for the economy, said Joel Naroff, an economist at First Union Capital Markets Group in Philadelphia.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615616","date":"1998-08-14","texts":"There is little doubt that the economic crisis now gripping East Asia is the most severe shock to the global economy since the end of the Cold War. But it would be wrong to attribute the recent weakness on Wall Street to the crisis. There is no reason for the Asian crisis to depress the growth rate of the U.S. economy. Instead, it is likely to change the sectoral composition of growth within the economy. The crisis will set the stage for poor performance in companies producing tradable goods, but it will also create opportunities for profit in companies catering to domestic consumption. The data on the U.S. gross domestic product for the first half of 1998 illustrate how the crisis has changed the U.S. economy's growth mix. There was an unprecedented expansion of the trade deficit, to 252.9 billion during the second quarter of 1998 from 149 billion during the fourth quarter of 1997. This reduced real annual GDP growth by about 2.4 during the first half of 1998. But total annual output growth still averaged about 3.5 because domestic demand grew at a 6.5 annual rate compared with 2.4 during the fourth quarter of 1997. This upsurge was not a lucky accident, but the result of three positive side effects the crisis has had on the U.S. economy. First, the risk of further financial collapse in Asia and elsewhere has deterred the Federal Reserve from raising interest rates to slow the growth of domestic spending. As a result, the U.S. economy is enjoying higher growth rates for home building, commercial construction and retail sales than it would have without the Asian crisis. Second, increased foreign demand for American equities and other U.S. financial assets has helped the U.S. withstand the Asia trade shock. The Asia crisis created a surplus pool of global liquidity that has driven U.S. equity prices to unprecedented levels. Foreign investors purchased U.S. equities at an annual rate exceeding 100 billion during the first quarter of 1998, compared with 66 billion during the whole of 1997. The buoyancy of the equity market has boosted household wealth while sending the household savings rate down to only 0.6 during the second quarter, from 2.6 one year ago.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615880","date":"1998-08-18","texts":"MILPITAS, Calif. -- A new breed of American company is arising out of the relentless drive to reach global markets more quickly -- the stealth manufacturer. One such company, Solectron Corp., makes computers, printers, cellular phones and other high-tech gear. But you can't buy Solectron-brand merchandise. The famous names stamped on its products, such as International Business Machines Corp., Hewlett-Packard Co. and Cisco Systems Inc., hire it to make major parts. Overseas contractors have been doing such work for years. But Solectron's biggest plant isn't in Asia but here in Silicon Valley. More than 5,600 people work for it in California, in jobs that were supposed to have fled the U.S. a decade ago. The U.S. contract manufacturers are helping hollow out America's corporations while bolstering its manufacturing base. They land orders because they are considered among the world's most efficient manufacturers, and their proximity is prized because it facilitates quick product development. As a result, electronics manufacturing is thriving in U.S. plants run by contractors such as Solectron, SCI Systems Inc., Jabil Circuit Inc. and Toronto-based Celestica Inc. The U.S. contractors are the leaders of a 90 billion global business that is growing about 25 a year, almost twice as fast as the industry they serve. They are so efficient that companies such as H-P, IBM and Texas Instruments Inc. are, in effect, handing over to them their factories.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617336","date":"1998-08-18","texts":"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. 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. 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. 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. 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.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616799","date":"1998-08-19","texts":"WASHINGTON -- The U.S. trade deficit narrowed in June from May's record level, thanks mainly to a drop in imports. But most analysts believe the improvement will be short-lived. Inflation, meantime, remains in check, the Labor Department says. The Consumer Price Index for July rose a modest 0.2, seasonally adjusted, over June. The Commerce Department said the trade deficit narrowed to a seasonally adjusted 14.15 billion in June from 15.54 billion the month before. Imports fell to an adjusted 90.32 billion in June from 92.12 billion in May. Exports in June slipped to 54.61 billion from 54.72 billion. Underlying these figures is an across-the-board weakness in U.S. exports stemming from the impact of economic turmoil in Asia and some price cutting by U.S. companies acting to remain competitive. U.S. shipments to the Pacific Rim countries, for example, fell to 13.59 billion in June from 17 billion in June 1997. That continued a recent downward trend in exports to the region. The year-over-year numbers are the most accurate measure of the trend, as these figures aren't seasonally adjusted. But U.S. export weakness spreads beyond Asia, says David Levy, director of forecasting at the Jerome Levy Economic Institute, Mt. Kisco, N.Y. Based on a 12-month moving average, he calculates U.S. exports to Europe essentially have been flat since March. Mr. Levy blames the strong U.S. dollar, which makes U.S. exports more expensive, and intense competition from Asian exporters.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615826","date":"1998-08-21","texts":"WASHINGTON -- First-time claims for state unemployment insurance slipped by 2,000 to 301,000 last week, indicating the labor market remains extremely tight, the Labor Department said. The four-week moving average for claims -- considered a better gauge of labor-market conditions -- fell by 4,000 to 303,000 for the week, the lowest level since Aug. 7, 1997. In a separate report earlier in the week, the Labor Department said the number of American workers laid off from 1995 to 1997 dropped sharply from the prior three-year period. A total of 3.6 million workers were displaced, according to the government's biannual survey, down nearly 15 from 1993-95. The study includes data from 1995 in both time periods. The study, reported in yesterday's New York Times, also found that getting laid off caused less trouble for workers as the economy improved. About three-fourths of people who lost jobs from 1995-97 found new jobs fairly quickly, a slight improvement over 1993-95. More than half of those who found new jobs earned as much or more than they had in their earlier jobs, a seven-percentage-point improvement over 1993-95. And while one in four laid-off workers suffered an income drop of 20 or more when they were re-employed, that was down from the one-third who saw such a decline in 1993-95.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613723","date":"1998-08-25","texts":"WASHINGTON -- Former President Bush said in a television interview that he blames Federal Reserve Chairman Alan Greenspan for his 1992 defeat. I think that if the interest rates had been lowered more dramatically that I would have been re-elected president because the economic recovery that we were in would have been more visible, Mr. Bush told interviewer David Frost. I reappointed him, and he disappointed me. Mr. Bush's economic advisers, particularly Treasury Secretary Nicholas Brady, were critical of the Greenspan Fed's reluctance to cut interest rates more rapidly during the recession of 1990-91 and the sluggish recovery that followed. Mr. Greenspan, a Republican, was appointed by President Reagan in 1987, and nominated for another term in July 1991 by Mr. Bush, partly because he couldn't find an acceptable alternative. He was reappointed by President Clinton to a term that ends in 2000. A spokesman for Mr. Greenspan declined to comment.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617461","date":"1998-08-26","texts":"The spread of the Asian contagion to Russia and possibly Latin America is raising the specter of deflation, which to many conjures up images of the bread lines and apple sellers of the 1930s. Back then, U.S. wholesale prices dropped 32 as demand nose-dived in the face of bankruptcies, widespread unemployment and massive pay cuts. Today we have financial crises aplenty in Asia, but they are unlikely to spread to the West. In the U.S., the long series of sectoral financial problems -- ranging from the farm-belt collapse in the early 1980s to difficulties related to the defense cutbacks of the early 1990s -- are behind us. Demand will probably not collapse in the West, even though there are some demand-reducing deflationary forces at work in the world. The Cold War is over, and the history of U.S. inflation is the history of wars. Since 1749, prices have risen at double-digit annual rates in wartime, but have fallen by more than 1 a year on average in peacetime. This isn't surprising, since the government is the only economic sector with enough financial credibility to outspend its revenues vastly and create excess demand for any length of time. Wars on poverty are similarly inflationary, but the passage of welfare reform suggests that Washington is serious about cutting nondefense spending. Government spending in Europe is hemmed in by the Maastricht requirements for deficits and debts. And despite eight years of a deflationary depression, Japan remains unwilling to enact major tax cuts for fear of the budgetary consequences. These are not the only deflationary forces at work. The Federal Reserve and other central banks continue to fight yesterday's war against inflation. Productivity-enhancing and cost-cutting restructuring prevails in this country and is spreading to Europe and Japan. Deregulation is bringing prices down. The continuing strength of the U.S. dollar encourages imports at lower costs, thereby forcing domestic competitors to reduce their selling prices. Even more significant are deflationary forces that increase supply. Global sourcing is mushrooming low-cost supplies, and not just of goods. Software engineers in India are working for U.S. firms at 20 of what Americans cost. The shift in both Russia and especially China from the command economy model to unbridled, buccaneer capitalism is also creating huge new sources of supply. The collapsed Asian economies, including Japan, desperately want to increase exports to employ their citizens and earn hard currency to service their huge foreign debts. Include booming high-tech industries, and global supplies of almost everything will surge while prices will necessarily fall.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616689","date":"1998-08-27","texts":"Deflation knocked louder at the door of the U.S. economy as the Bridge Commodity Research Bureau index ended the day at a 12-year low. The index, composed of 17 major commodity prices, slipped early in the day below an August 1992 intraday low of 198.17 -- seen as a key benchmark -- and dipped to 197.72 before settling down 1.65 at 198.12. That marked its lowest close since 1986. The move was the latest slip in the index's year-long 39.57-point fall from 237.69, signaling commodity markets' two-year bear market may be picking up steam rather than abating. The Goldman Sachs index of spot commodity prices also slipped 1.41 to 139.6070, its lowest level since 1977. Most industry observers don't believe commodity prices will recover any time soon. It's falling like a stone, said Ray Murphy, president of RTM Management Inc., who helped BridgeCRB create a CRB total-returns index tailored to investors like pension funds. There's plenty of supply of everything and no demand. Where it bottoms out could be anyone's guess. And the free fall could have implications for other areas of the economy as well. Robert Hafer, managing director at BridgeCRB, said the CRB traditionally is an advance indicator of what conditions will be like in six to 12 months. He says if deflation spreads, it will show up next in producer prices and then consumer prices. That, he said, could necessitate a cut in interest rates. For now, however, the inflation-shy Federal Reserve appears unwilling to consider such a move.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981787","date":"1998-08-29","texts":"Fund-raisers at Bowie State University spent extravagantly on banquets they weren't supposed to sponsor, cruises that few guests showed up for and dozens of other arguably wasteful items, according to an audit released yesterday. In all, the Bowie State University Foundation ran up a 181,968 operating budget deficit in just two years, forcing it to borrow from endowment funds contributed to the university, state higher education officials were told yesterday. The state university system's Board of Regents did not take action against any Bowie State officials yesterday, but Chairman Lance W. Billingsley said a subcommittee will decide whether anyone will be held responsible. Three months in the making, the independent audit offered an explanation of the financial scandal that has cast a shadow over the 5,400-student historically black college in Prince George's County and already forced the dismissal of three chief fund-raisers. The new audit also criticizes Bowie State President Nathanael Pollard Jr., saying he failed to check up on the foundation's finances.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982038","date":"1998-08-29","texts":"The boos and whistles began raining down on Helmut Kohl as soon as he mounted the stage in the market square of this dilapidated industrial city. When the chancellor of German unity began reciting his achievements, the chorus of catcalls nearly drowned out his amplified voice. Kohl must go Kohl must go chanted many protesters in the crowd of 1,000 people, who had come to a campaign rally Thursday night to hear Europe's longest-serving leader make his pitch for an unprecedented fifth term after 16 years in office. As police in riot gear shoved unruly demonstrators behind barricades, other spectators jeered and waved signs saying Thanks for 20 percent unemployment and Enough with your broken promises As he tours eastern Germany courting votes for the Sept. 27 national election, Kohl is confronting an ugly mood of disillusionment that has jeopardized his hopes for another comeback victory. Although some polls indicate he has narrowed the gap with Social Democratic rival Gerhard Schroeder to as little as 3 percentage points, the hostility Kohl encounters at nearly every stop in the east suggests he is making no headway in recapturing the allegiance of Germany's most fickle swing voters. Four years ago, Kohl came from 18 points down to win reelection with the help of an avalanche of votes from easterners still grateful to the father of German unity for liberating them from the bleak repression they endured under the Communist authorities of the German Democratic Republic. The republic collapsed in 1990 along with other Soviet-backed Communist regimes, and its five regions, along with Berlin, were folded into the Federal Republic of Germany. But rampant despair over widespread joblessness and embittered dismay with capitalist society have compelled many easterners to turn against Kohl with a vengeance. Many politicians and commentators now believe Kohl's Christian Democrats could tumble to third place in the east, behind Schroeder's Social Democrats and the former Communists known as the Party of Democratic Socialism.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983163","date":"1998-08-29","texts":"The U.S. stock market ended the worst week of the year today on a down note, leaving it in the shadows cast by a bear market and deepening financial gloom around the world. After Thursday's dramatic plunge of more than 350 points, the Dow dropped another 114.31 points today, or 1.4 percent, to close at 8051.68 -- a loss in value of 5.65 percent for the week. Although the blue-chip average was up as much as 78.43 points early in the day, buyers hunting for bargain-priced stocks were timid and couldn't sustain the rally in the face of recent financial free falls in markets in Russia, Asia and Latin America. Although the stock market in Russia rose today, shares on Tokyo's stock market closed at their lowest levels in more than 12 years. Despite the turmoil abroad, the Federal Reserve isn't likely to reduce U.S. interest rates, a number of Fed officials said yesterday at a conference in Jackson Hole, Wyo. However, the continuing turmoil and the likelihood it will slow U.S. economic growth has virtually eliminated pressure on the Fed to raise rates to restrain inflation, they said. Traders were glad to see the end of a tough week, when the Dow lost a total of 514.93 points. The Nasdaq Stock Market, heavy with technology stocks, took an even bigger hit this week, with the Nasdaq composite index dropping 8.8 percent to close at 1639.68. The Standard & Poor's 500-stock index was down 5 percent.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984666","date":"1998-08-29","texts":"Two cut-rate mortgage ideas that haven't been seen nationally for nearly two decades have resurfaced this summer and appear to be picking up significant steam. Both plans allow home buyers to qualify for interest rates below prevailing market levels. Both work especially well for jumbo loan borrowers -- those seeking mortgages of more than 227,000 -- and for buyers who know they're likely to sell or move sometime in the coming four to five years. But both require you to strike a bargain of sorts with your lender. You've got to give up something to get the discount rate. The first oldie-but-goodie making a comeback is the prepayment penalty plan. In exchange for a fixed 30-year interest rate that's about 0.25 percent less than the regular rate, you agree not to refinance during the next 60 months. After that, you're free to do whatever you want. And during those first 60 months, you are free to pay off the mortgage loan without penalty if you move or sell the house. But if you prepay the mortgage balance simply to refinance with another lender, you get hit with a penalty, the size of which varies according to state law. In California, for example, the prepayment penalty can't exceed 80 percent of six months' interest. In other states, where such prepayment penalties are subject to different statutory restrictions, the penalty may be different, or not permitted at all.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985172","date":"1998-08-29","texts":"The Federal Reserve isn't likely to reduce U.S. interest rates in response to the financial crisis that has swept Russia and many other nations this month, a number of Fed officials said here today. The added uncertainty about where the world economy is headed and the likelihood the crisis will be a drag on U.S. growth, however, has virtually eliminated pressure on the Fed to raise rates to keep U.S. inflation low, the officials said. William Poole, president of the St. Louis Federal Reserve Bank, who dissented in favor of a rate increase at a Fed policymaking session in May, said he no longer is pushing for higher rates. None of the other officials, including Fed Chairman Alan Greenspan, who are here for the Kansas City Federal Reserve Bank's annual economic conference, would speak for attribution. But several of the 14 policymakers here agreed that damage to the economies of nations such as Brazil, Mexico and Canada from sharply higher interest rates and falling stock prices means a weaker world economy and downward pressure on prices for many goods and services. Like the turmoil that began in Asian countries last year, the latest developments will be a serious drag on U.S. growth by lowering demand for U.S. exports, particularly in Latin America. At the same time, slower growth around the world and falling prices for many products, especially basic commodities such as oil and copper, and the rising value of the dollar, will keep the cost of U.S. imports falling. That in turn will put downward pressure on inflation in this country, the Fed officials said.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614715","date":"1998-08-31","texts":"The impact of the two-day-old pilots strike at Northwest Airlines will deepen today as employers in the markets it dominates return to work with few travel options. Business travelers from Detroit and Minneapolis raced home Friday night to beat the midnight deadline for the strike. But as Sharon Yourth, a regional manager for Baxter International Inc., said upon returning that night to Detroit's airport What am I supposed to do next week Now that next week has come, there is little hope of a quick resolution. The two sides haven't talked since the pilots walked out early Saturday. And Maggie Jacobsen, the federal mediator who supervised the talks, said in an interview that she had no plans at the moment to recommend that President Clinton invoke a rarely used law that would put the pilots back to work for 60 days, while a special panel investigates the deadlock. In Detroit, where Northwest controls 75 of the flights, General Motors Corp. is instructing its employees to drive to Buffalo, N.Y., and Dayton, Ohio, to find a plane. Still, the auto maker expects that the strike means about 20 of its planned business trips cannot be made. The situation is worse in Minnesota's Twin Cities, where Northwest controls about 80 of the gates at MinneapolisSt. Paul International Airport. Unlike Detroit, Minneapolis isn't located near other big cities, leaving big companies such as Minnesota Mining & Manufacturing Co. and Dayton Hudson Corp. with no easy backup plan.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614658","date":"1998-09-01","texts":"With yesterday's mini-meltdown on Wall Street, the question looms larger than ever Have the financial markets detached themselves from the real economy of jobs, incomes and gross domestic product For many economists, the answer is a fairly resounding yes. And they find it misguided to see the gyrations of the 1998 U.S. stock market as a reliable indicator of either a continued boom or an imminent bust. The stock decline is not telling us a thing about the U.S. economy, said James F. Smith Jr., professor of finance at the University of North Carolina. There's hardly anything wrong with the U.S. economy today that you can't solve with lower interest rates. It's tempting to believe otherwise, of course. It was less than eight weeks ago that the Dow Jones Industrial Average reached a record 9337.97. Optimists saw it as proof of a new economic paradigm. Bolder types concluded, as they had in past years, that the business cycle had been repealed by tremendous strides in technology and productivity, justifying enormous leaps in stock prices. Today, just a few weeks later, doomsayers point to the plunging financial markets and the global damage inflicted by the Asian crisis.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984853","date":"1998-09-01","texts":"While the incomes of most American households have remained stubbornly flat over the past three decades, the elderly have seen their financial circumstances improve dramatically, far outpacing every other demographic group, the Census Bureau reported yesterday. An analysis of household income from 1969 to 1996 showed a 57 percent rise in real median income for married couples over age 65, dwarfing the 6.3 percent increase for all households. Among elderly people living alone, incomes went up even more -- 63 percent. The improvements can be traced largely to increases in Social Security benefits and pensions, but also reflect a generation that enjoyed the combined effect of the G.I. Bill that gave many more college educations, a booming real estate market and the entry of more women into the labor force. These changes, said Martin Corry, director of federal affairs at the American Association of Retired Persons, have meant light-years of difference for that whole generation. In fact, the result has been to create a very different profile of retirement and aging. As late as the 1960s, many elderly ended up in county homes for the aged, a bed of last resort for those without income, family or health care coverage. Now, most older Americans are able to either live at home or, in a small but growing number of cases, move into retirement communities and assisted living facilities that enable them to live more active lives.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617033","date":"1998-09-02","texts":"TOKYO -- As the New York stock market goes, so goes Tokyo. That has been the lesson of recent experience, but it hasn't worked out that way in the first two days of this week, when sharp declines in U.S. equity prices were followed by surprising gains in Japanese shares. Yesterday, the Nikkei 225 stock average rose 261.74 points, or 1.8, to close at 14369.63. On Monday, the Nikkei gained 192.26 points, recovering from a 12-year low of 13915.63 that it hit Friday. The yen strengthened against the dollar to 138.20 yen per dollar in late Tokyo trading, up from 141.50 yen Monday. Broad movements in the New York and Tokyo markets have recently been closely linked, as investors have started treating Japan's biggest blue-chip exporters much the same way they do their U.S. counterparts. So the fact that Japanese stocks were able to shrug off the 6.37 drop in New York on Monday raised eyebrows on trading floors across the nation and fueled speculation that the government had stepped in to support the market -- something that politicians from Finance Minister Kiichi Miyazawa on down have promised not to do. There was no firm evidence that the government had intervened in the market, however. Although some traders interpreted buying by public pension funds as a sign of government support, other analysts said it was more likely that those pension funds were simply engaged in normal buying. While public pension funds have helped the government support the market in the past, these days they are burdened with huge unfunded liabilities and are desperately trying to earn better returns, making them unlikely proxies for a government interested in bolstering a sagging market. Instead, strategists think that fresh interest in Japanese shares, which many expect to be short-lived, mainly reflects a renewed caution among Japanese investors who are spooked by the turmoil in U.S. and European stock markets and willing, at least for now, to give domestic shares a second look. Some analysts suggested that the market rise also could be the result of hopes that the U.S. will cut interest rates in order to counter the effects of the U.S. stockmarket decline. Lower rates would mean a weaker dollar, which would help Japan's beleaguered banks.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984279","date":"1998-09-02","texts":"It is a long way from Wall Street to this mountain community near the Indian Peaks Wilderness 30 miles northwest of Denver, but the ties that bind millions of Americans to the stock market even wind through here. As many other small investors did on Monday, real estate broker Liz Ford took a keen interest in the market's stomach-churning plunge. But not for the same reasons. Two weeks ago, the investing newsletter she subscribes to advised its clients to dump their holdings, and Ford moved about three-fourths of her 160,000 in mutual fund shares into cash -- everything except those funds that require a letter to sell. Her reaction on Monday Yes she said, pumping her fist in the air, savoring her adept market timing and anticipating buying back in at significantly lower prices. I didn't get out at the top, but I didn't get out at the bottom, either. Across the hall at the Fowler Real Estate office in this picturesque former tungsten mining town of 1,500 people, her colleague, Jim George, was not celebrating. But he was not despondent either, despite seeing his 90,000 investment nest egg shrink to 58,000 as of this morning. He took his biggest hit in a fund that he belatedly learned has 17 percent of its assets invested in Russian bonds, something he ruefully admits he would have known had he read the fund's prospectus. Nonetheless George is holding tight, having learned an earlier painful lesson when Iraq invaded Kuwait, the market dropped, and he sold and took a hit. When it's down this much, you can't bail out, said George, who now classifies himself as a long-term investor. Luckily I have 11,000 in credit left on my Visa card and the grocery store and the gas station take Visa. I'd love to get a 100,000 home equity loan now and put it in the market.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984675","date":"1998-09-02","texts":"We should not fool ourselves that the recent sell-offs in world stock markets simply reflect a nervous reaction to Russia's turmoil or a long-overdue correction. They signify instead a gathering fear that the global economy is drifting toward a dangerous slump, driven by forces that world leaders only vaguely understand and seem powerless to affect. Even those supposed titans of global finance -- Treasury Secretary Robert Rubin and Federal Reserve Chairman Alan Greenspan -- give little hint publicly that they grasp the threat or know what to do about it. This is no longer a minor Asian crisis. Japan's recession is its worst since World War II. Latin America's economies are slowing. Mexico's economy -- which had been growing 4 to 5 percent -- will be lucky to grow 2 percent next year, says economist Desmond Lachman of Salomon Smith Barney. Russia's depression hurts its Eastern European trading partners. China is slowing. Together, these areas represent almost half the world economy's output. The United States and Europe, with another 40 percent of global gross domestic product GDP, cannot easily escape the fallout. Given today's prosperity, Americans are naturally disbelieving. Unemployment is 4.5 percent. Inflation barely exists. Exports -- the sector directly affected by the global slump -- are only 12 percent of U.S. GDP. But economists and others often blunder by projecting the present into the future. America's prosperity is precarious precisely because things can't get better they could easily get worse. How The economic expansion began in 1991. Americans have already bought lots of cars, computers and clothes. Consumer debt including home loans is high. In the first half of 1998, the personal savings rate was less than one percent. Until recently, the jubilant stock market made Americans feel wealthier. They are spending some of their stock profits since 1992, annual realized capital gains have roughly tripled. Now, lower stock prices could dampen confidence and consumer spending, which is two-thirds of GDP. Exports are already weakening rising imports further imperil domestic production. Why, then, would companies continue to increase investment 11 percent of GDP A recession is clearly possible. And a U.S. slump would compound everyone else's problems. The United States is the world's largest importer, and other countries -- from South Korea to Brazil -- need to export to recover. Lower interest rates would improve the outlook. Economist Gary Hufbauer of the Council on Foreign Relations rightly says that the Federal Reserve and Germany's Bundesbank should cut rates by half a percentage point. Lower rates would ease debt burdens and help sustain consumer spending and home-buying.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613864","date":"1998-09-03","texts":"MONTREAL -- Air Canada pilots went on strike, disrupting air transportation across Canada and into the U.S. several days into a similar walkout by pilots at Northwest Airlines. But Canada's biggest airline and its 2,100 striking pilots weren't far apart in their terms when negotiations broke off shortly before midnight Tuesday. With passengers scrambling for scarce seats on other carriers and the Montreal company losing millions of dollars for every day the strike lasts, some analysts said they expect the stoppage to end within days. Spokesmen for Air Canada and its pilots' union said yesterday they were prepared to return to the bargaining table quickly, though further talks hadn't yet been scheduled. As with the Northwest Airlines strike in the U.S., the Air Canada dispute stems from labor concessions in the early 1990s. The Air Canada pilots argue that a pay cut they took in 1993, combined with subsequent productivity increases, helped the carrier post a record profit last year. The pilots also claim they are paid 30 to 50 less than pilots for major U.S. carriers. Talks broke down late Tuesday night with the pilots seeking a 12 pay increase over two years and the company offering a 9 increase over that period. While the difference amounts to only about seven million Canadian dollars US4.5 million annually, Air Canada officials said they are concerned about the precedent for talks with other unions whose contracts will be up for negotiation in coming months.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982119","date":"1998-09-07","texts":"Let's stop celebrating Labor Day -- by which I mean, let's stop assuming that the hard-won gains of organized labor in the United States are a done deal. And let's start using Labor Day to rededicate ourselves to the victories labor must win if it is to help working families in the 21st century. In some ways, the end of this century resembles the end of the last one. Corporations have regained the kind of unfair advantages over working people that they have not enjoyed for nearly 100 years. And with this, we find many of the darker impulses of the Gilded Age alive and well among today's entrepreneurs -- specifically, the willingness to roll over working people who seem powerless. In the 1990s, Americans are working harder than ever -- and they've got the stress to show for it. Millions now know what it's like to work uncompensated overtime in understaffed offices, or to work two jobs or to go without vacations and health insurance. For all this extra productivity that's been squeezed out of them in today's lean and mean workplace, the average American worker today earns less, works longer hours and spends less time with family. Workers kept their side of the bargain in making America more competitive again, but the gains they won were not equally shared. And this inequality is going to continue until workers become as organized as they did in the labor movement's prime. About 16 million American workers are represented by unions today. That's down 24.5 percent since 1980, at a time when our work force approaching 137 million is at an all-time high. Some say the reason is that manufacturing jobs have gone overseas. But the United States has more manufacturing jobs today than ever before -- the jobs just have moved south and west, to states where workers are not organized. Labor can't win better pay and benefits for members when employers down the street require unorganized workers to do the same work for lower wages and fewer benefits.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616599","date":"1998-09-11","texts":"Stock-market investors, surprised by the quick delivery of a special prosecutor's report late Wednesday, found themselves sharing some of President Clinton's pain yesterday. But while more could be in store in the event of a protracted battle over Mr. Clinton's future, some Wall Street strategists say the market has a salve the continued presence of Robert Rubin as Treasury secretary and Alan Greenspan as Federal Reserve chief. It is times like these that you value people like Greenspan and Rubin, and we've got to make sure they don't resign or we're really in the soup, says Thomas Galvin, chief investment strategist for Donaldson, Lufkin & Jenrette. Market strategists and other experts were quick to point to such factors that could cushion the market from the impact of scenarios ranging from censure to resignation to a full-blown impeachment proceeding stemming from the president's relationship with a White House intern. For the financial markets, the most important thing is that Greenspan and Treasury Secretary Rubin are still there, and are visible and active, says Prudential Securities market strategist Greg Smith. And in that case, I don't think there will be quite the sense of hopelessness that nobody is in charge. In the end, he adds, unless the Clinton affair prompts either of those two to resign or be ineffective, the president's problems are largely an unpleasant side show.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981872","date":"1998-09-12","texts":"The unnerving spectacle of the stock market shedding almost a fifth of its value in less than two months might be expected to cool the enthusiasm of privatizers who want to give Americans the power to invest their Social Security funds in stocks. It has not. The market's recent imitation of a deranged elevator -- rising reassuringly one day only to plunge sickeningly the next -- comes as no shock to economists, policymakers and citizens who have faith that the long-term trend is up. But if these recent fluctuations worsen into a longer-term funk that lasts until Congress takes up Social Security reform, perhaps as early as next spring, proponents and critics said it could be difficult to pass legislation to shift part of the trust funds into private accounts. Rep. Mark Sanford R-S.C., among Congress's leading privatization proponents, said he worries that a continued market slide could hurt his side. The politics will be tough, real tough if the market sinks, he said. The idea's prospects could depend on where the stock market is going to be next spring, said Rep. Jim McDermott D-Wash., an opponent of private accounts. If the Dow Jones industrial average is at 6,000, nothing's going to happen. If it's at 12,000, well . . .  After hitting a peak of 9,337.97 points on July 17, the Dow began to fall, bottoming out at 7,539.07 on Aug. 31, a drop of more than 19 percent. It closed yesterday at 7795.50, still more than 16 percent off its peak.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842615405","date":"1998-09-14","texts":"TOKYO -- News that Japan has fallen into its longest economic contraction in five decades has led some economists and government officials to suggest that the country has nudged closer to a vicious spiral of falling prices, falling employment and falling output that would damage its economy even further. Economic activity fell 0.8 during the April-to-June quarter from the previous quarter, the government said Friday, an annualized decline of 3.3. And with spending by companies and consumers plummeting, there was almost no sign the situation will improve soon. The Japanese economy is walking along the edge of a deflationary spiral, said Taichi Sakaiya, head of the government Economic Planning Agency. Even before the gross domestic product numbers were released Friday, the benchmark Nikkei stock index plunged more than 5 amid concern over the economy and the gyrating U.S. stock market. At the end of the morning session on Monday, the Nikkei was up 30.12 points to 13947.10. The dollar weakened almost five yen during the Asian trading day as spooked investors brought dollar investments home and cashed them in for yen. The Japanese bond market touched another record high as yields, which move in the opposite direction of prices, plunged to 0.79 on the benchmark long bond. Japan's report on gross domestic product -- the total value of goods and services produced in the economy -- was a litany of problems that exceeded even the downbeat expectations of most private economists.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615689","date":"1998-09-15","texts":"NEW YORK -- A mild sense of optimism emerged in the options market as the stock market rallied. But traders didn't make any major commitments ahead of this week's reports that will help Wall Street gauge the health of the U.S. economy, Federal Reserve Board Chairman Alan Greenspan's testimony before a congressional committee, and expiration of September options contracts on Friday. What activity there was in the options market was premised on trading options in anticipation that the underlying stocks would move in a specific direction, a senior trader at a major New York securities firm said. Bargain hunters, which have maintained a constant presence in the options market, were active in sectors that have been ravaged, including technology, oil, bank and financial companies. People are getting back in the market in all different ways. People are re-establishing their general patterns of behavior, said Leon Gross, Salomon Smith Barney's institutional options strategist.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982411","date":"1998-09-16","texts":"Anyone who questions whether we are living in a global economy needs to reflect carefully on the financial turmoil of the past few weeks. We can no longer escape the issue of how to manage in a world in which economic currents have no frontiers but our instruments to deal with them do. The International Monetary Fund lies at the center of this storm. It is the only financial institution that has some semblance of global influence. The IMF, however, is the subject of considerable controversy. The traditional approach of the IMF is to lay the foundation for healthy economic growth by restraining government intervention in the economies, ensuring sound currencies and encouraging open markets. Its policies have been a major factor in spurring unprecedented changes in the global economy. Current efforts to stabilize the Asian economies, however, are far different and more complex. Gone is the luxury of an exuberant economic environment. Commodity prices are plummeting. Interest rates in the affected countries are soaring, crippling banks and bankrupting business. Manufacturing plants throughout Asia have idle excess capacity. Unemployment is rising sharply. Devaluations and the fall of capital markets have drained substantial liquidity from global markets. The losses on the U.S. stock market alone since July are equivalent to the total annual GDP of all of the Latin American nations combined. Governments cannot balance budgets in the face of collapsing tax receipts, impeding their capacity to stimulate their economies. The problem for the IMF, however, is that the issue of corruption that got us into this predicament is just as real. As we see in Russia and many countries of Asia, this is the most pernicious contagion that has infected many banks and commercial enterprises. The result has been illicit enrichment and misallocation of resources, which taxpayers the world over are now being asked to pay. This will not do. The deep concerns about corruption reflected in the debate in Congress about IMF funding have to be addressed in formulating new policies. On the positive side, strong U.S. and European economies still exert considerable pull to lift the faltering economies of the developing world. The countries of Asia are now yielding large current-account surpluses, which could help them restore their economies if they have access to bridge capital. The issue is how to restore global confidence while not abetting corrupt practices or rewarding ill-considered lending.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613928","date":"1998-09-17","texts":"Joliet, Ill. -- In this blue-collar city, both political parties will spend the fall vying for the attention and affection of citizens like Carol Rapcan. They will have to take a number and stand in line. Even as the presidential sex scandal fills the front pages, Ms. Rapcan says lots of things are more important to her life than national politics. At age 55, she devotes much energy to her three daughters. She is also focused on the good economy. A busy bridal-shop owner is practically begging her to come and do alterations. At her regular job -- working the gift shop at Harrah's casino in town -- Ms. Rapcan watches as more and more people line up to spend their extra cash. And in the past couple of years, something else has grabbed her by the heart Religion and the Lord, Ms. Rapcan says, clasping her hands together. Twice a week, she drives more than an hour to church. Last week, the sermon was on forgiveness. The week before, it was about seeing the good in everyone. Ms. Rapcan says she gets a lot more out of those messages than out of anything politicians can do for her. Apparently, she is one of many who place politics far down on the list of things that influence their lives. In the latest Wall Street JournalNBC News poll, the bulk, or 48 of people surveyed, say developments in medicine and health care affect their lives a great deal. About 46 feel the nation's moral values affect their lives a lot. And as the stock market dives and soars, 33 say the market and conditions of the country have a big personal impact.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615984","date":"1998-09-18","texts":"The past two months have been punishing ones for investors in high yield, or junk-bond, funds. After a few years in which these funds outstripped most other types of bond funds, they have recently fallen hard, in step with the stock market. Some other bond funds, by contrast, have eked out recent gains that partly offset investors' stock-market pain. The recent performance of junk bonds shouldn't be any surprise to investors familiar with the odd hybrid nature of below-investment-grade bonds. Sometimes these securities trade with the general bond market and sometimes they trade with the stock market, says Earl McEvoy, manager of Vanguard Fixed-Income Securities High-Yield Fund. Lately, it's been much closer to the stock market. But too often, Mr. McEvoy says, investors assume a high-yield fund is simply that -- just another bond fund with a higher yield. In a period like the past several weeks -- when stock prices tumbled but government-bond prices rose -- he says investors may assume mistakenly that their junk-bond funds are comfortably holding their ground. That certainly hasn't been the case. Since the stock-market peak on July 17, Lipper Analytical Services Inc.'s high-yield fund index has posted a negative 9.0 return. That's not as bad as the performance of most stock funds, such as the 15.7 decline for the Lipper Growth Fund Index. But it is sharply worse than the positive 3.1 return on a Lipper index of government-bond funds and a positive 2.0 return on its index of funds holding high-quality A-rated corporate bonds.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616691","date":"1998-09-18","texts":"Nike Inc. topped expectations for first-quarter profit but continued to be hurt by weak footwear sales and orders in Asia and the U.S. market. The Beaverton, Ore., shoe company said net income in the fiscal first period ended Aug. 31 declined 35 to 163.8 million, or 56 cents a diluted share, from the year-earlier level of 253.1 million, or 85 cents a share. The latest results are eight cents a share above Wall Street's per-share consensus of 48 cents, as tallied by First Call Corp. But Nike's good news came mostly from spending less money in the period than expected. Revenue dropped 9.5 to 2.5 billion from 2.77 billion, while orders for footwear and apparel to be delivered between September and January declined 15 from the year-earlier period. Philip H. Knight, Nike's chairman and chief executive officer, said economic signals out of Asia continue to be negative, requiring additional cost-reduction steps. So the company also announced it intends to cut about 300 jobs in its Asia Pacific region, or about 15 of its work force in the region. There is not a lot of daylight as far as the economic crisis in Asia is concerned, Mr. Knight said in a conference call with analysts and reporters. Nike released its results after stock markets closed. In New York Stock Exchange composite trading, its shares fell 2.3125 to 33.75 and didn't trade after hours.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981671","date":"1998-09-18","texts":"Stocks plunged today as U.S. investors mimicked their counterparts in Europe, Asia and Latin America who raced to sell shares after comments Wednesday by Federal Reserve Chairman Alan Greenspan dashed hopes of a coordinated global reduction of interest rates. The Dow Jones industrial average lost 216.01 points, or 2.7 percent, closing at 7873.77. On Wednesday, when Greenspan made his comments while testifying on Capitol Hill, the Dow had eked out a 65.39-point gain for the day. But Wednesday night in Tokyo, investors saw things differently. Japan's key market index slipped to a 12-year-low, followed by similar declines throughout Asia and in Europe. When the selling wave hit the Americas today, it dragged down blue-chip stocks in the United States and also hurt other markets, including Brazil's. You have a market that's very nervous, said Robert Froehlich, chief investment officer at Van Kampen American Capital. Everybody's trying to determine if we've hit bottom. In a global marketplace, nothing is done in isolation.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982075","date":"1998-09-18","texts":"The Senate began considering legislation to overhaul the nation's bankruptcy laws. A final vote is expected next week on the measure, which is being pushed strongly by the credit card industry to make it harder for consumers to erase debts through bankruptcy filings. But an amendment approved yesterday would bar credit card companies from penalizing or terminating card holders who pay their balances in full every month. U.S. inflation remained low in August, partly because of global economic troubles. The Labor Department said its consumer price index rose a seasonally adjusted 0.2 percent, the same as in July. So far this year, prices are rising at a 1.6 percent annual rate, compared with 1.7 percent for all of last year. Excluding food and energy prices, which many economists believe are too volatile to be a good measure of inflation, prices for other goods and services increased only 0.2 percent in August. For the year to date, these core prices are rising at a 2.5 percent annual rate, compared with 2.2 percent last year. Philippine Airlines, ravaged by labor conflicts and citing enormous losses, said it plans to shut down on Sept. 23 after 57 years of operation. A shutdown would make PAL the biggest Philippine firm to fold during Asia's economic crisis. Philippine President Joseph Estrada immediately called an emergency meeting with the airline's management and union officials in an effort to keep Asia's oldest national airline flying. U.S. farm exports in the first seven months of the year totaled 29.6 billion, well below the 31.2 billion in the year-earlier period, the Commerce Department said. The agency also reported that the U.S. agricultural trade surplus for January through July was 8 billion, down from 10.3 billion a year earlier. Large crops around the world, the strength of the U.S. dollar and Asian economic troubles have combined to take a heavy toll on U.S. farm exports this year. Chiron, a biotechnology company based in Emeryville, Calif., agreed to sell its diagnostics business to Germany's Bayer for 1.1 billion in cash. The company said that after selling Chiron Diagnostics it would focus on treatments for serious diseases, including cancer and infectious diseases on developing vaccines and on providing a safe blood supply.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984307","date":"1998-09-19","texts":"From his office overlooking the docks in Portland, Ore., Scot Laney can see the effects the Asian crisis is having on America, as he watches the empty containers stack up. Laney, president of Griffith Rubber Mills Inc., believes the U.S. economy could benefit from an interest rate cut. Back in Washington, in the offices of Federal Reserve Board Chairman Alan Greenspan, the view is more opaque. Here, after recently acknowledging that American prosperity could be threatened by the escalating global financial crisis, Greenspan is weighing whether short-term interest rates should be reduced when Fed policymakers meet in 10 days. We're asking the chairman to be proactive, said Laney, who heads the National Association of Manufacturers' small and medium-size business subcommittee. The NAM is among a group of business interests from Wall Street to Main Street clamoring for an immediate cut in interest rates to bolster the U.S. economy and help combat a global economic slowdown. Businesses are calling for lower rates for a variety of reasons -- some of which openly are in self-interest. Some argue that cutting the cost of consumer and business borrowing would stimulate a cooling U.S. economy, and counterbalance falling foreign demand for U.S. goods. Others believe easier credit would provide a crucial psychological boost to skittish financial markets on Wall Street and overseas. It's the domino effect, said Laney, whose company makes window casings for heavy trucks and buses. Laney reasons that if shipments to Asia are slumping, there will be less demand for trucks to carry U.S.-made goods to and from the ports -- and eventually less need for Laney's products.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985452","date":"1998-09-21","texts":"Proof positive that what's bad for the bulk of humanity is good for lawyers can be found these days in the Moscow satellite offices run by two D.C. law firms. It won't make anyone with devalued rubles feel better, but the economic crisis in Russia has been surprisingly easy on Steptoe & Johnson and Akin, Gump, Strauss, Hauer & Feld, both of which have Moscow outposts. The 13-lawyer Moscow office of Akin, Gump reports that its business mix has changed, without drastic financial consequences. Michael Waller, the managing partner there, said in a very long-distance phone interview that before the crisis the firm's capital markets lawyers were its main moneymakers. Those lawyers are basically idle now, but bankruptcy attorneys are more than picking up the slack. In fact, while the rest of the country, and many law firms in Moscow, are laying off workers, Akin Gump hired a new lawyer a few weeks ago. You have to structure your business so that you can provide services in a restructuring period as well as an expansion period, Waller said, predicting that revenue for the year will match last year's numbers. We were incredibly busy for the first six or seven months of the year, and now we're just normally busy. Meanwhile, Steptoe & Johnson Chairman Lon Bouknight reports the firm's six-lawyer office is considering some new opportunities. We represent people and companies that have been there for years and wouldn't have the ability to pick up and leave, even if they had the desire -- and they don't have the desire, he said. Firms specializing in capital markets have gotten pummeled, but the bulk of Steptoe's billables are generated through work on contracts, joint ventures and natural resource issues, he said. A lot of contracts need to be restructured now, and those natural resources are going to stay there in the ground notwithstanding the economic problems, Bouknight said. Moreover, the downturn will inevitably lead to a drop in the real estate market, which could translate into lower office rents.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617462","date":"1998-09-22","texts":"Sure, this summer's stock market has been rough. But it will get better, right Most of us have bountiful optimism and abundant self-confidence. In many ways, this is a useful trait. Self-confident, optimistic people tend to be happier, more motivated and more likely to persevere. But when we turn to investing, this self-confidence can become a killer. A positive mental attitude, optimism and self-confidence are good attributes, says Steven Thorley, a finance professor at Brigham Young University's Marriott School of Management in Provo, Utah. But in the financial world, they just don't work. You're not interacting with people. You're interacting with prices. They don't care how you feel that day. In general, overconfidence is a negative. Overconfident investors tend to trade too much and tend to bet too heavily on particular stocks or market sectors, says Meir Statman, a finance professor at Santa Clara University in California. These investors think they know more than they really do, and they buy and sell stocks on this knowledge. Trading volume is higher after a period of high returns, Mr. Statman says. That is consistent with the notion that people confuse brains with a bull market. They think that, because their portfolio is fatter, they are smarter.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982107","date":"1998-09-22","texts":"Seven weeks after Prime Minister Mesut Yilmaz called early elections on the strength of his government's economic track record, Turkey is trying to weather the fallout from the economic collapse in Russia, its principal trading partner. Until this summer, Turkish officials had been predicting that the country would escape the economic contagion spreading from Southeast Asia. As of mid-year, the economy had enjoyed three years of steady growth, and Yilmaz's anti-inflation policies had won the approval of the International Monetary Fund and brought foreign investors flocking. But Russia's festering economic problems already had begun to erode Turkey's strong base, and the recent Russian financial collapse and the free fall of the ruble have sent shock waves southward. According to recently released government figures, Turkey's official trade with Russia declined 15 percent in the first half of this year. The unofficial export of textiles and other goods to Russia and other former Soviet Bloc countries, which earned the Turks around 8.5 billion in foreign exchange two years ago, is expected to bring in little more than 4 billion in 1998. Overall, Turkey has seen its trade deficit grow to 7.5 billion in the first half of this year. In addition, internal commerce is undergoing a cyclical slowdown, analysts say. Concerns have gradually spread among investors, who looked to Yilmaz to implement policies that might halt the economic slide.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983639","date":"1998-09-25","texts":"The near-collapse of a huge and unregulated investment fund this week has prompted lawmakers to consider whether closer regulatory scrutiny is necessary to track the complex -- and often obscure -- financial deals these funds make with large sums of borrowed money. We are exploring . . . whether these funds that can pose a threat to the economic system or to the bank deposit insurance system should have more federal oversight, said Richard Baker, a Louisiana Republican who chairs the House Banking Committee's subcommittee on capital markets and securities. Wednesday, at the urging of the Federal Reserve Bank of New York, a group of 14 banks and securities firms agreed to provide more than 3.5 billion to rescue Greenwich, Conn.-based Long-Term Capital Management L.P. after fears rose that its demise would send a shock wave through the global economy. The once highflying fund faced losses on about 100 billion in bets it had made in financial markets around the world. Baker and the staff of other lawmakers suggested that the question of regulating this type of funds, known as hedge funds, could affect the progress of pending legislation to revamp 65-year-old banking and securities laws. Unlike most other financial companies, operators of hedge funds answer to no oversight institution, either state or federal, even though the funds make speculative, multibillion-dollar bets with borrowed money in markets all over the world. As recently as last week, Federal Reserve Board Chairman Alan Greenspan said he had no problem with that arrangement. Hedge funds are very strongly regulated by those who lend the money, Greenspan said in response to a question by Baker during testimony before the House Banking Committee. The major vehicle for supervision of lending is really from those who make the loans.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614842","date":"1998-09-29","texts":"If the stock market of the 1990s is any guide, the meek will almost certainly inherit the earth. The fact is, boldness hasn't been rewarded in recent years. Ventured into emerging markets You got clobbered. Tokyo stocks They have been hammered. Smaller U.S. stocks After showing promise early in the decade, they too have faltered badly. Amid all this gloom, blue-chip U.S. stocks have barreled ahead, providing big gains for stock-market investors who were too timid to buy anything else. But even here, the more courageous have recently been singled out for punishment. Companies are often divided into two camps, growth stocks and value stocks. Growth stocks promise rapid increases in sales and profits. Often, they are the sort of companies we admire, like Microsoft, Pfizer and Wal-Mart Stores. That makes these stocks easy to own. Value stocks aren't nearly so lovable. Their sales and profitability are lackluster, which is why their shares languish at lowly prices compared with corporate assets and current earnings.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617344","date":"1998-09-29","texts":"ASIDE FROM the odd short seller, there aren't many people actively rooting for further stock-market declines. But executive recruiters admit they'd be happy to see the market stumble a bit more. I'm paid to uncouple employment deals and extricate the talent, says Peter Crist, of Crist & Partners, Chicago. Extrication was difficult when the bull was roaring and executives were getting rich on options. Now, some of that wealth is vanishing. None of us wants a disastrous blow, but a little softening would give us some working room, Mr. Crist says. If your options are underwater, you're more interested in listening to my overture. The volatility of the stock market has created some interesting career quandaries for senior executives. Market gains aren't covering up mediocre results anymore, so underperformers are feeling the heat. Meanwhile, depressed stock prices can mean bigger profit potential on newly issued options, a potent selling point for recruiters attempting to entice star performers to jump ship. Plenty of people are still tuning out the recruiters' siren song, confident that the bull will eventually return, confirming the wisdom of taking a long-range view. Others refuse even to acknowledge the market's role in career decisions, saying that job satisfaction and the potential for increased challenge mean more than money. But let's face it The best senior-level people aren't about to change jobs without a financial incentive. And stock options have become the velvet handcuffs of the compensation game.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613924","date":"1998-09-30","texts":"Investors were happy that the Federal Reserve cut interest rates yesterday, but sad that the cut wasn't bigger, so they bid stocks through a series of gyrations that finally left them little changed. In heavy trading at the time of the Fed announcement at about 215 p.m. EDT, the Dow Jones Industrial Average fell nearly 100 points in eight minutes. Then it climbed to its high for the day, only to fall again. The average closed down 28.32, or 0.35, at 8080.52. On the New York Stock Exchange, however, advancers and decliners were about even. Treasury bonds gained, since interest rates on new bonds will be lower than on existing bonds, and the dollar fell. Stocks already had gained in broad anticipation of a cut of at least one-quarter point in the federal-funds rate, the rate at which banks lend one another money overnight. Traders had been hoping for a larger, half-point cut. Few were surprised when stocks fell on news of the smaller rate cut, and some said the quick recovery could herald continuing strength. I think it kind of bodes well, said Bill Schneider, head of block trading at Warburg Dillon Read, who noted that some investors have been holding money out of the market. I think a lot of cash has been raised, he said, partly as window dressing for quarterly fund-management reports, to show that mutual-fund managers are being conservative.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617072","date":"1998-09-30","texts":"BONN -- A group of Free Democratic Party campaign workers didn't find many takers when they tried to foist pamphlets and balloons on pedestrians here on the eve of Sunday's election. I asked one of them why the Free Democrats -- the closest thing Germany has to a Thatcherite or Reaganite conservative party -- were attracting so little interest. People here don't always like our message, he sighed. They don't want Germany to be like America. That is an assessment I heard throughout Germany in the run-up to the election. Alarming rates of unemployment and signs that the country is losing its competitive edge have convinced the German people that the welfarist social market economy that has served them since the end of World War II is seriously ill. But aside from the 6 to 7 of voters who regularly back the FDP, there is little support for a wholesale change of the old system. It is said that the laissez-faire capitalism that has fueled growth in the U.S. is somehow un-German and un-European, a risky experiment with what is perceived to be a uniquely American culture of slums, crime and rampant individualism. That mentality -- the desire for change, but only a bit of it -- explains the enormous appeal of Gerhard Schroeder, Germany's new chancellor-elect. He speaks in lofty terms of the future, but the success of his message is in its implication that Germany can reclaim a past when the welfare state seemed to work. The voters screamed for change, but all they really wanted is the promise of a more functional status quo. This is a conservative country with conservative attitudes, says Dieter Roth, a pollster with Forschungsgruppe Wahlen in Mannheim. He means conservative in the European sense The German people want security -- social security. They have been socialized behind the German economic model. Mr. Roth adds that while Germans don't fully believe it is possible to maintain a socialist economy in today's world, Mr. Schroeder has managed to convince the country that it just might be. What does this all mean for the future of the world's third-largest economy Despite Mr. Schroeder's claims, German socialism has seen its last days. Tanglesome regulations, one of the world's heaviest tax burdens and the most expensive labor force in the Western world are eroding the competitiveness of German corporations. The subsequent unemployment is contributing to a rotten culture of dependency. Sixteen percent of able-bodied Germans are unemployed if you include, as government statistics do not, sources of hidden unemployment, such as those given part-time jobs by the government.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613574","date":"1998-10-01","texts":"NEW YORK -- Currency traders returned to a strategy that some say is the only clear bet they can make buy Europe, sell Japan. What that amounted to was the same market pattern repeated on numerous occasions in recent weeks -- the dollar falling against the mark, but rising against the yen, alongside a healthy rally in markyen. Analysts said Tuesday's quarter-percentage-point cut in the U.S. Fed funds rate suggests the Federal Reserve will make additional easings before year end, a process many believe will weigh on the dollar. Lower U.S. interest rates make dollar-denominated assets less attractive. Notwithstanding recent signs that German Chancellor-elect Gerhard Schroeder favors softer monetary policy, the Bundesbank is believed to be adamantly opposed to German rate cuts. Add to this situation some additional bad news on Japanese banks yesterday and markyen looked like a strong buy, traders said. Markyen has been the favorite play of the past few weeks. If the mark gets through the 8283 yen level, it will look like people are really coming back to start selling yen again, said John McCarthy, vice president, foreign exchange, at ING Barings Capital Markets in New York.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982095","date":"1998-10-01","texts":"For months now we have been treated to Wall Street success stories in which investors such as Lobo Botonovitch have been cleaning up by throwing billions of dollars on the stock market floor and sweeping up billions of dollars in return. Botonovitch has been getting bad press lately because the more money he invested in his fund, the more it seemed to disappear into the sewer next to the Staten Island Ferry. Botonovitch decided the key to his fund's wealth was in Russian rubles. He started ordering all the rubles the Russians would let him buy. But they didn't call him the Whiz Kid of Wall Street for nothing, so Chase Manhattan, Bankers Trust and the Nickel Savings Bank of New York joined forces to buy into the ruble market. What made the whole thing a gamble was that the Whiz Kid was losing his shirt on rubles. The reason was that the Russian people knew the rubles weren't worth an Indonesian rupiah.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615674","date":"1998-10-02","texts":"NEW YORK -- The dollar continued its southward path yesterday, dragged down sharply against the mark and the yen by persistent concerns about U.S. and Latin American asset markets and the direction of U.S. interest rates. Systemic risk within the U.S. financial sector again weighed on the minds of nervous investors as falling banking stocks led Wall Street into yet another nosedive. The Dow Jones Industrial Average closed at 7632.53, down 210.09 points, while the flight into U.S. government bonds pushed down the yield on the benchmark 30-year Treasury issue to a 4.875, the lowest level for long-term bonds since June 1967. Meanwhile, the Bovespa index fell 9.6 in Brazil, where fears of a devaluation in the local currency, the real, are intensifying ahead of this weekend's presidential election. As went U.S. and regional stocks, so went the dollar. It fell to another 19-month low against the mark and gave up about half the gains it posted Wednesday against the yen.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983011","date":"1998-10-03","texts":"The chairman of UBS AG stepped down today after an internal investigation by the Swiss banking giant revealed shortcomings in risk management in the company's dealings with Long-Term Capital Management L.P., the massive speculative fund that nearly collapsed last week. Mathis Cabiallavetta and three top executives were the first casualties in the upper echelons of the bevy of blue-chip financial firms that lent hundreds of millions of dollars to Long-Term Capital -- and then wound up rescuing the fund. But many on Wall Street are bracing for similar shake-ups, particularly amid public scoldings about a lack of lending controls at many institutions by Federal Reserve Chairman Alan Greenspan and Treasury Secretary Robert E. Rubin. There have got to be sacrificial lambs, said a senior Wall Street executive. We're all waiting to see who is going to take the blame. Executives of some firms speculated that lower-level managers may take the fall, particularly in cases where their own chiefs were unaware of the extent of the risk their companies were taking. Indeed, Bank of Italy Governor Antonio Fazio today said he was unaware until this week of the involvement of Italy's Foreign Exchange Office UIC in Long-Term Capital -- even though he chairs UIC, which manages Italy's foreign-exchange reserves on the central bank's behalf.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842616044","date":"1998-10-05","texts":"WASHINGTON -- The Clinton administration unveiled its plan to stanch the global economic crisis, including a new preapproved credit line for countries that fall victim to investor panic despite sound economic policies. With financial chaos rolling over East Asia and Russia, and threatening Brazil as well, the U.S. put forth a wish list that sharpens some old tools and offers some new initiatives, but adds no new money to the international response to the crisis beyond already-requested funding. The key element is the new preapproved contingency fund under the International Monetary Fund, a proposal that finance ministers and central bankers from the Group of Seven major industrialized nations agreed to explore at their meeting Saturday night. The G-7 gave a warmer endorsement to U.S. calls for more multilateral lending to battle poverty and fix troubled banking systems, as well as a U.S. plan to use multilateral guarantees to encourage private investors to put their money back into emerging markets. The IMF proposal, however, is likely to prove the most controversial element of the U.S. initiative. While other IMF loans require borrowing countries to agree to implement often-austere economic policies before they get loans, this new approach would be for countries whose policies the IMF judges to be sound already. But the idea appears to challenge the IMF's traditional insistence on strict conditions on its loans without such conditions, the IMF and others have argued, IMF money may be wasted.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981873","date":"1998-10-06","texts":"By David Nicholson, a Washington writer, whose reviews appear Tuesdays in Style, and who can be reached at nicholsdclark.net. Now, don't for a moment take that to mean there's anything funny here. This is a serious book about a serious subject -- the horrors of war, how suffering can lead to healing, the hard choices the world forces where some can be saved and others must be abandoned -- and author Scott Anderson writes with grace and intelligence. But the secrets on which the book so heavily depends are like punch lines. Midway through, I'd already guessed one. And the second, which the author so clearly intended to be stunning, has a connect-the-dots quality to it, a quality that characterizes, and mars, too much of the book. Triage begins with the main character, a war photographer named Mark, wounded in an attack in Kurdistan and making his way to a primitive field hospital. There we are introduced to the process of allocating scarce medical resources to determine who will live and who will die that gives the book its title and theme. Though Mark is soon pronounced well enough to return to the States, he remains grievously wounded. Not physically, but spiritually. One sign of the extent of his wounds is his refusal to tell his girlfriend, Elena, the truth of what happened. I got lost in the dark and fell in a river, he tells her, got dragged over some rocks.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614220","date":"1998-10-07","texts":"Try to ignore the storm-warning flags and enjoy the fourth quarter, because 1999 may be a batten-down-the-hatches year. That's the advice of most economists as the Southeast wraps up its eighth consecutive year of economic expansion. The region's gross state product -- the value of all goods and services -- will still grow at a respectable 3.7 annual rate in the next three months, ahead of the 2.8 pace forecast for the nation as a whole, according to eight economists recruited by The Wall Street Journal to forecast the Southeast's economic output. Among the reasons for the near-term optimism Interest rates at decade lows, lean inventories and payrolls, and an influx of retirees, second-home buyers and tourists from Tennessee's Great Smoky Mountains to Florida's Sanibel Island. But with the exception of one shooting star -- South Carolina -- the Southeast's other five states are slowly losing their luster. Just last quarter, the panel of economists predicted growth of 4 for the six-state region.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613645","date":"1998-10-08","texts":"Yahoo Inc. blew past third-quarter earnings expectations, driven by increasing traffic at its popular World Wide Web site and tighter expense controls. The Santa Clara, Calif., search and directory business reported net income of 16.7 million, or 15 cents a diluted share, compared with 681,000, or one cent a diluted share, for the year-earlier period. Analysts' earnings consensus estimate was nine cents a share, according to First Call. Yahoo's revenue tripled to 53.6 million from 18.1 million analysts had expected revenue of about 45 million. Yahoo's site has become one of the most-traveled spots on the Web, and the company attained profitability earlier than most of its rivals. Despite the relatively slow summer season, the company said it increased its daily page views -- defined as one electronic page of information displayed in response to a user request -- 25 to 144 million in September, compared with 115 million in June. In addition, registrations at Yahoo properties -- where users give the company detailed information to use its services -- grew by seven million to 25 million in the quarter. We are really starting to see the law of big numbers, said Tim Koogle, Yahoo president and chief executive officer. We are pleased with the growth across the entire business.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614358","date":"1998-10-08","texts":"As part of their general pre-election cave in, Congressional Republicans are greasing the skids for 18 billion in fresh money for the International Monetary Fund. Having set themselves up in 1995, the Congressional leadership wakes up at night shaking with fear that President Clinton will veto a bill to keep the government open, then blame them for closing the government. With Asian economies toppling and the U.S. financial boom topping out, Republicans are particularly worried about getting tagged for an economic crisis unless they give Mr. Clinton anything he asks. The President lectured them again when speaking at the IMF meeting this week They should pay the 18 billion because there is no excuse for refusing to supply the fire department with water while the fire is burning. Before you pour liquid on a raging fire, we might suggest, make sure it doesn't smell like gasoline. On the record of the past 15 months of crisis, the IMF doesn't look like much of a fireman. More of an arsonist. Back in March 1997, IMF Managing Director Michel Camdessus gave a speech predicting for Asia at worst a cyclical correction that is not expected to be deep or prolonged. Mr. Camdessus was at that point already urging Thailand to devalue -- apparently clueless about the trouble that would come of it. The IMF went on to urge the devaluations that dragged down South Korea, wrecked Indonesia and set off shock waves that -- amplified by Russia -- now threaten Brazil. To combat this, the IMF began by pouring 18 billion into Thailand, and said the worst was over. Then the Fund led a 43 billion bailout for Indonesia and said all would be well. There followed 57 billion for South Korea, 23 billion for Russia. That comes to 141 billion. The fund is now arranging a similar 30 billion experience for Brazil, bringing recent IMF crisis-dousing to 171 billion. Yet clearly the world is in worse shape than when the Fund back in 1994 hopped on its fire engine to put out Mexico. Why is Congress buying in to this Three reasons.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983603","date":"1998-10-11","texts":"On a gray day in a black week for government service, many of the town's impeachment-tossed met to say goodbye to two surpassingly splendid public servants, who, in their separate ways, had shown us how it should be done. Toni House was a blithe spirit who spoke for the Supreme Court. Kirk O'Donnell, a rock of decency and good judgment, spoke generally for Democrats and particularly for former House speaker Tip O'Neill. They both died young last month. Toni, who succumbed to lung cancer at the age of 55, was a radiant blonde. I knew her from the days when we both worked at the Washington Star. In the paper's last days, she was like a bright banner flowing around us. She wore one of those square paper caps that only printers know how to make, and she was everywhere. She carried news about people who had landed jobs and those who hadn't she knew about morale in classified and she gauged the rage of our overlords at Time, Inc. A photograph of her mourning as the Star's final edition rolled off the press said it all. When she went to the Supreme Court in 1982, Toni's fans wondered what kind of a fit it would be. Here was an institution more reserved than the Federal Reserve, stuffy and huffy and never explaining itself. When its members ventured out of their marble temple, they sometimes dropped speeches like hand grenades in the provinces. And there was Toni, who had been a police reporter, accustomed to trading expletives with recalcitrant desk sergeants who were trying to withhold information. But the match worked wonderfully well. Toni charmed the justices into some acknowledgment of the needs of the Fourth Estate. Supreme Court Justice Oliver Wendell Holmes Jr. once said of his place of business, We are very quiet there, but it is the quiet of a storm center. Toni was at the eye of the storm. On decision day, she presided over the distribution of the latest edict from the bench. It was always a mad moment, and Toni loved it. At her memorial service at St. Mark's Episcopal Church, Lyle Denniston, a famously crusty Supreme Court reporter who now works for the Baltimore Sun, told about it through tears Toni was quite at home amid that chaos indeed . . . she was quite capable of adding to the chaos, but then also uniquely gifted at bringing everything back to order. All who spoke at her service conveyed Toni's greatest quality an obligation to be delightful. She took pride in her job, but she was also a fashion plate, a gourmet cook and an impassioned gardener. She brought picnic hampers into the office from home. She filled her office with flowers. She fed her cats lobster thermidor.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614704","date":"1998-10-12","texts":"Limited international exposure and continued strong end markets helped U.S. building-products companies continue their streak of strong earnings in the third quarter. Except for company-specific problems at paint and coatings provider Sherwin Williams Co. and tool maker Stanley Works, analysts say they see little bad news coming out of the sector. They said the moderate inventory correction in retail home-center distribution channels was a second-quarter phenomenon. Although there are some individual cases where they're not, most of these companies are hitting on all cylinders, said analyst Peter Dannenbaum of Morgan Stanley Dean Witter. While the Asian turmoil has hurt U.S. companies in other sectors, many building-products companies have little or no exposure to that region and so are immune from some global pressures. In addition, the companies don't have negative currency translations and few exports, said analyst Jonathan Goldfarb of Merrill Lynch & Co. All those global forces that are causing big earnings shortfalls don't affect them, so the earnings trends are especially strong, he said.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830985601","date":"1998-10-12","texts":"Don't go looking for it in Virginia yet, says Roy L. Pearson, who analyzes the state's economy at the College of William and Mary. The deep slump in Asian economies has spread recession and hardship there, with Latin America standing next in line and the U.S. economy looking at risk. But the crisis has actually helped Virginia thus far, says Pearson in a new report by the college's Bureau of Business Research. His analysis would apply to Virginia's neighbors, Maryland and the District, as well. Virginia's consumers have benefited as Asian manufacturers cut prices in hopes of boosting sales. The dollar's strength -- until recently -- also created bargain prices on Asian-made goods. Lower import prices contributed to lower inflation in this country, Pearson noted, making U.S. workers' paychecks go further. The recent drop in interest rates, engineered to protect the American economy from Asia's problems, have given another windfall to homeowners who refinance their mortgages.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615827","date":"1998-10-14","texts":"Last year was a year of record profits for Criimi Mae, a business whose name no poet will ever make a sonnet of. Everything was going fine and then it collapsed on the same heap as hedge-fund guru John Meriwether. Criimi Mae managed a portfolio of commercial mortgages, buying half of all such securities underwritten by Wall Street. The strip malls, apartment buildings and supermarkets behind the mortgages did not all become delinquent. They're doing fine -- rents have held up, consumers continue to consume. The underwriters did not all flee to the Bahamas, leaving a wake of disorderly paperwork. What dropped dead was demand for mortgage-backed securities. This is what a bank run looks like in a world where banks are no longer the most important lenders. Superficially everything seems fine in the economy, but beneath the surface there has been a sudden withdrawal of liquidity from various markets that you didn't even know existed. This might seem a bad moment to be attacking the consumer credit industry. Yet the Justice Department last week filed an antitrust case against Visa and MasterCard. Let's see, the vital sectors of the economy now under assault include Microsoft, Intel, Cisco Systems and 30 or 40 industries subject to grand-jury investigation. In a world ravaged by deflation, where the uniform wail of CEOs is that we have no power to raise prices, Justice believes now is a good time to go hunting cartels. The latest complaint is the usual quizzical piece of work. The credit card business is wildly competitive, with every mail bringing come-ons for lower rates, bonus points and higher credit limits. Some 6,000 banks issue Visa and MasterCard in ferocious rivalry with each other.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616269","date":"1998-10-16","texts":"That hot U.S. job market It's getting cooler by the minute. After months of low unemployment and intense competition for workers, U.S. companies in a variety of industries have started a round of year-end job cuts. Nearly a dozen big firms have announced staff reductions in the past week in an attempt to bolster profits amid weakening sales and pricing. Wall Street felt the jolt on Tuesday, when Merrill Lynch & Co., New York, said it would cut 3,400 jobs, or 5 of its work force. The move had Wall Street employees bracing for cuts at other securities firms. Indeed, the Salomon Smith Barney unit of Citigroup Inc. yesterday laid off 100 traders, salespeople and research analysts in its bond department, people familiar with the firm said. Analysts expect the BT Alex. Brown unit of Bankers Trust Corp., which has significant exposure to Asian markets, to eliminate as much as 10 of its staff of 18,000. This round of downsizing is turning out to be surprisingly nondiscriminatory, affecting companies ranging from banks to makers of exercise equipment. Last week, Lexington, Mass., defense contractor Raytheon Co. boosted the total number of jobs it will cut to 14,000, or 16 of its work force, from the 8,700 it said it would cut last January. Los Angeles oil concern Atlantic Richfield Co. jumped in yesterday, announcing it will eliminate 900 jobs, or nearly 5 of its work force. The reason fears that the global economic slowdown won't reverse itself anytime soon. We've taken a look at what's going on in the world, and we've decided we have a situation that could hang around for a period of time, said Lee Tashjian, an Arco spokesman.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985553","date":"1998-10-17","texts":"Home buyer Duane Rollins had secured a 30-year, fixed-rate mortgage last May at a decent 6.75 percent interest rate so he could buy a small, one-bedroom house in Kensington. Nonetheless, he still needed several thousand dollars to cover his closing costs, even though he wasn't sure exactly how much. What Rollins, 35, a facilities manager for a nonprofit group in the District, did know was where to turn for the cash a retirement fund he had set up with a previous employer. I got close to 10,000 because I couldn't get a hard figure on my closing costs, he said. But when he ended up only needing 2,600 to settle the loan, he decided to use the rest of the money to help pay the cost of expanding the house, a former photographer's studio, to 1,700 square feet of living space. Rollins is one of a growing number of consumers in the Washington area and across the country who are using a portion of their retirement nest eggs toward the purchase of a house. Whether taken as a loan or pledged as collateral in a mortgage application, such funds have become an attractive source of money for down payments, settlements, moving and decorating costs, and paying commissions to real estate agents, lenders and financial planners said. Loans from 401k and other employee-directed retirement savings plans lately have blossomed in tandem with the stock market's growth, which boosted earnings among the mutual funds that launched many retirement plans, even if the bottom line for many savers has diminished since mid-July. Retirement savings accounts, whether 401k, profit-sharing or some combination plan, have earned an average compounded annual return of 11 percent since 1983, said David Wray, president of Profit Sharing401k Council of America in Chicago.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982936","date":"1998-10-19","texts":"The 1.3 percent raise that federal and military retirees will get in January will be the lowest cost-of-living adjustment they've received since 1986, when they also got a 1.3 percent COLA. The increase is official and will first show up in checks received in January. People getting Social Security benefits -- and that includes many federal retirees, too -- will also get the 1.3 percent raise. It reflects the rise in living costs, as measured by the consumer price index between the third quarter of this year July, August and September and the third quarter of 1997. In other words, inflation for that 12-month period rose only 1.3 percent. While many retirees are disappointed with a COLA of only 1.3 percent, most experts say it is a good thing because it means inflation is low and prices are stable. Retirees longing for the good old days of double-digit COLAs forget what double-digit inflation can do to prices on everything from food to cars. In 1979, retirees got a 10.8 percent COLA. In 1980, the COLA was 13.7 percent. And in 1981 the last time retirees got two raises in one year, they got 13.1 percent. That was a period of double-digit inflation. It also was before Congress voted to eliminate the twice-a-year COLAs that some feared would eventually push the cost of civil service retirement higher than payroll costs. Since that time, federal retirees have had to fight regularly and usually with success to get one full COLA a year. There was no COLA adjustment in 1985, and Congress and the White House delayed COLAs for three months paying them in April instead of January in 1994, 1995 and 1996. Workers who retire under the old Civil Service Retirement System get a full COLA each year. Workers who retire under the newer Federal Employees Retirement System are under a diet COLA system. They get a full COLA on the CSRS portion of their annuity. But the FERS portion of their annuity is subject to different rules. For example, if living costs as measured by the CPI are up 2 percent or less, both groups get the same increase. But if the rise in living costs is between 2 and 3 percent, CSRS benefits go up by the full amount, while payments on the FERS portion rise by only 2 percent. If the CPI goes up 3 percent or more, FERS benefits equal the CPI minus 1 percent.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614534","date":"1998-10-21","texts":"WASHINGTON -- Continued weak exports and strong imports caused the U.S. trade deficit to widen to a record level in August. The Commerce Department reported that the trade gap ballooned to 16.77 billion from a seasonally adjusted 14.55 billion in July. The August total was the largest since the department began keeping the numbers in the current format in 1992, and a department analyst estimated that it was probably the biggest since December 1985. Exports in August slipped to an adjusted 74.84 billion from 75.10 billion in July it was the lowest figure since the 73.43 billion in shipments in January 1997. Meanwhile, a growing number of countries continue to ship goods here to try to sell their way out of recession. Imports in August climbed to an adjusted 91.61 billion from 89.65 billion the previous month. Exports were weak across the board, reflecting the spreading economic crisis. The U.S. deficit with Japan, which is mired in recession, swelled to 5.2 billion in August from 4.54 billion a year earlier. The year-over-year comparisons provide the most accurate measurement, since these figures aren't seasonally adjusted. The overall trade deficit with Pacific Rim countries, including Japan, surged to 15.69 billion from 11.65 billion a year earlier. The U.S. trade surplus with Brazil narrowed to 363 million from 535 million a year earlier. The trade deficit with China, which hasn't been as affected by the Asian economic ills as most of its neighbors, also expanded in August. The red ink grew to 5.91 billion from 5.14 billion in August 1997.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614137","date":"1998-10-28","texts":"SLOWER ECONOMIC GROWTH will trim budget surpluses, analysts predict. As economic storm clouds darken, economists are cutting budget-surplus estimates for next year. Bruce Steinberg of Merrill Lynch predicts the economy will grow only 1.5, down from an estimated 3.5 this year. Clearly, the budget surplus will be much smaller than advertised, he warns. Corporate tax receipts are already beginning to fall off because of the weakness in corporate earnings. Slower job growth and the stock market's woes also are likely to weigh heavily on income-tax receipts. James Glassman of Chase Securities, a unit of Chase Manhattan, predicts the economy will expand only about 1 or less over the next four quarters, with the federal budget surplus narrowing to 50 billion or less in fiscal 1999 from about 71 billion this year. Donald J. Boyd of the Center for the Study of the States, a unit of the Rockefeller Institute of Government in Albany, N.Y., adds There's no question the slowing economic environment will have adverse effects on state finances. Next year, we will see far fewer proposals for state-tax cuts than we have in recent years, Mr. Boyd predicts. SELF-EMPLOYED WORKERS may deduct more of their health-insurance costs.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613746","date":"1998-10-29","texts":"It seems that postcommunist Russia poses a greater threat to global capitalism than the Soviet Union ever did. The Russian debt default in mid-August has generated financial shock waves that could drive next year's growth rate of the world economy to the lowest level in the postwar era. There are worrying signs that the U.S. will experience a credit crunch in the banking sector that could offset the benefits of lower interest rates. And while the European economy still enjoys moderate growth momentum, it will be highly vulnerable to an export slump if the rest of the world continues to slow. The magnitude of the correction after the Russian default illustrates how profoundly global financial markets have changed as new technology has driven down the cost of trading, hedge funds have gained access to leverage from bankers, and investors have developed an increasing appetite for risk following the long Wall Street boom. In turn, these changes have exposed how vulnerable the global financial system is, and underscored the need for an international lender of last resort. One vulnerability is the remarkable interdependence that has developed among markets because of the growth of global capital flows and the increasing role of highly leveraged investors in allocating capital. In the late 1980s, capital flows to developing countries were less than 50 billion. The Cold War's end and the growth of financial markets in developing countries drove this figure up to more than 300 billion in 1996. There has also been a dramatic expansion in the size of security markets. In the U.S., the ratio of stock-market capitalization to gross domestic product has nearly tripled during the 1990s while the mutual-fund industry now has greater assets than the banking system. The spectacular performance of the U.S. equity market stimulated an appetite for risk among high-income investors that encouraged a proliferation of new hedge funds. According to survey data, the U.S. now has more than 1,200 hedge funds with 200 billion to 300 billion in assets. During the 1990s these funds have become leading players in emerging markets. When Russia defaulted, it did not merely force some hedge funds to liquidate securities in other emerging markets. Instead, it produced such losses that many bankers felt compelled to curtail both their security market and their lending exposure in emerging markets. It also prompted some hedge funds to repay the low-cost yen loans they had taken out to finance security purchases and thus encouraged a large rally in the yen. Before August, few investors would have expected a Russian default to shatter Latin America's access to credit or produce a surge in the value of the yen, but such are the consequences of today's new global financial integration.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984514","date":"1998-10-29","texts":"Tropicana Products announced it would raise the wholesale price of its orange juices an average of 10 percent because of a sharply reduced Florida orange crop blamed on heavy winter rains and a dry summer and spring. That translates to about 30 cents to 40 cents more for consumers buying 64-ounce and 96-ounce containers. The higher prices will probably start showing up in stores in late November. Minute Maid, Tropicana's chief national competitor in the orange juice market, said it expected to announce a price increase in the near future. A new U.S. savings bond plan will allow Americans to have the costs of the bonds automatically deducted from their bank accounts by the government. The new program, called the EasySaver Plan, is intended to complement the existing payroll deduction plan. Savers will be able to choose the dates they want the Treasury Department to charge their accounts -- a minimum of twice a year. The traditional Series EE bonds, which sell for half their face value, will be available in denominations ranging from 50 to 1,000. Series I bonds, which carry a lower interest rate but are adjusted to reflect inflation, also will be sold, at their full face value, in denominations from 50 to 1,000. Long-Term Capital Management, the hedge fund taken over by 14 lenders last month, is seeking to refinance soon-to-expire credit lines from banks not involved in the rescue, a person familiar with the fund said. It also fired 18 percent of its staff to cut costs. Credit lines from banks not involved in the takeover financed about 10 percent of Long-Term Capital's 100 billion balance sheet, the source said. Durable goods orders rose 0.9 percent in September, pulled higher by demand for automobiles, communications equipment and military goods. The unexpected fourth consecutive increase brought orders to a seasonally adjusted 192.1 billion, the Commerce Department said. Economists had expected about a 1 percent drop, with world financial turmoil diminishing demand for U.S. products. The Treasury sold 16.002 billion of two-year notes at a yield of 4.025 percent, the lowest in five years. Demand was considered subdued, judging by the bidcover ratio, which gauges demand by comparing the number of bids to the amount of securities sold. The bidcover ratio was 1.97, showing that there was less demand than at the Treasury's last monthly sale of two-year notes on Sept. 23 when the ratio was 2.39. The yield on the two-year notes sold yesterday was the lowest since 3.94 percent at the Oct. 26, 1993, auction. At the Sept. 23 auction, the notes yielded 4.615 percent.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984537","date":"1998-11-03","texts":"Walt Disney Co.'s ABC said it won't allow more than 1,000 unionized workers who walked off the job to protest its health-care policy to return to work unless they pledge not to take such action again without first warning the company. The lockout comes in response to the start of a 24-hour strike earlier yesterday by the workers at ABC-TV and ABC Radio. The workers said they walked out because ABC and its parent, Disney, are demanding they drop their current health care coverage and switch to Disney's new Signature plan. The court-appointed officer for the Teamsters election mailed ballots to the union's 1.4 million members, who have one month to choose James P. Hoffa, son of Jimmy Hoffa, or Tom Leedham, head of the union's warehouse division, as the next union president. Hoffa narrowly lost his bid to unseat incumbent Ron Carey in 1996, but the results of that contest were overturned when investigators concluded that Carey's campaign had raised funds illegally. BMC Software of Houston, a maker of network monitoring software, said it will buy rival Boole & Babbage for about 900 million in stock to extend its international business. San Jose-based Boole & Babbage's software helps companies manage and operate computer networks that use different kinds of computers and operating systems. The Chicago Mercantile Exchange begins offering a futures contract today that allows companies to profit from an increase in the number of customers who can't pay their bills. It is targeting lenders in the 1.3 trillion market for consumer credit by basing the contract's value on the number of bankruptcy filings each quarter. SyQuest Technology, once the leader in removable memory storage devices for personal computers, said it has suspended operations and may file for bankruptcy. Analysts blamed the Fremont, Calif.-based company's apparent demise on a shaky business model. They said SyQuest was also hurt by the Asian financial crisis, weak PC sales earlier this year and the expense of expansion amid a disk drive industry downturn.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616514","date":"1998-11-04","texts":"MINNEAPOLIS -- K-tel International Inc.'s president resigned from his post at the company two months ago, and was succeeded by a relative of K-tel's founder and biggest stockholder. Separately, K-tel's often volatile shares nearly doubled yesterday, soaring 6.375 in Nasdaq Stock Market trading, to 13.25. Volume was extremely heavy, with 16.6 million shares changing hands that number represents roughly two times the 8.34 million common of K-tel shares outstanding as of Sept. 30. The stock's surge was spurred by the disclosure yesterday of an agreement between K-tel and Playboy Enterprises Inc.'s online unit, under which they will jointly develop an online music store at Playboy's Internet Web site. The marketer of entertainment and consumer products said 41-year-old David Weiner, who had served as president since 1996, resigned Sept. 4 to pursue other interests. K-tel named as its new president Lawrence Kieves, 50, who was formerly managing director of closely held EWK Associates, a real-estate development concern. Mr. Kieves served previously as chief operating officer of Network Event Theater Inc., a publicly traded campus media and marketing concern. Mr. Kieves, the company noted, is a first cousin, once removed, of K-tel's 69-year-old chairman and chief executive officer, Philip Kives. Mr. Kives, who founded K-tel in 1968, holds about a 42 stake in the company. A K-tel spokeswoman declined to elaborate on the reasons behind Mr. Weiner's departure, and Mr. Weiner couldn't be reached for comment. K-tel's spokeswoman also declined to discuss why the company, although it had previously disclosed the management changes in filings with the Securities and Exchange Commission, had waited so long before issuing a public statement about the departure of its No. 2 official.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983962","date":"1998-11-08","texts":"I recently had the privilege of working closely with two men of uncommon courage -- Andrew F. Brimmer, former chair of the D.C. financial control board, and Julius W. Becton Jr., former chief executive officer and superintendent of the D.C. public schools. Before taking up their work in the District, these men had climbed the heights of their chosen professions. Brimmer was one of the leading economists in the United States and a member of the Federal Reserve Board. Becton had retired, after 40 years of service, as a U.S. Army lieutenant general. Both Brimmer and Becton are members of what Thomas Jefferson called that natural aristocracy, based not upon birth but upon virtue and talents. Brimmer and Becton volunteered for arduous and time-consuming positions in our community in a time of troubles. They did this not for recognition, of which each already had received a full measure, but because they hoped to make a difference. And they did make a difference. Brimmer helped put the District on the road to recovery and reform. Changing the city's course was like turning a battleship in a storm, but his firm hand on the helm managed to bring the ship around. Likewise, Becton laid the groundwork for a better school system, which he left to the control of his chosen successor, Arlene Ackerman. The Bible says that a prophet is not without honor, save in his own country. Although neither Becton nor Brimmer would claim the mantle of prophet, each in his own way blazed a trail for others to follow toward a better future for the District. As the Bible also says, men such as these are the glory of their times. They need no defense from me.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615237","date":"1998-11-09","texts":"OTTAWA -- Canada's unemployment rate declined in October to its lowest level in eight years, dropping to 8.1 from 8.3 in September, Statistics Canada, a government agency, said. The stronger-than-expected October job data eased fears that Canada, the largest foreign customer for U.S. goods, was heading toward an early recession. Many analysts had predicted a rise in the October jobless rate. Alister Smith, deputy chief economist at Canadian Imperial Bank of Commerce, said the October report was really good, showing job strength across industries and regions. He said the job strength supports the bank's view that the Canadian economy will grow at a rate of about 3 through 1998 before slowing to a pace of about 2 in 1999. Wojciech Szadurski, Bank of Montreal economist, said the latest job gains significantly reduce concern about an imminent recession in Canada. These concerns have been heightened by the economic turmoil in Asia and other regions. Full-time jobs showed a big gain in October, rising 83,900, or 0.7, from September. Manufacturing jobs, after declining for three consecutive months, rose 42,700, or 2, from the previous month. Statistics Canada's latest survey of manufacturers indicated they were more positive about new orders and were planning to increase production in the next three months.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616353","date":"1998-11-10","texts":"Investors caught their breath after an eight-day Wall Street rampage, pushing stocks down and bonds up in what many traders viewed as a temporary pause in the stock rally. The Dow Jones Industrial Average fell 77.50, or 0.86, to 8897.96. Sharp gains by technology stocks including Dell Computer and Internet-related stocks pushed the tech-heavy Nasdaq Composite Index up 4.49, or 0.24, to 1861.05. Treasury bonds bounced back after taking a beating during last week's push toward stocks, and the dollar gained. The 30-year bellwether Treasury bond gained 1 1332, or 14.0625 per 1,000 bond, pulling the yield which moves opposite to the price back to 5.288. The bond market and most banks are closed tomorrow for Veterans Day, although the stock market remains open. It was a light-volume day where you just saw some profit-taking in stocks, said Robert Harrington, co-head of listed block trading at PaineWebber. William Meehan, chief market analyst at Cantor Fitzgerald, noted that bond investors worried last week that the Federal Reserve might not cut interest rates this month he said that worry spread to stock investors this week.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613589","date":"1998-11-12","texts":"GOLDEN, Colo. -- Atlas Air Inc., which provides freight flights for airlines, is expected to announce an agreement today to fly three Boeing 747 jumbo jet cargo planes for Federal Express Corp. The outsourcing deal, valued at more than 30 million in annual revenue for Atlas, is believed to be part of FedEx's strategy to restructure operations to reduce reliance on its own pilots. By contracting some international shipping to low-cost Atlas, FedEx risks further rankling its higher-paid pilots during contentious contract negotiations. Federal Express, a unit of FDX Corp., Memphis, Tenn., declined to comment. Atlas, a six-year-old concern that founder Michael A. Chowdry has built into the world's largest operator of 747 freighters, said service for FedEx would begin in the fourth quarter. Atlas will provide two 747-400 freighters, a 747-200 cargo plane plus crews, maintenance and insurance. The company declined to say how long the FedEx contract would last. Last year, Atlas provided two planes for extra seasonal lift to FedEx in the fourth quarter and, in 1996, provided one plane for FedEx.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616569","date":"1998-11-12","texts":"What a difference a month makes. In July, consumer confidence reached a 29-year high, the Dow Jones Industrial Average was at an all-time high, unemployment rates plumbed 28-year lows, and the dollar grew stronger against virtually every currency on earth. By late August consumer confidence was down, as was the dollar, and a growing number of economists were forecasting recession in 1999. Yet no sooner had the doomsayers spoken then the Dow rebounded and the economic outlook brightened once again. Volatile markets will always be with us. But what's of real concern is the increasingly volatile and self-contradictory nature of our economic policies. The Federal Reserve, shifting abruptly from the inflation front to the recession front, has cut short-term interest rates by half a percentage point and revved up monetary growth rates beyond nearly all targeted growth ranges. Yet undermining this new tack are constrictive fiscal policies -- higher taxes and burgeoning regulations -- which virtually guarantee that output cannot keep pace with the money supply. If previous business cycles are any guide, the result will almost certainly be a return of inflation and the end of the steady-growth economy. Fiscal and regulatory policies today are particularly burdensome. Taxes consume 42 of personal income, and regulations cost 10 of gross domestic product. The federal tax code has grown from 11,400 words when it was conceived in 1913 to 555 million words today. Last year's Taxpayer Relief Act, which like so many of its predecessors was billed as a tax-code simplifier, actually created 824 amendments and added 285 new sections to the existing code. It requires an estimated 60 million hours of extra work by taxpayers, creates 18 new tax forms and revises 230 existing forms. As Mark Twain said, History may not repeat itself, but it sure rhymes. What measures might be taken to synchronize fiscal and monetary policies into a pro-growth, price-stabilizing mode Years ago, Milton Friedman recommended putting the Fed on automatic pilot, meaning that it should create money at a steady rate of 3 to 5, consistent with the estimated long-term growth potential of real output. In revisiting this guide, it is especially helpful to recall that in its 84-year history the Fed has tended to be reactive rather than pre-emptive. Its sudden midcourse corrections have merely amplified the swings of the business cycle.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616004","date":"1998-11-16","texts":"ATLANTA -- HBO & Co., preparing to be acquired by McKesson Corp., said one of its top executives, Jay P. Gilbertson, resigned to pursue other opportunities. Shares of HBO, a supplier of software to the health-care industry, fell sharply on the news. In Nasdaq Stock Market trading Friday, HBO closed at 22.875, down 2.3125. McKesson, a drug wholesaler based in San Francisco, agreed last month to acquire HBO in a stock swap currently valued at about 11.5 billion. In New York Stock Exchange Friday composite trading, McKesson closed at 70.375, down 1.3125. At HBO, Mr. Gilbertson served as co-president, co-chief operating officer and chief financial officer. McKesson and HBO had said he would play an important role in the combined company as a member of a new operating committee of eight executives, a McKesson spokesman said. But he said Richard H. Hawkins, McKesson's current chief financial officer, would retain that role in the new company, to be called McKesson HBOC. Mr. Gilbertson couldn't be reached for comment. The McKesson spokesman said the two companies wanted to retain Mr. Gilbertson, but added His departure should not have a significant impact on our business. HBO said Albert J. Bergonzi, also a co-president, would assume Mr. Gilbertson's duties. Ben Rooks, an analyst at CIBC Oppenheimer, said the stock market seemed to be overreacting to Mr. Gilbertson's departure. I'm not surprised he's leaving, Mr. Rooks said. I'm a little surprised by the timing. But Anthony Vendetti, an analyst at Gruntal & Co., said the resignation raised questions about who's going to be minding the store at HBO.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617082","date":"1998-11-16","texts":"Things are better in the bond markets, but maybe not good enough for the Federal Reserve, which meets tomorrow to set the future of interest rates. Traders and investors in various parts of the bond market have had much to cheer in recent days. Liquidity, or the ease of trading, has substantially improved in many sectors since the Fed cut interest rates Oct. 15. And the difference in yields between risky bonds and safer Treasurys has narrowed, indicating investors feel more comfortable with riskier assets, helping to avert what seemed like a looming credit crunch. Issuance of corporate bonds is suddenly back on track, highlighted by Sprint Corp.'s sale of 5 billion in bonds last week, the second-biggest corporate-bond deal on record. The issuance followed the successful sale of 4.8 billion of bonds by Associates Corp. of North America, a unit of Associates First Capital Corp., on Oct. 27. Meanwhile, money began to flow in the past two weeks into high-yield and emerging-market bond funds, which could lead to higher bond prices -- and thus, lower yields -- in the months ahead. In addition to the vast improvements in the credit markets, Friday's reports of stronger-than-expected increases in retail sales and producer prices make it less likely the Fed will cut interest rates when it meets tomorrow.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617348","date":"1998-11-16","texts":"WASHINGTON -- The Clinton administration is delivering a mixed economic message to Asia this week Boost your ailing economies through trade liberalization, but don't export so much that it hurts U.S. companies and their workers. And the trade message is bound to be diminished because of President Clinton's absence from a leaders' meeting of the Asia-Pacific Economic Cooperation forum in Kuala Lumpur, Malaysia, on Wednesday because of the Iraqi confrontation. Vice President Al Gore will be attending in Mr. Clinton's place. If I were still in the administration, I'd be throwing up over this issue, Robert Litan, a former Clinton economic official who now directs economic studies at the Brookings Institution here, says of the contradictory trade signals. As a free trader, it would make me sick to my stomach. Many of the president's advisers also have heartburn managing fallout from the Asian financial crisis. At the same time that Vice President Gore will be lecturing Asian leaders to cut tariffs and reform their economies, the Commerce Department is helping the U.S. steel industry to fend off Asian imports. Later in the week, if the Iraqi crisis ebbs, Mr. Clinton plans to fly to Japan and South Korea, in part to press the steelmakers' complaints. The administration's economic officials argue that unless they can protect American workers from surging imports caused by Asian countries anxious to boost their economies, congressional support for easing trade barriers -- already tenuous -- will collapse. Even though such efforts undermine U.S. free-trade proselytizing, the administration says it has no alternative.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616929","date":"1998-11-17","texts":"After several years of relatively flat health-insurance costs, U.S. businesses are starting to be hit with a startling increase in premiums -- and small businesses are being whacked the hardest. Premium increases in health-policy renewal notices for 1999 are running as high as 50 for some small companies, according to benefits consultants. Even medium and large companies are seeing rises of about 5, after flat or even declining health costs in the past few years. Thirty days ago, the average increase already was 14 to 15, and just since then, the average has moved into the high-teens -- and it's not uncommon now to see increases of 30 to 50, said James Mueller, president of the employee-benefits group of Frank Haack & Associates, a Milwaukee-based health-insurance broker. For large companies, the rise in premiums isn't nearly as painful. According to health-care consultants, the most aggressively managed health plans at large companies are seeing annual increases of between 4 and 5, after flat increases last year. But overall, says Edwin Hustead, senior vice president of Hay Group, a benefits consulting firm, insurers probably are going to be asking for rate increases of 6 to 7 or as much as around 10 for 1999. And a recent survey of Fortune 500 benefits managers by BT Alex. Brown found that they expect an average 10.3 increase in premiums for health-maintenance-organization coverage. That compares with an average increase of 5.9 for 1998. Small companies have always been hit harder than large companies by healthcare inflation, largely because their tiny employment bases pose much greater actuarial risks to insurers. In large companies, the costs of sudden medical events is spread over hundreds or thousands of workers. But in a small company, if just a few employees bear children at the same time, for example, the increased cost to the insurer for medical and hospital expenses, in percentage terms, could be enormous, and insurers try to recover those costs through large premium increases.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616894","date":"1998-11-18","texts":"EUROPE Alitalia Forecasts Sharp Rebound As Sale Nears As Italy moves closer to privatizing Alitalia, the nation's flag carrier is apparently making significant progress on several fronts. The airline yesterday announced that it expects its earnings to be up sharply for the full year and that it plans to invest 4.3 trillion lire 2.6 billion over the next few years to buy 23 jetliners and update its information technology. But the most impressive figures to potential future investors have got be what the carrier, which saw third-quarter sales jump 5 and is set to be privatized within months, is doing to improve its balance sheet. It has cut debt to 15 of capital in the first half, from 89 at the end of last year, and is continuing to trim its bloated payroll. The airline's stock is also benefiting from the fact that Italy and the U.S. recently struck a preliminary deal to boost the number of flights between the two countries and free ticket prices from government control.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982632","date":"1998-11-18","texts":"They bought like crazy. They sold like crazy. And for a tense 15 minutes leading up to the Federal Reserve's latest interest rate cut, investors froze. Then they bought again, sold off again and called it a day. I can't take the stress anymore, barked Bob Basel, chief trader at Salomon Smith Barney, after the Dow Jones industrial average rode a roller coaster to an 8986.28 close -- down 24.97 points, or 0.3 percent. The average of 30 blue-chip firms had been frozen -- down about 60 points -- until shortly after 215 p.m., when the Fed announcement came. There was this sort of jump ball as to whether the rate cut would come or not, said Ed McMahon, head of U.S. trading for Merrill Lynch. The Fed said it would cut two key interest rates -- and within 15 minutes the Dow jumped nearly 100 points, but it then bobbed up and down for the remainder of the afternoon. Day traders seeking a quick profit were out in full force, traders said, and some large computerized sell-offs kicked in during the final minutes of trading, plunging the Dow into negative territory. The cut was significant because it confirms that the Fed is prepared to do whatever it has to do to maintain liquidity and keep the market's momentum going, said Mary Farrell, an equity strategist at Paine Webber. They have restored rationality in the market.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616266","date":"1998-11-19","texts":"THE DOW JONES INDUSTRIALS rose 54.83 points to 9041.11, their highest close since July 22, as cautious optimism followed Tuesday's interest-rate cut. The Nasdaq Composite climbed as well. Meanwhile, crude-oil futures dipped below 12 a barrel for the first time since June before recovering slightly. December crude closed at 12.14 a barrel, down 31 cents. --- The U.S. trade deficit narrowed in September, thanks to a jump in sales of U.S.-made aircraft and autos. But economists don't expect such sales to continue, suggesting the deficit will resume its record-setting pace. --- Consumers will pay more for PCs and see less innovation if Microsoft's Windows monopoly is unchecked, an economist hired by the government testified in the antitrust trial.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617261","date":"1998-11-19","texts":"Tuesday's quarter-point cut in U.S. interest rates continued to underpin a rally in many of the world's stock markets, driving the Dow Jones World Stock Index up 0.34 point, or 0.18, to 189.36. Stocks in Asia and the Americas, in particular, welcomed the rate cut as likely paving the way for lower domestic interest rates in emerging markets. Hong Kong initially rallied 2, but gave up a lot of the gains to end just 0.6 higher. Elsewhere, the Philippines was up 2.3, Indonesia up 3.9, Singapore up 2.9, and Japan up 1.3. In the Americas, Brazil continued its rallying streak to close up 2.6, benefiting from last week's news of a big financial rescue package and Tuesday's U.S. rate cut. The Bank of Canada yesterday followed the Fed's easing with a cut in its key rate, but the move failed to inspire Canadian stocks, which rose just 0.1. European markets ended mixed, with Sweden up 1.9, Switzerland up 0.9 and France up 0.3, while decliners included Germany, down 0.4, and London, down 0.5. In Asia on Thursday, Tokyo closed the morning session down 0.5, while South Korea was up 0.9 at midday. In early dealings, Indonesia had jumped 1.7, Hong Kong had gained about 1, but Malaysia was down 1.3.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984778","date":"1998-11-21","texts":"Stocks shot higher today as a late surge gave the Dow Jones industrial average another triple-digit increase and left the blue-chip index just 178 points off its record high. The Dow rose 103.50 to 9159.55, giving it a 239.96-point increase for the week, which was dominated by the Federal Reserve's decision Tuesday to lower interest rates by one-quarter percentage point. Just six weeks ago, the market had slid below 7500 as investors worried about the world economy. The Dow is now up about 1,275 points for the year, and within sight of its 9337.97 record high reached July 17. Stocks pushed higher in many sectors, from drugs to the Internet to telecommunication services. The technology-laden Nasdaq index and broader stock indicators also rose. Banks and financial services stocks were among the front-runners as investors grew more confident that lower interest rates will boost the economy with more borrowing and spending.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614254","date":"1998-11-23","texts":"Is there a Santa Claus on the World Wide Web This may be the first e-Christmas, a recent article in this newspaper speculated. The current cover of Fortune depicts the Internet as a rainbow -- with, one must assume, a pot of gold at the end. Here's a reality check. This summer an Internet trade magazine asked some technically savvy employees to create an Internet store selling baseball books. The result In two months they had five orders, totaling 76.75. In all, excluding labor but including advertising, the sites cost them 485. E-commerce isn't fast and it isn't easy, reported the chastened publication. And these techies did everything right. They knew to register and reregister with the right search engines they knew how to wrestle with service bugs they knew to link to other sites and how to design banner advertisements they knew to sell baseball books during baseball season. Still they flopped. If people who know what they're doing can't make money on the Web, who can So far the answer is almost no one. A Morgan Stanley e-commerce study from last year found that the top 10 Internet sites got 50 of the advertising revenue. The top 100 sites got almost 95 of the revenue. So who is making money As in past gold rushes, it is the people who were there first, like Amazon.com, whose stock split 3-to-1 last week. Also doing well are sharpies selling maps and pickaxes. The Internet map makers have various guises, including search engines like Yahoo and AltaVista, as well as market researchers like Jupiter Communications and Forrester Research. Many a fanciful business plan has been launched using numbers from Internet market researchers, yet they know little more than anyone else. But without maps, online businesses are nowhere -- thus many map-makers are profitable. The Internet is a little bit recession proof, opined David C. Peterschmidt recently from his vantage as CEO of Inktomi Corporation, a search company. And he cheerfully added, Every time somebody hits the search button, our cash register rings.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615619","date":"1998-11-24","texts":"NEW YORK -- The bond market got the holiday-shortened week off to a poor start, as investors moved money out of Treasurys and into stocks and corporate bonds. Long-maturity Treasurys saw the biggest declines while shorter-dated issues registered only minimal losses. In trading late yesterday, the price of the benchmark 30-year Treasury bond was down 2232 point, or 6.875 for a bond with 1,000 face value, at 99 2532. Its yield rose to 5.256 from 5.215 late Friday, as bond yields move in the opposite direction of prices. Selling pressure on long-maturity Treasurys was compounded by the record high reached by the Dow Jones Industrial Average, which closed up 214.72 points, at 9374.27 -- topping its closing of 9337.97 on July 17 and marking the first time in four months the industrial average has surpassed the 9300-point mark. The continued heavy issuance of corporate bonds also drew money out of Treasurys. The most notable bond deal was pharmaceutical company Merck & Co.'s 500 million 30-year bond.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614134","date":"1998-11-25","texts":"Stock prices having more than bounced back from their post-Russia lows, we are being told once more by various authorities that the market is wrong. Maybe the hordes of small investors are simply processing the available information better than the pros. What might the non-chumps who have started putting money into stock funds again know Their jobs are secure, wages are rising, and their employers are doing well. Heading out to do their shopping, they experience the joy of finding that prices, if anything, are a bit lower than last time. Harder to put a finger on but palpable nonetheless, there is something distinctly less crappy about the goods for sale. The clothes are made from natural fabrics, the appliances have computer chips in them, the cars never seem to break down. What else does our shmoe know Downsizing gave him a rough ride, and wisecracks about the boss's stock options are a standard water-cooler hors d'oeurve. But somehow the company does seem more focused and disciplined No more drifting in the clouds of wishful thinking, executive vanity and bureaucratic inertia. So his boss is keener on earning a profit, and his dollars are worth more down at the Wal-Mart, Home Depot or Price Chopper. What does this mean for the shmoe's stock funds","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616426","date":"1998-11-30","texts":"NEW YORK -- U.S. bankers have blown it again. They lost millions in Russian Treasury bills. They got creamed on Asian securities. They loaned too much to hedge funds. They're at risk -- again -- in Latin America. When will they learn In fact, bankers have learned a lot this decade. While their earnings may be bruised and their growth prospects may be slowing, the nation's banks are in far better shape today than they were the last time the economy showed signs of slowing down. That will almost surely mean a softer landing when the next recession strikes. It was less than a decade ago that U.S. banks seemed mired in their worst crisis since the Great Depression. Big international banks lost hundreds of millions in real-estate and Latin American loans during the 1980s. Dozens of small banks failed in Texas and New England, deepening the recession in those places. These days, U.S. banks are awash in capital. Indeed, the Securities and Exchange Commission even put heat recently on SunTrust Banks Inc. of Atlanta for stockpiling reserves to boost earnings during a slowdown.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983314","date":"1998-11-30","texts":"The stock market, up. Consumer confidence, up. Job growth, up. The planets seem aligned for a burst of holiday shopping indulgence that should pump more than 5 billion into the Washington area economy in November and December. It's going to be better than we were expecting just a few weeks ago, said Mark Zandi, chief economist of Regional Financial Associates in West Chester, Pa., which tracks the region's economic performance. Holiday spending on items sold in malls and shops, through catalogues and on the Internet will exceed last year's total by more than 5 percent, predicted Mark P. Vitner, chief economist at First Union Corp. in Charlotte. In the Washington region, that translates into roughly 250 million in additional sales over 1997 -- equivalent to a year's revenue for a good-size technology company. Earlier this year, the National Retail Federation had predicted a 5 percent to 6 percent increase in spending over last year's holiday season. When the stock market briefly turned turtle this summer, that forecast looked shaky.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613956","date":"1998-12-02","texts":"EXXON AGREED to buy Mobil for stock valued at about 75.3 billion, creating an energy giant in the largest takeover ever and marking an era of low inflation. The deal is likely to attract close antitrust scrutiny, and the two companies face the task of integrating different corporate cultures. Meanwhile, the CBOE is investigating premerger options trading in Mobil. Lower oil prices will offer U.S. consumers extra purchasing power, while airlines, railroads, and other companies will reap a windfall. January crude fell nine cents to 11.13 a barrel at the New York Merc, a 12-year low. --- Boeing announced sharp production cutbacks for almost every jetliner model and the elimination of as many as 20,000 additional jobs through 2000, as it acknowledged the impact of Asia's problems on its strategy. ---","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616494","date":"1998-12-02","texts":"Nasdaq is bidding farewell to a growing number of Florida's smaller stocks. Many of the state's stocks have long called the Nasdaq Stock Market their home without much fear of eviction unless they filed for bankruptcy protection. But now, that's changing as many of Florida's mostly little companies find that they can't meet the more-stringent standards -- including a 1 minimum bid price and heightened governance rules -- imposed this year by Nasdaq on its main National Market and lower-profile SmallCap Market. In the first 10 months of the year, an estimated 42 Florida companies have been booted from either the Nasdaq National Market or the Nasdaq SmallCap Market for their inability to meet the new qualifications, according to an analysis by The Wall Street Journal. That's about 18 of the state's Nasdaq stocks and roughly double the national average. The figures include companies that weren't deleted from Nasdaq altogether, but found a home on the SmallCap Market, which, despite its own stricter requirements, is more hospitable to companies with modest market values. It could get worse in Florida. The summer's stampede out of small-caps has turned off some prospective investors and contributed to shrinking share prices. Of the more than 230 Florida stocks on the National and SmallCap markets, about 10 traded for less than 1 as of Nov. 20, meaning they are at risk for getting demoted or kicked out. Nearly 45, or more than 100, of these Nasdaq stocks are below the 5 mark, making them vulnerable, too, because they don't have far to fall.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985451","date":"1998-12-04","texts":"The Japanese government announced today that the world's second-largest economy continued to shrink for an unprecedented fourth quarter in the three months that ended in September, despite a boost from government spending. In addition, the government announced that for the first time in its history, the value of the national and local governments' debts will exceed the nation's total economic output at the end of this fiscal year. Basically there is no recovery in sight, said Yasuhiko Ushikubo, an economist with the Industrial Bank of Japan. The United States and other nations have urged Japan to revive its economy as fears mount that Japan's woes could prolong economic turmoil in Asia and threaten the rest of the global economy. Japan's gross domestic product -- the value of all goods and services produced -- contracted 0.7 percent in the July-September period, for an annual rate of 2.6 percent.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982220","date":"1998-12-05","texts":"The nation's unemployment rate fell to 4.4 percent last month, as stronger-than-expected hiring by builders, retailers, restaurants and other service providers more than offset layoffs by manufacturers, the government reported yesterday. The gain of 267,000 payroll jobs in November, which was much greater than many analysts had anticipated, showed that the nation's labor markets remained strong despite the recent flurry of corporate layoff announcements. Boeing Co., Johnson & Johnson, Merrill Lynch & Co. and merging oil companies Exxon Corp. and Mobil Corp. are among the corporate giants that have recently announced plans to slash tens of thousands of jobs. But many of those cuts won't occur for months or years. Meanwhile, other payrolls are booming. The U.S. growth story remains a tale of two economies, with the manufacturing sector shedding 47,000 jobs in November, purchasing agents reporting the weakest factory conditions since February 1996 and new factory orders dropping in October, said Bill Dudley, chief economist at Goldman Sachs & Co. in New York. More than compensating for those job losses were a jump of 55,000 jobs at firms providing business services, including temporary help, and of 47,000 in construction. Unusually strong holiday hiring boosted retail trade employment by 65,000 jobs, the Labor Department said.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983765","date":"1998-12-09","texts":"It's a part of the country's social fabric that is as American as motherhood and apple pie homeownership. Sociologists and economists alike have praised the value of homeownership, because of its beneficial effects on crime and neighborhood stability as well as its stimulative effect on the economy. Housing has a tremendous impact on the economy, said Sung Won Sohn, an economist at Norwest Bank in Minneapolis. People have said one out of every six jobs in America is housing or related industries. The largest user of copper in the world, or at least in America, is housing. The demand for lumber, aluminum, carpets, all these things are affected by housing. Right now, that demand is sky high, helping the economy by offsetting some of the drop in demand for exports from ailing Asian economies. That's because the percentage of Americans owning their own homes is at an all-time high of 66.8 percent, as the chart at right shows. That's an increase from the 1997 rate of 65.7 percent, which broke a record set back in 1980, when the rate stood at 65.6 percent. Not surprisingly, housing experts credit the strong economic combination of low inflation and low interest rates for the high ownership rate -- which has risen almost a point from the start of the year. A point may not seem like a lot, but it translates to about 1 million additional homeowners.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614472","date":"1998-12-10","texts":"WASHINGTON -- Christmas may not be as merry as some retailers hoped. As the economy slowed in several parts of the country, retail sales in the past six weeks were weaker than retailers expected, according to the Federal Reserve's latest survey of regional economic conditions. There were some bright spots Discount department stores showed strong growth in sales. And on the day after Thanksgiving, regarded as the biggest shopping day of the year, sales rose modestly from a year earlier. But in the Boston area, for example, most retailers reported that sales were clearly slowing, the report said. And Christmas has started slowly in and around San Francisco, where sales were mixed. In the Atlanta district, sales were flat. Some retailers were concerned that consumers may pull back during the holiday season, the report said. But others are counting on more traditional weather conditions to arrive and drive shoppers from the parks back into the malls. Retailers also said the tight labor market is making it difficult to recruit and maintain qualified workers for the holiday rush. Some retailers in the Cleveland district said they are paying seasonal employees as much as 25 more than last year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614626","date":"1998-12-10","texts":"WASHINGTON -- The Internal Revenue Service picked a team of companies led by Computer Sciences Corp. to take over the agency's bungled computer-modernization program. The multibillion-dollar project, expected to stretch over more than a decade, could become the biggest nondefense contract ever awarded by the federal government and is one of the most prestigious. For the troubled tax collector, the award marks a sharp about-face. The IRS will rely for the first time on the private sector to update its aged computer system, abandoning numerous efforts to do so internally, even when it clearly lacked the expertise. For taxpayers, the IRS insists, the system designed by CSC of El Segundo, Calif., will finally make gaining access to personal records and reaching agency officials by phone as easy as dealing with a bank or credit-card company -- though they caution that goal will still take years to reach. The IRS needs to break out of its technological time warp from the 1950s and 1960s, Commissioner Charles Rossotti said in a statement. This new partnership will help us replace archaic technology with the modern tools we need. . . . This marriage of the private and public sectors offers the best approach, he added. Yesterday's announcement was also a huge victory for CSC -- an information-technology, consulting, and outsourcing giant -- which bested a rival group headed by Lockheed Martin Corp. of Bethesda, Md., in the yearlong competition for the project. With revenue last fiscal year of 6.6 billion, CSC is less than one-third the size of Lockheed Martin. CSC officials said the IRS award could end up as the largest contract the firm has ever won.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615210","date":"1998-12-10","texts":"J.P. Morgan & Co., still buffeted by this fall's tumultuous markets, said it would take a pretax charge of 100 million in the fourth quarter because of cost-cutting, and warned that operating earnings for the quarter would be weaker than those of the third quarter. The forecast of weaker earnings is another sign that global markets are still a drag on corporate performance despite the resurgence of the stock market. The nation's fourth-largest bank attributed the expected quarterly shortfall to reduced revenue in its proprietary equity investments and trading, activities which were slammed during the roller-coaster markets of September and October. The disclosure hit the company's shares, which dropped 2.375 to close at 104.1875 in New York Stock Exchange composite trading. But J.P. Morgan said both the number of clients and revenue from many investment-banking activities had picked up during the quarter. J.P. Morgan recently has been an agent or adviser on several high-profile deals, including the advice it provided in the 75.3 billion merger of Exxon Corp. and Mobil Corp. Our position is strong going into the new year as markets recover, said a company spokesman. The charge relates to J.P. Morgan's continuing cost-cutting plan. The company previously said it planned to cut about 5 of its employees, or roughly 740 people, during the fourth quarter in piecemeal fashion. J.P. Morgan, which has been hampered by high costs in recent years, has said it plans to cut 400 million in core expenses in 1999, while reinvesting at least 100 million in additional savings it expects from cost cuts.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984199","date":"1998-12-16","texts":"Consumer prices barely budged last month as moderation in food and energy costs kept inflation under wraps. In good news for holiday shoppers, the price of computers, video equipment and toys all declined. The consumer price index edged up just 0.2 percent in November, matching the October increase, the Labor Department reported yesterday. So far this year, inflation is rising at an annual rate of just 1.6 percent, even better than last year's 11-year low of 1.7 percent. Inflation remains benign, said Paul Kasriel, chief domestic economist at Northern Trust Co. in Chicago. But while consumers are reaping benefits, Kasriel said domestic industries are being caught in a profit squeeze. Their labor costs are rising but they don't have the ability because of foreign competition to raise their prices to maintain profit margins, he said.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614030","date":"1998-12-23","texts":"The New York Stock Exchange struck an agreement with the city and state of New York to build its first major new facility in a century while staying in its historic lower-Manhattan neighborhood. The city and state are putting up a record 560 million in subsidies, tax breaks and other benefits to build a 60-story office tower, including a state-of-the-art trading facility, across from the Big Board's current home at Broad and Wall streets. The long-expected agreement is critical to both city and exchange. The stock exchange gets vital space to add more foreign stocks and trading technology, while the city and state retain the institution that defines the New York City financial district, which has only recently recovered from the early 1990s real-estate recession. But the deal also carries risks for both sides. The Big Board, by far the world's biggest stock market, is prospering now, but its open outcry system of trading stocks on a physical floor faces serious challenges from electronic-trading systems. Such systems have prompted many foreign markets to scrap their floors entirely. And though it is the financial district's first new office tower in 10 years, signs of a slowing economy have made speculative new construction risky, and some projects are already being called off around the country. The agreement, announced jointly yesterday by the state, New York City Mayor Rudolph Giuliani and Big Board Chairman and Chief Executive Officer Richard Grasso, is subject to a more definitive agreement and to approval by the exchange's board. Under the deal, the city and state will acquire a site across Broad Street now primarily occupied by J.P. Morgan & Co. and find a developer to build the tower.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982081","date":"1998-12-26","texts":"A Maryland governor's task force will recommend that the state give an extra 22 million to the University of Maryland at College Park over the next two years and guarantee at least 5,000 in funds per student to each of the University of Maryland system's 13 campuses. In a report to be delivered to Gov. Parris N. Glendening D next month, the panel will urge the Maryland Higher Education Commission and the University System of Maryland to create a statewide funding strategy for higher education that will help College Park realize its intended status as flagship and set mandatory minimum funding levels for the system's colleges and universities, which saw state funding stagnate during the recession of the early 1990s. The funding guarantees will give university presidents a built- in, reliable component to their budgets . . . so they can project what programs they can take care of, said Del. Nancy K. Kopp D- Montgomery, the task force co-chairman. The task force's recommendations recognize College Park's need for additional funds to compete for staff and students with top-ranked public universities elsewhere. When the University System of Maryland was created in 1988, lawmakers called for an increase of 20 million a year for College Park from 1990 to 1995 to put it on par with top public universities in California, North Carolina, Michigan and Illinois.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983573","date":"1998-12-27","texts":"Bucking dire predictions about the effects of impeachment, declining earnings and sky-high price-to-earnings ratios, the stock market has risen for the past six sessions in a row and could return more than 30 percent in 1999. In fact, the four years that come to a close this Thursday may be the best in history. Throughout this bull market, naysayers have fretted about lofty valuations, but stocks have simply climbed higher. Today, for example, the PE ratio of the Standard & Poor's 500-stock index, the best proxy for the broad market, is an astronomical 32, compared with an average of 19 over the past 12 years. Could it be that prominent pessimists -- such as Robert Shiller of Yale and John Campbell of Harvard, who said two years ago with the Dow at 6382 that stocks were at unsustainable heights, and the Economist magazine, which seems almost to be cheering for a crash -- are drawing conclusions from an antiquated model of the market It seems so. With a colleague, economist Kevin Hassett of the American Enterprise Institute, I have been working for the past year on a book that offers an explanation for the fabulous returns of recent years. We argue that stocks are moving now to correct a state of perennial undervaluation and that this strong upward trend will continue. Our analysis is pretty technical, but it begins with a fact that economists have known for years Over the long term, stocks are no more risky than bonds. Stocks and bonds should logically provide roughly the same returns, but stocks return far more -- an average of 11 percent a year, compared with just 5 percent for bonds.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614208","date":"1998-12-28","texts":"ASIAPACIFIC South Korea Hits A Snag in Overhaul Of Conglomerates Controversy erupted in South Korea over the proposed merger between Hyundai Electronics Industry and LG Semicon when the latter vowed to fight the transaction. LG Semicon's announcement Thursday came after U.S. consulting company Arthur D. Little chose Hyundai to take a controlling stake in the new entity. LG Semicon, a central unit of the country's fourth-largest conglomerate, LG Group, wouldn't say how it plans to nullify the decision, but analysts say the company probably will appeal to public sentiment, lobby government officials, sell some of its equity to foreign investors and accumulate more cash. The company is expected to argue that it is able to remain independent. It appears that LG Group is on a collision course with the government now, an electronics analyst at Dongwon Securities said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616941","date":"1998-12-28","texts":"Japan's floundering economy has crossed another humiliating milestone Its official unemployment rate is as high as America's for the first time since Tokyo started keeping such statistics 45 years ago. The Japanese government said Friday that its jobless rate, which averaged 2.5 in the 1980s, rose in November to a record 4.4 from 4.3 in October, matching the U.S. rate for the same period, announced a few weeks ago. This once-unthinkable development -- reported in banner headlines in the Friday-evening editions of five national Japanese daily newspapers -- is the latest manifestation of a decade in which nearly everything has gone wrong for the Japanese economy and so much has gone right for the U.S. Japan is suffering its longest downturn since the country was reduced to rubble during World War II. The U.S. is enjoying the longest peacetime expansion in its history. The U.S. has always had a lot of unemployment this is frightening, says Shuhei Oshima, a 26-year employee of an insurance agency in Tokyo. Says 48-year-old housewife Masako Torii, her eyes widening, What's happening to all the things we believe in The bankruptcy of her husband's small printing company has forced her to seek full-time work, so far unsuccessfully, for the first time since she got married 25 years ago. The fact that it has taken so long to bring the two jobless rates together testifies to the durability of Japan Inc.'s famous commitment to employment security. Despite severe economic distress, major Japanese companies still hesitate to cut workers. In contrast, U.S. companies from Polaroid Corp. on the East Coast to Northrop Grumman Corp. on the West Coast have announced major layoffs this month amid the strongest economy in a generation.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614357","date":"1998-12-30","texts":"The recipe seems too easy Make widget, sell widget, add Web site. Stock prices for a growing number of companies are soaring on the burgeoning enthusiasm about the Internet and online shopping. Since November, brisk holiday sales on the World Wide Web have sent investors hunting for any company looking to expand its presence on the popular medium. The impact has been felt in just about every, and any, Internet-related stock. The Chicago Board Options Exchange's Internet Index set a new high Monday at 426.96 and has doubled since mid-October. Yesterday the index was down 11.4 to 415.56. The market capitalization of Charles Schwab, which owns the largest online broker, jumped over securities behemoth Merrill Lynch this week. And after the close tomorrow, as previously announced, America Online will join the blue-chip Standard & Poor's 500-stock index, further raising the demand for the Internet-service provider's shares. What's more, a number of obscure small stocks are surging on the news of Web efforts. Heavyweight motorcycle manufacturer Bikers Dream more than doubled to 6 2732 on the Nasdaq Stock Market as news reports about the company's planned Internet sales channel spread. Catalog specialty-retailer SkyMall has tripled since Christmas, after it announced faster-than-expected sales growth on its Web site. And Active Apparel Group, a tiny sportswear manufacturer, has increased by a factor of 15 after reporting new Internet retailing links. Yesterday, the New York company's stock rose 7 12, or 65, to 19. A lot of stocks are moving up on announcements of interest in e-tailing, says Keith Benjamin, Internet analyst at BancBoston Robertson Stephens. Fine-art auctioneer Sotheby's, for example, jumped 6 this month when a Merrill Lynch analyst mentioned the company's Internet prospects. Retailer Sharper Image's Web site was mentioned in news reports after Thanksgiving, helping the stock to an all-time high of 21 316 Nov. 30.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616105","date":"1998-12-30","texts":"Crowning the Jesse Unruh State Building, across the street from the Capitol in Sacramento, an inscription declares Bring Me Men to Match My Mountains. Well, the men who have led California may not always have echoed the inspiring majesty of the Sierras or the rugged power of the Tehachapis. But like it or not, the governors of modern California have been almost perfectly matched to their times. The thoughtful Pat Brown, elected in 1958, earnestly believed in an expansive future, devoting himself to the transportation and education systems that would undergird the California economy. When things seemed to be moving too fast and too far, voters in 1966 replaced Mr. Brown with Ronald Reagan, who promised a return to the homespun values he made famous in his black-and-white movies. His successor in 1974, Jerry Brown, seemed to embody the ambiguity of the '70s, simultaneously preaching lowered expectations and iconoclastic -- some thought reckless -- innovation. Straight-arrow George Deukmejian saw California through the conformist 1980s, while ex-Marine Pete Wilson marched the state past recession and retrenchment in the early '90s. So what does the landslide election of Gray Davis -- by any account, California's big winner of 1998 -- tell us about our own time After all, Mr. Davis seems best defined by what he lacks in comparison to his predecessors -- that is, the vision of the elder Mr. Brown, the charisma of Mr. Reagan, the audacity of Mr. Brown Jr., the certitude of Mr. Deukmejian, the pugnacity of Mr. Wilson. But for all the talk of how apt Mr. Davis's first name is, the new governor does seem to personify the cautious optimism with which California looks to the next millennium. Great calamities have befallen the state in the not-so-distant past, but the resolute way Californians rebuilt after earthquake and riot and recession proved that fundamental strengths remained to be -- and, indeed, should be -- tapped. To the steady Mr. Davis falls the task of harnessing those strengths -- without exhausting them. Of course, for every winner, there is a loser. For this year, on the flip side of Mr. Davis's victory was the California Republican Party, which lost not only the governor's office, but also the statewide posts of attorney general and treasurer, seats in both houses of the Legislature and the campaign against Democratic U.S. Sen. Barbara Boxer. This doubtless leaves the state GOP feeling confused and out-of-touch -- as the Democrats once did.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616999","date":"1999-01-06","texts":"Some mutual-fund companies may make changes to year-end fund prices after a trading glitch caused several companies to publish inaccurate data in recent days. Yesterday, the Nasdaq Stock Market, which provides the price listings used by newspapers for more than 10,000 mutual funds, sent a memo to U.S. mutual-fund companies asking them to make any necessary changes to their year-end prices. The move came after a number of fund companies, including giant Fidelity Investments, experienced problems publishing accurate share prices for funds that held the stock of America Online Inc., which experienced year-end price swings on the New York Stock Exchange on Thursday, the last trading day of 1998. The swings caused confusion among mutual funds over the closing price for AOL that day. The problems affected several wellknown funds, including Fidelity's Magellan Fund. In pricing shares of funds that held stock of the Internet company, several fund outfits initially used an incorrect, lower closing price for AOL when distributing per-share fund data to outlets for publication in newspapers and other uses. As a result, the price that mutual-fund buyers were charged to purchase funds that held AOL stock was actually higher than the too-low price that appeared in their newspaper fund listings. In a memo to fund companies, Nasdaq called on fund groups that may have a problem to correct the closing net-asset value of funds for 1998. The problem, Nasdaq officials say, is that end-of-year information is important in determining mutual-fund rankings and even tax issues that affect small investors.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615703","date":"1999-01-07","texts":"Corrections & Amplifications TOTAL RETURNS for the Standard & Poor's 500-stock index reported in the Quarterly Mutual Funds Review on Jan. 7 were preliminary figures. The final figures are 1998 fourth-quarter total return, 21.30 one-year total return, 28.58 three-year total return, 28.23 five-year total return, 24.06 10-year total return, 19.21. In addition, the cumulative five-year total return was 193.91. The preliminary figures were provided by Lipper Inc. A table accompanying a Jan. 15 article on retirement-fund investing included some of these preliminary figures and wrongly indicated they were final figures provided by Morningstar Inc. WSJ Jan. 28, 1999 Wrapping up a year in which stock prices surged, swooned and then soared once more, diversified U.S.-stock funds ended 1998 with an average 14.52 total return. That 1998 gain, as calculated by Lipper Inc. of Summit, N.J., is higher than many market watchers had expected at the beginning of the year -- and is right in line with the impressive 14.49 average annual gain for U.S.-stock funds over the past 15 years. But the 1998 advance was smaller than 1997's 24.36 average fund return and also lagged behind the 1998 gains of some widely watched market benchmarks. The strong if unspectacular year-end number for stock funds obscures the high drama of mutual-fund investing in 1998.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984868","date":"1999-01-10","texts":"Thanks to so-called being there raises, tens of thousands of civil servants will get an extra 3 percent in their paychecks later this year on top of the automatic 3.68 percent adjustment that goes into effect this month. The paycheck sweeteners are technically known as step increases, or within grade raises within the federal family. Each General Schedule pay grade has 10 longevity steps. The difference between starting pay and top pay in any grade is about 30 percent. Workers who are never promoted can reach the top of their grade in less than 20 years. Few people outside government know about the virtually automatic longevity raises that go to thousands of workers with enough time-in- grade each year, in addition to any regular January pay raise. But Clinton administration pay reformers are keenly aware of the little-known longevity raises that add hundreds of thousands of dollars to agency payroll costs each year. Like earlier administrations, the White House is expected to attempt to make the raises less automatic and linked more to productivity and performance. By law, employees get the extra 3 percent longevity raise unless blocked by their boss every year in the first three steps of their civil service grade. Afterward, if they are still in the same grade, they get a longevity raise every two years. Finally, if they are still in the same grade, they get a longevity raise every three years in the seventh, eighth and ninth steps of their grade. Workers at the top -- the 10th step -- of their grade don't qualify for longevity increases. But like other employees, they still get the annual January increase.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614040","date":"1999-01-12","texts":"Frenzied securities trading tied to the recent, robust stock market, as well as a surge in new-customer accounts, helped online broker ETrade Group Inc. post a narrower-than-expected loss for its fiscal first quarter ended Dec. 31. And even though analysts expect ETrade to continue to lose money well into this year, shares of the Palo Alto, Calif., company leapt on the news In Nasdaq Stock Market trading, ETrade soared 20.875, or nearly 31, to 88.50, a new 52-week high. ETrade, which analysts say is trading like an Internet stock instead of a financial-services company, has seen its shares skyrocket 217 during the last three weeks. ETrade said it had a loss of 13.2 million, or 23 cents a diluted share, compared with profit of 5.1 million, or 12 cents a share, for last year's fiscal first quarter. The Wall Street consensus estimate was for a first-quarter loss of 30 cents a share. Core transaction revenues, mainly stock commissions, increased 60 from last year and 40 from the last, sequential quarter as investors clamored for hot Internet stocks and other technology issues. It's existing customers trading more . . . coupled with new customers coming online faster, ETrade Chief Executive Christos Cotsakos said. But the flurry of trades couldn't make up for the 41 million ETrade poured into marketing to promote its new Web site, analysts said. ETrade, which is spending heavily to compete with scores of other low-priced Internet trading houses, could devote a staggering 50 million to 60 million to marketing this quarter, said Bill Burnham, who follows the company for Credit Suisse First Boston Corp.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616258","date":"1999-01-12","texts":"After six years of industry consolidation, an array of production and sales problems continue to bedevil leading aerospace and defense companies. Two companies, Lockheed Martin Corp. and Northrop Grumman Corp., are warning that their fourth-quarter earnings will drop below year-earlier levels. Boeing Co., which has struggled all year, is expected to do better in the quarter than it did in the year-earlier quarter but is warning of problems this year. Only Raytheon Co.'s prospects look brighter. Boeing and Northrop Grumman, whose fortunes are partially tied to the Seattle plane builder, have both warned of 1999 profit shortfalls of as much as 25 and 20, respectively, below Wall Street expectations, because of Boeing's miscalculation of the Asian economic crisis. The region's collapsing demand for jetliners -- especially the 747-led Boeing to announce sharp production cutbacks that will pressure margins in its commercial-jetliner division, which accounts for 60 of revenue. For the quarter, however, analysts estimate that Boeing earned about 42 cents a diluted share, compared with a loss of 51 cents a share a year earlier, when the company struggled not with Asian fallout but with a costly production bottleneck at its Seattle-area assembly lines. Also in the year-earlier quarter, Boeing posted a one-time 1.4 billion pretax charge to phase out two jetliner models it inherited in its 1997 merger with McDonnell Douglas Corp. Northrop Grumman, which derives about 12 of its revenue from building jetliner parts, most notably for the 747 jumbo jet, last week posted a 105 million charge stemming from increased costs to complete the fuselages because of Boeing's cutbacks. Additionally, Northrop Grumman, Los Angeles, posted a 20 million charge related to delays in a separate defense-electronics program. As a result, the company likely earned 90 cents a diluted share, compared with 1.71 a share in the year-earlier quarter, analysts say. Northrop Grumman's smaller charge, for the test delay, was typical of problems among the largest defense contractors. Although encouraged by the Pentagon amid stagnating procurement budgets, It would appear that the whole round of consolidation of all four companies, which has proceeded in quite a hurry, may be a factor in programs that go awry as the companies struggle to digest their acquisitions, said Paul Nisbet, an industry analyst at JSA Research in Newport, R.I.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615807","date":"1999-01-14","texts":"Brazil rocked the world's markets, as news of a devaluation of its currency and the resignation of the country's centralbank president raised the specter of renewed financial-market turmoil in the region. Yesterday's surprise action widened the band within which the Brazilian currency, the real, trades. That sent the real down more than 8 against the dollar, and international investors fear there is considerable risk of further devaluation, which could hammer Latin American stocks and bonds again. Brazil's main stock-market index, the Bovespa, initially plummeted nearly 11, before ending the day down 5.1, or 299 points, at 5917, in moderate volume. But the steep opening drop dragged other Latin American markets sharply lower and delivered a blow to the European stock markets, many of which closed down more than 3. Argentina tumbled 10.2, Mexico dropped 4.6 and Venezuela dropped 3. Meanwhile in Europe, where the markets were still open when the devaluation and resignation news emerged, Spain dropped 6.9, Italy dropped 4.1, France 3.5, Germany 4.1 and London 3. Asian markets, which had already closed when Brazil made its announcements, were hit by their own domestic concerns as well as the slide in the U.S. market Tuesday. Further revelations about bad loans in China weighed on the Hong Kong market, which fell 4.1, while Singapore shed 2 and Thailand fell 3.6. The firmer dollar gave support to Japan's stock market, which rose 0.3.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983570","date":"1999-01-19","texts":"I would like to respond to the letter from Ticked Off in Texas. His mother-in-law, Edna, used her granddaughter's name to get phone service, and then, Tiffany, the granddaughter, wound up 500 in debt. She filed charges against Grandma for fraud. You said, Relatives don't do that to one another. Ann, Tiffany had to file fraud charges to get the negative credit removed from her report. Paying it off without disputing the charges would still cause credit problems for the girl. I negotiate home loans for one of the nation's largest lenders. Here's what would have happened had Tiffany not filed the fraud report It would be virtually impossible for her to get a car loan at normal interest rates. She would forever have to put down a large deposit to get utilities. She would have difficulty qualifying for student loans, and certainly would have trouble getting her first home. Early credit problems for young people can forever change the way their credit is treated. Where I work, there is a flag put on credit reports for Social Security numbers issued in the last 18 years -- and thus belonging to minors. If the phone company had had this information, they would not have extended credit to Tiffany. While I'm at it, let me take this opportunity to get across some important credit information to your readers If you are moving to another state and plan to buy a home, keep close at hand your tax returns, bank statements and recent paycheck stubs. You will need these to qualify for the mortgage on a new home. If you are getting a divorce and dividing the debts, be certain you list the company name and account number for each credit card debt in the property settlement. Don't let your attorney write, He gets this bill, and she gets the other. Ten years later, it's difficult to determine who was supposed to pay what bills when new accounts and new spouses are added to the mix.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615929","date":"1999-01-20","texts":"WASHINGTON -- President Clinton made a bold opening bid in the Social Security debate, proposing to invest hundreds of billions of taxpayer dollars in the stock market and to create government-sponsored, 401k-type individual savings plans for taxpayers. We must help all Americans, from their first day on the job, to save, to invest, to create wealth, the president said during his State of the Union address last night. The plan, offered in the face of a congressional effort to remove the president from office, drew immediate and harsh criticism from congressional Republicans. But by agreeing to channel Social Security funds into the stock market and advocating individual savings accounts, the president advanced a debate that promises to be one of the most provocative of 1999. For Wall Street, the stakes are huge. The Clinton plan and some congressional alternatives would channel between 650 billion and 1.2 trillion of taxpayer dollars into stocks over the next 15 years. At the end of that time, White House officials said, the government would own 4 of the entire U.S. market. A number of Republican alternatives would channel as much money into the stock market, but would do it through individual accounts. The amounts being talked about are large but not overwhelming. An investment of 650 billion over 15 years would equal about 3.6 billion in new money a month. By comparison, individual investors have put 1.1 trillion into the stock market since 1991 through mutual funds, or about 11.5 billion a month, according to the Investment Company Institute. Since 1996, those mutual-fund inflows have averaged 17.1 billion a month.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984015","date":"1999-01-20","texts":"President Clinton's proposal to have a small percentage of Social Security money invested in the stock market could be just the tonic Wall Street needs to keep its bullish streak running into the 21st century. At least that's the conviction of market watchers, who note with glee how the invention of individual retirement accounts and 401k accounts have transformed the markets in the past two decades. Last year, almost 20 billion a month in new money flowed into the stock market from mutual funds. But some experts caution that such a huge shift could further pump up stock prices that some already consider inflated, while possibly hurting the bond market. Clinton is proposing diverting 62 percent of an anticipated 4 trillion federal budget surplus over the next 15 years to Social Security, then investing less than one-quarter of that amount in the equity markets instead of Treasury securities, in which the fund now invests. Clinton also wants to take another 11 percent of the budget surplus to establish universal savings accounts, which would be similar to the 401k accounts that many employers offer. Together, the two proposals could add as much as 6.5 billion or so a month to the market.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830982839","date":"1999-01-21","texts":"Fairfax County approved construction of more homes last year than at any time since the last recession, reflecting a robust economy that is expected to continue to grow in 1999 but at a slower pace. Residential building permits issued by the county rose 23 percent last year, to 8,342, from 6,774 in 1997, according to figures released this week. The level of activity was the highest since the mid-1980's, when a housing boom added 11,000 to 13,000 new homes a year. Last year was the best year since before the recession in total number of residential units, said Stephen S. Fuller, a George Mason University public policy professor who tracks the local economy. Everybody thought it couldn't go on like this after a strong 1997, but it did. Fairfax wasn't alone. Neighboring Arlington and Alexandria also reported an increase in both residential and commercial construction as Northern Virginia benefited from lower interest rates and a surge in new jobs. Some 41,000 jobs were added in the region, economists said, as mortgage interest rates dipped to a 30-year low. Economists keep a close eye on the number of residential and commercial building permits issued because it provides a leading indicator of the economy's health. Builders construct more new homes and offices if they sense growing demand and curtail activity if they see signs that it's weakening.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984394","date":"1999-01-21","texts":"It is beyond trite to note that U.S. markets have absorbed Bill Clinton's impeachment without fear or agitation but would buckle if the guillotine blade were hurtling toward the neck of Treasury Secretary Robert Rubin or Fed Chairman Alan Greenspan. That analysis is also misleading It takes credit away from the truly heroic figure of the current history-defying U.S. economic expansion in a world of strong deflationary pressures. The hero to whom economists will build statues to commemorate this epoch is the American consumer. Yankee Consumer shoulders the burden of a world suddenly adrift economically by continuing to borrow, spend and consume with impressive single-mindedness. If that spending suddenly stops, the international financial game of musical chairs played in the Clinton years will come to a devastating halt. But there's also evidence that American consumers have instinctively understood that the world economy now operates on a new and still poorly glimpsed paradigm that pays little attention to classic rules of inflation, productivity or the relationship between currency values and interest rates. American buying habits are fueling unprecedented rises in U.S. private debt -- now estimated at 4 percent of gross domestic product -- and stock market valuations, which are feeding each other to produce a potential bubble economy. This should be the stuff of nightmares for Greenspan and Rubin.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985366","date":"1999-01-21","texts":"President Clinton's surprise proposal to link the fate of Social Security more closely to the stock market began to stir doubts yesterday about how his initiative would affect the U.S. economy and prompted potent criticism from Federal Reserve Chairman Alan Greenspan. A day after Clinton made an overhaul of Social Security the centerpiece of his State of the Union address, his plan raised fundamental questions about whether the federal government should assume an unprecedented role in the workings of private enterprise. Greenspan, reflecting a wave of criticism that surfaced yesterday, contended that by pouring billions of dollars in Social Security reserves into Wall Street for the first time, the government inevitably would mingle politics into its investment decisions and would not produce the kind of returns that the administration hopes for. He also raised concerns about whether the government would end up in the business of picking which American companies are worth investing in. There is really no strong evidence to suggest any positive aspects of moving Social Security funds into equities, Greenspan, the chief architect of the government's last major revisions to Social Security 16 years ago, told members of the House Ways and Means Committee. Such skepticism arose as Clinton moved swiftly into full campaign mode to sell his Social Security plan to the public at a rally that attracted an overflow crowd in Buffalo.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614124","date":"1999-01-22","texts":"The most arresting part of President Clinton's State of the Union message was his proposal to shore up the Social Security system. The president is correct in focusing on this challenge. In 1950 there were 16 taxpaying workers for every retired person in the U.S. Today there are just over three workers per retiree, and the ratio is expected to fall below two during the next century. If Social Security benefits are to be maintained under present arrangements, substantial tax increases will be required on workers and companies -- a burden that will discourage employment. Alternatively, other government receipts will be required or large government deficits will reappear. Small wonder that Mr. Clinton has searched for a magic bullet that might painlessly avoid the hard choices. There are two parts to the president's proposal. The first is to preserve the budget surplus and allocate a substantial proportion to the trust fund. The second is to shore up the system by investing 700 billion from the trust fund in the stock market over the next 15 years. Presumably by investing in stocks that historically have produced returns considerably above the yield on long-term Treasury bonds, the trust fund would grow more rapidly, and the date when the fund would run out of money would be pushed out much later in the century. Mr. Clinton's proposal to invest part of the trust fund in equities is the more radical part of his plan. It is a bad idea with unpredictable and probably damaging consequences. Moreover, simply investing a part of the trust fund in stocks will not provide the extra resources to spare us from making hard choices during the next century. Having the government invest in private securities runs against the principles of free markets and could well interfere with the efficiency of the capital-allocation process. While the government would undoubtedly propose that the funds be given to an independent or private agency that would invest in a very broad equity index of perhaps thousands of securities, such a plan would necessarily increase the allocation of capital to larger companies at the expense of very small entrepreneurial concerns that lack the liquidity to accommodate large government purchases. Many of these smaller start-up companies are responsible for important productivity improvements.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983131","date":"1999-01-22","texts":"Playing the stock market can resemble blackjack-table guesswork. But move the market to a Web-based simulation -- giving yourself 100,000 in Monopoly money in the process -- and you might learn something. These simulations have become popular parts of personal finance and portal sites. Most of the real-world rules apply, and each transaction costs a commission of 15 or so. Top finishers can win prizes, converting their funny money to hard cash. Almost all games build in a 20-minute time delay from the market and reset players' accounts on the first of the month. I tried games at ETrade and Yahoo, starting with a shameful lack of knowledge in either trading or investing. In each I wound up with a little less money, but much wiser in the ways of the market. com was the geekier of the two, with a customizable main menu that automatically graphs major market indicators throughout the day. Its handy stockwatch feature lets you set upper and lower boundaries for a stock's price, then alerts you when it crosses either limit. But ETrade's inability to memorize my log-in was annoying, and its trial-by-fire approach doesn't help beginners. Yahoo's Investment Challenge httpquote.yahoo.com had trouble executing some trades and didn't let me peruse my trading history, making it harder to track how much I'd paid for what. But its news updates, customized for one's holdings, effectively teach how stocks move according to news throughout the day.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614003","date":"1999-01-26","texts":"NEW YORK -- A lack of conviction kept a lot of traders sitting on the sidelines of the options market. With few reasons to take a stand on the direction of the broad market, or even individual stocks, traders wiled away the session reviewing earnings reports and watching the stock market swing like a pendulum between positive and negative territory. Options on some individual stocks traded strongly on specific news or strong hunches. Microsoft Corp.'s announcement of a 2-for-1 stock split, subject to shareholder approval, made it the most actively traded option at all four exchanges. International Business Machines Corp., whose board meets today, also may announce a stock split, analysts said. IBM was the second most actively traded option in the market.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615911","date":"1999-01-26","texts":"TOKYO -- Japan's trade surplus grew a greater-than-expected 14 in December, including a 23 expansion in the surplus with the U.S. that could worsen trade tensions between the two countries. Japan's merchandise trade surplus rose to 1.415 trillion yen 12.36 billion on a customs-cleared basis in December from 1.237 trillion yen a year earlier, the Ministry of Finance said. The December figures reversed a narrowing of 16 in the trade surplus in November, and set the country's surplus growing again for the 20th time in the past 21 months. For all of 1998, Japan's trade surplus expanded 40 to 13.985 trillion yen, while the surplus with the U.S. grew 33 to 6.697 trillion yen, the ministry said. Japan's trade surplus with the rest of Asia shrank 36 last year to 3.977 trillion yen. In December, Japan's overall exports fell 12 to 4.130 trillion yen. But in a continuation of a pattern that has pushed Japan's surplus steadily higher since Asia's economic crisis hit, imports fell even faster, declining 22 to 2.715 trillion yen. On the import side, it was the steepest monthly drop in 12 years. Exports to the U.S. fell 6.1 to 1.175 trillion yen, while imports from the U.S. fell 25 to 578 billion yen, bringing Japan's surplus for the month to 597.26 billion yen. Japan's surplus could expand further if the country's weak economy continues to overwhelm the boost a strengthening yen usually gives to imports. A stronger yen tends to make imports more appealing because they cost less in yen terms. Still, in December, the drop in imports came despite an increase in the yen's value to an average of 119.91 per dollar in December from 128.18 yen per dollar the previous December.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615136","date":"1999-01-28","texts":"WASHINGTON -- The top regulator of the stock market is concerned about the explosion in online trading, through which some of the frenzied buying and selling of Internet-related stocks is being done. Yesterday, Securities and Exchange Commission Chairman Arthur Levitt cautioned individual investors that rapid-fire online buying and selling can be hazardous to their savings accounts. Online investors should remember that it is just as easy, if not more, to lose money through the click of a button as it is to make it, Mr. Levitt said in a statement yesterday. The remarks follow rising complaints about online-trading services bogging down as investors jockey to trade increasingly volatile technology stocks on the Nasdaq Stock Market. Mr. Levitt said he is particularly alarmed by the rise in day trading, in which sometimes-inexperienced investors trade stocks continuously to reap quick, short-term profits.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613868","date":"1999-02-02","texts":"America Online Inc. said it will buy MovieFone Inc. for about 388 million in stock, adding the seller of movie tickets to its stable of city-guide offerings. At 29.25 a share, the transaction values MovieFone at a premium of 4.25, or 17, to its Friday closing price. Shares of MovieFone fluctuated wildly yesterday after the company made a morning announcement that it was in talks for a sale. The stock rose as high as 33 on the Nasdaq Stock Market, then dipped back to close at 26.50 just before trading was halted for AOL's late-afternoon announcement. In composite trading on the New York Stock Exchange, shares of AOL fell 4.5625 to close at 171.1875. MovieFone, based in New York, is best known for its telephone-ordering service, which lets moviegoers call and buy tickets by punching in a credit-card number. The service -- with its signature introduction, Hello And welcome to MovieFone -- has become a pop-culture emblem parodied on Seinfeld and other television shows. But in recent months MovieFone has placed a growing emphasis on its MovieLink site on the World Wide Web, which lets Net surfers order movie tickets online. Moviegoers pay 1.50 a ticket for the service.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616985","date":"1999-02-02","texts":"One of the great moments from the Starr Report is when Monica Lewinsky earnestly offers the American President her thoughts on education. But that was mere prelude to the federal budget President Clinton unveiled yesterday. Monica may yet be remembered as the face that launched a thousand new federal programs. Congress should call it the Lewinsky budget. The President's proposals for fiscal year 2000 represent a grab-bag bonanza that can only be explained as an attempt to repay the liberal Democrats in Congress who've stood by Mr. Clinton through scandal and impeachment. And what a reward it is 1.833 trillion in revenue, which adds up to the greatest Beltway tax windfall in American peacetime history -- and all of it to be divvied up and passed around by politicians The only losers are taxpayers, who under Mr. Clinton's proposal will have to ante up 20.7 of the whole economy to the feds. The era of big government is not over the President has been born again as a tax-and-spend liberal. Just for reference Only once this century has the U.S. government sucked up this much tax money, in 1944, when it took in 20.9 of the economy to fight Hitler and Tojo. But just one year later, in 1945, the tax take had fallen to 20.4 of GDP. Mr. Clinton now wants federal taxation to claim more of the economy than it did during the height of the Korean War 19 in 1952, Vietnam 19.7 in 1969 and the Cold War 19.7 of 1981. He is presiding, and intentionally so, over the only peacetime era in American history when taxes have gone up. It's this fabulous rush of revenues -- and not spending cuts -- that is mainly responsible for federal surpluses as far as the eye can see. From 1997 to 1998 alone, revenues climbed by 143 billion, or 9, triple the rate of inflation. That followed a jackpot increase of 126.2 billion, or 8.7, from 1996 to 1997.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830981807","date":"1999-02-03","texts":"Stock prices declined today as investors, worried that higher interest rates could drag corporate earnings lower, took profits for the second day in a row. The Dow Jones industrial average fell 71.58 points, to 9274.12, extending Monday's 13-point decline. The Dow was down 147.53 at one point today before recovering. Broader stock indicators were lower as well, led by technology shares. The Nasdaq composite declined 46.67, to 2463.42. The Standard & Poor's 500-stock index fell 11.01, to 1261.99. Stock prices began falling early on Wall Street after Japan's interest rates rose to their highest levels since July 1997. The higher Japanese rates sent the dollar and U.S. bond prices lower in New York, as U.S. investors anticipated that their Japanese counterparts, important buyers of U.S. Treasury bonds, would begin routing some of their funds away from U.S. securities and into Japan.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614733","date":"1999-02-04","texts":"Interest-rate jitters and profit-taking dragged stocks in Asia and Europe lower as investors awaited the outcome of the Federal Reserve's policy committee meeting. While the Fed decided to leave U.S. short-term rates unchanged yesterday afternoon, the news came too late to revive wilting stocks in Asia and Europe. And investors still are waiting to see whether the European Central Bank and the Bank of England, both of which meet today, will lower European and British interest rates. German stocks fell 1.5, France fell 1.3, Italy shed 1, and Britain dropped 1.2. Meanwhile in Asia, the focus was on Japan, where government bond yields continued to climb. This boosted the yen, and hurt Japanese stocks, which fell 1.3. The key index in Hong Kong fell 0.9, South Korea dropped 2.5 and Thailand shed 2.6. Overall, the Dow Jones World Stock Index fell 0.32 point, or 0.16, to 205.77. In trading in Asia Thursday, Tokyo closed the morning session down 1.6, while South Korea was 1.4 lower in late-morning dealings. Hong Kong had shed 0.5 in early trading.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615786","date":"1999-02-04","texts":"THE FED LEFT short-term rates unchanged, keeping the federal funds rate at 4.75, though the economic slowdown that the Fed expected has yet to materialize. The stock market closed higher after the widely expected report. The Dow Jones industrials rose 92.69 points to 9366.81, and the Nasdaq composite gained 1.22. Treasurys ended modestly lower. Wall Street economists are rushing to revise their forecasts amid recent statistics that point to stronger, not weaker, growth in the months ahead. --- Goodyear will close a big U.S. tiremaking operation and cut 2,500 to 2,800 jobs world-wide as it expands its reach through its Sumitomo Rubber alliance. Goodyear's quarterly net rose, in line with analysts' estimates. ---","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616995","date":"1999-02-04","texts":"The president's budget this week boasts of the Clinton commitment to biomedical research by generously funding the National Institutes of Health budget. It renews the commitment that the president made to vastly expanding biomedical research. This funding, the administration notes, has made the United States the world leader in medical research. If you buy that rhetoric then you can accept the president's definition of is -- as in there is no sexual affair -- or alone -- as in whether he was alone while having oral sex. The truth is the president has beaten an unconscionable retreat in his NIH budget. Last year, prodded by outside groups like Research America, a bipartisan group of legislators committed themselves to doubling the health-research budget over the next five years. The first installment was a 15 hike to 15.6 billion for the current fiscal year. In signing that legislation, the president praised it as a critical downpayment for his 21st-century research fund for America, and while he proposed a 50 hike over five years, he indicated support for doubling that budget. In the 2000 budget, however, he seeks only a 2 increase, not even enough to keep pace with inflation this would be the smallest increase in the NIH budget this decade. Health-research experts say this budget would stifle the NIH's momentum, lessen the prospects for major breakthroughs in the next decade, leave scores of promising grant proposals unfulfilled and discourage bright young scientists from entering the biomedical research field.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616136","date":"1999-02-09","texts":"MONTREAL -- While Canada enjoys its healthiest economy in years, it faces a worrisome threat Lagging productivity growth is undercutting its ability to compete in the future. Last Friday, the government said Canada's unemployment rate fell to 7.8 in January from 8 in December, hitting its lowest level since June 1990. Employment in January rose 87,400, or 0.6, its biggest monthly rise since December 1987. The Canadian dollar finished the week at 67.08 U.S. cents, its strongest level since last July. But longer term, recent studies conclude, slowing productivity growth threatens to drag down Canada's living standard for decades to come. In different ways, the Canadian dollar's years-long slide, high taxes, skimpy research budgets and heavy regulation are all taking their toll. Signs of trouble are spreading. Here in Montreal, BioChem Pharma Inc. became a star of Canada's biotechnology sector by developing the widely used AIDS drug 3TC. But now, the company is moving aggressively to expand its vaccine business -- in Massachusetts. BioChem tried for two years to lure development specialists to Canada from the U.S., but attracted zero qualified people, says its chief executive officer, Francesco Bellini. We can compete on salary, but we can't compete on taxes, he says. Since 1990, manufacturing productivity has increased less than half as fast in Canada as in the U.S., the Organization for Economic Cooperation and Development reports. It is now only about 70 of the U.S. level. If Canada doesn't change its ways, its per capita gross domestic product will plunge from 10 above the OECD average now to 15 below that level in 20 years, the organization predicts. After taxes and inflation, Canada's per capita personal income has slid since 1990 and now trails that of Mississippi, according to the Bank of Montreal's Nesbitt Burns securities unit.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616168","date":"1999-02-09","texts":"WASHINGTON -- U.S. banks aren't any longer tightening standards for lending to businesses, the Federal Reserve's latest survey of senior bank loan officers found. Only 7 of domestic banks told the Fed in January that they were raising the bar to midsize and large business borrowers in a survey conducted in November, 37 said they were. A mere 4 of the banks said they were tightening lending standards to small companies, compared with 15 in November. When the Fed cut interest rates last fall, it cited, among other things, banks' reluctance to make loans and investors' reluctance to buy risky corporate bonds. The new Fed survey suggests that credit conditions have improved lately, though they still aren't as easy as they were in the first half of 1998. Business demand for loans seems to have strengthened over the past three months, the new survey showed. The major factor, the bankers told the Fed, was that business customers have shifted borrowing from other sources that have become less attractive. However, the Fed noted that U.S. branches of foreign banks continue to show a reluctance to make business loans. More than 60 of the foreign banks surveyed said they had tightened standards for approving commercial and industrial loans and lines of credit.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981779","date":"1999-02-09","texts":"The District reported a record 445 million budget surplus for 1998 yesterday, and Mayor Anthony A. Williams and other officials deemed it proof that the once nearly bankrupt city has made a speedy and powerful financial recovery. Williams D, who was the District's chief financial officer before running for mayor last year, said increased tax revenue from the strong economy and stock market, coupled with tight spending controls and more aggressive tax collection efforts, contributed to the surplus. The city located more than 15,000 new tax filers during 1998, mostly individuals who had not bothered to file returns in the past, officials said. The surplus wiped out the District's 332 million deficit from years of overspending, leaving the city with a positive balance of 112.5 million. Unlike other major cities that bounced back from severe financial crises by borrowing heavily, the District recovered by generating large back-to-back budget surpluses. This city, I believe, has gone farther and faster in a financial recovery . . . than any other American city similarly situated, Williams said. D.C. Council member Jack Evans D-Ward 2 said that the District's financial outlook is bright and that Williams and other city officials deserve credit.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983834","date":"1999-02-10","texts":"Strong economic growth last year gave a healthy boost to labor productivity, allowing firms to give their workers solid pay increases while raising the prices of what they produced only slightly, the Labor Department reported yesterday. Gains in productivity -- the amount of goods and services produced for each hour worked -- are a key ingredient in raising the nation's living standards. Consider this arithmetic Last year businesses other than farms increased their workers' compensation 4.2 percent while raising the prices they charged only 0.7 percent. The companies could do that without clobbering their profits because productivity gains offset 2.2 percentage points of that difference. And other cost-saving actions reduced non-labor costs by 1.4 percent on each unit of output. The overall result was a combination that's hard to beat. The firms eked out a small increase in profit on each unit sold, workers' real pay went up 2.6 percent faster than consumer prices, and inflation went down. The Labor Department uses the consumer price index, which rose 1.6 percent last year, to adjust compensation for inflation. However, many analysts and policymakers are questioning whether such good news is likely to continue for long.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614151","date":"1999-02-12","texts":"Philips Electronics NV's two-year financial recovery ground to a halt as the company reported an 853 million guilder 437 million operating loss for the fourth quarter. The economic crisis in Asia and parts of Latin America, as well as a costly fiasco in the U.S. mobile phone market, took a big toll on Philips's results, reversing a 1.16 billion guilder operating profit in the yearearlier quarter. The loss partly reflects two billion guilders in charges and provisions taken to cover such problems. Reflecting the difficult market conditions, sales fell 6 to 19 billion guilders from 20.3 billion guilders. Net income, however, jumped to 10.32 billion guilders from 2.67 billion guilders, buoyed by onetime gains largely related to the sale of Philips's 75 stake in PolyGram NV to Canada's Seagram Co. Philips warned that it expects to report lower earnings during the first two quarters of this year, while a possible recovery would have to wait until the second half of the year. Philips will return to double-digit growth of earnings per share in 1999, Chief Executive Officer Cor Boonstra vowed at a news conference in Amsterdam. Analysts said Philips still has plenty of upside potential left. While its entry into the mobile phone market proved disastrous, the company has gained consumer electronics market share in Asia, bolstered its brand name in the U.S., expanded a highly succesful semiconductor business and bolstered its balance sheet by disposing of noncore businesses such as PolyGram.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615109","date":"1999-02-12","texts":"NEW YORK -- Bond prices ended little changed despite soaring stock prices and a tepid response to a Treasury sale of new 30-year bonds. Elsewhere, the corporate debt market continued to see a spate of offerings. Issuers view borrowing conditions as favorable now and worry that interest rates could rise, pushing up the cost of tapping the market. In the Treasurys market late yesterday, the outstanding 30-year Treasury bond's price was unchanged at 98 732. Its yield stood at 5.361, also unchanged and around its highest for 1999 so far. Meanwhile, in when-issued trading, the newly sold 30-year Treasury was quoted at a yield of 5.298. Early in the day, Treasurys reacted little to evidence of healthy consumer demand and a robust labor market. Government data showed January retail sales up 0.2 and weekly claims for state unemployment-insurance benefits falling to their lowest level in a year and a half.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985355","date":"1999-02-14","texts":"David G. Herro, director of international equities for Chicago- based Harris Associates and a childhood fan of the TV game show Let's Make a Deal, likes to compare three stock market choices that investors can make, each one worth about 20 billion. Behind door number one, he says, you have Amazon.com, which doesn't generate a profit and maybe never will. Behind door number two, you have every phone company, every cell phone, every fixed telephone line in Brazil, the eighth-largest economy in the world. Behind door number three, you have the entire New Zealand stock market. For Herro, the choice is clear. Anything but door number one. If you take door number one, you're not buying as an owner. You're buying as a speculator, he says. Herro, who co-manages both the Oakmark International and the Oakmark International Small Cap funds, believes that investors can find better value in many of the world's battered international markets than they can in the richly valued markets in the United States and Europe. His biggest holdings are in Latin America Asia outside Japan and Britain. Rather than fleeing from emerging markets, Herro says he is looking to add to holdings in businesses that are good and able to withstand the shock of devaluations, deflation and recession. Unfortunately for Herro and his clients, the strategy has yet to pay off. Over the past year, an investor would have been far better off with Amazon.com, which rocketed up tenfold in 1998, than with Oakmark International, whose value dropped 7.01 percent in 1998 even after a strong recovery in the fourth quarter.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614251","date":"1999-02-16","texts":"Ecuador's move to devalue its currency for the third time in less than a year will ease pressures on the nation's floundering economy -- though not by much, given the failure of the nation's Congress to pass badly needed tax measures. It was this failure last Thursday that precipitated the resignation of respected Finance Minister Fidel Jaramillo and the move by the Central Bank to allow the sucre to float on Friday morning. The president has his hands tied, said an analyst at Multiplica Cia., an economic consulting firm in Quito. Congress isn't helping him. The sucre dropped 3.6 on Friday to an interbank midrate of 7,580 sucres to the U.S. dollar from 7,305 sucres on Thursday. Since the end of 1997, when the sucre was at 4,430 to the dollar, it has lost more than 41 of its value. The Central Bank couldn't hold out after losing nearly 300 million of its reserves over the past month as local investors rushed to swap sucres for dollars. Ecuador's economic activity also was being choked by short-term interest rates in the triple digits. The Central Bank sharply boosted the overnight interbank lending rate in January in an attempt to slow the flight of dollars after Brazil floated its currency. Friday the Central Bank lowered the rate to 95 from 140.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614686","date":"1999-02-18","texts":"NEW YORK -- Small-capitalization and Nasdaq stocks fell sharply, posting steeper losses than the rest of the stock market. The Nasdaq Composite Index posted the sharpest decline of the major stock market averages. Since last setting an all-time high on Feb. 1, it has fallen 10.4. The Nasdaq composite, at 2248.91, plunged 64.96, or 2.81, yesterday. The Russell 2000 index of small-capitalization stocks has dropped 8.8 since the end of January, and stands 20.7 below its April 21 record close. The index fell 6.86, or 1.73, to 389.54 yesterday. As has been the case since the current small-cap and Nasdaq pullback began, the groups' losses were fueled by the weakness of the technology sector. Stocks in a wide range of tech-sector industry niches fell substantially. Meanwhile, the mania for hot new technology stocks continues.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615770","date":"1999-02-19","texts":"FRANKFURT -- Bayerische Motoren Werke AG must reach concrete results this spring in efforts to restructure its ailing Rover unit, BMW's new chairman, Joachim Milberg, said. BMW's turnaround team already recommended to the board measures to integrate and improve Rover's business, Mr. Milberg said in an interview with Die BMW Zeitung, an internal BMW publication. Steps are being taken to bring Rover to the necessary efficiency and productivity level, he said. As said before, all these steps can't be discussed furtherthey need urgently to be implemented. Mr. Milberg said investment and workflexibility programs under way at Rover are just the start of a row of measures, adding that BMW will do everything to deliver the Rover 75 model at a BMW-quality level. Speculation surfaced last week that details of additional restructuring at Rover, of Britain, would come at the group's annual shareholders' meeting May 18. BMW's supervisory board is set to meet March 18. Less than two weeks ago, Mr. Milberg succeeded as chairman Bernd Pischetsrieder, who stepped down from the post amid sharp criticism of problems and financial losses at Rover. Mr. Milberg previously was BMW's board member in charge of engineering and production.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985596","date":"1999-02-21","texts":"From a working mother cleaning hotel rooms for a little more than the minimum wage to a computer-company executive bringing home almost half a million dollars a year, Americans across the economic spectrum will pay less of their income in federal taxes this year than they did 20 years ago. You read that right. It may be hard to believe when every street corner seems to have a politician claiming you're overtaxed and need a tax cut. But an analysis by the Deloitte & Touche accounting firm for The Washington Post shows that Reagan-era cuts for higher-income taxpayers, Clinton-era help for the working poor and targeted tax cuts contained in the 1997 balanced-budget agreement have all helped keep federal taxes for most Americans lower than they were in 1979. To the extent that the economy has made everybody better off, they're better off and they're not paying as much tax as they would have under the old rules, said Clint Stretch, director of tax policy for Deloitte & Touche. This analysis might help explain why some of the oomph has gone out of the impact of tax-cut promises. Robert J. Dole's pledge to cut taxes across the board did little for his losing 1996 campaign against President Clinton. And recent polling indicates that Republican calls for another tax cut don't seem to excite many Americans. Most seem to prefer improving education or overhauling Social Security. Republicans argue that a tax cut is necessary because, by their analysis, when federal taxes are measured against the size of the overall economy, the federal tax burden is as high as it has been in more than half a century. Federal tax revenue is projected by the Congressional Budget Office to hit 20.7 percent of the nation's gross domestic product this year GDP is a common measure of the size of the economy. That would mark the second-highest level recorded since the dawn of the modern income tax in 1913. Tax revenue hit its highest level ever-- 20.9 percent of GDP--in 1944, when the federal government was extracting enormous amounts of tax revenue to finance World War II.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614723","date":"1999-02-22","texts":"WASHINGTON -- Consumer prices increased a scant 0.1 last month, as prices for certain consumer goods -- notably clothing -- continued to fall. January's meager inflation rate was the same as December's, and over the past year consumer prices have climbed just 1.7, the Labor Department said Friday. Excluding food and energy prices, considered to be volatile sectors, consumer prices rose a similar 0.1 in January, following a 0.3 increase in December. To better understand just how well-behaved inflation is, it helps to look at particular sectors. For example, while prices overall crept up, apparel prices plunged in January by 1.1, after a 0.6 drop in December. Over the past year, clothing prices fell 1.4 compared to a 0.4 increase the previous year. Women's apparel fell 1.9 last month compared to a 0.6 drop in December, while footwear dropped 0.9 following a 0.6 decline. Energy prices, which fell 0.2 in January, helped to keep the overall transportation figure down, despite a 0.1 rise in gasoline prices. Tobacco prices jumped 6.6 after a 18.5 spike in December, and air fares rose 1.8, following recent announcements by major airlines of across-the-board fare increases.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616276","date":"1999-02-23","texts":"WASHINGTON -- Economic forecasters surveyed quarterly by the Federal Reserve Bank of Philadelphia no longer expect as much of a slowdown in the U.S. economy during the first half of the year. The average of the 33 private forecasts put growth in the first two quarters of 1999 at an annual 2.85 pace, well above the 1.7 they predicted just three months ago. The economy expanded at a 3.9 rate in 1998. Despite the economy's stronger-than-expected growth, the forecasters are more optimistic about inflation than they were in previous surveys. They expect consumer prices to rise only 2 in 1999, marking down their forecasts to reflect changes in the government's consumer price index. Over the next decade, the forecasters expect the CPI to climb 2.3 a year. With continued growth and little uptick in inflation, the forecasters expect the stock market to keep climbing over the next decade, but they foresee returns closer to the historical norm. On average, they expect the total return on the Standard & Poor's 500 index to be 8 a year after inflation, down from the 9 they forecast last year. The inflation-adjusted return on the S&P 500 last year exceeded 20. The Philadelphia Fed doesn't probe for the forecasters' short-term outlook for the stock market. Over the next decade, the forecasters are predicting that the U.S. economy will expand at about 2.5 a year, after adjusting for inflation, and that productivity, or output per hour of work, will climb 1.55, up slightly from 1.5 in last quarter's survey.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616101","date":"1999-02-24","texts":"WASHINGTON -- Federal Reserve Chairman Alan Greenspan said the Fed is ready to move quickly -- but doesn't know if it will be to raise interest rates or to lower them. Mr. Greenspan's comments to the Senate Banking Committee confirmed the widespread perception that the Fed is in wait-and-worry mode, as Salomon Smith Barney economists put it, and isn't planning any change in rates soon. Although the stock market showed a mixed reaction to the Fed chief's testimony, bond prices sank. Analysts pointed to Mr. Greenspan's comment that the Fed is evaluating whether the third of last year's three quarter-percentage-point interest rate cuts remains appropriate. But most of Mr. Greenspan's testimony was a catalog of the considerable upside and downside risks to the economic outlook and an attempt to explain why inflation remains so docile. The upside risk is that the economy's strength will outstrip its capacity to produce, and inflation will finally emerge. After eight years of economic expansion, Mr. Greenspan said, the economy appears stretched in a number of dimensions. Employers can't keep hiring as they have been, because the hiring pool is shrinking. But the downside risks are also substantial. Stock prices, which have sustained consumer and business spending, are high enough to raise questions about whether shares are overvalued, Mr. Greenspan said. And weakening economies overseas, not just in emerging markets of Asia and Latin America, could further depress demands for our exports, the Fed chairman added.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984775","date":"1999-02-24","texts":"Senate legislation setting a 4.8 percent military raise for next January is almost certain to include language urging the same raise for 1.2 million white-collar federal workers. Although it is tough to compare federal civilian and military pay because of various allowances accorded military personnel, both groups work for the same employer and generally get raises at the same time each year. But they don't always receive the same percentage amounts. Raises for civilian and military personnel are based on different political, economic and strategic considerations. That means one group is often playing pay catch-up with the other. Senate Armed Services Committee Chairman John W. Warner R-Va. has military pay on a legislative fast track. The bill would move separately from -- and ahead of -- the much larger defense authorization bill. But Warner, with strong bipartisan support, wants the pay raise issue dealt with fast and first. He has agreed to include language promising pay-raise equity from a non-binding resolution by Sen. Paul S. Sarbanes D-Md..","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615659","date":"1999-02-25","texts":"The 1,000 companies on the Shareholder Scoreboard are major players in their industries and should be of significant interest to investors. With a total market capitalization of 11.384 trillion, they represent more than 90 of the market value of all publicly traded U.S. stocks as measured by the Wilshire 5000. The Scoreboard companies were selected by L.E.K. Consulting using a careful screening process. It began with the 725 U.S. stocks included at the end of 1998 in the Dow Jones Global Indexes, a family of world-wide stock-market indexes calculated by Dow Jones & Co., publisher of The Wall Street Journal. L.E.K. eliminated six stocks that hadn't traded for at least a year, producing a list of 719 companies across 94 industries. Next, L.E.K. added another 281 corporations, based on market capitalization, that weren't included in the Dow Jones Global Indexes. Again, these companies had to have traded for at least a year mutual funds were excluded. Since the Scoreboard is meant to track stocks incorporated and trading in the U.S., American depositary receipts and foreign stocks -- including shares of companies such as DaimlerChrysler AG that are incorporated abroad but trade in both U.S. and overseas markets -- were generally excluded. But companies were included if, like Carnival Corp., they are incorporated elsewhere but trade primarily or exclusively on U.S. exchanges. The additional 281 companies were selected by relying on data from Dow Jones and Media General Financial Services Inc., a unit of Media General Inc., Richmond, Va.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616251","date":"1999-02-25","texts":"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. 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. 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. 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. 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.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617081","date":"1999-02-26","texts":"Most people think factories should run with machine-like precision, but not Charlene Pedrolie. After becoming manufacturing chief at Rowe Furniture of Salem, Va., she tore apart the assembly line and sent gluers, staplers and seamstresses madly scurrying to build sofas as they saw fit. Amid the pandemonium of the shop floor, productivity and quality shot through the roof. Major corporations jealously track every dollar and proscribe the actions of every employee, right Wrong, in the case of the family-owned Koch Industries of Wichita, Kan. Operating mainly in energy and agriculture -- industries performing poorly almost everywhere else -- Koch has grown bigger than Microsoft, Coke or McDonald's in sales, with no budgets, no central planning and no fixed job descriptions. Economic pundits say small-time middlemen are toast in a high-tech economy. But they haven't met Jerry the Seal Man Whitlock, who buys and sells more than 1 million a year of seals and gaskets world-wide, mostly over the Internet from a spare bedroom in his house. Business is at war with family life, people say. But not at a chain of used-book outlets called Half Price Books. It has become the largest used-book dealer in the U.S. by expanding into cities where employees and family members have a personal reason to move. For the last four years I've been investigating such rule-breaking success stories in The Front Lines column for this page. But as the case studies piled up -- my travels took me to more than 100 cities in 30 states to industries as far-flung as semiconductor design and grease recycling -- the unusual seemed more and more like the norm. Everywhere I turned, it seemed, people were succeeding in business by doing the exact opposite of what business had long counted as conventional. Was it possible that these offbeat leaders were becoming the new order of business Was I witnessing a new ethos or simply some new fads A new dawn or some new Dilbert fodder The arrival of a new day or simply the ascendancy of a new generation These questions forced me to consider business on an unfamiliar new level. What were the most fundamental forces guiding business","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614675","date":"1999-03-03","texts":"The name is the game on Wall Street these days. 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. 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. 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. 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.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616766","date":"1999-03-03","texts":"Fasten your seat belts. BE Aerospace Inc. could be preparing for takeoff again. The executives who are piloting the manufacturer of aircraft-cabin equipment started buying shares of company stock in February. This is the first significant round of activity since the summer of 1997, when BE Aerospace executives sold shares and reduced their stake in the company. There hasn't been much activity over the past year and a half, and because they were such heavy sellers in 1997, I find the buys very interesting, said Nancy Fedorowicz, an analyst at First Call Investnet, a Rockville, Md., concern that tracks insider transactions. The insiders have rekindled their interest in the stock just when shares were closing in on a 52-week low. From Feb. 10 to Feb. 19, six BE Aerospace insiders purchased 46,000 shares at 12.69 to 14.94, according to First Call Investnet. Yesterday, BE Aerospace shares closed at 14, down 43.75 cents, on the Nasdaq Stock Market. The latest round of purchases included top company officials, adding more credibility to the buys, some analysts said. The executives have been with the company for a while, they have a good track record and the cluster of activity represents fairly large dollar amounts, said Jonathan Moreland, director of research at InsiderTrader.com, a Web-based distributor of insider data. Just about every rule to get you interested in insider trading at a company is being ticked off.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984414","date":"1999-03-04","texts":"President Clinton sent a letter to Phil Gramm R-Tex., chairman of the Senate Banking, Housing and Urban Affairs Committee, warning he will veto Gramm's proposed legislation to revamp banking laws if that legislation passes Congress in its present form. Clinton said Gramm's proposal fails to provide adequate consumer protections and gives the Federal Reserve too much regulatory authority over banks. The veto threat comes as the Senate and House banking committees draft final versions of financial service modernization bills that they hope to send for full floor votes by early summer. Boeing 737s must be inspected for a fire hazard in the center fuel tank, the Federal Aviation Administration said. The FAA wants operators of the twin-engine aircraft -- the most common passenger aircraft in the world, with 2,984 in the worldwide fleet, including 1,181 registered in the United States -- to check the wiring of a fuel tank switch that prevents over-filling. The cost of disabling the switch and installing a caution sign is estimated at 180 per aircraft, or 212,580 for the domestic fleet for inspecting and reinstalling or replacing it the estimate is 1,080 per aircraft, or 1.3 million for the U.S. fleet. Occidental Petroleum said the Oklahoma Supreme Court has upheld a 742.2 million judgment against Chevron. The court affirmed a 1996 judgment favoring Occidental in a breach of contract case related to Chevron's purchase of Gulf Oil in 1984. Interest on the award has brought the total value of the award to 935 million, Occidental said. GE Aircraft Engines said it has laid off 270 workers in Massachusetts and Ohio to cut costs in the face of intense price pressures in the aircraft engine industry. The layoffs represent a small percentage of a 34,000-person work force. Allstate agreed to form a joint venture with Putnam Investments to sell a type of stock-linked retirement saving plan that has become a popular form of life insurance. The companies will sell variable annuities, a hybrid of mutual funds and insurance policies that let people make tax-deferred investments in the stock market.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614677","date":"1999-03-08","texts":"NEW YORK -- With the U.S. economy continuing to surge ahead, the dollar won't be far behind. It is only how fast it can travel this week that is in question. Few disagree the dollar is headed higher against the yen and euro, guided by the U.S. economy's strength relative to Europe and Japan. In fact, last Friday's higher-than-expected employment data took a lot of uncertainty out of the market over the need for a tightening of interest rates by the U.S. Federal Reserve. The figures again underlined the U.S. economy can grow at a strong pace without inflation. While lower U.S. rates usually mean a weaker dollar as the yield on dollar-denominated deposits declines, capital flows into the U.S. currency are increasing in line with gains in the U.S. stock market, said Joe Yuska, foreign-exchange manager at Banc One International in Dallas. There is nothing in the horizon that will trip up the dollar, said Mr. Yuska, who expects the euro could pass last week's low of 1.0785 to test 1.0680.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615772","date":"1999-03-08","texts":"President Carlos Menem of Argentina recently proposed that his country give serious consideration to full dollarization -- the abandonment of its own currency, the peso, whose value is already fixed to the U.S. dollar. It's a good idea, not just for Argentina but for other countries in the Western Hemisphere. But the dollarization of the Americas won't happen without U.S. leadership. Argentina's disciplined monetary policy stands in stark contrast with that of some of its neighbors. At the beginning of the 1990s, Argentina enacted an array of economic reforms, including a currency-board type of monetary system. This regime ensured a fixed exchange rate -- one peso to the dollar -- and thereby promoted stability in prices and interest rates. Other Latin American countries, such as Brazil and Mexico, instituted some economic reforms but failed to make basic changes in monetary institutions. These countries adopted the worst-of-all-worlds system in which exchange rates neither float nor are genuinely fixed. Hence, they have suffered from volatility in exchange rates, inflation rates and interest rates. On some occasions, such as the Mexican debt crisis and devaluation of 1994-95 and the ongoing Brazilian fiscal crisis and devaluation, the financial markets have speculated that Argentina would deviate from its peg to the dollar. Argentina has withstood these pressures in the past, notably in 1995. But today's Brazilian situation is especially serious because Brazil is Argentina's largest trading partner. Argentina feels pressure to respond to Brazil's devaluation with a devaluation of its own. Anticipation of a devaluation raises interest rates, because of increases in currency risk and in related default risk. Consequently, the economy tends to contract. It was to counter this speculation and to reaffirm the commitment to a fixed exchange rate that Mr. Menem floated the idea of full dollarization. Since much of Argentina's financial system already operates in terms of the dollar, the main change would be a switch of the hand-to-hand currency from pesos to dollars. Then, as in Panama, it would be virtually impossible for the government to devalue -- in effect, there would be no peso assets whose value could be reset in terms of the dollar. Thus the financial markets would have no currency risk on which to speculate. In Argentina, the currency board has become highly popular, and a further move toward dollarization might also be popular. Nevertheless, a proposal to dollarize involves political peril. For one thing, Argentina's presidential election this fall makes it difficult for the opposing political parties to agree on a major change in the monetary regime. Domingo Cavallo, the principal architect of the Argentine economic miracle, opposes a move soon toward dollarization.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616895","date":"1999-03-09","texts":"Corrections & Amplifications O'SULLIVAN INDUSTRIES HOLDINGS Inc. said it expects earnings for the fiscal third quarter ending March 31 will be up more than 70 from a year earlier. Yesterday's Small Stock Focus incorrectly stated that the company expects earnings to be up 24. WSJ Mar. 10, 1999 NEW YORK -- Small-capitalization stocks rose moderately, outpacing most broad-market and blue-chip measures. A notable exception, however, was the overall Nasdaq market, which was sharply higher and posted the steepest gains of the major stock-market indexes. The overall Nasdaq market outperformed the small-cap market, as measured by the Russell 2000 index, largely because of the strength of Nasdaq's large-cap technology components.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617190","date":"1999-03-10","texts":"A new legislative study says Florida's economic competitiveness with other states remains reasonably strong overall, but could be threatened in a few vital areas by low productivity and profitability. The in-depth report by the Legislature's Office of Economic and Demographic Research examined business data from Florida and 24 rival states. In part, the report simply confirms what previous research has showed Florida generally enjoys lower costs -- particularly labor costs -- than most of its rival states. For many sectors, that helps translate into strong competitiveness. For example, Florida's electronics-manufacturing sector is highly profitable, thanks in large part to low labor costs, the report notes. But with Florida's relatively low-skill, low-wage work force, productivity tends to be low, the report concludes. That is contributing substantially to relatively weak profitability in some industries. Even Florida's mighty hotel industry suffers from profitability that's 1.5 below the national average, the report shows. Of particular concern is the state's surprisingly low profitability in a couple of high-tech sectors that state leaders are anxious to nurture, including the aerospace industry. Profitability of that sector ranked 21st, and 10.1 below the average.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617358","date":"1999-03-10","texts":"Internet wunderkinds aren't the only ones rushing to cash in on the rejuvenated IPO market. Buyout kingpins are lining up, too. But rather than launching initial public stock offerings of the latest Web-site fad, the buyout pros are bringing out IPOs in less-trendy companies -- the ones they bought as investments and now want to cash out of. Last week, Henry Kravis of Kohlberg Kravis Roberts took public Boyds Collection, a maker of collectible kitsch, in an offering that valued his firm's investment at four times what it paid a year ago. Bully for Mr. Kravis. But are the buyouts-turned-IPOs good for today's IPO-hungry investors There's a mixed record there. What's certain is that buyout firms like KKR, which were sidelined from doing IPOs by the market's turmoil late last year, are lining up at the reopened IPO window, suggesting that public-market pricing is rich. Texas Pacific Group took public Del Monte Foods last month, six months after shelving the offering because of unfavorable markets. It recently filed to bring public Ducati Motor Holding, a venerable Italian motorcycle maker, on stock exchanges in Milan and New York.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982027","date":"1999-03-10","texts":"RJR Nabisco Holdings Corp., plagued by lawsuits and uncertainty in the tobacco business, said yesterday that it will sever its cigarette unit from its Nabisco cookie and cracker operations, marking the end of a tumultuous corporate marriage. The move, long urged by a group of dissident shareholders, underscores how the legal and political battles that engulfed tobacco in the past decade have left one of the United States' earliest industries with few fans on Wall Street. Despite the booming stock market, the company's stock has lost more than half its value since 1991. Now, in hopes that investors will refocus on its core food products -- which include such brand names as Oreo cookies and Ritz crackers -- the company that produces Camel, Salem and Winston said it will spin off its domestic tobacco business to current shareholders and sell its international cigarette holdings to a Japanese firm for about 8 billion. The news did not immediately improve investors' opinion of the company's value. RJR Nabisco's stock initially jumped 5 percent on the news but drifted down during the day, closing up only 12 12 cents at 28.75. Reynolds served up something and investors kind of yawned at it, said Gary Black, a tobacco analyst with Sanford C. Bernstein & Co. The company said the complex deal will not shield it from outstanding liabilities in the tobacco business.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983511","date":"1999-03-11","texts":"DuPont, the biggest U.S. chemical company, said it expects to announce a pharmaceutical alliance this year and plans to issue stock to track the performance of its life-sciences businesses. DuPont, still a relatively small player in drugs, said it's in discussions with unspecified companies to help bulk up its pharmaceuticals business and help the company reach critical mass in the industry. The creation of two classes of common shares will allow investors to separate DuPont's life sciences, which are considered to be growing faster than its traditional chemical business. Journalists should shun the role of Chicken Little in reporting year 2000 computer problems and avoid undermining Americans' confidence in the banking system, a senior regulator said. If glitches occur or problems loom, report fully on them, of course, but make sure to place the problem in an appropriate context, Federal Reserve Board member Edward W. Kelley Jr. said during a panel discussion at the Freedom Forum Media Studies Center. Balance and perspective are key. Kelley said the Federal Reserve was conducting extensive advance planning to ensure that banks and savings institutions have cash on hand to meet any surge in demand late in the year from Americans nervous about losing access to their money if computers misread the year 00. The Senate Commerce Committee approved a bill that would restore network TV signals to about 750,000 satellite-dish customers who lost the signals two weeks ago because of a court order. The measure, introduced by Sen. John McCain R-Ariz., would place a moratorium on cuts until the end of the year, aiding more than 2 million dish owners who have lost signals or are scheduled to lose them. The broadcast industry opposes the bill. General Motors agreed to buy more than 1 billion in recycled aluminum over 13 years from Imco Recycling, to lock in supplies for lighter cars that meet new pollution standards. Imco, based in Irving, Tex., the world's largest recycler of aluminum and zinc, will build a 22 million plant in Zilwaukee, Mich., as part of the deal. As automakers strive to use more aluminum in place of steel, still the dominant metal in the industry, they are seeking supply and price guarantees. The Today Sponge, the most popular over-the-counter contraceptive for women before it was pulled off the market in 1995, is headed back to U.S. drugstores. A newly founded New Jersey company, Allendale Pharmaceuticals, said it has bought the sponge from its previous manufacturer and hopes to begin selling it again by fall. The Food and Drug Administration said there was never any problem with the product's safety. Instead, then-manufacturer Whitehall- Robins Healthcare decided it would cost too much to upgrade the old manufacturing plant where it made the sponge to meet stringent government safety rules.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617349","date":"1999-03-12","texts":"NEW YORK -- The hairy beast of inflation, hunted to the brink of extinction in the broader economy, has taken refuge in the Ivory Tower. Even while prices on everything from clothing to computer chips steadily decline, the cost of getting an education continues to rise, whether the sought-after institution is a private Ivy League college, a public university or a popular preschool. In recent weeks, private universities have been announcing tuition for the 1999-2000 academic year, and the increases -- which range between 3 and 5 -- are more than double the annual rate of inflation. Private grade schools and preschools are boosting tuition as much as 7. Public universities, which depend on state legislation to determine tuition, won't release new fees until the summer. However, previous increases have tended to be slightly lower than private-school increases, but still above inflation. To hear some schools tell it, students should be happy that the increases aren't higher. The actual cost of a Harvard education is close to 48,000 per year, lamented Harvard University when it announced a few weeks ago that next fall's fees will rise 3.3 to 32,164. Stanford University in Palo Alto, Calif., which plans to charge 30,939 for tuition and room and board next fall, seems disappointed that its tuition remains significantly behind our major competition-Harvard, Yale and Princeton. The 3.5 increase will not close the gap. How can educational institutions justify raising tuition at a time when inflation has nearly disappeared and when the stock market's stunning performance has boosted college endowments about 74, on average, in the past four years","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984990","date":"1999-03-12","texts":"Oil prices are beginning to recover from low levels that produced inflation relief and record-low pump prices, and so are oil industry stock prices, which contributed to the run-up in the Dow Jones industrial average yesterday. The rally, which has pushed crude oil prices up 33 percent from a 12-year low of 10.72 in December, resulted from different developments, according to oil industry experts. The prospect of further cuts in production when the Organization of Petroleum Exporting Companies meets on March 23, a reduction in inventories and heavy demand for heating oil in Germany in advance of an increase in tariffs have all fed the trend. Yesterday the rally stalled and prices fell slightly, with April crude oil futures on the New York Mercantile Exchange dropping 38 cents to 14.31 a barrel. But many analysts continue to believe that the signs point to a production cutback by OPEC nations, which were meeting in preliminary sessions yesterday and today in Amsterdam. In the past, many oil-producing nations doubted Saudi Arabia's commitment to reducing production, several analysts said. But meetings over the past 10 days between Saudi Arabia and Iran have begun to remove those doubts, said Roger Diwan, director of global oil markets for the D.C.-based Petroleum Finance Corp. But industry analyst Constantine Fliakos of Merrill Lynch & Co. said that Venezuela, which also is a member of OPEC, is under pressure from its unions to maintain production at current levels, which might threaten an agreement.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983419","date":"1999-03-13","texts":"Further evidence that inflation is dormant emerged yesterday as the government reported a 0.4 percent drop in the producer price index last month, the biggest decline in more than a year. The report cheered financial markets, but an early rally in the stock market petered out after the Dow Jones industrial average came within 42 points of breaching the 10,000 level. The average finished the day at 9876.35, down 21.09 points, after several big companies issued disappointing earnings forecasts. Bonds rose, with the 30-year Treasury bond gaining 5.53 per 1,000 invested, and its yield falling 0.04 percent to 5.52 percent. The fall in the PPI, which measures the prices of finished goods produced at factories, farms and refineries, was mostly from decreases in the volatile food and energy categories. The food index dropped 1.4 percent, because of falling prices for meat and vegetables, and the energy index fell 1 percent mainly because of a steep decline in heating oil prices. But even the core index, which excludes food and energy, was flat in February, underscoring the remarkable absence of inflationary pressures in the robust U.S. economy.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842616040","date":"1999-03-15","texts":"BOSTON -- State Street Corp. Chief Executive Marshall Carter, whose bank's stock-market performance has beaten many of its peers, received a special long-term incentive payment of 5.7 million last year. The bank's executives are eligible to receive the special payments every two years if the company meets certain goals of profitability and stock-market performance, according to the company's latest proxy statement. Mr. Carter's award was more than triple the amount he received in 1996, the last year he was eligible. The four other top executives received similar awards ranging from 1.7 million to 3.5 million. Mr. Carter also received an award of restricted stock that the company valued at 1.2 million. Meanwhile, his base salary increased 4, to 976,265. His bonus fell to 895,372, from 1.4 million in 1997. In all, Mr. Carter received total pay of more than 8.7 million last year, compared with 2.3 million in 1997. Mr. Carter also realized 6 million by exercising 148,980 in stock options last year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616290","date":"1999-03-16","texts":"NEW YORK -- Merger news animated banking and technology, and optimism about earnings fired up transports, sending market averages to new highs, though not to widely anticipated milestones. Banking names such as J.P. Morgan, which improved 3 38 to 125 38, Bank One, which rose 2 18 to 57 116, and Mellon Bank, which gained 2 916 to 73 12, all moved higher after Fleet Financial and BankBoston announced plans for a 16 billion combination. Meanwhile, technology stocks improved on merger hopes, as well. CMGI shot up 28 58 to 192 58 on the Nasdaq Stock Market, after reports over the weekend in the Boston Globe indicated the Internet marketing and investment concern expects to lure other bids for Lycos, the Internet concern it holds a piece of. Lycos climbed 7 18 to 105 34 on Nasdaq, while a host of other Internet names advanced. The strength of CMGI helped the whole group, said Tim Grazioso, Nasdaq-trading manager at Cantor Fitzgerald. The Dow Jones Industrial Average rose 82.42, or 0.83, to finish at 9958.77, its highest close ever, and first above 9900.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614659","date":"1999-03-24","texts":"Personal-computer makers seem destined for a disappointing first quarter, but evidence of a lasting drop in demand remains inconclusive. Jitters about PC sales contributed to a sharp drop in many technology shares yesterday. The sell-off was partly triggered by comments from market researcher PC Data Inc., which on Monday said U.S. retail unit sales of PCs in February rose just 1, while revenues dropped 16. Later the same day, PC maker Micron Electronics Inc. reported a 24 drop in sales for the fiscal second quarter ended March 4. Some of the revenue slowdown reflects rapid declines in PC prices. Some customers also appear to have held up purchases until they could buy machines based on a new chip from Intel Corp. A more subtle factor, analysts and industry executives say, is that many investors appeared to be betting that computer spending associated with the year 2000 problem might stimulate PC purchases in the quarter. That now doesn't appear to have happened. It's clear that the first calendar quarter has not been as strong as everyone expected it to be, said Joel Kocher, Micron Electronics' chief executive officer. I would characterize it as squishy.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983273","date":"1999-03-25","texts":"The children's defenses lowered, and a sense of camaraderie and adventure rose to take their place at a campsite in rural Maryland. At once, 37 boys and girls were just a short ride from their fractured District neighborhoods -- and fully a world away. Two boys wandered off from a blazing campfire and ran to a bench in the shadow of an old barn. They lay down on their backs and looked up into the black sky, taking in all the stars that are so hard to see from home. I've never been to a place like this before, Toribio Contreras, 13, told his friend Clayton Chatman, 12. Why can't it always be this good Toribio and Clayton, who both live in the Shaw neighborhood of Northwest Washington, met 35 other children from some of the District's most impoverished neighborhoods Saturday night to do something so removed from their everyday experiences that for some, it required an explanation. They went camping. Is there going to be a test asked Isaac McLaughlin, 10, as he found a seat on a school bus that picked up 12 children from an Anacostia apartment building. Are we going to the Virginia That must be five hours away. What if we fail the test","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615398","date":"1999-03-26","texts":"Your article on Chile-Japan trade, Chilean Firms Suffer Pain From Japanese Recession, is engaging and encouraging, yet its focus on short-term setbacks may stand a different reading if viewed from a global, longer-term perspective. To Chile, trading with Japan is part of a broader Asia positioning effort whose scope reaches beyond short-term issues. The two nations have a century-old record of cooperation and trade. Distance has been no object to doing business. Japan, now the second most important destination for global Chilean exports, has ranked as one of our four largest trading partners ever since 1970. About 13 of all Chilean goods currently sold abroad are bought by Japan. The success of Chile-Japan trade links warrants further analysis. Our partnership is far from having peaked, and Japan is far from a market lacking in possibilities. True, the dollar value of sales to Japan fell 28 in 1998, but a whopping 82 of this U.S. 593 million was simply due to lower ore and copper prices. A softer market for just five items -- mineral ores, copper cathodes, dressed pine boards, gold, and fish in brine -- accounted for 100 of the dollar drop in sales to Japan. Such is the predicament of commodity sellers today, a predicament that is hard on us all, not just Japan. Still, the record for 1998 shows an 81 increase in the diversity of products exported to Japan over 1997, as well as 27 firms newly joining the ranks of bilateral trade. In other words, despite Japan's downturn, trade with Chile, save for a few, admittedly major items, continues to thrive. Hector Casanueva Director, ProChile","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984344","date":"1999-03-28","texts":"With the Dow Jones industrials on the brink of 10,000, you might think this would be a period of celebration and congratulation. But no. The gloomy financial pundit class is issuing more ultimatums than NATO and heaping scorn on those poor saps who have sextupled their money in America Online Inc. The truth is, small investors have been right for the past five years. When stocks fell sharply in October 1997 and again during the summer of 1998, many pros panicked, but the little guys held their ground. Still, the theme emerging in the press on the eve of quintuple digits is that dimwitted investors have forgotten the past. After several years in which stocks do better than their long-term average- -as they have in the 1990s--there is a better-than-even chance that they'll underperform over the subsequent several years, wrote Mark Hulbert last week in the New York Times. Hulbert quoted two economics professors, John Campbell of Harvard and Robert Shiller of Yale, as saying that stocks will drop by one- third--or worse. But don't panic just yet. Campbell and Shiller have been bearish for a long time. It was Shiller who issued the influential dire warning at a Federal Reserve Board meeting in 1996 just before Chairman Alan Greenspan's irrational exuberance speech--with the Dow at 6437.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614115","date":"1999-03-30","texts":"Where do we go from way up here Some investors get vertigo peering down from the lofty height of Dow 10000. But to the standard-bearer of the bull market, Goldman Sachs chief U.S. strategist Abby Joseph Cohen, the horizon looks clear for further gains. This is an economy that is doing quite well and we think will support an increase in stock prices, says Ms. Cohen, who marked Dow 10000 sipping tea in her office. But we don't think that the increase in stock prices will be at the same high rate. We are still quite bullish, but we aren't quite as exuberantly bullish. She says stocks have the green light unless government, corporations and individuals stop making the sensible decisions that have transformed the economy.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614906","date":"1999-04-02","texts":"NEW YORK -- Small-capitalization issues rose, erasing intraday declines on a late-day wave of buying centered on the technology sector. The overall Nasdaq Stock Market also benefited from the late tech-sector rally, and the Nasdaq Composite Index posted the sharpest gain of the major stock-market indexes. The Russell 2000 index of small-cap stocks advanced 1.11 points, or 0.28, to 398.74, and the Nasdaq composite gained 31.97 points, or 1.3, to 2493.37. Small-cap and Nasdaq stocks were confined to relatively narrow trading ranges throughout much of the thinly traded preholiday session, before jumping higher late in the day. The stock market is closed today in observance of Good Friday. For the holiday-shortened week, the Russell 2000 rose 4.82 points, or 1.2, and the Nasdaq composite was up 74.2 points, or 3.1.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614664","date":"1999-04-07","texts":"NEW YORK -- Two high-tech initial public offerings presented more evidence of investors' preference for anything related to the Internet. Shares of Claimsnet.com Inc., an electronic-commerce company that helps health-care companies process transactions on the Internet, doubled in their first trading day on the Nasdaq Stock Market. Meanwhile, PLX Technology Inc., which makes semiconductor devices and software and has a solid history of earnings and revenue growth, made a less impressive debut on the Nasdaq. Investors appeared willing to overlook the fact that Claimsnet.com is losing significant sums of money and is barely generating revenue. It's distressing, said David Menlow, president of the IPO Financial Network in Millburn, N.J. Analysts said the latest trend appears to be successful offerings from Internet companies that not only are posting losses, but hardly have revenues. PLX priced 3.3 million shares at 9 apiece, 1 above the projected sale price. The stock closed at 12.125. Claimsnet.com priced 2.5 million shares at 8, the midrange of the estimated spread of 7 to 9. The shares closed at 16.50.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616296","date":"1999-04-07","texts":"At a huge team-building meeting last month for nearly all of Charles Schwab's 13,000 employees, Co-Chief Executive David S. Pottruck implored his troops to keep innovating in their jobs. We don't have time to build bridges to the next millennium, Mr. Pottruck declared in the speech at San Francisco's Moscone Center, where 5,000 employees watched in person the rest watched on a worldwide video feed. Mr. Pottruck also read inspirational email from employees. We take leaps. We leap across chasms into new and unexplored territory, he said. Lately, the same might be said of Schwab stock, which has fast become one of the signature stocks of today's Internet-charged stock market. In fact, Schwab -- which has the biggest online-brokerage operation -- is itself trading more like an Internet stock than a stodgy brokerage firm, without even having to add a dot.com or an exclamation point to its name. Shares of the San Francisco financial-services company have rocketed 91, splitadjusted, on the Big Board since the start of the year, to yesterday's record close of 107 14 , up 3 78 , as it has outshone other brokerage companies that have been around much longer. The stock has jumped 14 this week alone, amid a rally in online-brokerage-related shares.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982526","date":"1999-04-07","texts":"Gillette provided the latest sobering news for a giddy stock market today, sending prices lower with a warning that it will fall short of analysts' expectations for first-quarter earnings. Gillette's announcement deflated the rally that had sent the Dow Jones industrial average to a record high Monday. The Dow fell 43.84 points today to close at 9963.49. Broader market indicators were mostly lower, although the Dow sustained the sharpest losses. Barry Hyman, analyst at Ehrenkrantz King Nussbaum, said Gillette's bad news illustrated the recent split between the fortunes of the blue-chip companies and the Internet upstarts. This is a two-tiered market, he said. It has been for quite some time, and as long as the Gillettes, the Cokes, keep coming out with warnings, it will remain so. While the blue chips propelled the Dow past 10,000 for the first time in recent weeks, the market has appeared extremely vulnerable to signs of weakness from the corporate giants. Today, after Gillette said weakness in its Latin American business will cause it to miss analysts' expectations by 1 cent per share, its stock fell 7 34, to 50.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982432","date":"1999-04-12","texts":"Loudoun County, the Washington region's fastest-growing county, also received a second distinction last year It was the hottest market for home sales. The average resale price of Loudoun County homes rose by 6.4 percent in 1998, the biggest gain within the region, according to the Metropolitan Regional Information Systems Inc. new-home sales aren't included. Population growth and rising home values typically go hand in hand in a suburban community like Loudoun County, the newest center of technology industry expansion in the Washington region. But the runner-up to the hottest market title may surprise you. That's right, the District of Columbia. The average resale price for District homes rose 4.9 percent last year, ahead of Prince William County 4.2 percent, Northern Virginia 3.6 percent, Montgomery County 3.2 percent, Frederick County 2.7 percent, Charles County 1.3 percent and Prince George's County 0.8 percent.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615648","date":"1999-04-13","texts":"Small companies with swooning stocks sometimes are called Roach Motels -- you know, shareholders can check in, but not out, except at huge losses. But some buyout firms now are asking this Where can I get a room With the Russell 2000 index of smaller stocks having plunged 16.1 since its peak a year ago, a gap has emerged between the market valuations of small and large companies. So buyout firms are starting to pore over financials of distinctly unglamorous small concerns with beaten-down stocks, then bidding to take them private. Recently, buyout firms have offered to take private this group of seemingly humdrum stocks an office-furniture maker, an outdoor-apparel concern, a small hotel company, a furniture-rental firm and a human-resources outsourcing firm. Huh Didn't Wall Street buyout firms make their names a decade ago from glamour buyouts of large conglomerates see Kohlberg Kravis Roberts & Co.'s acquisition of RJR Nabisco","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617038","date":"1999-04-13","texts":"PHILADELPHIA -- When First Union Corp. took over Corestates Financial Corp. last year, Albert W. Mandia figured he'd be just another merger victim. After a 24-year career that had seen him rise to chief financial officer at Corestates, Mr. Mandia worried that his new employer would consider him extra baggage as a decade of downsizing climaxed with the loss of Philadelphia's last major bank. As he began looking for a new job in early 1998, he wasn't sure he would be able to stay in Philadelphia -- or in banking. Just a year later, Mr. Mandia is thriving in a corner of the financial-services industry that hardly even existed a decade ago. He is chief financial officer at Philadelphia-based American Business Financial Services Inc., a much smaller but fast-growing firm that makes retail loans to people with spotty credit records. Mr. Mandia represents a new class of employee who, thanks to a booming economy and tight labor market, is finding that there's not only life after downsizing, but opportunity, too. The Philadelphia banking scene is representative of a dynamic taking place in lots of industries. In the past, low unemployment levels and fast economic growth often made companies reluctant to lay off workers. Now, companies sometimes see layoffs as a source of growth as they reconfigure themselves to work more efficiently.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616083","date":"1999-04-16","texts":"WASHINGTON -- Hoping to lure private capital back to emerging markets, the World Bank plans to provide guarantees to help poor countries sell bonds to international investors. The bank's board is expected on Tuesday to approve the new policy, which could last as long as two years. The partial guarantees, limited initially to a total of 2 billion, are intended to restore investor confidence in governments that adhere to sound economic policies but whose ability to borrow on international capital markets has been undermined by investor panic. That situation has been a common one during the financial upheaval of the past 20 months. The guarantee program, which could also apply to commercial-bank loans, is one component of a broader international effort to prevent and resolve financial crises. The bank, the International Monetary Fund and the rich countries that fund them are trying to make as much progress as possible on those initiatives in time for the World BankIMF spring meetings, here at the end of the month. A centerpiece of that effort is the search for ways to encourage private investors -- an increasing source of financing for developing countries during the 1990s -- to return to emerging-market bonds and to stay when things get shaky. The World Bank and IMF are walking a fine line. They don't want to bail out private investors who already receive high yields on emerging-market bonds because the investors are taking big risks. But the institutions also want to be sure that deserving emerging-market governments have access to private capital even when markets are nervous. World Bank guarantees would make the bonds less risky in exchange, investors presumably would accept lower interest rates.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983762","date":"1999-04-16","texts":"The FBI arrested a 25-year-old computer engineer yesterday and accused him of originating a fake news story that swept across the World Wide Web last week and bid up the stock of a telecommunications equipment company. The suspect, Gary Dale Hoke of Raleigh, N.C., is an employee of the firm, PairGain Technologies Inc. Hoke was released on 50,000 bond yesterday. He faces a charge of securities fraud, which carries a maximum penalty of 10 years in federal prison and a 1 million fine. A federal complaint and affidavit filed against Hoke said he created the fake Bloomberg News Web page that falsely reported that Tustin, Calif.-based PairGain was about to be bought by an Israeli company. The fake news story and e-mail messages touting the deal sparked a frenzy of trading in PairGain shares on the Nasdaq Stock Market on April 7. Word of impending acquisitions often leads investors to buy the target company's stock, on the assumption that they will be able to sell it for a better price. This buying, in turn, drives the price up. According to the affidavit, which was filed in U.S. District Court for the Central District of California, the FBI investigation showed that Hoke on April 7 used the Angelfire service, which allows people to design and post pages on the Web for free, for his bogus page.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614875","date":"1999-04-21","texts":"One of the largest utility acquisitions in Massachusetts is supposed to provide a jolt to the economy. Shock is more like it, to hear the business community tell it. BEC Energy, which owns Boston Edison, said in December that it planned to acquire Commonwealth Energy System, which owns Commonwealth Electric Co., Commonwealth Gas Co. and Cambridge Electric Light Co., for 948 million. BEC Energy is paying a premium of 502 million over the book value of Commonwealth. Utility officials say the melding of the two operations would allow them to freeze rates for four years and create substantial operating efficiencies that would save customers billions of dollars. But to get there, the utilities want permission from regulators to make customers pay the combined company 959 million over 40 years for costs incurred as part of the acquisition. The utilities propose to collect 34.1 million a year for the first 10 years and 20.6 million annually for the remaining 30 years.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615581","date":"1999-04-23","texts":"SkyTel Communications Inc.'s announcement this week that it had hired an investment banker underscores the troubles now gripping the once highflying world of paging. Although John Stupka, SkyTel's chief executive, declined to confirm that the company is for sale, some Wall Street analysts believe that the paging firm will be sold within 90 days. Potential buyers, say observers, include MCI WorldCom Inc., one of the country's largest telecommunications companies, which presumably would be interested in SkyTel's nationwide two-way messaging network. A spokesman for MCI WorldCom, based in Jackson, Miss., declined to comment. Wall Street believes SkyTel will fetch as much as 1.5 billion, or about a 50 premium over the stock's current price. SkyTel closed up 50 cents at 15.6875 in Nasdaq Stock Market trading yesterday. Although SkyTel was the nation's first paging company to earn a quarterly profit, during its 10 years in business it has wracked up huge losses -- as have most paging companies. SkyTel has had to invest heavily in building its nationwide wireless messaging networks and on consumer marketing. But with more people buying cell phones and organizers such as Palm Pilots, the alert system associated with pagers seems increasingly simplistic. This has forced the beleaguered paging industry to reinvent itself. They need to find a match between their services and the new demands of consumers, says Steven Yanis, a wireless analyst with Nationsbanc Montgomery Securities.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616763","date":"1999-04-28","texts":"U.S. involvement in the Balkan crisis has done nothing to weaken consumers' rosy outlook for the economy. The Conference Board said its monthly consumer-confidence index rose to 134.9 in April from 134.0 in March, reaching its highest level since last summer. Low unemployment and a booming stock market helped keep the gauge at lofty levels. I was looking for the number to fall in part because of the Kosovo crisis, said Tim Martin, senior economist for BankAmerica Corp. But consumers aren't too focused on the war in Kosovo, which is kind of surprising, because during the Gulf War, consumer confidence took a pretty severe beating. Meanwhile, sales of existing homes rose less than 1 in March as a strong economy and low mortgage rates continued to lure buyers. The National Association of Realtors said existing single-family homes changed hands at a seasonally adjusted annual rate of 5.05 million, compared with 5.02 million in February and up 3.7 from 4.87 million in March 1998. Sales rose slightly in the Midwest and West, while the Northeast fell slightly and the South was flat. The home-sales report also surprised economists, who had predicted home sales would drop about 2 from February's level. That forecast was based partly on a mortgage-application survey compiled by the Mortgage Bankers Association of America that showed activity among purchase mortgages, a leading indicator for home sales, had slipped in recent weeks.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615356","date":"1999-04-29","texts":"WASHINGTON -- Top U.S. financial regulators are expected to recommend that hedge funds disclose their portfolios' financial condition in quarterly filings that are available to the public, but they fell short of proposing broad new rules for the 300 billion industry. The regulators' review of hedge funds has resulted in at least eight legislative and regulatory recommendations aimed at tightening standards for banks and broker dealers that either lend to or take part in risky investments, many of which are common to hedge-fund portfolios. The recommendations are part of a report that will be released as early as today by the President's Working Group on Financial Markets, which includes top officials at the Treasury, Federal Reserve, Securities and Exchange Commission, and Commodity Futures Trading Commission. After the near-collapse of Long-Term Capital Management LP last fall, Congress asked the group to find the best way to control hedge funds, which have widely been blamed for aggravating financial crises around the world. Hedge funds are largely unregulated investment pools in which the participants are primarily wealthy individuals. Treasury officials outlined the report yesterday during a briefing for House Banking Committee members. Of the three recommendations that would require legislation, the proposal for new disclosures in hedge-fund quarterly filings would have the broadest impact on the industry.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613466","date":"1999-04-30","texts":"MCI WorldCom Inc., fueled by growth in Internet traffic, data and old-fashioned phone calls, beat analysts' earnings expectations for the first quarter as revenue grew a healthy 15. But shares of the Jackson, Miss., telecommunications company continued to drop amid uncertainty over whether MCI WorldCom will make a bid for Nextel Communications Inc., the nation's last major independent wireless company. MCI WorldCom remains in talks with Nextel about a potential acquisition, but the two sides are said to be deadlocked over price. MCI WorldCom officials are reportedly growing concerned about the fall in their company's stock price as the talks continue. MCI WorldCom shares have lost more than 10 in value since April 12. On the Nasdaq Stock Market yesterday, MCI closed at 83.875, down 3.8125. MCI WorldCom had net income of 709 million, or 37 cents a diluted share, compared with pro forma earnings of 191 million, or 10 cents a share, in the year-earlier period. Excluding MCI WorldCom's 19 interest in Brazil's Embratel Participacoes SA and a one-time gain, the company had operating earnings of 688 million, or 36 cents a share, compared with the yearearlier pro forma results of 169 million, or 10 cents a share. Analysts had expected operating earnings of 34 cents a share, according to a consensus compiled by First Call Corp.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985181","date":"1999-05-06","texts":"The influence of medical journals on biotechnology stocks is being demonstrated again, this time by a 75 percent jump in the shares of Digene Corp. of Beltsville over the past 2 12 weeks. In an study made public Monday, the Journal of the American Medical Association reported that a test developed by Digene can identify some women at high risk for cervical cancer, eliminating the need for repeated testing. The JAMA article is the latest in a series of positive developments that has pushed Digene's stock from 6.87 12 a share on April 19 to 12.25 at the close of trading yesterday on the Nasdaq Stock Market. For a time Tuesday, Digene's stock traded above 15 -- its highest level in more than a year. It has pulled back in the past couple of days, which often happens after a volatile technology stock suddenly spurts because of important developments. Digene's chief operating officer, Charles M. Fleischman, said he believes the stock has run up because people are starting to understand the full impact we can have as a growing business.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982014","date":"1999-05-08","texts":"The unemployment rate in the District dropped to 7.2 percent in March from February's 7.4 percent, the best showing in eight years, as the economic recovery spread to nearly every section of the capital. Although the District's jobless rate remains more than three times that of the Washington suburbs' 2.1 percent rate in March, the capital's improvement is dramatic nonetheless. In March 1998, D.C. unemployment stood at 9.3 percent. The suburban figure is not adjusted for seasonal employment changes. Job gains at District offices and restaurants, consulting and law firms and retail outlets contributed to an increase of 3,800 private- sector jobs over the past year. There were 7,200 more D.C. residents at work this past March than in the same month a year earlier. Meanwhile, the number of unemployed D.C. residents declined to 19,000 in March from 24,700 a year earlier. The District's improvement comes in part from the updraft of a strong national economy and in part from the District's enhanced image, analysts noted.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983382","date":"1999-05-12","texts":"It is quite a trick for something to grow larger and at the same time become more invisible. But that is what's happening to the health care problem in the United States. The greater the number of people without medical insurance, the less the politicians want to talk about it -- let alone deal with it. In 1992, when the plight of the uninsured became a major issue in the presidential campaign, there were 38 million non-covered Americans below Medicare age. Five years later, according to a report released last week, the number had grown by 5 million. And the rate of increase is accelerating, from an average of half a million annually in the first two years to an average of 1.2 million annually in the three most recent years. But last week, when the National Coalition on Health Care, a bipartisan group headed by former presidents Bush, Carter and Ford, put out its latest report on The Erosion of Health Insurance Coverage in the United States, it barely made a ripple. Monica Lewinsky's appearance on Saturday Night Live drew more coverage than the fact that in the most recent year cited by the report, 1.7 million Americans were added to the ranks of the uninsured. Why is this happening The report's authors, Steven Findlay and Joel Miller -- who had the assistance of Tulane University's Kenneth Thorpe, probably the country's leading authority on this question -- say the legions of the uninsured are rising because of fundamental economic and demographic forces, which, by themselves, are certain to make the problem worse. The authors say that even if the rosy economic conditions prevalent since 1992 prevail for another decade, a projected 52 million to 54 million non-elderly Americans -- one in five -- will be uninsured in 2009. If a recession occurs, that number likely will jump to 61 million -- one in four. Most of the uninsured have jobs, but increasingly, they work in small businesses or in service sectors that either do not cover employees or require them to pay so much for health insurance that they cannot afford it. The growing numbers of self-employed, part- timers and contract workers swell the totals.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983802","date":"1999-05-12","texts":"In a corner of a nondescript, red-brick building here are dozens of boxes emblazoned with Compaq Computer Corp.'s familiar red logo. The boxes contain printed circuit boards and related accessories for Compaq's high-end computer servers. The tops of the boxes show a return shipping location for Compaq at the address here. But this is not a Compaq factory. Rather, it is one of 21 high- tech manufacturing plants that form the global manufacturing empire of a Silicon Valley company named Solectron Corp. Most people have never heard of Solectron, or of the curious mix of state-of-the-art manufacturing systems and ancient Asian principles by which it operates. The name Solectron does not appear on any product. What Solectron makes is nonetheless very familiar cell phones, inkjet printers, personal computers and medical equipment that bear the names and logos of a virtual who's who of high tech -- International Business Machines Corp., Intel Corp., Hewlett-Packard Co., Motorola Inc., Nortel Networks Corp. and others that would rather not reveal who is building their products. We are their factory, said Gary Fain, the Solectron manager who oversees the Compaq assembly line. We've got their name on it, but they never touch it.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614092","date":"1999-05-13","texts":"NEW YORK -- Small-capitalization and Nasdaq stocks rose, with the two groups -- like much of the stock market-shaking off initial skittishness over the resignation of Treasury Secretary Robert Rubin. The small-cap market, as measured by the Russell 2000 index, posted somewhat steeper gains than the overall stock market, while the Nasdaq market posted the sharpest gains of the major stock-market indexes. The strength of the small-cap and Nasdaq markets was again fueled by the technology sector, with last week's sell-off quickly becoming little more than a fleeting memory. Within the overall technology sector, a broad range of industry groups posted significant gains. The Nasdaq computer index rose 1.97. The Chicago Board Options Exchange computer-software index was up 2.3, the Philadelphia Stock Exchange semiconductor index rose 4.4, and the American Stock Exchange Internet index added 1.6. The Russell 2000 index of small-capitalization stocks gained 2.45, or 0.55, to 449.26, and the Nasdaq Composite Index, at 2606.54, advanced 39.86, or 1.55.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983197","date":"1999-05-13","texts":"Sen. Richard C. Shelby R-Ala. will review the Federal Reserve Bank's role in overseeing a small California bank suspected of being a possible conduit in the mid-1990s for illegal Chinese political contributions. Shelby, who chairs the Senate Intelligence Committee, already has said he will review if another federal bank regulator, the Office of the Comptroller of the Currency, was negligent in its oversight of the bank, the Far East National Bank of Los Angeles. The Fed approved the sale of the bank to a foreign bank in Taiwan in June 1997, the same month the Fed knew the OCC was notifying the Justice Department and other criminal investigators of the bank's activities. Cox Communications agreed to buy TCA Cable TV for about 4 billion in stock, cash and assumed debt, moving to become the fourth-largest company in the rapidly consolidating U.S. cable television industry. TCA has 883,000 subscribers, mainly in Texas, Arkansas and Louisiana. Cox -- which last month agreed to buy Media General's cable systems for 1.4 billion -- and many of its competitors have been on an acquisition spree in the past year, seeking to build larger regional groups of subscribers to spread out the cost of new programming and digital services such as high-speed Internet access and local telephone service. Bank fraud charges were filed against 33 people in federal court in Manhattan for using false papers to apply for more than 35 million in loans from Citibank, Chase Manhattan and five other banks. The defendants, mostly small-business owners, got the bogus documents from a former NatWest Bank loan officer who has already pleaded guilty. U.S. Attorney Mary Jo White said the banks actually lent out about 20 million based on the papers and lost 10 million to 15 million. Avondale Industries said its board has authorized management to begin talks with Litton Industries over Litton's 500 million cash offer to purchase the New Orleans shipyard. Litton has made twin, unsolicited offers for Avondale and Newport News Shipbuilding, which also has an offer pending for Avondale. While Litton is offering cash for Avondale, Newport News has offered its stock in a bid valued at about 470 million. Newport News has not publicly responded to the bid from Litton. Insight Communications said it plans to raise more than 500 million through an initial public offering of Class A common stock. The cable TV system operator did not disclose the number of shares or estimated price range in a filing with the Securities and Exchange Commission. It plans to use proceeds from the IPO to acquire systems in Kentucky, introduce new and enhanced products and services and invest in a telephone venture with AT&T.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616138","date":"1999-05-19","texts":"NEW YORK -- The dollar finished slightly lower against the yen and euro, barely reacting to the Federal Open Market Committee's decision to tilt toward raising U.S. interest rates. In the longer term, the bias toward higher rates, disclosed after the meeting of the Federal Reserve's policy-setting panel, is expected to help the dollar continue its climb against the yen and keep it strong against the euro. After trading flat for most of the session in New York, the dollar at first edged higher against the yen and euro on the FOMC announcement before sliding for a muted reaction overall. The dollar has gained three yen since May 10 on the widening gap between U.S. and Japanese bond yields, so the FOMC's announcement does lend support to that interest-rate differential, said Susan Stearns, foreign-exchange director at the Bank of Montreal in New York. The Organization for Economic Cooperation and Development said it expects the Japanese economy to contract by 0.9 in 1999, compared with its earlier estimate of 0.2 growth. The yen also is pressured by speculation that rallies in Japanese stocks are near their limits, after a rise of more than 20 in the benchmark Nikkei 225 Stock Average since January.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616268","date":"1999-05-19","texts":"BUENOS AIRES -- Four months after Brazil's devaluation, Argentina's recession drags on as companies struggle with high costs and a U.S. dollar-pegged exchange-rate system that many believe is still essential to economic stability. Despite weakened currencies in just about every major Latin American economy in the past five years, Argentina has hung on doggedly to its link to the dollar. The so-called Convertibility Plan, in which the dollar peg plays a key part, extinguished Argentine inflation and provided a base of stability that allowed the economy to grow at an average annual rate of 5.8 between 1991 and 1998. But because the dollar peg means Argentina can't weaken its currency to make its exports more competitive, it has to find ways to lower the cost of production. Economists say the government hasn't complemented the currency system with policies that lower costs for businesses, and that may be delaying economic recovery. If the government is going to say that convertibility is a sacred cow, they have to build competitiveness, says Pedro Lacoste, whose Buenos Aires economic-research firm bears his name. It's a tough agenda with powerful interests against it. But whoever the next finance minister is, he better be very convinced about these issues. In the early 1990s, Argentina increased competitiveness, Mr. Lacoste says, by slashing export taxes and liberalizing port regulations. But the government's attention now seems to be diverted by political shadow plays in a presidential election year. Some new tax policies appear to be working against competitiveness. In an announcement of default yesterday, power generator Central Termica Guemes SA said it wouldn't make a 3.6 million interest payment in part because of new taxes levied by the Argentine government on assets and on cash interest payments. Mr. Lacoste estimates that gross domestic product will fall 3 this year, while exports decline around 12. Yesterday, the government said auto production fell 51 in April from the same month a year earlier electricity consumption fell 9 in the same period. The government and some economists were betting on a recovery in the second quarter it is just not happening yet, says Martin Lousteau, an economist who works with Mr. Lacoste.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983684","date":"1999-05-20","texts":"Stocks rallied at the end of an erratic session as investors pondered their next move after the Federal Reserve's warning on inflation. The Dow Jones industrial average rose 50.44 to close at 10,887.39 after changing direction several times during the session. Broader stock indicators also closed higher after struggling all day to chart a course. The Standard & Poor's 500 index rose 10.91, to 1344.23, and the Nasdaq composite index rose 19.04, to 2577.40. Everyone has adopted a wait-and-see attitude, said Dan Ascani, president and research director at Global Market Strategists Inc. in Gainesville, Ga. On Tuesday, the Dow fell 16.52, recovering from a 112-point slide that followed the Fed's decision to leave interest rates unchanged. But a warning from the Fed that rates are likely to rise if inflation reawakens left the market jittery today.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615914","date":"1999-05-21","texts":"Major Latin American markets, under pressure earlier this week from rumors about Argentina's currency, rebounded. But the mood remains cautious following the U.S. Federal Reserve's shift to a bias in favor of tightening interest rates. The currency rumors, immediately denied by the Argentine government, were further dispelled late Wednesday when a former economy minister denied having said Argentina should float the peso anytime soon. Domingo Cavallo's calming words helped lift Argentina's Merval Index 1.2, partially offsetting a 4.3 decline during Wednesday's session. Mexico's IPC Index bounced back 1.2. But another interest-rate cut in Brazilits fourth in three weeks-failed to inject much life into the Bovespa, which was flat for most of yesterday's session. That suggests to some investors this highflying market could have reached an inflection point, where anticipated interest-rate cuts will no longer automatically power the Bovespa higher. This the first time I can remember that the Brazil market failed to go up after good news, said Stephen Oler, senior portfolio manager for Latin America at Putnam Investments in Boston. It means that the market may need to consolidate before resuming its advance. In other markets, Asian stocks enjoyed a slight rebound of their own, though South Korea's Kospi Index continued to slide. European stocks, led by the telecommunications sector, propped up most major markets.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984094","date":"1999-05-23","texts":"Taped to the side of Jose Gabriel Gonzalez's snack cart is a handwritten note asking, WHAT WILL HAPPEN TO THE CANAL NOW The question testifies to his anxiety about what will happen after Dec. 31, when the United States pulls out the last of its troops and the Panama Canal comes under full Panamanian control. I have great worries, said Gonzalez, whose cart occupies a busy street corner here. I have lost my sense of security. I have never known Panama without the Americans being here. Judging from numerous interviews, many Panamanians share his concern about the departure of the Americans, whose presence in Panama dates to its creation in 1903 after it broke from Colombia. In particular, they fear that entrenched political corruption and incompetence in the government will affect the administration and financial stability of the canal, which links the Atlantic and Pacific oceans. They also worry about the economic costs of the U.S. troop pullout as well as potential harm to the investment climate. Such reservations are not without irony. The treaties that set the stage for the canal handover and troop withdrawal were negotiated by Panama's then-leader, Gen. Omar Torrijos, and President Jimmy Carter and approved overwhelmingly by Panamanian voters in 1977. The signing of the accords was seen as a powerful assertion of national sovereignty and catapulted Torrijos to the status of national hero. In recent years, however, newspaper polls have indicated that between 50 and 70 percent of Panamanians queried support a continued U.S. military presence beyond 2000, particularly when the issue is framed in economic terms. About 36 percent of Panama's 2.8 million people live in poverty, and unemployment hovers near 13 percent. Some polls have even found that a majority of Panamanians would like the United States to retain control of the 50-mile-long canal, or, at least, operate it in partnership with Panama similar to the current arrangement.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984336","date":"1999-05-23","texts":"If the Redskins or the Capitals had gone on the block a decade ago, there might have been some Washingtonians among the bidders. But we wouldn't have seen the likes of Daniel Snyder or Ted Leonsis. That's because Snyder, who runs a fast-growing Bethesda marketing firm and is in line to buy the Redskins, and Leonsis, an executive of America Online Inc. and future majority owner of the Capitals, represent something remarkably new in the Washington region an entrepreneurial class with widespread wealth based on a record- setting stock market and a giant wave of technological innovation. It's too early to guess what this affluence means for the local economy and the local culture. But assuming the sales of the two teams go forward, we will soon see what happens when two of the city's most visible institutions wind up in the hands of a new breed of aggressive, impatient-for-success entrepreneurs. Of course there were moguls of great wealth here before America went online in the mid-1990s. But fundamentally, Washington was a world capital where business took a back seat to politics. Its economy was anchored in real estate, banking and federal jobs, contracts and lobbying. Fortunes tended to grow incrementally and to be handled conservatively. That's all changed now. The 1990-91 recession mowed down much of the Washington region's old business leadership and in its place has come a younger, opportunistic crowd. It's a clan with gobs of money, a group that seems determined to spend, invest and enjoy its wealth with the urgency and personal involvement with which that wealth was accumulated.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613687","date":"1999-05-24","texts":"WASHINGTON -- Forecasters surveyed quarterly by the Federal Reserve Bank of Philadelphia expect the economy to grow faster this year than they did previously, but they don't expect inflation to be any worse this year. The median of the 37 forecasts is for the U.S. economy to expand at an annual rate of 3.2 in the current quarter, 2.8 in the third quarter and 2.7 in the fourth three months ago, they were predicting inflation-adjusted growth rates of 2.7, 1.9 and 2.4, respectively. After a hiccup in consumer prices in the current quarter because of higher oil prices, the economists expect consumer-price inflation to calm to a 2.1 pace in 1999 and rise slightly to 2.3 in 2000, the same as they did in a February survey. Over the next decade, the forecasters expect 2.5 annual increases in the consumer-price index. But the Philadelphia Fed cautioned that two-thirds of the new forecasts were received before the government reported a surprisingly sharp increase in the CPI in April. As they have in previous surveys, the forecasters said they expect the year 2000 computer glitch to increase inflation-adjusted growth by an average of 0.3 percentage point this year and shave 0.3 point off growth early next year. As a result, the forecasters expect the economy to slow to a 1.8 growth rate in the first quarter of 2000 and then to rebound to a 3.0 pace in the second.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615538","date":"1999-05-24","texts":"A husband, father and entrepreneur with more responsibilities than he cares to count, Marshall Lane is happy to see his pile of bills getting shorter as he hacks away at credit-card debt. In 1996, Mr. Lane and his wife, Jannicke Kolderup-Lane, carried a combined credit-card balance of about 20,000. Three years later, that balance has been cut in half. We're at a point where we could pay it off if we wanted to, said the 31-year-old San Francisco art dealer. He may not know it, but Mr. Lane -- and others like him -- is beginning to demonstrate a new level of prudence in personal finance that could have broad implications for the U.S. economy. For years, economists warned that a high level of consumer debt was the Achilles' heel of an otherwise athletic economy. Overextended consumers, they pointed out, would be forced to use an ever-growing share of household income to pay credit-card bills, leaving little to support consumer spending. And if consumer spending slowed, they bemoaned, so would the economy. Yet in recent months, the statistics on the consumer debt front have shown signs of improvement. The pace of new debt has slowed significantly, delinquencies and charge-off rates are falling sharply and the amount of revolving credit outstanding declined in the first quarter. Reducing credit-card debt, say economists, could be the first step to raising the U.S.'s low rates of saving.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614430","date":"1999-05-25","texts":"NEW YORK -- Be cautious. Be smart. This is the options market's advice to stock investors. With few people interested in adding to, or opening, positions, sentiment was slightly bearish, representing a shift from the previous week's listless mood when most traders watched everything from the safety of the sidelines. As traders say, 'It's a heavy market.' It's for sale, a specialist at the American Stock Exchange said. The change in confidence was caused by a confluence of events including another sell-off in the technology and Internet sectors, an analysts' downgrade to sell from hold for bank stocks and lingering concerns about interest rates and inflation. No one's making money-long or short, the head of a major options-trading desk said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617399","date":"1999-05-26","texts":"German and British stocks dropped as fallout from U.S. interest-rate concerns spread from emerging markets to the more mature markets of Europe. Taking their cue from sharp declines in U.S. stocks on Monday, London's FTSE 100 Index fell 1.2 to 6249.3, while in Frankfurt, the Xetra DAX Index declined 88.05 points, or 1.7 to 5165.72. Only four components of the blue-chip DAX index managed to end the day higher. European markets slumped even though the Continent is unlikely to face the same threat of higher interest rates that U.S. investors now confront. Indeed, last month European central bankers slashed key lending rates, while Federal Reserve policy makers have shifted their bias in favor of raising rates in the U.S. Looking at European equities in isolation, there's little reason to be concerned about valuations or earnings, said Ian Scott, European equity strategist at Lehman Brothers in London. The threats to Europe come from outside the Continent. Meanwhile, Brazilian stocks were pummeled for the second consecutive session that together have trimmed nearly 10 of the market's value. The benchmark Bovespa Index closed down 552.43 to 10602.10, ruffled by interest-rate concerns and yet another market rumor, this time allegations linking President Fernando Cardoso to a recent privatization controversy.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616084","date":"1999-05-28","texts":"Uncertainty about interest rates and economic growth, ahead of a long holiday weekend, pushed stocks to some of their sharpest declines this year. The Dow Jones Industrial Average fell 235.23, or 2.20, to 10466.93, the year's heaviest drop in point terms and thirdheaviest in percentage terms. Leading the way down were the old-style manufacturing stocks that had soared in April, as well as the banking stocks. Even considering that point moves in the industrial average aren't as significant, in percentage terms, as when the index was at lower levels in past years, this has been a volatile week. There have been three drops of more than 100 points, including yesterday, and one gain Wednesday's 171.07-point rally. Some investors were locking in profits yesterday by selling winners ahead of what is expected to be quiet pre-MemorialDay trading today. International Business Machines, which had soared on Wednesday in advance of a stock split, declined. But Nasdaq-listed semiconductor stocks such as Intel posted gains, and the technology-heavy Nasdaq Composite Index fell just 8.03, or 0.33, to 2419.15. News that the Nasdaq Stock Market plans to extend trading into the evening hours helped buoy that index. Investors continued to worry about last week's announcement from the Federal Reserve that it is leaning toward raising interest rates. A variety of analysts warned that a Fed move could come as soon as its next meeting, scheduled for June 29 and 30. Bonds fell on those concerns and on reports that foreign central banks were selling U.S. bonds. The bellwether 30-year Treasury bond declined 2032, or 6.25 for every 1,000 in bond face value. That pushed the yield, which moves inversely to bond prices, up to 5.842.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613918","date":"1999-06-02","texts":"Texas' unemployment rate is hovering around 4, so the state's fund for unemployment benefits ought to be flush with cash, right Think again. In the past year, the unemployment trust fund has seen a dramatic rise in the size of monthly benefit payments. Total payments in the first quarter of 1999 jumped 42 to about 312 million from 219 million in the same period last year. At the same time, the monthly balance of the fund has decreased. As of last week, officials project the fund at the end of May will have a balance of about 847 million, 13 below the May 1998 balance. Oddly, the trend is partly due to the state's healthy economy, which is in some ways aggravating the effect of Oil Patch and other layoffs that account for the shrinking fund balances. If current trends continue, the fund by this fall could drop so far that there will be little or no new money to transfer to the state's worker-training programs. It also could reach the level that would trigger an automatic increase in the unemployment insurance premiums paid by employers. This outlook is, of course, subject to change an unexpected drop in the number of people collecting jobless benefits would enable the fund to build back up. But the trend is unmistakable. In their latest projection, officials with the Texas Workforce Commission say the trust fund will have a balance of 651 million on Oct. 1, excluding money tentatively set aside for job training as recently as March, officials projected a balance of 756 million.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616128","date":"1999-06-02","texts":"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. 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. 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. 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. 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.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614555","date":"1999-06-03","texts":"The euro was meant to bring Europe closer together. These days, it seems to be doing the opposite. The common currency, already caught in a major slide, is becoming the cause of heated political finger-pointing. The Germans blame the Italians for lack of budgetary backbone. The Dutch head of the European Central Bank faults the Germans for failing to kick-start their economy. And currency traders are voting with their feet. The big question is whether the euro is going through normal growing pains -- or facing a major crisis. The answer may be a bit of both. Yesterday, the euro hit another low, trading for as little 1.0326 on uncertainty over Kosovo and prospects for higher U.S. interest rates. In late New York trading, the euro traded for 1.0358. There was extensive debate before European economic and monetary union that it would be difficult to have a single currency for this region, says Thomas Mayer, European economist with Goldman, Sachs & Co. in Frankfurt. This has just all become clear much earlier than expected, he said. Wim Duisenberg, head of the European Central Bank, yesterday played down concerns about the euro's drop, stressing the euro-zone's favorable inflation outlook. The euro is a currency firmly based on internal price stability and therefore has a clear potential for a stronger external value, Mr. Duisenberg said at a news conference after the ECB governing council's regular meeting. The ECB held interest rates steady, as expected.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614174","date":"1999-06-04","texts":"WASHINGTON -- Federal Reserve Board Vice Chairman Alice M. Rivlin said she is resigning from the Fed after three years in the job, effective July 16. As is the custom at the Fed, Ms. Rivlin won't participate in the June 29-30 meeting of Fed policy makers. That removes one potential voice against raising interest rates. At least until recently, Ms. Rivlin has emphasized the enormous social benefits of a strong economy and has strongly advocated holding rates steady. The resignation means the Clinton administration now has two vacancies to fill on the seven-member board. The vice chairman's title may help the recruitment effort. For one of the two slots, the White House is leaning toward nominating Carol J. Parry, an executive vice president of Chase Manhattan Bank in charge of mortgage and commercial loans to low- and moderate-income communities and of the bank's philanthropy. Ms. Parry had rejected earlier overtures. Ms. Rivlin, 68 years old, said she will return to the Brookings Institution, a Washington think tank where she spent most of the Reagan and Bush years, and hopes to spend more time with her three grandchildren. However, she will continue to head the board overseeing the District of Columbia's finances. I hope to spend more time and to be more effectively involved in the city than I have been able to be while at the Fed, she said in her letter of resignation. Ms. Rivlin's four-year term as vice chairman was to expire in June 2000, though her term as a member of the Fed board extended to 2010. She had been overseeing Fed administrative operations and the Fed's oversight of bank payment systems.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615531","date":"1999-06-10","texts":"The price rise of theglobe.com's stock on its first day of trading last Nov. 13 was the most spectacular ever for an initial public offering. But the trading session also was one of the messiest ever on the Nasdaq Stock Market. Theglobe.com was priced the night before at 9 a share. The next morning, there was a crush of demand. At the opening, some investors bought it for 96 to 97 a share from Mayer & Schweitzer Inc., a unit of Charles Schwab Corp. At the same time, underwriter Bear Stearns Cos. was selling shares for 90, and someone sold it on Instinet Corp.'s screen-based trading system for 87. The apparent result Some buyers overpaid or some sellers sold too low. The controversial opening illustrates the structural problems plaguing Nasdaq. Though it once boasted of being the stock market for the next hundred years, Nasdaq's inability so far to resolve these issues could make it vulnerable to competition from upstart electronic exchanges and, perhaps soon, from the New York Stock Exchange, too. By all accounts, the 1997 reforms that followed an investigation into dealers' alleged fixing of stock prices made Nasdaq a fairer market. But those reforms, coupled with advances in electronic trading, are fragmenting Nasdaq into many submarkets, making it harder to ensure that buyers and sellers are getting the best price. It's an absolute Frankenstein, Douglas Atkin, chief executive officer of Instinet, said at a conference in March. The National Association of Securities Dealers, Nasdaq's parent, thought it had a solution last year to this problem a central limit order book into which investors and dealers from around the country could funnel orders. Big brokerage firms and institutional investors backed it as an essential step. But some firms saw it as proof that NASD management was bent on competing with its own members. Seeing a threat to their livelihoods, those members fought and killed the proposal.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615773","date":"1999-06-11","texts":"NEW YORK -- Volatility rose sharply as options traders hedged stock portfolios and took profits as the long bond's yield rose above 6. With the exception of precious metals, most sectors declined as Wall Street sweated in front of today's release of the producer-price index. Traders are worried the report could be stronger than expected, which would give the Federal Reserve's policy-setting committee more of a reason to raise interest rates when it meets at the end of June. There's a real fear out there that we could have a very aggressive Fed, a trader at a top Wall Street firm said. In anticipation of an interest-rate increase, traders reconsidered stock prices and defensively traded options. Taking coin and running, is how a floor broker at the Chicago Board Options Exchange described the session. The option market's fear gauge, the CBOE's Market Volatility Index, or VIX, rose 1.19, or 4.9, to 25.39, below its intraday high of 27.35.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616374","date":"1999-06-11","texts":"Inflation fears ruled the markets again, driving down stocks and bonds as investors await price reports to be released today and Wednesday. With the producer-price index to be announced this morning and the more important consumer price number due Wednesday, investors were taking few chances. Despite a late-day rebound, Dow Jones Industrial Average finished down 69.02, or 0.65, at 10621.27. Other indexes also fell. The industrials now are 4.37 below the year's high, but still up 15.68 for 1999. The day's big news was that Japan's economy returned to growth in the January-to-March quarter. Instead of welcoming the sign of world recovery, investors worried it will stoke inflation. That reinforced the view the Fed will boost benchmark interest rates June 30. The expected rate boost, together with the launch of new corporate-bond issues, pulled money out of Treasury bonds. The bellwether 30-year Treasury bond declined 1532, or 4.688 for each 1,000 in face value, pushing the yield up to 6.059, its highest level since April 1998. The dollar was mixed. All eyes are on Friday morning right now, said Brian Conroy, head of listed trading at J.P. Morgan. He attributed the late rebound to short sellers, investors who bet on stock declines, who bought stocks to close out their bets before the inflation news hits.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984280","date":"1999-06-12","texts":"Economists have all sorts of sophisticated measures of how the economy is doing, but sometimes the best indicator results from something as simple as a shopping trip. For Cynthia Latta, principal U.S. economist for Standard & Poor's DRI, a moment of clarity came when she went to a mall recently and didn't see a single sign advertising a sale. I just turned around and walked out, she said, making a mental note that the lack of customer incentives was a sign that store owners had plenty of business without cutting prices, a telltale tip that the economy continues to boom. What Latta saw at the mall was reinforced by reams of data that show that consumers, who account for fully two-thirds of the nation's economic activity, continue to spend at a pace that is remarkable eight years into an economic expansion. Sales of cars and light trucks are booming, as are sales at chain such as Wal-Mart Stores Inc. and Sears, Roebuck and Co. Yesterday, government figures showed that retail sales jumped a full 1 percent in May, up from just a 0.4 percent increase in April and no increase in March.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830985286","date":"1999-06-12","texts":"EBay, the boisterous online auction community and one of the signature successes among Internet commerce firms, was felled by a technical problem late Thursday that lasted about 22 hours. Investors, however, were not pleased by the disruption. Shares of eBay Inc., one of Wall Street's highest Internet high-flyers over the last year, fell 16.81 14 yesterday to close at 165.87 12. The San Jose company had notified customers throughout the day about efforts to fix the problem. We're sorry, but the eBay system is temporarily unavailable, it had said on a portion of the site that still worked. At about 830 p.m., it said We believe we isolated the problem, and we will keep a vigilant watch. Shortly after that, service was restored. But that was small consolation to eBay's more than 2 million participants -- purveyors of Beanie Babies, pink can openers, antique candy boxes and an array of items culled from the nations' attics. EBay typically has more than 2.2 million items up for bid at any given time. When the site first crashed at about 11 p.m. Thursday, Sharon Doney of Severn was auctioning 10 vintage jazz and classical music LPs on eBay. Doney sells 600 to 900 a month at online auctions, making such sales a primary source of her household income. But in recent weeks Doney has grown frustrated with frequent crashes at eBay. The site went down for six hours Wednesday, seven hours May 20 and four hours May 3. Because of eBay's problems, Doney said she has diversified her online selling by using other online auction venues such as Yahoo and Amazon.com. If I were only selling on eBay, I would be panicking at this point, Doney said.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616342","date":"1999-06-15","texts":"MEXICO CITY -- The Mexican government will announce today an 11 billion financing package aimed at building confidence that the country can survive next year's presidential election without suffering an economic crisis. The heart of the package, officials said, is a new 4.2 billion International Monetary Fund standby loan, to be disbursed over 18 months, that the fund's board is expected to approve shortly after recent lengthy negotiations. The package will also include commitments by the World Bank and the Inter-American Development Bank, some previously announced, as well as the longexpected renewal of an estimated 6.8 billion in swap lines with the U.S. Federal Reserve, the U.S. Treasury and Canada's central bank. The swap arrangement dates back many years and was strengthened in the 1994 peso crisis when Canada and the U.S., Mexico's partners in the North American Free Trade Agreement, and commercial banks supported Mexico's faltering economy with 47 billion in emergency financing. A Finance Ministry spokesman said late yesterday he couldn't confirm details. An IMF official in Washington, however, confirmed that a deal had been struck and said the Mexicans would probably draw on the funds. Countries sometimes secure IMF lending agreements to calm financial markets, but don't actually draw on the money.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984713","date":"1999-06-16","texts":"Mexico said yesterday that it had lined up more than 20 billion in loans and lines of credit that it might tap in an effort to ensure economic stability during next year's presidential election. The loans, which include some that were previously pledged and others that renew existing credit lines, come from the International Monetary Fund, the U.S. and Canadian governments, the World Bank, and the Inter-American Development Bank. The money is aimed at keeping President Ernesto Zedillo's six-year term from ending the way nearly all of his recent predecessors' terms have ended -- in a panicky flight by investors and lenders fearful that the country is on the verge of bankruptcy. In many past election years, the government has gone on spending binges aimed at winning support for the ruling Institutional Revolutionary Party, or PRI. This will provide us with the conditions necessary to have an orderly economic transition at the end of the six-year administration, Guillermo Ortiz, the governor of Mexico's central bank, said at a news conference in Mexico City. The move comes amid nervousness in financial markets that next year's elections, which are expected to be hotly contested, could be afflicted by the sort of political instability, economic mismanagement and capital flight that caused the peso to plunge in 1994, weeks after Zedillo's electoral victory. The peso crisis rocked global markets and prompted the Clinton administration to lead a 50 billion bailout for Mexico that sparked criticism on Capitol Hill. The administration, the IMF and their allies contend that this time around, Mexico is in much better economic shape and will use its international support to buttress sensible policies. The government has won praise from economists for keeping its budget and trade deficits under control, and Zedillo has sworn to keep from repeating the mistakes of his predecessors. The loans are designed to guard against a sudden loss of investor confidence by providing the government with extra resources if the need arises and by assuring markets the government is sticking to a sound policy path.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614706","date":"1999-06-17","texts":"WALKING SHOES are strong sellers, although the category is tough to define. The Sporting Goods Manufacturers Association, North Palm Beach, Fla., says sales of walking shoes rose 1.3 in 1998, while overall sales of athletic footwear fell nearly 8. The trade group adds that walking remains popular as a fitness activity. But it's hard to say just what shoes people are buying to walk in, says Mike May, a spokesman for the group. Choices range from white athletic shoes to dressier brown specialty shoes. Retailers note that the sales trend, while not new, is accelerating, and manufacturers are adding fashion brands. Travelers who want a cozy, crossover shoe for trips are a factor, they say. New Balance Athletic Shoe Inc. in Boston reports a huge surge in walking-shoe sales in the first quarter -- up 55 from a year earlier. Adele Rubinstein, manager of a Footprints Footwear store in Royal Oaks, Mich., says sales are brisk at the shop, which specializes in brands such as Mephisto, Rockport and Birkenstock. In Seattle, Nordstrom says the chain has been building its walking-shoe stock since this past fall. DKNY plans to introduce a Comfort line this fall that includes, among other features, antibacterial linings. A PEACHY CROP in Georgia spells good news for farmers there.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614503","date":"1999-06-18","texts":"Some non-Internet stocks that managed to crash the Internet party have been finding that they, too, have got a splitting hangover. Take CheckFree Holdings. The Norcross, Ga., company earns most of its money from electronic bill-payment services and from software used by financial institutions, businesses that existed long before the Internet. But CheckFree's Internet bill-paying service is growing rapidly. Around the start of the year, investors embraced CheckFree as a back-door play on the blazing-hot Internet. By April 14, the stock soared to an intraday high of 69 18, up from 23 38 at the end of 1998. Since then, CheckFree has continued trading like an Internet stock It fell like a rock to as low as 33 58, and closed yesterday at 38 38, up 1 18 on the Nasdaq Stock Market. This 44 decline -- despite a recent rebound in sympathy with the Internet stocks -- is a bit steeper than those of Internet bellwethers America Online and Yahoo in the same period. That is even though CheckFree, unlike them, has plenty of non-Internet revenue and -- egad -- even non-Internet earnings, to buoy it. Since the air started leaking out of the Internet bubble in April, it has been something of a mixed blessing for companies once tagged as backdoor plays on the Internet. Such companies can still garner a higher price-earnings ratio than run-of-the-mill enterprises with no Internet connection.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983955","date":"1999-06-20","texts":"Today, the boomer generation worries about amassing enough money for retirement. Tomorrow will bring another worry how to make a limited pool of savings last for life. That's where annuities come in--the type known as immediate pay. These annuities guarantee you a permanent income, no matter how long you live. They have some drawbacks. But insurers are starting to rethink immediate-pay annuities to make them more salable--especially annuities linked to the performance of stocks. You buy an immediate-pay annuity with a lump sum of money. The funds might come from regular savings, stock market gains, a retirement plan, even the cash in a life insurance policy. The insurer will turn that money into a lifetime income. The income could also cover the joint lifetimes of you and your spouse. Neither of you would ever run out of cash, no matter how long you lived.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615257","date":"1999-06-23","texts":"NEW YORK -- Qwest Communications International Inc. is close to increasing its bids for U S West Inc. and Frontier Corp., according to people close to the situation. Although the situation is fluid, Qwest's board is scheduled to meet this morning to consider various options to increase the unsolicited offers it made for U S West, a Denver-based Bell company, and Frontier, a Rochester, N.Y., long-distance company, on June 14. To be sure, the board can decide to remain pat. Qwest's bids for the companies were at first financially superior to those made by their original suitor, Global Crossing Ltd. But the value of the bids fell as Qwest's stock dropped as much as 25 last week. The stock of the Denver longdistance company has since rallied back a bit as its chief executive, Joseph P. Nacchio, has sought to explain the reasoning behind his bids to investors. Qwest's shares closed yesterday at 35.3125, down 1.3125, on the Nasdaq Stock Market. But in recent days, there has been little difference in the financial value of the bids from Qwest and Global Crossing. Accordingly, the boards of Frontier and U S West have both voted to stick with their original agreements with Global Crossing, having little incentive to go with Qwest. Subsequently, the pressure is building for Qwest's Mr. Nacchio to either walk away from his offer or put more money or stock on the table. People close to the situation say that Qwest could increase its offer for one or both companies, or put a collar on the deal that guarantees shareholders of U S West or Frontier a minimum share price. Such a move could ease concerns about Qwest's volatile stock, a factor the U S West board raised when it turned down Qwest's bid late Monday.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614955","date":"1999-06-24","texts":"While bond investors were turning gloomy, investors in technology stocks perked up. Worries about Federal Reserve plans for interest rates at next week's meeting depressed Treasury bonds and most stocks in another day of lackluster stock trading. But tech stocks bucked the trend again, amid hopes that earnings gains will offset any rate increase. The tech-heavy Nasdaq Composite Index rose 17.86 points, or 0.69, to 2598.12, on a day when the Dow Jones Industrial Average was falling 54.77, or 0.51, to 10666.86. The benchmark 30-year Treasury bond fell 1 232, or 10.625 per 1,000 bond, pushing the yield up to 6.140. The dollar was mixed. The bond is weighing heavily on stocks, said Bill Schneider, head of block trading at Warburg Dillon Read. You've had a couple of good earnings reports, notably from Lehman Brothers and Goldman Sachs Group, and it seems that the sell tickets are stamped and ready to be entered in anticipation. Both stocks fell despite beating earnings estimates.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984657","date":"1999-06-26","texts":"Smith, chief economist at the National Association of Realtors, closed on a house purchase in Alexandria Thursday. His mortgage A one-year adjustable at 5.25 percent. Why a one-year Because, unlike many other housing economists, Smith thinks fixed-rate mortgage rates will go down this year and into the next. The Federal Reserve is expected to announce next week that it will raise a key interest rate -- the benchmark federal funds rate -- to 5 percent from 4.75 percent. And when the Fed plays around with interest rates, the conversation around Washington dinner party tables inevitably turns to mortgages. But nobody needs to worry, Smith said. Contrary to what many Wall Street analysts are predicting, Smith believes that mortgage interest rates, still quite low by historical standards despite their upward drift in recent months, will go down later this year. Rates for a 30-year fixed mortgage should be down around 6 percent by the end of this year, plus or minus a bit, he said. The Mortgage Bankers Association sees a downward trend as well, although not as significant a dip as Smith predicts.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615601","date":"1999-06-28","texts":"With the sort of attention usually reserved for royal weddings, the Federal Open Market Committee of the Federal Reserve convenes today and tomorrow to determine whether or not to leave the current federal funds rate unchanged. In the course of their deliberations, which closely resemble an academic seminar, the Fed governors will take into account everything from the unexpectedly large increase in the April consumer price index to its benign follow-up in May to Japan's first-quarter growth. The probable result of all this activity a rate hike of one-quarter of one percentage point. Why so much attention to an event once known only to Fed watchers at investment banks The reason has little to do with whether and by how much the Fed raises the rate, though this will of course have some bearing on the immediate direction of the markets. What really matters, however, is what the Fed's action suggests about its view of the future of inflation. After decades in which mainstream economists held that the costs of inflation were negligible, and that an inflationary monetary policy could stimulate economic growth, it is now widely appreciated thanks to the work of Milton Friedman, Robert Lucas, Martin Feldstein and others that stable, low inflation is essential to longer expansions and stronger growth. Thus the intense speculation Will tomorrow be the start of another long march, a 300 basis point increase such as began in 1988 and 1994 to ward off inflation Is the Fed going to reverse the 75 basis point decrease in interest rates in response to the last year's global turmoil and the prospect of deflation The change in forecasts of what the Fed will and should do has been rapid. As recently as late February, the Economist magazine ran a cover story worrying about the risk of global deflation a few weeks later it hawkishly editorialized that the Fed was late in raising interest rates. Behind these large swings in opinion lie some unresolved questions about the economy, among them -- Why has inflation continued to decelerate Is it due to a string of one-time favorable shocks, such as low oil prices, a strong dollar, and a steeper than anticipated decline in computer prices Has that string run out","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614816","date":"1999-06-29","texts":"NEW YORK -- Prices of Treasurys surged as investors and traders adjusted positions ahead of important events this week, ranging from a meeting of Federal Reserve policy makers to a Labor Department update on employment growth. Late yesterday, the benchmark 30-year Treasury bond gained 2732, or 8.4375 for each 1,000 in face value. Its yield fell to 6.090 from 6.158 late Friday, as bond yields move inversely to prices. Today, in what likely will be the main focus for the bond market, Fed officials begin a two-day meeting to discuss monetary policy. People in the market expect the Fed to raise short-term interest rates after Fed Chairman Alan Greenspan recently cited the need for a pre-emptive policy. Most analysts expect the Fed to raise its target for the federal funds rate, or the rate financial institutions pay on overnight loans, by a quarter percentage point. Yesterday, as people fine-tuned positions ahead of the Fed meeting, the market saw a technical rebound, said Dennis Hynes, chief market strategist at R.W. Pressprich & Co., New York.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614941","date":"1999-06-29","texts":"In a year when the Real Thing took a beating, timing was everything. Many beverage analysts were caught flat-footed when Coca-Cola's growth rate started to fizzle because of turmoil in overseas markets. Coca-Cola, a perennially popular stock, rose 33 from January to July and then lost nearly its entire gain in the second half of the year. The company's 1.4 gain for the year, including reinvested dividends, helped depress the overall return for many a stock picker. Unless you were Timothy Swanson, a 32-year-old analyst for A.G. Edwards in St. Louis. Mr. Swanson was able to catch the wave of buoyant optimism for Coca-Cola in the first half of the year, before cutting his rating in mid-July, capturing a nifty 31 return. And in August, when many investors were bailing out of the stock of Coca-Cola Enterprises, the company's largest bottler, Mr. Swanson saw it as a cheap buy, riding that stock for 36 before jumping off. As a result, the three-time All-Star's 36 estimated overall return easily trumped the 11 median return for the 14 analysts evaluated in the survey. To a great extent, Mr. Swanson's calls were based on macroeconomic trends. With one international economy after another falling into recession, he felt that Coca-Cola, which gets 75 of its earnings from foreign markets, was too vulnerable. It had a great run, and it was time to take a respite, says Mr. Swanson, who likes to compete in triathlons.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984884","date":"1999-06-29","texts":"If the Federal Reserve, as expected, raises short-term interest rates by a quarter of a percentage point tomorrow, many consumers, homeowners and smaller businesses will shortly be paying more when they borrow -- but not much more. Banks likely will boost their 7.75 percent prime lending rates by the same quarter-point. Tied to the prime are rates for many home- equity loans, credit-card balances and small-business loans. I think you would see an industrywide increase of a quarter-point by the end of the week, said Wayne Ayers, chief economist at BankBoston. The Fed would expect that and want to see it as well. But even on a 20,000 loan, that would be only an added 50 in interest over the course of a year, some or all of which may be tax- deductible. In terms of impact on the booming U.S. economy, however, that 50 would be just the tiniest tip of a very big iceberg.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616279","date":"1999-06-30","texts":"Hoping to see a summer rally after the Federal Reserve does its interest-rate deed today, investors bid stocks up again. The Dow Jones Industrial Average rose 160.20 points, or 1.5, to 10815.35, its third consecutive gain. The Nasdaq Composite Index, full of rebounding technology stocks, surged 39.67 points, or 1.5, to 2642.11. It stands 9.94 points, or 0.4, short of its April 26 record close of 2652.05. Bonds rose again, and the dollar was mixed. The market's strength really caught most of us by surprise given that the Fed is widely expected to raise its guideline interest rates this afternoon, said Andy Brooks, head of stock trading at Baltimore mutual-fund group T. Rowe Price. I guess the market is saying, We are already comfortable with the Federal Reserve raising interest rates by a quarter percentage point Wednesday,' he said. But if it is more than that, I think it would be kind of a shock. It is another sign of the market being very comfortable with how Fed Chairman Alan Greenspan orchestrates this whole process. He telegraphs well. The Fed's policy-making committee has been meeting yesterday and today, and any interest-rate announcement is expected at about 215 p.m. EDT.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617382","date":"1999-07-01","texts":"NEW YORK -- In the end, it was the dollar that suffered most from the Federal Reserve's decision to maintain a neutral stance toward further fiscal tightening, despite climbing against the yen. U.S. stocks and bonds rallied on the news. Emerging markets and their currencies soared. Commodity-linked currencies jumped, while the Swiss franc, sterling and the euro sprang to their highest levels of the day against the dollar. The Fed's 0.25-percentage-point increase of its key lending rate to 5 from 4.75 was expected. But its adoption of a neutral bias wasn't -- at least not in currency markets. Thus the dollar, positioned for the rewards it would reap from an interest-rate differential widened by a series of rate hikes, was sold off against most currencies. Against the yen, however, the dollar was playing by a different set of rules.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616247","date":"1999-07-02","texts":"Optimism again ruled the stock market, driving two major indexes to records for a second day, even as gloom infected the bond market. A report of unexpected manufacturing strength reawakened inflation worries among bond traders, who took back some of Wednesday's gains and pushed the benchmark 30-year bond's yield back above the 6 level. But stock investors preferred to focus for a second day on the Federal Reserve's apparent reluctance to raise interest rates further this summer, and they sent stocks ahead for a fifth consecutive day. The Nasdaq Composite Index and the Standard & Poor's 500-stock index set records again. Dow Jones Industrial Average rose 95.62 points, or 0.87, to 11066.42, just 40.77 points, or 0.37, short of its May 13 record close of 11107.19. There was some money that was waiting on the sidelines, and had to get into the market once the Fed announcement came out on Wednesday, said Warren Epstein, head trader at Richard A. Rosenblatt. The Fed raised its target interest rate by a quarter-point but said it is neutral for the future, no longer leaning toward rate increases.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981914","date":"1999-07-03","texts":"The markets rose to record highs today in a broad-based rally fueled by a positive jobs report and a predictable Federal Reserve. The buying spree touched companies of every size in virtually ever sector. The three leading barometers -- the Dow Jones industrial average, the Standard & Poor's 500 and the Nasdaq composite -- all posted new highs. Analysts cited two main reasons for the market's best week since October a government report this morning showing the nation gained more jobs than predicted, and continuing relief that the Fed did nothing more than expected when it raised interest rates by 0.25 percentage points Wednesday. There was Fed euphoria today, said David Blitzer, chief economist at Standard & Poor's. They did what everybody expected them to do. So everybody thought they must be smart, we must be smart. Led by American Express, the Dow Jones industrials rose for a sixth consecutive day, gaining 72.82, or 0.7 percent. It closed at 11,139.24 -- its first record since May. The blue-chip barometer added its biggest weekly point gain, rising 586 points, or 5.3 percent.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984637","date":"1999-07-03","texts":"The nation's economic boom continues to produce jobs for some groups, such as minorities and persons with limited education, who have had far more trouble finding them in the past, the Labor Department reported yesterday. The overall U.S. jobless rate inched up to 4.3 percent last month, but the rate among blacks fell to 7.3 percent, the lowest since separate figures for blacks were first published in 1972. Fifteen months ago, in April 1998, the national unemployment rate was the same as last month, 4.3 percent, and the rate for blacks was 9 percent. While the national rate has barely changed during that period, joblessness among blacks has fallen sharply. Among whites, unemployment last month was 3.8 percent, less than half the rate for blacks. But the figure was hardly changed from the 3.7 percent rate of April 1998. A strong demand for workers and the shrinking pool of unemployed workers has led many firms to hire -- and often to train -- people with less education and fewer skills that they had insisted upon in the past. As a result, incomes of workers in the bottom fifth of the income distribution have been rising significantly for the first time in decades after adjusting for inflation.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614866","date":"1999-07-07","texts":"Is this a ballpark or a brokerage office While fans at Busch Stadium in St. Louis watch the high arc of slugger Mark McGwire's latest home run, they also can see a Bank of America sign out of the corners of their eyes. Or if the hit takes too long to come down, fans can check on how the financial markets fared that day Locally based brokerage firm A.G. Edwards has a sign in left field that displays the close of the Dow Jones Industrial Average. New York Mets officials, meanwhile, must think the stands are packed with day traders and stock-market fanatics who can't get Wall Street off their minds even during the seventh-inning stretch. Why else would TD Waterhouse Group and Reuters Group co-sponsor not one, but two, stock-quotation tickers in the outfield at Shea Stadium Beer and food companies have long promoted their brands by plastering signs on the walls of sports stadiums and arenas. Now banks, brokerage firms and insurance agencies are getting into the game as the explosion in online investing has expanded the audience for Wall Street's pitch. The Mets, who play less than an hour from Wall Street, depending on traffic, recognize that.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615393","date":"1999-07-07","texts":"Washington's just-ended program to retrain displaced workers has received a so-so report card from the Joint Legislative Audit and Review Committee. The eight-year-old program, which gave extra unemployment-insurance payments to laid-off timber and other displaced workers who enrolled in job-retraining courses, had some success, but the success has been mixed, the committee's report said. The report didn't voice an opinion on whether the Legislature should have continued the program, in which the state paid about 150 million in benefits to some 14,000 laid-off workers enrolled over the years. Lawmakers didn't get around to voting on the question during the 1999 session because they -- and business and union interests -- couldn't resolve their differences over a proposal to keep the program going and expand it to ex-aerospace employees. But the report did suggest that if it had to expire, now was a good time. Given the state's improved employment picture, it said, ending the program now would not have the same potential for an adverse effect as it would have some years ago. According to the report, while most participants did start new careers after finishing their schooling, many landed jobs paying less than what they earned before they were laid off. Those who took the highest concentrations of technically oriented classes, from health and trade courses to science and math classes, ended up earning the highest salaries among the participants. The study also found that in many cases the extension of unemployment payments to workers, and not retraining classes, contributed to higher income.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614384","date":"1999-07-08","texts":"Yahoo Inc. soundly beat Wall Street expectations for the second quarter, surpassing even unofficial whisper estimates for results and more than doubling its revenue from a year ago. The Santa Clara, Calif., company, one of the top destinations on the Internet, recorded a net loss of 15.1 million, or seven cents a diluted share, compared with a loss of 14.2 million, or eight cents a share, in the year-ago period. Both quarters include merger-related charges. Without the charges, Yahoo earned 28.3 million, or 11 cents a share, compared with year-earlier operating profit of 1.5 million, or one cent a share. The analysts' consensus had been eight cents a share, according to First Call Corp., while some unofficial estimates had recently crept up to nine or 10 cents. Worries that Yahoo wouldn't meet those whisper numbers had caused its stock to slump earlier this week. It closed yesterday down 8.0625 to 167.0625 in Nasdaq Stock Market trading, but rebounded to 171 in after-hours trading following the announcement, according to Instinet Inc. Yahoo reported continued growth in traffic to its popular Web portal and index site, as well solid operating margins. Revenue swelled to 115.2 million from 44.9 million a year ago, and above analysts' estimates of about 103 million.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615661","date":"1999-07-15","texts":"NEW YORK -- While many traders speculate on earnings reports, hedge-fund manager Kyle Rosen waits for the Consumer Price Index report. By today's opening bell, he will know how to adjust his short strangles in the Standard & Poor's 500 options to best capitalize on the stock market's reaction to the inflation report. I think that could set the tone, at least for a few days. We seem to be locked in this temporary equilibrium, and the CPI could determine which way we move, Mr. Rosen, president of Rosen Capital Management, said. The market could break out of its trading range if the CPI report meets expectations, but it also could remain range bound between 1385 and 1407 on the S&P 500 if the number is out of line, Mr. Rosen said. A short strangle -- selling a call with a high strike price and selling a put with a low strike price -- gives Mr. Rosen the flexibility to quickly respond to the market.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613504","date":"1999-07-21","texts":"WASHINGTON -- The Federal Reserve Board approved a special loan facility to ease any liquidity pressures on banks that arise at the end of this year. But the board denied bankers' requests to lower the interest rate to be charged on the loans. The board voted unanimously to create a Century Date Change Special Liquidity Facility, which will let banks borrow funds at a rate 1.5 percentage points above the Fed's target for the federal funds rate, which is 5. The program will be available from Oct. 1, 1999, through April 7, 2000, one month longer than originally proposed. Some banks anticipate great demand for cash toward the year's end because of the Year 2000 computer problem, which is expected to render some software unable to differentiate between 2000 and 1900. Recognizing the uncertainty people have about the consequences of the date change on banks' computers, the Fed has promised to have extra cash on hand to avoid potential disruptions. When there are strange distributions or unusual distributions of reserves, banks under pressure that ordinarily wouldn't be under pressure, this will be there to help them out, a Fed official told reporters. By ensuring the ready availability of funds, the facility should enable depositories and their customers to enter into agreements to meet possible credit needs with greater confidence, the Fed said in a memorandum. The facility also should help to damp any tendency for money markets to tighten owing to inevitable difficulties . . . in gauging the overall supply and demand for reserves each day.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616710","date":"1999-07-22","texts":"Cincinnati Bell Inc. agreed to buy IXC Communications Inc. in a deal valued at 2.2 billion, plus the assumption of about 1 billion in debt. The move will enable the company to expand its Cincinnati phone empire to include business services nationwide. Wall Street responded to the deal by sending Cincinnati Bell down 3.75, or 16, to 19.8125 a share in New York Stock Exchange composite trading shares of IXC rose 3.50, or 9.7, to 39.75 on the Nasdaq Stock Market. IXC, an Austin, Texas, long-distance company, is building a nationwide fiber-optic network amid competition from rivals such as Qwest Communications International Inc. But it has so far failed to inspire investor enthusiasm. IXC brought in a chief executive and chief financial officer and is overhauling its strategy in the business-services market. Cincinnati Bell said it is gaining an asset that has the potential to become a big profit center. We see this as a tremendous marriage, said Richard Ellenberger, president and CEO.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983136","date":"1999-07-22","texts":"Barely three weeks into the second half of the year, economists and others are calling attention to the inevitable The area's economy is beginning to show signs of slowing. One need not be an economist, however, to conclude at some point that the region's economy can't possibly sustain the high level of growth that we've seen in recent years. That's not to say, however, that slower growth will lead to a prolonged slump. It merely means the area's economy is slowly slackening, Stephen S. Fuller, a professor of public policy at George Mason University, told The Washington Post recently. Job growth, generally regarded locally as the bellwether of the area's booming economy, remains at an all-time high. Employment growth has nonetheless tapered off recently, recording a net increase of 13,100 in February and a gain of only 6,700 in April. Meanwhile, the area's unemployment rate edged up slightly in May, rising to 2.6 percent, from 2.3 percent in April, according to the most recent figures compiled by the D.C. Department of Employment Services.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830985358","date":"1999-07-24","texts":"Blue-chip stocks extended their losses today as the renewed threat of higher interest rates convinced investors that the strong corporate earnings of the second quarter might be in jeopardy. After dropping as much as 100 points in early trading, the Dow Jones industrial average closed 58.26 points lower, at 10,910.96. For the week, the Dow lost 298.88 points, or 2.7 percent. Broader stock indicators were mixed, as the Nasdaq composite index, which had fallen steeply earlier this week, managed a last- minute gain of 7.96, closing at 2692.40. For the week, the Nasdaq lost 6.1 percent of its value. Banks and brokerages led the Dow lower today, as Thursday's remarks by Federal Reserve Chairman Alan Greenspan continued to worry Wall Street. Greenspan told Congress that while 1999 has been an exceptional year for the U.S. economy, the central bank would act promptly and forcefully by raising interest rates at the first hint of inflation pressures.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983006","date":"1999-07-28","texts":"Q I work at a federal agency. We have a nondiscrimination policy against homosexual people. Most people don't have a problem with this. But a question has come up about a couple who have a special relationship and who have moved back and forth around the country together. Recently, one of the couple was promoted, and she selected the other as her employee, which was a promotion. That has left management in a quandary about the situation. Morale has declined rapidly as other employees feel favoritism has occurred. Married couples who are heterosexual or other workers with a familial relationship are not allowed to enter into this supervisor-employee relationship. It doesn't seem fair that it is permitted with this relationship. A There is widespread consensus that romantic relationships between bosses and subordinates aren't good business practice because, as in this case, they can stir allegations of favoritism, hurt morale and productivity, and even lead to sexual harassment lawsuits if they later go awry. An American Management Association survey in 1994 found that three-quarters of corporate personnel officials said they disapproved of relationships between higher- ranking and lower-ranking employees. But because companies are cautious about treading into the area of personal relationships, only about 6 percent of the firms had policies banning them. The rules are more clear-cut with married couples. In the federal government, there are specific nepotism rules that forbid public officials from hiring, promoting or even offering special training opportunities to a wide array of legal relations, including spouses, fathers, mothers, children, cousins, in-laws and step-family members, according to the Office of Personnel Management, the government agency that oversees personnel matters for many branches of the government. But these rules do not apply to gay people, who cannot legally marry. Consequently, the OPM does not have any rules governing supervisors and subordinates in homosexual relationships, according to an OPM spokesman, who said he also believed it would be an awkward issue to raise at work without appearing to pry into people's personal lives. The OPM is not unusual in not having rules addressing this issue, said Sue Meisinger, chief operating officer and executive vice president of the Society for Human Resource Management in Alexandria.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615223","date":"1999-07-30","texts":"NEW YORK -- Small-capitalization and Nasdaq stocks fell sharply, although both groups ended the day above their intraday lows. Stocks pushed lower at the opening following news that the second-quarter employment-cost index rose substantially more than it had in the first quarter, and by more than analysts had been expecting. The jump in employment costs, which often is seen as the first stage of an increase in overall inflation, has increased concerns that the Federal Reserve may see the need to raise interest rates again at its late-August policy meeting. The Russell 2000 index of small-capitalization stocks fell 5.03, or 1.13, to 441.58, having been down as much as 6.81, and the Nasdaq Composite Index, at 2640.01, tumbled 65.83, or 2.43, after posting an intraday loss of 78.04. The increased potential for higher rates took its toll on the small-cap and Nasdaq markets' two important sectors, technology and financial services. Internet telephony services company Net2Phone was the star among the day's IPOs, putting in a 77 first-day increase despite the market's jitters. The Hackensack, N.J., firm closed at 26 916 on Nasdaq, up from its offering price of 15 a share.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982304","date":"1999-07-30","texts":"Economic growth slowed significantly in the second quarter while wages increased at the fastest pace since the early 1990s, the government reported yesterday. The news led to a sell-off on Wall Street as investors feared the Federal Reserve was more likely to raise interest rates again. At first glance, the slowing in the annual rate of growth in gross domestic product from its 4.3 percent clip in the first three months to 2.3 percent in the spring appeared to be a development that would satisfy Federal Reserve Chairman Alan Greenspan, who has been counting on a chilling of the economy to forestall the need for any further increases in interest rates. But financial markets passed over that possibility and instead focused on a 1.1 percent increase in the employment cost index ECI, a broad measure of wages and benefits. The index rose at a rate greater than the 0.8 percent analysts had expected--and raised the specter of inflationary pressures increasing in an economy that already is experiencing the tightest labor market in decades. The Dow Jones industrial average fell 180.78 points, to 10,791.29, as investors worried that the markets' benign environment of strong economic growth and weak inflation was undergoing a sea change. The technology-dominated Nasdaq composite index slumped 65.83, to 2640.01, and the Standard and Poor's 500-stock index tumbled 24.37, to 1341.03. The bond market also soured on the news, with the price of the benchmark 30-year Treasury bond falling 7.81 per 1,000 in face value and the yield rising to 6.07 percent, from 6.00 percent on Wednesday.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982683","date":"1999-07-31","texts":"The TV images were searingly familiar. Terror-stricken people scrambling to safety. Heavily armed police officers hustling to the scene. Covered bodies being loaded into ambulances. The killing of 12 people by a gunman in Atlanta on Thursday brought back echoes of Columbine High School in April. In several important ways, the two events were similar--in the means and method of attack, in their senselessness and amount of carnage. But where Columbine lingered in the national consciousness for many days, the Atlanta killings were struggling for media attention yesterday, less than 24 hours after the first reports broke. All three national cable news networks carried live coverage of a news conference by Atlanta's police chief all three later aired tapes of the initial 911 calls. But by 2 p.m. yesterday, Fox News Channel was busy analyzing a Congressional tax-cut proposal and MSNBC was summing up the action on the bond market. Despite the proximity of the news to its headquarters, Atlanta-based CNN slipped in reports on the stock market and President Clinton as well. The broadcast networks never turned away from soap operas. Jerry Springer was not preempted. To news analysts and news decision-makers, the relative indifference to Atlanta boils down to two key factors the victims and the setting.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615141","date":"1999-08-02","texts":"Corporate earnings have come roaring back so fast that it would seem the business environment can't get much betteryet some signs suggest profits won't weaken anytime soon. Second-quarter earnings of major U.S. companies blew past analysts' estimates. Setting aside the effect of cable-TV provider MediaOne Group's extraordinary gain last year of about 24.5 billion, income at the 654 companies that make up the U.S. part of the Dow Jones Global Indexes rose 37 in the second quarter from a year earlier. MediaOne's gain, from its separation from U S West, skews the year-to-year comparison including the gain, net income was up 5. Other one-time events, such as writeoffs and gains from the sale of affiliates, and easy comparisons against year-earlier results weakened by restructuring charges boosted the companies' net income. But even operating income, which excludes such items, rose 15 from the second quarter of last year, according to calculations done by First CallThomson Financial for The Wall Street Journal. In the 1999 first quarter, net income was down 6, while operating income rose 9.6. Analysts who wondered early this year if the rebound in first-quarter operating profits was a fluke now know for sure that it wasn't business is better for a broad swath of corporate America. The bottom line is that business is good and we expect it to continue for a while, says Chuck Hill, director of research at First Call, which tracks corporate earnings. We're in a period of accelerating earnings growth that will peak out in the third quarter, but we still expect earnings to stay strong.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614641","date":"1999-08-05","texts":"NEW YORK -- A big push from Union Carbide couldn't compensate for sharp losses by technology and growth stocks, as market indicators dropped again. Shares of a host of Internet stocks paced the decline for a second straight session. DoubleClick fell 6 1316 to 67 1116, Yahoo eased 4 38 to 121, eBay decreased 8 58 to 75 34 and Excite At Home shed 2 38 to 41, all on the Nasdaq Stock Market. The Philadelphia Stock Exchange Internet Index, which topped out in mid April, fell 3.3. The sector barometer has retreated 30 from its record. Even the deans of the sector, such as America Online, which declined 1 38 to 87 716, and CMGI Nasdaq, which lost 5 78 to 76, weren't immune to the selling, as investors showed unexpected fortitude despite some relatively bargain-basement prices coming into the session. As on Tuesday, the loss leaders included smaller, more-speculative names in the technology sector, while the sell-off again spared the blue-chip names. Hewlett-Packard gained 1 34 to 110 14. Intel Nasdaq, which traded at a 52-week high, finished with a loss of just 116 at 72 1316.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614464","date":"1999-08-09","texts":"WASHINGTON -- The July employment report did little to ease concerns that the Federal Reserve will soon raise interest rates to further reduce inflationary pressures. While July unemployment remained steady at 4.3, hourly wages rose faster than at any time since January, and the economy added a higher-than-expected 310,000 nonfarm jobs. The report appears to bolster the view of those Fed officials who are advocating higher rates -- perhaps another quarter percentage point -- when the policy committee meets Aug. 24. For some Fed watchers, the jump in nonfarm jobs was the most troubling aspect of the report. Most economists had predicted gains in the range of 200,000 to 230,000 new jobs, well below the actual figure. Financial markets flinched at the news. After rising slightly in early morning trading, the Dow Jones Industrial Average finished the day at 10714.03, down 79.79. The bond market, which is much more sensitive to inflationary fears, reacted more severely. The benchmark 30-year bond fell 1 2032 to 87 1532, pushing the yield to 6.168, its highest level since November 1997. Financial futures traders, however, substantially increased their bets that the Fed would raise rates. Based on the movement of futures contracts as of midday, they were betting with 86 certainty that a rate increase would occur, up from 64 late Thursday.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617445","date":"1999-08-09","texts":"NEW YORK -- It was a nerve-racking week to be a technology-stock investor, and as usual much of the pain was felt in the small-stock and Nasdaq markets. Last week, amid a flurry of selling in Internet-related stocks, and rare declines for initial public offerings of Web names, the Russell 2000 small-stock index fell 3.8 and the Nasdaq Composite Index -- dominated by large tech stocks -- dropped 3.4. In contrast, most other market measures had more-moderate declines, and the Dow Jones Industrial Average edged up 0.55 for the week. The Nasdaq composite now has fallen 11 from its July 16 record close. In the same period, the Russell 2000 has dropped 8, leaving it 12.9 below its April 21, 1998 record high. On Friday, technology stocks, which like the small-cap and Nasdaq markets have been under steady selling pressure the past few weeks, pushed moderately lower. The small-cap market was weighed down by the weakness of financial-services stocks, which make up the largest industry group in the Russell 2000 index, and which are particularly sensitive to rising interest rates. The Nasdaq nonbank financial index fell 2.7. After Friday's modest declines, the Russell 2000 stands at 428.04, and the Nasdaq composite at 2547.97.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983205","date":"1999-08-12","texts":"The U.S. economy is still growing strongly with labor shortages reported nationwide, the Federal Reserve said yesterday in a report that highlighted concerns that the economy may be growing too rapidly. The Fed's latest survey of economic conditions around the country, compiled from reports from its 12 regional banks, found only scattered signs of mounting wage pressures and little evidence of rising inflation in general. Widespread labor shortages persist in virtually every district, but there have been only scattered reports of acceleration in wages, the Fed survey said. There are some reports of accelerating prices-- largely related to home construction--but there is no evidence of any broad-based pickup in consumer price inflation. The Fed survey, known as the beige book for the color of its cover, will be used by Fed policymakers when they next meet Aug. 24 to review interest-rate policies. There has been a growing concern in financial markets that the central bank will boost interest rates for the second time this year because of growing fears that inflation will take off if economic growth does not slow.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613987","date":"1999-08-19","texts":"WASHINGTON -- Just a few months ago, American policy makers fretted that the world economy was flying on a single engine, the turbo-charged U.S. Now, they see signs that Europe and Japan and other parts of Asia may finally be revving up again. The brighter prospects for global growth are moving financial markets. The dollar has fallen against the yen as well as the euro, as investors shift their capital to increasingly attractive investment opportunities outside the U.S. Yesterday, the dollar dropped to its lowest level against the yen in seven months, in part because of a fresh batch of positive economic news out of Tokyo. President Clinton said in a recent television interview that he wasn't particularly alarmed by the dollar's modest decline. He said that his administration still supports a strong dollar. But he also suggested that the currency's recent softness is a price worth paying for the benefits of more-balanced world growth. A stronger global economy provides a stronger market for our exports, and reduces pressures on other countries to dump surplus products into our markets, says Treasury Secretary Lawrence Summers. More broadly, Mr. Summers says that recovery abroad means a more stable and harmonious global economy, in which disruptive shocks to financial systems are less likely. Yet just as foreign turmoil produced both winners and losers in the U.S. during the past two years, a rebound overseas would cause a new round of gain and pain at home.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613722","date":"1999-08-20","texts":"A piece of the New York Stock Exchange went public yesterday the bulls didn't stampede. In fact, investors looking to the possible IPO of the entire Big Board itself hope it will make a bigger splash than yesterday's debut by LaBranche & Co., one of the pre-eminent Big Board floor-trading firms-so-called specialists -- and the first to complete an initial public stock offering. LaBranche, the third-largest specialist firm, offered its shares Wednesday night at 14 each, below the expected price range of 15 to 17. The company had filed 11.5 million shares, but sold just 10.5 million. Not only is LaBranche the specialist firm in charge of trading such blue chips as AT&T and Exxon, it is a firm that is an integral part of the world's most-famous trading floor. Specialists stand on the exchange's floor and match buyers and sellers of particular stocks and put up their own capital when necessary to ensure smooth trading. But the small-capitalization LaBranche IPO finished its first day of Big Board trading yesterday up just 3.5 over the offering price at 14.50 -- not exactly a big splash in an era of skyrocketing dot-com issues.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984184","date":"1999-08-23","texts":"The hood of the school bus is cracked open like a giant yellow clamshell, and Alysia Saddler leans in with a pointer and ticks through the checklist. This is the radiator cap. It can't be cracked or leaking or hot. The sight glass--when there's enough coolant, it's green. Hoses aren't supposed to have bubbles. There's the air compressor, the power steering is secure, the air lines, the steering shaft . . . The suspension, the spring hangers, the leaves, clamp, the U bolt is in the proper position, the drag link, the tie rod . . .  It's an impressive display from a 24-year-old who weeks ago, before starting Howard County's school bus driver training, could barely identify the dipstick under a car's hood. Back then she was just a tow-truck dispatcher from Catonsville now she's a commodity as rare as a moon rock. With the opening bells of schools ready to sound, officials are struggling to get enough bus drivers behind the wheel. During prosperous times--Washington area unemployment was only 2.9 percent in June--any job is tough to fill. But it's hardest to get people to take a job that rarely guarantees full-time hours and only sometimes carries benefits. Add to that the perception that children's behavior and traffic have degenerated, and the entire nation is facing a driver shortage.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616398","date":"1999-08-25","texts":"NEW YORK -- The Federal Reserve's decision to raise interest rates gave high-growth technology issues reason to slip out from under the cloud of valuation pressures but did take a little steam out of some cyclical issues. Shares of several blue-chip names in the technology sector posted sharp gains by the close. Microsoft added 5 34 to 92 316 on the Nasdaq Stock Market, while Gateway gained 3 516 to 97, and EMC rose 2 to 62 12. Shares of Micron Technology, trying to cement its status as a new entrant in the inner circle of blue-chip names, shot up 4 1516 to 68 1516. A few rifts developed in the sector, as International Business Machines fell 2 716 to 122, and the best Intel Nasdaq could do turned out to be a 316 gain to 83 18, though it set a 52-week high intraday. Overall, semiconductor stocks played a leadership role for the broader technology group. Investors think that with further rate hikes off the table, it makes high PE price-to-earnings ratio stocks more attractive, said Thomas Galvin, chief investment strategist at Donaldson, Lufkin & Jenrette. The news has been better for tech stocks than for industrials. In fact, those industrials finished with only slight gains, despite some wilder swings in market averages throughout the day.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617331","date":"1999-09-02","texts":"Stocks finally managed a mild recovery after four weak days, but bonds and the dollar kept falling. After declining every trading day since hitting a record on Aug. 25, the Dow Jones Industrial Average finally rose 108.60 points, or 1.00, to 10937.88. That leaves the industrials still 3.43 short of last week's 11326.04 record, although up 19.13 for 1999. Other stock indexes also managed small advances. But the dollar fell to yet another low since Jan. 11 in late New York trading. Bond and stock investors went in opposite directions. Bond investors worried that August payroll and unemployment data due tomorrow could signal a strong economy, pushing the Federal Reserve toward raising interest-rate guidelines again next month. Stock investors bet that interest-rate boosts are about done with, Ned Riley, chief investment officer at BankBoston, said. The stock gains were a precelebration of Friday's news, he said, adding people are expecting that the payroll number will be weaker than forecast. They think that the markets will see a better interest-rate environment as we go into the fourth quarter.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617343","date":"1999-09-03","texts":"Corrections & Amplifications ANNTAYLOR STORES Corp. reported total sales of 66.1 million for the four weeks ended Aug. 28, up 21.4 from a year earlier. Year-to-date sales rose 21.1 to 581.2 million. Sales at stores open at least a year increased 9 in August and 12 for the year to date. Based on information provided by the company, a table accompanying Friday's Industry Focus gave year-earlier data. WSJ Sept. 7, 1999 Retailers rang up modest gains in sales for August, but some analysts cautioned that the pace could signal the beginning of a slowdown in consumer spending. Overall, retailers posted respectable gains for the month, led by strength from the discount sector. But several retailers, including Sears, Roebuck & Co. and J.C. Penney Co., reported disappointing results. And the most recent gains were milder than retailers have reported for most of this year, even though August is traditionally a month when consumers are expected to spend more money on back-to-school shopping. We've been waiting for a consumer slowdown for four months now, ever since interest rates started climbing back up, said Richard Church, an analyst at Salomon Smith Barney. This could be the early sign that that process is under way.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983965","date":"1999-09-03","texts":"U.S. productivity growth slowed and labor costs rose sharply in the second quarter, sparking new fears that the Federal Reserve may raise interest rates again next month. Productivity at non-farm businesses rose at an annual rate of 0.6 percent and labor costs rose at an annual rate of 4.5 percent in the April-June period, according to revised estimates released yesterday by the Labor Department. The department earlier had estimated the productivity growth rate at 1.3 percent. Stock and bond prices fell on the news, with the Dow Jones industrial average initially dropping more than 200 points. The Dow closed down 94.67 points to end at 10,843.21. Yields on 30-year U.S. Treasury bonds at yesterday's close rose to 6.13 percent, from 6.08 percent. Strong productivity growth helps keep inflation low by allowing employers to boost wages and salaries without necessarily raising the prices paid by their customers. The second-quarter productivity number was down considerably from the 3.6 percent rate in the first quarter. Investors apparently were concerned that faltering productivity growth could prompt the Fed to raise short-term rates, as it did at the end of June and again last month, to make sure inflation stays under control.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984321","date":"1999-09-05","texts":"If you hold mutual funds that are allowed to invest in all kinds of stocks, what Alan Greenspan and the Federal Reserve decide to do this year and beyond should make little difference to your investment decisions. As a holder of a broad-based fund, you are doing more than just buying a bunch of companies You also are investing in the brains of your fund manager. Part of the service you should expect is that your manager is able to anticipate changes in interest rates, or else to react to changes very quickly. But if you invest in individual stocks or sector-based mutual funds, interest rates matter greatly, the same way they do to the manager of a growth or general-performance fund. A good manager would dump certain stocks and embrace others if assumptions about future inflation changed. All stocks do not react the same way to higher interest rates, and no major market features more differentiated behavior among stocks than the United States. If interest rates are set to keep rising, it pays to have a plan of action. To see why rates matter so much to certain kinds of companies, imagine your household has little or no debt at all. You pay rent on an apartment every month, pay off your credit card in full regularly and take the bus to work. You are saving for some day in the future when you will buy a car or a house, maybe five or eight years down the road. How do interest rates affect you Probably only inasmuch as higher rates get you a higher return on your savings account. But if you had a mortgage and car payments tied to movable interest rates, then a major increase in rates would actually hurt you, maybe quite badly, as your mortgage payments increased. The same goes for companies. Higher interest rates can kill businesses that are heavily leveraged have a lot of debt, or those that invest heavily in bonds. Insurance companies hold piles of bonds, for instance, because they have so much premium money to invest. Because bond prices move in the opposite direction to rates, higher rates make the insurance company's bonds worth less.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984826","date":"1999-09-06","texts":"As America observes the century's last Labor Day, workers are reaping the benefits of the best economy in modern history. But whether the nation's work force continues to prosper and post gains in income and financial security will depend largely on some critical decisions that Congress and the president will make in the coming months. We're in an economic expansion that just won't quit. At 4.3 percent, our unemployment rate is the lowest since 1970, and the lowest of any major country. More than 64 percent of the adult population is working today -- more than ever before in our history. Inflation remains at an insignificant level. Real wages have increased nearly 5 percent in just the past two years. Home ownership is at an all-time high. Since 1990, household financial assets have doubled, and since 1995, the increase in household financial assets for each year was equivalent to nearly one-half of disposable after-tax income for all households. Millions of Americans own stock directly, and millions more own stock indirectly through pension funds. That's a clear sign that Main Street and Wall Street are becoming one and the same. While politicians are quick to take credit for the booming economy, most of the credit belongs to American companies and their employees -- especially the millions of small businesses and self- employed entrepreneurs who take most of the risk, spur most of the innovations and create most of the new jobs in our country. Yet while government may not have created the current expansion, it will have a profound impact on whether prosperity continues and whether on Labor Day in the year 2000 working families are still moving forward or are in a period of decline.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842613709","date":"1999-09-07","texts":"NEW YORK -- As bond investors return from the holiday, they still have memories of Friday's pleasant kickoff, when bonds went through the roof as investors cheered upbeat economic news. But some analysts say the rejoicing may be out of place, because the jury is still out on the Fed's next move. The price spike on Friday, the last trading day before today, was triggered by bond-friendly employment news, which eased fears that the Federal Reserve will raise interest rates next month. The Labor Department reported that 124,000 nonfarm employees were added to the nation's payrolls in August, a little less than half of what Wall Street had been expecting. The unemployment rate fell to 4.2 from 4.3 in August. Meanwhile, average hourly wages increased just 0.2, comforting investors worried that rising wages will lead to higher inflation. The news sent bond prices climbing. In preholiday trading that ended early, at 2 p.m. EDT Friday, the bellwether 30-year Treasury bond rose 1 1732, or 15.313 for a bond with 1,000 face value, to 101 1332. The bond's yield, which moves in the opposite direction of its price, fell to 6.014. It was the first gain for Treasurys in seven sessions. Other types of bonds, such as mortgage-backed securities, also rallied.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614930","date":"1999-09-09","texts":"Blue-chip stocks treaded water yesterday, but the broad market declined on profit-taking in semiconductor stocks and concern over comments by a Fed governor on the outlook for inflation. The Dow Jones Industrial Average crept up 2.21 points to 11036.34 after spending most of the day in negative territory. But Standard & Poor's 500-stock index eased 6.3 points, or 0.5, to 1344.15, and the Nasdaq Composite fell 28.52 points, or 1, to 2808.74. Dominating the technology scene was a midday reversal in semiconductor stocks led by Intel, which went from up 1 on the day to fall 1.6875 to 85.9375. The Philadelphia Stock Exchange semiconductor index fell 1.7, but it is up 45 from late May. The fact the index, as well as some higher-profile components like Micron Technology and Texas Instruments, were making 52-week or all-time highs triggered alarm among some investors who thought the air was feeling kind of thin, Ciaran O'Kelly, a stock trader at Salomon Smith Barney, said. They decided to take some money off the table. There is speculation Intel will announce that third-quarter earnings are expected to be above current analysts' estimates. If so, it will likely be soon since the company enters its quiet period Monday ahead of reporting earnings Oct. 12. An Intel spokesman declined to comment.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615324","date":"1999-09-09","texts":"NEW YORK -- The Federal Reserve Bank of New York unveiled several moves aimed at ensuring there will be enough funds in the banking and financial systems ahead of year 2000. The initiatives involve the Fed's so-called open-market operations, whereby the Fed adds and subtracts money from the financial system. The moves are aimed at preventing financing shortages if the year-2000 computer bug, or worries about it, causes disruptions at year end. There is concern from some parts of the banking industry that demand for short-term financing will increase sharply as 2000 approaches. Earlier this year, the Federal Reserve said it would put 50 billion in extra currency in circulation to cope with possible cash-hoarding by individuals, and announced a special liquidity facility for lending to banks. We want to mitigate the risks, said Peter R. Fisher, executive vice president of the New York Fed and the Federal Open Market Committee's manager for the system open-market account. We face uncertainty as far as possible strains on the system, he said. The steps taken yesterday seemed to reassure members of the bond community and helped the tone in various bond markets yesterday.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983370","date":"1999-09-09","texts":"Concerned that overnight interest rates could soar late this year because of fears in the financial markets of potential year-end computer glitches, the New York Federal Reserve Bank today announced a series of actions it hopes will help keep rates under control. One step, affecting mortgage-backed securities issued by government-sponsored agencies such as Fannie Mae, could help head off a potential spike in mortgage rates. A number of financial analysts said the changes would help the markets function more smoothly as the new year approaches. Meanwhile, the announcement had an immediate impact on some types of securities that mature in December or January. In one instance, the interest rate on a type of contract committing someone to make money available in December fell by more than a quarter of a percentage point, which underscored the level of apprehension in the market. This is a doozy, said F. Ward McCarthy of Stone & McCarthy Research Associates, a financial-markets research firm. The Fed is pulling out all the stops to both calm market anxieties and provide the . . . tools necessary to allow the money markets to continue to function through the fourth quarter and early 2000. Overnight rates often shoot up at the end of a year as many major banks, brokerages and investment-banking firms seek to improve the look of their balance sheets by shedding even modestly risky assets. This year, with all the concern about potential year-end computer problems, the pressures could be enormous, though no one is sure that will happen.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830983865","date":"1999-09-09","texts":"Consumer borrowing surged in July, mainly reflecting heavy credit- card use, which posted its sharpest increase in two years. Consumers' credit outstanding, excluding mortgage debt, advanced at a 7.9 percent annual rate in July to a seasonally adjusted 1.354 trillion, the Federal Reserve said. All told, consumers borrowed 8.8 billion more in July than during the month before, greater than the 6.3 billion gain many analysts' had expected. Lorcin Engineering, a California-based manufacturer of inexpensive handguns, shut its doors last month, according to people in the gun industry. Lorcin was one of the leading producers of Saturday night specials, and its guns were among those most frequently traced to crimes. Lorcin's operations were highly profitable, but the company's two business partners recently had a falling-out, industry officials said. Lorcin officials could not be reached or did not respond to requests for comment. American Airlines had the most passenger complaints of any major U.S. airline in July, while America West Airlines ranked last in on- time performance, the government said. American placed first for the second month in a row in complaints, with more than five filed for every 100,000 passengers in July, the Department of Transportation said. About 60 percent of America West's flights were on time, ranking it last among the 10 largest carriers. Southwest Airlines performed best in both areas for the second month in a The American Medical Association wants a federal judge to impose an additional condition on Aetna's 1 billion acquisition of Prudential HealthCare to ensure competition in Dallas and Houston. The AMA said it wants the court for five years to keep Aetna from requiring doctors in the two cities who want to join its network to accept customers from all health plans offered by the company. Wholesaler inventories rose in July by 0.9 percent, their fastest pace in 10 months, led by increases in stockpiles of lumber, electrical equipment and furniture, the Commerce Department reported. Wholesaler sales fell 0.2 percent, their first decline since January.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616793","date":"1999-09-10","texts":"JAPAN INTERVENED Friday to stem the yen's surge against the dollar. The U.S. currency had plunged to a three-year low when traders bid up the yen on news of Japan's strong GDP growth. After Tokyo's action, the dollar touched 110 yen but later receded slightly. Yesterday in New York, the greenback fell as low as 107.55 yen. The U.S. shows no signs it is ready to intervene itself. --- Illinois Tool Works said it agreed to acquire consumer-products maker Premark for 3.4 billion, creating a broad-based manufacturing giant. --- Torfinex, a wire-transfer company linked to the Bank of New York money-laundering probe, appears to have operated illegally in the U.S., funneling millions of dollars out of Russia, law-enforcement officials said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985047","date":"1999-09-10","texts":"The yen soared to a three-year high against the U.S. dollar yesterday, after Japan released better-than-expected numbers about its troubled economy. According to overnight reports from Tokyo, Japan's central bank intervened in the market in a effort to halt the rise, out of fear that it would damage Japan's tentative recovery from a decade of economic malaise. The effort appeared to be working--by late morning Friday Tokyo time, it took 109.92 yen to buy a dollar, 1.08 yen more than it had taken there the previous day. A senior U.S. policymaker appeared to signal that the United States was not sufficiently worried about the yen and the resulting decline in the dollar to join in any intervention. William McDonough, president of the Federal Reserve Bank of New York, said, I don't believe the change in the dollar-yen exchange rates has particularly significant implications for the U.S. economy, Reuters reported. In late trading yesterday in New York, it took only 108.06 yen to buy a dollar, about 3 percent less than the previous day.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983611","date":"1999-09-12","texts":"governor of Texas, Bill Clements, an irascible Republican who was running for reelection to a second term. It was a lousy year to be a Republican, given the national recession, but right up until the weekend before the vote, Tarrance's polls showed his client cruising toward victory. When Election Day came, however, Clements got swamped by a tidal wave of Democratic voters. A few weeks later, Tarrance saw the vanquished governor at a meeting of the Republican Governors' Association and coined a memorable line when asked how their first post-election session went. It was like being Napoleon's intelligence chief after Waterloo, Tarrance said. Tarrance's remarkable candor offers a benchmark as the campaign of 2000 heats up. Over the next 14 months, a small army of pollsters will chart the mood of America and offer insights into the psyches of every imaginable demographic slice of the electorate to candidates hungry for the clues that will turn a close contest into victory. The luckiest among them will end up with the unofficial title of pollster to the president, which will bring fame and no little fortune. But the law of averages says that somewhere along the way, some of these pollsters will get it wrong -- a single poll perhaps, a strategic insight almost certainly, even possibly a whole race, although the odds weigh heavily against that, given the round-the- clock sampling that marks the conclusion of any truly competitive race. You wouldn't guess it from talking to them, however. in the polling business recently to ask what happens when things go wrong. The calls produced few confessional tales of the race that got away or the poll that went awry. As Mark Mellman,a Democratic pollster, put it, More often than not it's a matter of interpretation. The numbers aren't usually wrong. Even though every pollster knows that one poll in five is likely to be outside the margin of error, the bad ones mostly have disappeared into the mists of memory.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613728","date":"1999-09-13","texts":"NEW YORK -- The aftermarket has been kind to many of August's underachieving new issues. Most of the companies that foundered when they launched their initial public offerings last month have found new life and many market watchers are pointing to this trend as a sign that, when the IPO market returns from its traditional summer slowdown this week, momentum is on its side. We've gotten a little bit of a reprieve from the selloff in August, said Kathy Smith, portfolio manager at Renaissance Capital's IPO Plus Aftermarket Fund in Greenwich, Conn. Investors are still jittery, but they're definitely feeling better about the near term, and that's so important for the small-cap growth sector. This shift in sentiment is seen most clearly in many of the Internet IPOs that had struggled for most of August. Online recruitment company HotJobs.com Inc., for instance, sold 3 million shares at 8 each-below price estimates of 9 to 11and closed at 8 in its first day of trading on Aug. 10, according to Thomson Financial Securities Data. The company's shares, though, closed Friday at 26.25 on the Nasdaq Stock Market. Mortgage.com Inc. closed below its 8 offering price when it debuted Aug. 11, but now trades at 16.125 on the Nasdaq Stock Market. Even those companies that saw just modest gains in their opening days have had big increases. Homestore.com Inc. closed at 22.75 Aug. 4 after pricing 7 million shares, then barely broke 23 after its first week. The shares closed Friday at 49.50 on the Nasdaq Stock Market. Likewise, Netscout Systems Inc. closed at 13.875, a healthy premium over its 11 offering price, when it debuted Aug. 12. But now the shares stand at 26.625 on the Nasdaq Stock Market.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616654","date":"1999-09-13","texts":"The Agriculture Department cut its harvest forecasts to reflect the devastating drought in the Eastern U.S., but consumers won't see much impact in their food bills. Lush conditions in the Midwest mean farmers in the major grain states probably will harvest large enough crops over the next several weeks to keep the nation awash in a price-depressing grain glut. The two-year-old glut, combined with weak exports, has tipped the farm economy into recession. Several economists said they continue to expect U.S. grocery prices to climb only about a moderate 2 this year. Cheap prices of raw materials such as corn are helping food manufacturers offset their rising costs of energy and labor. There is still plenty of everything to go around, said John M. Schnittker, a farm economist in Washington. Based on monthly field surveys, the USDA said it expects farmers to harvest 2.78 billion bushels of soybeans, down 3 from its August forecast but still 1 larger than last year's record harvest.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615586","date":"1999-09-15","texts":"TIANJIN, China -- Three years ago, Tianjin Optical & Electrical Communication Group typified the thousands of backward state-owned companies that drag on China's economy The electronics manufacturer boasted skilled technicians, but mismanagement had pushed it to the brink of bankruptcy. Motorola Inc. changed that. The U.S. telecommunications company offered to take on Tianjin Optical as a supplier if the company adopted Motorola's quality-control and management practices. Today, Tianjin Optical sells a third of its products to Motorola and ekes out a slim profit. Now, we think we can survive, says Zhang Bingjun, Tianjin Optical's chairman. Motorola's corporate doctoring is but one example of the far larger role in China that foreign businesses play beyond providing jobs and padding the country's tax roll. Since Communist China opened up to overseas investment two decades ago, foreign companies have become an important catalyst in economic reform, introducing modern management as well as technology. Including these collateral benefits, foreign firms and their joint ventures account for as much as a fifth of China's trillion-dollar economy. That help is all the more critical now as China's consumer spending flags and prices fall, threatening to pull the economy into a slump. Every dollar spent by multinationals adds 2.50 to China's economy, estimates Gilbert Choy, head of China research at Dresdner Kleinwort Benson. When multinational manufacturers buy from Chinese suppliers, those suppliers, in turn, spend money to expand their own production lines, generating business for other local companies. Sourcing by large automotive companies such as General Motors Corp., Ford Motor Co. and Volkswagen AG, have spawned a vast network of auto-parts suppliers.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984710","date":"1999-09-18","texts":"Your stocks or mutual funds may--or may not--have gained much in value this year. But unless you live in one of a handful of places around the country, you can be certain of this Your home racked up solid appreciation gains in the last 12 months--5.3 percent on average nationwide, and 8 percent to 9 percent in the hottest statewide markets, such as Massachusetts, Minnesota and Colorado, plus Washington, D.C. And unlike your stock market profits, there's an extra layer of icing on top of your home's appreciation It's tax-free, and it can be readily converted to cash if you need it--which is what growing numbers of American consumers are doing. Two new national statistical studies highlight the continuing, impressive jumps underway in home values, and how owners are turning at least some of that appreciated equity into spendable dollars. The first study, prepared by a federal agency that monitors the housing economy, documents what gleeful homeowners and sellers suspected Inflation in most goods and services may be in the range of 1 percent to 2 percent a year, but home values are jumping at four to five times that pace. According to the latest data from the Office of Federal Housing Enterprise Oversight, even three of the four slowest-appreciating markets--Nevada, Pennsylvania and Idaho, with gains in resale value of 3 percent or less--are beating inflation in the overall economy. Hawaii posted a scant 0.1 percent appreciation rate during the last 12 months. Massachusetts continues to lead the nation's resale-value boom, with a 9.3 percent average rate of gain per house in the last year, and nearly a 30 percent increase over the last five years. That's especially impressive given Massachusetts' already high-cost housing stock. If you bought a 300,000 house outside Boston last year, it's probably worth about 327,000 today. If you bought it in 1994, it's probably worth about 386,000. Other relatively pricey home real estate areas are not far behind.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982639","date":"1999-09-26","texts":"Treasury Secretary Larry Summers may have concluded by now that some guys do have all the luck. His fabled predecessor Robert Rubin seems to have left the cupboard bare. The state of Summers's karma matters. He arguably has one of the four or five most important jobs in the world--along with guys named Clinton, Greenspan and Yeltsin. If the financial gods frown at Larry Summers at some point, they frown at nearly all of us. And they are curling a lip his way right now. A stock market that soared to irrationally exuberant new heights under Rubin has yo-yoed downward under Summers. The strong dollar that helped wring inflation out of the U.S. economy has weakened erratically against the Japanese yen, tearing a hole in international monetary cooperation. And Summers was forced to defend himself in Congress last week against charges that he contributed to the ineffectiveness of U.S. aid to Russia. This sea of troubles arrives as Summers plays symbolic host this week to the annual gathering here of the world's most important central bankers, finance ministers, private banking executives and the other assorted money men who have some connection to the International Monetary Fund and the World Bank. Rubin managed these meetings with his customary aplomb, elegantly turning aside European schemes to weaken U.S. domination of the IMF and, to calm the panicky types, repeating that the world's economic fundamentals were solid.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613625","date":"1999-09-29","texts":"BOSTON -- With the Big Dig more than halfway done, is it time to start on Big Dig II A five-year, 4 million study nearing completion by the Massachusetts Bay Transportation Authority says yes. The study found that drilling beneath downtown Boston and connecting North and South stations with a 1.1-mile, four-track train tunnel would yield huge transportation benefits and could even pay for itself. Perhaps the most shocking conclusion of the report so far is that the cost of linking Boston's primary train stations has actually gone down since the first study of the project was completed in 1993. The study has the project's price tag at 3.68 billion, which, after adjusting for inflation, is 35 less than the 1993 figure. That's mostly because new electric-diesel locomotives significantly reduce the number of tracks that need to be electrified for the project. Everybody should get down on their knees and pray that it happens, says Bob O'Brien, chairman of a citizens advisory committee that is reviewing the study. For the project to proceed, the full report needs to be published and subjected to comments from the public and the Massachusetts Bay Transportation Authority. Finally, the project backer -- which could be the MBTA, Amtrak or another entity -- would issue a proposal with specific plans.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615843","date":"1999-09-29","texts":"For mutual-fund investors, the stock market's move toward evening trading won't push back dinner. Large fund companies surveyed this week say they have no plans to change their practice of pricing mutual funds at the traditional market closing time of 4 p.m. Eastern time to take advantage of extended trade-reporting hours that will begin Monday at the New York Stock Exchange and the Nasdaq Stock Market. And while a few traders at mutual-fund firms may end up staying later to check out stock opportunities in the evening market, longer trading hours probably won't force much more trading at first, either. Of course, if evening trading catches on and attracts a high volume of individuals' trades, mutual-fund firms may find they can't afford to miss out, industry executives say. I keep wondering if this is going to be the party where everyone's invited and no one comes, said Andy Brooks, head of trading for T. Rowe Price Associates, Baltimore. Mr. Brooks plans to keep his trading schedule pretty much the same, doing paperwork in the early evening, not trading, even as stock exchanges are open later. We'll be there, but only if there are opportunities, he said. At some point, we all need time for the market to be closed. Fidelity Investments, the nation's biggest mutual-fund company, is studying the issue of evening trading and is planning to make further determinations once all the exchange plans are known, said a spokesman for the Boston company. But for now, Fidelity intends for the forseeable future to price funds at the normal 4 p.m. closing time.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984081","date":"1999-09-29","texts":"A jittery Wall Street pummeled stock prices for most of the trading session yesterday before bargain hunters helped pull prices back up toward the close. The Dow Jones industrials lost 27.86 points, or 0.27 percent, to close at 10,275.53, but that was far above the intra-day low of about 10,080. Fear is the issue here, an innate insecurity that too much of a good thing has gone on for long, said Michael Farr, president and chief investment officer of Farr, Miller & Washington, a D.C.-based financial-consulting firm. Bellwethers Microsoft and Intel took big hits. The software giant touched an intra-day low of 89-116 but finished at 91-716, a little lower than Monday's close of 92 18. Intel at one point dipped to 75 14 before recovering to finish at 77 12. On Monday it had closed at 78-316. Investors, concerned about another round of interest-rate increases, have been driving stock prices down for the past few weeks. The Federal Reserve's rate-policy-setting committee will meet next week to evaluate the economy, though most Fed watchers believe there is little chance the Fed will raise rates next week.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615151","date":"1999-10-01","texts":"Quarter's end brought a one-day bounce for stocks and bonds, leaving investors to debate whether they can hope for a more lasting rebound as the year's final quarter begins. Amid heavy buying by large professional investors that wanted to avoid showing unspent cash on their books, the Dow Jones Industrial Average rose 123.47 points, or 1.21, to 10336.95, the blue-chip index's biggest gain in almost four weeks. With the latest economic news seeming to militate against a Federal Reserve interest-rate increase, investors also turned more optimistic about the market's future. Most major indexes gained, although technology stocks tended to lag behind. Treasury bonds posted sharp gains. The dollar, which has been regaining ground against the yen in recent days, pulled back a bit. It was end of the quarter, so there was a lot of portfolio rebalancing, said John Peluso, head of block trading at Lehman Brothers. Perhaps more significant, he said, was a rebound by bank and financial stocks that appeared to start before the brunt of the rebalancing process hit. That gave a better tone to the tape and that's what gave legs to the market, Mr. Peluso said. Financial stocks benefited from news that second-quarter economic growth was slower than initially believed and that unemployment claims were up last week. This added credence to the widening view that inflation is under control and that the Federal Reserve may leave interest rates alone at its policy meeting on Tuesday.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983235","date":"1999-10-01","texts":"Stocks rallied sharply for the first time in nearly two weeks as a government report of slower economic growth raised hopes that the Federal Reserve won't raise interest rates next week after all. The Dow Jones industrial average rose 123.47 to close at 10,336.95, the index's second gain in eight sessions. It was also the Dow's biggest point gain since Sept. 3. Broader indicators were higher as well. The Standard & Poor's 500- stock index rose 14.34, to 1282.71, and the Nasdaq composite index rose 15.89, to 2746.16. Stocks rose after the Commerce Department reported that the U.S. economy, weighed down by record trade deficits, saw its growth slow to an annual rate of 1.6 percent during the second quarter, the lowest rate of expansion in four years. The report on the nation's gross domestic product provided some relief for investors who have driven stocks lower over the past week as they pessimistically awaited the Fed's Oct. 5 meeting on interest rates.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983076","date":"1999-10-03","texts":"The rise of soft money has been the most disturbing trend in campaign finance in the 1990s. The idea that groups and individuals can inject unlimited, unregulated amounts of money allegedly for party building into campaigns for federal office has made a mockery of the post-Watergate reforms enacted in 1974. The fatal flaw of the 1974 law is the capping of individual contributions at 1,000 per person--never adjusted or indexed for inflation. This has made Senate and House incumbents very difficult to beat, and has meant that non-incumbent candidates not personally wealthy or closely connected to the party establishment are finding it increasingly difficult to mount serious campaigns. I believe soft money, whether by corporations, unions, interest groups or individuals, should be prohibited. But to make such a ban work, reformers must accept the simple fact that if we want competitive elections, the ability of candidates to raise large amounts of money from individuals and from fully regulated political action committees is a good thing, not a bad thing. The limit on individual contributions should be raised to 5,000 and indexed against future inflation. The limit on contributions by political action committees should be raised from 5,000 to 10,000 and indexed. I do not favor putting restrictions on issue ads. The American people should have the right to express their opinions under the First Amendment. But encouraging people and groups who care about issues to advance their beliefs by supporting candidates they agree with will go nowhere until campaign contributions can once again be large enough to make a difference in our elections. I am running for president because I want an American democracy that invests in the future of its children by lifting them out of poverty and offering every child--every child--a decent education. I want more Americans to have good health care. I want to heal the racial divide that short-circuits our national potential. I want to be the good steward of a good economy in which working Americans of all incomes can become financially secure. But I know to achieve any of these things, we need a healthy democratic process. A process in which everyone's voice can be heard, where dissent is respected and candidates run on the strength of their ideas--not the weight of their wallets. That is why I advocate comprehensive campaign finance reform, to make our democracy work for people again. In July, I laid out my proposals, which include  Public financing of congressional general elections, with federal funding on a matching basis for small contributions in the primary and overall spending limits.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615504","date":"1999-10-05","texts":"NEW YORK -- Bond prices rose as investors, betting the Federal Open Market Committee will refrain from raising rates when it meets today, took advantage of beaten-down prices to scoop up Treasurys. Strength in the dollar, and weakness among some key commodities, also helped the market's tone. In late trading, the bellwether 30-year Treasury bond was up 1932, or 5.9375 for a bond with a 1,000 face value, at 100 1432. The bond's yield, which moves in the opposite direction of its price, fell to 6.083 from 6.127. Medium-term bonds also rose. Ten-year Treasurys, for example, climbed 832 to yield 5.927. Bonds tumbled on Friday, after the release of stronger-than-expected economic data. But yesterday some investors saw value in Treasurys. The market was a little bit oversold, and while a small minority of people expect rates to be raised today, it's still a minority, said Bill Kirby, Prudential Securities' co-head of government trading.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983135","date":"1999-10-06","texts":"Asarco's board unanimously recommended that shareholders reject takeover offers from Phelps Dodge and Grupo Mexico, challenging suitors for the copper producer to raise their bids. The directors also authorized management to begin seeking better offers. The offer from Phelps is valued at 1.98 billion in cash, stock and assumed debt, while Grupo Mexico has offered 2.05 billion in cash and assumed debt. The Nasdaq Stock Market unveiled a new electronic display system that it says will give customers access to better prices and make it easier to execute trades quickly. Nasdaq has asked for Securities and Exchange Commission approval of the new system, designed to link all types of alternative trading networks and to make the market more transparent by revealing more orders. It hopes to adopt the new plan in about a year. A Superior Court judge discharged a jury hearing a class-action lawsuit filed by New Jersey consumers allegedly injured by fen-phen, a diet-pill combination made by American Home Products. The move suggested that the judge anticipates a global out-of-court settlement for all fen-phen users--a deal reportedly totaling 4 billion-- though details of a final agreement are still being discussed. The Canadian Auto Workers reached a tentative contract agreement with DaimlerChrysler less than two hours before 13,800 union workers were set to strike. CAW President Buzz Hargrove said the deal was modeled on an agreement the CAW rank-and-file ratified last week with Ford of Canada. A former Kidder, Peabody consultant agreed to pay 140,612 to settle SEC accusations that he and the firm rigged bids connected to a 1993 bond financing for Tampa, federal and state regulators said. The Securities Exchange Commission contended that Michael Cornblum and Kidder used fictitious bids to get the firm hired to help Tampa restructure a municipal-bond escrow account.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615231","date":"1999-10-11","texts":"The after-hours trading revolution on U.S. stock markets has been delayed yet again. While certain individual investors can already trade stocks through alternative trading systems as late as 8 p.m. EDT -- or even overnight -- the Nasdaq Stock Market and the New York Stock Exchange will sit out the evening session a little longer, it was announced Friday. Nasdaq said it pushed back the tentative date when it will extend hours for certain stock-quotation distribution systems to Oct. 25 from today. The market said it is working out details of the plan with its participants and with the Securities and Exchange Commission, which has yet to approve it. That means a similar plan for NYSE-listed stocks most likely also will be pushed back. Those plans, of course, never did amount to a full-blown extension of hours by the two stock forums. Both the Big Board and Nasdaq, a unit of the National Association of Securities Dealers, plan to keep their official closing time at 4 p.m. Eastern time until at least next year. Meanwhile, investors were given some preliminary guidance on Friday as to how after-hours trading on the major U.S. stock markets might look. Three of the four working groups created at a June summit to study the issues of full-blown extended hours by Nasdaq and the Big Board submitted reports containing their recommendations.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616560","date":"1999-10-12","texts":"With earnings hopes up and interestrate worries on hold, technology stocks pushed the Nasdaq Composite Index to yet another record close, although most other stocks fell. In a session of light Columbus Day trading, the Nasdaq composite, dominated by names such as Intel and Dell Computer, rose 29.38 points, or 1.02, to 2915.95 yesterday. With a sixth consecutive trading day of gains, the Nasdaq composite surpassed its Sept. 10 record close of 2887.06. With its first close ever above 2900, it now is less than 100 points short of 3000, up nearly 33 since Jan. 1. But other major indexes fell slightly, and more stocks declined than advanced on the New York Stock Exchange. The Dow Jones Industrial Average fell 1.58, or 0.01, to 10648.18. The dollar pulled back, while the bond market was closed for the Columbus Day holiday. Technology bulls prevailed over bears who fear that companies will restrict technology purchases because of possible year-2000 computer glitches, said James M. Weiss, deputy chief investment officer for stocks at Boston mutual-fund group State Street Research. The bulls are buying the stocks for the longer term, Mr. Weiss said, amid optimism about semiconductor demand and about use of technology to boost productivity. The mid-term to long-term fundamentals are just terrific for tech, Mr. Weiss said. Intel and Motorola advanced yesterday amid hopes for their third-quarter earnings, which are to be announced today. But investors appeared cautious about the prospects for earnings from nontechnology companies as the earnings-announcement season kicks off in earnest this week.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614046","date":"1999-10-14","texts":"Robert A. Mundell, a Columbia University economist, won the Nobel economics prize yesterday. Following are excerpts from an article he published in the July-August 1990 issue of the Rivista di Politica Economica, an Italian economics journal. Reprinted with permission. Supply-side economics emerged as a political force partly as a reaction against the steep progressivity of personal and corporate income taxes and partly as a result of the breakdown of the international monetary system in 1971. The principal features of the supply-side program were a reform of the tax system, featuring a drastic slashing of marginal tax rates, and a reform of the international monetary system to one based on stable exchange rates anchored by gold or some alternative international asset. The United States had enacted high income tax rates after it entered World War I, and they were only gradually lowered, to a maximum rate of 25 under Treasury Secretary Andrew Mellon. But in June 1932, during the last year of the Hoover administration, marginal income tax rates were suddenly raised again to a maximum level of 60. They remained at or frequently considerably above this level for half a century. The grand bargain entered into by both Democratic and Republican administrations up to 1981 was the exchange of punitive marginal income tax rates to satisfy the political left in exchange for sweeping tax loopholes to placate the political right. The collapse of monetary discipline with flexible exchange rates in 1973 and the subsequent oil embargo and increase in oil prices led to an inflation that further exacerbated the progressivity of the tax system. At the same time the absence of a stable monetary environment led to rising interest rates and exchange rate fluctuations that, almost arbitrarily, altered relative labor costs and international competitiveness. The exchange rate was determined increasingly by volatile international capital movements rather than the requirements of international trade. Reform of the international monetary system was therefore the second pillar in the platform of supply-side economics. Supply-side economics addressed itself directly to policy considerations rather than theoretical abstractions. It would be a mistake, however, to believe that it lacks any less of a scientific foundation than the older demand-side schools of monetarism and Keynesianism, or the new classical school. Its own academic credentials lie in the solid allocation-theoretic literature of neo-classical economics and the policy-oriented models of global monetarism and macroeconomics.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616416","date":"1999-10-15","texts":"DAIMLERCHRYSLER AGREED with Aerospatiale Matra to combine their aerospace businesses and create the world's No. 3 aircraft and defense company. The pact between the German and French firms raised concerns at the Pentagon and is likely to intensify the fierce competition between U.S. and European rivals. --- GM posted record third-quarter earnings, beating forecasts and reversing a loss, on strong results in North America. Still, shares eased on worries that momentum might slow and concern about labor costs. --- Retail sales rose just 0.1 in September, cooling after two months of blistering growth. Prices of imported consumer goods rose a sharp 0.3, though, fueling some inflation fears.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983715","date":"1999-10-16","texts":"Historically, rising interest rates have hurt individuals by making two of their biggest purchases--the automobile and the family home--more expensive. But now, with more individuals owning stock than ever before, rising interest rates are threatening family finances in a third way, one that could ultimately spell an end to the stock market-driven wealth effect fueling the current economic boom. Certainly the country's red-hot housing sector has cooled somewhat, with housing starts, residential construction spending and mortgage loan applications down in recent months. But sales of new and existing homes are still running close to record levels, and auto sales are on track to set a record of more than 17 million this year. But it is in the stock market, where the values of some high- technology companies have been driven to stratospheric levels, where interest rate jitters have been felt most strongly. Yesterday's 267- point sell-off in the Dow Jones industrial average, market strategists said, was largely attributable to fears that interest rates are headed further upward after two summer rate increases by the Federal Reserve Board. The rate increase and the prospect of more rate increases have cooled the equity market, said economist Ray Stone, of Stone and McCarthy Research Associates in Princeton, N.J. Consumers will probably slow their spending.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616387","date":"1999-10-18","texts":"Your Sept. 17 article SEC Sweep of 45 Day-Trading Firms highlights the unhealthy and irresponsible speculation taking place in the stock market. In light of the day-trading information already possessed by securities industry regulators, it is time this activity was closely regulated. Unless day trading is checked, this widespread speculative fever may well lead to social, economic and financial disasters. The Federal Reserve should prohibit the extension of margin loans to day traders and limit commercial banks' lending to day-trading brokerage firms. Special higher capital requirements on day-trading brokerage firms should be imposed by the SEC and the NASD. Regulators should mandate that the funds devoted to day trading by any day trader should be restricted by that individual's overall net financial resources. Finally, regulators ought to limit the number of trades by an individual day trader and his brokerage firm on any given day. Moreover, legislation should be passed making it a criminal offense to post information on the Web that is unsubstantiated and unverified. It is irresponsible for regulators not to have begun imposing restrictions on day-trading individuals and firms. They are the new boiler shops of this seven-to-eight-year bull market. E. Magnus Oppenheim President","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617458","date":"1999-10-18","texts":"WASHINGTON -- Though a sharp jump in wholesale prices in September set off fears on Wall Street that long-dormant inflation has awakened, economists said the numbers were artificially boosted by a number of one-time factors, and that widespread evidence of rising prices was still slight. Indeed, the report seems unlikely to spark much panic in one place it matters most, the Federal Reserve, which is charged with keeping inflation in check. In comments over the past few weeks, top officials have been more likely to marvel about the tameness of prices than to express concern about nascent inflation. The sticker shock . . . exaggerates the inflation numbers, economists at Warburg Dillon Reed LLC wrote Friday in a report to clients, adding that the price rises do not represent a significant change in the underlying trend of inflation. The Fed, too, will be able to look past these developments, the Warburg analysts concluded. While the odds of a central-bank interest-rate increase next month may be rising, they said, they are not yet above 50 in our opinion. The numbers in the Labor Department's producer-price report for September were, indeed, stunning. The index for finished goods soared by 1.1, seasonally adjusted, the biggest monthly increase in nine years. That followed a large 0.5 jump in August, an especially terrible back-to-back performance for a price gauge that has been flat or negative for much of the past two years. Even stripping out the volatile food and energy sectors, the so-called core index jumped by a hefty 0.8. The stock-market reaction was equally dramatic. The Dow Jones Industrial Average fell 266.90, or 2.6, to 10019.71, and briefly dipped below 10000 for the first time since April. Investor inflation jitters were aggravated by comments made by Fed Chairman Alan Greenspan the night before warning investors and lenders against excessive confidence in the market's lofty levels.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617352","date":"1999-10-19","texts":"Somehow we doubt too many money managers or even day-traders are heavily into sky-diving. You jump out of an airplane and let your body go into a downward free-fall, trusting yourself to pull the parachute cord at the right time. Everyone who does it says it's fun. But your body is one thing, your net worth something else. And with the market off 5.92 last week, and despite yesterday's 96 point recovery, a lot of earthbound traders are getting aggrieved that Alan Greenspan hadn't pulled the interest-rate cord for them earlier. Now they're worried it's too late, that inflation is loose and they're headed for a fall. It's not overwhelmingly clear to us that inflation's back. Maybe the wholesale price jump was only a blip. But bond traders, like canaries in a coal mine, are worth watching. There are enough worrisome signs around that this is a good moment to start thinking seriously about what's beyond the economic horizon for the U.S. economy. Robert Mundell, the supply-side economist who just won the Nobel Prize, already has the near term in mind. Interviewed last week he said, I don't see any indication of a slowdown in the U.S. economy in the present, but I would not be surprised if that occurred next year. Now when we say serious thinking about the near term, that includes Presidential candidates who will be running full tilt next year. What if inflation indeed shows up and the Fed feels impelled to tighten, even at risk of a downturn during the election campaign If the person heading for the White House inherits a stalling U.S. economy, voters will want an answer. The answer isn't, I plan to stay within the spending caps. That's a Beltway thing it's not an economic strategy. A real economic strategy is aimed at boosting the real economy, whose state of health is anticipated by stock and bond markets. In this world, what one watches are prices, which direct goods and investments to their most productive uses. Inflation disincentivizes that process, and the concern of late is that some relevant prices have been blipping upward. The price of oil, for instance, has more than doubled the past 12 months, owing in great part to the oil-producing nations' ability this time to hang together on prices. They're helped by a number of factors, such as the participation of Mexico. But OPEC's success can also be read as a sign of accommodative monetary policies.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983056","date":"1999-10-20","texts":"Excerpts from the first rough draft of history as reported in The Washington Post on this date in the 20th century. The stock market crash of Black Monday, 1987, was in many ways the nation's gravest financial crisis since the Great Depression. But the Federal Reserve's decisive moves to pump money into the banking system and cut interest rates averted a recession. In fact, the stock market soon recovered and the economy kept growing. An excerpt from the Post of Oct. 20, 1987 The stock market was devastated by the worst one-day collapse in history yesterday in a pandemonium of panic selling that shattered all records and swamped stock exchanges around the country and overseas. The best-known market barometer -- the Dow Jones average of 30 industrial stocks -- plummeted 508 points, five times the previous record set last Friday. The Dow closed at 1738, dropping 22.6 percent, or nearly double the 12.8 percent plunge of Oct. 28, 1929, the crash that began the Great Depression. More than 604 million shares were traded on the New York Stock Exchange and 239 million on the American and over-the-counter markets, shattering previous records.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613685","date":"1999-10-21","texts":"NEW YORK -- Microsoft's strong profit stirred enthusiasm for technology stocks. Microsoft Nasdaq jumped 5 1516 to 92 14 after the software company issued fiscal first-quarter earnings late Tuesday that topped analysts' forecasts. Salomon Smith Barney, praising what it called a pristine profit statement, bumped up its fiscal 2000 profit estimate for the company. They played off those Microsoft numbers from the opening bell, and we've seen some good follow-through in the technology sector, said John Manahan, head of trading at Brown Brothers Harriman. Gateway rose 5 18 to 52, Hewlett-Packard gained 2 1316 to 76 916, and Apple Computer climbed 6 58 to 75 18 on the Nasdaq Stock Market. Even Dell Computer moved higher, gaining 1 12 to 40 on Nasdaq. Dell had stirred some profit worries for the technology sector when it warned earlier this week its results would be hurt by rising prices for memory products. Strong profit performances from other technology issues contributed to the optimism evident in the session. Computer Associates gained 3 34 to 58 14 after its fiscal second-quarter profit, released late Tuesday, proved a penny a share better than analysts anticipated.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615980","date":"1999-10-22","texts":"BUENOS AIRES -- Fernando de la Rua is favored to win Argentina's presidential race Sunday, and his choice for the Finance Ministry will be an anxiously awaited signal on the course of the country's economic policy. Argentina's finance minister is second in importance to the president. The country doesn't have enough savings to finance its own growth or debt load, so the finance minister must constantly bolster the confidence of international investors. One of the first challenges faced by the new economic team will be the financing of about 16 billion in Argentine debt in global markets next year. The second challenge is to regain momentum on economic reforms. The Argentine peso is fixed to the U.S. dollar, and without additional policies that enhance productivity or lower costs, Argentine companies risk losing competitiveness. Mr. De la Rua's top pick for the Finance Ministry post appears to be 53-year-old Jose Luis Machinea, who heads a center-left think tank in Argentina. Mr. Machinea has a doctorate in economics from the University of Minnesota, and his peers say he is a smart economist steeped in economic theory. Nevertheless, he is overshadowed by Argentina's instability during the late 1980s when he was central bank president. He left that post in March 1989, and shortly thereafter, following a failed stabilization plan, Argentine inflation spiraled out of control. Mr. Machinea doesn't have the unqualified support of Argentine businessmen or international investors, but he is working to gain their confidence. There are concerns about whether his center-left tendencies might translate into an acceptance of mild forms of protectionism or subsidies, but few doubt his macroeconomic orthodoxy. He wouldn't generate applause, says Aldo Abram, general-director of Exante, an economic consulting firm here, but it wouldn't worry me a bit if he was minister.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614760","date":"1999-10-26","texts":"WASHINGTON -- Sales of existing homes fell by 2.1 in September amid rising interest rates, continuing a slide that may indicate the beginning of a slowdown in the domestic economy. Although the annual pace of 5.13 million units, seasonally adjusted, is relatively high by historical standards -- and is up 3.4 from September 1998 -- it is down sharply from June's record rate of 5.63 million units, according to the National Association of Realtors. It was the third consecutive decline. The number is down just a little bit, but we're still on pace for a very strong year, said Fred Flick, vice president of economic research for the NAR. Economists attribute the decline to the Federal Reserve's recent interest-rate increases and argue that it may help show policy makers that the economy can cool enough without a further rate increase when officials meet on Nov. 16. The Fed has already raised rates twice this year-in June and in Augustand economists are trying to figure out whether those moves are working by slowing growth down and, if so, by how much. Economists say it takes months, or sometimes well over a year, for the full impact of a Fed boost to work its way through the economy. But an early reading of whether the policy is having an impact comes from the most interest-sensitive sectors, notably housing and construction.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984077","date":"1999-10-26","texts":"Stocks closed mostly lower today as revived fears of rising interest rates distracted investors from the latest good news about corporate profits. The Dow Jones industrial average fell 120.32 points to close at 10,349.93, having recovered from a loss of as much as 155 points. Broader stock indicators contained their slide. The Standard & Poor's 500-stock index fell 8.02, to 1293.63, and the Nasdaq composite index fell 0.57, to 2815.95. Stocks fell after bond yields rose early in the day. Analysts said bond prices, which move in the opposite direction from yields, were hurt by a European Central Bank official's suggestion that the European economy is solid, but in danger of succumbing to rising inflation. That warning sounded familiar to U.S. investors, who fear the Federal Reserve will soon raise interest rates to cool the robust growth of the U.S. economy. Yields on bonds, which are highly sensitive to inflation, have reached their highest levels since October 1997, drawing some investors away from stocks in favor of the fixed returns available on bonds.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842613998","date":"1999-10-27","texts":"LOS ANGELES -- Over the past three years, Kaufman & Broad Home Corp. has worked hard to develop a marketing-driven approach to home building that it says will insulate it from the industry's notorious cycles. But investors, so far, aren't convinced. The big home builder last month posted its 17th consecutive quarterly earnings report that topped or matched analysts' expectations. Yet its stock sells for just seven times earnings that are expected to increase by 52 to 145 million, or 3.02 a diluted share, for the fiscal year ending next month. The stock closed yesterday in New York Stock Exchange composite trading at 17.8125, up 6.25 cents and near a 52week low. Industry-wide, earnings multiples are exceptionally low by historical standards, Merrill Lynch analyst Robert F. Curran says, probably among the lowest ever. The reason fears that another interest-rate increase is imminent, in a year when rates on 30-year fixed mortgages have already risen nearly a percentage point. Wall Street also frets about spot labor shortages and increasing land and construction-materials costs. Bruce Karatz, Kaufman & Broad's chief executive, finds this sentiment exasperating. The market is saying 'the end is near,' and clearly doesn't give Kaufman & Broad Homes credit for changing its business model and mitigating cyclical risk, he complains.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616431","date":"1999-10-27","texts":"It isn't unusual for a takeover lawyer to get attention for his role in a corporate drama. But a leasing lawyer Meet Jonathan Mechanic, the 47-year-old, bushy-moustached head of real estate for Fried Frank Harris Shriver & Jacobson in Manhattan. He employs a publicist, socializes relentlessly, and instills drama into the dusty world of landlord and tenant law by turning every negotiation into a fight. I want a tough lease. I want to win every right that can go the client's way, he says. Though rivals deplore his tactics, the 500-an-hour lawyer has collected clients such as Conde Nast Publications, a unit of Advance Publications Inc., and Jerry Speyer, plus 1998 revenue of 10 million at his 30-lawyer group. And Fried Frank aims to represent not one but two suitors, including Brookfield Financial Properties Inc., in the forthcoming contest for the country's biggest lease 10 million square feet of offices at New York's World Trade Center. In lease negotiations, lawyers routinely complain that Mr. Mechanic wastes time and money with his 50-page documents, while challenging every detail in their much shorter ones. Then, at some point, he will always pound on the table about something that surprises me because it seems so unexceptional, says attorney Philip Rosen of Weil Gotshal & Manges, who has sat across the table from Mr. Mechanic several times. Mr. Mechanic is nevertheless a very good lawyer, he adds. And his methods win clients. Real-estate investor Andrew Davidoff of Emmes Group of Cos. first encountered Mr. Mechanic 12 years ago representing a company that wanted to lease space in a building Mr. Davidoff then owned, Harborside Financial Center in Jersey City, N.J. Last year, buying out a partner in a difficult 50 million negotiation, he made sure Mr. Mechanic was working for him. He knows when to go on a rampage to get a deal closed, Mr. Davidoff says.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982667","date":"1999-10-27","texts":"Stocks closed lower as investors' nervousness about inflation and interest rates again overshadowed upbeat earnings news. But Intel got a boost as it and Microsoft were picked as new components of the Dow Jones industrial average. At the close of trading on Wall Street, the Dow was down 47.80 at 10,302.13, having surrendered an earlier 59-point gain. The blue chips fell 120 points on Monday amid uneasiness over higher rates. Broader indicators were mixed. The Standard & Poor's 500-stock index was down 11.72 at 1281.91, and the Nasdaq composite index was off 4.48 at 2811.47. Stocks were hampered by continuing concerns about inflation, especially as the Federal Reserve's next policy-setting meeting approaches on Nov. 16. The jitters have caused investors to look past better-than-expected earnings reports, including news today of strong earnings from Lucent Technologies. The market is still under pressure, and the interest-rate question is probably a big part of it, said Charles White, president and portfolio manager at Avatar Associates.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614881","date":"1999-10-29","texts":"The Dow Jones Industrial Average staged its strongest percentage gain since March, as a wave of optimism swept through the stock market following news of moderate third-quarter gains in inflation and labor costs. Many investors still believe that the Federal Reserve will raise its interest-rate target by another quarter point on Nov. 16. But now they are hoping that the Fed will be able to leave rates alone for a while afterward. Some even think the Fed may avoid raising rates in November. In the fourth-heaviest trading day ever on the New York Stock Exchange, the Dow industrials advanced 227.64 points, or 2.19, to 10622.53, the highest percentage rise since they put on 2.84 on March 5, and the fourth-highest percentage gain of the year. The blue-chip index still stands 6 below its Aug. 25 record. But the Nasdaq Composite Index, heavy in popular technology stocks, now has zoomed to within 40.76 points, or 1.4, of its Oct. 11 record close of 2915.95. Yesterday, it rose 72.70, or 2.59, at 2875.22. Bonds also soared and the dollar was mixed.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614279","date":"1999-11-04","texts":"Lockheed Martin Corp. shares fell 7.5 after two credit-rating agencies downgraded the defense company's debt. The downgrades signal that interest rates will increase on about 3 billion in commercial paper, according to credit experts. The downgrades by Moody's Investors Service Inc. and Standard & Poor's Ratings Services sent Lockheed Martin shares down 1.50 to close at 18.5625 in New York Stock Exchange 4 p.m. trading. The stock has dropped from a 52-week high of about 56.75, as a series of management and program problems have emerged in the past year. Some of the new ratings are at the lowest possible level in the investment-grade category. The drops stem from a Lockheed Martin forecast last week indicating that year-2000 cash flow will drop to less than 500 million from about 900 million estimated in late September. Lockheed Martin, based in Bethesda, Md., also said its year-2000 earnings are likely to be about 1 a share, instead of the 2.15 a share forecast in late September. Lockheed Martin has faced serious production and sales problems in certain of its units making satellites, rockets and some military aircraft. Wall Street experts said the most dramatic effect of the credit-agency downgrades would be the increased interest rates applied to the 3 billion or so of commercial paper the company has used for short-term borrowing. The paper typically features a variable interest rate. Another effect could be to trigger further sales of the stock by institutional holders. Analysts speculated some of that selling already has begun.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616756","date":"1999-11-05","texts":"Tech-stock enthusiasm overcame interest-rate worries yet again, pushing the Nasdaq Composite Index to a fifth consecutive record close and a second day above 3000. Nervousness ahead of today's announcement of closely watched October employment data produced some late-day selling, but the Dow Jones Industrial Average still closed up 30.58 points, or 0.29, at 10639.64. The Nasdaq composite, which closed above 3000 for the first time Wednesday, surged 27.44, or 0.91, to 3055.95. Bonds advanced and the dollar was mixed. People are shifting from worries about interest rates to optimism about technology investment, said Robert Gasser, head of U.S. stock trading at J.P. Morgan. Fading worries about year-2000 computer-clock problems help to explain the strength of the Nasdaq composite, which is dominated by technology stocks such as Microsoft, Intel and Cisco Systems. Bond investors until recently feared the Fed was falling behind in combating inflation and would be forced to raise shortterm interest-rate targets by half a percentage point at its Nov. 16 policy meeting, said Scott Graham, chief government bond trader at Prudential Securities.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614340","date":"1999-11-08","texts":"WASHINGTON -- Good news concerning the U.S. economy continued last week as the October unemployment rate dropped a notch to its lowest level in 29 years and wage gains remained tame. Job growth was solid, but wage pressures were completely absent in October, said Bill Cheney, chief economist at John Hancock Mutual Life Insurance Co. The inflation threat has receded yet again. The new numbers, combined with some signs the economy may be slowing, will bolster those inside the Federal Reserve arguing against an interest-rate increase when policy makers meet Nov. 16. The anemic growth in wages, in particular, gives Fed officials more breathing room to see whether the economy is slowing on its own, or whether growth can continue at the current pace without sparking inflation. The Fed will probably be on hold until March 21, 2000, said Rosanne Cahn, chief U.S. equity economist at Credit Suisse First Boston, describing what she calls benign wage inflation. Still, many analysts think the Fed will move next week.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616070","date":"1999-11-08","texts":"What comes after Nasdaq 3000 Nasdaq 4000 or Nasdaq 2500 All the hoopla surrounding Nasdaq 3000 last week masked some interesting aspects of the Nasdaq Composite Index's rise to stock-market dominance The advance has been going on for longer than many investors realize, but of late it has been driven by a surprisingly small group of stocks. That raises a question When a stock index becomes so dominated by a handful of names, how long can the gains continue Some of those companies are going to be worth it, but I think the majority aren't going to be worth it, says David Mead, chief investment officer at Harris Bank. Ultimately you will have more democracy in the stock market, he adds, meaning that a wider group of stocks will start to perform better. Then, investors will realize that many of the top companies are priced too high. He still likes networking colossus Cisco Systems, for example, but he has his doubts about software mammoth Microsoft. The antitrust ruling against Microsoft, announced after markets closed on Friday, throws an additional cloud over the stock, which as it happens was added to the Dow Jones Industrial Average just last week. Of course, experienced investors have been warning for years now that the highfliers could fall to earth. Up to now, it hasn't happened. And certainly, no one was worrying much last week.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616962","date":"1999-11-08","texts":"According to the latest mutual-fund returns, the U.S. has been surpassed by the rest of the world, and portfolio managers say that trend could continue. International-stock mutual funds are up an average 17 this year through Friday. Despite the recent record-shattering move by the Nasdaq Composite Index, the average U.S. diversified stock fund lags behind its foreign counterpart with a 13 return through Friday, according to fund-tracker Lipper Inc. There could be more of the same in the coming months. I think international markets will continue to outperform the U.S. stock market, but perhaps not the tech-heavy Nasdaq index, said Irene Cheng, lead manager of Scudder International Fund. Ms. Cheng's assertion stems from her belief Japan is dead serious about turning around its economy. David Lui, who manages Strong International Stock Fund, agrees. A number of secular trends in Japan bode well for a lasting economic recovery, he says. Companies in Japan are restructuring, instituting layoffs and selling unprofitable divisions, moves they hadn't undertaken before. In addition, Mr. Lui says, individual investors in Japan are tiptoeing back into the market after they got so badly burned in the early 1990s, and that's a very bullish signal. A year ago, Japan's markets were starting to dig out from a devastating financial crisis. Meanwhile, European markets were thriving, in part because of optimism over the European Union's unified economy and the then-coming euro monetary unit. This year, things have reversed Japan has performed well, while Europe seems to have been a victim of its own success. But don't count the Continent out yet, managers say, there is room for improvement.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983652","date":"1999-11-09","texts":"One of the big problems that most of us have in life is that we never get to read our own obituaries, which would be our best chance to see people saying nice things about us. But high-profile corporate chieftains who announce their departures don't have this problem. They get to hear all that nice stuff while they're still around, because retirement stories strongly resemble obits, except that the subject is still alive and kicking. As witness the gushing and slobbering over General Electric Co. Chairman Jack Welch last week after he mentioned on a TV show that he plans to retire in April 2001. Welch would then be 65, and he would have had a nice, round 20 years at the helm of GE. Welch, the highest-profile corporate manager in the world--not to be confused with Microsoft Corp.'s Bill Gates, who's a founder, not merely a manager--is one of those people who make you feel good about subscribing to the Great Man Theory of business the idea that one person can make a huge difference. No matter how much of Welch's success you ascribe to historical forces and luck--the economy was dead in the water, with interest rates at 20 percent, when he took over, and it is roaring ahead now--it's clear that a good part of what's happened at GE since Welch took over in 1981 must have a lot to do with the man and the people he picked as subordinates. GE's stock price has risen from 4.18 34 adjusted for four stock splits on March 31, 1981, the day before he took over, to 134 yesterday. That 3,100 percent increase is more than triple the 900 percent rise in the Standard & Poor's 500-stock index during that period. GE stock has risen 20.5 percent a year, compounded, compared with 13.2 for the S&P. But even as the encomiums pile up for Welch, known as Neutron Jack in his younger days for vaporizing jobs while leaving buildings intact, it's time to play my traditional role as skunk at the garden party. Welch is clearly very, very, very good. But as effective as his leadership has been in helping GE transform itself from an old- line industrial company into a sleek, finance-oriented conglomerate, it's not yet clear how good a manager Welch is. How can I say that Because picking a worthy successor is one of the most vital elements of managing. Since we don't know who Welch's successor is or how worthy he all the leading candidates are men will prove to be, I think it's too early to call Welch a management god. This may sound like nitpicking, but please bear with me. Consider, if you will, what's happened to Coca-Cola Co. since the charismatic and wonderfully well-regarded Roberto Goizueta died in 1997. He was on the same level as Welch in the business pantheon. But Goizueta's handpicked successor, Douglas Ivester, has had nothing but trouble since taking over the Coke chairmanship. Similar fates have befallen the people who succeeded two other well-regarded, visionary corporate chieftains Charles Lazarus, who retired as Toys R Us Inc. chief executive in 1994, and Anthony O'Reilly, who retired from H.J. Heinz Co. last year. Lazarus and O'Reilly were good leaders--but not, in my humble opinion, good managers. It's a bad reflection on them that their successors all seem to have had feet of clay. Hmm. It makes you wonder whether these guys were really as good as they seemed to be when they left office. And whether they'd have had trouble if they'd stayed around. Why does this matter Because it's important to keep perspective and not get swept away by conventional wisdom. Reporting about the personalities and peccadilloes of corporate managers has in large part replaced reporting about the corporations they run--both in the media world and on Wall Street. That's partly because people are generally more interesting than companies, partly because they're easier to analyze.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615406","date":"1999-11-10","texts":"BP Amoco PLC, taking a further step in its cost-cutting efforts, is expected to announce today that it will transfer much of its U.S. accounting and back-office operations to PricewaterhouseCoopers LLP in a 1.1 billion, 10-year deal. The transaction is expected to be among the largest of its kind in the fastgrowing business-outsourcing industry, in which companies have been unloading functions that once were thought inseparable in a multinational corporation. PricewaterhouseCoopers executives credited technology with enabling such outsourcing, making it possible to conceive of a company that concentrates on areas where it has an advantage and leaves noncore functions to others. It's a relatively new and emerging way for large organizations like BP Amoco to focus on what they do best and improve their performance, said Ray Bayley, partner in charge of business-process outsourcing at the accounting firm. Under the deal, the oil giant's backoffice and accounting operations in Tulsa, Okla., Chicago and Houston will be taken over by PricewaterhouseCoopers. About 1,200 employees, mostly in Tulsa, will be transferred from BP Amoco to the accounting firm, but there won't be employee reductions or salary cuts. PricewaterhouseCoopers will assume the financial-reporting, accounts-payable and accounting responsibilities for BP Amoco's chemical and oil-exploration and production units in the U.S., excluding Alaska. The U.S. refining and marketing operation isn't part of the arrangement. The sides are currently negotiating a deal for the Canadian operations that could be announced early next year. PricewaterhouseCoopers will also take over the acquisition, maintenance and upgrading of technology linked with providing the services.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982152","date":"1999-11-10","texts":"The multitrillion-dollar market in privately arranged financial derivatives does not need government regulation and should not be subject to U.S. futures laws, top U.S. regulators said yesterday. In a long-awaited report that eased market fears, the regulators recommended that Congress rewrite the Commodity Exchange Act CEA, which governs U.S. futures trading, to provide clear legal certainty for widely used financial derivatives. Derivatives are investments whose values are linked to underlying factors such as interest rates or currency exchange rates. The Bank for International Settlements has estimated that the total notional amount of outstanding over-the-counter derivatives contracts reached 80 trillion in 1998. Market participants have worried for years that U.S. futures regulators could try to assert jurisdiction over the currently unregulated OTC market. That might have thrown the legal status of many contracts into question. A special working group of U.S. regulators, including the Federal Reserve, Treasury Department, Securities and Exchange Commission and Commodity Futures Trading Commission CFTC, studied the issue for more than a year. Congress will use the group's findings in a rewrite of U.S. futures laws due to be completed next year.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616811","date":"1999-11-15","texts":"Older Internet stocks still are swinging, but they aren't leading the band anymore. As the Nasdaq Stock Market has romped to repeated new highs in recent weeks, it has done so without the help of many Internet stocks that had been so hot in April. The Dow Jones Internet Composite Index, though up 59 since its August low, remains 15 below its peak of mid-April the Nasdaq Composite Index is up 22 in the same period. Hardly any of the stocks in the capitalization -- weighted Internet index now trade anywhere near those highs. America Online and Yahoo both trade within 20 of their peaks, but the average of the index's 40 components still was down 38 from its 52-week high as of Thursday. With three Internet-related initial public offerings of stock in the past three weeks rocketing into the ranks of the top five first-day gains ever, it is clear the Internet party isn't over. It has just moved to a different neighborhood, leaving some lonely guests at the old one. This time last year, e-tailers a la Amazon.com were all the rage, says David Simons, managing director of Digital Video Investments, an investment-research and advisory firm in New York. Now e-tailers, led by Amazon's petulant preference for expansion over profit, are passe, and now it's b-to-b business to business commerce and networking. Of course, with the broad market rallying, some big Internet blue chips could well soon achieve new highs. Signs of modest economic activity and low inflationary pressure helped the Dow Jones Industrial Average soar 174.02 points, or 1.64, to 10769.32 on Friday, although uncertainty remains on whether the Federal Reserve will raise rates when its policy-making body meets tomorrow. The Nasdaq composite gained 23.86, or 0.75, to 3221.15, its third consecutive record and its 10th in 11 days. For the week, the Dow industrials gained 64.52, or 0.6 Nasdaq rose 118.86, or 3.8.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616817","date":"1999-11-15","texts":"When the software's for rent, what can investors buy The abbreviation ASP is suddenly as much of a stock-market buzzword as e-commerce and dot-com once were. And just as with the earlier manias, some traders already have made a bundle while others have lost their shirts. ASP, or application service provider, is technology lingo for a company that rents out access to computer software and hardware to business customers, often providing the access over the Internet. Bullish investors believe that ASP is the Next Big Thing and that it will revolutionize how small and medium-size companies approach technology. Before long, the theory goes, everybody from mom-and-pop retailers to steel warehouses will embrace the notion of outsourcing complicated stuff such as accounting programs and productivity software, saving themselves time and money -- and creating stock-market winners among the ASP providers. Such beliefs already have created wild rides in the stock market. As investors have caught outsourcing fever, ASP firms such as the pioneering company USinternetworking Inc. and, more recently, Breakaway Solutions Inc. have enjoyed wildly popular initial public offerings.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616872","date":"1999-11-16","texts":"Retirement is like a long vacation in Vegas. The goal is to enjoy these years to the fullest, but not so fully that you run out of money. It is a dicey endeavor, involving tricky issues of longevity and investment returns. As you try to figure out how much you can spend once retired, take a cue from the accompanying tables, which were put together by T. Rowe Price Associates, the Baltimore mutual-fund company. To use the tables, you have to decide how long your retirement might last, what stock-bond mix you will hold and what percentage of your portfolio's value you might withdraw in the first year of retirement. After the first year, you are assumed to step up the amount you withdraw, along with inflation. The tables don't provide definitive answers. Instead, like a gambler, you have to play the percentages. The answer you pluck from the tables is the chance that you will make it through retirement, without running out of money.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617111","date":"1999-11-16","texts":"What, us worry Some investors think the Federal Reserve will raise interest rates at its policy meeting today some think it won't. Both camps seem to think that whatever the Fed does, it won't hurt too much. In that only-slightly-nervous environment, stocks were virtually flat yesterday, one of the least pronounced moves recently on a day before a Fed policy meeting. The Nasdaq Composite Index, dominated by technology darlings such as Cisco Systems, fell only a hair after setting a string of 11 records in 12 trading days. It inched down 1.61 points to 3219.54. The Dow Jones Industrial Average fell a comparable 8.57 points to 10760.75. Bonds rose slightly and the dollar fell. For the first time in months, noted Larry Lawler, head of stock trading at Dreyfus Corp., people expect the announcement to be a nonevent. And the general view, he adds, is that a nonevent is good for stocks.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617452","date":"1999-11-17","texts":"BERLIN -- For the first time in years, the economies of nearly all the world's industrialized regions are going in the right direction, the Organization of Economic Cooperation and Development said. The agency's new semiannual world economic outlook projects that the OECD area, which consists of 29 industrialized countries, will expand by an inflation-adjusted 3 this year and next -- 1.5 percentage points higher than forecast six months ago -- before slowing to around 2.5 in 2001. The slowdown which occurred late in 1998 has ended, the OECD said. For the first time in several years, output levels in all the major OECD regions might be moving toward their respective potential, that is, toward full employment, albeit marginally so in Japan. Japan is expected to grow at only 1.5 a year during the next couple of years, according to the report, but even that economy is showing some positive signs. These changes reflect mainly unexpected near-term momentum of the U.S. economy, a stronger and more rapid resumption of growth in Japan, and particularly Korea, as well as a slightly better outlook for the European Union, the report said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614394","date":"1999-11-18","texts":"NEW YORK -- The Nasdaq Stock Market, by some measures, is having a great year. Day after day, trading volume and indexes tracking the market's technology stocks have hit records. But for Nasdaq itself, which likes to bill itself as the tech market for tech companies, all that volume and the technology needed to keep up with it have been double-edged swords. The 17-minute outage of key Nasdaq trade-reporting and order-routing systems Tuesday not only crippled the market in the half-hour leading up to the 4 p.m. EST close -- it also resulted in incorrect day-end values for the Nasdaq Composite Index and for certain individual stocks, including six of the vigorously traded Nasdaq 100-index tech stocks. The Nasdaq Composite's actual finish Tuesday was 3295.52, not 3293.05 as reported in many news outlets, including The Wall Street Journal. The index ended yesterday at 3269.39, down 26.13, on record volume of 1.65 billion shares. There were delays in morning trading, but they were less severe than Tuesday's problems. While Wall Street traders said Tuesday's shutdown was the worst of the recent problems, they also said it wasn't the first problem they'd experienced with Nasdaq's technology and in particular with SelectNet, the heavily trafficked e-mail system used to send orders and report trades. SelectNet problems, they say, have gone on for months and are particularly pronounced on days like Tuesday when volumes surge.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984496","date":"1999-11-18","texts":"U.S. businesses and government agencies are being forced to spend about 100 billion to keep the year 2000 glitch from crashing their computers, making a simple two-digit programming bug the most expensive peacetime catastrophe in modern history. But the vast electronic repair effort, which has commanded an unparalleled mobilization of people, money and executive attention in the past two years, is not likely to slow down the surging American economy, the Commerce Department predicted yesterday. Comparing Y2K to a tangled shoelace for a world-class marathon runner, the department also forecast that any problems created by malfunctioning computers--either domestically or overseas--will have an insignificant impact on the U.S. economy. Any glitches that pop up next year should not hurt our economic growth, said Commerce Secretary William Daley, who noted that the Y2K price tag works out to 365 for every American citizen. Is this a lot of money Absolutely, Daley said. But the potential cost of not doing anything was far greater.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616205","date":"1999-11-19","texts":"Pretty soon, you may not recognize the money in your pocket. The U.S. Mint began full-scale production of a new 1 coin yesterday, a gold-colored depiction of the Native American explorer Sacagawea that replaces the Susan B. Anthony coin. The new coin is part of a revamping of U.S. money that includes new 5 and 10 bills next year, which have the presidents' images set off-center. Twenty-dollar bills and larger denominations already have been changed. With the new 1 coin, dubbed the Golden Dollar, the Mint is banking on an ambitious marketing plan, a new design and 20 years of inflation since the Susie's introduction to help the new coin succeed. Officials and even the coin's proponents say its chances of replacing the paper dollar are virtually nil. But coin-dependent entities such as mass-transit systems, the Postal Service and the 23 billion vending industry are still hoping the Sacagawea dollar will provide a boon. We're coming to a time when the dollar coin will probably be more useful than people would like to admit, said Rep. Michael Castle R., Del., who wrote the 1997 law paving the way for the new coins. Because the cost of things is higher, there are more items you simply have to spend a dollar on, so this is a good solution. The new coins are about the size of Susan B. Anthony dollars, will be in circulation by early 2000, and are made of an alloy of manganese, brass and copper.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983473","date":"1999-11-19","texts":"Federal Reserve officials have grown increasingly unhappy with the impact on financial markets of their new effort to inform the public whenever they change their view about the likelihood of near-term changes in interest rates, according to the minutes of an Oct. 5 policymaking session released today. At that meeting, members of the policymaking group, the Federal Open Market Committee, took no action on rates but adopted a directive that was biased toward higher rates. That decision sparked a discussion about what has happened since the FOMC agreed at the end of last year to begin announcing such moves immediately. In the past, the adoption of a biased directive was disclosed only when the minutes of a meeting were released six to eight weeks later, so market participants usually paid relatively little attention to it. This May was the first time the FOMC adopted a bias toward raising rates and announced it right away. Financial market participants reacted to the announcement, to the dismay of many of the committee members, virtually as if rates had been increased. At the next meeting, at the end of June, the target for overnight rates was raised and the committee went back to a neutral directive-- not because another rate increase wasn't likely but because the members feared that that if they said that they were still leaning toward higher rates, the market would overreact again. At the Oct. 5 meeting, FOMC members observed that the recent practice of making such announcements had led to some misinterpretations of the committee's intentions and seemed to have added to volatility in financial markets, the minutes said.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983367","date":"1999-11-21","texts":"It's no coincidence that check-cashing businesses locate in poor and working-class neighborhoods. These operations, which usually move in as commercial banks move out, can be found in pawn shops, liquor stores or their own storefronts. But no matter where they are found, check-cashing businesses have two things in common They are unregulated by the state, and they fleece the poor. For a substantial fee, these enterprises will cash a paycheck, sell a money order or facilitate the payment of utility or other bills. However, their real pay dirt comes with the payday loan. The payday loan, already banned in New Jersey and New York, is a process by which people can borrow against their next paycheck at interest rates nearly 20 times the state's 33 percent interest rate cap. For example, a person who wants to borrow 300 on his next paycheck writes a postdated check for 379. The check casher holds the check until the borrower's next payday. For another 79 fee, the loan can be rolled over for two more weeks. Calculated on an annual basis, the 79 comes to an interest rate of 600 percent. Legislation will be introduced during the next Maryland legislative session to impose state regulation on the check-cashing industry. Another bill will be introduced to prohibit payday loans. Of course, the industry claims these cash advances are not loans at all but deferred deposits. But several states, including Virginia, have won court cases that found that deferred deposits were indeed loans and that the interest charged was in excess of the interest caps mandated by those states.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615714","date":"1999-11-23","texts":"The outcome of this year's budget battle could hardly have been more disappointing. Probably 95 of what Clinton wanted, he got, lamented Sen. Arlen Specter of Pennsylvania. Mr. Specter's fellow Republicans then added billions more for themselves. Result a pork-filled budget of 1.75 trillion, bigger than the entire economy of France. But here's some surprising news The federal government is getting smaller, at least relative to the size of the economy as a whole. This year, for the first time in more than 25 years, federal spending slipped below 20 of gross domestic product. As the chart nearby shows, this percentage has been shrinking throughout the 1990s it is projected at 19.3 next year. That's still too big, but it's down from 24 just 15 years ago. True, much of this progress is a result of post-Cold War defense cutbacks, but even domestic spending is receding relative to private-sector output. This benign fiscal state of affairs seems incomprehensible, given a Congress that has proved itself incapable of cutting nearly any federal agency budgets and a president who has stopped paying even lip service to small government. But America's miracle economy, helped along by Ronald Reagan and Jack Kemp's supply-side tax policies, is outgrowing the budget. The federal budget has grown by 132 in 1982, but the GDP has increased by 176. And Americans' financial wealth has grown to 32 trillion from 7 trillion, four times as fast as federal expenditures. The trend has been quite different for most of the 20th century. Federal spending as a share of GDP rose to 24 in 1982 from 4 in 1932. Who gets credit for turning things around First, Mr. Reagan, who won the Cold War, chopped punitive tax rates roughly in half and made the case that big government was the problem, not the solution. Second, Paul Volcker and his successor, Alan Greenspan, who ended double-digit inflation and returned America to price stability. Third, Bill Gates, Andy Grove, Steve Jobs, Steve Case and all the other high-tech entrepreneurs who made possible today's booming information economy. All this progress has happened without any serious effort to cut federal spending. If the next president adopts the right small-government policies, he could shrink federal spending to 15 or even 10 of GDP. To get there will require a combination of modest fiscal disciplinary measures to slow federal spending and a prosperity agenda aimed at coaxing economic growth up to 4 or 5 a year. The policy prescriptions necessary include personalized accounts for Social Security, a flat 20 alternative maximum tax with unlimited IRAs, medical savings accounts for health care, unilateral free trade, the abolition of corporate welfare and an ironclad commitment to keep the Internet tax- and regulation-free.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984050","date":"1999-11-23","texts":"On a packed square where Bulgarians celebrated the end of their Stalinist government a decade ago, President Clinton praised this Eastern European nation today for turning its eyes and ambitions to the West. He promised more help from the United States if Bulgaria continues its movement toward democracy and a reliable economic system. As several thousand people cheered and waved flags in the broad square before the Nevski Cathedral, with a full moon just starting to rise, Clinton hailed Bulgaria for throwing off communism and holding fair elections, even as he acknowledged the path has been bumpy. Communist rulers . . . fed you lies, yet you sought the truth, he said. When the Cold War ended, it took much longer for the ground here to thaw. Bulgaria, like Romania, has found it difficult to evolve from life as a Soviet satellite, suffering crippling inflation and unstable governments until 1997, when Petar Stoyanov was elected president and the economy began to find its feet. Clinton spent a busy day here not only to encourage that transition but also to draw a distinction between Bulgaria and its neighbor, Yugoslavia. While many Bulgarians disapproved of the U.S.-led bombing of Yugoslavia during the Kosovo conflict, Stoyanov's government did not openly condemn the NATO campaign. Clinton, the first U.S. president to visit this country, returned the favor today. Standing next to Stoyanov, he told the crowd, you stood with NATO when the Yugoslav president, Slobodan Milosevic, threatened the promise of an undivided, democratic Europe.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614143","date":"1999-11-24","texts":"Investors pulled back ahead of the Thanksgiving holiday, selling highflying technology names and other stocks in order to take profits. The hot, tech-driven Nasdaq Composite Index broke its recent streak of records, falling 49.69 points, or 1.46, to 3342.87. Amid continuing fears of inflation and rising interest rates, the Dow Jones Industrial Average fell 93.89, or 0.85, to 10995.63, slipping below the 11000 level. The blue chips still are up almost 20 for 1999, and the Nasdaq composite is up more than 52. The declines hit almost every stock group except airline stocks, which benefited from plans for a fare increase. Bonds and the dollar were mixed. It was just a breather in technology after a remarkable string of new highs, noted Robert Harrington, co-head of listed block trading at PaineWebber. But the way some of the interest-rate sensitive indexes have been acting has given some people cause for concern, he said, adding, You're heading into the last month of the year and performance has been fantastic. It could be sideways to down for a while here. Interest-rate worries were reflected in bank stocks, which fell for a fifth straight trading day, and in the Dow Jones Utility Average, which now is down more than 15 from its June record.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982093","date":"1999-11-25","texts":"The U.S. economy grew at a hefty 5.5 percent annual rate in the July-September period, a remarkably rapid pace for an economic expansion only a few months shy of its ninth birthday, the Commerce Department reported yesterday. The U.S. economy remains in overdrive, said Bruce Steinberg, chief economist at Merrill Lynch & Co. in New York. We expect the fourth-quarter gross domestic product to rise at about a 5 percent rate and then to moderate slightly to a 3.5 percent to 4 percent rate during 2000. Last month, Commerce had estimated third-quarter economic growth at a somewhat slower but still strong 4.8 percent annual rate. It revised that estimate upward yesterday on the basis of more complete information about economic developments during the period. Even with such rapid growth and an unemployment rate just above 4 percent, inflation remained extremely low during the summer. Prices paid by consumers, businesses and governments for their purchases--regardless of whether the goods and services were produced in the United States or imported--rose at a 1.7 percent rate in the third quarter. Excluding the volatile prices of food and energy items, the increase was at only a 1.2 percent rate.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983782","date":"1999-11-27","texts":"The Nasdaq Stock Market sprinted to another record today as investors gave Internet retailers a boost at the traditional start of the holiday shopping season. But stocks overall delivered a mixed performance in light post-Thanksgiving trading. Broader stock indicators were mixed. The Nasdaq composite index rose 27.31, to 3447.81, its 16th record close in four weeks. The Standard & Poor's 500-stock index dropped 0.46, to 1416.62. For the week, the Nasdaq rose 78.56 points, and is up 57 percent so far this year. The Dow dropped 14.98 for the week while the S&P 500 slipped 5.38. A tremendous pocket of strength in technology is pulling up the Nasdaq, said Richard McCabe, chief market analyst at Merrill Lynch. But he cautioned that, overall, declining stocks are outpacing advancing ones, which should raise a yellow flag of caution for investors. Stock gains were held back by inflationary concerns spurred by a Commerce Department report today that Americans' personal income in October rose 1.3 percent, its biggest jump in more than five years, and had increased more than twice as fast as spending.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984255","date":"1999-11-28","texts":"Editor's note Going public--that is, selling a company's shares to public investors for the first time--is the dream of many an entrepreneur and of the people who go to work for many of today's start-up companies. Mike Mills left his reporting job at The Washington Post in April to join one such firm as the company's vice president of business development. This is his story of participating in the company's venture into the public stock market. Our company's chief executive is about to break one of the cardinal rules of an IPO roadshow Never attempt a live demonstration of your product. We've implored him not to do this. Should the product, for some reason, fail to perform, the presentation is finished. To drive that point home, our chief financial officer nervously recounts a legendary anecdote from his former employer The guy says, 'See our new Styrofoam cup It's lighter but stronger Let's pour water into it.' Then, whoosh The bottom of the cup mysteriously gives out. Show over. But the cautionary tale doesn't sway David Oros, president and chief executive of Aether Systems Inc. Rather, it merely strengthens his resolve. So there I stand, along the wall in an auditorium at Merrill Lynch & Co.'s Wall Street headquarters, wondering whether my boss's determination will pay off or do us in. Though our actual roadshow won't begin until tomorrow, we were reminded beforehand that this meeting--to the entire equity sales staff at Merrill Lynch, our lead investment bank--is every bit as important as our direct pitch to investors. If the demo crashes, these sales agents will hardly be enthused to get on the phone and push Aether's first publicly traded shares out the door.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616286","date":"1999-11-29","texts":"The furthest thought from Zachary Skolnik's mind is retirement. Any money he makes in the stock market or at work, he's aiming to spend. The San Franciscan has 4,000 in an Internet stock, Excite At Home Corp., and fancies himself a bit of a day trader and entrepreneur. He buys and sells shares through the Datek Online service, and when he isn't writing programs for a financial Web site for 7.50 an hour, he's building computers from scratch, mostly from scrap parts he buys online. Someday, he hopes to run his own software company -- someday after 2002, when he graduates from high school. Mr. Skolnik is only 15 years old. Hopefully, I can make some extra money and have more to spend, he says of his investments and part-time job. There's also the fact that I'm learning a lot of important things for later on in life. Say hello to the Millennial Generation.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982363","date":"1999-11-29","texts":"The worse it got, the better the economy worked for most companies and consumers in the Washington region -- and most Americans, for that matter. Cheap goods from Asia helped restrain inflation, boosting U.S. consumers' buying power. The Federal Reserve nudged interest rates down to head off a wider crisis, making housing, business expansion and consumer credit purchases more affordable. The Asian crisis was terrific for the American economy, except for manufacturing. Ironically, the recovery there will have the opposite effect, said Anirban Basu, director of applied economics at Towson University's RESI, a regional economic research institute. Exporters in Virginia and Maryland whose sales to the Pacific Rim were battered by the crisis are due for better results this year and next. We expect exports from Virginia will improve next year, said Ann Battle, an economist with Chmura Economics and Analytics in Richmond. Some of that should be evident already.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613716","date":"1999-11-30","texts":"Sales of existing homes fell sharply in October as rising interest rates continued to take a toll on consumers. Nevertheless, sales remain brisk by historical standards and are on track to set a record this year. In October, sales declined 6.6, according to the National Association of Realtors, to a seasonally adjusted annual rate of 4.79 million units. That was down from September's 5.13 million rate and was 3 below the 4.94 million level set in October 1998. An increase in mortgage rates is translating into a slowdown in home sales -- exactly what the Fed wanted when it raised interest rates three times this year, said Kory Bockman, an economist with the NAR in Washington. Still, home sales are likely to top 5.20 million units this year, besting last year's 4.97 million mark and the fourth consecutive record year. It's still a good time to be a Realtor, said Mr. Bockman.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983214","date":"1999-11-30","texts":"The splendid Benaroya symphony hall, built with donations from Seattle's prosperous global firms, was crammed over the weekend with an impressively global assortment of globalization's critics. Along the sleek slate-and-steel hallway, activists from five continents clustered by the latte bars African campaigners for debt relief, Brazilian defenders of rain forests, Indians opposed to neocolonial investment, European haters of beef hormones, Canadians concerned about everything. Inside the auditorium, a marathon teach-in was underway, convened to denounce the World Trade Organization as one of the world's most powerful, secretive, undemocratic and dangerous bodies. And yet this festival of activism suggested a rather different notion. Perhaps the activists themselves are the real stealth world government Last time trade liberalizing talks were launched, in Uruguay in 1986, 12 nongovernmental organizations registered to observe the process. But the reach and clout of NGOs have since expanded marvelously, courtesy of the Internet. NGOs set the agenda for the Earth Summit in Rio in 1992, and lobbied governments to attend they publicized the Chiapas rebellion in Mexico in 1994, so preventing the Mexican government from suppressing it violently. Three years ago Jessica Mathews, now head of the Carnegie Endowment for International Peace, suggested that centuries of governmental dominance might finally be ending. If that was plausible three years ago, it now seems even more compelling. In 1997 a loose alliance of 350 NGOs from 23 countries set out to ban land mines they soon persuaded 122 nations to sign on to a treaty. In 1998 another NGO alliance, this time reckoned to number 600 groups in nearly 70 countries, sank a painstakingly negotiated treaty on multilateral investment. This year yet another coalition, known as Jubilee 2000, led an international lobbying effort for Third World debt relief. During the recent budget fight, Jubilee pressure had much to do with the congressional Republicans' last-minute assent to provide money for debt cancellation. Fresh from those victories, the NGO community has descended on Seattle to take on the international trading system. Many of the lead players from previous NGO victories are there they greet each other in hallways with the camaraderie of veterans. Their rhetoric paints the World Trade Organization as a proto-government possessed of frightening power, but their own clout is just as striking. The WTO has a budget of just 80 million a year and a staff of fewer than 500. NGO coalitions wield more money and have thousands of expert delegates in Seattle.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617125","date":"1999-12-02","texts":"Informix Corp. and Sybase Inc., two longtime makers of database software, announced acquisitions to help boost growth. Informix said it agreed to acquire Ardent Software Inc., a developer of data-warehousing technology, for 772.5 million in stock. Sybase agreed to buy an Internet financial-services company called Home Financial Network Inc. for 143.3 million in cash and stock. Both software companies have been diversifying beyond databases, a market led by rival Oracle Corp. In buying Ardent, of Westboro, Mass., Informix gets a larger position in data warehouses, a comprehensive form of database that can combine information from many sources in a company. James Pickrel, senior analyst at Hambrecht & Quist LLC in San Francisco, said some Informix customers already have been using Ardent software to combine data from older computer systems and Web sites dedicated to electronic commerce. Now they can go to one source for that technology, he said. Jean-Yves Dexmier, Informix's chief executive officer, said we are going to grow revenue faster as a result of the acquisition. Under terms of the agreement, Informix will offer 80 million shares, or 3.5 shares of Informix common stock for each outstanding Ardent share, and assume all outstanding Ardent options. At the close of Nasdaq Stock Market trading at 4 p.m., Informix shares fell 1.3438 to 9.6556, while Ardent shares jumped 5.50 to 31.75.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984869","date":"1999-12-04","texts":"The nation's 4.1 percent unemployment rate, the lowest in nearly three decades, was unchanged last month as hefty productivity gains allowed strong economic growth to continue without adding to inflation, the Labor Department reported yesterday. Employers added 234,000 payroll jobs, mostly in the services sector and construction, while average hourly earnings rose only 0.1 percent. The evidence of strong growth based on productivity gains and no hint of inflationary pressure from wages triggered rallies in both the stock and bond markets. The Dow Jones industrial average rose 247.12 points yesterday to close at 11,286.18, and in a less exuberant rally the price of a 30-year U.S. Treasury bond rose 8.12 12 per 1,000 in face value. Analysts said the markets were happy because the lack of any hint of inflation flowing from the low unemployment rate suggested that the Federal Reserve will be less likely to raise short-term interest rates in coming months. The report was greeted with great fanfare at the White House because November's rise in payroll jobs pushed total job creation since President Clinton took office in January 1993 past the 20 million mark. In his nearly seven years in office, payroll employment has increased by nearly 3 million a year to 129.5 million and the jobless rate has dropped from 7.3 percent to 4.1 percent.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613571","date":"1999-12-06","texts":"NEW YORK -- Small-capitalization stocks rose solidly Friday, although the group's gains were considerably more contained than those of the broad market and blue-chip stocks. The overall Nasdaq Stock Market was up sharply, posting steeper gains than most of the other major stock-market indexes, the biggest exception being the Dow Jones Industrial Average. The Nasdaq Composite Index closed at a record level for the second straight session. The Russell 2000 index of small-capitalization stocks rose 4.14, or 0.90, to 464.58, and the Nasdaq composite climbed 67.85, or 1.97, to 3520.63. Meanwhile, the Dow industrials surged 247.12, or 2.24, to 11286.18. Stocks pushed higher at the opening following the release of the November employment report, which showed that employers eased the pace of hiring. The benign jobs data have led many analysts and investors to presume that the Federal Reserve won't see a need to raise interest rates for the next several months. The small-cap and Nasdaq markets were driven higher by the strength of technology stocks, with software and Internet issues setting the pace.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982582","date":"1999-12-07","texts":"AT&T tells the world that it's a broadband communications company ready to serve your every need, be it a wireless phone, long- distance service, an Internet connection or cable TV. In reality, though, what AT&T has really become is a marketing company. And what it's marketing most successfully lately is its stock. AT&T's full-bore stock-promotion campaign explains why the company announced yesterday that it's creating a separate tracking stock, to be called AT&T Wireless Group, that will be tied to--duh--AT&T's wireless business. News of AT&T's plans, reported in the Nov. 22 Wall Street Journal but not confirmed by the company until yesterday, sent AT&T stock up almost 25 percent in just four trading days. On the fifth day, the stock ran up some more, but that was because of a buy recommendation issued by an influential telecommunications analyst, Jack Grubman of Salomon Smith Barney, who had been bearish on AT&T for years. Why in the world would a tracking stock that changes absolutely nothing about AT&T's basic business add 35 billion to its stock- market value in just four days As we used to say at Forbes magazine, it's the principle of When the ducks quack, feed them. Or, as marketers say, give the customers what they want. Wall Street loves wireless companies and it also loves tracking stocks, which are securities tied to a particular business within a company. A wireless tracker Such a deal. AT&T biggies have been grumbling for months, because the company's stock had been trading in the 40s even though Wall Street analysts valued AT&T's assets at 60 to 70 a share. So AT&T is scattering duck food, trying to put its stock on the fast quack. The fact that companies cater to Wall Street's ever-changing whims isn't exactly news. But AT&T's providential rise from 46.56 14 on Nov. 19 the last market day before the Journal story to 57.43 34 on Nov. 26 came at a very convenient time. For starters, through Nov. 19, AT&T had way underperformed arch competitor MCI WorldCom. AT&T's stock had fallen 8 percent for the year, while WorldCom's had risen 26 percent. The surge closed most of the gap. For companies like AT&T and WorldCom, stock price is more than just a way to keep score.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613708","date":"1999-12-08","texts":"DETROIT -- For the first time in years, the U.S. auto industry is starting to pay attention to the price of gasoline. Although inflation-adjusted prices at the pump remain near historic lows, a 31 jump this year, to an average 1.35 a gallon in November, sounded a warning bell for the auto industry that buyers could put fresh emphasis on fuel efficiency. That isn't likely to threaten what's expected to be a record-breaking year of auto sales in the U.S. in 1999, but it could ease demand for sport-utility vehicles, which are among the least fuel-efficient vehicles. Sport-utility vehicles have nearly doubled their share of U.S. sales, to 18 this year from just under 10 in 1994, according to Ward's Automotive Reports, an industry newsletter. More important for auto makers, profits from SUVs are huge, while small cars remain loss leaders. The big question for the industry is whether gasoline prices will rise high enough -- and stay there long enough -- to spook many buyers into shifting to more fuel-efficient vehicles. In the long term, the industry could respond to such demand with a raft of technologies that it is developing, from advanced internal-combustion engines to hybrid power plants that use electric power to cut fuel consumption. In the short term, however, renewed consumer consciousness about fuel efficiency could slow sales of SUVs. James Holden, president of DaimlerChrysler AG's U.S. arm, which depends for much of its profits on sales of SUVs such as the Dodge Durango, says he expects average U.S. gasoline prices to rise to about 1.50 a gallon and stay there for a couple months. If prices rise much higher than that and stay there long, they would cause some shift in consumer demand to smaller trucks, he figures. But he doesn't see gasoline prices rising to a point where consumers would trade trucks for small cars. It's not going to get people to sell the Durango and the boat they tow, he says.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616227","date":"1999-12-14","texts":"American Airlines parent AMR Corp. is expected to unveil plans for a 6.2 billion spinoff of its Sabre Holdings Corp. today and announce the hiring of a telecommunications executive to head the newly independent computer-services company, people familiar with the moves said. The spinoff, long sought by Wall Street, will split AMR in half and free Sabre to wheel and deal in the rapidly changing world of technology outsourcing and Internet-based travel sales. What is more, analysts and AMR executives have argued that neither the full value of American Airlines, the nation's second-largest airline, nor Sabre was reflected in the share price of AMR. When people do the math, it's clear the market has not fully valued the airline, one person familiar with the transaction said. AMR has taken Sabre as far as it can, and it has realized as much value for AMR shareholders as it knows how to do. About 17 of Sabre is publicly traded. AMR plans to spin off its 83 stake to AMR shareholders in March, subject to Internal Revenue Service approval as a tax-free transaction. AMR applied for IRS approval in the fall. AMR shareholders will receive 0.7 share of Sabre stock, valued at about 36 at yesterday's closing price, for each AMR share owned, people involved said. Sabre shareholders, including AMR, will receive a one-time dividend of about 5.50 a share, or a total of 675 million, prior to the spinoff. People involved said the payment is intended to repay AMR for the cash balance built at Sabre during AMR's ownership. AMR, which has worked to ward off possible debt-rating downgrades as it sheds more than half of its market value, will use the cash to bolster its balance sheet. Sabre, on the other hand, will borrow about 350 million for the dividend, damping earnings next year, because of increased interest expense on top of about 10 million transaction fees for the spinoff, people familiar with the terms said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617292","date":"1999-12-15","texts":"NEW YORK -- Bonds suffered their worst one-day plunge in more than four months as newly released data sparked concerns that the economy's continued head-turning growth will cause the Federal Reserve to raise interest rates at least once next year to keep inflation under wraps. In late trading, the bellwether 30-year Treasury fell 1 1132, or 13.438 for a bond with 1,000 face value, to 97 1732. The bond's yield, which moves in the opposite direction of its price, rose to 6.295. It was the benchmark bond's worst one-day performance since Aug. 6. Shorter-term securities also dropped. Two-year notes, for example, fell 632 to yield 6.045. Volume was 49.4 billion, higher than the average of the last week and last 30 days, according to GovPX Inc., which tracks trading volume at five of the six interdealer brokers. Investors were spooked by a stronger-than-expected retail-sales report for November. The Commerce Department said retail sales jumped 0.9, above the 0.5 increase economists expected. Excluding autos, however, sales were up 0.4, in line with forecasts. In addition, October sales were revised to show an overall increase of 0.3 from an unchanged reading in the initial report. As a result, what looked like slight slowing in consumer spending, and a possible precursor to a slowing economy, instead showed the economy may be overheating.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982339","date":"1999-12-15","texts":"After two months of weak gains, a rebound in automobile purchases helped retail sales to a strong 0.9 percent increase last month as the Christmas selling season got going, the Commerce Department reported yesterday. Sales were also strong at building supply and furniture stores, and those selling general merchandise and apparel. In a separate report, the Labor Department said consumer prices rose 0.1 percent last month while the core portion of the consumer price index, which excludes volatile food and energy prices, increased 0.2 percent. Over the past 12 months, the core CPI rose 2.1 percent and the overall index was up 2.6 percent. The difference was due primarily to a 10.5 percent year-over-year increase in energy costs, which constitute about 7 percent of the CPI. In a third economic report released yesterday, Commerce said the United States had a record 89.9 billion deficit in its international transactions in the third quarter.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616678","date":"1999-12-17","texts":"SPARTANBURG, S.C. -- Ask John McCain's campaign whom the presidential candidate consults for economic advice, and the first answer is, we'll get back to you. The second answer is Kevin Hassett, co-author of Dow 36,000, a super-bullish stock-market tome. But maybe the real answer is no one, since Mr. McCain recently fretted, during a GOP debate, that today's 11,000-point Dow is a stock-market bubble. Texas Gov. George W. Bush has platoons of economists who spent nine months assembling his tax cut. Sen. McCain has -- the top of his own head, which in a sense sums up the entire McCain candidacy. The medium is his message, and the medium is the man himself. This explains both his recent surge and his vulnerability as he tries to steal the GOP nomination from Mr. Bush. His war record and blunt political style are perfect for a year when prosperity and Bill Clinton have made character count more than issues. Just as Democrats turned to Jimmy Carter as the purest anti-Nixon after Watergate, many Republicans view Mr. McCain as the ideal anti-Clinton. Rightly offended by media adoration of Mr. McCain over campaign finance, some conservatives have missed this part of his grass-roots appeal. But the reality is as clear as Christmas in this key primary state, perhaps the most anti-Clinton in the country.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982048","date":"1999-12-21","texts":"Federal Reserve Chairman Alan Greenspan's term doesn't expire for another six months, but that hasn't stopped presidential candidates from offering President Clinton advice on reappointing him to a fourth four-year term as head of the central bank. Their comments have ranged from replacing Greenspan because he's doing a lousy job Steve Forbes and thinking others could do just as well Bill Bradley, to enthusiastic endorsement for his outstanding A-plus-plus performance Al Gore and extremely enthusiastic endorsement John McCain. During a Republican debate earlier this month, the Arizona senator said, If Mr. Greenspan should happen to die--God forbid--I would do like they did in the movie 'Weekend at Bernie's.'  Referring to a comedy in which two men take over a dead man's beach house, he said I'd prop him up and put a pair of dark glasses on him and keep him as long as I could. And President Clinton When asked about Greenspan's future at a news conference in July, he said I have, as you know, enjoyed a very good relationship, both personally and professionally, with Mr. Greenspan. I think he has done a terrific job. I have no idea whether he would even be willing to serve another term. He added that he expected to decide in a timely fashion. That, it turns out, is just what he is doing.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982640","date":"1999-12-21","texts":"Stocks closed mostly lower today as bond yields soared to the highest level in more than two years on fear that the Federal Reserve will suggest Tuesday that interest-rate increases may be needed in the future to cool the nation's economic growth. The Dow Jones industrial average fell 113.16, to close at 11,144.27. At one point, the Dow had been up more than 50 points and was closing in on an all-time high. Broader stock indicators were mixed. The Nasdaq composite index lost some of its early momentum but still finished with a gain of 30.81, closing at 3783.87, its 55th record high close of 1999. Stocks gave up early gains as the bond market faltered in midafternoon. The price of the Treasury's benchmark 30-year bond fell 7.81 per 1,000 invested, and its yield rose to 6.44 percent from 6.37 percent late Friday. The last time bonds closed with a higher yield was Sept. 15, 1997. The decline in bond prices was caused by worries about the Federal Reserve's last policymaking meeting of the year, set for Tuesday. Most analysts expect central bankers to leave short-term interest rates unchanged, but many are wary of a change to a tightening bias, which would mean the Fed is inclined to raise rates on any future signs of inflation.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613603","date":"1999-12-22","texts":"NEW YORK -- Options traders focused on adjusting their positions, finding ways to make money even as they waited for a critical decision on interest rates. The central bank's policy-making panel ended its final meeting of 1999 yesterday without an interest-rate increase, but it surprised market watchers by maintaining a neutral monetary-policy stance. The options market's fear gauge, the Chicago Board Options Exchange's Market Volatility Index, or VIX, fell 1.22 to 23.44, after it had climbed past 25.80 early in the session. Market watchers expect volatility to continue to ease heading into the holidays, but not for long. Volatility could relax a little, but with the next earnings season just around the corner, the anxiety will return to the market, said Paul Foster, 1010WallStreet.com's options strategist. Even before Bank One Corp. announced the retirement of Chairman and Chief Executive John B. McCoy, traders who managed to catch wind of the news began buying the bank's call options.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614494","date":"1999-12-22","texts":"WASHINGTON AP -- The government recorded a budget deficit of 27.6 billion last month, much bigger than the 16.9 billion deficit posted for November 1998. The Treasury Department said that last month's revenue totaled 121.4 billion while expenditures came to 149 billion. Slipping tax collections for the month accounted for most of the difference between the November 1999 and November 1998 budget totals. For the first two months of fiscal year 2000, which began Oct. 1, the government is running a deficit of 54 billion. A budget surplus still is expected for all of 2000, however. The Clinton administration is predicting a 142.5 billion surplus for fiscal 2000 and 168.2 billion in 2001. For all of fiscal year 1999, which ended Sept. 30, the government reported a record surplus of 123.6 billion. ---","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982551","date":"1999-12-25","texts":"Low unemployment, low interest rates, a soaring stock market, virtually no inflation and high consumer confidence in the economy drove buyers to new-vehicle showrooms in record numbers in 1999, according to auto industry analysts and executives. But the really good news for automakers and their dealers was that a solid 48 percent of those buyers chose light trucks--pickups, vans, minivans and sport-utility vehicles. Trucks generally bring in more money than cars. For example, look at Ford's third-quarter 1999 performance. According to industry analysts, Ford had an average pretax profit of 953 on each vehicle that it sold in the United States in the third quarter. The automaker broke even on cars, generally losing money on smaller models such as the compact Contour sedan, while making up the losses on sales of large and luxury cars. But Ford earned an average of 2,540 on every pickup, sport- utility vehicle, van and minivan it delivered to consumers, analysts said. At the beginning of the year, if anyone had told me that we'd be looking at this kind of number, I would not have believed them, said Jim O'Connor, president of the Ford Division of Ford Motor Co. I don't think many people would've believed them.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983233","date":"2000-01-04","texts":"Visions of doomsday comfortably behind them, investors continued pouring money into high-tech stocks today, pushing the Nasdaq composite index to yet another record. But while euphoria buoyed tech stocks on the first trading day of the year 2000, bond prices fell to their lowest levels since May amid rampant expectations that the Federal Reserve would raise rates to slow the economy, now that the Y2K bug is quashed. Those fears also pounded financial stocks, dragging down the Dow Jones industrial average and the Standard & Poor's 500-stock index. The Fed is increasingly frustrated by the tightening of labor markets, and I would not be surprised if they raised rates once or twice this year, said Eugene Ludwig, former comptroller of the currency and managing general partner of District-based Cornerstone Financial Partners. That expectation was stoked by the release of a National Association of Purchasing Managers' index of factory activity showing evidence of continued economic strength. The index registered 55.5 in December, indicating that U.S. manufacturing expanded for an 11th straight month. On Friday, an employment report will show how strong wages have been and suggest whether the tight labor market is creating inflation pressures. Higher interest rates would hurt profits at financial companies and the return on outstanding long-term bonds.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616359","date":"2000-01-06","texts":"FRANKFURT -- European Central Bank President Wim Duisenberg said an expected increase in euro-area inflation isn't cause for immediate concern, but he warned against excessive union wage demands based on that rise. At the ECB's monthly news conference, Mr. Duisenberg repeated the euro has strong upward potential based on improving prospects for euro-zone economic growth and said he was pleased the currency has recently moved away from near parity with the dollar. Late in European trading, the common currency of the 11-nation euro zone was at 1.0332, strengthening from 1.0302 the previous day. In late New York trading, the euro rose to 1.0317 from 1.0313 Tuesday. The ECB, as expected, left its refinancing rate unchanged at 3, where it has been since a half-percentage point rise in November. In addition to the good prospects for euro-zone growth, Mr. Duisenberg noted generous liquidity in the market and expected upward pressures on consumer prices. Although such comments could be seen as paving the way for an eventual interest-rate rise, Mr. Duisenberg stopped well short of sounding an inflation alarm. Rather, he said consumer-price increases the ECB sees for early 2000 should not give undue cause for concern. Euro-zone government bonds rose on Mr. Duisenberg's remarks, which markets took as lessening the chances of a nearterm rate rise. However, European stocks generally ended lower as markets focused on the possibility rates will soon rise in the U.S.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614998","date":"2000-01-07","texts":"Toys R Us Inc. said it expects to report full-year earnings well below earlier expectations, reflecting weaker-than-expected holiday sales. The retailer's shares dropped 11 on the news. The forecast for the company's fiscal year ending Jan. 29 was the latest setback in an attempted turnaround, and came after a favorable third quarter. Much of the retail world is celebrating big holiday sales, driven by a strong economy and a surging stock market. Toys R Us told analysts it was comfortable with a reduced earnings-per-share estimate of about 1.10 a share for the year, down from about 1.40. The company said it expects to post an operating loss of 20 cents a share to 25 cents a share in its Internet business for the year, also wider than earlier expectations. Toys R Us's retail Web site had trouble handling volume over the holidays, and to placate customers, it offered discounts and free shipping. Those moves contributed to the operating loss, said Louis Lipschitz, chief financial officer. For the crucial nine-week holiday season ended Jan. 1, sales in U.S. stores open at least a year fell 2 compared with the year-earlier period. Analysts had been expecting same-store sales to rise to the mid single-digit range. In November, Wall Street had been buoyed by the retailer's robust third quarter when comparable-store sales were up 13 in the U.S.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984946","date":"2000-01-08","texts":"Mortgage rates started off 2000 by hitting their highest levels since August amid fears that the Federal Reserve will raise interest rates next month. The average interest rate on 30-year fixed-rate mortgages climbed to 8.15 percent for the week ending Jan. 7, up from 8.06 percent last week, according to a weekly survey released Thursday by Freddie Mac. Before late August, the last time mortgage rates were this high was April 18, 1997, when they reached 8.16 percent. Fifteen-year mortgages, a popular option for refinancing, also were up this week with an average rate of 7.73 percent this week, up from the average rate of 7.66 percent last week. On one-year adjustable-rate mortgages, lenders were asking an average initial rate of 6.60 percent this week, up from 6.56 percent the previous week.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842616209","date":"2000-01-12","texts":"The success or failure of Ecuadorean President Jamil Mahuad's push to dollarize his country's economy depends less on the technical details than on his ability to do something he has failed to do since taking office in August 1998 gain credibility. Late Monday evening, Ecuador's Central Bank approved Mr. Mahuad's proposal to replace Ecuador's troubled currency, the sucre, with the U.S. dollar. The president of Ecuador's Central Bank, Pablo Better, resigned in protest. Mr. Better was the only member of the Central Bank's board to oppose the measure. As Mr. Mahuad has struggled to deal with such multiple crises as widespread bank failures, a deep recession, foreign-debt defaults, rising inflation and unemployment, he has been dogged by criticism for acting too slowly and too late. His proposal to dollarize Ecuador's economy stands out as the boldest move he has made so far as president. The risk, say critics, is that Ecuadoreans and investors have lost so much faith in the beleaguered president that even this measure may not be enough to save his presidency. Mr. Mahuad's move puts Ecuador at the center of a growing and controversial movement in the developing world toward dollarization or so-called currency boards as pressures on weak currencies push countries to link them to stronger currencies. Some economists have expressed concern over the potential dangers of developing nations sacrificing control over monetary policy to the central banks of stronger, industrialized nations, whose economies have little in common with poor countries like Ecuador. Mr. Mahuad's proposal to dollarize is meant to end the currency crisis and silence growing calls for his resignation. Last week, the president declared a state of emergency to keep protests against his government from getting out of control. Yesterday, there were announcements of a new wave of protests by leaders of Ecuador's indigenous groups who were angered by the dollarization move. It's not such a bad idea, says Michael Henry, Latin America economist at ING Baring. But Mr. Mahuad has to build some credibility and break the cycle of low expectations that has plagued his government almost from the start. If this is enough to shock Ecuadorean politicians and get them to make the necessary changes in how the country's economy is run, then it's a good idea.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617396","date":"2000-01-14","texts":"The voice on the telephone exuded bewilderment. I've lived a fortunate life, Donald Sterling was saying. As a trial lawyer I generated a good income. I got into real estate and, thanks to inflation and this wonderful country we live in, everything I owned went up tenfold. I have a wonderful family, wonderful friends. But this basketball team of mine... Mr. Sterling didn't finish the thought because he didn't have to. Everybody knows about the Los Angeles Clippers, the basketball team he bought in 198l. The Clippers are famous for failure, a club that defies the so-called law of averages by being bad year in and year out. Other teams also do that, but not with the Clippers' obduracy. They were bad last year, when their 9-41 won-lost record was the worst in the National Basketball Association's Pacific Division, and second-worst overall. They were bad the year before, at 17-65. They've had exactly one winning season in the 17 in which Mr. Sterling has owned them, and not many more in the years before that, when he didn't. They have some good young players this season, but, as everybody knows, it takes more than good young players to win in the NBA, and their record through Wednesday was 10-24, good or bad for sixth place in their seven-team division. They've won but one playoff series in their franchise's 30-year history, in 1976, and aren't likely to add to that total this year. The Clippers have been good for a couple of things, neither of which professional-sports teams like to claim as distinctions. One is for ticket availability Even in the new Staples Center, which they and their NBA citymates, the Lakers, occupy jointly, the Clippers are averaging 6,000 empty seats a game, about the same number as they had at their former home at the old Sports Arena the Lakers generally sell out. The other is as a source of jokes. Los Angeles has everything, the comedian Arsenio Hall has remarked. If you like basketball, there's the Lakers. If you don't, there's the Clippers.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614757","date":"2000-01-17","texts":"So one week after The Deal, who are the winners and losers If the stock market is any guide, one obvious winner in the announced megamerger of America Online Inc. and Time Warner Inc. is Time Warner itself, which obtained a stunning 70 merger premium to its then-prevailing stock price. The transaction was valued at about 160 billion when announced, but the decline in AOL's stock reduced the value to a current price of 138 billion. In some respects, that was completely expected, and the one-day delay before AOL's decline -- now standing at about 18 -- was largely driven by the early euphoria over the deal. But what also took place was a massive transfer of value from AOL shareholders to Time Warner shareholders, so a decline in AOL was inevitable, points out one media investment banker. Time Warner's shares ended up 25 for the week, a very respectable showing. Though it was precedent-setting in many respects, from a financial point of view the transaction was a typical late '90s deal a fast-growing upstart with a high-multiple stock -- WorldCom Inc., Qwest Communications International Inc., Global Crossing Ltd. -- using its currency to buy a more-established company with hard assets. Thus, WorldCom acquired MCI Communications to form MCI WorldCom Inc. and is now buying Sprint Corp., Qwest is acquiring U S West Inc., and Global Crossing acquired Frontier Corp. Those deals all deflated the multiples of the buyers. Then, later in the week Charles Schwab Corp., the online brokerage behemoth that has an Internet-like multiple compared with other financials, said it would pay 2.7 billion in stock to buy blue-blooded U.S. Trust Corp. The two seemingly dissimilar announcements underscored to Wall Street that the new and old worlds combining would likely be good news for the old-world stocks -- and for more mergers. Trust banks climbed on the news.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617030","date":"2000-01-17","texts":"TORONTO -- The prospect of rising interest rates across the world's leading industrialized economies and the continued strength of the Japanese yen will be significant issues for currency markets this week. The week should begin on a quiet note as most U.S. markets close Monday for Martin Luther King Jr. Day and currency watchers expect little change for the dollar against both the yen and the euro. At the end of the week, though, finance ministers from the Group of Seven nations gather in Tokyo. Talk of coordinated action by the world's top central banks to weaken the yen has weighed on the Japanese currency since it flirted with 100 yen to 1 late December. But most analysts believe the Tokyo G-7 summit will offer little beyond the kind of joint communique issued at the September 1999 G-7 meeting in Washington, in which finance ministers groused about the strong yen and its potential effects on the Japanese and world economies, but ruled out joint intervention to weaken it. There's a lot of rhetoric about concerted G-7 intervention, particularly in Japan, said Jeff Cheah, market strategist at Standard & Poor's MMS online service in Toronto. But we haven't seen the G-7 intervene for a long time, and I don't think dollaryen has got to a level where it's considered excessive enough to warrant intervention.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616327","date":"2000-01-18","texts":"It's the mantra of investors in love with Internet stocks Yes, most dot-com companies have meager revenues and steep losses. But their levitating share prices are justified because they are blue-chip giants of tomorrow, even if it takes five or 10 years. So why do many investors who buy these stocks dump them after five or 10 days or, in the case of rapid-fire day traders, after five or 10 minutes I won't hold a 'Net stock for more than a week, says Barbara J. Simon, a big believer in the new economy who runs a stock-picking business, called Market Gems, on the Web. You don't want to get stuck in a correction. Ms. Simon, a 40-year-old former high-school teacher and graphic designer, and the 1,400 subscribers who follow her stock calls aren't the only ones playing hot potato with Internet stocks. Individual investors chatting on Internet-message boards, as well as Wall Street professionals, say they can't resist taking quick profits in tech highfliers, even though they insist they believe fervently in the companies' long-term prospects. This raises the question of what happens if the faithful lose faith. It's very paradoxical, what's going on, says Steve Galbraith, a financial-services analyst with Sanford C. Bernstein & Co. He says, So much of the current valuation is tied to out-year earnings, yet no one who's investing in these things is going to hang on to see if they make money in the out years.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981695","date":"2000-01-19","texts":"Salomon Smith Barney, the brokerage arm of Citigroup, said it would buy the investment-banking business of Schroders, one of Britain's biggest investment-banking firms. The 2.2 billion deal thrusts Salomon into the forefront of advising European corporations, as the number of transcontinental deals accelerates. And the deal doubles the size of Citigroup's relatively small United Kingdom investment banking operation. El Paso Energy agreed to buy Coastal Corp. for 16 billion in stock and assumed debt, expanding a natural-gas pipeline network that already is the biggest in the United States. Adding Coastal's pipelines to its own will help El Paso's plan to expand in electricity sales by making it easier to build power plants near major markets, Ronald Kuehn Jr., El Paso chairman, said in a statement. JDS Uniphase, the world's largest maker of fiber-optic equipment parts, agreed to buy E-Tek Dynamics for 15 billion in stock to alleviate shortages in capacity and make new products faster. San Jose-based E-Tek's main products are found in equipment that phone companies increasingly are using to boost the capacity of fiber- optic networks to handle the growth of Internet use. Mariner Post-Acute Network, the nation's second-largest operator of nursing homes, filed for Chapter 11 bankruptcy protection, blaming federal cuts in Medicare reimbursement. The Atlanta-based company, which runs more than 400 nursing homes nationwide, said the 1997 Balanced Budget Act had cut its Medicare reimbursement by 115 per nursing-home resident. Two other large long-term care chains-- Louisville-based Vencor and Albuquerque-based Sun Healthcare Group-- have filed for bankruptcy protection in the past six months. Coca-Cola said Jack Stahl will become the beverage giant's new president and chief operating officer. Atlanta-based Coca-Cola said it intended to elect Stahl, who currently leads the soft-drink maker's operations in the Americas, to his new position as second-in- command at the company's April 19 board of directors meeting.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614432","date":"2000-01-21","texts":"ROVIDENCE, R.I. -- Textron Inc. reaffirmed its confidence in meeting analysts' expectations for the recently ended fourth quarter and full year. The earnings projection was issued as a number of big industrial companies, including Textron, took a beating in the stock market yesterday. The share-price drop, however, wasn't linked to any serious problems at Textron -- an aircraft, automotive, industrial and finance company -- but a general selloff in the market of older-line industrial issues, said Brian Eisenbarth, analyst for Collins & Co. in San Francisco. At the 4 p.m. close of New York Stock Exchange trading yesterday, Textron stood at 57.875, down 5.375, or 8.5. A First CallThomson Financial survey of 11 analysts put the mean earnings estimate for Textron at 1.11 a share for the fourth quarter and 4.04 a share for the year ended Dec. 31.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614512","date":"2000-01-21","texts":"Don't count out the dinosaurs when it comes to Internet banking. 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. 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. 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. 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.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616643","date":"2000-01-21","texts":"WASHINGTON -- The U.S. trade deficit hit another record in November, swelling to 26.50 billion on a surge of imports of foreign cars and consumer goods. The deficit in goods and services, seasonally adjusted, was 940 million more than October's revised and record 25.56 billion, the Commerce Department reported. Higher oil prices helped fuel the rise, and economists also blamed some of the import surge on year-2000 stockpiling, in which many U.S. car dealers built up their inventories in the latter part of 1999. But as the trade imbalance continued to swell, there was a tiny ray of sunshine in the November numbers U.S. export performance, dismal for much of 1999, was slightly improved, rising 557 million to 82.89 billion on increased demand for telecommunications equipment, semiconductors and other products. Imports, as usual, outperformed exports, swelling to 109.39 billion from October's 107.90 billion. It was the U.S.'s worst trade performance since the Commerce Department started compiling the monthly numbers in 1992. While steadily climbing trade deficits are worrisome politically, they leave many economists sanguine. The buildup of precautionary inventories ahead of Y2K probably pulled in a few more exports during the fourth quarter, said Mark Vitner, economist with First Union Corp. in Charlotte, N.C. The continued strength in the U.S. economy, however, is the most important reason imports remain so strong.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983784","date":"2000-01-21","texts":"Blue-chip stocks fell steeply amid worries that rising interest rates will ultimately cut into corporate earnings, while signs of strong growth from leading technology companies boosted the Nasdaq further into record territory. The Dow Jones industrial average fell 138.06 to close at 11,351.30. The Dow pitched wildly during the session, rising as much as 68 points early and plunging as much as 214 at midday. The Nasdaq composite index rose 38.22, to 4189.51, extending the record high reached the day before. The Standard & Poor's 500-stock index fell 10.33, to 1445.57. Stocks rose at the opening bell after IBM, which sent a chill through the technology sector last fall when it said sales had slumped because of worries about year 2000 computer problems, easily beat Wall Street's profit forecasts. Alcoa dropped 4 58, to 73 12, as the company announced plans to restart primary aluminum production to meet growing global demand. The announcement sparked fears that aluminum prices will drop, hurting Alcoa's bottom line. A steady rise in aluminum prices last year helped Alcoa turn in the highest returns of any Dow component stock.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984449","date":"2000-01-24","texts":"Newly installed President Gustavo Noboa named some members of his cabinet today as his government began trying to restore public confidence in the political system of a country that has had six presidents since 1996. Noboa became president of this small South American country Saturday after Jamil Mahuad was ousted following week-long protests by thousands of Indians that culminated in their taking over the Congress and Supreme Court buildings on Friday. After the takeovers, a three-man junta was formed, only to fall apart when the army general on the team dissolved it, following pressure from the United States and other countries. Congress then quickly voted Vice President Noboa into the presidency, leaving him to try to calm a population that is bowed under the country's worst economic crisis in decades and is profoundly cynical about government's ability to do anything about it. In brief comments to reporters today, Noboa said his top priority was to establish a government with great transparency and honesty. Everyone should know that I will fight corruption.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613495","date":"2000-01-25","texts":"WASHINGTON -- Reaffirming its landmark 1976 campaign-finance decision, the Supreme Court ruled that states may impose limits on campaign contributions to candidates for statewide office. In a 6-3 decision, the justices said a Missouri law that capped contributions to statewide candidates at different levels, with an inflation adjustment, didn't violate free-speech rights. The law was challenged in 1998 by a small political-action group, Shrink Missouri Government PAC. The law was upheld by a U.S. district court in Missouri but overturned by the U.S. Appeals Court for the Eighth Circuit, in St. Louis. The decision was announced yesterday, as Iowans prepared to vote in their state's caucuses in the kickoff of the 2000 campaign season. The timing highlighted the growing public disgust with the huge amount of money needed to mount a campaign and the amount of influence -- and sometimes corruption -- that such contributions often bring. As a result, both advocates and critics of campaign-finance laws had been interested in whether the high court would use the Missouri case to redraw the landscape created by its 1976 decision, Buckley vs. Valeo. At that time, the justices ruled that the Constitution permitted limits on campaign contributions but not on campaign spending. The current limit on contributions by individuals in federal elections is 1,000, slightly below the upper limit of 1,075 in the Missouri case. Writing for the majority, Justice David Souter addressed the corruption issue, which was the prime justification for the Missouri law. There is little reason to doubt that sometimes large contributions will work actual corruption on our political system, and no reason to question the existence of a corresponding suspicion among voters.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984953","date":"2000-01-25","texts":"Stocks plunged today as optimism about corporate earnings gave way to jitters about rising interest rates and their impact on profit growth. The Dow Jones industrial average fell 243.54 points to close at 11,008.17, its biggest loss since Jan. 4, when it fell 359 points. The sell-off was broad-based, with 27 of 30 Dow component stocks finishing lower. General Electric, down 6 at 138 18, and Johnson & Johnson, down 6-316 at 83-1116, led the decline. Broader stock indicators also fell in a volatile session. The Nasdaq plummeted 139.32 points to close at 4096.08, its worst point drop since it fell 150 points on Jan. 5, and its fourth-biggest point decline ever. The Nasdaq had risen 67 points in early trading. The Standard & Poor's 500-stock average fell 39.45, to 1401.91, and the Russell 2000 index of smaller companies fell for the first time since Jan. 12, dropping 10.99, to 522.95. After a strong opening, stocks began to slide at midday as investors looked ahead to the next meeting of the Federal Reserve on Feb. 1-2. Many people on Wall Street now fear that an interest rate increase at that meeting will be the first of several this year as the central bank works to stave off inflation.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616823","date":"2000-01-26","texts":"WASHINGTON -- With unemployment continuing to fall and the economic boom nearing a record as the longest in U.S. history, consumers began the new year with confidence in the economy soaring to an all-time high. The Conference Board's monthly index measuring the economic outlook of U.S. households jumped three points in January, to 144.7 from 141.7 in December, and now stands at the highest level in the survey's 32-year history. The increase is the fourth straight monthly rise for the index, which has more than recovered from a slump in the summer and fall. This is an astonishingly strong report, Ian Shepherdson, chief U.S. economist for High Frequency Economics in Valhalla, N.Y., told his clients. The survey, considered a good predictor of consumer demand, offers further evidence that consumer spending is likely to remain strong into the immediate future. With jobs remaining plentiful, economists said consumers weren't fazed by recent stock-market volatility, rising mortgage rates or surging energy prices. An expanding global economy and a robust job market suggest that consumer optimism and consumer spending could rise even further, said Lynn Franco, the economist who oversees the survey of 5,000 households for the New York-based private research firm.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983776","date":"2000-01-26","texts":"We are about to rewrite history. Unless a recession begins in the next few days, this boom will soon become the longest in the American experience. In February, it will have lasted 107 months. The current record is 106 months between February 1961 and December 1969, according to the dating of business cycles by the National Bureau of Economic Research. By and large, Americans are behaving as if recessions are a relic of the past, even though everyone must realize that the boom will end someday--and might end badly. As with all records, people will celebrate and assert bragging rights. President Clinton always claims credit and will almost certainly repeat the claims in tomorrow's State of the Union. Alan Greenspan, chairman of the Federal Reserve Board, is idolized for his presumed role. The murkier truth is that the boom's causes remain obscure and, to the extent they can be identified, reflect a protracted and largely nonpolitical process. Low inflation has been the critical catalyst. In the past, rising inflation has doomed expansions through higher interest rates, increased labor costs and squeezed profits. Consumer spending, housing construction and business investment all suffered. Yet, inflation now remains tame. By various measures, it's running between 1 percent and slightly more than 2 percent a year. This is lower than in 1990 between 4 percent and 6 percent by the same measures and defies the conventional tendency of inflation to worsen as the economy heats up.  The Fed Paul Volcker, chairman of the Fed between 1979 and 1987, crushed inflationary expectations. In the 1960s and 1970s, these had become ingrained. Companies raised prices because they expected customers would pay. Workers expected pay raises to compensate for higher prices--and then some. The Fed blessed the process by creating more money. Its permissive policies rested on the prevailing--but faulty--theory that a bit of inflation aided economic growth. By 1980 inflation had reached double digits. Volcker tightened money, increased interest rates and caused a savage recession. In 1982 unemployment neared 11 percent. Though brutal, the downturn stifled wage and price increases. By 1983 inflation was 4 percent. President Reagan sanctioned Volcker's policy by muting criticism. Since then, Greenspan's Fed has pursued price stability and has raised interest rates as in 1994 to prevent inflation's upward creep. Presidents Bush and Clinton have emulated Reagan's self- restraint.  Better Management Through the 1970s, corporate managers were rarely fired. Their job tenure rivaled university professors'. In the 1980s, things changed. Managers became vulnerable to job loss for many reasons the recession foreign competition deregulation in the airline, trucking and communications industries hostile corporate takeovers the growth of new discounters Wal-Mart, Home Depot. Self- preservation made managers more ruthless. They cut costs to raise profits. Old plants were shut. Layoffs and downsizings became common. Again, the immediate consequences were often cruel and as with Volcker's recession widely deplored. But the lasting effect was less inflationary behavior.  New Technology As everyone knows, business investment in computers and communications has exploded. The presumption is that these investments enable companies to do things faster and cheaper-- they raise productivity. Firms can minimize unneeded inventories or speed the processing of customer orders. Higher productivity can be magical. If a company improves productivity 3 percent, it can raise wages 3 percent without increasing prices or sacrificing profits. And productivity has improved. In recent years, it's approached 3 percent a year, up from 1.6 percent in the 1980s.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842614131","date":"2000-01-28","texts":"NEW YORK -- The board of the National Association of Securities Dealers approved a pilot program that would extend to investors the same sort of price protection in thinly traded stocks that they have had for several years on the more heavily traded Nasdaq stocks. The program will require market makers -- who quote prices at which they trade with investors -- on the NASD's OTC Bulletin Board to execute customer limit orders before their own. A limit order is an order to buy or sell a stock within the customer's prescribed price limit. The Bulletin Board, unlike the NASD's Nasdaq Stock Market, isn't an electronic stock forum but rather a quotation system whose securities are traded manually by and through market makers. Rules giving priority to customer limit orders on Nasdaq have been in place since early 1997, after the stock market came under scrutiny for price fixing. The 12-month program, which must be approved by the Securities and Exchange Commission, is part of a continuing effort by the NASD to make more-stringent rules for the Bulletin Board, home to small and infrequently traded stocks with a reputation for being more easily manipulated than those on mainstream stock markets.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615453","date":"2000-02-02","texts":"Holman W. Jenkins Jr. Business World, Jan. 19 posed the question, What exactly is the purpose of the federal makework project known as the public audit The answer is that an audit provides reasonable assurance that the financial statements are not materially misstated. Audits make financial information more reliable by reducing the frequency and magnitude of errors and fraud. Controversy arises over how much assurance auditors should provide at a reasonable cost. Victims of fraud argue that every fraud should have been detected. Auditors argue that providing absolute assurance against fraud would make audits prohibitively expensive. Although the SEC requires public corporations to have their financial statements audited, it is a mistake to think that audits occur only by government mandate or that audits have no economic value. In 1926, prior to any government requirements, 79 of the corporations listed on the NYSE published audited financial statements. They did so because investors and creditors demanded an auditor's assurance before entrusting the corporations with their money. Today, hundreds of not-for-profit organizations and private businesses voluntarily hire auditors. Research shows that private businesses with audited financial statements pay lower interest rates on their commercial bank loans than do similar private businesses whose financial statements are not audited. Evidently, lenders value the assurance provided by an auditor's report. Thousands of CPAs employed in small accounting firms are proud to provide audit services to their clients. Unfortunately, many in the Big 5 appear to share Mr. Jenkins's view that audits are unnecessary compliance exercises. The large firms seem ashamed of their accounting heritage and now call themselves professional service organizations. The problem is not that audits have no value. The problem is that too many large firm partners are more concerned about making money than with upholding professional standards. Paul M. Clikeman, Ph.D., CPA Assistant Professor of Accounting","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985317","date":"2000-02-03","texts":"Stocks struggled to a mixed finish after the Federal Reserve's widely expected interest-rate increase did little to calm turbulent U.S. financial markets. The Dow Jones industrial average fell 37.85 to close at 11,003.20. The blue-chip index rose as much as 60 points in the moments before the Fed released its decision, then bobbed between positive and negative territory for much of the rest of the session. The Standard & Poor's 500 slipped 0.16, to 1409.12, and the Nasdaq composite index rose 21.98, to 4073.96. Stocks gave up early gains after the Fed said it was raising its target for the federal funds rate--the interest banks charge one another on overnight loans--to 5.75 percent from 5.50 percent. Several commercial banks quickly announced that they, too, would boost borrowing costs. Higher rates can cut into corporate profits by making it more difficult for companies to borrow money to finance growth.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982761","date":"2000-02-06","texts":"The mortgage broker called out of the blue a year ago, but Jaquetta Patrick liked what he was selling. The 62-year-old retired secretary for the D.C. school system, who is legally blind, recalls that he said he could get her a much better deal than the 56,000, 15-year, 10.99 percent loan she had at the time. He said he could get her an interest rate under 7 percent and told her to stop paying her mortgage because he would take care of that until the new loan came through, according to court papers. Several months and a confusing array of mortgage brokers later, the District resident ended up with a 30-year loan for 65,800 carrying a rate that varies from 11.49 percent to 18.49 percent. When she asked why the rate was so much higher than what she had been paying, she says, she was told it was because she had a bad credit record, brought on by her failure to pay her mortgage for the past three months--as the broker had instructed. Patrick says she signed the papers for the new loan out of fear she would lose her house. They have danced me around so much I don't even know who's who anymore, she said. I'm devastated. There's an uneasy revolution going in consumer finance--subprime lending. Over the past five years many banks have rushed headlong into this market, defined as extending credit to consumers whose troubled credit histories make them a higher risk. The lure, despite the higher risk, has been potentially higher profit margins than lending to top-notch, prime credits, said Thomas Abruzzo, bank analyst at FitchIBCA, a credit-rating agency headquartered in New York.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614857","date":"2000-02-08","texts":"WASHINGTON -- Even as he trumpeted his plan to pay off the national debt by 2013, President Clinton quietly suggested an increase in the legal ceiling on how much debt the government can hold. Why The answer lies in the difference between the debt held by the public and the total debt that the Treasury owes, which includes long-term obligations to other government agencies -- notably the Social Security trust fund -- for future benefits. Many economists consider the public debt, which the White House projects will decline to zero in 2013 from 3.48 trillion in the current fiscal year, to be the most important. That is what affects interest rates and the government's immediate impact on the broader economy. Mr. Clinton uses that measure when he talks of cutting up the government's credit card. But some analysts and politicians consider total government debt a better measure of the government's long-term responsibilities, and that figure rises as aging baby boomers stake an ever-bigger claim on Social Security benefits. Congressional limits on federal borrowing apply to that figure, not just publicly held debt. The current statutory debt limit is 5.95 trillion. For the current fiscal year, the debt subject to that limit will be safely below that figure -- about 5.65 trillion. But under the Clinton plan, government debt would cross the ceiling by hitting 6 trillion in 2004 and 6.79 trillion in 2013.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982126","date":"2000-02-08","texts":"Stocks today diverged in familiar fashion, with technology shares leading the Nasdaq composite index higher for a sixth straight session while blue-chip industrials slumped. The Dow Jones industrial average fell 58.01, to 10,905.79, and the Standard & Poor's 500 slipped 0.13, to 1424.24. The Nasdaq, dominated by technology stocks, has risen nearly 6 percent so far this year, while the blue-chip Dow industrial average has fallen more than 5 percent. It's a very fragmented market, and you can understand why, said Larry Wachtel, market analyst at Prudential Securities. General Electric, down 5-116 at 136 12, and Boeing, down 2-316 at 41-1316, contributed most to the Dow's decline.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616239","date":"2000-02-09","texts":"NEW YORK -- Price swings and odd price movements returned to the bond market after two days of relative normalcy, as investors scrambled to buy longterm Treasurys and traders sought to reverse so-called hedges, pushing longterm Treasury prices higher. In late trading, the 30-year Treasury bond was up 1 1332, or 14.0625 for a bond with a 1,000 face value, at 98 1532. The bond's yield, which moves inversely to the price, fell to 6.230 from 6.337. But 10-year Treasury notes, quickly becoming the benchmark of the bond market, rose just 532 to yield 6.609. And two-year Treasurys were unchanged, yielding 6.665. Investors and traders who sold short Treasurys in recent months, or borrowed and sold these securities as part of a hedging strategy aimed at protecting other bond investments, scrambled to buy back Treasurys yesterday, traders said, forcing prices higher. There's more dislocation in the market as more hedges are unwound, or reversed, said Scott Graham co-head of government-bond trading at Prudential Securities. It will take more than a few days to get through it all.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983510","date":"2000-02-09","texts":"Cisco Systems, which makes Internet equipment, said fiscal second- quarter net income rose to 825 million from 282 million as revenue rose 53 percent. Excluding acquisition expenses, its profit was 906 million, or 25 cents, a penny better than analysts expected, compared with 609 million, or 17 cents. The company also set a 2-for-1 stock split, payable in March. Bank of New York agreed to provide information about its customers to Federal Reserve regulators in the wake of an examination into fund transfers from Russia. The bank agreed to report quarterly to the New York Fed Bank and state regulators about transactions of customers it has identified as potential money-launderers. The bank said it would devise a plan within 45 days to identify those customers involved in known or suspected criminal activity against the bank. Nokia Oyj extended its lead as the world's biggest maker of cellular phones, boosting global market share to 26.9 percent last year from 22.5 percent, according to Gartner Group's Dataquest unit. Motorola and Ericsson held on to the No. 2 and No. 3 spots, respectively, but Motorola's share slipped to 16.9 percent from 19.5 percent, while Ericsson's share dropped to 10.5 percent from 15.1 percent. Europe had the biggest percentage of mobile phone sales, and Asia-Pacific beat the United States for the No. 2 spot. Sales in Latin America doubled. Five large hedge funds released a report offering recommendations on risk management and business practices for the industry, in response to Long-Term Capital Management's near-collapse in 1998 after it lost 4 billion. The report was prepared by Soros Fund Management, Caxton, Kingdon Capital Management, Moore Capital Management and Tudor Investment, each of which manage more than 3 billion. Raytheon, the third-largest U.S. defense company, plans to sell 500 million of its businesses this year as it trims debt and focuses on more profitable units, the company told analysts and investors at a conference in New York.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613862","date":"2000-02-10","texts":"NEW YORK -- Stocks ended more than a week of divergence by falling in unison. High-tech stocks, one of the few sectors to hold up in recent trading, lost ground, as investors took profits in high-priced issues. That halted a streak of seven straight gains by the Nasdaq Composite Index. Blue-chip issues such as Microsoft lost 5 1516 to 104, while Intel, coming off a 52-week high Tuesday, declined 4 316 to 104 58 both on the Nasdaq Stock Market, and Motorola declined 6 1316 to 153 916. Meanwhile, several of the momentum-driven high-tech issues that had persisted in the face of a broad decline in recent sessions got caught in the sell-off. Yahoo fell 10 1316 to 362 516, while Commerce One eased 9 34 to 155 38, and Conexant Systems, also coming off a 52-week high, fell 7 to 104 1516, all on Nasdaq. Some technology issues managed to gain. Juniper Networks rose 16 516 to 185 1516, and Vitesse Semiconductor climbed 5 1316 to 55 1316, both on Nasdaq. Sun Microsystems Nasdaq, after an upbeat research note from Bear Stearns, gained 4 916 to 91 916. Nortel Networks advanced 1 34 to 122. Rival Lucent Technologies fell 1 18 to 53.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617265","date":"2000-02-15","texts":"Shares of Diversa Corp. soared in their first day of trading, rising to more than triple their 24-a-share initial public offering price. The San Diego biotechnology company said it raised about 200 million in gross proceeds from the stock sale, before expenses. The shares opened yesterday at 56 on the Nasdaq Stock Market and rose to a high of 79.375 before falling back to 75 at 4 p.m. Diversa said it sold about 8.3 million shares, including the exercise of options to cover underwriters' overallotments. More than 14 million shares changed hands during the trading day. Diversa is an early-stage biotechnology company that is developing novel enzymes from diverse natural environments and then screening them for possible use in agricultural, industrial and pharmaceutical applications. The company said it has collected samples from such places as Costa Rica, Indonesia, Iceland, and Yellowstone National Park in the U.S. Our processes are designed to help our strategic partners and customers reduce cost, reduce waste, improve yield and enhance the quality of end products and manufacturing, Diversa said in its prospectus filed in December with the Securities and Exchange Commission. The company's first product, Pyrolase 160, is used in the energy industry to facilitate oil recovery. Diversa is also hoping to discover compounds that may be used to develop human drugs. Diversa's strategic partners, which have been a significant source of funding, include units of Novartis AG, Dow Chemical Co. and Rhone-Poulenc SA. In addition to 9.5 million received through Sept. 30, 1999, Diversa's partners are committed to fund at least 69.1 million under existing agreements, according to the prospectus.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615282","date":"2000-02-16","texts":"Correction What correction The Dow Jones Industrial Average soared 198.25 points, or 1.88, to 10718.09, on top of a 94.63 gain Monday. The Dow has now recovered in two days all of Friday's 218.42-point loss and more. At Friday's close, the industrials were down 11 from their Jan. 14 high, in what Wall Street calls a correction, or a drop of at least 10. Now the surging blue chips are down just 8.6 from that high. Beaten-down old-industry stocks such as Minnesota Mining & Manufacturing again led the gains, along with financial stocks such as American Express. Big technology stocks also staged a recovery, but last year's tech highfliers, such as Qualcomm and JDS Uniphase, didn't keep pace. The Nasdaq Composite Index rose a marginal 0.05, or 2.22 points, to 4420.77. But that small gain was the product of a huge afternoon recovery the tech-led Nasdaq had been down as much as 127.45 in the morning and recovered all of its losses before trading ended. Bonds fell, and the dollar was mixed.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983087","date":"2000-02-17","texts":"Stocks were mixed in volatile trading as blue-chip issues, falling victim once again to investor worries about interest rates, ended a two-day rally. Technology stocks managed a slim advance. The Dow Jones industrial average fell 156.68 to close at 10,561.41, wiping out more than half of the past two sessions' 292- point gain. Broader indicators were mixed. The Standard & Poor's 500-stock fell index 14.38, to 1387.67, and the Nasdaq composite index rose 6.88, to 4427.65. American Express led the Dow lower, tumbling 5-932, to 153-27 32, as investors guessed it would be among the stocks to suffer if the Federal Reserve continues raising interest rates to force a slowdown in the U.S. economy. In an effort to keep inflation under control, the Fed has raised rates four times since last June. The U.S. economy doesn't seem to be slowing down at all, said Alan Ackerman, senior vice president at Fahnestock & Co. in New York. Stocks continue to climb a wall of worry over higher interest rates.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615639","date":"2000-02-18","texts":"WASHINGTON -- Federal Reserve Chairman Alan Greenspan is taking a harder line on the perils of rapid growth, signaling that the Fed will keep raising interest rates unless consumer spending and the stock market quickly cool down. In his semiannual economic presentation to Congress, Mr. Greenspan dropped his assertion -- made a month ago -- that the Fed's attempts to rein in the economy with earlier interest-rate increases were well advanced. Instead, he said yesterday that investor optimism and a bullish stock market have to date . . . more than offset the effects of higher rates and that spending even in sectors of the economy normally considered sensitive to higher rates has remained robust. There is, he said, little evidence that the American economy . . . is slowing appreciably. In a booklet presented to the House Banking Committee accompanying Mr. Greenspan's testimony, Fed staffers wrote that the continued surge in demand implies that the level of interest rates needed to align demand with potential supply may have increased substantially. Markets have long been expecting the Fed to boost its target for the federal funds rate -- the rate at which banks lend to each other overnight -- by at least a quarter of a percentage point when policymakers next meet on March 21. Many investors have been expecting at least another half-point increase by the summer.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615680","date":"2000-02-22","texts":"NEW YORK -- Investors and traders are looking forward to a quieter week in the Treasurys market. But few are willing to bet they will get one. There won't be much market-moving economic data, but here is what could go wrong anyway Investors might turn a cold shoulder to tomorrow's Treasury two-year note auction, causing the entire market to sell off. More companies could tap the corporate debt market, possibly siphoning money away from Treasurys and causing price gyrations. Bearishness about Federal Reserve policy could increase, especially after Fed Chairman Alan Greenspan resumes his testimony to Congress tomorrow.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985429","date":"2000-02-23","texts":"Blue-chip stocks broke a three-day losing streak in a volatile day on Wall Street as investors looked for bargains and shunned usually hot technology stocks. The Dow Jones industrial average, which had been down as much as 115 points early in the day, rallied in the afternoon to close up 85.32 at 10,304.84. The technology-focused Nasdaq composite index, however, was unable to shake off concerns about interest rates and fell 29.62, to 4382.12. The Standard & Poor's 500-stock index rose 6.08, to 1352.17. Today's performance was a marked change from the recent trend on Wall Street that has pushed the Nasdaq up more than 8 percent this year and the Dow down 11 percent. What you are really seeing today is what has been oversold, the Dow, is coming back. And what was overbought, the Nasdaq, is having a correction, said Rao Chalasani, chief investment strategist at First Union Securities in Chicago.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615445","date":"2000-02-24","texts":"Some key Persian Gulf oil ministers hinted that they back production increases to ease high oil prices, but they carefully avoided specifics about how much and when. Meeting in Riyadh, Saudi Arabia, oil ministers of the Gulf Cooperation Council said they hoped to maintain the market stability . . . for the interests of producers and consumers without harming the world economy. The council comprises Saudi Arabia, the world's largest exporter of oil Kuwait, the United Arab Emirates, Oman, Bahrain and Qatar. The meeting comes as concern about higher oil prices is intensifying. The price for West Texas Intermediate crude now hovers around 29 a barrel, and inventories are unusually low. The supply tightness has pushed prices high enough that major consuming nations, notably the U.S., are beginning to worry about its impact on inflation and their economies. UAE oil minister Obaid bin Said al-Nasseri told his country's official news agency WAM that oil prices in a range of 20 a barrel to 25 a barrel would be an acceptable level for both consumers and producers. An identical range was mentioned by Mr. Naimi a few days ago on a trip to South Korea, according to Korean officials. That would imply some increase in supplies when the Organization of Petroleum Exporting Countries meets March 27 in Vienna, unless demand suddenly slackens for seasonal or other reasons.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615617","date":"2000-02-24","texts":"The spotlight in Europe's new-issue stock market is focused almost exclusively on telecommunications-industry offerings, as investors battle for the growing numbers of newly public enterprises. Zurich-based Carrier1 International SA became the latest beneficiary of the fervor for telecommunications stocks yesterday, as investors in both Europe and the U.S. fought for a piece of the company's initial public offering. Even after both the size and the price range of the IPO were boosted by the underwriters -- led by Morgan Stanley Dean Witter & Co. and Citigroup Inc.'s Salomon Smith Barney -- the issue was still about 30 times oversubscribed. The IPO of 9.375 million shares was priced at 87 euros a share 87.27 raising 818.2 million and giving the company a stock-market value of roughly 3.5 billion. The shares priced above the range at which they had been marketed, which already had been boosted from the initial range of between 65 and 75 each. Underwriters have the option to sell an additional 1.4 million shares to help meet the excess demand. The company, which is less than two years old, will begin trading today on both the Nasdaq Stock Market and Germany's Neuer Markt, the growth-stock division of the Deutsche Boerse. About a third of the shares were sold to U.S. investors and the remaining two-thirds sold in Europe. Carrier1 is just the latest example of how telecommunications companies dominate the financing landscape in Europe. Carrier1 is building a European fiber-optic network.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985031","date":"2000-02-24","texts":"Extraordinary affluence is obviously changing the nation's political agenda. Less obviously, and ominously, it is changing the nation's political sensibility, reducing to the vanishing point the once-sturdy concern for limited government. The nation's freedom and prosperity have been secured. The problems that dominate day-to-day legislative business--e.g., reducing pollution and congestion, improving medical care, providing more police--are not resource problems The sacrifices involved in paying for such things are not prohibitive. Christopher DeMuth, head of the American Enterprise Institute, argues that although Americans are unprecedentedly prosperous, self-sufficient and at peace with one another, government continues to grow prodigiously because of little- understood dynamics. Government outlays federal, state, local and regulatory costs-- largely imposed on the private sector--have grown more than 50 percent faster than the economy for 50 years and now claim more than one-third of GDP. The federal government owns one-third of all land, pays for 40 percent of medical care, manages nearly 50 percent of individuals' retirement funds and regulates many industries. Most Americans live and work in a web of government rules. Forces working to inhibit government include globalization--the ability of capital and services to move to hospitable locales--and technological change. For a quarter-century, says DeMuth, the government has been trying and largely failing to regulate the computer industry Although it may lasso an individual firm such as Microsoft, it has no hope of corralling the entire industry as it did trucking and railroads in an earlier age. However, more private wealth means more resources for the traditional lobbying of government, and more incentives for government to try something new. It is what DeMuth calls the New Executive State expanding through extortion.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982675","date":"2000-02-25","texts":"President Clinton, in a wide-ranging defense of his economic policy, urged the nation today to continue shrinking the federal debt and seeking new trade opportunities to keep the economy strong. In what the White House billed as a major economic speech, the president rejected criticisms of his fiscal strategy--which has largely focused on deficit reduction--from the political left and right. Noting that some liberals want him to spend more heavily on social issues and some conservatives want deeper tax cuts, Clinton said, You can't forget what got you here. Clinton said the government also must continue to encourage the growth of information technologies and to close the digital divide that keeps many from sharing the benefits of computerization and the Internet. And he renewed his call for China's membership in the World Trade Organization, which some labor and environmental groups oppose. The federal debt reduction that has occurred under his watch set in motion a virtuous cycle that lowered interest rates and made it easier for businesses to expand and for families to pay off loans for cars, houses and college educations, Clinton told an audience at the University of Pennsylvania. His 44-minute address was the first in an annual lecture series founded by entrepreneur and Clinton political supporter Michael Granoff. The president said he will convene a major White House conference on the economy on April 5. It will include several economists, corporate executives and others to focus on the most cutting-edge issues facing the new economy, an administration briefing paper said.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830981707","date":"2000-02-28","texts":"The first thing is to keep wishing really hard that the energized U.S. economy keeps on going and going and going. Baltimore, for example, began a long downward slide in 1990 that was accelerated by a devastating recession that infected its manufacturing, real estate and financial services industries. But now, the nation's recovery has gone on long enough that its benefits have spread even to hard-hit urban cores like Baltimore's, or the District's. Employment in Baltimore peaked at 470,900 in March of 1980. Eight years later, it had plunged to around 395,000, or a net loss of more than 75,000 jobs, based on monthly Bureau of Labor Statistics reports. The job shrinkage continued even after the U.S. and Maryland economies turned upward as the city's rising crime and drug problems and deteriorating schools chased families and employers away. But in the past year, Baltimore has enjoyed a small renaissance. Employment in the last three months of 1999 averaged around 417,000-- a gain of more than 4 percent from the previous year's low point.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614130","date":"2000-02-29","texts":"TeleCorp PCS Inc., a wireless-phone company that builds and operates networks in affiliation with AT&T Corp., said it will acquire the wireless-phone company Tritel Inc. for about 5.3 billion in stock. TeleCorp, based in Arlington, Va., is the largest affiliate of AT&T's big wireless-services unit. National wireless operators such as AT&T, Sprint Corp.'s Sprint PCS business and Nextel Communications Inc. often work with smaller companies such as TeleCorp and Tritel to fill holes in their national footprints. In the case of TeleCorp and Tritel, Jackson, Miss., the companies operate wireless networks in certain markets, and both co-brand their service with AT&T. AT&T holds minority equity stakes in both companies. Indeed, the deal adds heft to AT&T's wireless network, consolidating two of its largest affiliates and accelerating the growth of its wireless network. It also strengthens TeleCorp's position in the fastgrowing affiliate niche, creating a wireless company with licenses that will cover some 35 million potential subscribers from the Great Lakes to the Gulf of Mexico. This puts together the middle of the country. said Gerald Vento, CEO of TeleCorp. We can effectively operate in a competitive market with a larger footprint.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615634","date":"2000-02-29","texts":"WASHINGTON -- Reversing a recent trend, consumers' incomes rose faster than their spending in January. But Americans are still reaching for their wallets more than Federal Reserve decision makers would like. Personal income jumped 0.7 last month while consumer spending rose 0.5, the Commerce Department said. Adjusted for inflation, core consumer spending inched up just 0.3. Inflation, as measured by the personal consumption expenditures index, was unchanged at 0.2. The savings rate bounced back to 1.4 after hitting a record low of 1 in December. The numbers, which suggest Americans are thinking twice about some purchases, represent an about-face from December when personal income grew just 0.3 and consumer spending surged a revised 1.1. Core consumer spending climbed 0.9. The increase in personal income, which includes wages, interest and government benefits, was boosted by pay increases for federal civilian and military personnel, agricultural subsidies, and cost-of-living adjustments for Social Security and other programs. Excluding the special factors, such as a 1.3 rise in government wage expenditures, the largest monthly gain since January 1993, income would have advanced 0.6. Still, consumer spending, an important driver of the nation's economy, shows few real signs that it's easing up. If January's gain in core spending repeats itself in February and March, spending in the first quarter would increase at a 5.8 annual rate, a hair under the robust 5.9 pace recorded at the end of last year.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616915","date":"2000-03-02","texts":"NEW YORK -- Treasurys ended mixed as the market largely ignored signs of continued strength in manufacturing and instead looked ahead to tomorrow's monthly update on labor-market growth. The 30-year Treasury bond fell 932 point, or 2.8125 for a bond with 1,000 face value, to 101 632. Its yield rose to 6.153 from 6.133 late Tuesday, as bond yields move inversely to prices. But shorter maturities ended higher. Prices of 10-year notes gained 632, for example. The divergence stemmed from sales of 30-year bonds and purchases of other maturities -- so-called curve trades -- driven by wagers on how the market will be affected by the Treasury Department's planned buybacks of debt securities. Dealers decided it was the trade of the day, said Vinnie Verterano, director of government trading at Nomura Securities in New York. Among economic reports during the session, the National Association of Purchasing Management's February business index -- a broad gauge of manufacturing-sector activity -- rose to 56.9 in February from 56.3 in January. A figure above 50 suggests an expansion of activity. An index in the NAPM report that tracks prices paid by manufacturers jumped to 74.1 from 72.6, indicating a substantial rise in price pressures during the month.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613471","date":"2000-03-03","texts":"OTAVALO, Ecuador -- The long black braid, the blinding white cotton trousers and the woven shoes of the local businessmen here are visible reminders of this community's tenacious cultural pride. But it is at the markets, brimming with traditionally designed wool sweaters, bags, hammocks and wall hangings -- all crafted on imported looms -- that the Otavaleno's much-touted entrepreneurial savvy is on display. Behind the walls of many humble homes in this town, substantial inventories of those same products are bound for markets in Colombia, Chile, Venezuela, Europe and the U.S. Located two hours north of Quito by car, on a winding and rutty road, this is said to be the only indigenous community -- of about 40 -- in the country never to have been brought under the control of the Spanish conquistadors. Ergo, instead of the stereotypical Indian poverty and isolation, the dignified Otavaleno is renowned for his independence and worldliness. There is one thing, however, that Otavalenos share with this country's other Indian groups, mestizos and Europeans profound economic suffering at the hands of the perniciously politicized Ecuadoran central bank. Since August 1998 the country's currency, known as the sucre, has lost 80 of its value in dollar terms, destroying savings and living standards 1999 gross domestic product contracted 26.6 in dollar terms. Inflation, which in 1999 was more than 60, is forecast to reach 90 in 2000. Things are so bad here that even Ecuador's politicians, notorious fans of the central bank as an inexhaustible source of generosity, have caught on. This explains how it is that on Tuesday the Ecuadoran Congress narrowly passed a law mandating that within 180 days the central bank's dollar reserves will be used to retire the paper sucres currently in circulation -- at a rate of 25,000 to one. The new law marks the end of the central bank's power to print money and the beginning of economic hope for 12 million Ecuadorans. Yet, it is still only hope. The law grossly perverts the term dollarization in order to preserve specific discretionary central-bank powers such as setting reserve requirements and interest rates and the ability to intervene in the markets through the use of repurchase agreements. The central bankers, it would seem, harbor a deep-seated desire to manipulate monetary outcomes even in the absence of a domestic currency system. This is absurd, but it is also illustrative in that it dramatically defines the core problems of the country The central bankers, along with this country's other privileged elite, are dug in so hard that nonsense becomes law at their behest. Prying their hands off the economy and moving toward liberalization will mean a long, hard fight, well beyond the simple dollar-for-sucres exchange.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982953","date":"2000-03-04","texts":"Stocks bounded higher today, giving the Dow industrials their best week since July, after the government delivered a sign that the Federal Reserve's interest rate increases might finally be slowing the economy. The rally was sparked by a Labor Department report that showed some easing of the tight labor market. The Dow Jones industrial average rose 202.28, to 10,367.20. For the week, the blue-chip index rose 505.08 points, its best performance since the week ended July 2, 1999, when it rose 586.68. The Nasdaq composite index, meanwhile, surpassed 4900 for the first time and closed at a new high. The index rose 160.28 to 4914.79, well above the previous record of 4784.08, set Wednesday. The Russell 2000 index of smaller companies rose 13.84, to 597.88, a new record. The broader Standard & Poor's 500-stock index rose 27.41, to 1409.17.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842615117","date":"2000-03-06","texts":"Average together absolute euphoria and dreary disappointment and what do you get The 2.97 advance of the average stock mutual fund in the first two months of this year. Behind that small gain, as calculated by Lipper Inc., lies a huge disparity in results Some conservative stock funds favoring seemingly cheap value stocks tumbled 15 or more over the course of January and February, following a rough 1999. Meanwhile, growth funds that invest in the stocks of the fastest-growing companies continued to soar, with some gaining 40, 50 or more in a mere 60 days. Indeed, at a time when investors are still agog over the triple-digit returns posted last year by more than 175 funds, a few funds that specialize in the recently red-hot biotechnology sector broke the 100 barrier in just the first two months of this year. Those triple-digit gainers include specialized healthbiotech offerings from the Orbitex, Nicholas-Applegate and Dresdner RCM fund families. The stock market's split personality comes to life in the voices of mutual-fund managers at the two ends of the performance spectrum. It's been a wild year, exults Kurt von Emster, manager of the 1.5 billion-in-assets Franklin Biotechnology Discovery Fund, up 86.4 in January and February after a nearly triple-digit 97.9 gain in 1999. Like I tell my wife every morning, it's fun to come into work now. Fun certainly isn't the way Tony Maramarco describes his labor as manager of the bargain-hunting Babson Value Fund, which posted a 17.4 negative return for January and February after rising a bare 1.1 last year. Mr. Maramarco quotes market strategist Thomas Galvin of Donaldson, Lufkin & Jenrette as declaring that value investing has been utterly abandoned in the marketplace. That's the feeling we get, the Babson manager says.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616355","date":"2000-03-06","texts":"CHICAGO -- Bank One Corp., whose credit-card business has been hurt by rising interest rates, warned investors that first-quarter profit would likely fall shy of analysts' projections. A First CallThomson Financial poll of 14 analysts showed a median estimate of 65 cents a diluted share, with a range of 62 cents to 69 cents. We would expect and encourage the consensus to settle at the 60-cent level, said Bank One's president and acting chief executive, Verne Istock. With about 1.1 billion diluted shares outstanding, 60 cents would equal about 660 million of net income for the quarter ending March 31. A year ago, the banking concern posted net of 1.15 billion, or 88 cents a share. The disclosure sent Bank One shares down 1.1875, or 4.5, to 25 each in New York Stock Exchange composite trading at 4 p.m. Friday. Mr. Istock said the first quarter would be the year's weakest. Rates that banks pay for deposits and other funds they lend have risen in recent months. But in the hotly competitive credit-card market, it is difficult to raise loan rates because many borrowers can easily jump to lower-rate cards offered through directmail solicitations.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984964","date":"2000-03-08","texts":"National Association of Securities Dealers Chairman Frank Zarb asked the Securities and Exchange Commission to delay the start of decimal stock prices until the first quarter of next year. The SEC has ordered a phase-in of decimals on U.S. securities markets between July and October. We believe the shift to begin trading in decimals this year would impose unacceptable risks, Zarb said in a letter to SEC Chairman Arthur Levitt Jr. An SEC spokesman declined comment. The Department of Agriculture will announce today that it is lifting restrictions on how much soy, diary and vegetable protein can be included in the National School Lunch and Breakfast programs. Currently, food service professionals working in schools only can include up to 30 percent of soy or other proteins in the meat, poultry or seafood served to children. Regulators said they wanted to give menu planners more flexibility in menu planning and lower the fat content of foods. Productivity grew at the fastest pace in seven years in the fourth quarter of 1999, and labor costs fell for the second straight quarter, the Labor Department said. Productivity, a gauge of output per hour worked, rose at a 6.4 percent annual rate in the final three months of the year. Unit labor costs, a barometer of underlying inflation pressures, fell at a bigger-than-expected 2.5 percent rate in the fourth quarter, the steepest drop in seven years. BP Amoco wants to swap Atlantic Richfield's Alaskan oil fields for similar assets elsewhere to overcome federal antitrust objections to its proposed 32.5 billion purchase of Arco, people familiar with the situation said. Chevron and Royal DutchShell have large fields in West Africa that BP Amoco would want, said Fadel Gheit, research director at Fahnestock. RCN's Starpower Internet services, which were out for about 33 hours on Sunday and Monday, were supposed to be back online yesterday, but more than a few of its half-million subscribers still couldn't couldn't log on. Tony Pedutto, general manager for Starpower, formerly Erols, blamed jammed phone lines due to increased traffic from people who couldn't get their e-mail over the weekend. He also said some customers who did manage to get on to the service weren't able to reach popular sites such as Yahoo Mail and ESPN because of network problems. Pedutto said the problems when they are being reported are being fixed.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982244","date":"2000-03-11","texts":"The average stock trader can't figure out a way to convert stock prices like 9-1116 into dollars and cents--and, apparently, neither can the Nasdaq stock market. At least not by July 3. So Securities and Exchange Commission Chairman Arthur Levitt Jr. is going to give them another month to look at their math and submit a plan for converting from fractions to decimals. The SEC gave the nation's equities markets until April 14 to agree on a plan. The original deadline was to be Monday. But regulators did not change the July 3 target date for the markets to actually start using the penny quotations. Frank G. Zarb, chairman of the National Association of Securities Dealers, which owns the market, said in a letter to the SEC this week that the Nasdaq would not be ready to implement decimals until 2001 because of the explosion of transactions in the technology-heavy market. In the past year, the number of daily transactions on the Nasdaq has more than doubled to a high of 2 billion, while the number of quote updates has tripled to a record 4.95 million.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616930","date":"2000-03-13","texts":"After lying low for a couple of decades, the Organization of Petroleum Exporting Countries is back with a vengeance. The cartel has rediscovered its economic muscle and driven up oil prices to more than 30 a barrel. Democrats and Republicans alike are demanding that government bring down prices. But before we dust off the policy playbook of the Carter era, we should recall some lessons learned. First, begging OPEC heads of state to increase production -- as Energy Secretary Bill Richardson is now doing -- is a waste of time. Production decisions are determined by financial considerations. Nothing will change that. Trying to convince OPEC that it's in the cartel's best interest to head off a global recession -- thus, that it should increase oil production -- is naive. OPEC members are almost entirely dependent on the oil trade. So long as oil profits remain robust, global recession need not concern them. The recessions of 1974 and 1979 demonstrated that OPEC can make a lot of money during hard times. Second, investigating big oil for price gouging is counterproductive. In the 1970s those suspicions were stoked by stories of oil tankers lingering offshore, supposedly waiting for prices to go up before they unloaded their cargo. Tankers were indeed lingering, but it was because docks were overloaded and ships had to wait to unload. Big oil -- then and now -- is guilty only of passing on its increased costs to consumers instead of selling at a loss. Political saber rattling about alleged corporate profiteering makes the crisis worse. The only hedge against supply disruptions in the near term is inventories. But inventories are costly to maintain. If companies can't cash them out at a profit during price spikes because they fear criminal investigation or the imposition of windfall-profit taxes, they won't bother maintaining inventories. Ironically, that is the upshot of the Strategic Petroleum Reserve. Politicians, alarmed that oil companies don't keep stockpiles, decided that the government must do so. Yet the existence of the reserve makes it certain that companies won't stockpile. Oil companies don't know if or when government might flood the market, dropping prices and preventing them from profiting from their inventories.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983477","date":"2000-03-13","texts":"Montgomery County Executive Douglas M. Duncan today is to propose spending almost 100 million more on public education over the next year, focusing much of the increase and other resources on helping the county's most vulnerable children do better in the classroom. The proposal is part of Duncan's budget for the coming fiscal year, a 2.6 billion plan that represents an 8.2 percent increase over current spending. Duncan D is not proposing any tax cuts at a time of large budget surpluses. But his education plan would restore the county's contribution to public schools, as measured by per-pupil spending adjusted for inflation, to the level it reached before recession struck in 1991. The spending plan underscores the influence new School Superintendent Jerry D. Weast had in shaping the county budget, which gives the school system virtually its entire request. Duncan is scheduled to present the budget today during a noon news conference at Twinbrook Elementary School in Rockville. The size of the spending increase for education can be attributed partly to a school system plan to keep better track of spending and hold teachers more accountable. Duncan had criticized the school system for not having such a plan in place. The increase also comes as a strong economy generates windfalls for local governments, and many regional school systems are benefiting. Fairfax County officials recently proposed a 7 percent increase in the public schools budget. In the District, Mayor Anthony A. Williams D has proposed a 5 billion budget that includes an 80 million increase for education.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615677","date":"2000-03-14","texts":"The National Association of Securities Dealers, pushing forward with its proposed plan to sell off part of the Nasdaq Stock Market, set April 14 as the date for a membership meeting to vote on the plan and mailed out proxy materials to its 5,500 member firms. The NASD also opened the process by which qualified potential investors can ask for shares in Nasdaq as part of the offering, which is expected to raise roughly 1 billion. The NASD's plan would sell Nasdaq to its members, market-making firms, listed companies and others in a two-step private-placement transaction. The first step would bring the NASD's stake in Nasdaq down to between 47 and 49, while the second step would reduce that stake further, to around 22. In order for the transaction to go into effect, its first phase requires an affirmative vote by a majority of the firms voting, while the second phase has a higher bar, requiring an approval by a majority of all members. NASD Chairman Frank Zarb, who hosted several live town-hall meetings late last year while the plan was being put together, says he will preside over a series of conference calls with members to go over the materials in the private-placement memorandum and answer questions. In an interview, he said six such meetings already are planned, with the first an all-member call planned for tomorrow.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615903","date":"2000-03-14","texts":"I2 Technologies Inc. expects the acquisitions of Aspect Development Inc. and Supplybase Inc. to have a neutral effect on its operating profit this year and to add to profitability next year. The Dallas developer of business software agreed to buy Aspect Development, Mountain View, Calif., for 44.9 million shares, or about 105 a share. The purchase is valued at 8.6 billion based on the 191.1875 price of i2's stock at 4 p.m. in Nasdaq Stock Market trading. Shares in i2 were down 16.8125, or 8, amid a broad technology-sector decline. Aspect was up 11.8125, or 14, to 96.8125, also on the Nasdaq. The deal is the largest to date in the software industry and combines i2's software and skills in Web-based marketplaces with Aspect's electronic catalogs that list parts and products of several thousand manufacturers. Separately, i2 said it will pay 1.8 million shares, or 344 million, for Supplybase, a closely held San Francisco company developing supply-chain software that works on the Internet. I2 bought the companies to bolster its menu of electronic-commerce software and services. A pioneer of software used by manufacturers to improve planning, factory scheduling and shipping, i2 has been moving aggressively to put its products at the center of Web-based marketplaces.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613588","date":"2000-03-15","texts":"The New York Stock Exchange, already facing pressure to modernize its trading operations, is about to get a major, fully electronic competitor. The Archipelago trading system and the Pacific Exchange announced they are creating a new stock market. The alliance marks the first time one of the new alternative trading systems, known as ECNs, will effectively share a membership card as a traditional stock exchange. By joining with the Pacific, Archipelago would instantly acquire the status necessary to compete with the NYSE on a level playing field. Under the alliance, Archipelago Holdings LLC, which operates the Archipelago electronic communications network, will acquire the Pacific Exchange's struggling stock-trading business. In return, the Pacific Exchange, based in San Francisco, will become a minority shareholder in Archipelago and provide regulatory and exchange-management services to the new entity. The plan is subject to regulatory approvals. Archipelago is one of the fast-growing screen-based trading systems that have grabbed almost a third of the Nasdaq Stock Market's volume. They have taken very little share of NYSE-listed volume, however, partly because they are technically brokers, and only stock exchanges have full access to the linkages between the venues that trade NYSE stocks.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615076","date":"2000-03-16","texts":"Global investors spent another day dumping many of the world's most high-priced technology stocks, though by the end of the day there were nascent signs that the selling pressure may be about to ease. Much of the selling came in reaction to the Nasdaq Stock Market's 4.1 decline Tuesday, and many analysts believe technology shares globally will remain volatile until the U.S. technology barometer finds traction. The Nasdaq closed down yesterday an additional 2.6. Still, the blue-chip technology stocks in Japan that ignited this week's global selloff appear to have found their footing again with two straight days of gains. Other Asian markets, meanwhile, managed to bounce off their lows and close with minor losses. I think the pullback will be shortlived, said Robert Reiner, portfolio manager at Deutsche Asset Management in New York. There is still a lot of money on the sidelines waiting to get in. In Europe, technology, media and telecom declines dragged down the broader markets, but investors showed selective interest in some Old Economy industrial stocks. Latin American stocks edged higher.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615395","date":"2000-03-17","texts":"WASHINGTON -- For months, market-watchers and analysts have been on the lookout for any sign that inflation -- largely dormant for years -- may be stirring. But the latest gauge, the Labor Department's February producer-price index, which measures prices paid to the nation's farms, factories and refineries, proved inconclusive. Inflation hawks could cite the index's larger-than-expected 1 increase, the largest monthly advance since October 1990, as evidence that a broader resurgence may be on the horizon. As in previous months, much of that increase stems from a sharp run-up in the cost of energy goods, which soared 7.5, the biggest gain in almost a decade. Wholesale prices overall were 4 higher than they were in February 1999, the largest year-over-year change in more than 13 months. On the other hand, the report offers some reason for optimism. Excluding food and energy, prices rose 0.3 for the month, with a 6.3 surge in cigarette prices accounting for all of that increase. For the past 12 months, prices for core finished goods climbed just 1, the lowest year-over-year change since last November. Investors seemed undisturbed by yesterday's inflation report. The Dow Jones Industrial Average rose 499.19 points -- a record rise when measured by points gained -- to close at 10630.60 as investors poured cash into blue-chip stocks. Bonds, which tend to fall in price on any sign of inflation, actually rose yesterday. The 10-year Treasury bond rose 1032 point, about 3.125 for a bond with a 1,000 face amount. The issue's yield eased to 6.238.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617368","date":"2000-03-17","texts":"CHICAGO -- Online grocer Peapod Inc. questioned its ability to keep operating after losing its chief executive and a vital cash infusion of 120 million. The suddenness and seriousness of those setbacks incited an enormous sell-off of Peapod stock, which fell 4.0938, or 52, to 3.7188, as of 4 p.m. in Nasdaq Stock Market trading -- a 52-week low. For many investors the implications extended beyond Peapod and other online grocers to the vast array of profitless e-commerce companies that are dependent on the faith and funds of venture capitalists. It is symptomatic of the New Economy where companies are able to go public with unproven business models when they are still losing money, said Barry Stouffer, senior analyst covering Internet grocers at J.C. Bradford & Co. of Nashville, Tenn. The crisis prompted an immediate Peapod search for strategic alternatives including a sale of the company. Peapod said it has only 3 million in cash on hand to cover debts of an amount it wouldn't disclose.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613972","date":"2000-03-20","texts":"WILMINGTON, Del. -- Loehmann's Inc. said it will file a plan of reorganization under Chapter 11 of the Bankruptcy Code within a week, according to documents filed Thursday in the U.S. Bankruptcy Court in Wilmington, Del. Still, the discount-apparel retailer, operating under Chapter 11 protection from creditors since May when it also was delisted from the Nasdaq Stock Market, is asking the court for a 90-day extension of its exclusive periods to file a reorganization plan and solicit votes in favor of it. Extending the debtor's exclusive periods will provide the debtor with sufficient time to fully review and consider all comments to its draft plan before filing the final document and will provide creditors with sufficient time to consider the proposed reorganization, Loehmann's said. If its request is granted, Loehmann's, New York, would have the exclusive right to file a plan through June 12 and the sole right to solicit plan acceptances through Aug. 11. Loehmann's also is asking the court to extend the time within which it must assume or reject its leases of nonresidential property to June 12. A hearing on the exclusivity-extension request is scheduled for March 29. The deadline for objections is Friday. Loehmann's said its official committee of unsecured creditors, with which it has worked extensively in finalizing the plan provisions, supports the exclusivity extension. Loehmann's filed for Chapter 11 protection May 18, listing assets of 189 million and liabilities of 184 million.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614797","date":"2000-03-22","texts":"You've just been given 200 million to invest, but with a catch. You can buy only Internet stocks. And you're expected to deliver big returns, while avoiding risks. That's the opportunity -- and challenge -- facing mutual-fund manager Matthew Ervin, who finds himself on a recent day trying to pursuade his boss that he has found Net stocks that fit these seemingly contradictory criteria. With feigned patience, he paces a sunlit conference room, explaining the history of computing Computers have gotten progressively faster, but until recently, everything was slowed by the lack of bandwidth. Now that the pipes have opened up, a new era has dawned, and companies seizing that change would be great investments for his soon-to-be launched mutual fund, even at today's sky-high prices. Morty Schaja, president of Baron Capital Group, disagrees with his fund manager. I'm uncomfortable with the business, he says. But if the valuation was 10 or 20 times less than it is now, I might be interested. Too risky, too expensive. And so it goes as Mr. Ervin, 30 years old, and his co-manager, Mitchell Rubin, 34, try to identify stocks for one of the latest entries in the Internet-fund sweepstakes Baron iOpportunity. At this point, late in the afternoon of Feb. 29, just 18 hours before the fund goes live, the managers have approvals to buy just 15 stocks, unless prices drop significantly. Yet they have a lot of cash to put to work -- 199,626,449.63 to be precise. That's the amount Baron, a highly respected boutique-fund family, has raised for the new portfolio.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983285","date":"2000-03-23","texts":"Concerned about unfair and deceptive lending practices in the mortgage industry, Federal Reserve Board Chairman Alan Greenspan said yesterday that he has called on a group of federal law enforcers and bank regulators to examine ways to solve the problem. Greenspan said officials from the Justice Department, the Department of Housing and Urban Development, the Federal Trade Commission, and six banking and credit-union regulatory agencies, including the Fed, have been meeting informally since October to tackle the practice, called predatory lending. Such lending is believed to be mostly targeted at poor, underserved consumers, especially blacks, Hispanics and other minorities. Sources involved with the group said that so far its meetings have focused on gauging the scope of the problem and how best to grapple with it. The group hopes to have some recommendations for its members as well as for Congress by year's end. North Carolina last year enacted a law to curb predatory lending, and several other states, including New York, are considering similar steps. But the federal government has been criticized for not doing more. For example, according to participants in the group, the Fed itself has not written rules describing what constitutes unfair and deceptive mortgage lending practices, even though Congress gave it the authority to do so six years ago in legislation aimed at curbing predatory lending. Some members of Congress think that law has not worked as intended and needs to be strengthened.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983983","date":"2000-03-24","texts":"Some Federal Reserve officials, increasingly concerned that strong economic growth risked an acceleration of inflation, urged that the Fed raise short-term interest rates by half a percentage point at a policymaking session on Feb. 2, according to minutes of the meeting released yesterday. But a majority of the members of the Federal Open Market Committee, the central bank's top policymaking group, preferred raising the target for overnight interest rates by only a quarter- point, the view that prevailed. Last week, at the subsequent FOMC meeting, the target was lifted again by a quarter-point. Some analysts said that because economic growth hasn't slowed, some Fed officials probably were pushing again for a larger move. Many of the analysts and investors expect at least one and possible two further increases at the FOMC meetings in mid-May and late June. At the February session, a majority of the committee cited significant uncertainties about the future course of the economy, including any impact of three earlier rate boosts on the pace of economic growth and unsettled conditions in financial markets, as reasons for moving slowly.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984715","date":"2000-03-27","texts":"Alice Rivlin, head of the District of Columbia's control board, thought the Woman's National Democratic Club invited her to lunch last week to make a Women's History Month speech. To her surprise, she was not only a speaker--but also the topic of speeches by Mayor Anthony Williams U.S. Treasurer Mary Ellen Withrow Jack Lew, director of the Office of Management and Budget and Robert Litan, Brookings Institution vice president. WNDC President Anna Stout introduced them all. They had gathered to honor Rivlin with the WNDC's Democratic Woman of the Year Award. The praise was high for her distinguished public service. Besides heading the control board, she has served as vice chairman of the Federal Reserve Board and director of the Office of Management and Budget, and was the founding director of the Congressional Budget Office. Williams, speaking mostly off the cuff, said, Alice and I have a unique relationship. I'm trying to put her out of business at the control board and she's trying to help me. In her previous life, she helped balance the books for our entire country. We haven't always agreed on every detail, but we share a common commitment to completing the financial recovery, moving back toward self- government and helping this city take its place alongside Paris and Rome as a great world capital. Mary Ellen Withrow, U.S. treasurer, praised Rivlin's many efforts, but it is her unspoken talent as a role model for women-- especially Democratic women--that most captured Withrow's attention.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613688","date":"2000-03-31","texts":"MEXICO CITY -- Mexico may be starting to suffer from too much of a good thing. That has authorities worried. Good news since the year's start -- including the surging price of oil, falling inflation and the decision by Moody's Investors Service Inc. this month to elevate the country to investment grade -- has strengthened the peso by more than 4, reignited domestic demand and caused a deterioration in the trade balance. All of this makes Mexico vulnerable to a sharp economic correction if the price of oil, Mexico's single largest export, falls more than expected, or if the economy of the U.S. -- the country's largest trading partner -- slows precipitously. I've seen this movie before and I don't want to see it again, central-bank governor Guillermo Ortiz says. It's a bad movie. Problem is, there isn't much authorities can do to choke off rising domestic demand. Monetary policy, exercised through the corto, a mechanism that drains liquidity from the interbank market, is already tight. So, too, is fiscal policy, despite the room for relaxation afforded by strong oil prices in the past year. There is little political incentive to put an end to the fiesta, given that the most fiercely contested presidential election in Mexican history takes place in early July and that the purchasing power of most people here still hasn't recovered to the levels they enjoyed when President Ernesto Zedillo took office in 1994.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614892","date":"2000-04-04","texts":"NEW YORK -- Weakened by last week's sell-off and desperate for a life preserver, technology stocks instead got a millstone -- courtesy of Microsoft -- and sank along with it. Many of the best-performing stocks of this year's first quarter suffered losses. Applied Micro Circuits fell 32 78 to 117 316. Juniper Networks dropped 30 916 to 233. Sandisk declined 17 12 to 105. PMC-Sierra slid 34 116 to 169 58. And Rambus, the best-performing name so far during 2000up 337 for the period-surrendered 37 916 to 256 1516. All trade on the Nasdaq Stock Market. The psychology has changed, even though the fundamentals have not, said Thomas Galvin, the chief market strategist at Donaldson Lufkin & Jenrette. We're in a hand-wringing high-technology correction. The sell-off was sparked by news that Microsoft couldn't reach a settlement with the government in its antitrust suit. Drug, financial and retail blue chips all mounted big improvements during Monday's trading. Merck gained 4 58 to 66 34. J.P. Morgan added 10 to 141 34, the first time it has traded that high since November. Wal-Mart Stores gained 5 78 to 61 12.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616904","date":"2000-04-05","texts":"THE STOCK MARKET STAGED one of its biggest declines and one of its biggest recoveries-all in the same day. The Nasdaq was down 574.57 points at its low, before rebounding to finish at 4148.89, off 74.79. The Dow Jones Industrial Average dropped 503.53 at its low, but recovered to end down only 57.09 at 11164.84. The market's swings could signal some modest slowing of the economy, but the Fed still is likely to raise rates again when it meets next month. --- Judge Jackson told Microsoft and the government that he wants to move quickly to determine penalties in the antitrust case, and then immediately seek an appeal to avoid disrupting the economy. Microsoft shares fell 2.3125, extending Monday's 14 drop. --- Netscape is introducing a major overhaul of its Web browser, the first since it became part of AOL last year. AOL said the move, which follows the Microsoft ruling, is coincidental.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617115","date":"2000-04-07","texts":"NEW YORK -- Something strange is afoot in the mortgage market -- and it is causing home buyers to fork over more money. By all accounts, rates on mortgages should be tumbling. That is because mortgage rates typically track interest rates on long-term bonds, which have been falling since the beginning of the year. But mortgage rates have remained essentially flat, causing the gap between mortgage rates and bond yields to widen by the largest measure in years. Unfortunately for home buyers, this trend comes just at the beginning of the spring buying season, when activity in the residential real-estate market peaks. Freddie Mac, the mortgage servicer, said yesterday that the rate for a 30-year-fixed-rate mortgage averaged 8.20 this week. While down slightly from 8.23 last week, it isn't much different from three months ago, when the average rate was 8.15. During the same period, yields on 10-year Treasury notes, most frequently used to set mortgage rates, have fallen to about 5.9 from about 6.5. They were quoted at 5.915 late yesterday. On a 200,000 mortgage, the difference between an 8.2 rate and a 7.6 rate is about 84 a month on a 30-year conventional fixed-rate mortgage.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615148","date":"2000-04-10","texts":"WASHINGTON -- The jobless rate continues to hover near its 30-year low, but new government data don't shed much light on whether it will fall still further in the months to come. The unemployment rate held steady at 4.1 in March despite the creation of 416,000 new jobs, the sharpest monthly gain in more than four years, the Labor Department said. The unemployment rate has been at or below 4.5 for 24 months in a row. Most economists had expected the jobless rate to slip back to 4 in March, which would have tied a 30-year-low set in January, and many still project a 4 rate for April. The number of Americans filing new claims for jobless benefits, meanwhile, fell to a 27-year-low for the week ending April 1, lending further credence to the argument that the labor market may still be contracting. Still, there's another plausible interpretation. March's surge in payroll growth comes on the heels of a weaker-than-expected February increase of just 7,000 jobs, revised downwards from a previous estimate of 43,000 new positions. And while more jobs were created in March than in any month since February 1996, when 454,000 new positions were added to business payrolls, the number may be significantly overstated. The Census Bureau, for example, hired 117,000 temporary workers in March, while a statistical quirk gave the month a fiveweek survey period instead of the customary four-week period, adding about 75,000 jobs. Stripping away such factors brings the actual number of new positions down to a more moderate 224,000. Indeed, excluding all special factors, payroll growth slowed to about 190,000 per month in the first quarter of this year, compared with an average of 226,000 per month in 1999.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983635","date":"2000-04-11","texts":"The truth is that even for rich people there are good days and bad days on the stock market. The other day was a bad day, and billionaires lost a bundle. How do rich people deal with bad days This is my guess. Bill Gates comes home from the office, and his wife senses something is wrong. What happened she asks while putting his Microsoft slippers on. Just then the phone rings. Gates says to his wife, It's Steve Ballmer. He lost 3.7 billion in Hong Kong. Mrs. Gates says, What's the big deal Tell him all of us lose some and win some--as long as we don't lose our private planes. Bill Gates says, Steve wants to know if he can borrow a couple of billion so he can fix his driveway.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615115","date":"2000-04-14","texts":"John Schott loaded up on biotechnology stocks last year, then watched them soar fourfold. He sold a few but held on to most -- only to see the prices cut in half in a matter of days. His reaction Easy come, easy go. All through the '90s we've tended to have these rolling crashes, says the 62-year-old suburban-Philadelphia investor. That tends to inure you to the whole thing. Without question, the volatility in stock prices is unprecedented. Last year, the Nasdaq Composite Index moved 2 or more on a quarter of the trading days. That was the most in the Nasdaq Stock Market's 29-year history. But this year is more volatile still More than half of the trading days have seen the index close up or down by at least 2. Yesterday, it swung all the way from being up 3.8 to being down 2.5 at its close of 3676.78. Even the Dow Jones Industrial Average, representing established, blue-chip stocks, is fluctuating the most it has in a decade. Investors had better get used to it. The broad embrace of momentum investing by big and small investors alike, the growth of technology stocks that are intrinsically volatile, and the Internet's instant news and inexpensive trading all suggest that the market is becoming more susceptible to sudden surges and swoons. How much does this volatility really matter Clearly, that depends partly on where stocks go from here. With its 27.2 sell-off since its March 10 high, the Nasdaq Composite is in what Wall Street customarily calls a bear market, but it is still up 45.8 from 12 months ago.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982714","date":"2000-04-19","texts":"Retail gasoline prices dropped 5.4 cents from their all-time highs to an average of 1.489 a gallon since last month, tracking a recent drop in crude oil prices, AAA reported. Last month, members of the Organization of Petroleum Exporting Countries decided to re-inject more oil into the world market, easing crude oil prices and, in turn, allowing lofty gasoline prices to settle back, AAA said in its monthly report on fuel prices. Comsat of Bethesda has won a court battle to reinstate a five- year Navy contract for satellite telecommunications services that could be worth up to 111.9 million, the company said. Comsat won the contract last June, but Stratos Mobile Networks USA challenged the award. The U.S. Court of Federal Claims sided with Stratos and blocked Comsat from future work under the contract, but this week the U.S. Court of Appeals reversed and vacated that ruling. The contract involves providing access to the Inmarsat satellite network for high- speed data, voice and multimedia communications. The Navy can buy services as needed over the five-year period, up to a total potential value of 111.9 million. The Federal Reserve, responding to complaints from the European Union, said foreign banks are treated fairly under new U.S. rules that permit banks to expand their services. Among other things, the Europeans have raised concerns about rules governing capital requirements for foreign banks that want to expand beyond their core banking business to sell securities, insurance and other services in the United States. The Consumer Product Safety Commission will distribute posters to better alert the public to recalls of dangerous products. The posters will join the FBI's Most Wanted list in 33,000 post offices, where 7 million people go each day to mail letters and ship packages. The first posters should be up later this week. Sears, Roebuck, the second-largest U.S. retailer, said its stores will mainly sell computers made by Compaq Computer and drop PCs made by Hewlett-Packard and eMachines. Sears will continue to carry Apple Computer's iMac and Sony's laptop computers. The Compaq computers, which will be available in June or July, will be built to order and specially designed for Sears customers.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616883","date":"2000-04-21","texts":"NEW YORK -- A week that began with some of the most powerful rallies in the stock market's history ended with a whimper in the options market. Volatility, a major factor in the price of options, remained at elevated levels, while equity and index options trading patterns indicated that traders were still nervous. The option market's fear gauge, the Chicago Board Options Exchange Market Volatility Index, fell 1.93 to 28.31. When the VIX declines, it normally means traders are increasingly optimistic about the stock market. But yesterday's expiration of April options contracts likely depressed the index. That is because dealers unwound hedges that had been initiated to offset risk associated with filling options orders executed by money managers and retail investors. Indeed, Schaeffer's Investment Research, a trading-advisory firm, advised clients that it was shifting its short-term stock-market outlook to neutral from bullish because the VIX is trending higher. The VIX has closed above the psychologically significant 30 level for five of the past six sessions. Whenever the VIX trends higher, the market tends to undergo weakness, Schaeffer's said in a research report yesterday.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614498","date":"2000-04-25","texts":"NEW YORK -- After mild fluctuations, major currencies ended little changed. With European financial markets closed for the Easter holiday and little data to trade on, analysts say investors initially sold technology stocks and the dollar on news that Microsoft Corp. might be forced to split off its various divisions. The dollar rebounded during the New York session, despite a mixed performance in the U.S. stock market, where the Nasdaq Composite Index fell about 160 points and the Dow Jones Industrial Average rose about 62 points. It takes more than Nasdaq moves lately to have a sustained impact on the dollar, said Bob Lynch, currency strategist in New York with French bank Paribas. The impact the Microsoft report had might have been more sizable than normal, too, because there was nothing else to focus on. Late Monday, the dollar was at 105.79 yen, nearly unchanged from 105.84 yen late Friday. The euro was at 93.75 cents, little changed from 93.81 cents late Friday in New York. Against the yen, the euro slid to 99.22 yen from 99.36 yen late Friday.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616794","date":"2000-04-26","texts":"Let's get one thing straight B.F. Goodrich doesn't make tires. In fact, it hasn't made tires since 1986, when it sold that business to France's Groupe Michelin in order to focus on more-lucrative operations aerospace parts, engineered products and chemicals. Last July, still trying to distinguish itself from the tire industry, the company moved its headquarters from Richfield, Ohio, near Akron, the rubber capital of the world, to Charlotte, N.C., home of Coltec Industries, an aircraft-parts maker that Goodrich bought last year for 1.6 billion in stock and cash. The company is so fed up with its case of mistaken identity that it even considered changing its name to Inrich combining innovation and Goodrich before scrapping that idea. Now, it is seeking a moniker that still includes Goodrich. Despite lingering confusion over its business lines, investors are warming to the company, whose stock-market value totals 3.3 billion. From a 52-week low of 21 in mid-December, the shares have risen to around 30. But Goodrich is still an old economy bargain, bullish analysts say. They envision a gain of 40 or more in the next 12 months, to as much as 43. There's a lot of value in B.F. Goodrich, says Mark Parker, chief executive of Joseph Parker & Co., a Thomasville, Ga., money manager that owns nearly 72,000 shares. Their earnings and sales keep growing, and nobody seems to care. The stock trades at about 10 times analysts' average 2000 earnings estimate of 3.16 a share. The Standard & Poor's 500 Index carries a higher PE of 25.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616959","date":"2000-04-26","texts":"As the tech-stock shakeout on Wall Street continues, global money is likely to seek out better returns in markets outside the U.S. But don't expect Asia to be the big beneficiary. Analysts suggest that any U.S. capital flight following Nasdaq's recent correction is more likely to go to Europe than to Asia. The money that does cross the Pacific may be destined largely for Japan, rather than for the smaller Asian economies that need the capital most. Asian markets were mixed as many investors took a wait-and-see approach following Monday's Nasdaq turbulence. Renewed buying interest in blue chips led European markets higher, despite weakness in technology stocks. Latin American shares also rallied. Overall, the Dow Jones World Stock Index rose 4.07, or 1.69, to 244.32. Excluding the U.S., the index fell 0.21, or 0.12, to 179.35. Amid the rise in uncertainties overhanging the U.S. market, many predict a continued shift of money abroad. What we're seeing is just the normal process of portfolio rebalancing, says James Lucier Jr., a Prudential Securities Inc. senior analyst. A year and a half ago you had calamity in Asia, recession in Japan and slow growth everywhere else, which made the U.S. a haven of last resort and a disproportionately hot place to invest in. The U.S. still looks attractive but Europe and Japan in some respects are looking more attractive. Who will benefit from the outflow, however, is less clear, with some analysts noting that the flow of money into Asian stocks this year has slacked off. The share of portfolio money in the U.S. and Europe slated for non-U.S. markets has risen this year, but the share specifically slated for Asia hasn't, says Ajay Kapur, a Hong Kong-based regional strategist with Morgan Stanley Dean Witter.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617167","date":"2000-04-26","texts":"The state's biggest law firms are caught up in a bidding war for top law-school graduates, and corporate clients will inevitably pick up part of the tab. Salary inflation has reached such extremes that hundreds of wet-behind-the-ears lawyers in this state will gross 115,000 this year -- the same as the chief justice of the Texas Supreme Court. Twenty-seven-year-old Trent McKenna, who started last year with the Houston office of Akin, Gump, Strauss, Hauer & Feld L.L.P. at a base salary of 78,000, has already received raises of about 37,000. It's not so much that we're 100 worth whatever salary, he says. What's driving this is that we're a commodity that is more scarce than it used to be. The root cause of the salary surge is the booming economy. In particular, dot-coms are competing for top legal talent by offering lucrative stock options. The biggest Texas law firms expect to shell out up to 12 million each in extra salaries this year. That could have drastic consequences, and not just for the legal profession In-coming lawyers will be asked to work more hours partners at top firms may make less money and big firms could lose clients to cheaper firms or in-house lawyers. Some worry that big law firms will cut back on pro bono services. Debby Ackerman, associate general counsel for Southwest Airlines Co. in Dallas, says that while it's usually worth paying for top talent, her company might bring more work in-house if legal salaries keep rising. If the rates go up again, clearly that would be too much pressure, she says.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982627","date":"2000-04-27","texts":"With the stock market as spongy as a swamp, and initial public offerings disappearing as if they were swallowed by quicksand, three fearless Washington entrepreneurs are nonetheless starting down the path toward going public. While several would-be public companies in the region have pushed the pause button on their IPOs and the most recent one instantly fell below its offering price, three new deals have been filed with the Securities and Exchange Commission. Nettel Communications Inc. of Washington, which provides communications services to medium-size businesses, hopes to raise 175 million in an offering that was filed last Friday and made public this week. MainControl Inc. of McLean hopes to raise about 57 million with an offering that hit the SEC two weeks ago. The company creates software that businesses use to manage their e-infrastructure, which to non-geeks means their office computers, networks, Internet connections and other information technology equipment. Vastera Inc. of Dulles wants to sell 70 million worth of stock. In an April 7 filing, Vastera said it provides international trade management services, using the Internet to help companies make their importing and exporting operations more efficient.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617359","date":"2000-05-05","texts":"NEW YORK -- Blue-chip stocks finished modestly lower in one of the most gently traded sessions this year. Investors apparently decided, after being handed data expected to provide insight into what the Federal Reserve plans to do with interest rates this month, that they hadn't seen enough information to guide their investing. A few rate-sensitive growth stocks wobbled in the session, including General Electric, off 2 116 to 154, AT&T, which lost 1 316 to 38 716, and General Motors, down 1 12 to 86 916. Banks also suffered declines. Chase Manhattan lost 1 to 73 14. Citigroup gave up 1 12 to 58 58. FleetBoston Financial fell 1516 to 33 18. But they weren't the kind of vigorous moves usually associated with downbeat inflation data. Ahead of the session, the federal government released a report that showed worker productivity rose 2.4 in the first quarter this year, well off the 6.9 growth pace of the fourth quarter, and south of the forecasts of 3.5 growth. The same report also showed unit-labor costs picked up during the quarter, suggestive of the sort of inflation pressures likely to spur the Fed to active management of the economy's expansion through further -- and likely larger -- rate increases.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614577","date":"2000-05-08","texts":"It isn't often that Canadians get to boast about having one of the world's top-performing stock markets, but hot technology and communications stocks have put Canadian indexes in the limelight. Though Asian markets generally fared even better last year, Canada handily outperformed the U.S. and most of Europe. Many investors still think of Canada's stock market as a play on natural resources. However, surging shares of such high-tech names as Nortel Networks Corp., BCE Inc. and JDS Uniphase Corp. with headquarters in both San Jose, Calif., and Nepean, Ontario have pushed Canada's traditional sectors into the shadows over the past year. Technology and communications stocks accounted for about 51 of the weighting of the Toronto Stock Exchange 300 Composite Index at the end of the first quarter. That compared with a weighting of just 15 for all of Canada's energy, mining and forest-products companies. Though some high-tech stocks have since plunged amid the sector's wobbles, telecom-equipment giant Nortel has seen its shares hold up well in the wake of strong earnings. The weighting of Canada's resource stocks in the TSE 300 has long been declining as commodity producers disappointed investors and companies in other fields prospered. The combined weighting of resource companies has fallen from 20 two years ago and 29 a decade ago. Over the past six months or so, many foreign investors have woken up to the fact that there's much more going on here than rocks and trees, says George Vasic, market strategist with Bunting Warburg Dillon Read Inc. in Toronto. Mr. Vasic says the TSE 300's heavy weighting in technology stocks makes it perhaps the second-greatest tech index behind the tech-drenched Nasdaq Composite Index in the U.S.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616256","date":"2000-05-08","texts":"Shares of Plug Power Inc. fell nearly 6 Friday after two analysts downgraded the stock. The stock-price decline came a day after the designer of consumer fuel cells said design changes relieved its joint-venture partner, General Electric Co., of a contractual obligation to purchase 485 fuel cells, the bulk of its projected product sales this year. That drop followed a nearly 27 decline on Thursday, when Plug Power made the disclosure in its first-quarter earnings report. Shares fell 3.4375, or 5.8, at 56 at 4 p.m. Friday on the Nasdaq Stock Market. Plug Power shares have lost nearly twothirds of their value since hitting a 52-week high of 156.50 on Jan. 24. On Thursday, Plug Power, Latham, N.Y., said fuel-cell units it was designing and which GE planned to market for the company didn't conform to specifications agreed upon in a February 1999 contract, which relieved GE of the obligation to buy them. The company, which didn't disclose the precise specifications for competitive reasons, originally had expected to deliver the fuel cells, which are small, appliancetype units designed as power sources for homes, by year end. The delay is significant because fuelcell technology, while viewed as promising, still is evolving. GE was contracted to pay 10.3 million for the units through the companies' joint venture, GE MicroGen, at a projected loss to Plug Power, then resell them to residential customers for initial field trials. Officials at both companies said GE, Fairfield, Conn., still expects to purchase most, if not all, of the 485 units from Plug Power, albeit some not until 2001, and said other aspects of their relationship remain intact. GE owns a 12 stake in Plug Power, and the head of GE Power Systems, Robert L. Nardelli, sits on Plug Power's board.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616892","date":"2000-05-08","texts":"FRANKFURT -- No matter what rhetoric it uses, the European Central Bank has to keep raising interest rates in lockstep with the U.S. Federal Reserve -- or risk an even sharper decline to the already sinking euro. With the U.S economy growing so strongly and signs of inflation beginning to emerge, the Fed is firmly on the path toward higher U.S. interest rates. That puts strong pressure on the ECB to lift European rates -- even beyond what is necessary to control European growth pressures. For some of the smaller ECB member countries, this is an ironic change of circumstances. In the years prior to the formation of the ECB, less economically advanced countries often complained of being held hostage to the monetary policy of Germany's powerful Bundesbank, over which they had no say. Germany was, and still is, the major economic power in Europe and to remain on a level playing field with Germany, other central banks had to follow the Bundesbank's lead. But with the ECB, the rest of Europe thought they would finally have a voice. Instead, they now feel they're hostage to Alan Greenspan. The euro, the shared currency of 11 nations, has lost 24 of its value against the dollar since its inception in January 1999. For many reasons, global investors appear to prefer to put money in the U.S. instead of Europe, and the European currency is suffering as a result. To name a few ever-stronger economic reports from the U.S. and relatively weaker performance of Europe the magnetic U.S. stock market political uncertainty in Italy the likelihood of highly indebted Greece, though economically insignificant, joining the euro next year the investigation of Jean-Claude Trichet, head of the Bank of France and heir apparent to the ECB president, for possible wrongdoings when he was in the French treasury the inability of Deutsche Bank AG and Dresdner Bank AG to pull off a merger and the resignation of the European Commission's executive body last year. Wim Duisenberg, the ECB's president, even listed the Balkan war as a reason for the euro's mysterious decline.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616208","date":"2000-05-11","texts":"This is a routine flight to Beijing from the Mongolian capital of Ulan Bator, and while the Gobi desert slips by below, up here American business is on the move. Two cashmere dealers based in the U.S. and an American suit maker based in Mongolia pick through their airline lunches. They're discussing the pricing of an order placed by Wal-Mart with a Mongolian cashmere company and what kind of computer system for designing menswear might be bought in Beijing and brought back to help make suits in Ulan Bator, to ship to buyers in the U.S. The suit maker even has a prospective buyer coming down from Siberia to see if U.S.-designed Mongolian-made clothes might fit the Russian market. Globalization has been with us one way or another for a long time. In brutal form, for example, when Genghis Khan's armies rode forth from Mongolia about 800 years ago to conquer the known world, and in a gentler manner later the same century when Marco Polo trekked the other direction from Venice to China. But today, between the advent of such technologies as the Internet and the end of such deadweight as Soviet rule, globalization is moving with a speed and agility that just a few years ago most modern world travelers scarcely imagined. Between 1990-99, the real volume of world merchandise exports grew 72. Especially significant is that merchandise exports of developing nations grew last year by 8.5, more than twice the global average, according to the World Trade Organization. This suggests still larger trade leaps in the offing, as countries long self-exiled from world markets rearrange their institutions to become global players. Though statistics tell the abstract story, they do not convey the energy with which enterprise is finding its way into places that for much of the past century had fallen off the commercial map. A recent trip to Mongolia from a small town in upstate New York offers at each step a chance to see the speed at which globalization is now seeking its level. Start with a visit to almost any U.S. discount store to buy some traveling clothes. The labels amount to a roster of near-forgotten countries now waking up. Along with the by now standard nightgowns made in Costa Rica and blouses from Bangladesh, there are T-shirts from Swaziland, Burma and Cambodia. From the former Soviet state of Moldova -- how many American shoppers had heard of it 10 years ago -- we see flower-print pajamas. From the former Soviet backlot of Turkmenistan, in Central Asia, come tank tops.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615697","date":"2000-05-15","texts":"In a significant concession to the growing number of investors buying and selling at lightning speed, asset-management giant Vanguard Group said it will add new mutual-fund products that trade throughout the day like a stock. The decision to seek Securities and Exchange Commission approval for the new investment vehicles comes after months of hand wringing at the nation's second-largest mutual-fund firm. During the past year or so, low-cost exchange-traded funds, or ETFs, have surged in popularity on the American Stock Exchange, threatening to steal business from Vanguard's franchise index funds. ETFs are a hybrid version of index mutual funds that can be bought or sold during the day at market prices instead of at the once-daily 4 p.m. price used by traditional mutual funds. The new Vanguard ETFs will compete with upstart ETFs offered by State Street Corp.'s State Street Global Advisors and Barclays PLC's Barclays Global Investors, among others. Vanguard, based in Malvern, Pa., studied the easily traded products for years, and began seriously considering them as an add-on to their traditional index mutual funds about a year ago. Industry observers said Vanguard's entry could prompt other fund companies to add ETFs to their traditional index funds. It's really a case of Vanguard's premier brand name putting the Good Housekeeping seal of approval on exchange-traded funds, said Burt Greenwald, a mutual-fund consultant in Philadelphia. The new products, to be called Viper shares and listed on the American exchange, will be added as a new share class to five of the company's most prominent index funds the 105 billion-in-assets Vanguard 500 Index Fund, the 19 billion Vanguard Total Stock Market Fund, the 16 billion Vanguard Growth Index Fund, the 4 billion Vanguard Small-Cap Index Fund and the 3 billion Vanguard Value Index Fund. Pending regulatory approval by the SEC, the new share class will be introduced during the third quarter, a Vanguard spokesman said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616181","date":"2000-05-16","texts":"It's better to build than to buy. That is the current mantra of online brokerage firms, whose ranks have ballooned in recent years and now number about 140. But with prices and activity on the Nasdaq Stock Market -- playground of online traders -- swooning since March, a shakeout among online brokers seems inevitable. This industry is absolutely ripe for consolidation, says Henry McVey, an analyst at Morgan Stanley Dean Witter. You've got a glut of capacity out there. Yes, yes. But not so fast. What's holding things up is a little-known fact It remains far cheaper for online brokers to acquire new accounts through massive ad spending than to gobble up smaller rivals.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616877","date":"2000-05-16","texts":"WASHINGTON -- Production by U.S. factories, mines and utilities continued to accelerate in April, offering further evidence of the economy's strength in the face of rising interest rates. Industrial output jumped 0.9 last month from March, its fastest pace in almost two years, the Federal Reserve said. Output is now 6.1 higher than it was a year earlier. The March gain, meanwhile, was revised upward to 0.7, sharply higher than the preliminary estimate of a 0.3 increase. Taken together, the numbers suggest that U.S. industrial production continues to gain strength and that the April increase isn't a one-month anomaly. With suppliers straining to keep up with strong consumer and business demand, the nation's capacity-utilization rate jumped 0.4 to 82.1, the first time that the index has climbed above 82 in about two years. Utilization rates of less than 84, however, suggest that manufacturers have enough slack to increase output without triggering production delays or bottlenecks The report came as the Federal Reserve's Federal Open Market Committee prepared to meet here to consider a further interest-rate increase designed to slow the pace of the economy's growth while keeping inflation under wraps. The central bank has raised rates by a quarter of a percentage point five times since last June, but is widely expected to choose a more aggressive, half-point increase at its meeting today. A half-point move would bring the federal-funds rate -- the rate at which banks lend to each other overnight -- to its highest level in about nine years. Still, yesterday's report offers some good news on the inflation front. Most of the overall increase in industrial output came about because of a 1.6 run-up in production of computers and other information-processing hardware and software. This and other technology have helped spark the massive productivity gains, which have held inflation in check in recent years. Technology production rose 2.7 in April, and is up an eye-popping 59 year over year. Consumer goods production, by comparison, increased 0.6 after being flat the last two months.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982991","date":"2000-05-16","texts":"MicroStrategy chief executive Michael J. Saylor has personally guaranteed a line of credit for the Vienna-based software company and has backed the guarantee with collateral, MicroStrategy reported in a filing with the Securities and Exchange Commission. To secure the loan, Saylor pledged all the financial assets held in an account of Alcantara LLC, according to a document filed with the SEC. Alcantara is the vehicle through which Saylor owned 43.1 million of his 43.8 million shares of MicroStrategy, as of March 31. The company had fallen out of compliance with the conditions of a 25 million bank credit line. But with Saylor's guarantee, Bank of America has increased the credit line to 28.6 million. Saylor does not receive any compensation for providing the guarantee, MicroStrategy reported. Industrial production last month made its largest gain in 20 months, reinforcing expectations that Federal Reserve policymakers will raise interest rates when they meet today. Output at factories, mines and utilities increased 0.9 percent in April after rising 0.7 percent in March, more than previously reported, Fed figures showed. The April increase was the largest since a 1.8 percent rise in August 1998, when General Motors factories rebounded from a two-month strike. Continental Airlines, after leading a round of air-fare increases over the weekend, surprisingly rescinded its decision. Before Continental's reversal, the nation's three largest air carriers-- United, American and Delta--said they would match the increases of 10 to 30 a round trip on business and leisure fares. Arlington- based US Airways had matched both increases Friday but changed course yesterday, keeping the fare increase on business fares but not leisure fares. Continental cited rising fuel costs as its original reasons for boosting fares. Choice One Communications will double its territory as a provider of Internet and telephone service with the purchase of US Xchange for about 517.5 million in cash and stock. Choice One, which serves the Northeast, will pay 311 million in cash and 7 million shares for the closely held US Xchange, which provides local and long-distance telephone service to about 17,000 business and residential customers in four Midwestern states. EMC, the largest maker of computer data-storage systems, canceled a year-old plan to buy 3 billion worth of hard drives from IBM, amid worries at IBM that a delay in introducing new drives will cut into second-quarter revenue. EMC cited production delays and said it worked out a new purchase agreement that doesn't include a specific amount. The agreement is part of an effort by the two companies to settle all patent suits against each other.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614923","date":"2000-05-17","texts":"MEXICO CITY -- On a day when fears that a cooling in the U.S. economy could damp Mexico's expansion, figures released by the country's Finance Ministry showed there's plenty of momentum here. Mexico's gross domestic product surged at an annual rate of 7.9 in the first quarter, its fastest clip in 212 years and well above expectations, as the strong peso and low inflation helped spread the economic recovery to all sectors. Mexico's industrial sector expanded by 8.6 from a year earlier, with manufacturing output rising 9.4. Construction expanded 6.9, while mining and energy sectors also increased by healthy margins. Mexican officials noted that the first-quarter results were skewed by several additional working days in the period. Strong fundamentals are the real story behind the surge, analysts said. Even before garnering a coveted investment-grade rating from Moody's Investor Service Inc. in March, the country had met its overseas debt obligations for 2000. Moreover, despite increased government spending this election year, Finance Minister Angel Gurria confirmed Mexico is on track to meet its target of a budget deficit of 1 of gross domestic product for 2000. slightly better than 1999's 1.15 figure.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616222","date":"2000-05-17","texts":"Texas looks sharp when it comes to today's high-tech industry. But the Lone Star state lags a bit when it comes to its spending on tomorrow. That's according to the fourth edition of the American Electronics Association's Cyberstates A State-by-State Overview of the High-Technology Industry. The report, which is being released today, takes a number of different measures of the state's high-tech industry -- including its employment, wages and share of exports -- and compares them with those of other states, as well as Washington, D.C. and Puerto Rico. The report, funded in part by the Nasdaq Stock Market, also provides an analysis of both high-tech venture-capital investments and research-and-development expenditures. The association defines high tech using three broad categories manufacturing, communications services, and software and computer-related services. The definition doesn't include such fields as biotechnology or aerospace. In high-tech employment, the Lone Star State ranked high For every 1,000 private-sector workers in 1998, 56 were employed by high-tech firms, or 22 more than the total U.S. share of high-tech employees. That placed Texas 11th in the country in terms of that concentration -- behind such states as California, Massachusetts and New Hampshire. Colorado had the highest concentration of high-tech workers 84 for every 1,000 private-sector workers, while Wyoming ranked last, with 14. The number of high-tech employees that Texas hired grew by a healthy 48, compared with the national average of 28, placing Texas 10th. North Dakota's high-tech employment grew 90, placing it first, while Indiana was last with a decline of 7.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616605","date":"2000-05-17","texts":"High tech is raining prosperity down on the region. That's according to the fourth edition of the American Electronics Association's Cyberstates A State-by-State Overview of the High-Technology Industry. The report, which is being released today, takes a number of different measures of the region's high-tech industry -- including its employment, wages and share of exports -- and compares them with those of other states as well as Washington, D.C. and Puerto Rico. The report, funded in part by the Nasdaq Stock Market, also provides an analysis of both high-tech venture-capital investments and research-and-development expenditures. The association defines high-tech using three broad categories manufacturing, communications services, and software and computer-related services. This definition doesn't include such fields as biotechnology or aerospace. High-tech employees in Washington state were the best paid around as of 1998, earning an average annual salary of 105,681 -- almost twice the U.S. average of 57,701. And it's more than three times the state's average private-sector wage of 32,914. Dick Conway, a Seattle economist who tracks regional business issues, attributes that to the high stock-option income at Microsoft Corp. Puerto Rico had the lowest high-tech wage at 24,169. By comparison, the average high-tech wage in Oregon was 54,771, ranking the state fifth. But in another measure, the Evergreen State ranked far lower than one might expect 45th in its share of high-tech exports. Again, Microsoft is the culprit, says Mr. Conway, because the software the Redmond-based company sells often doesn't get counted as merchandise by the U.S. Census Bureau, but rather as a service that requires a license to operate.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616483","date":"2000-05-18","texts":"Lycos Inc. reported better-than-expected results for its fiscal third quarter, but its shares plunged more than 20 amid concerns about the proposed takeover by Spain's Terra Networks SA. Lycos shares closed at 57.6094 apiece on the Nasdaq Stock Market, down 15.0156 and almost 40 below the proposed takeover price of 97.55. The sharp drop was highly unusual, and suggests that some Lycos shareholders are worried that Terra isn't a good strategic partner. It may also be a bet that Terra shares will fall further, which could lower the price that Lycos shareholders will receive under the pact. Separately, Waltham, Mass.-based Lycos reported that net income for the period ending April 30 hit 122.4 million, or 1.05 a diluted share, aided by a 270.2 million gain from investments. That reversed a net loss of 13.2 million, or 15 cents a share, in the year-earlier quarter. Operating profit totaled 7.9 million, or seven cents a share, higher than the five cents a share analysts were expecting. The Internet portal reported that revenue more than doubled to 78.6 million, compared with the year-earlier 35.8 million and higher than the 75 million analysts had been expecting. Revenue from advertising, a key yardstick on the Internet, more than doubled to 51.6 million. Paul Noglows, of Chase Manhattan Corp.'s Chase H&Q unit, called it a good quarter, but pointed out that most investors are focusing on the Terra deal.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616822","date":"2000-05-18","texts":"NEW YORK -- With the Federal Reserve's decision to raise interest rates behind it, the options market looked forward to its next signpost tomorrow's monthly expiration of options contracts. The problem is, traders and strategists frequently complain that expiration isn't as big an event in the options market as it once was. They say that this is partly because the position-rolling activity isn't as concentrated in the last few days leading up to expiration as it used to be. Cibc World Markets options strategist Michael Schwartz said that a midafternoon scan of yesterday's most-active options contracts yielded few suspects for trades that were rolling positions forward, those that occur when an options player moves a position's expiration farther out, sometimes also using the opportunity to move the strike price up or down. One possibility, though, was Cisco Systems Inc. With the stock falling 2 916 to finish at 58, Cisco's May 60 and June 70 calls were among the most active call contracts at the Chicago Board Options Exchange. Mr. Schwartz said that the activity may have been the result of expiration-related adjustments. Additionally, options trading hasn't been as active as some would like. Paul Foster, options strategist at 1010WallStreet.com, complained that this week's expiration is the driest expiration I've seen in the past 12 months.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613962","date":"2000-05-22","texts":"The persistent shortage of workers that has been crimping growth plans at many companies won't be ending anytime soon, according to Manpower Inc.'s latest survey of U.S. employers' hiring plans. Demand for employees is still growing, and with unemployment at its current extremely low levels, the traditional labor supply is essentially exhausted, Manpower said. Companies pinched for labor may get a modicum of relief from recent legislative changes that eliminated Social Security earning limits that freed some older workers from restrictions on their ability to work. But recruiting more workers will continue to challenge employers throughout the country, Manpower said. Of the about 16,000 companies that participated in the survey, about 35 said they expect to be recruiting additional workers in the third quarter. That's the highest level seen in the 24 years that the survey has been conducted. During the year-earlier quarter, and again in the second quarter of the current year, the figure was an already very strong 32.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617207","date":"2000-05-22","texts":"-- 27 years old -- Co-founder and vice president of finance and operations, PeachtreeNetwork Inc., Montreal -- A network of Web sites for online groceries -- Founded February 1997, 17 employees -- Company valuation about 25 million","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616361","date":"2000-05-23","texts":"Past performance is a rotten guide to future results. But that hasn't deterred investors. Folks love to pore over stock-market data, hoping to divine the future. But unfortunately, while the past gives credence to certain investment principles, it doesn't offer much help to those looking to beat the market. History Lessons. We have U.S. stock data going back two centuries. What can we learn Three lessons stand out. First, it pays to take risk. The longer we go out, the more pronounced the risk-reward trade-off becomes, says Scott Lummer, chief investment officer of mPower, a San Francisco online investment adviser. Bonds beat cash, stocks beat bonds, small stocks beat large stocks. Second, unlike bonds or Treasury bills, stocks have proven to be a wonderful long-run defense against rising consumer prices, outpacing inflation by an average seven percentage points a year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614950","date":"2000-05-25","texts":"The Nasdaq Composite Index came close to crossing 3000 again -- this time from the wrong direction. But the shock of revisiting the milestone apparently helped persuade some investors to step in and buy, turning a potential stock-market rout into a rally. The buying began after the technology-dominated index fell within a hair of the 3000 level that it had crossed triumphantly on Nov. 3 of last year, on its way to 4000 and then 5000 by this past March. All of those previous gains set the stage for the sharp declines that tech stocks have suffered in the past two months. Yesterday's flood of money surged back into the market after a morning decline sent the Nasdaq composite as low as 3042.66. The Nasdaq index closed up 106.06 points, or 3.35, at 3270.61. It had been down 121.89 at midday, so the total swing from low to close was 227.95 points. Names such as Intel, Cisco Systems and Sun Microsystems were in demand. The violence of the rally caught everyone off guard, said Rob Cohen, co-head of listed trading at Credit Suisse First Boston. You might have set a low level for the short term. Still, traders said the volatile market could retest the Nasdaq 3000 level again later. But after days of weak demand for stocks, they said, the return to strong volume was a positive sign. On the New York Stock Exchange, trading volume exceeded one billion shares for the first time since May 2.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616194","date":"2000-05-26","texts":"WASHINGTON -- Growth in corporate profits slowed in the first months of the year, while profit margins improved only slightly, suggesting that the bottom line at many firms may begin to suffer in the months ahead. In its first look at first-quarter corporate results, the Commerce Department said that profits, adjusted for the impact of inflation on inventories and depreciation, rose 3.8, slightly slower than the 4 gain recorded in the last months of 1999. Profits were 7.6 higher than they were a year earlier, down from a 9.6 year-over-year change in the fourth quarter of last year. Profit margins, meanwhile, inched up 0.1 to 9.8 for the quarter, but have been relatively flat for the past two years. The peak rate of profit growth is behind us, said David Orr, chief economist with First Union Bank Corp. in Charlotte, N.C. There will still be growth, but at a decelerating rate. The numbers were included in the department's revised first-quarter gross-domestic-product report. In the first three months of the year, GDP -- the broadest measure of goods and services produced by the U.S. economy -- surged ahead at a brisk 5.4 annual rate, confirming the department's earlier estimate. Many analysts had expected the GDP numbers -- which came on the heels of a torrid 7.3 pace in the fourth quarter of last year -- to be revised downward slightly. As in the preliminary report, the data suggest that inflationary pressures continue to build in the economy. The gross- domestic-purchases portion of the GDP figures, which Commerce officials point to as the broadest gauge of inflation in the report, rose 3.2 for the quarter, its sharpest gain in more then ten years. The increase, the same as in the department's earlier estimate, follows a 2.3 gain in the fourth quarter of 1999. The measure tracks increases in the prices paid by companies and individuals.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981691","date":"2000-05-26","texts":"The U.S. economy surged at a 5.4 percent rate in the first three months of the year. But existing-home sales dropped 6.2 percent in April, a sign that the Federal Reserve's interest-rate increases are beginning to have an impact. The first-quarter increase in the gross domestic product was slightly bigger than many analysts expected but matched the government's estimate from one month ago. Calpers named Daniel Szente chief investment officer of the nation's largest public pension fund. Szente, 52, was director of research of Pennsylvania-based McGlinn Capital Management. He will oversee the California Public Employees' Retirement System's 175 billion in assets. NextWave's wireless licenses may be auctioned by the FCC, according to one appeals court decision. A federal appeals court in New York has ruled that a bankruptcy court overstepped its authority in blocking the auction. The FCC had canceled 63 spectrum licenses awarded to NextWave Telecom for 4.74 billion after the bankrupt company failed to pay for them on time. The FCC had planned to re- auction the licenses July 26. Whether the auction can occur now is still unclear because the company is pursuing a similar case before a federal appeals court in Washington. Saturn plans to lay off about 490 workers at the assembly plant near Newport, Del., because of slow sales of its new mid-size car. The cuts represent about 19.6 percent of the work force at the plant. Walt Disney Co. agreed to pay Internet portal GoTo.com 21.5 million to settle a copyright-infringement lawsuit over a logo. Disney also agreed to stop using the disputed logo for its Go Network as well as a replacement logo the company devised after a court issued an injunction against it in November.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982566","date":"2000-05-27","texts":"U.S. durable goods orders fell 6.4 percent in April, the steepest drop in more than eight years, as bookings for electronic equipment such as semiconductors posted a record decline and demand for automobiles weakened. The decrease followed a 4.5 percent gain in March that was higher than previously reported, Commerce Department figures show. Analysts said the decline suggests growth in manufacturing may have peaked after 15 months of advances, as six interest-rate increases by the Federal Reserve begin to slow consumer purchases. Women earned an average of 76.5 cents on the dollar last year, compared with men doing the same full-time work. The gap was little changed from 1998, when women took home an average of 76.3 cents for every dollar earned by men, the Bureau of Labor Statistics said. Since 1979, when the agency started keeping track, women have closed the gap by 14 cents. A new e-mail virus disguised as a resume hit a number of U.S. corporations using Microsoft software. Antivirus software makers said the virus, called Resume.A by some, mimics earlier viruses that exploit Microsoft's Outlook e-mail software. The virus, contained in an e-mail attachment that appears to be a resume, sends itself to every user stored in an infected computer's address book. The e-mail carrying the virus generally has a subject line of Resume--Janet Simons. Potomac Electric Power is being sued by Panda Energy International, which is seeking to prevent the District-based utility from selling a 25-year contract to buy electricity from Panda's Brandywine, Md., plant. The suit alleges that Pepco can't sell the contract, agreed to in 1996, without Panda's permission. A Pepco spokesman declined to comment on Panda's claims, saying Pepco hasn't officially been served with the lawsuit. Dallas-based Panda owns power plants in Maryland, North Carolina and Texas. British Telecom must let its competitors supply unmetered access to the Internet over BT's network, Britain's telecommunications watchdog ruled. The ruling by the Office of Telecommunications paves the way for the spread of American-style, flat-rate Internet service and offers the prospect of lower phone bills for millions of British Internet users.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614696","date":"2000-05-31","texts":"SAO PAULO, Brazil -- Some of Brazil's biggest companies have postponed plans to borrow on international debt markets, as lending terms stiffen and foreign investors back off. Several large electric utilities have postponed dollar-denominated debt issues, and firms including cellular and media concerns are looking to local markets and bank loans to finance their operations and repay maturing debt. A new international issue just won't happen right now, says Robert Nydegger, a Latin America corporate credit analyst at Credit Suisse First Boston Corp. The cost of debt is just way too expensive. The interest rate on Brazilian corporate bonds has jumped by about two percentage points over the past two months, raising bond yields for some blue-chip companies to nearly 16. The recent half-percentage-point rate rise by the U.S. Federal Reserve was the breaking point for some companies, whose foreign borrowing rates are priced according to U.S. Treasury bonds. Fresh from a four-city roadshow in the U.S. and Europe, electric utility Light Servicios de Eletricidade SA last week postponed a 150 million bond sale following the Fed move. A person familiar with the issue, who says Light was also following the whipsaw movements of the Nasdaq and the Dow Jones Industrial Average, says investors who had tentatively agreed to accept a rate of 9.75 were suddenly demanding payments as high as 11.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983491","date":"2000-06-01","texts":"Sales of new homes tumbled 5.8 percent in April while a key index of future economic activity slipped 0.1 percent, two signs that the Federal Reserve's higher interest rates are beginning to slow the economy. The Commerce Department said sales of new single-family homes edged down to an annual rate of 909,000 last month in the biggest one-month drop since a 7.2 percent decrease in September. Meanwhile, the index of leading economic indicators declined by 0.1 percent last month, according to the Conference Board in New York. Virginia's jobless rate dropped to 2.3 percent in April, only the third time the rate has been that low in more than 30 years, the Virginia Employment Commission said. The rate dropped from 2.5 percent in March and was far below the national jobless rate of 3.7 percent in April. The number of Virginians looking for work declined from 91,500 in March to 82,000 in April. Fairfax City had the lowest jobless rate at 0.6 percent, followed by the city of Bedford at 0.7 percent. Manassas Park and Greene, Rockingham and Loudoun counties had rates of 0.9 percent. AT&T, which is trying to become the largest U.S. cable-TV provider through acquisitions, plans to carry the Hot Network, a pay-per-view channel that shows sexually explicit movies. Financial terms were not disclosed. The channel is owned by Hot Networks, a privately owned company that also operates the Hot Zone, another sex-oriented channel. Brown Brothers, Harriman, the oldest privately held U.S. bank, said it will exit the brokerage business to focus on managing money for wealthy individuals. Brown Brothers, founded in 1818, will fire 78 analysts, traders and support staff from among the 125 people who work in its institutional brokerage business. Sunterra, operator of 90 time-share resorts in North America, Europe and Asia, said it filed for Chapter 11 bankruptcy-court protection from its creditors after recent losses and debt-payment problems. Orlando-based Sunterra, which employed 7,800 people at the end of December, said last week that it will fire more than 900 workers and cut costs by halting sales at some resorts.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985520","date":"2000-06-04","texts":"Do you want an investment that's absolutely safe And earning a higher interest rate than you can get at the bank And tax-deferred Take a look at the up-to-date version of U.S. Savings Bonds--the Series I bonds. They're paying an amazing 7.49 percent that's an annualized rate on savings as low as 50. Small savers can't get a higher rate anywhere. Sophisticated savers, with larger portfolios, are buying them, too. If you're balancing risky investments with safe ones, I bonds are the place to look. Series I bonds were introduced in September 1998. So they're still pretty new, and savers may not have heard about them. The I stands for inflation. These bonds guarantee you an attractive, real rate of return, no matter what happens to the inflation rate. Lately, inflation has been rising--so the I bond's total return is rising, too.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614360","date":"2000-06-06","texts":"NEW YORK -- Barnes & Noble.com Inc. is paying about 20 million for a 20 stake in MightyWords Corp., which offers digital versions of books and texts by both wellknown and unknown authors. MightyWords is being shed by Fatbrain.com Inc., a Santa Clara, Calif., online retailer of technical books. Under terms, Barnes & Noble.com will begin offering MightyWords' content on its site. Technical and educational books have provided a market for electronic publishers for several years. But e-publishing burst out to a wider audience earlier this year when Viacom Inc.'s Simon & Schuster Inc. published a novella by Stephen King exclusively on the Internet. MightyWords' writing -- which can be downloaded to a personal computer and then printed onto paper -- includes some romance and fiction by authors including Toni Morrison and Arthur C. Clarke. But much of its subject matter focuses on technical subjects such as business or computing. Fatbrain announced it would shed MightyWords in March, just about the time the stock market soured on Internet investments. Instead of taking the company public, Fatbrain turned to private investors. MightyWords' deal with Barnes & Noble.com is part of the company's initial round of funding, which totals 36 million. Vulcan Ventures Inc., the investment vehicle for Microsoft Corp. cofounder Paul Allen, is investing 10 million in MightyWords and 6 million is coming from other investors.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614457","date":"2000-06-07","texts":"In Wall Street's leading corporate drama, it's not the opening act that worries investors. It's the encore. What investors fear most these days about Microsoft's antitrust case isn't so much an AT&T-style breakup, but rather conduct remedies that could hobble Microsoft much as International Business Machines was legally hamstrung in the 1970s and 1980s. Investors and analysts still expect Judge Thomas Penfield Jackson to endorse the government's proposal to break Microsoft into two one company focusing on computer operating systems, the other on application and Internet software. Even if the ruling isn't overturned on appeal, it might not be so bad in and of itself, some investors say. What if, 18 months ago, Bill Gates said We're getting too big, we're gonna split into three companies,' muses Charles Carlson, manager of the 145 million Strong Dow 30 Value Fund, which has a stake in Microsoft. If a breakup had been proposed in that way, Mr. Carlson says The stock would have gone up 50. Well, it didn't. And now, investors increasingly are worrying about the lessobvious conduct remedies, which have been proposed and are expected to be included in Judge Jackson's ruling. As in new rules governing Microsoft's relations with computer makers, Windows pricing and the disclosure of computer source code. These rules are designed to restrain Microsoft from abusing its monopoly in the software business and would expire in three years if Microsoft were broken upor 10 years if it isn't.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615753","date":"2000-06-07","texts":"LUDWIGSHAFEN, Germany -- During a decade as chief executive of BASF AG, Juergen Strube has bucked business cycles and prevailing political winds to transform a provincial German company into the world's biggest integrated chemicals group. After the collapse of communism in the early 1990s, BASF forged a controversial alliance with Russian natural-gas producer RAO Gazprom and spent billions of dollars building pipelines across Germany today, oil and gas is the company's most profitable division. During the 1998 Asian economic crisis, BASF snapped up chemical producers in Korea and speeded up construction of huge chemical complexes in Malaysia and China. Earlier this year, Mr. Strube flouted the furor in Europe over genetically modified crops by launching a 700 million euro 664 million research blitz in plant biotechnology. Then, raising the ante, BASF shelled out 3.8 billion for the agrochemical division of American Home Products Corp. This week, Mr. Strube is pitching an Old Economy story to investors besotted with the New Economy. BASF stock begins trading on the New York Stock Exchange today. It's the kind of challenge Mr. Strube savors. For all its global clout, BASF remains a relative unknown in U.S. financial markets. American investors currently hold a meager 8.5 of the German company's shares outstanding. BASF isn't issuing any new stock in conjunction with the New York listing. But Mr. Strube hopes the U.S. stock market debut will boost the company's valuation and enable BASF to use its shares to finance future U.S. acquisitions. Despite spending 243 million euros so far on a two billion euro share-buyback program, BASF stock is down more than 10 so far this year at yesterday's closing price of 44.75 euros.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617120","date":"2000-06-09","texts":"With long-awaited economic figures about to be released, investors hunkered down, pushing down both stock prices and trading volumes. The Nasdaq Composite Index, which gained 19 last week, is now slightly down for this week after giving back 0.36, or 13.70 points, to close at 3825.56. It is a similar story for the Dow Jones Industrial Average, up 4.8 last week, but down 1.33, or 144.14 points, to 10668.72 yesterday. Other indexes also fell, although bonds and the dollar managed gains. Trading volumes were among the lightest of the year. One reason for the Dow Jones Industrial Average's weakness was an earnings warning from Procter & Gamble. But the bigger issue hanging over the market is a group of economic announcements, starting with May producer prices this morning. That could help determine whether the Federal Reserve feels the need to continue raising interest rates at the end of this month. People are waiting for confirmation of the economic numbers we saw last week, to give them conviction to put more money into this market, said Brian Conroy, head of listed trading at J.P. Morgan.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830985091","date":"2000-06-11","texts":"Fifty-five years ago this September, the Austrian composer Anton von Webern stepped into the autumn night outside the little town of Mittersill, Austria, and lit a cigar. No one knows quite what happened next, but he found himself on the wrong end of a GI's gun, and a few hours later he was dead. It was a death that conductor Pierre Boulez, whose second complete edition of the works of Webern has just been released on Deutsche Grammophon, called absurd in a breathlessly adulatory article about the composer published in 1958. Webern's death at age 61, a war casualty after the war was over, was absurd. It was most likely the result of a jittery soldier working undercover to nab the very same black marketeer who had given Webern his cigar. It was a silly, ignominious death for a composer who had suffered more than his share of unjustified ignominy. The deaths of all three of the great Viennese modernists were absurd. Webern's teacher Arnold Schoenberg, the consummate Viennese curmudgeon, died in Los Angeles in 1951, grumpy, isolated and superstitious almost to the point of paralysis. Fellow Schoenberg disciple Alban Berg died at 50 in 1935 of an abscess that might have been easily treated today. Although Schoenberg lived well into his seventies, not one of this great trinity of modernism, who elaborated a succession of post- tonal styles--most famously the 12-tone technique and serialism-- really got to be a grand old man. None of them enjoyed the esteem and career security that makes possible reassessment and stylistic reflection. Unlike Stravinsky's, for example, the music of the atonalists had little autumnal evolution Berg and Webern didn't live long enough and Schoenberg, desperate for commissions, made only feints in new directions.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614836","date":"2000-06-12","texts":"The Agriculture Department trimmed its estimate of the wheat harvest under way across the Southern Plains to account for drought damage, but recent rains have improved crop conditions in much of the Midwest. The department's June crop report, released Friday, predicted a 1.62 billion-bushel winter-wheat harvest, down 2 from the May forecast and down 5 from last year's actual harvest of 1.7 billion bushels. The damage isn't enough to fuel any acceleration in the nation's mild level of food-price inflation. U.S. wheat prices are depressed. Several of the U.S.'s wheat-exporting rivals, such as Australia and Canada, are sitting on large stockpiles in the wake of several good growing seasons. As a result, the Agriculture Department didn't change its forecast that the price of a bushel of U.S. wheat will average about 2.65 this year, give or take 25 cents. Many farmers can't make a profit at that price. Winter wheat, the biggest variety grown in the U.S., is planted in the fall and harvested in late spring. The wheat fields in the worst shape are located in Texas, where 59 of the crop is in very poor to poor condition, according to a government survey released a week ago.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615785","date":"2000-06-12","texts":"NEW YORK -- The U.S. money-supply report will take yet another step into the shadows this summer. Beginning sometime around the first of August, the Federal Reserve Bank of New York will start to phase out its weekly, in-person news briefing, where it has given out the weekly money-supply data for decades. It will be replaced with an electronic virtual news conference. For market players wanting to see the money-supply data, nothing is changing. At 430 p.m., the headlines will still scroll across trading screens. The report won't look any different than it did before. There won't be any new details. Even so, the change in the process signals just how far the money supply has fallen from its status as one of the pre-eminent economic indicators to one watched by a small audience of technically minded Federal Reserve watchers. The Fed may in fact be behind the curve most market veterans say it has been literally decades since the money-supply report captured their attention and had the ability to affect the direction of prices. The prime years of importance were between 1979 and 1982, says Marc Wanshel, an economist with J.P. Morgan. That is when the Federal Reserve was engaged in desperate combat to stomp out what seemed like an intractable inflationary spiral, he said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615940","date":"2000-06-12","texts":"NEW YORK -- The dollar looks poised to weaken somewhat this week, as the market turns its attention to the last big batch of data ahead of the Federal Reserve's meeting at the end of the month. However, political events elsewhere could help the dollar, as Japan readies for its June 25 Lower House election and Europe grapples with economic reform. Analysts expect the dollar to trade in a range of 103 yen and 108 yen and near 96 cents against the euro. Many European markets are closed today for a holiday. Analysts expect more data indicating that the U.S. economy is slowing, which would feed speculation that the Fed will pass on raising interest rates at its June 27-28 meeting. The key data are retail sales and consumer prices, said John Rothfield, senior currency strategist at Bank of America in San Francisco. We expect those to be benign, and that will probably trigger a rally in some of the other currencies. The producer-price index for May, announced Friday, was unchanged, suggesting that consumer prices also will be benign and leaving an uncertain outlook for U.S. interest rates.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615217","date":"2000-06-13","texts":"WASHINGTON -- Business groups are promising to wage a court battle over government regulations that would allow states to use unemployment-insurance money to give new parents paid time off from their jobs. The regulations, expected to be formally introduced today, would allow state governments to use unemployment-insurance funds to pay parents of newborn or adopted children while they are on leave from their jobs. A lawsuit challenging the rules is expected by the end of the week. The guidelines would amend 1993's Family and Medical Leave Act, which allows parents to take as much as 12 weeks of unpaid leave to care for new children or sick relatives. White House officials say many Americans are simply unable to take such leave if it means doing without a regular paycheck. With jobs plentiful in a surging economy, the officials argue that excess unemployment-insurance funds can safely be shifted to pay for leaves. In today's strong economy, we can provide this important benefit without threatening the fiscal strength of the unemployment-insurance programs, said Labor Secretary Alexis Herman. Nonsense, say many business groups, who accuse the White House of playing politics with money meant to provide a safety net for out-of-work Americans. They argue that the funds could run out if the economy were to slow, forcing companies to pay higher payroll taxes.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614748","date":"2000-06-21","texts":"Winners -- Family Art Robert Callahan, retired chief justice of Connecticut's Supreme Court, had his younger brother Kevin paint his official portrait. -- Activism Isaac Evans Frantz, a senior at Vermont's Brattleboro Union High School, will be the first student member of the state Board of Education. -- Patriots It took just 90 minutes to sell all the remaining tickets for seats at the eight New England Patriot home games next season. Losers","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616623","date":"2000-06-21","texts":"LONDON -- The London Stock Exchange is coming under increasing pressure to respond in detail to questions raised by critics of its proposed merger with Deutsche Boerse AG. But exchange officials are warning that owners of the two exchanges may have to vote on the merger plan before many of the questions can be answered. The exchanges last month announced plans for a merger that would create a new pan-European exchange called iX and involve a joint venture with the U.S.-based Nasdaq Stock Market, which is owned by the National Association of Securities Dealers. The agreement is subject to approval by owners of 75 of the shares in each exchange in votes expected to be held in September. Officials of the London exchange, known as the LSE, may have trouble winning enough votes from the 298 member firms that own the bourse. In early July, the two exchanges are due to give their owners an information memorandum on the deal, expected to be more than 100 pages long. Indications of its contents could be given to key London bankers tomorrow, when Werner Seifert, who is the chief executive of Deutsche Boerse and would hold the same post at iX, attends a meeting of an LSE committee that helps set trading rules. An LSE spokesman said the document will include projections for the prospects of iX but won't delve into issues beyond the exchanges' immediate control, such as regulation, settlement and the effect of the deal on stock indexes.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982842","date":"2000-06-21","texts":"How do you translate synergy into French It's a nonsense word, and maybe it's a nonsense concept, too. But Jean-Marie Messier, chief executive of Vivendi, is betting his company on the dicey prospect that a transatlantic hodgepodge of European and American assets can indeed produce synergy--and make real money. Messier yesterday delivered the formal announcement of his 34 billion mega-deal to buy the Canadian drinks and entertainment company Seagram, which owns Universal studios and Polygram records. His hope is to make the merged Vivendi Universal into a Paris- based media company that will play in the same monster league with AOL-Time Warner. A comment by Messier at yesterday's press conference made it clear that one factor behind this deal is France's decades-old insecurity about the reach of America's cultural imperialism. For the first time in Europe, there is a communication group of a size that will be able to rival all the American giants, Messier boasted. Maybe so. But many a would-be entertainment baron has stumbled in the pursuit of Hollywood's irresistibly glamorous assets. Just ask the Japanese company Matsushita, which a decade ago was seduced into buying MCA, which it later sold in frustration to Seagram, which Seagram is now selling in frustration to Vivendi. When it comes to the entertainment business, it seems, there always is one more sucker. Even by recent standards of the merger-crazed business world, this one is a high-risk combination. It's premised on the belief that immense scale is essential to compete in today's economy. That remains a shaky proposition, in my book. Insiders say that even before the planned merger with AOL, Time Warner was an almost unmanageable collection of rival princes running their own fiefdoms. Add to that the difficulty of combining Paris and Hollywood--Gerard Depardieu and Julia Roberts--and you have a truly daunting challenge. The chance of the French succeeding in running a U.S. music and film business properly is about zero, one analyst told Reuters news service yesterday. The stock market certainly agrees with that gloomy assessment. Since news of the deal leaked last week, Vivendi's stock has fallen about 22 percent, including a 7 percent drop yesterday, according to the Associated Press. That drop reflects investors' doubts that Vivendi can make enough money from the deal to recover the premium it paid for Seagram, headed by Edgar Bronfman Jr.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614431","date":"2000-06-23","texts":"The following were among yesterday's offerings and pricings in U.S. and non-U.S. capital markets, with terms and syndicate manager, based on information provided by Dow Jones Newswires. A basis point is one-hundredth of a percentage point 100 basis points equals a percentage point. CORPORATE American General Corp. -- 300 million of capital securities was priced through lead manager Salomon Smith Barney, according to people familiar with the deal. Terms maturity July 1, 2030 coupon 8.5 issue price 99.471 yield 8.549 spread 242 basis points above Treasurys debt ratings A2 Moody's, single-A S&P. EQUITY Cox Radio Inc. CXR -- 8.8 million common shares were priced at 29 apiece through lead underwriter Credit Suisse First Boston Corp.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982515","date":"2000-06-23","texts":"Federal Reserve officials are widely expected to leave short-term interest rates unchanged when they meet Tuesday and Wednesday, but they are also likely to say they are still more concerned about rising inflation than they are about signs the economy is slowing. The choice facing policymakers next week, Fed officials say, is between leaving their target for overnight interest rates unchanged or raising them by a quarter of a percentage point. A large majority of investors and analysts are betting rates will not change. The situation was very different when the central bank's top policymaking group, the Federal Open Market Committee, last met in mid-May. Then, the choice was between raising the rate target by a quarter-point or a half-point. The policymakers opted for the latter, lifting it to 6.5 percent, a cumulative increase of 1.75 percentage points over a period of less than 11 months. But the statement issued at the end of next week's meeting undoubtedly will contain the same language as the one released last month Against the background of its long-term goals of price stability and sustainable economic growth and of the information already available, the Committee believes the risks are weighted mainly toward conditions that may generate heightened inflation pressures in the foreseeable future. In other words, Fed officials see no reason yet to believe rates are necessarily high enough to slow the economy enough to keep inflation at bay. They could well decide at the following meeting, Aug. 22, to raise rates again if new data indicate a rebound in growth.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614805","date":"2000-06-26","texts":"NEW YORK -- When it comes to targeting consumers, an ax may work as well as an ad. A host of advertisers are investing in the Underhand Chop and the Single Buck -- two kinds of ax throws -- as well as target shooting, fishing and bird-fetching by teams of dogs, all in the hopes of luring the American public and its disposable income outside. The aforementioned contests are part of a new sports series titled The Great Outdoor Games, slated for broadcast on Walt Disney Co.'s ESPN cable sports network July 20-23. And they represent just one of the methods being utilized to prod sports nuts back to nature. It's the next Nascar, crows Jason Klein, the president and chief executive officer of Times Mirror Magazines, the newly acquired unit of Tribune Co., that publishes outdoorsy periodicals such as Outdoor Life and Field & Stream. The magazines are a partner in the upcoming sports program. With bass-fishing tournaments that feature boats decked out in corporate logos on the rise, his claim may be more than wishful thinking. This niche's consumers are taken for granted, says Jake Wienert, an executive director at ESPN. And yet the money spent in the industry flabbergasts me.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615489","date":"2000-06-27","texts":"NEW YORK -- As technology stocks showed signs of recovery, with the Nasdaq Composite Index climbing back toward the 4000 level, bets on a pullback have increased. The level of short sales not yet closed out, known as short interest, on the Nasdaq Stock Market rose 1 to 2,808,345,712 shares on June 15 from 2,780,161,105 shares in mid-May, according to Nasdaq. The figures include Nasdaq small-capitalization and large-capitalization stocks. On the Nasdaq Small-Cap Market, which is made up of the 893 smaller-cap stocks, the number of short sales outstanding fell 16.9. It rose 1.5 for the 3,842 larger-cap stocks on the Nasdaq National Market. The figures suggest that investors are betting large-cap stocks have a greater chance of declining than small-caps. Short interest is often considered an indication of the level of skepticism in the market. Traders who sell securities short borrow shares and then sell them, betting they can profit by buying the stock back later at lower prices. Short interest reflects the number of shares that haven't been repurchased for return to lenders. Aside from making negative bets, investors may rely on short selling for other purposes, such as a hedging strategy related to corporate mergers and acquisitions, for convertible securities and options, and for tax purposes.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614215","date":"2000-06-28","texts":"Executives at Burr-Brown Corp. sold 11.7 million of their Burr-Brown stock in the month before Texas Instruments Inc. announced it would acquire the computerchip maker for 7.6 billion in stock. Shares of the Tucson, Ariz., maker of analog chips used in camcorders, DVD players and hand-held computers, traded in a tight range from late March to early May, when the executives sold the shares. The May sales followed several months of insider sales. From May 11 to May 22, four BurrBrown executives, including Chairman, President and Chief Executive Officer Syrus Madavi, Chief Operating Officer Kenneth Wolf and Chief Financial Officer Scott Blouin, sold more than 180,000 shares in the 55 to 67 range. It's not unusual to see insider selling around a deal that doesn't carry much premium over the insider sale price, said Robert Gabele, director of insider research at First CallThomson Financial. What's unusual here is this insider selling occurred prior to a deal that resulted in a big premium. Burr-Brown declined to comment on the sales.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614467","date":"2000-06-28","texts":"WASHINGTON -- Consumers are feeling somewhat less secure about the economy judging from June's drop in a key measure of consumer confidence. The nearly six-point decline in the Conference Board's monthly index of consumer sentiment, to 138.8 from a high of 144.7 in May, strengthens the widely held belief that the Federal Reserve Board won't raise interest rates today. As the Federal Open Market Committee enters its second day of meetings, its members should welcome a sign of waning consumer optimism. The May number, revised upward to 144.7 from a preliminary 144.4, equaled the record set in January. The index jumped seven points in May after moving up less than a point in April. We see a little slackening in expectations for businesses, said Lynn Franco, the economist who oversees the New York market research firm's survey of 5,000 households. Overall it's just basically a little bit of cooling, but not enough to slide into a recession. Historically, she said, June's 138.8 reading is very strong. Numerous reports in recent weeks, from construction to employment to consumer spending, have shown signs that the Fed's cycle of tightening may finally be reining in the galloping economy. It points toward a slowing economy but is not really alarming, said Ms. Franco.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982611","date":"2000-06-28","texts":"Q The manager at the high-tech firm I work for is living with one of my co-workers. They like us to go drinking with them after work and have us socialize with them, with no distinction made between professional and private life. Resume-enhancing assignments, technical resources, training opportunities and phony sick days accrue to the favored colleague and those others who are willing to cater a social life for the happy couple. The rest of us get the leftovers and see clearly that if we don't participate outside of work, we are excluded from the inner circle. The manager and my co-worker appear to have simultaneous illnesses frequently, and work is not accomplished on time as a result. My manager's superior has been unofficially informed of this situation and appears willing to tolerate it. How, without ruining our own careers, can we get the company to fix this problem Should we just walk away, or do we owe it to the company to try harder A Office romances are a fact of modern life, with the workplace often acting as a kind of dating service for young men and women launching their adult lives. A 1994 report by the American Management Association, a human resources research organization, found that 79 percent of 485 managers surveyed said they had either been aware of or participated in an office romance. A parallel survey by the Society for Human Resource Management in 1998 found that many such romances resulted in marriage.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614204","date":"2000-06-30","texts":"WASHINGTON -- Inflation is running higher than previously thought, even as more signs emerge that growth is slowing. The Commerce Department said the personal-consumption-expenditures price index rose 3.5 in the first quarter on a seasonally adjusted annualized basis, revised upward from a preliminary report of a 3.1 rise. The index, a key inflation gauge, rose 2.5 in the 1999 fourth period. The department also said gross domestic product grew at an annual rate of 5.5 in the first quarter, revised upward from an increase of 5.4. The fourth-quarter growth rate was a scorching 7.3. A separate department report showed that sales of new single-family homes fell again in May, another indication that the housing market may be softening after a series of interest-rate increases. Federal Reserve Chairman Alan Greenspan has indicated that the personal-consumption-expenditures price index is one of the best measures of inflation and is among those he watches most closely. The Fed's policy-making committee chose not to raise interest rates after its meeting Wednesday, although it released a statement citing heightened inflation pressure as cause for concern.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617109","date":"2000-07-06","texts":"Computer Associates International taught investors an old, but important lesson yesterday Fourth of July firecrackers are best enjoyed when you are not holding them when they explode. The mainframe software firm lighted a fuse when it reported very late Monday night, actually just before midnight on July 4, that it would miss analysts' estimates for its fiscal first quarter ended June 30. It didn't provide full details in the late Monday announcement. This wasn't your ordinary, miss-the-estimates-by-a-penny-type announcement. Instead of earning the 55 cents that analysts expected, the Islandia, N.Y., company anticipated earnings of 11 to 16 cents, it later disclosed in a conference call yesterday morning. When the post-holiday markets finally opened, investors couldn't drop the stock fast enough. It plunged 43 to 29.375, down 21.75, in heavy 4 p.m. New York Stock Exchange composite trading -- the largest percentage decliner on the Big Board. Wall Street was fuming. Indeed, the market carnage underscores the sensitive issue of trust between a company and Wall Street investors. Credibility can get a company through a rough patch, keeping investors from bailing out, limiting the damage to a stock price on bad news, and buying senior executives time from boards that look to the stock price as a report card for management. All that is blown when a company throws the Street a nasty curve.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613847","date":"2000-07-07","texts":"MEXICO CITY -- A sharp increase in the number of U.S. visas granted to Mexican nationals will be a foreign-policy priority for incoming President Vicente Fox Quesada, according to a campaign working paper. The policy memorandum, obtained by The Wall Street Journal, says Mexico should consider negotiating a broad new immigration agreement with the U.S. The proposed plan would commit the U.S. to granting Mexicans many more visas in exchange for what would be unprecedented Mexican cooperation in reducing the northward flow of illegal immigrants. A U.S. State Department spokesman said any change in the number of Mexican immigrants allowed into the U.S. would have to be approved by Congress. Nevertheless, he said we look forward to working with Mr. Fox on the major issues of the relationship, especially immigration and economic issues. A top adviser to Mr. Fox says Mexico also should endorse a recent AFL-CIO initiative to grant an amnesty to illegal immigrants living in the U.S. An estimated eight million Mexicans live in the U.S., with about half believed to have entered without documents. While many are able to legalize their status through marriage or other means, the number of undocumented arrivals is growing faster than ever -- about 300,000 this year. In comparison, the number of Mexicans entering with visas is small, about 70,000 a year, according to the adviser. Despite increased patrolling along the border, migrants keep crossing. Already this year, more than 100 migrants have died attempting to enter the U.S.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617438","date":"2000-07-07","texts":"With the second-quarter earnings season almost here, optimism replaced pessimism and tech stocks resumed their rise. The Nasdaq Composite Index, dominated by technology names, surged 2.52, or 97.47 points, to 3960.57, recovering most of Wednesday's 128.83-point loss. The index is again nearing the 4000 level that it briefly surpassed in June. More stocks rose than fell on the New York Stock Exchange. But Old Economy industrial stocks held the Dow Jones Industrial Average down. The average fell a scant 0.02, or 2.13 points, to 10481.47, in one of the smallest daily moves the blue-chip index has taken in recent years. Bonds fell and the dollar rose. Stocks have been held back by end-of-quarter earnings warnings from companies that will miss expectations, said Tim Morris, chief investment officer at Bessemer Trust. With the warning season ending, positive reports are set to begin.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616880","date":"2000-07-10","texts":"JDS Uniphase Corp., an acquisitive fiber-optics concern, has reached an agreement to acquire rival SDL Inc. for about 41 billion in stock, a nearly 50 premium over SDL's closing stock price Friday. The boards of the two companies have approved the deal, in what is believed to be the biggest technology merger on record. JDS just completed the purchase of E-Tek Dynamics Inc. for 15 billion on June 30, and began discussions with SDL almost the day that the E-Tek deal closed, according to Jozef Straus, JDS Uniphase's co-chairman and chief executive officer. Donald Scifres, SDL's chief executive, will become co-chairman of the board with Mr. Straus and a board member of JDS Uniphase. Marty Kaplan remains chairman of JDS, and Mr. Straus will remain chief executive. The transaction values SDL's shares at 441.5125 a share, compared with Friday's closing stock price of 295.3125 in Nasdaq Stock Market trading. Each share of SDL will be exchanged for 3.8 shares of JDS Uniphase. Shares of SDL were up 10.875, and climbed last week on some takeover speculation, as well as on expectations of strong financial performance. One reason why the price tag is so high is that Corning Inc., a rival fiber-optics concern, had been bidding for the San Jose, Calif.-based company as well, said one person familiar with the matter. The deal shows how major manufacturers are moving rapidly to team up so they can add capacity and develop higher-performing products to keep up with surging demand for fiber-optic equipment. In particular, Messrs. Straus and Scifres pointed to the desire by vendors to bring products to market quickly as a driving force behind the deal.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615084","date":"2000-07-12","texts":"Corrections & Amplifications Contest Correction Because of a calculation error and the failure to take into account a stock split, this column selected the wrong winner in last month's stock-picking contest. The real winner Paul Zweng of Palo Alto Investors, whose selection, Palo Alto-based ClickAction, was the top-performing stock for the first six months of the year. After taking into account a 2-for-1 stock split in April, ClickAction posted a 17.4 gain for the period. Mr. Zweng, who was a good sport about the mistake, will return to compete in a future contest. WSJ -- August 16, 2000 Sometimes the best offense is a good defense. That was certainly the case in the latest round of Heard in California's semiannual stock-picking contest. The winner Scott Hood of First Wilshire Securities Management in Pasadena, whose pick -- East West Bancorp -- had the best showing during the six months ended July 5. The San Marino banking concern, chosen as a defensive play during a period of market volatility, was up 20, closing July 5 at 14.563. Mr. Hood's victory marked the first time since the contest started in January 1999 that a professional came out on top. In our contest, three pros compete against each other and a team of students who've won the latest round of a statewide stock-market game for school kids. Contestants pick a California company that they think will have the best return in six months.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615768","date":"2000-07-17","texts":"It's not quite IPO Mania again, but . . . . 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. 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. 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. 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.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983907","date":"2000-07-19","texts":"With high energy costs the main culprit, consumer price inflation, at least temporarily, is eating up the lion's share of the average American's annual increase in wages. The consumer price index rose 0.6 percent last month and 3.7 percent over the past 12 months, the fastest rate of increase since 1991, the Labor Department reported yesterday. Over the same period, average hourly wages for production and non- supervisory workers increased 3.6 percent, according to earlier department reports. Those figures include overtime pay but not bonuses or fringe benefits. Most analysts think this situation will be short-lived, because many energy prices appear close to a peak, the food and beverage prices rose only 0.1 percent last month, and the rest of the consumer price index--the core, which excludes both food and energy prices-- rose 0.2 percent for the third month in row. Since June 1999 the core CPI is up 2.4 percent, but it rose at a slower 2 percent rate in the past three months, the department said. On the energy front, there already has been some relief. In recent weeks, Saudi Arabia has proposed increasing production by 500,000 barrels daily but so far has not gotten agreement from other members of the Organization of Petroleum Exporting Countries to do so.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616300","date":"2000-07-21","texts":"NEW YORK -- Treasurys prices soared yesterday after Federal Reserve Chairman Alan Greenspan, appearing before the Senate Banking Committee, said there are signs that economic growth is slowing to a more sustainable level. Investors wagered that his remarks mean there is less likelihood that Fed policy makers -- who meet again on Aug. 22 -- will raise interest rates again this summer. It was the best day for the bellwether 10-year Treasury in over a year, and the best performance for the 30-year bond since February. The 10-year Treasury note's price jumped 1 332 points, or 10.94 per 1,000 face value, to 103 1532. Its yield fell to 6.00 from 6.15 late Wednesday, as yields move inversely to prices. The 30-year Treasury bond's price surged 1 1632 points its yield fell to 5.808 from 5.911 Wednesday.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616000","date":"2000-07-24","texts":"The boards of both Deutsche Telekom AG and VoiceStream Wireless Corp. yesterday approved the German company's 50.5 billion stock-and-cash bid for the U.S. wireless concern, according to people familiar with the matter. The proposed transaction, which also requires Deutsche Telekom to assume 5 billion of VoiceStream debt, would bring the booming wireless industry a step closer to seamless world-wide usage of cellular phones. The new company would have licenses to operate wireless networks that stretch from some of Europe's hottest markets to fast-growing U.S. wireless markets such as New York and California. The deal also forges the first wireless competitor that operates in both Europe and North America using a common digital standard called Global System for Mobile Communications -- paving the way for cell-phone customers to more easily use one phone all over the world. VoiceStream's major shareholders -- including Hutchison Whampoa Ltd. and Sonera Ltd. -- have also agreed to vote for the deal. In total, holders representing more than 50 of the shares outstanding are already in favor of the deal, according to a person familiar with the matter. Hutchison, which purchased its 23 stake starting in 1997 for 1.2 billion, stands to reap 11.6 billion. John Stanton, VoiceStream's chief executive, who owns six million shares, stands to reap about 1.1 billion. But the proposed deal faces growing opposition in Washington toward a foreign-government-backed telecommunications company owning a U.S. telecom concern. A bill introduced by Sen. Ernest Hollings D., S.C., seeks to block Deutsche Telekom from buying a U.S. phone company as long as the German government holds more than 25 of the company. Should the VoiceStream deal be completed, the German government's stake in the company would be diluted to 45 from 58. Deutsche Telekom hopes this will help appease concerns in Washington. Meanwhile, some Europeans see the Hollings initiative as a sign of U.S. protectionism. In recent days, European Union diplomats have said a U.S. move to block Deutsche Telekom from purchasing VoiceStream based on foreign-government holding could threaten existing trade agreements. German officials said they would almost certainly file a complaint with the World Trade Organization. The transaction would also be subject to approval from the Federal Communications Commission.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614631","date":"2000-07-25","texts":"When analysts surveyed the wasteland of oil-equipment and services companies in early 1999, they saw a sector littered with companies not only down but nearly out. Things were abnormally beat up, said Marshall Adkins of Raymond James & Associates, who took second place among stock pickers in the category in this year's Best on the Street Analysts Survey. There were fears in the marketplace that some of these companies wouldn't make it. Compounding those fears was an industry caught up in merger paralysis, with the big integrated oil companies focused on getting leaner at the expense of the new field development on which the service companies depend. So, after oil prices bottomed out in the spring, savvy analysts pounced on companies leveraged to North American natural-gas drilling, which is controlled by smaller independent companies that were more likely to put rigs back to work sooner. The reward triple-digit returns for several companies. We were surprised that the oil-price crash of 1998 lasted as long as it did, said Matt Conlan, 31 years old, of Prudential Securities, who took top honors among stock pickers in the category. The secret of his success We were very early to hop on the stocks that we thought would recover first and fastest and strongest.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614107","date":"2000-07-26","texts":"Technology highflier JDS Uniphase Corp. has been gyrating even more than usual of late, and its frantic dance tells something about a nasty little problem that is beginning to affect more and more investors After more than 100 years of dealing with stock indexes, Wall Street still often can't revise an index without developing severe indigestion. Last week, it was announced that JDS Uniphase will enter the Standard & Poor's 500-stock index at today's close. The stock soared 26 on Nasdaq on Thursday and Friday. Then it fell 3.4 yesterday and Monday. If all goes as it usually does in such cases, the stock is likely to gyrate even more today, with a particularly big pop at day's end. These moves are caused by mutualfund and other portfolio managers seeking to mimic indexes even as other investors are trying to make money by anticipating such moves, and they can be disruptive. In December, Yahoo Inc. gained more than 63 in the week before it joined the S&P 500. In the following weeks, starting well before the rest of the market turned down, its stock price crumbled more than 50 it still isn't back to where it was when it joined the index, while the Nasdaq Composite Index is back to its December level. Even broader and, to some investors, more disturbing gyrations took place just last month. Hundreds of stocks were jolted on June 30 by seemingly innocuous changes in a variety of indexes, including the Russell 2000 and the S&P Barra growth and value indexes. With billions of dollars of shares changing hands on both the New York Stock Exchange and the Nasdaq Stock Market, stocks that often don't move much in a month dropped 10 in a matter of minutes. Some investors felt they had been hit with a sucker punch.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614644","date":"2000-07-26","texts":"The restless Joseph Galli is trading in books and compact disks for backhoes and organic brown rice syrup -- and a pay package estimated at around 25 million. After a tumultuous 13 months in the No. 2 spot at the consumer Internet retailer Amazon.com Inc., Mr. Galli is moving on to the job of chief executive at VerticalNet, a business-to-business online exchange based in Horsham, Pa. Mr. Galli, who was president and chief operating officer at Amazon, succeeds Mark Walsh, who will become VerticalNet's chairman. Mr. Galli's departure comes at a difficult time for Amazon. The Seattle-based online merchant has come under fire from Wall Street critics for its continuing losses, heavy debt load and dwindling cash reserves. While Amazon has said it has plenty of cash, the failure of a growing number of Internet retailers, including clothing retailer Boo.com Group Ltd. and toy seller Toysmart.com Inc., has reduced the patience of some investors. Amazon shares have fallen sharply from a 52-week high of 112.375. Yesterday, they traded at 37.625, down 1.125, as of 4 p.m. on the Nasdaq Stock Market. Both Jeff Bezos, Amazon's founder, chairman and CEO, and Mr. Galli, who is 42 years old, put the best face on Mr. Galli's decision to leave. There are only good feelings between them, Mr. Bezos said. I was happy to be a good reference for Joe. Mr. Galli, for his part, said he relished the opportunity to become CEO of a high-flying Internet company and to be closer to his children, who live in Baltimore. Mr. Galli added that Amazon was a great adventure and that he learned a great deal from Mr. Bezos.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985436","date":"2000-07-27","texts":"Here's how some major bills fared recently in Congress and how local congressional members voted, as provided by Thomas's Roll Call Report Syndicate. NV means Not Voting. The House approved a motion that had the effect of giving members of Congress a 2.7 percent pay increase, raising their salary to about 145,100 in January 2001. Had opponents of the pay raise won this vote, they would have offered a motion to kill the automatic cost-of-living adjustment COLA. They mounted this procedural attack after House leaders denied them debate and a direct, up- or-down vote on the merits of raising congressional pay. The vote occurred during debate on a Treasury Department funding bill for fiscal 2001 HR 4871. The House approved tax breaks to help individuals invest more of their earnings in Individual Retirement Accounts IRAs, 401k plans and other retirement vehicles. The bill HR 1102 is projected to cost the Treasury 52.2 billion over 10 years. It would raise the IRA contribution limit for individuals from 2,000 today to 3,000 in 2001, 4,000 in 2002 and 5,000 in 2003, and begin adjusting IRA contribution limits for inflation. For individuals older than 50, the new 5,000 limit would take effect as soon as the bill became law.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983569","date":"2000-07-31","texts":"Ordinarily when Fannie Mae announces its quarterly earnings, chief financial officer Timothy Howard has a conference call with analysts and talks for the better part of an hour about the numbers that drive the performance of Washington's biggest business. Interest rate trends comprehensive net interest margins what it costs Fannie to borrow money, compared with what it costs the U.S. Treasury LIBOR rates T-bill spreads--it adds up to billions of dollars measured off in basis points, each of which is one one- hundredth of a percentage point. But this month, when Fannie put out its second-quarter financials, the conference call was dominated not by the jargon of Wall Street, but the spin control of Washington. Thomas E. Donilon, Fannie's executive vice president for law and policy, took over the teleconference and made a point of introducing Arne Christenson, senior vice president for regulatory policy. Christenson was, Donilon reminded the Wall Streeters, chief of staff to Newt Gingrich when he was House speaker. When your chief executive, Franklin Raines, used to be President Clinton's budget director and your vice chairman, Jamie Gorelick, is Clinton's former deputy attorney general, it's important for the politically naive numbers nerds on Wall Street to understand that you have a balanced offense. Because from that point on in the call, it was pure politics. We manage our political risk with the same intensity we manage our other risks, proclaimed Donilon, assuring investors they do not have to worry about all the bad things being said in Washington about Fannie Mae.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615013","date":"2000-08-01","texts":"SUPPORTERS PUSH for legislation to reform unemployment insurance. It's late in the congressional session, but a group that includes business, state agencies and labor unions has reached a consensus on long-discussed unemployment-insurance reform. Their proposal would boost state unemployment funds, lower the corporate tax burden and extend benefits to part-time workers. We believe it's possible, says Rich Hobbie, unemployment-insurance director for the Interstate Conference of Employment Security Agencies. The plan calls for tapping billions of dollars generated by a 0.2 payroll surtax that employers have paid since the 1970s. By 1987 the surtax had repaid the loans for which it was levied in the first place. But companies still pay, to the tune of 1.6 billion last year. Under the plan, the surtax would be repealed and state trust funds would receive 11 billion over six years. Part-timers would be eligible for unemployment compensation if they were laid off, and antiabuse measures would be beefed up. But the tax cut and a call to move the program to mandatory status, where it wouldn't compete with other programs for a share of the budget, may draw opposition. AT THIS WORKPLACE, a mental disability could be an advantage.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984009","date":"2000-08-01","texts":"An attempt by the Clinton administration to establish government- paid leaves of absence for new parents is about to die a quiet death, rejected in every state legislature that took up the cause at the urging of the White House. Lawmakers in 15 states introduced legislation to use unemployment insurance trust funds--fattened by years of prosperity--to pay benefits for as much as 12 weeks of leave for working parents of newborns or adopted children. Clinton called on states last year to create the major new benefit, which the Republican-controlled Congress firmly opposed. The measures were introduced amid promises of reshaping the country's work and family policy to meet the needs of what is now a majority of families with two working parents. But one by one, the proposals died, stymied by business opposition and fears that unemployment insurance would run dry in a future recession. The last surviving bill, in Massachusetts, was buried in a study committee yesterday. Advocates there and in other states vow to try again next year, possibly creating a disability fund to pay for parental leave. The fate of the efforts reflects deep political resistance to using the fruits of economic prosperity to create new, ongoing government obligations--a vision advanced by Clinton and the presidential campaign of Vice President Gore.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616166","date":"2000-08-02","texts":"When it comes to personal-income levels in Texas, the gap between the rich cities and the poor cities is continuing to widen. Houston, Dallas, Austin and San Antonio registered the biggest gains in per capita income, while the border towns slowed sluggish increases. Per capita income growth is a key economic indicator. When incomes rise briskly, people have more money to spend on everything from restaurant food to housing. In Houston, personal income soared 5.8 in the first quarter over a year earlier as the city's economy rebounded from the low oil prices of 1999. Dallas, which wasn't particularly affected by low oil prices, still saw a strong 5.2 rise during the same period. And in Austin, the hottest economy of all in Texas, incomes gained 4.6 over a year earlier. San Antonio, long a bastion of stable growth, posted a 4 improvement. The strength in the state remains in those large cities, says economist Toni Horst of Economy.com formerly RFA Dismal Sciences Inc., West Chester, Pa., which compiles the data. That's where the growth is taking place. And that's where you're going to see the income growth. The bigger border cities didn't fare nearly as well. Even though most of them are growing rapidly, they aren't adding high-paying jobs like the big four Texas cities.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614348","date":"2000-08-03","texts":"PHILADELPHIA -- When George W. Bush makes a warm-hearted appeal for support across the political spectrum in his acceptance speech tonight, he will sound compassionate. In other words, he'll sound a lot like Bill Clinton. But compassionate is only half of Mr. Bush's compassionate conservative formula. The conservative half has gotten far less attention here this week, and yet it forms the bedrock of the strategy that Bush advisers will pursue in search of victory in November. The strategy is based on a simple belief There are more conservatives than liberals in the American electorate, and nearly all of them now are Republicans. That's the legacy Ronald Reagan, who wrenched millions of conservatives from their ancestral Democratic homes, bequeathed to today's GOP. From the beginning of his campaign, Mr. Bush's first priority has been to keep these conservatives content, and that will continue to be the case through the fall run toward the White House. Despite much advice to the contrary, candidate Bush has refused to shrink from his conservative positions. He's pushing a sweeping tax-cut plan, even though his congressional counterparts have retreated this year in favor of more modest cuts. He's offering a controversial proposal to partially privatize Social Security that many Republicans in Congress dare not touch. And he's resisting popular gun-control measures, despite fierce Democratic attacks. He also brushed off GOP moderates in selecting a solidly conservative, antiabortion running mate in Dick Cheney. The goal to nail down the two core elements of a winning coalition, a phalanx of Southern and Western states and white male voters nationwide. What's most striking about Mr. Bush's strategy is how it has diverged from the theories that many strategists advanced after the Republicans' electoral setbacks of 1996 and 1998. GOP leaders received plenty of advice to soften their conservative positions on issues such as tax cuts, abortion and gun control, even though such moves would anger the party's base. Mr. Clinton, for his part, used just such an approach to break his party's presidential losing streak in 1992, when he ran as a different kind of Democrat who pushed welfare and trade policies at odds with the Democrats' black and labor constituencies.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616770","date":"2000-08-03","texts":"MADRID -- Spanish stock-market regulators formally opened an investigation of TXU Corp. of the U.S. and Electrabel SA, Belgium, as well as several executives, for allegedly violating Spanish takeover rules. The two companies are suspected of acting in concert last month when buying a combined 29 stake in Spanish power company Hidroelectrica del Cantabrico SA in the midst of a takeover battle for Spain's smallest utility. Spanish takeover rules require acquiring companies to launch a bid for 100 of the target company once a 25 stake is acquired. The Spanish Stock Market Commission, or CNMV, will draw up formal charges and take testimony from all three companies during the investigation, which could take months. Both companies' voting rights in Cantabrico have been suspended. If the two utilities are found to be in violation of Spanish securities law, they could face fines of as much as 50 million pesetas 275,200. The CNMV could also force the companies to launch a full takeover bid at 24 euros 21.98 a share, the price of the last, failed bid for Cantabrico. TXU Europe PLC Chairman Phil Tuberville denied any wrongdoing and promised to cooperate with the investigation. At the same time, he insisted that TXU would support any takeover bid of Cantabrico by another company. TXU and Electrabel set off the controversy by jointly acquiring some 15 of Cantabrico from two of its core shareholders, Banco Sabadell and savings bank La Caixa, in early July. In the deal, conducted by investment bank Lazard, TXU acquired an additional 5.25 of the Spanish utility, bringing its total stake to 19.25. Electrabel took a 10 stake in the same operation.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985613","date":"2000-08-03","texts":"The Treasury Department announced yesterday that it will be able to pay down 221 billion worth of the publicly held national debt this year without further curtailing its scheduled auctions of new Treasury securities. Gary Gensler, Treasury undersecretary for domestic finance, told reporters that earlier cutbacks in the issuance of new securities and the department's planned buyback of 30 billion of older, high- yielding notes and bonds should allow the government to pay down the debt both this year and next. But by 2002, when the amount of older securities coming due will begin to drop substantially, additional reductions in auctions will be needed, he indicated. At the present time, we do not believe further changes in the overall pattern of our coupon debt issuance are necessary, he said. The price of the 30-year bond dropped on the news. It had climbed in recent trading because many economists and investors had expected the Treasury to say it will soon stop issuing the long bond, increasing the scarcity value of those remaining.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830981918","date":"2000-08-05","texts":"Switzerland's two biggest banks said today they had officially accepted an amended 1.25 billion settlement with victims of the Holocaust era. But Credit Suisse Group and UBS AG criticized new conditions that other Swiss companies and government bodies would have to follow to enjoy protection from future litigation. The banks said in a joint statement they had notified the responsible U.S. court in New York of their acceptance of the amendments relating to looted art, the further search for bank accounts, financing legal costs and the inclusion of insurance companies. But the banks said in reaction to a 55-page fairness ruling by U.S. District Judge Edward Korman that they had not destroyed any documents to avoid honoring obligations. They also rejected suggestions that the total value of Holocaust accounts could be bigger than 1.25 billion. We want this criticism to be included in the protocol. But we are not going to do anything with it we accept the settlement and its content, a spokesman for Credit Suisse said.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982594","date":"2000-08-10","texts":"The red-hot U.S. economy began showing more signs of slowing in the late spring and early summer, the Federal Reserve reported yesterday in its latest survey of business activity throughout the country. While the economy was in no danger of tipping into recession, the Fed survey found slower activity in consumer spending, manufacturing and construction in June and July. The conclusions were based on reports submitted by the Fed's 12 regional banks and intended for Fed policymakers to use when they next meet on Aug. 22. While economic growth accelerated in the spring, most analysts believe recent signs of a cool-down will persuade the Fed to leave interest rates unchanged at the August meeting. Over the past 14 months, the central bank has raised short-term interest rates six times in an effort to slow the economy enough to keep inflation under control, achieving what is often called a soft landing for the economy. The Fed's latest survey said, Economic activity in all Federal Reserve districts continued to expand in June and July, but there were additional signs the expansion was moderating in some sectors and the majority of districts.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617077","date":"2000-08-11","texts":"Dell Computer Corp. said fiscal second-quarter earnings rose 19, but revenue increased at the slowest rate in nearly six years. The biggest U.S. personal-computer maker reported net income for the quarter ended July 28 of 603 million, or 22 cents a diluted share, compared with 507 million, or 19 cents a share, a year earlier. The results exceeded analysts' expectations of a 21-cent-a-share profit by a penny, according to First CallThomson Financial. The mixed results reflect slower growth in its desktop PC sales and Dell's growing reliance on sales of server computers for its revenue and profit. Server computers, which power Internet Web-sites, are growing faster and deliver higher margins than PCs due to their greater utility. Server computers are a relatively new business for Dell, but one growing faster than its traditional desktop PC business. It said unit sales rose just 22, compared with a 55 increase a year earlier. Higher server sales helped boost gross profit margins to 21.3 of revenue, from 20 in the year-earlier period. The margin improvement also reflected lower-than-expected component prices and burgeoning laptop PC sales, according to Dell Vice Chairman Kevin B. Rollins.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984686","date":"2000-08-11","texts":"Washingtonians headed south this month, beware. The long, hot season of traffic congestion around Colonial Williamsburg and Busch Gardens is in full swing. This year's tie-up has an interesting twist. A new Busch Gardens exit, including a bridge over Interstate 64, was supposed to open this summer but the project is a full year behind schedule. The exit will benefit tourists and residents by redirecting traffic from clogged roads. The Virginia Department of Transportation explains that its contractor faces a severe shortage of U.S.-made steel for the project. Federal Buy American laws forbid interstate highway projects with federal financing from using imported steel, even if there is no domestic steel available. The restrictions apply equally to the raw material rolled beam or the fabricated product finished girders. A Northern Virginia contractor with whom I spoke said his supplier could use imported rolled beam for the contractor's private projects, but for federal roads projects such as the Interstate 95 exchange at Springfield, the domestic raw material costing 15 to 30 percent more was required. By expensively micromanaging his projects, his firm has steel. Others are scrambling. Guess who ultimately pays the extra cost. Buy American policies are nothing new, and they have a patriotic plausibility to most people. Who could be against saving American jobs In many circumstances they are also innocuous. On the other hand, if they squeeze out imports as intended, they maintain higher prices to American steel users or cause them production delays waiting for backlogged orders to clear. This may save some jobs in favored industries like steel, but at a cost of sales and jobs in American industries that use steel. The benefits this policy provides to the protected steel workers and shareholders come directly out of the pockets of other Americans. This is income redistribution of the worst sort--from average folks to a group that earns substantially more than the manufacturing mean wage. In times of high unemployment, Buy American provisions conceivably can raise domestic demand, thus cushioning a cyclical downturn. But these discriminatory policies are hopelessly inefficient compared with Alan Greenspan's well-oiled monetary policy machine. By the way, has anyone checked the unemployment rate lately What many people do not realize is that the most intense competition American firms face is not with foreign firms but with other American firms in markets for talented labor and scarce capital. Any policy that favors one set of American industries disfavors others. The most important possible exception to this is for policies that are designed to enhance innovation in ways that spill over to other American firms. Buy American policies are not directed toward research and development, and the steel industry is not at the cutting edge of technical progress. Highway construction contractors happily use Komatsu earth-moving equipment and a host of other imported products. So why is USX favored and Caterpillar not The answer, of course, is lobbying power. A large industry spread across a number of important states often gets its way. Alas for the steel industry, its influence isn't what it used to be. The industry employs more than 400,000 fewer workers than it did in 1960. Small, modern mini-mills now provide almost half of domestic output. They have production costs substantially lower than the remaining large-scale integrated mills for which steel protectionism was designed.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982015","date":"2000-08-12","texts":"Stocks rose today as blue chips surged on encouraging economic data, but concerns about a second-half earnings slowdown kept technology stocks from broader gains. The Dow Jones industrial average closed 119.04 points higher at 11,027.80, marking the first time since April 25 that the blue-chip index has finished above 11,000. Today's surge gave the Dow a gain of 260.05 for the week. Broader indicators also rose. The Standard & Poor's 500-stock index was up 11.59 at 1471.84, and the Nasdaq composite index rose 29.48, to 3789.47, having recovered from a decline of 60 points earlier in the session. The S&P was up 8.91 for the week, while the Nasdaq eked out a gain of 2.11. Analysts said a pattern has emerged recently in which investors react to whatever news is released on a given day, causing markets to fluctuate from session to session. Today, for instance, investors in blue chips were encouraged by a Labor Department report that showed wholesale prices were virtually unchanged in July after a large increase in June. The turnabout in the producer price index was the result of a big swing in gasoline and other energy costs.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983378","date":"2000-08-15","texts":"First Union, taking steps to reverse two years of profit declines, said it will sell its credit-card business to MBNA and take a 1 billion pretax gain as a result. Charlotte-based First Union, which said it will sell more than 3 million accounts and 5.5 billion of loans to MBNA, declined to disclose how much MBNA will pay. First Union also informed the Securities and Exchange Commission last week that it may cut as many as 5,291 jobs, double the number it had mentioned in June. The Nasdaq Stock Market said it is continuing to halt trading of Value America shares. Trading in the Charlottesville-based company's stock was halted at 403 p.m. Friday at a last sale price of 71 78 cents a share. Trading will remain halted until Value America has fully satisfied Nasdaq's request for additional information, the Nasdaq said. At the time of Friday's halt in trading, Value America, a pioneer in Internet retailing, announced it had filed for Chapter 11 bankruptcy protection from creditors. The company also halted its electronic retailing operations, shut down its Web site and fired 185 employees. Gasoline prices have fallen an average of 7.48 cents a gallon nationwide in the past three weeks, to 1.53, continuing their decline after record highs in some areas in June. The slide began after suppliers rushed gasoline to the Midwest to solve distribution problems in the region, analyst Trilby Lundberg said. Prices in Chicago have fallen 17 cents over the last survey period, 13 cents in Cincinnati and 31 cents in Detroit. The national average price of gas has fallen 18 cents since June 23, when it reached a high of 1.7134. Declines occurred in every region of the country. Agilent Technologies, which warned last month that its fiscal third-quarter profit would not meet analysts' expectations, said it will fire about 650 workers at its health-care unit to cut costs. The Palo Alto, Calif.-based maker of testing and measurement instruments will cut about 450 full-time employees, equal to 9 percent of its full-time health-care work force or about 1 percent of its total staff. It also will fire about 200 of its 350 contract workers, a spokeswoman said. Chiron, the world's largest maker of a medicine for kidney and skin cancer, said it will buy PathoGenesis for about 700 million in cash, giving Chiron a drug for cystic fibrosis. PathoGenesis's TOBI, an inhaled antibiotic that is used by cystic fibrosis patients, accounted for 60 million of the company's 60.8 million in 1999 sales.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615906","date":"2000-08-16","texts":"WASHINGTON -- Industrial output rose sharply last month as a resurgent manufacturing sector offset steep declines in production by the nation's utilities and car makers. The Federal Reserve said industrial production rose by 0.4 in July, double its 0.2 gain in the previous month. The increase was in line with market expectations and brought the index 5.8 higher than its level a year earlier. The nation's factories, meanwhile, were operating at 82.3 of capacity in July, a notch higher than the 82.2 level recorded in June. Many analysts believe that plants can operate at as much as 84 of capacity before production bottlenecks develop, raising risks of inflation as companies increase prices to offset the costs of bringing new plants into operation to ease delays. The numbers point to continued strength in the manufacturing sector, the biggest component of the industrial-output measure. Manufacturing output rose by 0.5 and is now 6.8 stronger than year-earlier levels. In June, output rose 0.4 and was 6.4 higher year over year. The July increase came despite a 5.5 drop in motor-vehicle production as car and truck manufacturers began retooling factories for new product lines. Excluding the vehicle sector, manufacturing output rose 0.9, its sharpest gain since October.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982166","date":"2000-08-16","texts":"Whenever Nancy Lloyd comes face-to-face with consumers, they often ask the same question How do I pay off my credit cards as quickly and inexpensively as possible Most people get this wrong, says Lloyd, the local author of Simple Money Solutions 10 Ways You Can Stop Feeling Overwhelmed by Money and Start Making It Work for You Times Books, 23, but the rules keep changing, so I can't really blame them. Lloyd rarely blames consumers for their financial pitfalls and pratfalls.. The former Federal Reserve Board economist knows firsthand how easy making wrong money decisions can be, whether paying off credit cards, purchasing a new car or buying life insurance. That's why her new how-to book, which addresses those kinds of everyday and sometimes complex money issues, starts paying dividends from the first chapter on ending money yo-yo diets to the Time-Is-Money Calendar in the appendix. I always approach these problems as if I had to make the decision What do I need to know and how do I do it says Lloyd, who started tracking money issues 10 years ago in The Washington Post's Style Plus pages and since has been a contributing editor for Family Circle magazine, a money adviser for CBS News and ABC News, and National Public Radio commentator. Despite impressive credentials, Lloyd is no windbag. Simple Money Solutions proves to be exactly that--simple. A lot of the books try to show everybody how much they know about money and they use phenomenally big words, she says. I wanted to present it in a way you could just pick it up anywhere and follow the advice. Indeed, the book is driven by mistakes Lloyd or people she knows unwittingly made. In a lot of these financial issues, she says, people don't know what questions to ask until after something's gone wrong.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614847","date":"2000-08-17","texts":"WASHINGTON -- Consumer prices rose modestly last month and construction of new homes fell, further suggesting that Federal Reserve policy makers won't raise interest rates at their meeting next week. The Labor Department said the consumer-price index rose a seasonally adjusted 0.2 in July, compared with a sharper increase of 0.6 the previous month. Steady prices in the energy sector were responsible for the moderation. Energy prices rose just 0.1 last month, compared with a 5.6 jump in June. Meanwhile, housing starts fell for the third month in a row, dropping 3.3 in July, compared with a 1.8 drop in June, to a seasonally adjusted annual rate of 1.51 million, the Commerce Department said in a separate report. The figures suggest a sustained cooling in the market for new homes. Yesterday's reports provided the last important data before the Fed's rate-setting meeting, scheduled to begin on Tuesday. With the mild inflation picture and the home-building slowdown, market expectations that the Fed will leave its target for the federal-funds rate unchanged look like a safe bet. The federal-funds rate governs overnight loans between banks. The housing-start number will reinforce the view that we're starting to head into a slower period of growth in the economy, said Mike Moran, chief economist at Daiwa Securities America in New York. I would view it as the type of news that will keep the Fed on the sidelines.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614272","date":"2000-08-18","texts":"Firestone's top executive said the company realized there were problems with the treads on its Wilderness AT tires under severe conditions and moved to improve that model before it announced the recall of 6.5 million of its ATX, ATX II and Wilderness AT tires. Masatoshi Ono, chief executive of BridgestoneFirestone Inc., said in an interview that Firestone had implemented measures to improve the performance of the Wilderness tires before the recall. Mr. Ono said the tire maker began to make those improvements when it realized the treads could separate under severe conditions, such as high-speed driving in sweltering heat with underinflated tires. Mr. Ono also conceded that Firestone and Ford Motor Co. had disagreed over proper tire-inflation levels. Yesterday, BridgestoneFirestone was forced to make a major concession aimed at accelerating the process of replacing the millions of recalled tires. It said it would extend indefinitely its reimbursement policy after a Kentucky judge slapped the company with a temporary restraining order requiring it to continue reimbursing owners of recalled tires who have them replaced with a competitor's brand someplace other than at one of the company's designated outlets. Rep. John Dingell D., Mich. had also written to the company expressing concern that Firestone customers wouldn't be able to replace tires quickly enough.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615188","date":"2000-08-30","texts":"Technology stalwarts drifted higher on positive earnings prospects but Old Economy blue chips fell and bonds lost ground, as volumes remained at low summertime levels. The dollar, meanwhile, strengthened, particularly against the euro, as the European common currency again fell close to its all-time low. Battered by inflation fears, the euro fell to 89.28 cents from Monday's 90.08 cents, near the low of 88.45 cents set in May. On the stock front, some technology and Nasdaq investors said the market will likely see a strong rally after Labor Day, because the specter of interest-rate increases has largely dissipated. Others are eagerly counting down to third-quarter earnings reports. But at least during yesterday's session, tech optimism, and a boost to financial stocks from acquisition reports surrounding Donaldson Lufkin & Jenrette, weren't enough to offset weakness in other sectors.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613586","date":"2000-09-01","texts":"NEW YORK -- Many options traders were reluctant to take advantage of puts and calls whose prices have been discounted ahead of the Labor Day weekend. With the financial markets closed Monday in observance of the holiday, specialists are lowering volatility -- an important part of an options price -- to attract buyers. A broad barometer of options prices, the Chicago Board Options Exchange Market Volatility Index, or VIX, declined 0.31 to 19.28, a level that is widely regarded as indicating that prices are cheap. Specialists hope discounted prices will persuade traders to buy their options, which would transfer time decay off their trading sheets. Time decay is the amount of money an options contract loses each day as it approaches expiration.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615184","date":"2000-09-08","texts":"WASHINGTON -- Facing intense pressure from cancer doctors and some members of Congress, the Clinton administration will put off plans to reduce payments for cancer and hemophilia drugs, officials said. In June, the Health Care Financing Administration, which runs Medicare, said that beginning this fall it would reduce overpayments for about 50 drugs, including those used to treat respiratory disease. But the agency now plans to announce that it won't reduce its payments for cancer and hemophilia drugs anytime soon and instead will study the issue further. It isn't clear exactly how many drugs will be affected. About one-third of the 50 drugs are chemotherapy drugs. However, many of the others are used in conjunction with cancer therapy. The agency's decision is a big victory for the cancer doctors, a politically powerful group represented by the American Society of Clinical Oncology. Throughout the summer, cancer specialists and patient advocates have mounted an aggressive campaign to derail the payment reductions. The physicians, sometimes accompanied by patients, argued in Congress that they wouldn't be able to afford to administer chemotherapy in their offices if the price cuts went into effect. The doctors concede that Medicare reimbursements for cancer drugs may be inflated, but they say they need the higher reimbursements to offset sharp underpayments for administering chemotherapy. The doctors want any changes in drug reimbursements delayed until payments for other expenses are increased.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616210","date":"2000-09-08","texts":"For a growing number of affluent families, Dad now earns so much that it doesn't pay for Mom to work. But as Nancy Ann Jeffrey finds, this return to traditionalism comes with some very modern stresses. David and Lisa Keyko were the classic high-powered two-career couple. He was a commercial litigator. She was a director at a design firm. They split the grocery-shopping and cleaning, left their kids with a babysitter and came home exhausted almost every night. But take a look at the Keyko family today Mr. Keyko is still a lawyer, but his income has doubled, allowing his wife to take up a whole new profession housewife. Most weekdays, he's at the office until 9 p.m., while she carts the kids around, volunteers at school and tries to have dinner waiting when her husband comes home. It's ended up being sort of traditional, says Mr. Keyko. Make way for Leave It to Beaver -- 2000. For a surprising number of couples, the New Economy has meant a return to the Old Family, with Dad as sole breadwinner. It's one of the most peculiar twists to the decade-long boom Couples who used to be economic equals have found that one partner's income -- usually the man's -- has soared so much that it hardly makes sense for both spouses to work. Indeed, while the percentage of single-income households has remained steady for Americans overall, it has moved up considerably for affluent families who earn 250,000 or more a year. But the change has also introduced some frictions that Beaver Cleaver's family couldn't have imagined. Besides the usual struggle over sacrificing career goals, some of these moms say they're astonished by just how traditional their roles have become, not just focusing on children but in some ways living vicariously through their husband's careers.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614291","date":"2000-09-12","texts":"CHICAGO -- One of the Federal Reserve's leading New Economy advocates said in an interview that interest rates could soon start heading lower. Once we get over the energy hump, I wouldn't be surprised if inflation declines and interest rates are going to come down, Robert McTeer, president of the Federal Reserve Bank of Dallas, said after his speech at the National Association for Business Economics conference here. He said market rates, such as the 10-year Treasury note, would be the first to fall. The federal-funds rate probably won't lead market rates down but eventually will follow. Mr. McTeer's remarks suggest that, aside from support inside the central bank for ending the recent rate-raising campaign, there is even some talk of moving to ease monetary policy. Some economists have suggested that the next Fed move would be an easing but that it wouldn't happen for several months or even well into next year. Behind that talk of an easing are expectations that inflation will ease once oil prices, which rose 1.51 yesterday to 35.14 a barrel, begin to decline. The federal-funds rate, which is the rate banks charge each other for overnight lending, is currently set at 6.5. But the 10-year Treasury yield, despite rising Monday, remains well below at 5.76.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985003","date":"2000-09-15","texts":"Ending a turf battle that has lasted nearly two decades, financial market regulators yesterday reached an agreement that clears the way for investors to buy futures contracts based on single stocks. The agreement still faces scrutiny from Congress. But lawmakers have told the Securities and Exchange Commission and the Commodities Futures Trading Commission that if they could settle their dispute, Congress would likely adopt their approach. The deal, in which the two have essentially agreed to share regulatory oversight, paves the way to end an 18-year ban on single-stock futures. A futures contract is a promise to deliver or to buy at a set date in the future and at a set price a certain item--pounds of coffee, barrels of oil, or, in this case, stocks or bonds. By law, a futures contract must be traded on an exchange. Once the ban on single-stock futures is lifted, investors could, for example, sell a futures contract based on shares of International Business Machines Corp. to hedge against a decline in the price of the company's stock, or buy such a contract instead of buying the actual IBM shares. Single-stock futures could lower investors' risk by allowing them to hedge against price changes in stocks and bonds. But because they also carry lower margin requirements, similar to those on options contracts, many experts say they could be riskier for many consumers. Initially institutional investors and businesses are expected to be the biggest customers for these new products.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613514","date":"2000-09-18","texts":"Gaining the confidence of Wall Street can be hard for a company. But regaining the Street's confidence after losing it can be even harder. Take health-care information provider IMS Health. It delivers information on drug sales and trends to pharmaceutical giants, with an amazing 93 market share. But some investors and analysts are reluctant to give the company a clean bill of health because of management-credibility issues. Concerns stem from the odd reverse merger IMS announced this past March with TriZetto, a three-year-old Internet health-care concern with a mere 33 million in annual revenue. Investors couldn't grasp why the venerable information provider -- with 1.4 billion in annual revenue last year -- was looking to merge with the newly public company, which offers medical billing and administrative software online. Amid the pummeling of both companies' shares, the deal was subsequently scratched, although IMS ended up selling a unit to TriZetto. The company's shares have been given a 5 management discount by Credit Suisse First Boston analyst Stephen DeNelsky. He has prepared an interactive stock-valuation spreadsheet for investors in which they choose how much of a discount they want to apply. It's the risk that when you walk in one morning and boot up your machine that there is another news item with something like the TriZetto deal, Mr. DeNelsky says of the discount. For their part, IMS's top executives continue to defend the deal, believing it would help IMS to expand its Internet strategy. From a strategic point of view, it was a good transaction from a timing point of view, we couldn't have picked a worst time because we did announce it simultaneous with the collapse of the technology market, Robert E. Weissman, the company's chairman, says in an interview, referring to the spring collapse in tech shares. We were not tone deaf in spite of the fact that we did not need shareholder approval. We listened and we modified the transaction.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614889","date":"2000-09-21","texts":"PRAGUE -- For the second day in a row, a top International Monetary Fund official put public pressure on the world's big economies to intervene to support the plunging euro, but there were no signs that the U.S. is prepared to join such an effort. Calling the euro heavily undervalued, the IMF's new managing director, Horst Koehler, told reporters it is clear that intervention cannot be taboo, because it is part of the instruments any central bank or government has available. The day before, the IMF's chief economist, Michael Mussa, said the conditions ripe for coordinated intervention are rare and added, One has to ask, If not now, when'  The unusually blunt comments from the IMF officials sparked speculation in financial markets that finance ministers and central bankers from the Group of Seven big industrialized nations, who are to meet here Saturday, may be preparing to step up the rhetoric about the euro or agree on joint intervention. But the common currency fell to a new intraday low against the dollar of 84.38 cents, suggesting the markets weren't counting on intervention. The euro, born at 1.17 in January 1999, was trading late yesterday in New York at 84.83 cents, down from 85.09 cents Tuesday. The conventional wisdom about currency-market intervention, particularly among U.S. officials, is that it is most likely to succeed when it is coordinated among big economies, announced publicly and catches the markets by surprise. Although G-7 officials appear to agree that the euro is oversold, and by implication that the dollar is unsustainably high, widespread expectations about intervention offer an argument to delay rather than to act now.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983615","date":"2000-09-21","texts":"Phyllis D. Rose spends up to 90 minutes each weekday in her car, driving to and from the General Services Administration's offices in Arlington where she works. And when she gets there, after the traffic-filled ride from her home in Laurel, Rose typically gets interrupted many times over by bosses, colleagues and the telephone. The distractions are many the opportunities to concentrate are few. But things are a lot calmer on the days she reports to the Laurel Telecommuting Center--a mere five-minute drive from her house. Away from the interruptions of her workplace, she finds she is far more efficient and gets much more done. Rose is one of 27 federal workers signed up to telecommute part of the week from the telecommuting center in Laurel, which opened almost a year ago. The center is part of a federal program and one of three pilot projects run by the College of Southern Maryland in La Plata. There are now 17 such telecommuting centers in the Washington area and about 27 around the country, all of which are nonprofit projects started in 1994 and funded by the General Services Administration GSA. Each federal agency also has 50,000 set aside in its annual budgets to contribute to the centers, if employees use them.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983662","date":"2000-09-21","texts":"On Sunday in Miami, the Baltimore Ravens finally got more than just a glimpse of running back Jamal Lewis's potential. And now that his potential has turned into productivity, Lewis will be playing a bigger role in the offense. Coach Brian Billick said this week that Lewis, who is 5 feet 11 and 231 pounds, will become the Ravens' primary ball carrier, which is exactly what the team anticipated when it used the No. 5 overall draft pick on him in April. You can see what he brings to the offense, the combination of power, explosion, all the things we've talked about since we drafted him, Billick said. The thing he gives you is the potential for the big play. Lewis, who made his first NFL start in Miami, led the team in rushing with nine carries for 76 yards and had the biggest play on offense against the Dolphins. Late in the second quarter, Lewis ran off left guard and broke free for a 45-yard gain. As he sprinted down the sideline, Lewis shrugged off three tackles before being tripped up and pushed out of bounds. Although that was his longest run of the game, Lewis was equally impressive the times he carried the ball much shorter distances.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982464","date":"2000-09-24","texts":"Don't be misled by the title of this book. Though Murray Sperber discusses big-time college athletics at length and with impressive asperity, his real subject is the decline of undergraduate education at what he calls Big-time U, the large public university with high- profile football andor men's basketball teams playing at the highest NCAA levels. At many of these institutions, he argues, beer-and- circus--the party scene connected to big-time college sports events-- replaces meaningful undergraduate education. The case he marshals against these places--schools scarcely seems the right word--is overwhelming, a devastating condemnation of higher education in America. Sperber teaches English at the Indiana University, where for years he has enjoyed the dubious privilege of observing Big-time U at intimate range. The basketball program there, under the egregious, and finally fired, Bobby Knight, may or may not embody all the worst excesses of Division 1A athletics--Sperber calls Florida State University the national champs of beer and circus, and with ample reason--but it certainly is a leading contender. Because of his outspoken views on big-time athletics generally and Knight specifically, Sperber is a controversial figure on his own campus, but that has not stopped him from speaking out or from writing books, of which Beer and Circus is the most important. Much of what he says in the book has been said before, by him in a previous book, College Sports, Inc. and by others. What is new here is the direct connection he makes between two phenomena that would seem at first glance to be unrelated. Just about everyone knows that under the enthusiastic management of the National Collegiate Athletic Association, big-time football and basketball programs have become the tail that wags the academic dog, and just about everybody knows that almost every undergraduate at these big schools is, as a freshman at Ohio State told Sperber, just another number, rolled through the assembly line with little if any attention from tenured faculty and not much more from the graduate students and teaching assistants who shoulder so much of what passes for the academic load. Sperber argues that these phenomena feed off each other. The big public universities and some of the private ones as well are engaged in an unseemly competition for prestige as reflected in the frivolous but influential rankings of U.S. News and World Report and other publications. These are based principally on graduate programs and research, helping persuade university administrators that research prestige was the way to attract attention to their institution and to improve its standing in the academic world. A few years ago, I listened with still-undiminished horror as the newly crowned chief administrator of my alma mater told alumni and anyone else who would listen that his chief goal for the institution was to elevate it to Number One among public universities at U.S. News that ambition seems to be universal. But ambitions such as that are expensive, and universities need funds to underwrite them. Enter the undergraduate, whose tuition and fees these universities covet and for whom they compete energetically. In the 1980s, Sperber writes, some higher education officials began to discuss 'the student as consumer'. . . . Colleges and universities needed to fill their classrooms and dorms . . . and, as a result, except for the most prestigious schools in the country, the demographic crunch of the 1980s and early 1990s transformed admissions from a selection process to a sales campaign, often involving clever scams.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615338","date":"2000-09-25","texts":"John Vernon thinks of it as his Captain Kirk moment. The president of consulting firm Approach Inc. stood in front of the six-pack of cubicles outside his office one day and realized that office space is the final frontier for boosting productivity. His vision a sleek space allowing his information-technology consulting teams to serve clients at warp speed. His company's office in Valhalla, N.Y., had more in common with the cube farms of Dilbert cartoon fame. The offices were on the exterior of the floor, and I had the corner office, of course, because I was the president, the 38-year-old Texas native says sheepishly. Everybody else was in a cubicle. If his firm of 60 employees was going to keep increasing revenue at more than 50 a year, he decided, the space needed to reflect the way his company actually did business. Fast-forward two years to today. Poorly designed cubicles and window-hogging offices are history. In their place is a work space defined by vertical black-metal supports and clusters of glass-walled conference rooms, desktops with low-rise dividers and tables. Laptops and flat-panel computer screens are scattered across work surfaces, which can be quickly reconfigured. Copiers and such are a few steps away, not down the hall and take the second right. People used to play phone tag or wander around the office to set up meetings, Mr. Vernon says. Now three guys working in the same area can just wheel their chairs around a computer terminal. As a result, Approach is getting its high-margin product -- client proposals -- to market at least 20 faster than before. We think a significant portion of this improved performance is directly attributable to our new office space, Mr. Vernon says.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984423","date":"2000-09-25","texts":"Traditionally, when we all think of work, we picture an office. With a boss. And co-workers. We have to dress a certain way, and worry that if someone sees us leaving early, they'll label us Slacker- Extraordinaire. But what about those free agents out there The ones who break away from the traditional office scene to freelance or consult There are many things to consider if you're pondering a life of working at least part-time in your pajamas. First of all, do you have the experience necessary to know what you're doing Have you spent enough years in the industry to have a couple of contacts you can hit up for some work Do you have a little bit of money saved up to cover the rent until that first payment comes in Flying solo can be an awesome experience, but it can also be a ponderous task if you haven't prepared yourself or don't know how to navigate. Susan Schulz was a 28-year-old editor at YM Magazine in New York about eight months ago, when she decided to jump ship and move into the dot-com world with a start-up. On her first day at the new company, she was told the company's funding fell through and she'd have to be let go, along with just about everyone else. Horrified, she went home and started calling a few contacts she had in the magazine industry to ask if they knew of any job openings. They didn't, but they did know of some freelance opportunities. So she ran with that, assuming she could freelance a few articles while looking for a more stable job.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983896","date":"2000-09-26","texts":"Place kicker Michael Husted clearly had breathed a healthy sigh of relief when the gun sounded to signal the end of the Redskins' 16-6 victory over the New York Giants on Sunday night. He knew full well that missing an extra point and 30-yard field goal in the second half could have led to disaster for his new team, not to mention swift NFL unemployment. For now, Husted has job security for at least another week, according to team sources, but the Redskins are planning to bring in free agent Jaret Holmes for a look this week, just in case Husted has further problems. Holmes, 24, has had practice-squad stints with the Bears and Giants, played in the NFL's European league this past season and was in Chicago's training camp last summer before being cut prior to the season. Husted, an eight-year NFL veteran, was added to the Redskins' roster the same day as the team's Monday night loss to the Cowboys last week. He signed when regular kicker Brett Conway continued to have problems with a quadriceps injury in his kicking leg. Husted said he did not want to make excuses for his two misses against the Giants and, that after looking at film, he said he had come in too tight to the ball and kept my hips open. I don't think I was consciously worried about the footing, but I'm sure the footing had something to do with it. New turf was installed last week at Giants Stadium, and a number of players reported having problems on the grass surface.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614214","date":"2000-09-27","texts":"PRAGUE -- After five months in office, International Monetary Fund chief Horst Koehler has begun to win over many of those who wondered whether he was up to leading the global lender through a period of public excoriation and internal reform. As thousands of antiglobalization protesters laid siege to the annual meetings of the IMF and World Bank here yesterday, Mr. Koehler laid out his vision for the agency responsible for rushing in with big loans and stern advice when a developing nation finds itself in financial crisis. The IMF, Mr. Koehler told top officials from 182 member nations, must make globalization work for the benefit of all. His effort to focus the IMF on emergency loans for better-off developing countries, and on poverty reduction and debt relief for the worst-off, won't convince the IMF's harshest critics, who believe its economic prescriptions favor corporations over the poor and the environment. But his approach is securing him the grudging cooperation of some outside activists and so far, so good kudos from member governments, large and small. The Clinton administration likes his embrace of many of Treasury Secretary Lawrence Summers's reform proposals. The British praise his ability to talk debt relief with antipoverty advocates. The Yemenis applaud when he prods rich countries to open their markets to exports from the developing world. These aren't necessarily the reviews that Mr. Koehler, 57 years old, might have expected. His appointment came after a bitter trans-Atlantic clash. Now, however, Clinton administration officials are warming to Mr. Koehler, who has endorsed many of the IMF reform proposals that Mr. Summers himself first put forth, such as the focus on crisis finance. Just last week the IMF board redesigned its lending programs -- shorter terms and higher rates -- to encourage countries such as Brazil, Egypt and Indonesia to borrow only when they're locked out of private capital markets. Preapproved credit lines are available to countries whose economic policies are judged sound but that might still be hit by contagious market panic.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985398","date":"2000-09-28","texts":"Big government is about to get bigger, despite the Republican and Democratic presidential candidates' pledges to the contrary, according to a new report. After years of downsizing, the number of people directly or indirectly employed by the federal government could grow by about 1 million to reach 18 million over the next five to 10 years, according to Paul C. Light, director of government studies at the Brookings Institution. Directly or indirectly responsible for about one-eighth of the jobs in the nation's economy, the government now is poised to expand, no matter whether the electorate chooses George W. Bush or Al Gore as the next president, Light writes in an article in the October issue of Government Executive. According to Light, promises by candidates Vice President Gore and Texas Gov. Bush on defense spending, prescription drug coverage and education will lead to increased staff numbers. Both candidates are making promises that can only be kept by adding to the true size of government, as measured not only by the size of the federal civil service but by the number of employees working indirectly for Uncle Sam under contracts and grants, Light says. Excluding state and local jobs mandated by the federal government, which Light sometimes includes in his numbers, the size of the federal government last year was down nearly 1 million jobs from the beginning of the Clinton administration in 1993. Light has contended previously, and continues to do so in the October article, that the true federal work force includes not just civil service employees but also postal workers, contract workers and grantees, as well as the state and local employees whose work is mandated by the federal government. All of these workers are needed to deliver the federal mission, Light states.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984912","date":"2000-09-29","texts":"A problem involving rents paid for apartments and houses caused the government to slightly understate the rate of consumer price inflation for the first eight months of the year, officials said yesterday. The Bureau of Labor Statistics yesterday revised its monthly figures for the consumer price index to correct the problem, raising the inflation rate by 0.1 percentage point, to 3.5 percent on an annual basis, for the January through August period. The rate for the so-called core portion of the index, which excludes volatile food and energy prices, was also lifted by the same amount, to 2.7 percent. Katharine G. Abraham, commissioner of labor statistics, said at a press briefing the problem first arose in January 1999 when the agency began using a significantly different sample of housing units to collect rent information. However, she said, the CPI figures for 1999 were not revised because the agency decided the changes were too small to warrant all the problems such a revision would cause for everyone who uses the CPI to adjust benefits, pay, rents and even parts of the tax code for inflation. It would be enormously disruptive for the whole gamut of users of this information if the 1999 figures had been revised, Abraham said, adding that her agency's guidelines for such matters say we should not be revising too far back in time. The agency will not know until next month, when it has the September price figures, whether the changes announced yesterday will affect next year's cost-of-living increases in Social Security payments, veterans' benefits and federal pensions. Those benefits are raised each January according to the increase in the average level of the CPI in the July through September period from the level in the same three months of the preceding year.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830981815","date":"2000-10-01","texts":"CORRECTIONS The name of Jeffrey E. Garten, dean of the Yale School of Management, was misspelled in a story on globalization in the Oct. 1 Business section. Published 10062000 It may be only a slight exaggeration to say that nobody has profited more from globalization than George Soros, who made billions speculating in financial markets around the world, in some cases bringing entire national economies to their knees. But there he was last week, standing among top financiers from Citicorp and Deutsche Bank, in a magnificent rococo ballroom of the old Hapsburg palace here, denouncing the excesses of the new global economy. It is in our enlightened self-interest to make sure that the losers in this global system--and right now there are billions of them--get a chance to participate, he said between bites of a tangy chicken goulash. Why Because otherwise the people who are disadvantaged will use their political clout to capture the system. Two days later, much the same warning was delivered by a young, multi-pierced anarchist as he hurled a cobblestone at the head of a Czech riot policeman guarding the entrance to the annual meeting of the World Bank and the International Monetary Fund. On a nearby building, one of his comrades had scrawled, Kill Capitalism Before Capitalism Kills Us.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985222","date":"2000-10-01","texts":"Al Gore's campaign headquarters is swamped in suggestions about how he should behave in the first, crucial debate Tuesday in Boston. By fax, tape and letter, advice is pouring in. The gist of it Be nice--don't try to make Bush look stupid. George W. Bush's unsolicited kibitzers are telling him to search for a crushingly simple one-liner like the immortal There you go again that Ronald Reagan used against Jimmy Carter in '80. There is a push on the agenda, too. Hundreds of citizens are pelting moderator Jim Lehrer of PBS with ideas. One issue needs no champions. It has elbowed its way to the top. You have only to hear Republican candidates voicing their support for a Democratic prescription drug bill that they once voted against to realize what a headache seniors' pills are giving the GOP this fall. Says House Democratic leader Dick Gephardt, At every stop, it comes up--not just from seniors, but from boomers who take care of their parents. Erik Smith, communications director of the Democratic Congressional Campaign Committee, says that in the two dozen hottest races, prescription drugs is at or near the top.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985413","date":"2000-10-01","texts":"The last two of seven HMOs will close at the end of the year, according to Thursday's paper Extra, Sept. 28. About 1,000 people out in the cold for insurance coverage. Of the original seven HMOs in Charles County, averaging about 500 per company, that is about 4,000 people that have been left with no medical or drug coverage. Yesterday on a television morning show a lady 79 years old was explaining to the television host how she spent two to three hours a day collecting aluminum cans for 5 cents apiece in order to supplement her monthly income to eat something besides the oatmeal she eats every day. Her monthly annuity is 800 and her medical bill is 300 a month plus. So she must collect cans. Now here is a 79-year-old lady who stands a chance of being mugged in some alley. She has put aside her dignity and pride to survive. I wonder how many Congress people would like their mother, brother, sister or son to be exposed to the same thing At the same time our Congress is on the Hill playing partisan games with legislation that might help us while we suffer. Folks, we have got to do something for ourselves. Most of us are too old I'm 80 to walk protesting picket lines, and we do not have money to have elaborate protest signs printed. So all we have is our vote. On Nov. 7, vote. We can be vicious. We can be mean. Or we can be kind and fair. But we can also be judgmental by the use of our X in the voting booth. Put it in the right place.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985103","date":"2000-10-02","texts":"The Washington area's economy has been swimming upstream for many months against the currents of higher interest rates, a volatile stock market and rising fuel prices. But so far the region's economy has kept its head up, with the latest jobs reports showing only small increases in unemployment and a slight drop in employment growth. August's unemployment rate for the metropolitan area was a low 2.3 percent, just a notch higher than the 2.2 percent average for the three preceding months, according to the Bureau of Labor Statistics. The bureau's August survey of employers also shows virtually no change in job growth in the region. Employment increased at an annual rate of 2.7 percent in the Washington area between August 1999 and this past August. The growth rate from July 1999 to this past July was 2.7 percent. The District's jobless rate moved up to 5.4 percent in August, from 5 percent in July, after allowing for seasonal employment changes. Despite the increase, the District's unemployment rate is still far lower than its average during the 1990s. Virginia's unemployment rate was 2.5 percent in August, unchanged from the month before, while Maryland's jobless number climbed to 3.5 percent in August from 3.2 percent in the previous month.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984065","date":"2000-10-07","texts":"Vice President Gore today escalated his bid to put Florida in the Democratic column, telling voters here that they hold the power to decide whether prosperity will continue under a Democratic administration, or elect a Republican administration that would threaten the surplus and endanger Social Security. The choice is yours, he told about 2,000 supporters at the Walt Disney Amphitheater next to Lake Eola. This state is the key to the election, and central Florida is the key to this state, Gore declared with his running mate, Joseph I. Lieberman at his side. Gore warned the crowd that the nation's economy is on the line on Nov. 7. Prosperity itself is on the ballot all across this great state this year, he said. Prosperity itself is on the ballot in the United States of America this year. Both Gore and Lieberman claimed victory in their respective debates this week, and the vice president drew cheers and laughter as he ridiculed Texas Gov. George W. Bush's charge that Gore used fuzzy math to fault Bush tax and spending initiatives. The other side would give almost 30 percent of all their proposed tax cuts to individuals with incomes of more than 1 million per year. Those facts aren't fuzzy those facts are real, they are real. They may be inconvenient but they're not fuzzy, Gore said. To the surprise of Democratic and GOP strategists, Florida has emerged as one of the battleground states this election. The state had been moving steadily in a Republican direction and Jeb Bush, brother of George W. Bush, is the governor. President Clinton carried the state and won its 25 electoral votes in 1996, but, until late summer, few people expected Gore would have a chance to duplicate that feat.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616377","date":"2000-10-09","texts":"WASHINGTON -- The unexpected decline in September's unemployment rate doesn't mean the economy has blown off its course toward a soft landing. The 0.2 percentage point decline reported by the Labor Department brought the jobless rate back down to 3.9 last month, matching a 30-year-low first reached in April. The jobless rate for African Americans fell one percentage point to a record low of 7. The numbers tell me that we haven't landed yet and that it's somewhere off in the future, but that we're still on track, said Mark Vitner, an economist with the First Union Bank Corp. in Charlotte, N.C. Mr. Vitner, like many economists, expects third-quarter economic growth to slow to about 3.5 before speeding up to 4.1 in the final quarter. That's slightly higher than the 3 and 3.6 consensus forecasts from Blue Chip Economic Indicators. Still, the overall drop in the jobless rate set off alarms at the Federal Reserve, which remains worried that desperate employers will boost wages and benefits to attract or retain workers, triggering inflation. The Fed has raised interest rates six times since June 1999 to slow the economy, though it has kept rates steady at its past three meetings. Many analysts said that before raising rates again this year, the central bank would have to see a similar decline in next month's jobs data, alongside a clearer indication that labor costs were rising.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616502","date":"2000-10-13","texts":"The current sharp slide in the stock market has elicited a variety of explanations. We are told that investors fear a possible Gore presidency and a Democratic Congress. That Federal Reserve monetary policy has been too tight, jeopardizing the prospects for a soft landing. Or that a speculative bubble in technology stocks has finally burst. In each case it is assumed that something has changed drastically somehow, for some very important reason, investors now look at the market very differently than they did a few months ago. I believe this view reflects a fundamental misunderstanding of how stocks are valued. To get back to the basics, over the long run stocks are worth exactly and only an amount equal to the discounted future value of the cash flows investors expect to receive from them. This is usually taken to mean both future dividends and share repurchases that put money back into the hands of stockholders. What most analysts fail to understand when they breathlessly seek out dramatic reasons for major moves in the market is that in this model relatively minor changes in assumptions about interest rates, and the rate of future dividend increases, can create very large shifts in theoretical stock valuations. Take, for example, the 1987 crash. Immediately before the crash, dividends were roughly 3, and interest rates 10. For purposes of simplicity, we shall ignore share repurchases. This means that, given the assumptions of the model, investors before the crash were anticipating that future dividends would grow at a 7 annual rate. What if investors became slightly more conservative For example, as economist Merton Miller has pointed out, if investors in the fall of 1987 increased their forecast for interest rates by only 0.5, and also reduced the rate at which they expected dividends to grow by a similar 0.5, a whopping 25 drop in stock prices would have resulted. In fact, the market fell by 22 on Oct. 19, 1987.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614267","date":"2000-10-17","texts":"WASHINGTON -- College tuition is still rising faster than inflation, increasing 4.4 at public four-year colleges and 5.2 at private four-year schools. Average tuition at public schools in the 2000-2001 academic year was 3,510, while at private schools the tab was 16,332, the College Board said in its annual report on college pricing. College Board President Gaston Caperton called the increases modest, and said inadequate academic preparation is a greater barrier to college admission than cost. But the tuition increases outpaced both the 3.5 annualized increase in the consumer price index for the first eight months of this year, and year-earlier price increases. The College Board said student aid rose 4 to 68 billion, but the aid data lag behind the college-cost survey by a year. Room-and-board costs increased by an average 5.1 to 4,960 at public colleges and by 4.2 to 6,209 at private schools. Mr. Caperton attributed the increases in both tuition and housing to students demanding more, including a lower student-teacher ratio, better housing and increased technology spending.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614604","date":"2000-10-17","texts":"Internet banks have run into all kinds of problems in the U.S., but ING Group NV thinks it has some solutions. Part of its strategy biscotti and comfy sofas. Last month, the big Dutch banking and insurance concern launched its ING Direct Internet bank in the Northeastern U.S. The move was the first phase of a rollout of online banking services across the country that could take several years. In the U.S., ING will be adapting strategies that already are luring many Canadians. Starting as a telephone operation, ING Direct in Canada didn't even have Internet service until late 1998. But the online bank already has more than 300,000 clients and over three billion Canadian dollars US2 billion in deposits in the country. Like its competitors, ING attracts deposits mainly by offering easy access to accounts and beating traditional banks on interest rates. It is offering a 6.5 rate on U.S. savings accounts, for instance. But unlike many Internet banks, ING Direct targets mainly ordinary consumers rather than computer sophisticates or affluent folk with online brokerage accounts. Then it stretches to put a human face on its machine-based business. To help do this, it runs cafes that serve up generous helpings of banking information as well as espresso and biscotti. Among other functions, the cafes calm potential customers worried that their savings will somehow vanish into cyberspace. With its sofa, armchairs and popular music, the cafe on the ground floor of a Toronto office tower looks like any striving-to-be-hip coffeehouse. Giant wooden clogs and a model windmill attest to the bank's Dutch origins.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985193","date":"2000-10-19","texts":"Civil service and military retirees will get a 3.5 percent increase in their retirement checks next year, the largest cost-of- living adjustment for most retirees in a decade. The Social Security Administration and Office of Personnel Management announced the benefit increase based on inflation data reported yesterday by the Labor Department. Retirees and surviving spouses covered by the Civil Service Retirement System and military annuitants will receive the 3.5 percent COLA. People who retired under the newer Federal Employees Retirement System and who are 62 or older will receive a 2.5 percent increase. The benefit increase probably will help many retirees pay for higher health insurance premiums in the Federal Employees Health Benefits Program next year. According to the latest available data, the typical CSRS retiree receives a monthly benefit of 1,811, which the COLA will increase by 63 a month. That's about double the increase in the FEHBP's popular Blue Cross and Blue Shield standard-option family plan, whose premiums are going up by 30.61 a month in 2001.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983860","date":"2000-10-24","texts":"The wireless industry adopted guidelines to let customers protect their privacy and control data used by mobile phone companies to pinpoint the locations of subscribers. The Cellular Telecommunications Industry Association said companies will tell consumers that location information is being collected, ask them to authorize any use of the data, ensure records are secure and give consumers a chance to correct errors. The move comes as Congress prepares to tackle data privacy and carriers try to head off legislation. Worldwide personal-computer shipments rose less than expected in the third quarter and replacements of older models won't rise significantly until next year, according to a Dataquest survey. Shipments rose 15.2 percent, to 33.9 million units, from a year earlier, it said--less than the 17 percent growth predicted. It said price cuts may come as companies try to boost demand. Another researcher, IDC, reported third-quarter growth of 18 percent, to 33.3 million units, in line with its forecast. Web-based companies fired 5,677 workers in the four weeks ended Oct. 20, the largest total this year, according to a survey by Challenger, Gray & Christmas. Since December, companies with sites offering information on finance, consulting and other industries have cut 8,113 jobs retailers, 5,450 and health and fitness companies, 2,190.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615855","date":"2000-10-27","texts":"European officials tried to talk up the euro after it hit a new low against the dollar in European trading. But the jawboning -- including renewed talk of intervention from one European Central Bank official and a suggestion from a finance minister that the euro could rise 20 -- did little to spur markets to bid up the struggling common currency. In late New York trading yesterday, the euro stood at 82.94 cents, just above its record low of 82.28 cents earlier in the day. Currency-market traders said officials' silence on the euro after a Group of 20 meeting in Montreal prompted the euro's slide to the new low. The ECB will do all it can to achieve its objective of price stability, without excluding the possibility of intervention, said Eugenio Domingo Solans, an ECB executive board member, in Madrid. Mr. Domingo said the solid state of the European economy will sooner or later cause the euro to rise. The weak euro is at the root of inflation in Europe, and doesn't help the economies of the U.S. and Japan either, Mr. Domingo added. Last month the ECB, the U.S. and Japan intervened in the currency markets to prop up the euro, which initially rose but has fallen further in the past two weeks because markets doubt the U.S. would be willing to intervene again before the presidential election. In a sign of how sensitive markets are to the threat of intervention, the euro rose to its high for the day after Otmar Issing, the ECB's chief economist, reiterated what has become the central bank's party line Intervention is a tool at the bank's disposal. Laurent Fabius, France's finance minister, stated the euro has the potential to rise 20. On the whole, Europe is in a positive position. We are not managing to get that across, Mr. Fabius said in Paris. The strong performance of the U.S. economy and perceptions of an inflexible, rigid Europe have contributed to the euro's 29 slide against the dollar since it was founded in January 1999.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985534","date":"2000-10-27","texts":"The advertising slogan was supposed to trumpet the Bigfoot presence of America Online, stir consumer confidence and capture national attention. It said simply We're the biggest because we're the best. In late August, the line did get national attention, but not the kind AOL Latin America wanted. After Brazil's leading Internet provider angrily challenged AOL's claim, a national consumer regulatory group forced the company to abandon the boast. Now, AOL billboards in Brazil sport a more softly spoken pitch, referring to convenience of access This is the easy way. In its first foray into Latin America--among the world's fastest- growing Internet markets--AOL has had virtually nothing easy in Brazil. A clogged, highly complex market, a batch of unlucky breaks and what analysts call a series of strategic miscues have left the behemoth Internet service provider grasping for a place in an arena that experts predict will grow only more competitive in coming years. The struggles of AOL's Latin America venture have included not only ad campaign troubles but a highly publicized software glitch, a domain-name crisis, management turmoil and a flaccid initial public offering. Analysts say those setbacks, along with the company's failure to capitalize on its powerful brand name, have led to AOL's surprisingly soft position in a country with roughly half of Latin America's Internet users. The question now is whether AOL Latin America, a joint venture between the Dulles-based company and the Miami-based Cisneros Group, can recover from its stumbling start to forge a fresh, distinctive identity in this teeming market.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982385","date":"2000-11-04","texts":"The heads of both houses of the Philippine Congress and more than 40 other legislators withdrew their support for President Joseph Estrada today, making it almost certain that he will be impeached over allegations he pocketed millions of dollars in bribes from an illegal gambling racket. The decision by Senate President Franklin Drilon, House Speaker Manuel Villar and the other legislators to resign from Estrada's ruling LAMP party and throw their support behind efforts to remove him from office has increased the pressure on Estrada to resign. The defections appear to provide opposition lawmakers with more than enough support to forward an impeachment complaint to the Senate for a potentially embarrassing trial that could result in his removal from office. We should spare the Philippine people needless suffering, said Drilon, who urged Estrada to step down. Allegations that Estrada received almost 12 million in kickbacks from tobacco taxes and an illegal numbers game have roiled the Philippines, leading to mass street protests calling for his resignation. The scandal has rocked the country's financial markets, battering the stock market and the Philippine peso. The crisis has already escalated to the point of threatening a paralysis in government and the collapse of the economy, Villar said.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830981762","date":"2000-11-12","texts":"They're slipped under dorm-room doors, strewed down stairwells and scattered to the winds that blow across the District's campuses. Like autumn leaves, they crackle underfoot in multicolored heaps on college lawns and sidewalks, each with its own alluring message The latest advertising technique for city bars and nightclubs has turned into a major headache for officials at some colleges. Discouraged by anti-solicitation policies banning handing out or posting fliers on college campuses, some event promoters have taken to simply dumping hundreds in one spot, then moving along quickly. They drop them in the quad as if, 'Whoops Dropped them'  said Elana Nightingale, a sophomore at American University, which has been hit hard by the scatter phenomenon. Recently, Nightingale saw someone open a high window on campus and release a stack of fliers into a stiff breeze. University officials are frustrated by the eyesore caused by the handbills as well as the potential hazard--some of the ads are on slick, glossy paper that they fear could send pedestrians sprawling. Most annoying, though, is what officials see as a subtle appeal to underage drinkers.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617171","date":"2000-11-15","texts":"If last week's outcome of several anti-sprawl ballot measures is any indication, Southeast voters are more willing than ever to foot the bill for buying up land before real-estate developers can get their hands on it. Now comes the hard part Cities and counties from North Carolina's Research Triangle to South Florida must stretch public dollars far enough to please voters by curbing sprawl but not spend so much that they become too financially leveraged in the process. Rising land costs in the region are making that increasingly difficult. Some local government officials project they'll have to spend significantly more than they did in the 1990s to shield only a fraction of the acreage. Land that's most threatened by development tends to be the most expensive to buy. So acquiring even small parcels can rapidly drain a public land-buying bank account, leaving a city or county with little to show for the effort. Moreover, developers and property owners, in selling the increasingly scarce land, often attempt to inflate prices, thinking they can turn a quick profit at taxpayers' expense. Land-buying programs tend to create their own real-estate markets, says Andy Walker, former state director for the Nature Conservancy of Tennessee. With mounting frequency, he adds, cities and counties find themselves having to play hardball with land speculators who think their property is worth a lot more than it really is. In Broward County, officials are primed for tough negotiations after voters last week passed a 400 million bond package to purchase undeveloped land near the Everglades and improve existing parks. Broward County will walk away from deals if price gouging becomes an issue, vows Kristin Jacobs, a Broward commissioner.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614470","date":"2000-11-17","texts":"GREENSPAN By Justin Martin Perseus, 284 pages, 28 MAESTRO By Bob Woodward","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616242","date":"2000-11-17","texts":"TAIPEI -- Stocks tumbled 4.9 in Taiwan on continuing worries about bad loans at local banks. Most other Asian markets were also weaker, while slumping growth and auto-maker stocks dragged down most European markets. That left the Dow Jones World Stock Index down 1.30, or 2.84, to 216.05. Excluding the U.S., the index fell 1.07, or 1.70, to 157.31. A series of uncertainties has caused the Taiwan stock market to fall more than 30 since President Chen Shui-bian was elected in March, ousting the long-ruling Kuomintang. Political battles between Mr. Chen and the opposition-controlled legislature have put a question mark over his government's ability to pass crucial legislation. Local banks are faced with rising bad loans, and the extent of the problem isn't known because banks here generally don't follow international standards in reporting such loans. With so much uncertainty rattling investors, any news can be an excuse to sell, said Roger Yang, a fund manager at ABN Amro Asset Management. Mr. Yang said concerns about rising bad loans at local banks were one of the main reasons behind the drop in share prices. Separately, the government refused to release the results of a consumer-confidence survey. The decision was reported yesterday in the Economic Daily News, but didn't immediately affect market sentiment. It was the first time since the quarterly survey began in 1998 that it has failed to come out.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983043","date":"2000-11-17","texts":"Stymied by concerns about interest rates and earnings, investors pushed stock prices lower today, focusing again on technology issues. The latest blow for the high-tech sector was Merrill Lynch's downgrading of the fiber-optic industry, which had been seen as the last solid performer in the industry. And investors were still shaken by the renewed prospect of higher interest rates that would further cut into corporate earnings. Stock prices fluctuated in a narrow range for much of the day as the market sought a direction. By late afternoon, investors found a path downward. The Nasdaq composite index fell 133.61 points to close at 3031.88, and the Standard & Poor's 500-stock index was off 17.49 at 1372.32, according to preliminary calculations. Both indexes have a large representation of high-tech stocks. The Dow Jones industrial average finished down 51.57 at 10,656.03. You're still seeing a lack of deep conviction on the part of the bulls, said Ronald J. Hill, investment strategist for Brown Brothers Harriman & Co. So the market seems to be driven by the news of the day.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842613542","date":"2000-11-21","texts":"NEW YORK -- A plunge in stock prices helped lift Treasurys prices moderately. But traders said bond-market activity was muted as many people pared back trading positions well ahead of Thursday's Thanksgiving Day holiday in the U.S. Late yesterday, the benchmark 10-year Treasury note was up 732 point, or 2.19 per 1,000 face value, at 100 1632. Its yield fell to 5.664 from 5.694 late Friday, as yields move inversely to prices. Meanwhile, the 30-year Treasury bond's price was up 932 at 106 2832 to yield 5.752, down from 5.773 Friday. There weren't any major economic indicators during the session, and that left the bond market to focus primarily on the weakness in stocks. The Nasdaq Composition Index plummeted 151.44 points to 2875.75, while the Dow Jones Industrial Average sank 167.22 points to 10462.65. When stock prices fall sharply, investors often move funds to the relative safety of government securities. Some of the gains yesterday in Treasurys reflected such shifts, although a portion of the market's movement stemmed only from anticipation that investors would move to bonds from stocks.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615997","date":"2000-11-22","texts":"WASHINGTON -- The trade deficit exploded to a record in September, as Americans continued to soak up imported goods and U.S. exporters were hurt by damped economic growth overseas. The gap between exports and imports hit 34.3 billion, almost 13 wider than economists had expected for the month and 15 larger than the revised 29.8 billion deficit posted in August, the Commerce Department reported. The result of weaker exports is slower overall growth in the U.S., with economists now estimating that gross domestic product rose at a 2 annualized rate in the third quarter of the year, not the 2.7 the government previously had calculated. That would be the slowest growth rate since the U.S. economy limped ahead 0.8 in the second quarter of 1995. Nonetheless, the U.S. economy grew at an estimated 5.2 rate for the year ended Sept. 30. And even the reduced third-quarter pace in the U.S. is stronger and more consistent than the growth rates of its big overseas business partners. European growth has slowed recently, while Japan's perennially sluggish economy still hasn't gotten much traction. You have U.S. growth continuing to outpace the rest of the world, said Gerald D. Cohen, senior economist at Merrill Lynch & Co. in New York, adding, If we grow faster than our major trading partners, we'll pull in more imports than we export.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981965","date":"2000-11-23","texts":"It's not just the festive decorations or frantic shoppers that signal the start of the holiday season. There's also the rising price of butter. It just seems to happen almost every year at this time, said Marc Randolph, owner of the Arlington bakery Pastries by Randolph. In the past three weeks, Randolph has watched the price of butter climb on the Chicago Mercantile Exchange--where wholesale prices are set-- from about 1.20 a pound to 1.80, a 50 percent increase. Randolph now expects the price he's been paying his supplier to rise accordingly before the year is over We use a ton of butter a week, so this will put a little cramp in the business. Randolph said he doesn't plan to charge more for his products to recoup the cost because many customers won't be able to pay the price. But he said if prices get real bad, he may have to cut back production of some of the butter-laden holiday goods to keep his costs in line.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614073","date":"2000-11-24","texts":"In your Nov. 16 Technology Journal article Outsourcing Firms Shift Gears in Tight Market, the outsourcing development may be quite positive for the industry. As you point out, the U.S. outsourcing market is changing and 1999 revenues that were inflated by Y2K and ERP spending are unlikely to reappear anytime soon. Nevertheless, there are many positive trends, including global expansion of outsourcing to offset slower growth in a more mature U.S. market, greater spending on infrastructure, applications management and network services to facilitate the transition to e-business, and an aging federal information technology staff that will accelerate federal sector outsourcing, especially to enable e-government. If the so-called outsourcing dinosaurs have been outflanked by their smaller, newer competitors, the tide may well be reversing in favor of size, broad experience and financial staying power as the scramble for qualified IT staff intensifies. At a time when corporate IT departments and governmental agencies alike are confronting a work force nearing retirement, new IT graduates favor established outsourcers and shun the civil service. This will only intensify the trend toward outsourcing. If so, stock investors would be well advised to adopt a longer-term investment horizon. Announcements of layoffs should be understood as normal repositionings by outsourcers that acquire new staff with each contract win. They don't necessarily presage revenue shortfalls, and the growth of revenues from non-U.S. market doesn't signal a souring of the U.S. market. Albert Nekimken Vice President","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615035","date":"2000-11-24","texts":"WASHINGTON -- With signs that the job market is softening only a bit, consumer confidence remains high heading into the holiday shopping season, giving beleaguered retailers a reason to cheer. The Labor Department said the number of first-time claims for jobless benefits climbed by an unexpectedly large 7,000 last week while a longer-term gauge hit its highest level in nearly two years. The numbers suggest that the jobless rate will increase in coming months. Still, the unemployment picture has yet to take a bite out of consumer's confidence in the economy. The University of Michigan's index of consumer sentiment actually increased in November, surprising analysts expecting a decline due to stock-market weakness and continuing election uncertainty. The index finished the month at 107.6, nearly two points higher than its 105.8 level in October and only a few points below the record set in January. The report offered a burst of good news for the nation's retailers, who have seen their stock prices battered in recent weeks amid evidence of slackening sales and dire predictions for a relatively weak holiday-shopping season. Most retailers' fortunes rest on the crowds of shoppers who flock to their stores between Thanksgiving and New Year's Day. The new data suggest that such fears may be groundless. With the index at these levels, it would still be reasonable to expect robust growth in consumer spending, said Ian Shepherdson, the chief economist of High Frequency Economics in Valhalla, N.Y.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984030","date":"2000-11-24","texts":"This little question is the third rail of technology journalism. No other aspect of personal computing attracts so much emotion, or lands so much hate-mail in journalists' in boxes accusing them of bias. To make my own background clear I've got a Mac on my desk at home and a PC on my desk at work. I swear at both. If it means anything, I've gotten a little more hate-mail from Apple advocates than PC partisans. But apart from those true believers, there are people who would just like to know which platform will be a better fit for their own purposes. There's no right answer, but here are a few things to ponder Cost At the entry level, there's no longer a big difference between the prices of Macs and PCs. The cheapest PC-and-monitor combo with 64 megabytes of memory a realistic minimum at Best Buy's site costs 580 after a rebate. The cheapest iMac system available costs 800. That 220 isn't pocket change, but it's not a huge gap, either. Apple stays roughly competitive with its rivals throughout the iMac line. But between 1,500 and 2,000, Apple has nothing to compete with Windows machines. If you're looking for a computer with some open expansion slots and a 17-inch monitor, a desktop PC will be awfully cheap compared to a Power Mac G4. Reliability Both operating systems crash. A lot. Yes, it's possible to fine-tune either system to a remarkable degree of stability, but most users have neither the time nor the aptitude for that kind of tweaking. I'm not addressing Microsoft's more reliable, more expensive and more resource-intensive Windows 2000, which is designed for business use.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614610","date":"2000-11-29","texts":"ATLANTA -- In its second major restructuring in three months, iXL Enterprises Inc. said it will cut 35 of its work force, sell several units and take an unspecified fourth-quarter charge. The Web consulting company said that by shedding 850 more employees, closing several offices and selling some business units it can focus on its biggest customers and become profitable in the first half of 2001. The company said it will concentrate on about 75 major clients -- down from 300 currently -- and target the areas of financial services, travel and retail and consumer packaged goods. Chairman and Chief Executive U. Bertram Ellis said the latest moves go much further than the 350 layoffs and management shuffle he promised would turn the company around in September. We did not cut deep enough. We cut the fat out of the system, but we did not change the company, Mr. Ellis said of the previous restructuring. This time we've changed the company. It's a very, very radical step that would be sufficient even under our worst-case scenario. Mr. Ellis said that by slashing the company's costs, iXL will be able to operate profitably on revenue from its largest customers. The company's top 75 clients currently generate 90 of the company's sales, he said. Mr. Ellis conceded that the moves will slow iXL's revenue growth, which in the past often exceeded 35 in successive quarters. He declined to predict what the company's growth rate will be in the future or to specify how big the fourth-quarter charge will be.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614868","date":"2000-11-29","texts":"Jaap van der Meer was in a bit of a box. The Alpnet Inc. president needed cash to exercise 150,000 stock options this summer, but didn't want to sell any of his Alpnet shares, worried that it would send a negative signal to investors. So he borrowed against his roughly 3.2 million stake in the Salt Lake City multilingual information-services firm. As the head of a company, you're almost like a celebrity, says Mr. van der Meer. When a senior executive sells shares, he adds, it never looks very good. Neither, in hindsight, does his decision to borrow. After he took out the loan, Alpnet stock sank 40 on the Nasdaq Stock Market, and Mr. van der Meer was forced to dump the 150,000 shares he had exercised when the stock was trading at about 2.30. He sold, or planned to sell, most of those shares at prices ranging from 73 cents to 1.31, according to Securities and Exchange Commission filings. Mr. van der Meer says the sale was triggered by a margin call, a demand that he come up with additional cash or stock. He still holds 1.2 million Alpnet shares valued at 712,500. In February, his Alpnet stake was valued at 14.2 million. At the time of the loan, we felt, our company is doing well and the stock market will reflect that,'  says Mr. van der Meer. But, he laments, markets are unpredictable and irrational.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984471","date":"2000-11-29","texts":"So many job seekers are like Myra Walker, living in the city without a car. So many employers are like Frank Hearl Jr. of the Dulles Airport Marriott, based in a suburb where nearly everybody already has a job. A job fair yesterday in the Reeves Center, at 14th and U streets NW, brought together people like Walker and Hearl in an attempt to solve a problem faced by the region for decades Most new jobs are in the suburbs, while most of the unemployed are in the city. More than 650 applicants from the city, where unemployment is 6 percent, showed up for about 500 jobs in the Dulles corridor, where unemployment is less than 1.5 percent. Putting city job seekers in touch with suburban recruiters was only part of the plan, since even when District residents know of work outside the Capital Beltway, many have no way of getting there. So the job fair was timed to coincide with Monday's start of a Metro bus route between L'Enfant Plaza and Dulles International Airport. The buses are to run hourly from 530 a.m. to 1130 p.m., seven days a week, with fares of 1.10 each way. I just felt like it was a blessing, said Walker, 38, who lives in Petworth and was looking for a customer service position. If the jobs are in Virginia, it's a good thing they come here to recruit.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830981806","date":"2000-11-30","texts":"The U.S. economy grew at just a 2.4 percent annual rate in the July-September period, the slowest pace in four years, according to revised figures released yesterday by the Commerce Department. An unusual decline in federal government purchases of goods and services and smaller gains in business spending on new equipment and inventories were the primary reasons for the substantial drop from the second quarter's 5.6 percent growth rate. Commerce last month initially estimated third-quarter growth at a 2.7 percent rate, but more complete data recently available caused the downward revision. As they had when the original figures were released, however, a number of analysts said the nation's economic situation remains solid with growth likely to pick up again to between a 3 percent and 4 percent rate in the final three months of the year and continue in that range for some time. The headline was a lot weaker than underlying demand, said Bruce Steinberg, chief economist for Merrill Lynch & Co. in New York. Private domestic demand grew at a 4.4 percent rate in the third quarter, far from indicating any serious problems in the broad economy. We expect growth to rise north of 3 percent in the fourth quarter and in 2001.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617203","date":"2000-12-01","texts":"When the nation's bankruptcy rate started to drop last year, John Garza felt the impact almost immediately. Business at his suburban Maryland bankruptcy law firm slowed so much that he was forced to let half of his 15 attorneys go, and several of the survivors quit in frustration over their reduced earnings. Mr. Garza, for his part, had time for other pursuits. I played a ton a golf, he remembers. These days, tee times are down and court time is up. The caseload of Mr. Garza's firm rose more than 15 last month alone, leading him to hire a new attorney. We're like vultures perched on the telephone pole, waiting for the disaster so that we can eat, he says of his firm, which handles both personal and business bankruptcies. Well, the vultures are about to spread their wings. With interest rates up and the economy slowing, many households are discovering that their bills for years of torrid spending are coming due just as they are ill prepared to pay them. As a result, growing numbers of Americans are seeking court protection from their creditors. Personal bankruptcies, as measured by a 12-week moving average of filings, have increased nearly 10 since January. The moving average hit 24,288 for the week ending Nov. 4, up from 22,291 in the week ending Jan. 1, according to data from Visa. Extended over an entire year, that pace would translate into about 1.26 million personal bankruptcy filings, a notch lower than the 1.28 million filings recorded last year. Indeed, after rising steadily for most of the past decade, personal bankruptcies fell in 1999 amid low interest rates and solid wage gains associated with the nation's ultratight labor market. But what concerns many analysts is that the pace of bankruptcies appears to be accelerating. SMR Research Corp., a consumer-debt research firm in Hackettstown, N.J., estimates that bankruptcy filings will rise as much as 15 next year, easily surpassing 1998's record 1.4 million filings.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614476","date":"2000-12-04","texts":"LONDON -- No matter where you look in Europe, telecommunications companies are struggling to raise money. Investors have all but turned their backs on the sector, and the Dow Jones Stoxx telecommunications index has plunged 32 this year. The latest victim is Telenor of Norway, which was forced to slash the price range on the final day of order-taking for its high-profile initial public offering. European telecommunications and technology shares bounced back Friday, though most major markets closed only moderately higher. Asian stocks rallied, showing little effect from the sharp fall in Nasdaq overnight. Overall, the Dow Jones World Stock Index rose 0.92, or 1.91, to 208.68. Excluding the U.S., the index rose 1.5, or 2.29, to 155.28. Young European telecommunications companies have been shut out of the high-yield bond market for months, and yields in Goldman Sachs' sub-investment-grade Euro Telecom bond index have doubled from their lows of the year to 20.26 on Thursday. Only blue-chip stalwarts can still raise cash using their investment-grade ranking, though even they must offer higher yields to attract buyers. British Telecommunications, for example, had to increase the yield for its 6 billion to 8 billion global bond offering, which is expected to be priced today. Now, the loan market is starting to freeze up, according to some bankers. Syndicated loans typically have been the most stable source of funding for companies, and telecommunications concerns have borrowed a record 216.4 billion this year, according to Capital DATA Bondware.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616805","date":"2000-12-07","texts":"WASHINGTON -- As international financial troubleshooters cobble together multibillion-dollar rescue packages for Turkey and Argentina, they're haunted by memories of how isolated economic woes in a few countries in the late 1990s grew into a global financial crisis. This time, the International Monetary Fund and the Clinton administration hope to contain the upheaval with a 7.5 billion loan for Turkey and new financing -- still being negotiated -- for Argentina. But they're still anxious that investors, already fretting about a possible U.S. recession and skittish about emerging markets, might react to trouble in the two countries by withdrawing their money from other developing nations. What the fund is worried about is they want to localize this stuff because there are other problems out there, said Morris Goldstein, a senior fellow at the Institute for International Economics, a think tank here. Those other problems -- a slowing U.S. economy, high oil prices, stock-market volatility and political turmoil in nations ranging from Peru to Indonesia -- are serious enough without a major developing nation finding itself unable to pay foreign debts, Mr. Goldstein said. IMF and U.S. officials say they don't believe the problems have spread yet, although even if they did believe it they would be reluctant to say so aloud for fear of sparking panic. Investors, they say, learned from the Asian crisis not to shun one country just because a neighbor overspends its budget or allows its banks to make unwise loans. Obviously, markets are nervous, said an IMF official. But they also recognize and seem to reward countries that are following good policies or getting their acts together.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613884","date":"2000-12-08","texts":"Not with a bang but with a whimper. That's how the Clinton-Gore economy stumbles to an end. It's not a pretty sight. But will we end up mired in recession Don't bet on it. We should skirt a recession and resume our prosperous march, as long as Congress supports, rather than undermines, President-elect George W. Bush. As we enter the Christmas retail season, it's easy to come up with a list of sad data as long as Santa's happy list of holiday gifts. Durable goods orders dropped 5.5 in October and, of course, the Nasdaq Stock Market has lost 32 in 2000. The economic bears are on a rampage, forcing the bulls to hibernate for the winter. How did we get here Wasn't it just yesterday that gross domestic product growth was galloping at a 5 pace and financial authors sparked a bidding war over Dow 36,000, Dow 40,000 or Dow 100,000 Who broke up the party and launched this battle against our prosperity Let's use the acronym FOE, pointing our indignant finger at the Federal Reserve Board, OPEC and the euro. Each of these institutions has knocked us a few degrees off course. Of the three, at least the Federal Reserve had good intentions. Back on May 16, the day the Fed pushed up short-term rates by 50 basis points, I suggested on this page that the economy was preparing to slow on its own, and that bond bears worried too much about inflation. If only my bet on the New York Mets came out so lucky. Be careful what you wish for. . . goes the old saw. So now the Fed has achieved the slowdown it tried to engineer. Fewer cars are rolling off the assembly lines in Detroit, and carpenters will hammer fewer nails into new homes this winter. The junk-bond market has slammed its doors, and the Fed reports that bank loan officers have choked lending standards tighter today than during the 1998 credit crunch. On Tuesday, Alan Greenspan prudently and presciently softened his inflation warnings, pointing out that a flabby stock market could signal or precipitate a softening in spending. For now, at least, we don't have to fret about irrational exuberance in share prices.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615100","date":"2000-12-08","texts":"Weaker earnings. Slowing growth. Rising defaults. A surge in bad loans. Not the ideal environment for making money in the stock market -- and certainly not in banking shares. So as bank after bank announces bitter earnings surprises because of dud loans -- the latest being Bank of America this week -- how are investors making money In short, the strategy is to avoid the megabanks focused on corporate lending and buy banks focused on the consumer. This has yielded solid returns as smaller community lenders have soared. The closer you are to the consumer right now, the better, said David Ellison, manager at bank-fund FBR Fund Advisors, a small Boston money-management firm that has posted returns above 20 far this year. Mr. Ellison, for one, pared back his holdings in big regional banks such as Bank of America and FleetBoston Financial, long considered leaders of the banking industry. At the same time, he invested in lowly thrifts, unsung mortgage specialists like Golden West Financial and Astoria Financial, both of which have risen despite the current economic environment.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616621","date":"2000-12-08","texts":"Retailers call the period between Dec. 1 and the last weekend before Christmas the Dead Zone. Sales typically slow between the Thanksgiving-weekend crush and the right-before-Christmas panic, and shoppers procrastinate endlessly. But this year, the Dead Zone is more lifeless than ever. Traffic at department stores slid close to 5 last week from a year ago, and mall sales fell 6.9, despite a hefty bout of promotional sales. Worried about keeping Internet shoppers engaged and spending, online retailer Amazon.com Inc. extended its free November shipping offer on orders over 100 into December, a move designed to lure customers into purchasing before the last minute. Even giant Wal-Mart Stores Inc. said its sales were running below plan for the week after Thanksgiving at both its namesake discount stores and its Sam's Clubs division. With the stock market shaky and mounting signs of an economic slowdown, the midseason lull is making retailers particularly edgy this year. Despite a selling sweep on a handful of unexpectedly popular toys, most economists are predicting that holiday sales will be lukewarm, at best, this Christmas. And one big fear is lurking in many retailers' minds that a last minute snowstorm will keep some shoppers from resuming their shopping spree on Dec. 23. Such jitters are exacerbated by the fact that Christmas this year falls on a Monday, giving procrastinators the luxury of an entire weekend to whisk down Main Street or pop over to the mall and scoop up items, many on sale, at the last minute. Except for the odd, annoying relative who finishes holiday shopping in October, most Americans tend to put it off to the very last minute Over the last decade, the busiest shopping day of the year has shifted from the day after Thanksgiving to the Saturday before Christmas. Hopes of a late rush are of little comfort to retailers whose stores right now are full of merchandise but short on holiday shoppers. It is looking very painful, and it feels painful to look at the numbers now, if you don't realize what the calendar is doing, says Beryl Raff, chief executive of Zale Corp., who adds that she expects a surge of traffic the weekend before Christmas. The reality is that this is a Christmas that can't be read until December 25.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983826","date":"2000-12-09","texts":"With U.S. economic growth slowing, the nation's unemployment rate ticked up to 4 percent last month while employers' payrolls grew only modestly, the Labor Department reported yesterday. Analysts said the report provided further confirmation that growth has slowed recently from the very rapid pace of the first half of this year, which many economists and policymakers regarded as unsustainable. However, the details showed little sign of excessive weakness that would point to a serious slump. While employers added 94,000 workers to their payrolls, the total number of hours worked last month fell 0.2 percent as firms cut back slightly on the length of the average workweek. The reduction was sharpest in the manufacturing sector, where payrolls were virtually unchanged but hours worked dropped by 0.7 percent. It looks pretty favorable to me, said economist James Glassman of Chase Securities in New York. You have more confirmation of the slowing in growth, but not so much that unemployment is rising sharply. If you could freeze everything where it is now, it would be just about perfect. Growth has slowed to a sustainable rate, workers' pay is going up and inflation fears are waning, Glassman said. Everybody has gotten gloomy about the outlook because of companies warning about profits and the stock market is down. In financial markets, there is stress and worry about credit problems. But to me this is all part of the process of cooling off from a superheated growth rate.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830982746","date":"2000-12-10","texts":"With the exquisite timing of a master politician, Federal Reserve Chairman Alan Greenspan last week thrust himself into the middle of what has become a raging debate over the near-term prospects for the U.S. economy. Will the U.S. economy be able to manage a soft landing from the heights of spectacular and speculative growth of the past two years, as Greenspan had hoped when he initiated a series of interest-rate increases last year Or has the economy now slowed so far so fast in the past few months that a recessionary hard landing is as likely as not Back in 1996, Greenspan had warned Wall Street of an irrational exuberance that, if not contained, could eventually derail the American economy. His plea for moderation, while widely noted, was also widely ignored, and the Fed was forced to step in last year and raise interest rates in an effort to slow U.S economic growth to a less threatening pace. Now, four years later to the day, Greenspan was in New York before a group of bankers pleading for moderation once again. This time his concern was about an irrational foreboding that seems to have gripped Wall Street, which Greenspan warned could be a self-fulfilling prophecy if investors refuse to invest and lenders refuse to lend. Signaling an imminent change in Fed policy later this month, he hinted that the Fed was ready to cut interest rates at the first credible signs that the economy was headed for a crash landing. Although Greenspan's calming words triggered a brief rally in the financial markets, they were quickly drowned out by another wave of gloomy news coming out of corporate America--bad-loan problems at the country's biggest bank, declining sales of personal computers and computer chips, and holiday shutdowns of many of the nation's auto plants. And just Friday, the index of consumer confidence recorded its largest monthly drop in a decade.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982889","date":"2000-12-10","texts":"Last summer, as the NASDAQ temporarily staggered back from its spring drubbing, a still brash Internet company ran a full-page newspaper ad with a bold and memorable line Thanks, old economy, we'll take it from here. The ad got it exactly wrong. With the technology-heavy NASDAQ stock exchange about 40 percent below its March highs, the new economy no longer seems limitless. The American economy is entering an economic downturn. But even as the new economy implodes, the old economy will sustain us. This is a good thing It means that the slowdown will be short and shallow after an impossibly long economic boom. There will be other ironies in the coming months, the juiciest of which will be that old economy firms will surf the downturn more easily precisely because they have aggressively adopted high technology and made effective use of the massive structural shifts unleashed by New Economy forces. Make no mistake, the downturn will feel awful. Going from 6 percent growth to 2 percent growth is a terrible swoon. But it will not be awful. Despite a truckload of Chicken Littles predicting the end of the economic world, current economic indicators are pointing to a mild slump that never becomes a classic recession defined as two consecutive quarters of negative growth.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982480","date":"2000-12-14","texts":"Cysive Inc., a Reston Internet consulting firm, yesterday announced its plan to lay off workers for the first time in its seven- year history and lowered projections for its revenue and earnings in the quarter that ends Dec. 31. The company expects to cut 40 to 50 non-engineers, or 13 percent to 16 percent of its staff. Cysive also will freeze additional hiring, company officials said. The layoffs are part of a broader restructuring effort that will cost Cysive up to 8 million before taxes. Between 1 million and 2 million will go toward severance pay, the rest toward bad debt and real estate restructuring. Cysive, which customizes software systems, is reeling from cancellations, delays and spending freezes among some of its customers. In August the company dropped its largest customer in a payment dispute and said it would forgo nearly 4 million in revenue in the third quarter and another 1.5 million this quarter. At least one Cysive client could possibly file for bankruptcy protection, Cysive officials said yesterday in response to questioning from analysts. As a result, the company lowered its fourth-quarter revenue expectations to 9 million from 14 million. It dropped its projections for net income to a loss of 10 to 12 cents per share, before the restructuring charges, compared with the loss of 2 to 3 cents per share expected only a few weeks earlier.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614412","date":"2000-12-15","texts":"Frustrated by a decade of insane prices for everything from art to real estate, many Americans see a silver lining to the wobbly economy -- the chance to finally swoop in on some deals. Eileen Daspin and June Fletcher report. With the economy slowing and prices softening, Washington Redskins fan Paul Sawyer has one wish that things will get just a little bit worse. It's the only way Mr. Sawyer figures he'll ever move up the 45,000-name waiting list for Redskins' season tickets. The more the stock market wobbles, the harder he scours the classifieds for down-on-their-luck ticket holders. Not to mention other bargains he's eyeing if the economy keeps stumbling. I hate to prey on anyone's misfortune, says Mr. Sawyer, who has been reduced to watching games on television. But I won't feel too awful if someone loses their luxury. After a decade of watching prices go insane for everything from art to real estate, a lot of Americans see an upside to the economic downturn a chance to finally swoop in on some relative deals. The result is a kind of vulture culture, as Americans at almost every income level see some potential relief in every hiccup of the stock market. The hopes are especially high for bargains on big-ticket items that saw frenzied demand as the New Economy soared homes, waitlisted cars, high-end electronics and spa vacations -- the very things that often suffer first in a slump.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615536","date":"2000-12-15","texts":"Corrections & Amplifications FIDELITY INVESTMENTS' Contrafund estimates it will declare a capital-gains distribution equal to 9 of the portfolio's net-asset value on Dec. 29. Friday's Fund Track included Contrafund in a group of funds expected to have a distribution in the 20 range. WSJ Dec. 18, 2000 Ouch It is bad enough that lots of stock funds have negative returns this year. But many of those money-losing funds are about to sock shareholders with a big tax bill, too. Expect the worst of this one-two punch to hit investors in the coming two weeks. That is when perhaps as many as half of all funds finally make the capital-gains distributions required by the end of the calendar year, just as shareholders will see what year-end investment returns from their fund holdings will be.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614638","date":"2000-12-18","texts":"LONDON -- If Dr. Frankenstein were a money manager or foreign-exchange trader, would the euro be his currency of choice A month ago, Steve Barrow, a currency strategist at Bear, Stearns & Co. in London, vigorously argued yes. Europe seems to have created the currency equivalent of Frankenstein's monster, and it is running amok, he wrote to clients, noting forecasts that the euro would become a big currency in terms of trade, bond issuance, investment and as a reserve asset held by central banks. Europe's common currency, he predicted, would fall toward 75 U.S. cents next year. Now Mr. Barrow, whose euro predictions have been better than most, is singing a different tune -- and that's without a visit from Mary Shelley, the monster's creator. The 38-year-old native of East London now says he sees the euro at 95 cents in six months and 1.05 in 12. Mr. Barrow has lots of company. Confronted with the euro's 5.7 surge in the past three weeks, untold numbers of traders, analysts, portfolio managers, corporate treasurers and just plain old investors are trying to figure out whether they are experiencing future shock, which American author Alvin Toffler, 35 years ago, defined as the dizzying disorientation brought on by the premature arrival of the future.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614925","date":"2000-12-18","texts":"IRRATIONAL exuberance Make that uncontrollable, indefatigable, unreasonable, outlandish exuberance. Before the market's great fall early this year, investors managed to convince themselves that this time was different, that stocks couldn't go down very much, or for very long if they did. Bolstered by this ill-advised overconfidence, lots of people did lots of things they no doubt wish they hadn't. Turn back the clock, to the first quarter of this year. Investors who were content to settle for mutual funds and stocks with 10 to 20 annual returns were made to feel like, well, dullards. They just didn't get it. The people who did get it were leaving their Old Economy jobs for the excitement and riches of dot-com-dom. Or, if they didn't go to work for Internet companies, they were working with Internet companies and getting a piece of the action by taking shares in lieu of cash for business they did. Now, much of that stock may be more valuable as wallpaper.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616133","date":"2000-12-20","texts":"WASHINGTON -- The Federal Reserve promised to throw a life preserver to the U.S., declaring that the risks of economic weakness in the foreseeable future exceed the risks of inflation. But it left short-term interest rates unchanged. Financial markets now expect the Fed to begin cutting rates at the end of January, and to reduce them at least one-half percentage point by spring. Abandoning its 19-month stance that it was primarily worried about inflation pressures, Fed officials ended their meeting with a statement saying, The drag on demand and profits from rising energy costs, as well as eroding consumer confidence, reports of substantial shortfalls in sales and earnings, and stress in some segments of the financial markets suggest that economic growth may be slowing further. Although some inflation risks persist, the Fed added, they are diminished by the more-moderate pace of economic activity and by the absence of any indication that longer-term inflation expectations have increased. In contrast to recent Fed statements, this one included no mention of the inflationary dangers of tight labor markets. Until a report in The Wall Street Journal this week, financial markets had expected the Fed to declare the risks of inflation and recession about equal. Even though the Fed went further than that, financial markets initially were disappointed that rates weren't cut. Stocks, which had been up before the Fed's announcement in the hopes of a rate cut, sank soon thereafter. As investors' concerns about corporate profits grow, the Dow Jones Industrial Average fell 61.05 to 10584.37, while the Nasdaq Composite Index dropped 112.81 to 2511.71, a painful 4.3 drop.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616235","date":"2000-12-20","texts":"NEW YORK -- Treasury prices ended lower after Federal Reserve policy makers did what many bond investors had anticipated. The Fed left its target for the federal-funds, or overnight bank, lending rate, unchanged at 6.50. But its announcement of the decision suggested that the Fed is leaning toward lowering interest rates in the near future. It said that although there remains some potential for inflation, the risks to the economy now are weighted mainly toward conditions that may generate economic weakness in the foreseeable future. Largely because of optimism about interest rates, Treasurys had managed four consecutive higher closes through Friday, and most issues ended higher again Monday. Yesterday, prices trended lower on profit-taking earlier in the day, then recovered some on the news of the Fed decision. But, the market was basically expecting this, and had something like this priced in, said Drew Matus, an economist at Lehman Brothers in New York.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983119","date":"2000-12-21","texts":"Securities and Exchange Commission Chairman Arthur Levitt Jr. announced yesterday that he will step down by mid-February, ending the longest chairmanship in the agency's history. Levitt, 69, has overseen the nation's securities markets during a period of remarkable change since President Clinton appointed him in 1993. He told reporters that he had met with vice president-elect Dick Cheney at transition headquarters in McLean to tell him of his plans and that an acting chairman might be named before the new administration selects his replacement. Levitt could have remained a member of the commission until June 2003. He said he has not decided what he will do next. Observers and members of the securities world yesterday described Levitt much as he describes himself as an advocate for the investor.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983537","date":"2000-12-21","texts":"President Clinton issued an order in late November setting the January 2001 federal raise at 3.7 percent, on average. But saying that white-collar federal employees will receive an average raise of a certain amount tells only part of the story, and numerous employees have asked for a primer on pay. A There are two components to General Schedule raises--the across- the-board part and the portion divided up as locality pay. For 2001, 2.7 percentage points of the raise will go to the former and 1 percentage point to the latter. The government divides the funds available for locality pay among 32 designated localities based on how they rank in terms of pay gaps with local private-sector salaries. The calculation produced a 3.81 percent raise for the Washington-Baltimore locality for 2001. Although many Washington area employees believe the region gets or should get one of the biggest portions of the annual locality payout, it actually ranks in the middle of the pack among localities. Employees in the San Francisco area get the most. For example, the annual salary this year for a GS-15, step 1, is 89,264 in San Francisco, compared with 84,638 in Washington and 82,876 in the lowest-paid locality designation, the catchall rest of the United States, for employees outside the selected metropolitan areas. The distribution of locality pay is based on local wage markets, not on local living costs. There has been substantial controversy over the years about the methods used to calculate pay gaps and about whether a pay gap with the private sector even exists.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614882","date":"2000-12-22","texts":"ROME -- How felicitous it sounds in Italian globalizzazione. And why not For much of history, this was globalization. The outlines remain visible still, in the marble of Bernini and Michelangelo, in the Latin ringing the nave of St. Peter's, in the broken imperial columns that have not held a roof for 2,000 years. Respectively they evoke what was once the world order a common faith, a common language, a common law. The pilgrims who have filled the Eternal City this jubilee year remind us that it is also an order whose better angels retain a power to inspire. Clearly Pope John Paul II believes so. For when he looks out at the Third Millennium that begins this Christmas, he sees opportunity the chance to restore man to his proper footing, in solidarity with his neighbor and obedience to the truth. Understandably this has been read as at best an exercise in sentimentality or at worst a call for some Roman restoration. In fact, this civilization of solidarity emanates from the human heart out rather than some central authority down. And a recent Vatican conference suggests that a truly free and truly global economy may be one of its crucial ingredients. Granted, there are significant differences between love of neighbor and business, says the Rev. Robert A. Sirico, president of the Acton Institute. But perhaps not as many as one might imagine at first.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981947","date":"2000-12-28","texts":"Americans quickly come to think of pleasures as entitlements, so as the gaudy economic expansion encounters turbulence, they seem not just stunned but affronted. The stock market, however, is simply doing its job, reallocating capital from unproductive to more productive uses. This is, so far, what a soft landing of a high- flying economy looks like. And the vocal angst of many investors is what a soft landing sounds like in a spoiled nation that is becoming the crybaby of the Western world. Economic expansions are not like human beings and light bulbs. Expansions do not inevitably expire of natural causes. They could continue indefinitely, absent policy blunders by government or major mistakes by sizable elements of the private sector. The latter sort of mistakes have been made, particularly in overinvestment in technology and dot-com sectors. But government has two powerful levers for moving the faltering economy--interest rates, which are high, and fiscal policy, which is tight because government is running a surplus. Interest rates and taxes can be lowered. Anyway, America's long expansion may not be over. Housing starts are up, the job market remains strong, and some producers' difficulties are consumers' delights AT&T has cut its dividend for the first time in 113 years, and its stock is down 60 percent, but, then, long distance rates have fallen 35 percent in seven years, and cell phone rates even faster--in effect, a huge transfer of wealth from producers to consumers of those services. Third-quarter growth 2.4 percent was less than half the second- quarter rate 5.6, and sobering economic indicators have been multiplying for many months. Sobriety--a virtue, lest we forget--was producing dot-com carnage last spring. Investors were at long last pulling back from valuing companies for prospects--often chimerical-- rather than profits, and were belatedly acknowledging that, ultimately, profits dictate share prices. On Oct. 12, in a sell-off unrelated to technology, the Dow began falling 379.21 points 3.6 percent minutes after Home Depot, one of Wall Street's top growth stocks and a bellwether of consumer spending, warned that third-quarter earnings would fall short of analysts' expectations. Home Depot's stock plunged 28 percent because the firm's growth was 4 rather than 7 percent. But 4 percent is hardly agony. Besides, the analysts who set expectations sell stocks- -so they sell expectations. Furthermore, Home Depot ascribed its disappointment to the happy fact, for consumers, of falling prices of some building products. For example, during the summer, when housing starts slowed, sawmills did not, so lumber prices fell.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984785","date":"2000-12-28","texts":"The young man in baggy pants stands at a street corner with an armful of blue-and-gold fliers. Ma'am, he says, waving one of the sheets of paper at a passerby. Do you own a computer Juan Velez continues, telling the woman about the digital divide, the gap between the people who do and don't have access to the Internet. Many of the jobs in the next century will require computer skills, he says. Then comes the sales pitch She can get her very own home system, monitor and all, plus unlimited Internet access for a year, for only 249. Five other teenage volunteers are nearby, giving the same windup to other downtown visitors on a recent Saturday. They are part of an unorthodox technology-promotion campaign that began three months ago in this working-class town dotted with abandoned textile and paper mills. The organization they represent is no charity. It's part of a growing group of for-profit enterprises trying to do well by doing good. The business models of such start-ups make some uncomfortable, and it's unclear how many will survive the current high-tech shakeout. But proponents say the companies show promise in serving markets long ignored by mainstream businesses. Digital Mafia Entertainment Inc. DME, based about 20 miles southeast of here in Manhattan and worth about 8.5 million in the stock market, specializes in selling discount hardware and technology services to urban minority communities. Its chief executive is Darien Dash, 29, a well-connected entrepreneur who has been traveling around the country with President Clinton for the past year encouraging people to get online.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615510","date":"2000-12-29","texts":"WASHINGTON -- Consumer confidence plunged to its lowest level in two years as the holiday season failed to lift the spirit of Americans rattled by stock-market volatility and mounting fears of a significant economic slowdown. The Conference Board said consumer confidence slid to 128.3 in December from a revised 132.6 a month earlier. The November reading was initially estimated at 133.5. December's decline marked the third consecutive decrease in the closely watched index, which has lost 14 points since September. The reading compares results with its base year of 1985 when the index was 100. A sharp decrease in household expectations about the future health of the economy accounted for much of the drop. The New York business-research firm's data are the latest in a string of reports that depict an economy slowing more sharply, and more quickly, than anticipated. The cooling economy has led the Federal Reserve to formally identify slower growth, not inflation, as the biggest current threat to the economy, and analysts expect the central bank to begin cutting interest rates next year to spur growth. Although most sectors of the economy have begun to slow, the drop in consumer confidence is especially troubling because household fears about a recession can become a self-fulfilling prophecy. Consumer spending accounts for nearly two-thirds of the nation's total economic activity shrinking consumer confidence would probably cause spending to slow. A sharp drop-off in spending then could turn a relatively soft landing into a much bumpier one. That prospect was very much on the minds of Conference Board officials, who described the fall in confidence as somewhat disconcerting.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614479","date":"2001-01-02","texts":"I am responding to the Dec. 21 Letter to the Editor from Anuradha Mittal and Peter Rosset commenting on Norman Borlaug's Dec. 6 editorial-page essay We Need Biotech to Feed the World It is disingenuous on the part of critics of biotechnology to keep saying that there is enough food in the world and thus argue against scientific advances such as biotechnology to improve food production. Sure, there are plenty of food grains in the world, but most of them are in the West and much of them fed to animals 70 of corn produced in the U.S. is fed to livestock. Perhaps we can solve all the hunger in the world by asking everyone to become vegetarians in the West and then just ask Iowa farmers to donate their grains to the developing world. Export of food from developing countries accounts for only a small percentage of the global food trade, and much of it is in high-value tropical commodities that provide badly needed foreign-exchange for these countries. How does one improve access and distribution of food to the rural poor dependent on farming By improving farm productivity and by enhancing the infrastructure and policies that promote free trade. In South Asia and Africa, where much of the poor in the world live, the large majority of the people are involved in farming. Technologies such as genetically modified crops will help these people not only to produce more food, but also to increase their income. Increased prosperity of the rural sector would clearly help in reducing hunger and in narrowing the inequity between urban and rural people. It is the local production of food and greater income from farm products that can help the rural poor, and biotechnology will help them to reduce the chemical inputs on the farm, reduce labor and fuel, cut down farming costs, produce more nutritious food and improve the overall productivity. Can Messrs. Mittal and Rosset offer any alternative sustainable solutions to global hunger and poverty, or solutions for improving access and distribution of food other than distributing the surplus among those who desperately need it India is also home to me, as it is to Mr. Mittal India has increased food-grain production fourfold since independence in 1947, and a higher percentage of Indians are better fed today than ever before thanks to the Green Revolution. And this has happened while the population has also increased threefold due to medical advances.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615018","date":"2001-01-05","texts":"NEW YORK -- The Federal Reserve's surprise rate cut could help step up the pace of mergers and acquisitions in early 2001. The momentum that generated eight straight record years for M&A expansion began to falter in the second half of 2000 because of stock-market gyrations and a correction in valuations that damaged the purchasing power of potential acquirers. Jitters about the economy and market volatility prompted investment bankers and M&A lawyers to predict a sluggish start to 2001. But with the Fed's rate cut, announced earlier than expected, some of those concerns could be alleviated. To the extent that CEOs and decision makers become more positive about the economy, it's going to lead to decisions being made sooner rather than later, said Rick Escherich, a managing director in J.P. Morgan's M&A group. There's still a tremendous amount of activity going on under the surface, but there's been reluctance to pull the trigger on deals. The degree to which CEO confidence is restored, however, still hinges on how successful the Fed's move is in bringing in a soft landing for the economy. At this stage, it is too soon to gauge that impact, according to bankers. It's obviously a step in the right direction, but we need to see a continued improvement in the rate environment coupled with a tightening in credit spreads to see a significant impact in M&A activity, said Rick Leaman, head of mergers and acquisitions at UBS Warburg.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614493","date":"2001-01-09","texts":"WASHINGTON -- President-elect George W. Bush is under growing pressure to pack his overall tax-cut plan with more breaks for business -- an area he gave scant attention during the campaign. Business lobbyists have flooded the Bush transition team with requests for everything from technical tweaks to global overhauls. And if Mr. Bush rejects adding more business cuts to his 1.6 trillion, 10-year plan, members of Congress are expressing interest in doing it themselves -- likely at the expense of Mr. Bush's big across-the-board rate reduction. Most people are of the opinion that a smaller cut that's more targeted would be better, said Sen. John Breaux, the Louisiana Democrat who is an influential member of the tax-writing Senate Finance Committee. I think the long-term across-the-board reduction is fine but it's expensive. Mr. Breaux cited two business-oriented breaks he favored that he believed Mr. Bush would like incentives for energy production and credits for health care. While health-care credits would benefit families directly, they also would help insurance companies sign up more customers. Sen. Charles Grassley of Iowa, the incoming chairman of the Senate Finance Committee, said last week he favored more targeted provisions, including energy breaks and retirement-account reforms. Mr. Grassley said he doesn't sense sufficient support yet for Mr. Bush's across-the-board rate cut, which would provide the biggest sums to the well-to-do, but he added that he plans to keep plugging to win votes for individual rate relief, regardless.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617433","date":"2001-01-10","texts":"WASHINGTON -- For the first time in years, the dreaded word recession is back as a buzzword. Oddly, though, it will be months -- or even years -- before economists know for sure if the U.S. has entered one, partly because the definition is fluid. The most common definition of recession is two consecutive quarters of economic contraction. This was the explanation President Clinton used to defend his legacy when reporters asked whether President-elect George W. Bush was inheriting a Clinton recession. But that definition isn't widely embraced by economists. Economic growth is sort of more on a continuum, there's nothing special about zero, says Harvard University economist Greg Mankiw. His introductory economics textbook, Principles of Economics, defines a recession more generally as a period of declining real incomes and rising unemployment. In some cases, he says, two quarters may be too much. If you had a big enough fall in one quarter, you'd probably call that a recession, too, he says. For professional economists, the ultimate arbiter of economic peaks and troughs is the National Bureau of Economic Research's Business Cycle Dating Committee. Basically, a recession is whatever they want to call a recession, says Mr. Mankiw. The NBER is a nonpartisan, nonprofit think tank devoted to promoting the understanding of how the economy works. Founded in 1920 and based in Cambridge, Mass., the NBER has been dating expansions and recessions for decades. At their Web site www.nber.org, readers can examine the ebb and flow of U.S. economic growth back to 1854.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616784","date":"2001-01-16","texts":"After stumbling badly in last year's treacherous stock market, many folks are betting they'll recoup their losses during 2001. That, unfortunately, could turn out to be investors' next mistake. The critical issue In the stock market, do good years follow bad Or are returns pretty much random, and thus one year's performance doesn't tell us anything about the next 12 months If you are looking for a quick snapback, history isn't very reassuring. True, Standard & Poor's 500-stock index bounced back smartly from its most recent two annual losses, those in 1981 and 1990. But after the declines of 1969 and 1977, we had years with modest single-digit gains. And, of course, 1973's drubbing was merely a warm-up to 1974's thrashing. One bad year does not foretell a good year, says William Reichenstein, an investments professor at Baylor University. He says there is some evidence of mean reversion, suggesting results will drift back toward the average as good stretches follow bad, but it's not overwhelming.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616464","date":"2001-01-18","texts":"International Business Machines Corp. reported fourth-quarter earnings rose 28, topping analysts' forecasts in a standout performance that ran counter to gloomy warnings from other companies that sell large-scale computer systems. Revenue grew 6, matching or bettering many forecasts. IBM was among the rare few big computer makers and technology companies that hadn't issued an earnings warning about results for the December quarter. And, it didn't back away from this year's numbers, either. John Jones, an analyst with Salomon Smith Barney said IBM is somewhat insulated from economic turns, because about 40 of their revenues are in backlog from long-term software and service contracts. But he said he was surprised by the hardware growth. John R. Joyce, chief financial officer said the U.S. market is volatile but based on everything we know, we remain comfortable with consensus estimates for 2001. Analysts forecast 2001 earnings per share of 4.99, up 12 according to First Call.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614141","date":"2001-01-23","texts":"You could lighten up on stocks. Or you could just lighten up. Who says the investment news is relentlessly grim If you are frazzled by the market turmoil, maybe a little gallows humor will calm your nerves. Here's my list of 41 good things about a bad stock market, put together with help from investment experts Ted Aronson, William Bernstein, Kevin Bernzott, John Rekenthaler and especially Meir Statman. 1. Your 11-year-old has gone back to trading baseball cards. 2. You can once again see old bears on television. They look rested.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615817","date":"2001-01-26","texts":"WASHINGTON -- Wage and benefit costs remained contained in the last quarter, good news for inflation watchers. Meanwhile, a jump in unemployment claims in California could portend weakness in the country's largest state. The employment-cost index for the fourth quarter of 2000 rose 0.8 on a seasonally adjusted basis, the Labor Department said. That was down from a 0.9 increase in the third quarter and below consensus expectations of a 1.1 rise. It marked the third-straight deceleration in the ECI, a broad survey of labor costs that measures wages and benefits, since it jumped 1.4 in the first quarter of 2000. Overall, Americans' wages and benefits grew by 4.1 for the year, the biggest increase since a 4.3 rise in 1991. Inflation rose more slowly, meaning workers saw real gains in compensation relative to the cost of living. As long as employment costs remain low enough to keep inflation pressures down, say many economists, the message to Federal Reserve policy makers is clear. Despite the tight labor market, I think the Fed has a lot of flexibility in their deliberations on how to cut rates, said Stuart Hoffman, chief economist at PNC Financial Services Group in Pittsburgh.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616477","date":"2001-01-26","texts":"The U.S. housing market, which helped buoy a sagging economy earlier this winter, took it on the chin in December as home sales tumbled. Sales of existing homes fell 7.4 in December to a seasonally adjusted annual rate of 4.87 million units, 5.3 below the 5.14-million-unit pace in December 1999. Most economists had expected sales in the range of five million to 5.1 million units. For the full year, home sales totaled 5.03 million units in 2000. That was down 3.2 from 1999, which was a record year for home sales. Economists found the December data troubling, especially when taken with other reports suggesting the market slowed down at year's end. The Commerce Department said last week that while housing starts were up slightly in December, permit applications fell 6.6. Also, the most recent monthly survey by the National Association of Home Builders found builders are less optimistic about the market than before. While all that doesn't add up to a major slowdown, the latest sales data suggest there is a yellow flag for housing, says David Lereah, the realtors' chief economist. Not a red flag yet, but a yellow flag. He says the numbers should help assure that the Federal Reserve will lower rates by at least one-quarter of a percentage point when it meets early next week. Many economists, however, cautioned against placing too much stock in the December data. For one thing, weather was extremely bad, and even though the data are adjusted for that, the formulas used rely heavily on data from recent years when weather was unseasonably warm.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616108","date":"2001-01-29","texts":"Given that the economy seems to be slowing, the policy heads are furrowing their brows over which would be better -- lower tax rates or lower interest rates. Well, it turns out that both would be best, though neither is likely to run the economy on a dime. -- Taxes. Will lower marginal tax rates spur growth Sure. Low taxes are associated with rapid growth the world around. The Reagan tax cuts, once fully implemented in 1983, ended malaise and started a boom that persisted through 2000, except for a nine-month dip in 1990 and tepid growth as the economy digested the 1990 and 1993 tax increases. We would not now be experiencing growth close to zero, as Alan Greenspan described it in his testimony last week, if we had passed a tax cut last year, when opponents warned that it would overheat the economy, whatever that may mean. And there, in timing, is precisely the rub in using tax changes as countercyclical policy. Given the political delay in crafting tax legislation, tax cuts will arrive at the right time only through blind luck. What's more, taxpayers watching the political tides anticipate tax changes, often in perverse ways. Recall, for example, what happened with the investment tax credit. Expected passage of the credit brought business investment to a halt while the players waited for it to go into effect, just as an anticipated suspension called forth a burst of activity before the suspension was enacted. Both reactions merely aggravated the economic situation the tax credits were meant to remedy. It's better to think of tax policy in structural terms, designing it to produce incentives for growth in the long run. In these terms, cutting marginal tax rates is a no-brainer for one reason -- taxes are way too high. Not only did Mr. Clinton's tax increase create de jure brackets of 15-28-31-36-39.6, but the disallowance of certain deductions and his phase-outs of exemptions make the de facto brackets even higher. In high-tax states like New York and browned-out California, the top combined federal-local marginal rate approaches 50, a level loaded with disincentives and distortions. These higher marginal rates are especially punishing because real bracket creep -- what happens as wages and salaries increase with economic and productivity growth -- pushes more people into higher brackets. As a result federal tax revenue as a percentage of the economy is remarkably fat, at levels last seen in World War II. And the evidence that taxes are way too high is hanging out there for all to see in the form of budget surpluses.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616611","date":"2001-01-29","texts":"The dead have risen on Wall Street, and that has spooked some investors. The first month of the year has seen a stunning snapback in nearly every type of risky investment, the very stocks and bonds that investors thought they had slain last year. Now investors are torn Is this just a hugely exaggerated January Effect, a tax-related new-year rise in stocks that will disappear as the calendar turns, or are small technology stocks, junk bonds and emerging-markets securities going to keep rolling through the year No matter which camp they fall in, many money managers are terrified of being left behind. You can feel that panic to get invested and not miss out on a market that's taken off so strongly, says Kathleen Gaffney, a portfolio manager at Loomis Sayles who focuses on medium-quality and high-yield, or junk, bonds. There is a lot to be afraid of. While the Standard & Poor's 500-Stock Index is up 2.6 this year, the Nasdaq Composite Index already has posted a double-digit increase, having jumped 12.6. The Nasdaq's run looks pretty lame compared with really risky plays, such as the Dow Jones Internet Commerce index, which has soared 34.3.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617070","date":"2001-01-30","texts":"Alan Greenspan has endorsed tax cuts and the new Treasury secretary, Paul O'Neill, is on board as well after having waffled a bit in his confirmation testimony. Mr. O'Neill had argued that lower interest rates, not taxes, were the first line of defense against a slowing economy. He will be pleased if the Fed gratifies widespread expectations and trims its short-term rate target again this week. He also now says he will carry the tax-cut banner with pride. With Bill Clinton out of the way, some congressional Democrats have become tax-cutters as well. The administration of George W. Bush is only in its second week, but all the political harmony in Washington is so unnatural as to be disconcerting. Even the New York Times has overcome its reluctance to admit that Bush is a legitimate president and was marveling Sunday on what a smooth transition the Bushites were conducting. No doubt things would have been even smoother for transition manager Dick Cheney if Al Gore's staffers hadn't trashed the vice presidential offices Mr. Cheney was preparing to occupy. But kids will be kids. The honeymoon won't last, of course. The docility of the Democrats has been prompted in part by fears that the only legacy left behind by the Clinton presidency was a collapsing economy. They would have had to worry less if Mr. Clinton and Mr. Gore had boasted far less that this was an economy they themselves had grown. But the now-departed chief exec and veep were merely behaving like politicians. Don't tell the amiable Democrats this, but their worst fears may not be justified. Even if they are, Mr. Clinton and Mr. Gore deserve only a part of the blame, just as they deserve only a modicum of credit for the economic surge they claimed as their handiwork when the 20th century was going out like a lion. The late 1990s boom was the product of an entrepreneurial, high-tech explosion in which productivity rose dramatically and a new consumer product, the personal computer, came into its own. Last fall, the boom simply ran out of gas after consumers had used up most of their credit and corporations could no longer keep stock prices pumped up by borrowing money to buy up their own shares. Mr. Clinton and Mr. Gore, held in check by Congress, were not able to contribute much to the debacle. That's if you don't count the not inconsiderable regulatory mischief they inflicted before making their rather ungracious departures. Or their resistance to tax-cut proposals that, if enacted a year ago, might have headed off the current slowdown. It's a bit early to grant them absolution, particularly with regard to energy policy, but a little generosity never hurts.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985225","date":"2001-01-31","texts":"-- For the past six days, the world's political, academic and business luminaries who gathered in this Swiss mountain resort struggled -- between bites of lobster tail and sips of Louis Roederer champagne -- to comprehend the reasons behind growing populist backlash against globalization. At seminars and panel discussions held in a fortress-like conference center surrounded by armed guards and barbed wire, they were confronted by a staccato burst of statistics depicting the monstrous inequalities of our age that more than a billion people live on less than 1 a day, that half of humanity has never made or received a phone call and that Manhattan has more Internet connections than all of Africa. But as they descended today from the snowy alpine peaks, there was an air of disappointment among many of the 2,000 participants who were brought together by the World Economic Forum to ponder how to Bridge the Divides. When people talk about globalization, what we see is a world that is divided into two, said Thabo Mbeki, South Africa's president. There is a structural fault of poverty on one side, there are the powerful and the wealthy, and on the other side, there are the powerless and the poor. The exhilarating promises of globalization -- of new technologies, the elevation of living standards through free trade and the global web of mutual interests that was supposed to render wars obsolete -- have given way to fresh suspicions about the need to shatter traditions and break down the last barriers to the flow of capital, people and ideas. Given the growing hostility to globalization, Mexico's new reformist president, Vicente Fox, said the world's industrial democracies need to acknowledge that the present methods of reaching out to the illiterate and the impoverished are simply not working. Instead of bridging the divide, he said, the chasm between rich and poor is only getting worse.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615910","date":"2001-02-01","texts":"Asian markets generally welcome U.S. interest-rate cuts, but South Korea and Taiwan demonstrate why the Federal Reserve's move won't necessarily translate into parallel action across the Pacific. South Korea's higher-than-expected inflation numbers could imperil the size and timing of anticipated interest-rate cuts, despite the Fed's decision yesterday to cut rates one-half percentage point. At the same time, analysts believe that Taiwan will act more aggressively than the U.S. Fed in easing rates to prevent the Taiwanese currency from becoming too strong. That works to the favor of the Taiwanese stocks, said Shu Yin Lee on the Asian equity sales desk for J.P. Morgan Chase in New York. Shares in South Korea and Taiwan both jumped yesterday with heavy foreign buying setting the pace again. Most other Asian markets also rallied ahead of the Fed move, while the Tokyo market was flat. Most European blue-chip indexes finished higher, though most closed shortly before the Fed action. Overall, the Dow Jones World Stock Index fell 0.05, or 0.11, to 216.31. Excluding the U.S., the index rose 0.75, or 1.19, to 159.13. The Fed's rate cut -- combined with an earlier half-percentage-point reduction at the start of the year -- is good news for Asian and other emerging markets whether they follow the central bank's lead or not.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982085","date":"2001-02-01","texts":"It's been difficult to pin an ideological tail on the nascent Bush White House. One day the president is called a staunch conservative for nominating John D. Ashcroft to run the Justice Department and acting to restrict U.S. funding to overseas groups that support abortions. The next he's labeled a bleeding heart for helping prisoners' children and promoting literacy programs. The problem, some Bush advisers and friends say, is that conventional political definitions do not adequately explain what the president is trying to do. His actions have less to do with the left vs. right, they say, than with his embrace of many of the ideas contained in the movement known as communitarianism, which places the importance of society ahead of the unfettered rights of the individual. This is the ultimate Third Way, said Don Eberly, an adviser in the Bush White House, using a favorite phrase of President Bill Clinton, who also sought, largely unsuccessfully, to redefine the debate with an alternative to the liberal-conservative conflict. The debate in this town the last eight years was how to forge a compromise on the role of the state and the market. This is a new way to rethink social policy a major reigniting of interest in the social sector. Communitarianism, or civil society thinking the two have similar meanings has many interpretations, but at its center is a notion that years of celebrating individual freedom have weakened the bonds of community and that the rights of the individual must be balanced against the interests of society as a whole. Inherent in the philosophy is a return to values and morality, which, the school of thought believes, can best be fostered by community organizations. We need to connect with one another. We've got to move a little more in the direction of community in the balance between community and the individual, said Robert D. Putnam of Harvard University, a leading communitarian thinker. Many of Bush's early proposals fit this approach. This week, Bush moved to make it easier for the government to fund religious groups that cater to the poor and disadvantaged. He also gave a boost to AmeriCorps, the national service program that sends volunteers to help community initiatives. Last week, Bush rolled out an education plan that gave localities more authority over their schools. A week earlier, he spoke of the need for character education in schools. Even his tax plan, due next week, has what are touted as community- building elements a new charitable tax credit, a charitable deduction for those who don't itemize, and a reduction of the marriage penalty. Bush's inaugural address, said George Washington University professor Amitai Etzioni, a communitarian thinker, was a communitarian text, full of words like civility, responsibility and community. That's no accident Bush's advisers consulted on the speech with Putnam. At the same time, Bush has recruited some of the leading thinkers of the civil society, or communitarian, movements to his White House former Indianapolis mayor Stephen Goldsmith, University of Pennsylvania professor John DiIulio, fatherhood advocate Eberly, speechwriters Michael Gerson and Peter Wehner. Even Lawrence B. Lindsey, long before becoming Bush's economics adviser, was a Federal Reserve governor who explored ways to lure capital to rebuild poor urban communities.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613699","date":"2001-02-02","texts":"California, birthplace of the high-technology boom that helped carry the nation's economy to new heights, is also setting the national standard for layoffs. But the Midwest, bogged down in a manufacturing slowdown, is catching up quickly. Those are among the highlights of a report released yesterday by the Department of Labor's Bureau of Labor Statistics on so-called mass layoffs, where companies terminate 50 or more employees at once, and the employees file for unemployment insurance. The report indicated that while mass layoffs started 2000 little changed from a year earlier, layoffs rose 54 for the fourth quarter from a year earlier as a slowing economy prompted big companies to make sharp cuts in their work forces. In the October to December period, there were 5,248 mass-layoff events involving 647,012 workers, compared with 3,943 events and 420,827 workers a year earlier. For the entire year, there were 15,738 mass-layoff events affecting 1.84 million workers, compared with 14,909 events affecting 1.57 million in 1999. Not surprisingly, the largest percentage of the job cuts occurred in manufacturing, which accounted for 35 of all layoff events and 42 of all workers. Virtually everyone has been willing to admit that the manufacturing sector is miserable the question now is whether that weakness spreads out to other areas of the economy, said Brian Jones, an economist at Salomon Smith Barney. The distribution of mass layoffs on a state-by-state basis showed some surprising results. Partly as a result of an unfolding energy crisis, declining sales of technology equipment and the dot-com blowout, California reported nearly 155,000 mass layoffs for the fourth quarter, a 14 jump from a year earlier. The state also has seen huge job losses in the motion-picture and agriculture industries, although those industries are seasonal and experience heavy turnover.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615172","date":"2001-02-02","texts":"NEW YORK -- The dollar came under more pressure against the euro and yen after a look at two central-bank decisions -- and the data they were based on -- cast the euro in a more flattering light. Following Wednesday's Federal Reserve rate cut, the European Central Bank decided to leave rates unchanged. Central bank head Wim Duisenberg said that despite the U.S. slowdown, which could constrain global growth, euro-zone fundamentals look broadly favorable. Japanese life-insurance companies and trust investment funds seemed to have come to the same conclusion overnight and were notable bidders for euros, according to Tokyo traders. In late afternoon trading, the dollar was buying 115.58 yen, down from 116.30 yen early in London and 116.37 yen late Wednesday in New York. The euro was trading at 94.14 cents, higher compared with 94.05 cents early in London and 93.66 cents late Wednesday in New York. The euro had a brief spike on the release of the U.S. National Association of Purchasing Management manufacturing index, which fell to 41.2 in January, its lowest reading since March 1991.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616745","date":"2001-02-02","texts":"THIS YEAR'S SUPER BOWL was a blowout, but at least one group benefited from the boring football match-up advertisers. Viewers last Sunday paid even more attention to the ads that aired during the big game than they had expected to, according to a Wall Street JournalHarris Interactive poll. Harris Interactive surveyed 2,948 people online before the Super Bowl about whether they planned to watch the big game and the ads, and about their overall impression of Super Bowl advertising. The pollsters went back to those people after Sunday's game to find out if they watched the hyped ad campaigns as closely as expected. The pollsters conducted a total of 938 postgame interviews. As the Baltimore Ravens routed the New York Giants, just 52 of the respondents said they stayed tuned for every second of the game, compared with 71 who said they planned to watch the whole thing when asked before the game. Just as many respondents -- 52 -- said they watched every second of advertising during the game, even though only 39 had planned to stay tuned in through all the commercial breaks before the game. Still, fans overall were slightly disappointed by this year's advertising face-off. When this year's Super Bowl ads and those of previous Super Bowls were rated, the ads of Super Bowls past came out on top. On a scale of one to seven, with one being very negative and seven being very positive, this year's ads rated an average score of 4.7. That compares with an average score of 5.2 when respondents were asked their opinion of ads from previous Super Bowls, in general. As further proof, 22 of respondents asked after the Super Bowl said they found the ads annoying, compared with the 16 of pregame respondents who described the ads that way. And only 39 of postgame respondents said the ads made the game more enjoyable, compared with 51 of pregame respondents who said that.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982950","date":"2001-02-04","texts":"For two charmed years, California Gov. Gray Davis has been riding the political equivalent of a perfect wave a resounding vote into office, huge budget surpluses, a friendly legislature, rivals in disarray and glowing public reviews. Now, just as he is emerging as one of the nation's most prominent Democratic leaders, Davis is caught in a political riptide jeopardizing his career. The lights in the nation's richest and most populous state are barely on. Its biggest utility companies are broke and buried in debt. The Internet giants of Silicon Valley are nervous. Consumer groups are livid. Even Democratic lawmakers are questioning some of the governor's moves. And President Bush, whose campaign flopped here last fall, has no plans to come to the state's rescue. There is no easy escape from California's energy meltdown and little time to resolve the crisis before it gets worse. Desperate to end almost daily brushes with blackouts and silence his skeptics, Davis just patched together a 10 billion plan to keep power flowing into the state. Next, he has to find a way to keep utilities that have more than 25 million customers solvent.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983574","date":"2001-02-04","texts":"Jasper Becker is Beijing bureau chief for a Hong Kong newspaper, the South China Morning Post, which covers China more extensively than any other English-language paper does. Reporting from China most of the time since 1985, he has been everywhere and asked every question. A few years ago he published a well-regarded book on China's great famine of the 1960s. Now he has pulled together much of his own reporting and that of his Post colleagues to offer a corrective to the outside world's generally sunny view of China today. Becker focuses first on poverty-stricken minority peoples living in regions distant from the coast and on peasants in hilly and dry regions. Then he moves chapter by chapter to the cities, and up the ladder from factory workers to private entrepreneurs, bureaucrats and finally the top leaders. As he gets closer to the coast and to Beijing, he brings consumerism and intellectual sophistication into view. He emphasizes how recent China's consumer revolution is, and throws doubt on the argument that the Internet and faxes will pry Chinese society from the grip of the authoritarian state. A common view in the West -- and a principle behind the China policies of both Bush pegrvre and Bill Clinton -- was that economic opening and growth would improve human rights in China. Becker shows that this optimism has been largely unjustified. Beneath the back- slapping, banqueting and cell-phone networking of private-enterprise China he sees the pathologies of a sick society unemployment, nepotism, corruption and political repression. Many Chinese are worse off, even though GDP per capita has increased. The welfare system has collapsed, the state enterprises are even hollower than they're commonly understood to be, workers have lost job security, and the traditionally dismal terms of trade between the countryside and the cities have worsened. Private entrepreneurs flourish at the sufferance of the state but fall victim to predatory officials and shifts in government policy, and even on the most optimistic projections cannot create enough jobs to soak up China's surplus labor power. Police repression has tightened The individual freedoms bruited in the West are restricted to matters of lifestyle, which do not include politics or religion. The 600 million Chinese peasants, says Becker, are the largest unenfranchised group in the world. Becker's reporting is at its best where China is at its worst. Even among specialists, I do not think the collapse of China's health system has been portrayed as incisively as Becker does it here. He is convincing on the sorry state of rural education, although I think he underestimates strengths at the university level, and he is scathing and correct on the often overpraised reforms of the justice system. Some details Becker gets wrong. It's not fair to say that China has annexed the South China Sea or that China acts as if it has no international obligations other than to ethnic Chinese. It's not true that the National People's Congress has no permanent staff or offices or that Deng Xiaoping had no official post in 1989 except chairman of the Chinese Bridge Association in fact, Deng's chairmanship of the Central Military Commission was crucial to his role in the events of that year. The prediction that Taiwan will help fund the Chinese democracy movement and hence determine China's future strikes me as misguided in two ways -- because the Taiwanese avoid involvement in mainland politics, and because change is more likely to come from within the ruling Communist Party than from the dissident movement.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617315","date":"2001-02-05","texts":"WASHINGTON -- America's extraordinarily low unemployment rate is beginning to feel pressure from the sharp economic slowdown, but not enough to prove the entire economy has followed manufacturing into recession. The unemployment rate edged up to 4.2 in January, its highest level since September 1999 but only a bit above the near-30-year low of 4 in December, the Department of Labor said Friday. In January, the labor pool expanded faster than the number of new jobs that were created. Payrolls outside of farming jumped 268,000 in January, adjusted for seasonal variation, well above what economists expected, and a big improvement over the tiny increase of 19,000 jobs in December. That increase was revised down sharply from an original estimate of 105,000. The January data suggest that employment, especially in construction where 145,000 jobs were added, had been unusually depressed by bad weather in December. The report was the first comprehensive look at the entire economy for January. Previous reports had found that the industrial sector's decline accelerated during the month, and the payroll report provided further confirmation. Manufacturing jobs sank by 65,000, bringing total losses in that sector to 254,000 since June. But employment in retail trade, government and other services rose 183,000. It's clear you have a dichotomy between manufacturing and the rest of the economy, said Michael Prell, an economic consultant in Arlington, Va., noting that service-sector employment would have been higher but for the loss of jobs at temporary-help agencies, many of which were actually at manufacturing companies.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614689","date":"2001-02-06","texts":"MANCHESTER, Vt. -- Months after her school fund-raising campaign ended, Jenny Davis still sees only two kinds of people when she drives around town those who donated and those who didn't ante up a dime. She knows who's who because the campaign maintains a file on every property owner in town. There are people who are just freeloaders, says the 38-year-old mother of two. It's hard to look at those people in the same way. School fund-raising in this mountain resort town of 3,600 is anything but a friendly drive for new band uniforms. For parents such as Ms. Davis, it is a crusade to protect the town's children and keep local tax dollars out of the hands of state bureaucrats. Manchester's no-holds-barred campaign for private donations to the public schools is making it an unusual battleground in one of America's great debates what to do about unequal school funding. Property taxes, the main revenue source for local governments, have traditionally provided the primary funding for schools. But since the early 1970s, lawsuits in 45 states have argued that districts where property is expensive end up with the best-funded schools, creating illegal inequality. In 20 states where judges have agreed -- and in a handful of others -- legislators have tried to share the wealth. Some states now use statewide property or sales taxes to pay for a greater proportion of their school costs. Others, facing the added pressure of antitax initiatives, cap the amount of local property taxes that a district can raise.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615477","date":"2001-02-06","texts":"J.P. Morgan Chase & Co., already the biggest lender in the private-equity arena, wants to launch a 13 billion private-equity fund that would be the largest ever of its kind. The bank's private-equity investing division, once known as Chase Capital Partners and now called J.P. Morgan Partners, is looking for 5 billion of capital from outside investors such as pension funds, endowments and foundations, and will commit 8 billion of its own cash, according to the fund's confidential offering memorandum. Chase's prospective contribution is believed to be the biggest sum ever contributed to a single private-equity fund by any individual organization. If the bank is successful in raising the money, the new fund, dubbed the Chase Capital Global 2001 Fund LP, would dwarf not only the growing multitude of venture-capital funds with 1 billion to 2 billion ready to invest but even Thomas Lee's just-raised 6.1 billion buyout fund, now the largest private-equity fund. Private-equity funds invest in leveraged buyouts, start-up companies and other kinds of private deals. A spokeswoman for J.P. Morgan Chase declined to discuss the fund or comment on it. Raising capital for the new fund could be rough, despite J.P. Morgan Chase's strong track record of annualized returns of 40. The bank's plan comes at a time when rounding up investors for such initiatives has become much tougher. Backing hot technology companies produced eye-popping returns for many private-equity firms in the late 1990s and early last year. Those funds then used those high double-digit or triple-digit returns as a way to persuade institutional investors to boost allocations to private equity.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983259","date":"2001-02-06","texts":"President Bush has pitched his tax plan, which he unveiled yesterday, as a matter of fairness for overburdened American families, emphasizing how much he would deliver for middle-income Americans. But, no matter how the data is sliced in the upcoming debate in Congress and the country, most of the tax cut dollars go to wealthier Americans who in fact pay the majority of income taxes. The bigger problem for middle-income Americans since the Reagan tax cuts in the 1980s has been the payroll tax for Social Security and Medicare, which actually eats up much more of a worker's paycheck. Payroll taxes are not addressed by Bush's 10-year 1.6 trillion tax cut. Because 80 percent of federal income taxes are paid by the wealthiest 20 percent of Americans, they would receive the biggest tax cuts under any plan that cut overall rates. Administration officials argue that giving Americans a tax credit against payroll taxes is a troublesome concept because it effectively means someone is not paying for benefits they will later receive. We have concerns about that, said Lawrence B. Lindsey, Bush's chief economic adviser. That's not paying the Social Security tax.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614611","date":"2001-02-07","texts":"HONG KONG -- Asian airline stocks took a beating when oil prices rose in August and investors bet that soaring fuel bills would soak up industry profits. Many airlines lost more than a quarter of their value in seven weeks. Those bearish investors weren't far off the mark South Korea's two airlines said last week that the huge increase in fuel costs had pulled them into the red for 2000. Now, even though fuel prices have fallen 19 in the past two months, caution is still the watchword for airline stocks among analysts and investors. Shares in blue-chip companies Singapore Airlines and Cathay Pacific Airways have fallen over the same period, at times as fast as fuel prices. In yesterday's trading, Asian markets were mixed as interest-rate sensitive stocks helped propel Hong Kong higher, while Tokyo slumped for the fourth straight session. European markets were generally higher. That left the Dow Jones World Stock Index down 0.25 point, or 0.12, to 213.43. Excluding the U.S., the index fell 0.44 point, or 0.28, to 156.64. A big problem for Asian airlines is that the torrid growth that rapidly revived their financial health starting in mid-1999 seems to have run its course. For many of the region's carriers, load factors, or the share of seats and cargo space sold, started falling in the last quarter from historic peaks reached in mid-2000.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616137","date":"2001-02-08","texts":"NEW YORK -- Investors took out their disappointment with networking giant Cisco Systems' quarterly results on the company's stock -- and on the shares of its numerous rivals and vendors. Cisco itself faded to a 52-week low, thanks to a 4.69 decline that brought its shares to 31.06 apiece as of 4 p.m. in Nasdaq Stock Market trading. The selloff came after Cisco put out quarterly results that missed analysts' projections, and warned that its revenue isn't likely to grow for the next six months. In addition, a host of the communications-parts makers that sell gear to Cisco also saw their prices fall sharply. Applied Micro Circuits dropped 5.25 to 49.81 a share, PMC-Sierra declined 7.81 to 58.75 a share and Xilinx gave up 2.50 to 48 a share, all on Nasdaq. Other networking concerns also faded. Foundry Networks fell 1.56 to 17.94 a share, Extreme Networks slid 4.44 to 31.69 a share and Sycamore Networks tumbled 3.31 to 23.69 a share, all on Nasdaq. Electronics makers also lost more ground. Sanmina eased 1.88 to 36.25 a share and Flextronics fell 2.94 to 33.94 a share, both on Nasdaq, while Jabil Circuit declined 2.29 to 31.36 a share.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615340","date":"2001-02-09","texts":"A large investor in AT&T Corp., as well as the union representing 35,000 of the company's employees, is asking other AT&T shareholders to reject the telecommunications company's proposed breakup plan when it comes for a vote in May. In a conference call with institutional investors who hold about 20 of AT&T's stock outstanding, representatives from the AFL-CIO and the Communications Workers of America said the plan to break AT&T into four separate pieces is flawed and will hurt investors in the long run. The AFL-CIO, through its Capital Stewardship Program, works with 1,500 union-sponsored pension funds that collectively hold 25 million AT&T shares. Other participants in the call included representatives of banks and public-employee retirement funds, among others, who together hold 680 million of about 3.75 billion AT&T shares outstanding. Michael Garland, of the AFL-CIO's office of investment, told the investors that AT&T's decision to break the company into pieces was prompted by management's inability to execute on its original strategy of selling a bundle of telecommunications services. Faced with a sharp decline in its big consumer long-distance business, mounting debt from a host of acquisitions, as well as a plunging share price, AT&T said in October that it would split into three stand-alone entities wireless, broadband and business services. The company's consumer long-distance business will be paired with its Business Services unit and trade as a tracking stock.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615583","date":"2001-02-09","texts":"NEW YORK -- Retail issues faltered, joining high technology as a source of pressure on fading market averages. Shares of Talbots dropped 6.95 to 46.80 each, while AnnTaylor Stores fell 1.31 to 26.39 a share and Abercrombie & Fitch declined 1.29 to 29.86 a share. The losses came after a rival apparel retailer, Gap, reported disappointing January same-store sales figures, and warned that it didn't expect to live up to fourth-quarter profit forecasts. Gap shares retreated 2.95 to 26.61 each. Other retailers' share prices also contracted, including some that acquitted themselves relatively well with January sales totals, despite contending with aftereffects of the sluggish end-of-year sales season. Wal-Mart Stores, for example, fell 2.36 to 52.30 a share and Federated Department Stores dropped 2.96 to 42.98 a share. The retailers' declines also exacerbated the lingering pressure from the tech sector, which continued to deal with fallout from Cisco Systems' downbeat quarterly profit statement earlier this week, particularly as it related to inventory problems for communications hardware. Cisco surrendered 1.06 to 30 a share at 4 p.m. in Nasdaq Stock Market trading, while also inflicting some collateral damage on the market, as chip maker Applied Micro Circuits Nasdaq declined 3.06 to 46.75 a share and electronics maker Jabil Circuit gave up 1.21 to 30.15.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615821","date":"2001-02-13","texts":"Corrections & Amplifications THE NEW YORK STOCK EXCHANGE asks that issuers wanting to list on the exchange have three years of profits, which add up to at least 6.5 million in total. A Deals & Deal Makers article yesterday incorrectly said the exchange asks for market capitalizations of that amount. The required market cap for companies that are joining the exchange from other markets is 100 million. WSJ Feb. 14, 2001 The stock of ETrade Group Inc. goes to its new home this week, and its former stock-market landlord is still steaming. As announced last month, shares of the Menlo Park, Calif., online brokerage firm will leave the Nasdaq Stock Market on Thursday and start trading on the rival New York Stock Exchange. Many companies have left Nasdaq for the NYSE over the years, of course, but this defection is particularly sensitive -- and not just because it's the first one of 2001 or because ETrade has been a Nasdaq stalwart since its initial public offering of stock in 1996. Why does it grate on Nasdaq Officials at the electronic marketplace say they're still irked at how ETrade chose to break the news to them.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616651","date":"2001-02-13","texts":"The electricity market in California has swung over its history from monopolization by industrialists in its early days to comprehensive regulation, then to partial deregulation in the 1990s, and now back toward substantial regulation and government intervention. In the past, each swing of the pendulum came from public frustration with the way this market operated, and each produced a result that the public again found unsatisfactory. But the memory of politicians and the public is short. The state is poised to repeat the mistakes of the last cycle of regulation. Measures passed by the California Legislature this month are an ill-conceived intervention that will lock the state into high energy costs and put it at a competitive disadvantage for years to come. Unless there is further action, the state will maintain subsidized retail prices that discourage conservation, while capping in-state wholesale prices in a manner that discourages construction of new in-state generation capacity and leaves Californians at the mercy of out-of-state generators. Government subsidization of electricity consumption will drain tax revenues that might be better used for education and other needs, encumber California's children with debt to pay the state's energy bills, and threaten the state's future ability to sell bonds for public projects. The immediate political cost of consumer outrage from higher electricity rates may be postponed, but the real economic cost promises to be massive. The sad thing is that this is all unnecessary. The source of the crisis was rigid regulation of retail prices in the face of rapid increases in wholesale prices driven by increased fuel prices and increased demand in the national electricity market. The only effective solution to the crisis is to make retail price regulation more flexible, so that consumers see the real economic cost of electricity and respond to high prices through conservation efforts that reduce demand and push prices down. On the supply side, the state should encourage construction of new in-state generation capacity through the right market signals, giving producers the opportunity to site plants and sell power under conditions comparable to other states.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982288","date":"2001-02-15","texts":"Frederick County's farming industry, once the area's primary economic engine, is in decline and needs help from the county to stay competitive, according to a report presented to the Board of County Commissioners. Total farm sales dropped 20 million between 1990 and 1997, from 163 million to 143 million, according to a report commissioned by the Frederick County Office of Economic Development. The number of farms in Frederick County dropped nearly 10 percent, from 1,439 in 1987 to 1,309 in 1997, the study found. Agriculture remains a large and extensive industry, with some sectors showing some stability and growth, the report concluded. But despite some signs of improvement, the study said, the local farming economy continues to suffer from similar economic woes as the U.S. farm economy. The report, the county's first comprehensive study of agriculture, attributes drooping sales to rising farming costs, shrinking commodity prices and a decreasing amount of farmland, much of which has been gobbled up by development in recent years.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614281","date":"2001-02-16","texts":"NEW YORK -- Nasdaq and small-capitalization stocks rose solidly, although both groups saw intraday gains pared sharply by the end of the actively traded session. The Nasdaq and small-cap markets were driven higher by a rally in technology stocks following release of Ciena's fiscal first-quarter results. The fiber-optic networking-systems company posted earnings that beat analysts' projections, and raised its 2001 revenue-growth forecast. Ciena surged 16 to 89 in Nasdaq Stock Market trading. Ciena's outlook contrasts starkly with many recent quarterly earnings reports, which have been characterized by warnings that revenue growth is expected to slow for the first half. The Nasdaq Composite Index rose 61.51, or 2.47, to 2552.91, after posting an intraday gain of 101.69, and the Russell 2000 index of small-cap stocks, at 508.85, gained 5.36, or 1.06, having been up as much as 6.53. Rare Medium Group surged 56 cents, or 24, to 2.88. The New York Internet-consulting and venture-capital company reported a fourth-quarter loss that was the same as its year-earlier loss, with revenue rising 66. Analysts said the stock was bolstered by takeover speculation after the company's chief executive reportedly said the company was being approached with strategic options that we are evaluating very seriously.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616889","date":"2001-02-16","texts":"MEXICO CITY -- Mexico's highflying economy lost altitude quickly during last year's fourth quarter, with output here growing a modest 5.1 amid weaker growth in the U.S. Economists had expected a result closer to 6. Despite the late slowdown, figures released yesterday showed Mexico's economy easily beat the government's 4.5 target to grow 6.9 for the year as a whole, its fastest annual growth since 1981. The economy was helped by oil prices at a decade-high, a growing U.S. appetite for Mexican exports, and spending by Mexican consumers who enjoyed wage gains greater than price increases. This year's outlook under new President Vicente Fox Quesada is more uncertain, thanks to a recent drop in oil prices and a fast-slowing U.S. economy, where roughly 85 of Mexican exports are sold. Industrial output for December, the latest barometer of activity, slipped slightly after double-digit growth for much of the year. Some economists welcome a slowdown as a way to prevent prices from rising too quickly. But they note that the drop in industrial output doesn't necessarily mean that Mexicans are spending less. If spending on imports remains strong while Mexican factories export less, they note, the trade deficit could widen, weakening the currency. A slowdown for Mexico is inevitable, said economist Gray Newman at Morgan Stanley Dean Witter. The risk is that production slows substantially and spending does not.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984886","date":"2001-02-21","texts":"Careful analysis of the surge in U.S. productivity growth in the second half of the 1990s suggests the gains aren't simply the result of strong overall economic growth, Federal Reserve governor Edward M. Gramlich said yesterday in a speech in London. Instead, the new, higher rate of growth in productivity -- the amount of goods and services produced for each hour worked -- appears likely to last even as economic growth slows, Gramlich said. After the speech, he told reporters that U.S. productivity growth was still accelerating in the first nine months of last year, the Dow Jones news service reported. When economic growth slowed in the fourth quarter, productivity growth did as well, but only modestly. So it looks like productivity is hanging in there even with our slowdown, the Fed board member said. Gramlich told the International Bond Congress that numerous studies indicate that the long-term trend in productivity growth increased in the United States from about 1.5 percent annually during the two decades from the mid-1970s to the mid-1990s to about 2.5 percent more recently. That acceleration was caused primarily by two things, he said.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616337","date":"2001-02-23","texts":"WASHINGTON -- Treasury Secretary Paul O'Neill has tapped Federal Reserve Chairman Alan Greenspan's financial-market troubleshooter as the administration's emissary to a jittery Wall Street. Peter Fisher is no stranger to the kind of turmoil he would likely face as the Treasury Department's undersecretary for domestic finance. In his current job as executive vice president in charge of markets for the Federal Reserve Bank of New York, the 44-year-old Mr. Fisher watches global credit and currency markets for potential signs of trouble. Associates describe the red-haired, cherubic Mr. Fisher as an activist willing to use the government's powers to pre-empt or snuff out financial trouble. In 1998, he engineered the controversial Fed-brokered bailout of the Long-Term Capital Management hedge fund, persuading skeptical regulators that the alternative could have been an international financial meltdown. Mr. Fisher would join a Treasury team that is facing its first potential financial crisis in Turkey's emergency devaluation of its currency. Though Mr. Fisher has yet to get formal White House clearance, Mr. O'Neill has settled on him as his choice, according to people familiar with the nomination. His appointment would require confirmation by the Senate. Neither Mr. Fisher nor a Treasury spokeswoman would comment. The Fisher choice underscores the tremendous influence that Mr. Greenspan seems to be building in the new administration. The Fed chairman worked with the new Treasury secretary during the Ford administration, and Mr. O'Neill has frequently turned to his longtime friend for advice on economic policy. Mr. Greenspan also appears to have succeeded in persuading the Bush administration to reappoint Roger Ferguson as Fed vice chairman.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617251","date":"2001-02-26","texts":"Robert Galvin, Motorola Inc.'s legendary former chairman, plans to resign this spring from the board, marking an end to his more than 60-year reign at the technology and equipment giant. Mr. Galvin's departure comes at a time when his son, Motorola Chief Executive Christopher Galvin, is under tremendous pressure to prove his management mettle in what is turning into one of the most challenging chapters in Motorola's 73-year history. The elder Mr. Galvin has been a staunch supporter of his son's efforts to turn the company around. The Schaumburg, Ill., firm Friday warned that a severe slump in orders and sales could result in the company's first quarterly loss in 16 years. It was the second earnings warning issued during the past six weeks. Motorola blamed the decrease in orders on the slowing economy, but it also is clear that the company has made a number of missteps that have contributed to its problems. Alarmed investors drove down shares of Motorola more than 6, or 1.04, to 16.25 as of 4 p.m. Friday in New York Stock Exchange composite trading.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615077","date":"2001-02-27","texts":"Corrections & Amplifications FEDERAL RESERVE BANK of Dallas president Robert McTeer was interviewed by Nightly Business Report on a program that aired Monday on PBS. An article on the Politics & Policy page yesterday incorrectly said the interview was with PBS-TV. WSJ Feb. 28, 2001 WASHINGTON -- In a break with tradition, Federal Reserve Chairman Alan Greenspan will modify his testimony on the economy to a House panel tomorrow from what he gave to its Senate counterpart two weeks earlier. Some time has passed since the last testimony so he's updating the text, a Fed spokesman said. Stocks rallied in part on hopes that the changed testimony somehow increases the chances that rates will be cut before the Federal Open Market Committee, the central bank's decision-making body, meets March 20 -- and that Mr. Greenspan will signal that this week.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983548","date":"2001-02-27","texts":"-- Buyers took back control of Wall Street today on a bet that the Federal Reserve will lower interest rates before its March 20 meeting. Blue chips soared and technology issues recorded more modest gains as the market temporarily set aside worries about the economy. The advance gained momentum after former Fed governor Wayne Angell, now a Bear, Stearns economist, expressed optimism that such a rate cut would indeed occur. The Dow Jones industrial average closed up 200.63 at 10,642.53. The 1.9 percent gain represented the Dow's biggest one-day point increase since Jan. 3, when it rose 299 points. The Nasdaq composite index advanced 45.99, to 2308.50, a 2.0 percent increase, and the Standard & Poor's 500 index rose 21.79, or 1.8 percent, to 1267.65. The market has some hope that the Fed might move this week, said John Forelli, portfolio manager at Independence Investment Associates. The second thing happening here is that I think the market was really oversold. You tend to get a snapback after that.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985448","date":"2001-02-28","texts":"Consumer confidence fell this month to a level usually seen only during recessions as American households' expectations about their economic future plunged, according to a report released yesterday. Two other reports on last month's new orders for durable goods -- such as cars, appliances, computers and machinery -- and sales of new homes, showed much less weakness and were not nearly as disturbing to analysts as what has been happening to consumer attitudes. Falling stock prices, high heating bills, worries about job prospects and a drumbeat of gloomy statements about the economy from Wall Street analysts, company executives and the White House have taken a big toll on consumers' expectations. If they were to pull back on their spending, which accounts for about two-thirds of the nation's economic output, the already weak economy could slide into a recession. The Conference Board, a New York-based business research group, said its monthly index of consumer confidence fell to 106.8, down 25 percent from its level of five months ago. But the overall index is a composite of two measures of how consumers regard their present economic situation and what they expect it to be like six months from now. The present-situation index has declined 10 percent since September, while the expectations reading has plunged 40 percent. The erosion in consumer confidence continues to be fueled by weakening expectations regarding business and employment conditions, said Lynn Franco, director of the board's Consumer Research Center. While the short-term outlook continues to signal a severe economic downturn, consumers' appraisal of current economic conditions suggests we are still undergoing moderate economic growth and not a recession.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614996","date":"2001-03-02","texts":"NEW YORK -- The euro bucked recent trends by gaining against the dollar even as weak euro-zone data and solid U.S. economic data pressured the common currency. Traders generally shied away from dollar buying as U.S. stocks continued to sink on more profit warnings and little hope of immediate relief from monetary easing. Federal Reserve Chairman Alan Greenspan's testimony Wednesday quelled talk of an intermeeting interest-rate cut, but still left a fog of uncertainty over the U.S. economic landscape. The dollar was little changed against the yen as yen-negative implications of the Bank of Japan's surprise rate cut Wednesday and a 201.88-point drop in the Nikkei 225-stock Index yesterday squared off with yen-supportive continuing repatriation flows. Traders are building euro positions because they don't want to miss any abrupt move upwards, said Michael Donahue, senior vice president of foreign exchange at Fimat USA in New York. There is continued concern by overseas holders of U.S. equities, Mr. Donahue said, adding that if stocks couldn't find support soon, the euro could build momentum toward parity with the dollar.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615099","date":"2001-03-05","texts":"NEW YORK -- Some Merrill Lynch & Co. executives used to mock the viability of online stock trading. Now, one of the firm's top executives is poised to run Ameritrade Holding Corp., one of the nation's largest online brokerage firms. Joseph Moglia, a senior vice president in Merrill's private-client group, is expected to be named chief executive of Ameritrade, according to people close to the matter. The announcement could come as early as today. Mr. Moglia didn't return a telephone call for comment, and Ameritrade spokesman Larry Marchese declined to comment on the matter. Mr. Moglia would take the post vacated in August when Tom Lewis resigned. Since then, Ameritrade's founder, J. Joe Ricketts, has served as CEO, but he told shareholders at the recent annual meeting that he is looking forward to handing the job over to a permanent chief executive. The move, though, is somewhat ironic given Merrill's past opposition to online trading. The former head of its brokerage business, John Launny Steffens, was once quoted disparaging what he called the do-it-yourself model of investing, centered on Internet trading.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982113","date":"2001-03-07","texts":"Orders to U.S. factories fell 3.8 percent in January to their lowest level in 14 months, fresh evidence that manufacturers continue to struggle during the economic slowdown. But another report showed that growth in Americans' productivity - - or output per hour of labor -- while slower, was still solid in the fourth quarter despite the sharp economic slowdown. The Commerce Department reported yesterday that the January decline in factory orders, which followed a 0.6 percent increase in December, was led by a sharp drop in demand for airplanes, cars and other transportation equipment. Excluding the volatile transportation category, orders fell 0.3 percent, the third decrease in the last four months. Factory orders rose 5.3 percent, the largest increase in a year, in the category of industrial machinery orders, which include those for computers. That followed a 3.2 percent decline in December. January's overall performance was slightly weaker than the 3.5 percent decrease many analysts were expecting. The decline pulled orders to a seasonally adjusted 366.5 billion, the lowest level since November 1999.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614423","date":"2001-03-08","texts":"WASHINGTON -- Chronic shortages of high-tech and other skilled workers are starting to ease in many parts of the country as layoffs rise and job-hopping abates, a Federal Reserve survey found. The findings could mean unemployment, which edged up to 4.2 in January but remained near a 30-year low, could rise further. February's unemployment rate will be released tomorrow. The Fed report, known as the beige book, suggests demand has eased, mostly for the best-paid workers -- those in high-tech, Internet, manufacturing, and construction jobs -- while demand for entry-level, clerical and health workers has remained strong. The Fed's policy-making body, the Federal Open Market Committee, uses the report on business conditions around the country to help set the direction for interest rates. The FOMC is expected to cut interest rates by half a percentage point when it meets March 20, an expectation that appeared validated by the Fed report's finding that most regions reported sluggish to modest economic growth in February. A month ago, a Fed survey found a substantial portion of banks tightening lending standards, a development that could exacerbate the current slowdown. And yesterday, Fed Chairman Alan Greenspan told bankers in a speech that, in their zeal to make up for overly lax lending, they should not overcompensate and inhibit or cut off the flow of credit to borrowers with credible prospects.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982925","date":"2001-03-09","texts":"The outlook for a strong spring grew dimmer for the nation's big retailers today as they reported generally disappointing results for February. While many value-oriented retailers and some clothing stores, such as Talbots, did well, other merchants, most notably department stores and apparel retailers, including Gap, languished amid slowing consumer spending. Analysts said it was clear that consumers, who have been spending cautiously since last June, continue to retrench. This is the new reality that we are going to most likely see going forward, said Michael P. Niemera, vice president of Bank of Tokyo-Mitsubishi Ltd. He added that this was the most store chains he has seen reporting declines since July 1996. February is not a major contributor to retailers' profits, but it does reflect consumer psychology. Stock market volatility and high energy prices continue to plague Americans, and their confidence as measured by the Conference Board fell in February to its lowest level in more than four years.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982996","date":"2001-03-10","texts":"The nation's unemployment rate remained at 4.2 percent last month as job gains in construction, several service industries and government more than offset the loss of 94,000 manufacturing jobs, the Labor Department reported yesterday. Analysts said details of the report indicated that many employers, other than factories, are reluctant to lay off workers, probably because they expect the current period of very slow economic growth to be short. To be sure, manufacturing is in recession, but the rest of the economy is alive and kicking, said economist Sung Won Sohn of Wells Fargo Bank. Even in autos, where two-thirds of the layoffs in manufacturing have occurred, 13,000 more jobs were created last month. Adjusted for the volatility in weather, construction is in the process of stabilizing and gaining momentum, Sohn said. Services, which account for about 80 percent of jobs, are healthy. Health care, mortgage banking, retail, computer services and call centers have added jobs. Even with the loss of factory jobs, overall payrolls rose by 135,000 last month, more than expected after a gain of 224,000 in January. Those figures are up significantly from the 52,000 a month average in the fourth quarter of last year.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842616234","date":"2001-03-12","texts":"In the homestretch of the presidential campaign last October, I wrote a column noting that earnings warnings were suddenly papering Wall Street, By the time you clearly need a stimulative tax cut it's too late to get one through the congressional labyrinth, it observed. A good time might be right now. Perhaps Alan Greenspan had stopped tightening just in time to engineer a soft landing, I speculated, but if this rosy scenario did not materialize he may be short of maneuvering room. Oil prices were already signaling that a downturn could well be accompanied by a danger of inflation. So if George W. Bush actually won, his tax proposal may be on the table none too soon. This has pretty much worked as advertised, except that it's too bad George W. Bush didn't propose a stimulative tax cut. Well of course, the tax proposal President Bush sent to Congress is the same one candidate Bush had on the table in October. And with its attention to across-the-board marginal rate reductions, it certainly was a stimulative one when compared with Al Gore's tax proposal, a hodgepodge of spending programs in drag. But the economic downturn has become much clearer. Perhaps the economy will yet rebound in the second half leading indicators rose in January after three months of decline, and Friday's employment figures were encouraging. Still, with earnings declines and even layoffs spreading, stimulus soon would be only prudent. The Fed stepped up to the plate by lowering its short-term interest rate target, but the president has made no similar adjustment in his tax proposal. In the current environment, its long phase-in can no longer be overlooked. Experience warns that tax cuts usually stimulate only when they become effective. A phase-in creates incentives to delay income, perhaps making a downturn worse.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614911","date":"2001-03-13","texts":"There goes the sunshine theory. After a week's correlation between rain, sleet and snow with falling stock prices out of Wall Street, the sun shone over New York yesterday and . . . the DJIA went off 436 and the Nasdaq crashed through 2,000. Needless to say, we don't credit any of this with the New York Times spinning out two front-page stories Saturday that President Bush will dilute the cut in the top tax rate and sign Al Gore's version of the Kyoto Treaty. Well, we try to be cheerful if possible, and in the spirit of could-be-worse, we'll let the U.S. gulp air today and turn our attention to modern economic history's longest near-death experience Japan. We read that Japanese Prime Minister Yoshiro Mori is actually being kept in his post so as not to disrupt a March 19 working visit to the White House. In the Noh play of Japanese politics, Mr. Mori will be permitted to wear the mask of leader a while longer to disguise the internal discord. Alas, the divisions in Japan's body politic are there for all to see. Finance Minister Kiichi Miyazawa's comment last Thursday that state finances are near collapse must be taken as a sign of his growing frustration with the Liberal Democratic Party's failed attempts to jump-start the economy with trillions of yen in neo-Keynesian spending. With the LDP apparently bereft of ideas for fixing the economy, Mr. Mori's meeting with the Bush team could prove important. Even if the Japanese PM is a lame duck, American advice will be conveyed back to the inner circle. While Treasury Secretary Paul O'Neill hasn't publicly lectured the Japanese as the Clinton brain trust was wont to do, he no doubt recognizes that a deep crisis in Japan would have a huge impact on the U.S. economy. So what advice should he offer Even among those who recognized the futility of Japan's deficit spending, there has always been much disagreement over what should replace it. Monetarists and some demand-side economists have emphasized the damage that deflation and deflationary expectations have done to the economy. Since both inflation and deflation are monetary phenomena, adjusting the supply of money is the key to the problem. So they advocate printing money so that deflationary expectations would be erased, even at risk of a small dose of inflation.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615042","date":"2001-03-15","texts":"GENERATIONS OF VISITORS to Disneyland have been thrilled by Circle-Vision, an immense circular theater with a 360-degree screen that surrounds the audience with you-are-there movies. Those who can't make the trip to the theme park might want to check out BeHere Inc., a Silicon Valley startup that has what might be the next-best thing. BeHere sells a camera lens and software system that allows most sorts of cameras to take live 360-degree pictures. The company says these images can be put to any number of uses on the Web, in building security systems, and in a new generation of interactive television to allow viewers to be immersed, for example, in a sporting event. The five-year-old company was founded in Cupertino, Calif., by Ted Driscoll, 48 years old, a Stanford University computer science Ph.D., entrepreneur and inveterate tinkerer who developed its core technology. Last year, Andrew L. Thau, 35, a former senior vice president at Fox Sports International, came on board as chief executive. Mr. Thau set about boosting the company's ties to the broadcasting industry he opened an office in Los Angeles, though the company will keep its research-and-development operation in Silicon Valley. The idea of giving Web surfers and others a 360-degree view of something isn't new. Numerous sites afford a circle-style view of, say, the inside of a house that is for sale. A number of companies, such as Internet Pictures Corp. and RemoteReality Corp., are supplying the necessary technology to make that happen, though some of the companies currently sell only still cameras. Mr. Thau says BeHere's system allows a camera to take a moving, rather than still, 360-degree picture that has a seamless image. There are no fissure marks where separate pieces of the circular scene are pieced together to form a whole. What excited me about the company was that the technology was unique, Mr. Thau said. I spent seven years at Fox Sports, and if I was still there, this is something I would be willing to use and pay money for.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613713","date":"2001-03-19","texts":"If you are planning to retire in the next few years, should you lighten up on your stock investments after a bad year in the market This is a key question for people who are hoping to retire soon but wondering how their nest eggs will hold up if stock prices fall still more or rise only feebly in the years ahead. After five glorious years of 20-plus annual returns, the widely watched Standard & Poor's 500-stock index last year sank 9.1 including dividends, its worst year since 1977. The Dow Jones Industrial Average slid 6.2. And the technology-heavy Nasdaq Stock Market posted its steepest dive in history, shedding 39 while some Internet stocks fell much harder. The answer is that there is no single answer No cookie-cutter solution fits all. It may well be time for people nearing retirement to cut back on stocks, but it wouldn't be smart to do it in one fell swoop. The right move for you depends on several factors, notably your age, your life expectancy and -- this is key -- whether you have enough cash on hand to avoid dumping stocks at low prices if you encounter more bad stock-market years immediately after you retire. To provide some guidance, Encore talked with a number of financial advisers who specialize in retirement. Here's what we found The Lessons of History","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985058","date":"2001-03-20","texts":"Wall Street is counting on Federal Reserve officials to lower their target for overnight interest rates today by three-quarters of a percentage point to help the hapless stock market regain its footing and keep the economy from sliding into a recession. Wall Street may well be disappointed. Fed Chairman Alan Greenspan has promised that the central bank will respond aggressively to the abrupt slowing of U.S. economic growth, but it's far from clear exactly what that means in the swirling crosscurrents of the U.S. and world economies. Furthermore, the Fed's top policymaking group, the Federal Open Market Committee, has most often changed its rate target in quarter-point increments, and a half-point could be considered aggressive. A survey of 121 analysts and economists completed yesterday by Stone & McCarthy Research Associates, a financial markets research firm, found that nearly two-thirds of them believe the Fed will cut the 5.5 percent target by only half a point. Less than a third are looking for three-quarters, while a half dozen said the Fed would slash rates by a full percentage point. I think they are going to go half a point, said Charles Lieberman, chief economist for Advisers Financial, a money- management firm. The recent economic data actually suggest some improvement in the economy. Consumer spending has been better than expected, including for cars, and auto companies have boosted production plans for the second quarter. A larger cut could lead some people to conclude that The Fed must know about some problems that we don't, and then the markets might sell off even more, Lieberman said. And I don't think they will want to encourage anyone to think they are doing it to support the stock market.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615164","date":"2001-03-21","texts":"WASHINGTON -- The Bush administration may be having its cake and eating it too when it comes to government projections about economic growth. As the White House pushes its big tax-cut package, administration and congressional budget analysts predict boom times ahead that would generate giant revenue surpluses. But in a recent trustees' study on the solvency of Social Security and Medicare -- programs President Bush has targeted for major retooling -- the administration paints a picture of modest economic growth and flagging worker productivity. Some officials say this is largely a consequence of having separate bureaucracies prepare the economic forecasts for the budget and for the big entitlement programs. But the policy-making implications can be dramatic. For example, if the Social Security trustees' assumptions are basically correct, the overall budget surplus predicted by the Congressional Budget Office could drop by as much as 1.75 trillion from its current projected 5.6 trillion -- or about the amount Mr. Bush is seeking in his tax-cut package, economists said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614765","date":"2001-03-23","texts":"Markets across the world suffered one of their worst days in months as mounting concern about an economic slowdown punished stocks in every sector. While global investors have been dumping technology and other growth-oriented shares for many months, the declines highlighted how the damage has spread in recent weeks to parts of the market traditionally considered relatively safe. Before this month, people said they wanted safe-haven stocks, said Subodh Kumar, chief investment strategist for CIBC World Markets in Toronto. Now they don't want any stocks. Yesterday's selloff, which occurred before the end-of-the-day rally in the U.S., was particularly intense in Europe, where all the major blue-chip indexes fell 4 or more, and in Latin America, where markets in Brazil and Argentina each declined more than 5. Most Asian stocks also foundered. Hong Kong blue-chips lost 4, Tokyo's Nikkei Stock Average skidded 2 and Singapore's benchmark index fell 2.6. Overall, the Dow Jones World Stock Index was down 1.87, or 3.36, to 176.60. Excluding the U.S., the index fell 3.53, or 4.80, to 131.01.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982887","date":"2001-03-26","texts":"Washington, which gave birth to telecommunications competition 25 years ago, is now leading that industry toward its Darwinian climax. A ruthless restructuring has moved into its final phase in the past 10 days as three local telecom companies threw in the towel, starting what is projected to be the biggest industry implosion since real estate developers took down the savings and loan industry a decade ago. E.spire Communications Inc. of Herndon has filed for Chapter 11 bankruptcy protection. Metrocall Inc. of Alexandria says it may have to do the same. PSINet Inc. of Ashburn is trying to avoid it, but isn't given much chance by industry insiders. More local companies are lined up behind them. Each of these companies was set up to serve a different piece of the telecommunications market. E.spire was into local and long- distance voice. Metrocall sold wireless paging. PSINet's specialty was high-speed Internet services. Stockholders of this trio of companies have seen 14 billion in stock market value wiped out. Investors stuck with 5 billion worth of high-risk, high-yield junk bonds issued by the companies are expected to collect only pennies on the dollar for their debts. These are the first victims of an epidemic that by some estimates could wipe out more than a thousand telecommunications providers in the next few years.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615909","date":"2001-03-29","texts":"The Wall Street Journal recently reported that Fannie Mae has threatened several large financial services firms that had opposed Fannie's interests in Congress. According to statements by the CEOs of AIG, Wells Fargo and GE Capital Services, they, or their firms, were told that Fannie would withdraw its business from them if they remained active in FM Watch, an organization that seeks to limit Fannie's expansion beyond its traditional role in the secondary mortgage markets. Fannie's chairman Franklin Raines, as well as a Fannie spokeswoman, have both denied that such threats were made, but when CEOs of major companies go public with statements of this gravity they must be taken seriously. This is not an ordinary commercial dispute, since Fannie Mae is not an ordinary company. Along with its smaller cousin, Freddie Mac, Fannie enjoys a government charter authorizing it to help create liquidity in the residential mortgage markets by purchasing mortgages from banks and others and guaranteeing mortgage-backed securities. Although both Fannie and Freddie are now listed on the New York Stock Exchange, they have so many links to government -- including a special line of credit at the Treasury -- that they are called government-sponsored enterprises, or GSEs. As a result, the capital markets do not believe they will be allowed to fail, and provide them with financing at a rate only slightly higher than the Treasury's own borrowing costs. With this government backing and financial advantage, Fannie and Freddie have grown to enormous size and profitability. Today, they carry on their books the credit risk of over 40 of all residential mortgages in the U.S. and are by far the most dominant players in the residential mortgage markets. It is fair to say that if a company is denied the opportunity to sell its mortgages to Fannie or Freddie, or the opportunity to underwrite or deal in Fannie or Freddie securities, it will suffer serious financial harm. If Mr. Raines or Fannie did threaten these companies, that is the reason why his threat was menacing. Fannie Mae is to the residential mortgage markets what Microsoft is to computers, with one major exception Fannie enjoys government backing. Fannie's market power derives from its government connection -- from the fact that it holds, in effect, a government monopoly. A threat from Fannie's chairman, then, is roughly equivalent to the chairman of the Federal Reserve Board threatening to ruin a bank that opposes the Fed in Congress. Such a threat would be seen as a serious matter, out of order for a government official and considerably more serious than the threats that Microsoft is alleged to have made against rivals. This episode should alert us to dangers inherent in GSEs. They are sometimes praised as providing private-sector efficiency in the pursuit of government policies, without direct government expenditure. Unfortunately, the true costs are hidden or deferred. In the mid-1980s, Congress had to spend billions to bail out the Farm Credit System, another GSE. And the costs are often not simply financial. While we value the aggressiveness and efficiencies of private enterprises in their pursuit of profit, when these characteristics are hitched to the power of the government through a government-granted monopoly, they can dominate and distort otherwise competitive markets.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981743","date":"2001-03-29","texts":"Prince George's County Executive Wayne K. Curry yesterday proposed increasing school spending by 59 million, which would fund a teachers' raise, two new elementary schools and about 40 new guidance counselors. The 1 billion school spending plan was a key part of Curry's annual budget presentation, a proposal he touted for containing none of the service cuts or tax increases contemplated in neighboring areas. That's a whole lot of zeroes, Curry D said at a news conference in Upper Marlboro, referring to the money for schools. Nevertheless, the school increase was far less than the 158 million boost that Board of Education officials had requested. And Curry's proposal contained no money to reduce class sizes, something that Schools Superintendent Iris T. Metts listed as her top priority. Curry said it would be unwise to spend money on hiring more teachers to cut class sizes when there isn't enough classroom space. But school board members, who had requested 11.5 million for the initiative, say it can be accomplished by assigning two teachers to a single class.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617229","date":"2001-03-30","texts":"ASIAPACIFIC Japan's Production Declines by 2.1 Amid Global Slowing Japan's industrial production in February dropped 2.1 from a year earlier but was up 0.4 from January, the Ministry of Economy, Trade and Industry said. The year-to-year monthly decline, the first since the spring of 1999, underscored the slowdown in manufacturing amid Japan's declining exports and the slowing global economy. The 0.4 month-to-month rise was a modest bounce from a record 4.2 decline in January, and was much weaker than economists' consensus forecast of a 1.7 rise. METI said it expects output this month to fall 0.8 from February, putting production on track to drop 3.3 for the January-March period -- the first quarterly decline since the spring of 1999 -- before a predicted 0.6 rebound in April.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982262","date":"2001-03-30","texts":"Prime Minister Tony Blair enjoys a booming economy and enviable public approval ratings, but his decision on whether to call a national election for May has been complicated by the crisis surrounding the foot-and-mouth epidemic on Britain's farms. Under the parliamentary system, Blair can choose the date for national elections. He is said to be eager to dissolve Parliament and hold an election quickly, with May 3 as his preferred date. Blair has to decide by Monday, and he's receiving conflicting advice from across the political spectrum. A choice that once seemed almost automatic has suddenly emerged as a crucial test of Blair's political instincts and courage. While most members of Blair's governing Labor Party appear to favor a May election, several have joined the call for a delay until the farm crisis has been controlled. William Hague, leader of the chief opposition Conservative Party said today that a May election would be an arrogant choice that puts the interests of one party ahead of the country. In the rural communities worst hit by the epidemic, farm groups are bitter at the very thought of a May election. There's a sense that he's throwing us over the side to advance his own political agenda, said Mike Downham, a livestock farmer in the northern county of Cumbria. Rural voters generally don't back Labor, so Blair presumably wouldn't lose many votes if he angered farmers. But if city and suburban voters decide that it is callous to mount a campaign during a crisis, that could cost the Labor Party votes it badly needs, both in the parliamentary election and in the hundreds of city and county elections also scheduled for May 3.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983277","date":"2001-04-01","texts":"How should new retirees invest their savings so they get the income they need to help support them during a 15- or 20-year retirement That advice may sound a bit crazy, given the huge losses that so many stocks, including mine, have suffered during the past 12 months. Looking at the carnage on Wall Street, new retirees may wonder why anyone would tell them to get deeply involved in stocks. But that is precisely what some financial advisers suggest. The reason, of course, is that the advisers are not reacting to what the stock market is doing at the moment they're talking about what the market is going to do in the next 15 or 20 years. History is clear on this point. Sooner or later, stocks will recover and prices will rise. When that happens, stocks will again generate the gains that retired investors need for their long-term financial health. Of course, for older retirees who invest in stocks, it's hard not to worry. Thus far, my stock losses are still on paper. But I will admit that, at the age of 74, it is pretty scary to realize that if I had to sell some of my battered stocks anytime soon, my paper losses would become actual losses. I sometimes wonder if I should dump my stocks and flee to bonds. However, experience has taught me that it would be a bad idea. When you sell at the bottom, you lock in your losses. And then, when the market turns around and those stocks go back up, you no longer own them and you don't get any of the gains. So you lose both ways.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616944","date":"2001-04-02","texts":"WASHINGTON -- Americans' income and spending moderated in February but may still be growing enough to keep the economy from tipping into a recession. Personal income edged up 0.4 in February, the Commerce Department reported Friday, while personal-consumption expenditures rose 0.3. January income was revised to a gain of 0.5, down from the 0.6 pace previously estimated. Consumer spending in January was revised to a gain of 1, up from the 0.7 gain first reported. In another indication that consumers may be counted on to keep the economy growing, even while manufacturing flails, a widely watched barometer of consumer confidence rose in March after three months of declines. The University of Michigan's consumer-sentiment index, which measures current and future economic expectations, rose to 91.5 last month from 90.6 in February, according to people familiar with the report. Analysts had expected a lower reading because of the recent stock-market turmoil. But a separate report Friday gave further evidence of the sharp slowdown among U.S. businesses. The Purchasing Management Association of Chicago reported that its index of business activity in the Midwest fell to 35.0 in March, its lowest level in 19 years. Any number below 50 signals that business in the manufacturing sector is contracting. Analysts had expected a reading of 43.5, slightly higher than the 43.2 level reported for February. The Chicago survey is widely watched for indications of the index of the National Association of Purchasing Management, whose March report will be released today.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613671","date":"2001-04-05","texts":"CARTERET, N.J. -- Pathmark Stores Inc. said it posted a profit before reorganization and other items for the fiscal fourth quarter of 13.6 million, or 45 cents a diluted share, mainly because of the opening of new stores and renovation of existing locations. Including the reorganization and other items, the supermarket chain reported a net loss of 48.5 million, or 1.62 a share, for the period ended Feb. 3. For a year earlier, Pathmark posted a loss of 2.5 million, or eight cents a share. Results in the recent quarter are a combination of two different entities formed because of the company's emergence from Chapter 11 protection in September 2000. Sales for the period climbed 11 to 1.06 billion from 956.1 million. Aside from an extra week in 2000, a company spokesman said the increase was driven by strong holiday sales, the opening of four new stores and renovation of 19 stores in the Philadelphia and New York City metropolitan areas.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982498","date":"2001-04-07","texts":"Although the reasons behind Thursday's surge were a bit of a mystery, there were plenty of reasons for stocks to retreat yesterday -- reports of rising unemployment, more profit warnings and the bankruptcy filing of California's biggest utility. The Dow Jones industrial average fell 126.96 points to close at 9791.09, after soaring the previous day to its second-largest daily point gain. The Nasdaq composite index slipped 64.64, to 1720.36. The stock market's broadest measure, the Standard & Poor's 500-stock index, fell 23.01, to 1128.43. For the week, the Nasdaq dropped 6.6 percent, the S&P 500 declined 2.9 percent and the Dow fell 1.1 percent, despite the frenzied buying on Thursday. Thursday's rally was severe, said Michael W. Clark, head of equity trading for Credit Suisse First Boston, who said the sell-off yesterday was a logical reaction to that. The bottom line, he said, is that the underlying trend hasn't changed. Yesterday morning, the Labor Department reported that the nation's unemployment rate rose to 4.3 percent in March, the highest it has been in 20 months. Worse, businesses cut 86,000 jobs, the biggest one- month reduction in payrolls since 1991.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984216","date":"2001-04-08","texts":"The collision between a U.S. Navy surveillance aircraft and a Chinese jet fighter last Sunday has left Chinese President Jiang Zemin caught between Chinese expectations for an apology and Washington's refusal to deliver one, Chinese and Western analysts said today. China's continued insistence on a full apology carries substantial risks for the Chinese president, officials associated with him and for China, the analysts said. Jiang really doesn't have many cards to play, said one Chinese political analyst who spoke on condition of anonymity for fear of retribution. By setting his price so high for the Americans -- an apology -- he is probably going to fail, whatever the outcome. Jiang and the rest of the Communist Party are in a struggle over who will lead China into the future. A misstep by Jiang while simultaneously managing relations with the United States and dealing with potential opponents at home could result in his being eased from the political stage, Chinese officials speculated. Thus, the Bush administration must decide how much it wants to bolster the 74-year- old technocrat, who has made strong U.S.-China relations a hallmark of his government. More broadly, China is seeking to reunite with Taiwan, an island of 23 million people 100 miles off China's coast that Beijing has claimed as its territory since 1949. And it hopes ultimately, according to a report last year by the U.S. Defense Department, to replace the United States as the main power in Asia.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614379","date":"2001-04-12","texts":"Persistent inflation risks kept the European Central Bank from trimming interest rates -- despite a slowing economy, intense political pressure and market expectations of a cut -- and the bank signaled that any reduction wouldn't necessarily come soon. I specifically don't want to introduce a bias in our public utterances or statements, ECB President Wim Duisenberg said at a news conference. So you keep on waiting and we keep on seeing. Mr. Duisenberg further brushed off pressure to cut by saying a series of seven rate increases up until last October resulted in the disappearance of inflationary risks over the medium term. But having achieved that does not mean that we have to also reverse the course. Rate cuts in the U.S. and Japan three weeks ago, coupled with a softer tone on inflation from some of the ECB's most influential officials, sparked speculation the ECB would trim at least a quarter point from its key rate of 4.75 at yesterday's meeting. Now economists believe the ECB will keep rates steady until May or even June, remaining the only major central bank to stand still in the face of the global slowdown. The ECB sets interest rates for the 12 nations using the euro -- the world's second-largest economy. The decision disappointed those investors who believe the ECB is sacrificing too much growth for low inflation. Within minutes of the ECB announcement, the euro fell a half cent to 88.4 U.S. cents. Two hours later, the common currency hit a low for the day of 88.1 cents. Late in New York trading, it was quoted at 88.75 cents, down from 88.81 cents late Tuesday.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615726","date":"2001-04-12","texts":"Tosco Corp., in an effort to boost lackluster retail gasoline profits, has begun raising wholesale gasoline prices in Southern California and Arizona, two markets where it has significant market share. Service-station dealers in California and Arizona say that since March 26, Tosco has raised wholesale prices to its dealers that market under such brands as 76 and Circle K by between six cents and 16 cents a gallon, depending on the area. As a result, dealers say they are paying substantially more than their competitors for gasoline, forcing them to either boost retail prices or sustain losses. It isn't clear how long Tosco will hold out, however, if competitors like Exxon Mobil Corp. and Chevron Corp. don't match the increases. We will pursue every business practice the market will allow us to do. If the market doesn't allow us to do something, we can't do it, said Jefferson Allen, Tosco's president and chief financial officer. Tosco, a refining and marketing company based in Old Greenwich, Conn., agreed in February to be acquired by Phillips Petroleum Co. for about 7 billion, and shareholders of both companies yesterday approved that deal. Although Tosco posted record profit from refining operations in the fourth quarter, much of that achieved in California, the company says marketing income has sagged. So far, competitors haven't matched the price increases, but Tosco dealers and others in Arizona and Southern California believe they must be tempted. Gasoline spot prices, or the wholesale prices paid in the daily spot market for gasoline at the refinery, have been soaring in the states, and Tosco says it has lost money from marketing operations in the region for nine months. Gas stations have been unable to push through price increases in the fiercely competitive market.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614762","date":"2001-04-17","texts":"Brace yourself. Over the next several weeks, hundreds of U.S. companies will report profit-and-loss statements that are going to look ugly. According to analysts' estimates gathered by Thomson FinancialFirst Call, operating profits for the companies in the Standard & Poor's 500 declined 9 in the quarter ended March 31 from the year-earlier period. If the estimates hold up, it will be the sharpest drop since the 1990-91 recession. Second-quarter earnings are also expected to tumble 7 and the third-quarter outlook, while still barely positive, is rapidly deteriorating. That's a big departure from 1999 and 2000, when year-over-year quarterly operating profits frequently grew more than 20. But some economists say the current decline doesn't begin to tell the full story of what's in store in the coming years. They say that even once the economy rebounds and earnings start growing again, the outsized profit gains of 1999 and 2000 are a thing of the past. Profits in the 1990s, they say, grew out of sync with the rest of the economy, lifted temporarily by tame debt and labor costs, accounting quirks and technology investments that might never yield significant returns. They say a reversion to the mean is in the works that will translate into a period of profit gains that, at best, are in the single digits. And if consumers cut back on spending in response to their stock market losses, it will only add to the profit pain.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613910","date":"2001-04-18","texts":"Suppose your federal government dramatically slashed tax rates for the well-to-do, all in the name of promoting economic growth. Suppose, too, that it is running a budget deficit and plans to do so for at least the next several years. You might assume that you live in a country governed by a bunch of reckless right-wingers, willing to risk the nation's economic health for the benefit of a tiny fat-cat constituency. In fact, you reside in socialist Western Europe. Though most of Europe's countries are ruled by left-of-center governments, taxes are coming down across the Continent. Not only are tax-loving countries like the Netherlands and Sweden cutting rates, but so are economic heavyweights like France yes, France and Germany. Meanwhile, the only major industrial country that is running a large budget surplus, but where apparently respectable people still claim that it can't afford a major tax cut, is the U.S. Viewed from a European perspective, America's epic tax debate is strange indeed. Of course, Europe's tax cuts aren't nearly as big as they might be, and opposition parties have vowed to push through bigger relief if they regain power. Yet measured by the standards of American liberals, countries like Germany are about to enjoy irresponsible tax relief. Indeed, the tax cut that Berlin started to phase in at the beginning of this year is bigger than President George W. Bush's controversial 1.6 trillion plan.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615052","date":"2001-04-18","texts":"ExciteHome, issuing its second warning this year, said its first-quarter results would be weaker than expected due to a continuing falloff in the advertising market. The Redwood City, Calif., company, which provides high-speed Internet access over cable, said its revenue for the quarter would be significantly lower, even as its operating loss increases and its available cash is decreasing. Excite officials said the company expects to lose 14 cents to 15 cents a share in the first quarter, including certain charges, compared with a 13-cent loss that was expected by a consensus of Wall Street analysts compiled by Thomson FinancialFirst Call. The company estimated that revenue in the period will be between 140 million and 145 million. Excite said its cash has dropped to 105 million as of March 31, compared with 201 million at the end of 2000. It said it has executed a nonbinding agreement for its controlling shareholder, AT&T Corp., to contribute 75 million to 85 million by restructuring a pact related to improving Excite's high-speed backbone fiber network. Those services are a valuable asset for Excite, since broadband usage is growing. The company said its subscribership rose to 3.2 million in the first quarter, up 16.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984585","date":"2001-04-20","texts":"For anyone with an interest in the Great Depression, certain phrases set off chills. So when Anthony M. Santomero, president of the Philadelphia Federal Reserve Bank, declared this week that economic recovery was just around the corner, he must have been unaware that he was paraphrasing Herbert Hoover. The Federal Reserve's interest rate cut on Wednesday may, temporarily anyway, restore some of Fed Chairman Alan Greenspan's popularity. Accused of foot-dragging on the matter of priming a sluggish economy, Greenspan now seems in a full-speed-ahead mood to get things moving again. But the Fed's action also is a sign of how worried the economic masters of the universe are about our nation's slowdown. In the dry language of Fedspeak, the risks are weighted mainly toward conditions that may generate economic weakness in the foreseeable future. If a good inflation-phobe like Greenspan believes this, it's hard for anyone to disagree. The question is whether our sustained national experiment with very low unemployment is about to end. The unemployment rate has spiked up, and the news of layoffs suggests the numbers are likely to get worse this year. For all the media focus on stock prices, it's unemployment that has real human and social impact. With all those cable stations running the market ticker at the bottom of their screens all day long, it's hard to remember that in the economic lives of most people, stocks play a limited role. As David Leonhardt of the New York Times put it this week, Relatively few Americans rely on them for a significant portion of their income. It's an antique notion, I know, but jobs really matter.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985074","date":"2001-04-22","texts":"Federal Reserve officials are no strangers to criticism. They've heard all the barbed complaints about how the central bank takes away the punch bowl just as the party gets going, and thousands of home builders once sent then-chairman Paul A. Volcker short pieces of lumber to protest the impact of high interest rates on their industry. In more recent months, as the economy has stalled and the stock market has tumbled, letters have poured in to the Fed from individuals complaining bitterly that the central bank's actions over the past two years have ruined their retirements by driving down share prices. And even though the Fed has aggressively cut interest rates since the beginning of the year, many economists, politicians and business executives are complaining that it waited too long to begin lowering rates and that they are still too high. Until parts of the stock market began to head south a year ago, Chairman Alan Greenspan and other Fed officials were being hailed as geniuses. The economic expansion that began in early 1991 had become the longest in American history, and in an unusual twist, non- inflationary growth had accelerated as the expansion aged. The growth of productivity -- the amount of goods and services produced for each hour worked -- appeared to have shifted into a higher gear, raising U.S. living standards in the process. And the nation's unemployment rate was down to nearly 4 percent, a rate previously believed possible only in a world of increasing inflation. And that low rate meant that many Americans with fewer skills and low incomes were able to find jobs where none had been available before. The major stock indexes began slipping, and the nation's economic growth fell suddenly and sharply late last year to a 1 percent annual rate. It apparently hasn't done much better since.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614162","date":"2001-04-23","texts":"NEW YORK -- The prospect that the Federal Reserve could avert a recession through its aggressive easing of monetary policy is tolling a bearish knell for Treasurys. Last week, the Fed unexpectedly cut interest rates by a half percentage point, its fourth rate reduction of that size this year. That pushed the Federal funds rate, or overnight bank lending level, down to 4.5. Bond investors always fear that returns on fixed-income securities such as Treasurys could be eroded in the long term if stronger growth is accompanied by higher inflation. Thus, in their view, what's good for the economy isn't necessarily healthy for the Treasurys market. Reflecting such fears, the 30-year Treasury bond Friday ended at about its highest yield of the year so far, or 5.793. Its price, which moves inversely to its yield, was down 332 point from late Thursday at 94 132. Meantime, the benchmark 10-year Treasury note was down 232 point, or 62 cents per 1,000 face value, at 97 2632. Because of the small change in price, its yield ended unchanged from Thursday at 5.279.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616026","date":"2001-04-24","texts":"What next from the folks who gave the world the morbidly named guaranteed minimum death benefit There isn't a guarantee, but analysts think life-insurance companies that specialize in selling variable annuities are facing rough times -- rough times that could lead to earnings disappointments -- in the form of slowing annuity sales and some variable-annuity policy benefits that are suddenly in the money. Companies such as Hartford Financial Services Group, Lincoln National and Nationwide Financial Services saw assets in variable annuities, which are essentially mutual funds in an insurance wrapper, shrink last year, due to poor stock-market performance and, for most companies, shrinking net sales figures. And unlike securities brokerage firms and mutual-fund firms with stock-market exposure, insurers have an added layer of risk. In recent years, many have essentially locked in certain levels of stock-market returns of their policyholders. Now, with the Standard & Poor's 500-stock index and the Nasdaq Composite Index 20 and 59 off their highs of last year, respectively, some of those promises are coming back to haunt the sellers. The biggest earnings bite for variable-annuity sellers comes from the declining sales and assets under management. Variable-annuity net sales fell to 45.3 billion last year from 64 billion in 1999, according to the Vards Report, an industry newsletter. Morgan Stanley issued a report earlier this month estimating variable-annuity sales declined another 14 in the first quarter, and predicting a further 10 decline this quarter. In the same report, Morgan Stanley analyst Nigel Dally says the sales decline would make it difficult for Lincoln National to achieve its goal of positive net cash flows in its individual variable-annuity business by year end. Failing to do that, he wrote, could be a disappointment to the market. In recent weeks, analysts have cut Lincoln's first-quarter consensus earnings estimate to 90 cents from 94 cents, according to Zacks Investment Research.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983081","date":"2001-04-25","texts":"Surveying, with undisguised distaste from the mist-shrouded peaks of the New York Times op-ed page, the union hacks and Starbucks anarchists who sought to disrupt the Quebec trade summit last week, globalist-pundit Thomas L. Friedman sniffed the anti-globalization movement is largely the well intentioned but ill informed being led around by the ill intentioned and well informed. What the ignorant and malign anti-globalists do not understand, Friedman lectured, is that global trade expansion is the only route out of poverty for the world's poor -- not only a commercial good but a moral one too. Friedman's assessment is important because he is as close as there is to the voice of the globalization establishment. The establishmentarian view, as it has evolved in the face of increasing criticism, is that globalization is great not only because it creates wealth in the developed countries but because it functions as a sort of super-missionary, spreading both wealth and freedom among the less blessed nations of the earth. Last week in Quebec, George W. Bush summed up the perceived wisdom We seek freedom not only for people living within our borders but also for commerce moving across our borders. Free and open trade creates new jobs and new income. It lifts the lives of all our people, applying the power of markets to the needs of the poor. . . . And open trade reinforces the habit of liberty. This argument is true as far as it goes. As Friedman's paper is currently reporting in a series on free trade, the blessings of unfettered commerce are a great deal less than munificent but trade does bring jobs -- sweatshop jobs, gutter-level jobs, but still jobs - - to places where there were no jobs before. And, indeed, free trade has historically pulled freedom in its wake although, as China is proving, this need not necessarily be so. The problem with this argument is that it is a very fat herring of the reddest hue. It is beside the central political, economic and moral point of the whole debate. President Bush gave the game away in unscripted remarks on his proposal to create a hemispheric Free Trade Area of the Americas at last, truly the world's largest shopping mall. Addressing demands that participating countries adhere to minimum standards of worker treatment and environmental protection, Bush said the agreement certainly must not contain codicils to destroy the spirit of free trade. He added While I understand that some unionists are interested in making sure there's labor protections, I don't want those labor protections to be used to destroy the free trade agreement.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616382","date":"2001-04-26","texts":"From Manhattan to Montana, worries are mounting that a California-style electricity crisis could be on the way. The problem is rooted in the nation's piecemeal, poorly thought-out utility-deregulation process, which planted time bombs that could continue to explode across the nation for years to come. Deregulation in the '90s prodded many utilities to sell off power plants and then to sign long-term contracts to buy back the output. Now, those contracts are expiring. That will mean utilities are going to be buying electricity at much higher prices on the open market -- at a time when ownership of power plants is increasingly concentrated in relatively few hands. Another big problem The transmission lines that carry electricity are growing old and overloaded. But in the chaotic world of deregulation, few have sufficient financial incentive to upgrade the lines. The result In some parts of the country there may be no way to deliver enough power when and where it's needed most. While the rest of the country is in better shape than California, some ominous clouds are already gathering. Supplies in several regions are tight. Prices are rising sharply, affecting not only consumers in the 24 states that have already been deregulated but even some in states that haven't. An ill-timed heat wave from Maine to Pennsylvania could plunge parts of the Northeast into a power crisis. The breakdown of a few big power plants in the West could reverberate through nearly a dozen states. Whole chunks of the country, in other words, are balancing on the knife's edge between scant sufficiency and outright shortage, says Douglas Logan, a principal at energy firm RDI Consulting in Boulder, Colo.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613546","date":"2001-04-27","texts":"Most stocks held up better than many investors anticipated when this week began, even though technology shares succumbed to more profit-taking. Following 10 days of almost unprecedented gains earlier this month, there were widespread expectations that stocks would fall more heavily than they have. The Nasdaq Composite Index did fall 1.21, or 24.92 points, to 2034.88 yesterday. But on both the Nasdaq Stock Market and the New York Stock Exchange, more stocks rose than fell. Led by old-style industrial stocks such as Alcoa and DuPont, the Dow Jones Industrial Average moved up 0.63, or 67.15 points, to 10692.35. The broad Standard & Poor's 500-stock index advanced 0.47. Although the Nasdaq composite still is down more than 17 so far this year -- and 60 off its record high, set last year -- the industrials are down less than 1 since the year began, just 8.8 off their all-time high, also reached last year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614541","date":"2001-05-04","texts":"YOU'VE SEEN the headlines, and they're breathless. An auction of photographs from the Museum of Modern Art raises 4 million in a morning, with 90 of the pictures sold. The La Favorite diamond, a 50-carat bauble, brings 3.6 million. On Monday, a Paul Cezanne mountainscape goes on the auction block and could climb, its investors brag, to 80 million. As the economy slows, the art world seems to be in its own shiny bubble, insulated, giggling and still sipping champagne. It would be nice it if were true. As the huge spring art season kicks off Monday, with a dizzying two weeks of million-dollar auctions and gallery openings in New York City, collectors may indeed be opening their checkbooks wide, particularly for cutting-edge contemporary art, but they're buying scared. What's selling and what's going to sell well are the blue-chip Picasso portraits, the Matisse sure-things, the still-wet, still-cheap new art and, in effect, anything and everything that's been owned by somebody famous or that the Museum of Modern Art has said is all right to buy. It's May 2001 Meet the neurotic collector, the still-wealthy buyer of art who'll only do it if his friends, his broker and even art history agree he's doing the right thing. Money is still going into art hand over fist, particularly into contemporary art, but collectors want the Prozacs of paintings works so good, so rare or so enveloped in deafening buzz that even a 10 million purchase seems safe. Consider Walker Evans. This gifted photographer of the Depression-era South has a cult following, but never had the prices or household-name recognition of Ansel Adams. Then both the Metropolitan Museum of Art and the Museum of Modern Art held shows of his work at the same time. Last week, he was the stellar success of a MoMA sale, with his works selling for as much as 171,750 even though, as photographs, they weren't one-of-a-kind. How come A collector couldn't ask for a greater comfort level than to buy works by an artist the two biggest art-world gorillas fought over.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981819","date":"2001-05-05","texts":"The U.S. economy shed nearly a quarter of a million jobs during April, the government reported yesterday, all but dashing hopes that the economic slowdown that began last summer had nearly run its course. The unemployment rate rose to 4.5 percent from 4.3 percent in March, with 6.4 million Americans now out of work and looking for jobs. Most forecasters expect the jobless rate to rise to 5 percent by the end of the year. April's decline in payroll employment, the second in a row, was the biggest monthly drop since the last recession a decade ago. Many analysts and policymakers worry that continuing corporate layoffs and hiring freezes will cause consumers to pull back sharply on their spending, tipping the economy into recession. The fallout from a deteriorating job market on consumer spending hasn't kicked in yet, and when it does, it won't be pretty, said Allen Sinai, a leading economic forecaster. However, investors saw in the news an encouraging sign that businesses were moving aggressively to cut costs, trim excess capacity and return quickly to profitability. Stock prices rose on both the Nasdaq Stock Market and New York Stock Exchange see story, Page E1.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830982548","date":"2001-05-06","texts":"For years, the Hopkins Candy Factory in Old Town Manassas was little more than a crumbling property and a dream. The same could be said of a parking lot a block away where a granary once stood, a lot considered to be one of the city's most enduring eyesores. On Wednesday, Mayor Marvin L. Gillum R ceremoniously presented these two pockmarked properties as the new anchors of Old Town the Candy Factory, soon to be a center for the arts, and the abandoned corner at Center and West Streets, soon to be the City Square Pavilion and ice skating rink. City officials and project boosters streamed out of their offices, slapping each other on the back, shaking hands and talking merrily about the future. But getting to this point has been a long and arduous process for city officials and community leaders, who formally began discussing these projects more than five years ago. In that time, they have debated prices, purposes and architecture. They have watched both projects' costs increase and looked for federal, state and private funding. Progress slowed to a point where supporters of both projects were worried. And at times some of the city's most influential personalities have clashed over the Candy Factory's future, the design of the City Square and how the high-visibility projects would get funding from a sometimes skeptical City Council. These were huge, complicated projects that were being considered, said David Flach, president of Historic Manassas Inc. HMI, the group that has been mainly responsible for the pavilion. The council was very deliberative, and I think at times some of us wondered what the outcome was going to be.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613582","date":"2001-05-08","texts":"SINGAPORE -- Singapore's reputation as a haven for those seeking solid, if not spectacular, gains took a hit in the first quarter, as the market's main index fell more sharply than all others in Southeast Asia. But that doesn't mean investors should shift to higher-risk, potentially higher-return Asian markets, fund managers and analysts say. Instead, they say, investors need to study what has changed in Singapore companies while maintaining a long-term view. Those with a distant horizon and stock-picking acumen have found Singapore a good investment, they say. Singapore's Straits Times Index was closed yesterday for a holiday, as other major markets in Asia finished higher. Continental European markets were generally higher, while London was closed for a holiday. Overall, the Dow Jones World Stock Index fell 0.01 point, or 0.01, to 199.28. Excluding the U.S., the index rose 0.58 point, or 0.40, to 146.77. The first quarter proved that during global selloffs, the redundant phrase safe haven doesn't exist for stocks. The only safe haven is cash -- or utilities in Hong Kong, says Sean Darby, regional strategist at Dresdner Kleinwort Wasserstein. And some analysts and strategists aren't sure all the bad news has come out. Merrill Lynch has been underweight on Singapore for more than a year. And analysts believe that changes due May 19 in Morgan Stanley Capital International indexes will cut weightings for some local companies.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615587","date":"2001-05-10","texts":"BROOKLYN PARK, Minn. -- Wilsons the Leather Experts Inc. expects to report a net loss of 21 cents to 23 cents a share for its fiscal first quarter, wider than the most recent Thomson FinancialFirst Call analysts' consensus estimate of a loss of 12 cents a share. The specialty retailer of leather outerwear, apparel and accessories said first-quarter sales rose 30 to 117.5 million from 90.3 million a year earlier, but same-store sales rose only 2.1, compared with a 7.2 increase for the same period a year before. For last year's fiscal first quarter ended April 29, Wilsons posted a loss of 1.38 million, or eight cents a share. Excluding items, the company's year-ago loss was five cents a share. The retailer also expects to report a loss for its fiscal second quarter of 1.01 to 1.03 per share, which is in line with the 1.01-a-share loss expected by analysts. Wilsons said it expects sales of 106 million to 109 million for the second quarter. For the full fiscal year ending in January, Wilsons said it expects to earn 2.75 to 2.85 a share on sales of 842 million to 852 million. The most recent consensus estimate had seen the company reporting profit of 2.94 a share for the full year. Joel Waller, chairman and chief executive, said the wider-than-expected fiscal first-quarter loss estimate is due to the decision to accelerate the closing of four stores, lower comparable-store sales in April because of the timing of Easter and the performance of its newly acquired Bentley's Luggage Corp. unit.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616594","date":"2001-05-10","texts":"Corrections & Amplifications GENERAL MOTORS Corp. is offering a nationwide 400 rebate on Chevrolet Cavalier models to recent college graduates. An article Thursday about discounts offered by the Big Three auto makers incorrectly stated that GM had a nationwide, 1,000 college-graduate discount offer on the Cavalier. WSJ May 15, 2001 DETROIT -- The Big Three auto makers, facing fatter inventories and a shrinking market, are sweetening the pot with more discounts, including deals on important vehicle lines. Ford Motor Co. has cut the financing rate for buyers of the redesigned 2002 Explorer, and is offering an interest rate of 3.9 for 36 months, down from the previous 5.9 rate. That means a savings on a monthly payment of 18 to 25, or as much as 900 during the three-year contract. If you want to sell 400,000 Explorers a year, you can't be out in the market buck naked, Ford's chief market analyst George Pipas said. As good as the Explorer is, you've got to provide a good value equation. Ford just launched the redesigned Explorer in April, after a delay of nearly three months to work out potential quality problems.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983249","date":"2001-05-11","texts":"Rouse Co. of Columbia told investors yesterday that its portfolio of upscale shopping centers and offices remains strong despite the turbulent retail market, and that the company will open several new malls starting next year in South Florida. The developer and owner of commercial properties nationwide said at its annual shareholders meeting that it expects to profit this year from the recent renovations of its malls, including the Mall in Columbia, and future retail construction. More than 600 investors, employees and analysts attended the meeting in a crowded meeting room at the company's headquarters. The company said each of its three operating lines -- retail, office and land sales -- had record performances last year. For the year, Rouse's funds from operations rose 13 percent, to 252.6 million, up from 223.4 million in 1999. Funds from operations is the standard performance measure of real estate companies. The company leased 97 percent of the space in its shopping centers, said chief executive Anthony W. Deering. Rouse announced last week that funds from operations in this year's first quarter rose 12 percent, to 70.5 million, beating analysts' estimates by 9 cents per share, according to a survey by First CallThomson Financial. Shares of Rouse closed at 26.61, up 11 cents, on the New York Stock Exchange. The excellent results from last year and this year's first quarter should continue, producing strong growth for 2001, Deering said.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830981674","date":"2001-05-13","texts":"With U.S. stock markets in a trading range and still vulnerable to another downturn -- what economists euphemistically call testing the lows -- some investors may be looking overseas as a place to put some money. But while Europe may be a good place to spend a couple of weeks this summer with the euro still weak against the dollar, sending your money there is something else. You may have to wait three to five years before you can bring it home profitably. We have about 60 percent of our money invested there, said David Herro, who manages the Oakmark International Fund. We are buying Europe with the cheap euro. But for true investors, not people who think they can get a quick hit, you have to look three to five years out. Similarly, Joshua Feinman, chief economist for Deutsche Asset Management, part of Deutsche Bank, said I would not encourage people to try timing the market when it comes to Europe. It might be sensible to seek some growth opportunities for diversification outside the United States, if you have a longer time horizon. The creation of the European economic union and the single currency was expected to help countries restructure their economies by making their corporate governance more investor-friendly and developing an individual investor culture. Still, the time frame before the European economy catches up to the United States, especially in changing rigid labor practices, remains long, fund managers and international investment strategists say.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614759","date":"2001-05-14","texts":"NEW YORK -- Amid signs that the Federal Reserve is near the end of its aggressive rate-cutting campaign, the bond market appears at a turning point. Investors widely expect Fed policy makers, who meet again tomorrow, to cut interest rates once more. But what happens after that is less clear. Many in the market believe any rate reduction tomorrow could be the last the Fed makes in this interest-rate cycle. They cite evidence that consumer sentiment, wages, retail sales and the equities markets either remain fairly strong or are recovering from weakness last winter. The implications are crucial to the Treasurys market, which staged a yearlong rally as the economy and the stock market began to languish and as the Fed cut short-term interest rates by two percentage points in the first four months of this year. If interest rates are near their lows of this cycle, and if the economy finally is stirring in response to the Fed's strong medicine, the outlook for Treasurys is considerably less bright, analysts note.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616903","date":"2001-05-17","texts":"WASHINGTON -- U.S. inflation at the consumer level increased a bit in April, mainly reflecting rising energy prices. The Consumer Price Index rose a slower-than-expected 0.3, after accelerating at an 0.1 rate in March, the Labor Department said. Excluding food and energy items, the core index rose just 0.2, the same as in March. During the 12 months ending in April, core inflation was 2.6, down from 2.7 for the 12-month period ending in March. The government attributed April's faster growth in consumer prices mainly to a 1.8 surge in energy prices, after a 2.1 drop in March. Gasoline prices rose 5, but natural-gas prices fell 1.6 and electricity prices rose just 0.2. Food costs grew at the same 0.2 rate as in March. The government attributed the increase in the core index largely to housing and a rebound in transportation prices. Housing costs grew 0.1 after increasing 0.2 in March. Transportation prices rose 0.9 after falling 0.9 in March.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982110","date":"2001-05-18","texts":"Citigroup, the largest U.S. bank by asset size, agreed to buy Mexico's second-largest bank company for 12.5 billion in stock and cash, the companies announced yesterday. Analysts said the purchase of Grupo Financiero Banamex-Accival should strengthen Mexico's banking system. The system is still struggling to recover from the devastating effects of the 1994-95 peso devaluation and loan crisis that led to a 100 billion government bailout of debt-heavy banks, analysts said. The crisis caused many Mexicans to lose confidence in their banks. Banamex owns Banco Nacional de Mexico, which has assets of 37 billion, nearly 1,300 branches across Mexico and 27 percent of the country's deposits, more than any other bank. Citibank has had a bank in Mexico for more than 70 years, but recently its presence in Mexico has grown more visible, with an increasing number of automated teller machines and branches opening, especially in Mexico City. Citigroup will merge the company with its current banking operations.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983892","date":"2001-05-20","texts":"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 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. 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. 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. 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.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830981775","date":"2001-05-22","texts":"Republicans and a small group of Democrats in the Senate last night turned back efforts to significantly change a 1.35 trillion tax cut package that meets many of President Bush's goals, but were thwarted in their efforts to hold a speedy final vote. The tax bill appeared headed for easy passage by a solid majority, but shortly before midnight the Republican leadership abandoned efforts to complete work on the measure as Democratic opponents succeeded in forcing adjournment for the night. The Senate will resume its debate today, when Republicans said they would have a final vote. We see there is a delay being forced, Majority Leader Trent Lott R-Miss. said shortly before the chamber adjourned. But I think it is very important that we complete this work. As the evening progressed, the Democrats offered a series of amendments as they resisted GOP efforts to quickly push the bill through. They charged that the Republicans were trying to pass the largest tax cut in 20 years in the dark of night. We're going to be here until 6 in the morning at least, said Sen. Max Baucus D-Mont., assessing the stack of amendments awaiting action and asking Lott to adjourn.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613461","date":"2001-05-24","texts":"TORONTO -- Royal Bank of Canada and Bank of Montreal posted increased net incomes for their fiscal second quarters as prudence helped them weather the recent economic slowdown and stock-market volatility. Canadian banks have fared better than their U.S. counterparts as the economy has soured, partly because the Canadian companies had less exposure to deteriorating credit. Canadian banks are relatively cautious, said Kevin Choquette, a Toronto analyst with Scotia Capital, the brokerage arm of Bank of Nova Scotia. Credit problems for Canadian banks have also been milder because Canada emerged a year later than the U.S. from the last recession, Mr. Choquette added. That lag gave U.S. banks an extra year to put on more marginal credit, he said. For the quarter ended April 30, Royal Bank, based in Toronto, said net increased 4 to 602 million Canadian dollars US390.8 million, or 92 Canadian cents a fully diluted share, from C578 million, or 89 Canadian cents a share, a year earlier. Royal Bank's total provision for credit losses rose to C210 million from C172 million in the year-earlier period. Results for the latest quarter included, for the first time, a full quarter of earnings for two recently acquired businesses Dain Rauscher, a Minneapolis securities firm, and the insurance subsidiaries of South Carolina's Liberty Corp. While Dain Rauscher's results contributed to a 42 drop in Royal Bank's wealth-management earnings, the Liberty acquisitions' results fueled a 63 jump in insurance earnings. Personal- and commercial-banking earnings rose 26 to C334 million.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616079","date":"2001-05-24","texts":"Corrections & Amplifications INVESTORS PLACED 30.77 billion into money-market funds in the week ended Tuesday, bringing net assets to a record 2.045 trillion, according to Money Fund Report, a newsletter. An article yesterday incorrectly said that the 30.77 billion was a record in fact, the net-asset figure is a record. WSJ May 25, 2001 NEW YORK -- A record 30.77 billion flowed into money-market funds in the week ended Tuesday, bringing net assets to 2.045 trillion, according to Money Fund Report, a newsletter. The surge in inflows came from institutional investors, who stashed a net 31.74 billion into taxable money-market funds in an attempt to avoid the most recent cut in interest rates, said Peter Crane, managing editor of the Money Fund Report. Taxable money-market funds are considered temporary havens from interest-rate cuts because of their long maturity of about 52 days. As a result, assets in those funds yield the more appealing returns of former rates. The Federal Reserve cut key federal-fund rates by half a percentage point to 4 on May 15.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617405","date":"2001-05-24","texts":"WASHINGTON -- Many of the eye-catching benefits for the middle class in the Senate tax-cut bill will phase out after a few years, while breaks for the rich tend to arrive late -- and stay. The bill has been criticized as a legislative hall of mirrors, with benefits that often look bigger, or smaller, than they really are depending on when they take effect and for how long. The basic reason for this The Senate has been trying to cram most of the benefits of Mr. Bush's 1.6 trillion 10-year plan -- along with additional provisions aimed at pleasing middle-class voters -- into a much smaller, 1.35 trillion package. In order to do that, Senators had to push some benefits out to year 11, while starting others quickly, then stopping them after a couple of years. Even some of the bill's most basic breaks arrive slowly. For example, income-tax rate relief begins immediately, but takes full effect only in 2007 estate-tax repeal, tax relief for married couples and the doubling of the child credit all become fully effective in 2011. A new 500 credit for student-loan interest takes effect in 2009. But a new deduction for college tuition abruptly ends after 2005. Ridiculous, said Clint Stretch, director of tax policy for Deloitte & Touche in Washington, referring to all the phase-ins and phase-outs. The bottom line is they're stretching to do as much as they can.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614241","date":"2001-05-25","texts":"NEW YORK -- After an initial flurry of activity in Asian trading, the foreign-exchange market lost momentum as it assessed the implications of the pronounced euro weakness and unexpected yen strength Wednesday. In overnight trading, the dollar followed through on trends established late yesterday in New York and slipped under 119 yen for the first time since early March. Even more aggressive selling pulled the euro down against the yen, to another new 2001 low of just above 101 yen. At that point the market backed off. There were some good bids for the euro against the yen around 101 yen, and with Europe being closed people didn't want to stay too short, said John Cholakis, foreign-exchange dealer at Dai-Ichi Kangyo Bank in New York. With little new data in the U.S. to guide investors and limited liquidity because of the Ascension Day holiday in much of Europe, trading slipped into narrow ranges as traders moved to the sidelines ahead of the long holiday weekend in the U.S. and the United Kingdom. In late New York trading, the euro was at 85.72 cents, up from 85.45 cents in London, and slightly lower than 85.65 cents late Wednesday. Against the yen, the euro was at 102.48 yen, after bouncing off its overnight low of 101.04 yen. The dollar was at 119.89 yen, little changed from 119.78 yen in London and flat with 119.89 yen in late New York trade Wednesday. The dollar was at 1.7781 Swiss francs, compared with 1.7789 francs Wednesday, while sterling was at 1.4089, down from 1.4191.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614511","date":"2001-05-25","texts":"TiVo Inc. said it received an important patent associated with disc-based video recorders but also announced a fiscal first-quarter net loss that more than doubled from a year earlier. Analysts said the patent boosts the prospects for TiVo to get additional revenue from licensing its technologies. TiVo said it already has a licensing agreement with the original equipment makers that manufacture its recorders. But with the patent, it has the right to license its technologies to cable providers, competitors and other companies. In response, TiVo's shares rose 3.56, or 72, to 8.50 at 4 p.m. on the Nasdaq Stock Market. Personal video recorders such as TiVo's record TV programming work in a way that, among other things, let users effectively pause live broadcasts or skip over commercials. The Alviso, Calif., company said the patent covers many of the inventions associated with the devices, including a method for recording a TV program while playing back another or watching a program as it is being recorded a method for processing various multimedia streams such as video and audio at low cost and a storage format that allows users to pause and scan through a live TV broadcast. TiVo could use a boost. The company reported after the market closed that its net loss for the period ended April 30 widened to 49.1 million, or 1.20 a share, from 23.5 million, or 66 cents a share, a year earlier.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616094","date":"2001-05-25","texts":"Stocks edged higher in lackluster trading as traders' attention began to shift to the beaches and barbecues of Memorial Day weekend. On the strength of late-day upticks, the major indexes all finished in positive territory. The Nasdaq Composite index rose 1.72, or 38.54 points, to 2282.02. The Dow Jones Industrial average rose 0.15, or 16.91 points, to 11122.42. And the Standard & Poor's 500-stock index rose 0.32, or 4.12 points, to 1293.17. Volume is expected to be light today, and investors will have the three-day weekend to ponder whether stocks' relatively strong performance so far this week signals a sustained rise. Driving yesterday's market were new economic data showing a decline in April home sales and an increase in jobless claims last week. For the stock market, both were considered bullish signs of low inflation, which could clear the way for the Federal Reserve to cut interest rates. Cisco, Microsoft and Intel all rallied, helping the Nasdaq to post the day's best performance. The index is up 3.8 for the week so far.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615264","date":"2001-05-29","texts":"BOSTON -- Gaston Bastiaens, a former chief executive of Lernout & Hauspie Speech Products NV, is set to appear in U.S. District Court here today, after being arrested on a Belgian warrant accusing him of fraud and other charges. Mr. Bastiaens, a 54-year-old Belgian citizen, was arrested Saturday while sunbathing in his backyard in Winchester, Mass., a Boston suburb, said Timothy Bane, chief deputy U.S. Marshal in Boston. L&H, a once highflying maker of speech-recognition and language software, has crumbled in the past year amid allegations of accounting fraud. Internal investigations have concluded that nearly half the reported revenue from 1998 to mid-2000 was fake. The Ieper, Belgium, company is operating under bankruptcy protection in the U.S. and Belgium. Its market value, which once approached 10 billion, is almost nothing. L&H co-founders Jo Lernout and Pol Hauspie were arrested in Belgium in April on charges of forgery and stock manipulation, along with a third former company executive, Nico Willaert. Mr. Bastiaens was CEO of L&H from 1996 to August 2000, a period when the company appeared to expand spectacularly through acquisitions and internal growth. Much of the company's growth in 1999 and early 2000 was based on sales in Singapore and South Korea that internal probes found were either fictitious or booked improperly.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613463","date":"2001-05-30","texts":"Sequenom Inc., a genomics-based biotechnology company, said it will acquire Gemini Genomics PLC of the United Kingdom in a stock swap valued at about 226.8 million, one of the first in what analysts expect to be a series of consolidations among genomics companies. The deal combines two companies that are already working together closely in the search for human diseases linked to genetic defects. Both companies also reaped tremendous rewards by making initial public offerings during the 2000 biotech stock-market boom -- and both have also seen their stock prices plummet since then. Sequenom, of San Diego, makes systems for sifting through genetic data in order to pinpoint meaningful genetic differences that might be linked to disease. Gemini, of Cambridge, England, has focused on amassing large databases of genetic data from twins, disease-affected families and participants in drug trials. The two companies struck a research partnership last June, one that has already produced tentative gene candidates linked to heart disease. Under the terms of the agreement, Gemini shareholders will receive 0.2 share of Sequenom in exchange for each share of Gemini stock. Sequenom shares dropped 11 on news of the deal, and as of 4 p.m. traded at 15.75, down 1.93, on the Nasdaq Stock Market. Analysts generally applauded the deal, which they suggest is a harbinger of things to come among genomics firms and so-called platform companies, which build systems for processing and analyzing genetic data.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616801","date":"2001-06-05","texts":"A former corporate client of Credit Suisse First Boston opened a new legal front in the attack on how Wall Street allocates initial public offerings of stock. Creditors of the company formerly known as Mortgage.com Inc., which was taken public during the IPO boom, accused the Wall Street firm, a unit of Switzerland's Credit Suisse Group, of breaching its underwriting contract by obtaining kickbacks in the form of unusually large trading commissions from investors seeking IPO allocations. The suit by MDCM Holdings Inc. -- the entity that survived after Mortgage.com sold its name and Web site address last year for 1.8 million to a U.S. unit of ABN Amro Holding NV -- is a rare effort by a company claiming it was shortchanged in the IPO allocation process, securities lawyers say. Before ceasing operations, the suit says, MDCM was a provider of online-mortgage services. The case marks a twist in the current controversy surrounding the way Wall Street allocates IPO shares. Since December, individuals have filed more than 125 suits against major securities firms, alleging that they violated federal securities laws by seeking, among other things, oversized commission payments from investors who received IPOs, according to lawyers tracking the suits. But the MDCM suit stands out because it represents a corporate client of a Wall Street firm alleging IPO impropriety. Legal actions by corporate clients potentially are more problematic for Wall Street firms because such companies could possess more detailed data about who received their IPO shares.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985463","date":"2001-06-07","texts":"For much of the last half-decade, the story line for Southern Maryland's economy has been simple Growth, and how to manage it. People have flocked to the region, creating fertile ground for companies of every sort. Now, add this line to the story There are scores of new jobs, but with unemployment rates nearing the lowest level in decades, it can take time to fill them. Southern Maryland's roaring economy has significantly intensified demand for workers, fostering a climate in which prospective employees in some industries can command higher salaries or move to another job. People all over are having these problems. It's real, said Janet Cook, executive director of St. Mary's County's Chamber of Commerce, which recently lost an office manager to a better-paying job at a high-tech firm. The Southern Maryland experience so far relects that of the larger region. While much of the nation is braced for job layoffs as the economy slows, the deep reliance of metropolitan Washington's economy on the federal government appears so far to have shielded it from most of the fallout of any downturn, experts say.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614871","date":"2001-06-08","texts":"TOKYO -- Japan's economy is showing new signs of weakness, which could make it trickier for Prime Minister Junichiro Koizumi to carry out his promises of corporate restructuring and economic reform. The government is scheduled Monday to report gross domestic product for the first quarter, and most economists expect a flat figure compared with the previous quarter. But a variety of data suggest that the U.S. slowdown is taking its toll on Japan, and that GDP could shrink in the current and third quarters, throwing Japan back into a full-fledged recession. Among the negative signs The index of leading economic indicators has been below 50 for three months in a row, often a harbinger of recession. Industrial production fell 1.7 in April from March. Yesterday, a Ministry of Finance survey of corporate investment suggested slower-than-expected GDP growth in the first quarter. Meanwhile, corporate profits were flat in the latest quarter, after growth of 31.9 in the preceding quarter. It is only a question of timing . . . and not direction -- the economy is heading into recession, wrote Richard Jerram, economist at ING Barings in Tokyo, in a report to clients. Mr. Koizumi says further structural reform, such as clearing up bad loans at banks and eliminating wasteful government spending, will help the economy grow over the medium term. In the short term, however, economists agree that reform will likely damage the economy by increasing unemployment and bankruptcies. Should the economy slow sharply over the next few months, Mr. Koizumi would face increasing pressure to scale back his reform plans, among them his promise to restrain government debt.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981736","date":"2001-06-10","texts":"After being burned last year by actively managed equity funds focused on technology and the Internet, investors are again pumping money into index funds, seeking broad exposure to the U.S. stock market at the lowest cost. People are less willing to concentrate on specific areas of the market, said Eric Bjorgen, director of research at Leuthold Group, a Minneapolis-based research firm. They're looking for the diversification an index fund offers. Bjorgen said 15 percent of inflows into equity funds this year through May 23 went into stock funds that track broad market indexes such as the Standard & Poor's 500-stock index. That's up from just 4 percent during the same period last year. In the late 1990s, a period when the S&P consistently beat actively managed funds, index funds received about 25 percent of inflows. Because of the devastation in the technology market, mutual fund investors are coming back to some of the traditional, broad-based, old-economy funds, Bjorgen said. The biggest beneficiary of the shift has been Vanguard Group, the largest U.S. provider of index funds. Vanguard, the best-selling U.S. mutual fund group this year, raked in 12.71 billion this year through April, more than double that of its nearest competitor, according to Financial Research Corp., a Boston-based consulting firm.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982052","date":"2001-06-11","texts":"MCI stock came back from the dead Friday, three years after shares of the pioneering Washington telephone company stopped trading when the company was sold to WorldCom Inc. The resumption of trading means the 47 million merger, one of Washington's biggest ever, was a flop. The new incarnation of MCI is also likely to be a flop for investors, based on what has happened to other companies that have used the financial gimmick that enabled WorldCom to resurrect MCI stock. WorldCom isn't exactly divorcing MCI, but Chairman Bernie Ebbers is doing his darnedest to distance WorldCom's thriving data, Internet and international businesses from the boring, brutally competitive long-distance operations of MCI. In a financial fantasy using an increasingly popular form of pseudo-security, Ebbers is not splitting his company in two, he's simply splitting his stock in two.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830981704","date":"2001-06-15","texts":"United Bank, a West Virginia-based institution looking to increase its presence in the Washington area, yesterday bought the locally owned, 11-branch Century National Bank for 62.5 million. United, with 18 of its 22 Washington area outlets in Northern Virginia, agreed to pay 2 12 times Century's book value. United, with overall assets of 5.4 billion, said the deal will boost it from the 11th-largest bank in both Virginia and the Washington area to the ninth biggest, with 2 billion in assets here. Century's estimated 1,000 shareholders reaped an immediate windfall in the stock market, with its stock jumping 64 percent -- up 5.10, to 13.10. United's stock fell 68 cents, to 23.92. Under terms of the sale, which is expected to be completed in the fourth quarter, stockholders in Century's holding company, Century Bancshares Inc., will receive 0.45 shares of United's holding firm, United Bankshares Inc., and 3.43 in cash for each share of Century they hold, with the announced purchase price at 14.50 per Century share.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615470","date":"2001-06-19","texts":"Oracle Corp. used cost cutting to offset slowing sales and to edge past profit expectations in a fiscal fourth-quarter report that lacked any big downside surprises, as many had feared it might. The company also cheered investors by making positive comments about its short-term outlook. Oracle's upbeat view of its near-term future, though, doesn't mean a return to the regular double-digit-percentage sales growth the company saw a year ago, when it was busy supplying software for the still-burgeoning Internet and business-to-business sectors. By contrast, Oracle is now predicting that both sales and profit during the next three months will be essentially flat from a year earlier analysts considered that to be good news only because they were worried it might be worse. Oracle's financial report had been much anticipated as an indicator of the overall health of the broad technology sector. Earlier this month, analysts had braced for an earnings preannouncement from Oracle warning of an impending shortfall. While that didn't occur, analysts had still feared there might be some unpleasant surprises yesterday. But none came, a fact that, along with the company's cheery outlook, pushed up the value of Oracle's shares in after-hours trading, following the announcement. Oracle shares rose 8.5 to 16.10 after hours, after falling 16 cents to 14.84 as of 4 p.m. in Nasdaq Stock Market trading. The shares are, however, nowhere near their 52-week high of 46.47, and have fallen just like the stocks of other stars of the 1990s technology-stock boom. Robert Austrian, with Bank of America Securities, said the latest results suggest that Oracle's problems may have bottomed out. Maybe this is as tough as it is going to get for Oracle, he said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615614","date":"2001-06-20","texts":"ARE YOU ENJOYING the budget surplus Let's hope so it's disappearing right before your eyes. Nearly everybody in Washington is playing a part in making it evaporate. That isn't what you'll see in the authorized budget numbers, of course. But many of those numbers are at best suspect, and at worst part of a game that makes it easier for both parties to do what they want for short-term political reasons, while ignoring problems that are being sown for the long run. Why this gloomy analysis now Because three troubling trend lines are coming together. First, it's increasingly clear that the tax-cut bill recently passed by Congress and signed by President Bush, while reasonable enough at its advertised size, has enough tricks and omissions in its details that its true effect on the budget is understated, perhaps by hundreds of billions of dollars. Second, Congress and the administration have put the tax cut within a 10-year spending plan that an optimist would call extremely ambitious -- and a skeptic would call wholly unrealistic. It anticipates Congress somehow will keep spending increases for the next decade to roughly half the average of the last couple of years -- and that the Bush administration won't weigh in with big new defense-spending or substantial emergency-spending requests. Third, both parties in Congress already are showing in real life why such plans are at risk. President Bush's own Republicans are busy adding back into spending bills for next year items the White House doesn't want, pleasing fans of apple programs and water projects but undermining budget blueprints.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613859","date":"2001-06-21","texts":"WASHINGTON -- Corporate America, hurt by the global slowdown, is trying to persuade the Bush administration to abandon the strong-dollar policy that has been a staple of U.S. economic strategy since the mid-1990s. John T. Dillon, International Paper Co.'s chief executive and the new head of the Business Roundtable, pleaded his case at a private meeting with Treasury Secretary Paul O'Neill yesterday. The dollar's strength against the yen and euro, he said, makes it too hard for U.S. companies to compete with imports and to penetrate foreign markets. There's no question that orders for our products have been off for about a year, and foreign companies are taking an increasing share of the U.S. market, Mr. Dillon said after the meeting with Mr. O'Neill. It's not that their factories are any more efficient than our factories, but they do have a pretty sizable advantage because of the dollar's relationship with other currencies. During the past two weeks, the dollar has surged to 15-year highs both against the British pound -- down to 1.3981 in late New York trading yesterday from 1.4007 a day earlier -- and against a basket of currencies of major U.S. trading partners. The euro, which sold for 85.45 U.S. cents late yesterday, is 27 weaker against the dollar than when the 12-nation currency made its debut on Jan. 1, 1999. Mr. Dillon said industrial America is in a deep recession, and that the administration should let the markets know that the U.S. is no longer inclined to prop up the dollar.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613982","date":"2001-06-21","texts":"These days, economists have plenty to worry about. Add what's happening in Leesburg, Va., to the list. In that Washington, D.C., suburb, real-estate agent Ray Mauk has been trying to sell a four-bedroom, two-story house for the past two months. He figured it would sell in a day or two, given the recent frenzy for homes in the area. But instead, he has been forced to reduce the 395,000 asking price three times -- lowering it by 5,000 on each occasion. The market, says Mr. Mauk, just isn't there. Despite a slowing economy, the U.S. housing market has held strong and is widely credited with having helped to stave off a recession. But in a handful of cities across the country, cracks are starting to appear in the housing market's once-solid foundation. From San Francisco to Minneapolis to Denver, some real-estate agents say demand is slowing and the number of available homes is increasing -- often a sign of weakness. Meanwhile, home builder Centex Homes, a unit of Centex Corp. in Dallas, is offering a 10,000 discount or free amenities on some new homes in the Atlanta area to stimulate demand. And in Dallas, where inventories are up 24 from last year, price reductions are becoming more common. Although home sales overall remain healthy by historical standards, discounting and rising inventories are the indications that usually start off telling me we're going to see a tougher market, says Petey Parker, vice president of Ebby Halliday Realtors in Dallas. It's a different market than it was a few months ago, adds Marsha Sell, a sales associate at Coldwell Banker Buckhead Brokers in Atlanta. Every agent I talk to is experiencing fewer showings on their listings.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982984","date":"2001-06-21","texts":"Stock prices finally settled on solid gains today after investors spent a wobbly session perplexed by another batch of mixed signals about the economy and earnings. Buyers deemed a better-than-expected report on the economy to be a plus. But sellers fretted over the latest string of analyst downgrades of high-profile companies. The Dow Jones industrial average finished up 50.66 at 10,647.33, bouncing back from several dips into negative territory. The market's broader indicators followed the same path. The Nasdaq composite index rose 38.58, to 2031.24, and the Standard & Poor's 500- stock index advanced 10.56, to 1223.14. It was the first time since June 7 that all three major indexes advanced. Investors were feeling somewhat optimistic after hearing that the Conference Board's index of leading economic indicators, a key forecasting gauge, rose 0.5 percent in May. The reading was better than the 0.3 percent analysts were expecting and a sign that the economy is poised to slowly recover.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614640","date":"2001-06-28","texts":"Jean-Marie Eveillard is a patient man. As evidence, consider that he runs a gold fund. Founded in 1993, Mr. Eveillard's First Eagle SoGen Gold Fund has languished for much of the past eight years. An investor putting 10,000 in the fund at inception would have a little more than 7,000 today. With declines like that, plus investor withdrawals, the fund's assets have dwindled to 10.9 million from a high of 70.2 million. So it was little wonder that in 1998, Mr. Eveillard publicly pondered closing the thing altogether. He didn't, and during autumn of last year, finally, the fund began to glitter. It has gained 28.35 since the beginning of the year and more than 37 since bottoming out in November. Still, Mr. Eveillard, 61 years old, remains wary. Do I think the recent upturn and then downturn in the price of the metal are significant I don't have the foggiest idea, Mr. Eveillard says. The gold market is a very opaque market.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615074","date":"2001-06-28","texts":"How many more dashed hopes and false recoveries must we experience before politicians and monetary authorities accept the fact that our inability to manage fiat currencies is causing the global economic slowdown They keep waiting for interest-rate reductions to kick in, yet more than six months after the Fed began lowering rates the economy continues to weaken. Waiting for the recently enacted tax cuts to provide stimulus will prove futile as well. The economy does not suffer a lack of consumer demand, and more money in people's pockets will not revive the supply side of the economy. Ronald Reagan once said he knew of no great nation in history that went off the gold standard and remained great. Since Aug. 15, 1971, when the U.S. ceased to redeem dollars held by foreign governments for gold, we have put that thesis to the test. For the first time in human history, not a single major currency in the world was linked to a commodity. Economist Milton Friedman called the situation unprecedented and said it is not a long-term viable alternative. The world, he said, needs a long-term anchor of some kind. In the short term, at least, he was vindicated. In creating a world monetary system of floating fiat currencies with the stroke of a pen, President Nixon touched off world-wide inflation that lasted through the '70s and early '80s. Yet America recovered to preside over the demise of world communism, and overcame the rising inflation and unemployment of stagflation to enjoy an unparalleled 18-year economic expansion. Today, the U.S. is at the pinnacle of its power and enjoying its greatest prosperity ever. Were Messrs. Reagan and Friedman wrong I don't think so. If the U.S. has so far come out on top in this experiment, it is only because other countries' economies have suffered even more from floating currencies.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616967","date":"2001-06-29","texts":"NEW YORK -- What a difference a day makes, not to mention a meager quarter of a percentage point. That is what bullish gold traders discovered yesterday as they watched the recent gains accrued by the yellow metal wash away in a tide of disappointment. That followed the Federal Open Market Committee's opting to trim interest rates by a conservative quarter of a percentage point instead of the half-point some expected. August gold futures on the Comex division of the New York Mercantile Exchange plunged more than 4 before bouncing to end the session at 270 a troy ounce, 2.80 lower than Wednesday. To be fair, it wasn't the Fed decision alone that pulled the legs out from under gold prices. Even ahead of the announcement Wednesday afternoon, gold had begun to weaken on a selloff in the oil sector. Market watchers are increasingly looking at energies as leaders for other inflation-geared commodities, according to George Gero, first vice president at Prudential Securities.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984493","date":"2001-06-29","texts":"When Nobuyuki Idei, chairman of Sony, asked Howard Stringer, chairman of Sony America, to set up a little dinner for various Washington VIPs next month, Stringer enlisted his old friend Sally Quinn, our Post colleague, to help pick a venue and organize a guest list. Quinn suggested using the newly refurbished former presidential yacht Sequoia, docked at the Washington Marina. But when she toured the 106-foot vessel a few weeks ago, she spotted trouble A framed photograph commemorating Japanese Emperor Hirohito and Empress Nagako's 1975 cruise with President Ford was accompanied by a brass plaque bearing the inscription In 1945, President Harry Truman reportedly decided, while on the Sequoia, to drop the nuclear bomb on Hiroshima, Japan. Quinn immediately asked that the offending plaque be removed, and a new plaque -- omitting the reference to Hiroshima -- was ordered from a Capitol Hill framing shop. Yesterday, after dinner organizers got wind of our inquiries, the order for the new plaque was canceled instead the whole display will be hidden away. Quinn told us My initial reaction was that the whole point of entertaining people is to make them feel comfortable, and it seemed this would be a little insensitive to the guest of honor. One problem resolved, another cropped up during last week's inspection by a Sony advance team The onboard television set is a Sharp. We hear that the Sony folks demanded that it be replaced with one of their own models, but Sony Vice President Anne Murfogen told us she merely asked that the Sharp be stowed. Nobody will be watching TV, she said. We guess a screening of Pearl Harbor is out of the question. Stringer, meanwhile, told us We're throwing a party for the chairman of Sony, who has rarely been in Washington, and we thought it was a great opportunity for him to meet politicians, business leaders and journalists -- that's all. Among the invited guests, we hear, are Vice President Cheney, Defense Secretary Donald Rumsfeld, Federal Reserve Chairman Alan Greenspan, Secretary of State Colin Powell, National Security Adviser Condoleezza Rice, Sen. Chris Dodd D-Conn., AOL Time Warner chairman Steve Case and PBS anchor Jim Lehrer. I don't know anything about captions on pictures, Stringer said. That's not an issue with me or the Japanese executives.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985086","date":"2001-06-29","texts":"In a broad analysis of the state of U.S. energy markets, Federal Reserve Chairman Alan Greenspan last night disagreed sharply with the Bush administration's argument that capping spot prices for electricity in California would discourage construction of new power plants. Analogies to the economics of office buildings are evident, Greenspan said. Few office buildings would be constructed in the absence of the ability to reach long-term leases. Short-term rental agreements are no more conducive to new office construction than spot prices for electric power are to the building of new power plants. A copy of the text was released in Washington. California's energy problems appear to be easing, but they still represent a worrisome situation for Californians, certainly, Greenspan said. And because the state comprises one-eighth of our national economy, it should be a concern for the U.S. economic outlook as well. Fortunately, the overall effects on the California economy, and on those of its neighboring states, seems to have been modest, at least to date. Greenspan noted that large increases in the cost of gasoline and other petroleum products, natural gas, and electricity have hurt the U.S. economy in several ways. The most significant is the reduced profitability of non-energy firms, which has forced many companies to reduce spending for new plants and equipment. As best we can infer, a substantial part of the rise in the total costs of corporations between the second quarter of last year and the first quarter of this year reflected higher energy costs, only a small part of which companies apparently were able to pass through into higher prices of the things they sell, he said.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842615681","date":"2001-07-05","texts":"First Union Corp., responding to an attack by SunTrust Banks Inc., denied that the use of a tax shelter might force First Union to add to its level of reserves, a move that would decrease future earnings. In a statement Tuesday, First Union said SunTrust had issued false and irresponsible allegations. It continued, We are disgusted. The two banks are fighting to buy Wachovia Corp., a Winston-Salem, N.C., bank with valuable Southeast market share. First Union made a 14.35 billion friendly bid for Wachovia in mid-April. SunTrust, which sought a merger with Wachovia in December only to be rebuffed, responded to First Union's offer in May with a 14.65 billion hostile bid. First Union, Charlotte, N.C., and SunTrust, Atlanta, have traded barbs since. SunTrust on Monday upped the ante in a letter to the Federal Reserve System, alleging that First Union used a controversial tax vehicle to avoid paying billions of dollars in taxes. SunTrust's letter left some analysts and investors surprised at the extent to which SunTrust, once considered a genteel Southern bank, went to discredit First Union. It is certainly very close to, if not over the line, said Harold Schroeder, who follows financial-institution stocks for hedge fund Carlson Capital in Dallas. At this point, it's starting to look like a desperation move.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614458","date":"2001-07-09","texts":"NEW YORK -- Earlier this year, rising energy prices cast a shadow over global bonds. Now, slipping energy costs are brightening prospects for longer maturities, which are the most susceptible to inflation concerns. European Government Bonds may be the chief beneficiary of this shift. The specter of rising inflation fueled by higher energy prices loomed in mid-May, when gasoline futures spiked and crude oil was trading near 29 per barrel. But that worry is now off the agenda, says Mike Ryan, chief fixed-income strategist at UBS PaineWebber in New York. Global bond markets are not overly concerned right now about inflation, he says. Against this backdrop, global inflation concerns have been exaggerated, and inflation should fall in many areas of the world by next year in delayed response to slower growth and declining factory-utilization rates, Deutsche Bank strategists expect. For all major yield curves, this scenario offers positive inflation news, says Jack Malvey, chief global fixed-income strategist at Lehman Brothers in New York. In the euro zone, for instance, inflation is expected to fall to 1.8 in 2002 from 2.7 this year, Deutsche Bank estimates. Declines in global energy prices will certainly be welcome at the European Central Bank and should give the ECB more elbow room to cut interest rates, says Cary Leahey, senior economist at Deutsche Bank Securities in New York.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616519","date":"2001-07-10","texts":"On Friday the Labor Department released employment data for June. The employment report is the most important monthly statistical release the government produces and the focus is always on the unemployment rate and the monthly change in payroll employment. The June report showed a slight rise in the unemployment rate to 4.5 and a relatively small fall in payroll employment of 114,000 jobs. The market took those statistics badly. The stock market sold off, as did the long Treasury bond. Stocks were looking for more cost-cutting measures from companies, in this case a bigger drop in payroll employment. Bonds were looking for a stronger signal that the economy was weak and that the Federal Reserve would continue cutting interest rates. But there is a little secret in the employment report that you should know about. The Labor Department said that payroll employment fell 114,000 in June. What it did not tell you is that this reported change includes a bias adjustment factor that adds about 160,000 jobs a month. This bias factor is basically picked out of thin air, and is supposed to capture employment in newly started firms that Labor misses in its survey. In other words, Labor doesn't know how many new hires occurred at new companies, so it assume a number. In its June report, it continued to guess that it missed 155,000 new hires. The problem is that when the economy slumps, so do new business start-ups. A good indicator of new business starts is the Conference Board's index of help-wanted advertising. This index has plummeted back to levels last seen at the end of the 1990 recession. Back then, the bias factor also fell to zero, instead of hanging at the same level as in the boom period of 1998. Compare the published payroll survey with another measure of employment, the Labor Department's household survey, which measures employment by asking a survey of people, not businesses, if they have lost their job. The household survey is used to calculate the unemployment rate, but is otherwise ignored because it is very volatile from month to month. Over the past five months this survey shows a fall in employment of more than one million. Over the same five months the published payroll survey has fallen only 45,000. However, if you remove the monthly addition of 155,000 from the bias factor, payroll employment would be down 269,000 in June and 872,000 over the past five months. Now we're talking big numbers.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616965","date":"2001-07-11","texts":"NEW YORK -- DoubleClick Inc. reported a widened second-quarter loss as it struggles with a prolonged slowdown in Internet advertising. DoubleClick, which handles online advertising for other companies, reported a net loss of 37.9 million, or 29 cents a share, compared with 22.1 million, or 18 cents a share, a year earlier. Revenue fell 20 to 101.9 million from the year-earlier's 128.1 million. The results are far from the company's confident stance augured as late as January, when DoubleClick officials predicted a profit of seven cents to nine cents a share for the year. Four months later, officials reversed their prediction, saying the company wouldn't be profitable in 2001, blaming the economic slowdown across the Internet sector. In a conference call after the close of markets, DoubleClick Chief Executive Officer Kevin Ryan said, We don't see any indication that ad revenue is going to pick up in the third quarter. DoubleClick said that after excluding eight different items, including amortization of intangibles, certain noncash compensation, a write-down of investments and a gain on issuance of DoubleClick Japan stock, its per-share loss would have been seven cents. This was in line with its guidance to investors in April, when it projected a loss after certain items of between five cents and seven cents a share on revenue of 100 million to 105 million. Despite its continuing losses, DoubleClick reported a strong cash position of 812.8 million, though down from 831.5 million at the beginning of the quarter.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616867","date":"2001-07-12","texts":"American politics has undergone a revolution in its view of public finance. Thirty years ago, a Republican president said, We are all Keynesians now. Economic textbooks of that time discussed the automatic fiscal drag of a progressive income tax, and the need for a continuous fiscal stimulus to offset it. Today, a full year into an economic slowdown, there is virtually unanimous political agreement on the need to maintain a federal surplus of at least 160 billion. Some politicians even argue that this sum is insufficient, that a surplus in excess of 190 billion -- 9 of federal revenue -- is needed. One senator, Kent Conrad D., N.D., took to the Senate floor to announce that risking a surplus of a mere 160 billion, the second largest in American history, was an indication that we were driving right into the fiscal ditch. Sen. Fritz Hollings D., S.C. introduced legislation to repeal the first year of the recently enacted tax cut, arguing that the foregone revenue was needed for other purposes in Washington. By contrast, 38 years ago, President Kennedy proposed a tax cut twice as big a share of gross domestic product as the one just passed. The government was running a budget deficit of 1.3 of GDP at the time, not a huge surplus as today. Saying, in his 1963 State of the Union address, that enacting the tax cut overshadows all other domestic problems in this Congress, Kennedy argued that the tax cut will increase the purchasing power of American families and business enterprises . . . encourage the initiative and risk taking on which our free system depends, induce more investments, production, and capacity use . . . and reinforce the American principle of additional reward for additional effort. Today, by contrast, with a surplus of 1.5 of GDP, Democratic senators warn of driving into a fiscal ditch and seek to recapture the 600 tax-cut checks that American families are about to receive. It is hard to imagine a more extraordinary turn of political perspective.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616331","date":"2001-07-17","texts":"Dutch supermarket group Ahold NV said it would acquire the remaining shares of Chicago-based online grocer Peapod Inc. that it doesn't already own for about 35 million. The deal comes on the heels of a string of closures from other online grocers, including the high-profile Webvan Group Inc., which shut down its operations earlier this month. But analysts drew a distinction between the likes of Webvan, which wasn't affiliated with an existing, traditional supermarket, and Peapod, which works with Ahold's supermarket chains in the U.S., including Stop & Shop and Giant Food Inc. Ahold, which already owns 58 of Peapod, said it had agreed to buy the company's remaining 17.9 million shares outstanding for 2.15 a share, a 72 premium over Peapod's 4 p.m. Friday price of 1.25. At 4 p.m. yesterday on the Nasdaq Stock Market, Peapod was up 69, or 86 cents, to 2.11. Peapod will be delisted from Nasdaq upon completion of the deal, which is expected to happen in the third quarter of this year. Another European retailer to take a stake in the U.S. online grocery market is British supermarket retailer Tesco PLC, which in June bought a 35 stake in GroceryWorks.com, an online grocer established by Safeway Inc. in Pleasanton, Calif. Once a competitive sector, the U.S. online grocery business has thinned out, with Peapod one of the only players left. Closely held HomeRuns.com also closed last week. Without competition in its local markets, Peapod will be relatively free to pursue its own advertising and promotional plans, without concerns that its prices could be undercut, analysts said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613499","date":"2001-07-19","texts":"Affiliated Computer Services Inc., attempting to capitalize on the outsourcing of services by state and local governments, agreed to acquire Lockheed Martin Corp.'s IMS subsidiary for 825 million, company executives said. Both boards have approved the transaction, which is expected to be announced this morning. The deal is the largest acquisition by ACS, a Dallas company with 2 billion in revenue and 21,000 employees that was founded in 1988 and has become a leader in business-process outsourcing, handling back-office operations from processing health-insurance claims to loan and mortgage transactions. The sale is expected to generate as much as 550 million for Lockheed, Bethesda, Md. IMS, with 4,800 employees, gets its roughly 580 million in annual revenue by performing a number of tasks for municipal and state government agencies, including administering welfare benefits, tracking down deadbeat dads and snaring red-light runners with strategically placed cameras. The unit is best known for operating E-Zpass, the electronic toll-collection service used by vehicles in the Northeast. The acquisition bolsters ACS's position vying for government contracts against International Business Machines Corp., Armonk, N.Y., and Electronic Data Systems Corp. of Plano, Texas. ACS gets about one-third of its revenue from the federal government but has been less competitive on state and local government work.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616149","date":"2001-08-01","texts":"As School Holidays End, The Tax Holidays Begin Retailers are hoping state sales-tax holidays will attract droves of customers into stores for back-to-school shopping even though spending is expected to be down slightly nationwide. Office Depot Inc., Delray Beach, Fla., is disseminating tax holiday fliers in its 85 retail stores in Florida, touting the state-mandated nine-day break from the 6 sales tax that began on Saturday. The South Carolina Merchants Association anticipates more than a 200 million boost in sales, believing customers will flood stores beginning Friday for the latest in a series of weeklong breaks from that state's 5 sales levy. Governors and lawmakers pushing sales-tax holidays argue the overall economic stimulus will offset any lost revenue as people turn out to buy exempt as well as nonexempt items. The National Conference of State Legislatures estimates more than a half-dozen states -- including Connecticut, Iowa and Texas -- offer sales-tax breaks for school supplies and clothing. Pennsylvania is offering a weeklong sales-tax holiday for computer purchases only, beginning Sunday. For retailers, every little bit may help Parents and teenagers are expected to spend only an average of 527 on clothing and school supplies, down 4 from last year, according to the American Express Co. retail index.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982873","date":"2001-08-01","texts":"Michael Hill, manager of the Pilot House Restaurant and Marina in Woodbridge, is crying the blues this summer -- he has had fewer customers than usual all year. During the peak months of April, May and June, only about 40 people showed up each night. He's used to seeing 60. And those who went to the restaurant spent less money, ordered meals that cost less or split a plate. On busy weekend nights, the wait for a table is down to 20 minutes last summer, it was an hour or more. In Manassas, Dominion Semiconductor is unphased by the slowing national economy. Dominion, one of the largest companies in the area, has never stopped hiring and business is steady, said spokesman Mark Holcomb. The company's business plan includes hiring hundreds of people by 2002. We have done nothing to scale back operations based upon a slowdown in the local economy, Holcomb said. I don't think there is much evidence of a slowdown here. Those cases in Prince William County reflect the friction between the local and national economy. Prince William has followed the national economy in some areas but bucks the trend in others.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983374","date":"2001-08-01","texts":"Linking workers' rights to international trade is an idea whose time has come and stayed, despite the best efforts of free trade ideologues to chase it away. In looming congressional debates about fast track negotiating authority, the Bush administration and Congress confront powerful demands from workers, trade unionists and a wider public for rules protecting human rights and labor rights, not just corporate investments, in trade agreements. That's protectionism is a stock reply of government officials, international economists, multinational executives and many pundits trying to make a labor rights-trade link go away. Instead of engaging critics on the merits, their one-dimensional argument goes like this 1 Expanded trade spurs investment, growth and wealth creation in developing countries 2 after they can afford it, developing countries and companies operating in them will stop violating workers' rights and share the wealth. The first proposition is plausible, leaving aside debates about long-term vs. speculative investment and sustainable vs. destructive growth. But the conclusion does not follow. After wealth has been created, respecting workers' rights and paying them fairly is still a choice, one that doesn't always depend on economics. Instead, choosing justice for workers is driven by organizing, bargaining and political action, increasingly on an international scale. In Sri Lanka a few weeks ago, I met dozens of young women from factories in that country's fast-growing free trade zones who explained that the government's Board of Investment sets up company- controlled worker councils and gets rid of workers who try to form real unions. China's economy has grown impressively in recent years, but workers attempting to form independent unions there are dismissed, harassed and jailed. The rate of fatal factory fires keeps pace with the booming apparel export sectors of Bangladesh and Thailand. When Malaysia tried to pass a law allowing independent union formation in its burgeoning electronics sector, U.S.-based multinationals mounted a collective threat to decamp for Indonesia unless the law was reversed. They got their way.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616450","date":"2001-08-06","texts":"DUISBURG, Germany -- In Germany's much-vaunted stock exchange known as the Neuer Markt, Sudhir Bhatia is the king of would-be takeovers. Since the beginning of the year, he has jolted three companies' stocks higher by announcing bids to buy them. He faxes out his plans to, he says, 600 media organizations, earning himself prominent attention as a serious player in the newly minted stock market. But look a little closer and Mr. Bhatia's ventures appear quixotic. His company, Microboss Software AG, is tiny, with sales of 1.3 million last year. His takeover announcements often resemble rambling dissertations. He has misspelled his company's name as Micorboss and compared himself to a misunderstood genius. None of the announced bids have been consummated. Welcome to the other side of the Neuer Markt, the centerpiece of Germany's effort to build a U.S.-style stock culture. During the past four years, the Neuer Markt has brought 349 companies public, spurring hopes that Europe had a budding rival to America's Nasdaq Stock Market. But slumping stock prices have laid bare the exchange's flaws. More than half of its biggest companies lost money last year. Smaller companies are filing for insolvency at a record pace. The shares of about 10 of the companies listed now trade for pennies apiece, making the exchange a haven for speculators and market manipulators, critics say.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985426","date":"2001-08-06","texts":"Ralph Altman, 86, who helped draft and implement national unemployment benefits legislation during 35 years at the Labor Department, died Aug. 1 at Holy Cross Hospital. He was being treated for complications of hip surgery at the Fox Chase Rehabilitation and Nursing Center in Silver Spring. Mr. Altman, who lived in Arlington, retired in 1976 as deputy administrator of the Unemployment Insurance Service. He had also been an appeals analyst and chief of appeals and interpretations. He worked at the Federal Farm Labor Service at the Agriculture Department on loan from his agency. He wrote a definitive work on unemployment benefits, Availability for Work, that was published by Harvard University Press. Mr. Altman was a graduate of the State University of New York in his native Albany, where he received a law degree. He did graduate work in labor law at Harvard University. He served in the Navy during World War II.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985277","date":"2001-08-08","texts":"Government figures released yesterday provided potent ammunition for those who believe the U.S. economy has entered a new era in which technology and a more flexible labor market are making American companies more productive than before. The Bureau of Labor Statistics reported that productivity -- which measures output per hour worked -- grew at an unexpectedly strong 2.5 percent rate in the second quarter, compared with a revised 0.1 percent rate in the previous quarter. In large part, the improved efficiency in the April-June period resulted from companies' laying off workers and cutting work hours to bring labor costs into line with sluggish demand for their goods. But companies were able to increase overall national production slightly even with reduced workforces -- and the higher productivity figure didn't fit the usual pattern for recessions and slowdowns, when productivity typically begins to fall. Furthermore, revised figures for 1998 through 2000 showed that productivity rose at an annual rate of 2.6 percent during that period. That is a bit lower than the 3.2 percent annual rate originally estimated, but it is still well above the pace recorded during most of the 1970s, '80s and early '90s. And it is robust enough to ease the concerns, voiced by some new-economy skeptics, that the productivity gains of recent years were illusory. If you believed before that there was some fundamental change in the way the economy functions, you should believe it still, said Neal Soss, an economist with Credit Suisse First Boston in New York.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615130","date":"2001-08-10","texts":"The failure of the White House to promote an aggressive economic recovery plan may severely imperil GOP chances of holding on to the House and taking back control of the Senate in 2002. As economist Larry Kudlow points out, we are now officially in a private-sector recession two straight quarters of no growth in the economy outside of government. A weak economy in 2002 will mean major and potentially catastrophic GOP losses at the polls in the crucial midterm elections. Yet ever since the passage of the president's tax cut back in June, the GOP's legislative momentum has slammed nose first into a concrete wall erected by Tom Daschle and Dick Gephardt. Virtually every bill that now is speeding through Congress is a growth depressant. The legislative docket is filled with financially bearish legislation -- to wit, the patients' bill of rights which will cause a rash of lawsuits and enrich the trial lawyers the Medicare prescription drug benefit which could cost taxpayers 300 billion over the next 10 years the farm bill which would give away record subsidies to the agri-business industry and the appropriations bills that could allow spending to grow by 8 or 9 this year. President Bush should announce that he will veto any or all of these until the economy recovers. This is America's first New Economy recession. American investors, of all incomes, have lost an unprecedented 4 to 5 trillion in wealth in the past 18 months. There's no reassuring market signal that these losses will be recouped anytime soon and there's certainly little federal action to revive growth. These enormous wealth losses have not yet punctured consumer confidence or spending, and they have not caused many net job losses. Nor have real estate values taken a hit. Not yet, at least. We are surfing uncharted waters. This recession is driven by a drought in investment, not a conventional drought in consumption. High risk capital investment funding -- one of the driving forces behind the powerful expansion of the mid- and late-1990s -- has dried up. Venture capital funding is down more than 50 so far this year and the IPO market is moribund. Over the past several weeks, the White House proclamations on the economy by Larry Lindsey and Treasury Secretary Paul O'Neill have been mostly happy talk about recovery by the end of the year. Let's hope they're right. But what if they're not Where is the economic and political contingency plan A pep talk is not enough to rescue the economy from its doldrums. True, many Wall Street economists are also predicting a resumption of growth soon, but they have been totally wrong in predicting the direction of the economy and stock market over the past several years, so their confidence is actually discouraging.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616053","date":"2001-08-20","texts":"NEW YORK -- Coffee futures on the Coffee, Sugar & Cocoa Exchange charged higher Friday in a rally fueled by speculative buying. The most active December contract tacked on 9.5 to end five cents up at 57.85 cents a pound after a shopping spree the coffee pit hadn't seen since late April. Coffee futures have been in an overwhelmingly bearish trend since peaking at 3.18 a pound in May 1997. In the nearer-term, coffee drifted below what is considered as an average cost of production -- 80 cents -- in October 2000 and hasn't looked back. The break to the upside came at the bulls' insistence, as they pushed the market with an eye on speculators' preplaced buy-orders above 54 cents for December futures, and 50.5 cents on the September contract. Once those levels were pierced, the buying wave came with a vengeance. Buy-stops were abundant and ripe, and their triggering fueled the rally that absorbed all the producers' selling around.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613597","date":"2001-08-22","texts":"NEW YORK -- Technology issues fell again and consumer names retreated as investors interpreted the Federal Reserve decision to cut interest rates again as a signal that economic trends remain weak. A host of telecommunications-gear makers fell during trading. Communications-chip maker Broadcom shed 4.73, or 13, to 33.06 in Nasdaq Stock Market trading. Optical-equipment maker JDS Uniphase, which hit a 52-week low Monday, fell further, dropping 44 cents, or 5.9, to 7.07. Cellphone-chip maker RF Micro Devices slid 2.02, or 7.9, to 23.54. Storage-software developer Brocade Communications retreated 1.60, or 5.9, to 25.47. All trade on Nasdaq. The weakness came after the Federal Reserve voted to lower interest rates to 3.5 from 3.75, marking the central bank's seventh rate cut this year. Market averages, which had moved slightly higher, albeit in thin trading, ahead of the release of the Fed's decision, veered lower. The Nasdaq Composite Index finished down 50.05, or 2.7, at 1831.30, the lowest the index has finished since April 9. Technical analyst Peter Green of Gerard Klauer Mattison speculated the Nasdaq composite could fall another 4 during the short term, given the recent technical patterns. The Dow Jones Industrial Average closed down 145.93 points, a 1.4 drop, at 10174.14, its lowest finish since April 12.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614912","date":"2001-08-22","texts":"Stocks fell sharply after the Federal Reserve cut interest rates, as investors focused on a Fed statement suggesting that the economy will continue to be weak. After trading higher for most of the day, market indexes began falling almost immediately after the Fed announcement. The Nasdaq Composite Index tumbled 2.66, or 50.05 points, to 1831.30, its lowest level since March 29. The Dow Jones Industrial Average fell 1.41, or 145.93 points, to 10174.14, its worst level since April 16. The Standard & Poor's 500-stock index dropped 1.21, or 14.15 points, to 1157.26. Bonds rose and the dollar fell. The stock-market drops, which came even though the Fed's move was in line with Wall Street expectations, reflect a frustration among investors that the current economic slump may be nowhere near a turnaround. It was the most bearish commentary the market could have received, the worst-case scenario, said Bill Schneider, head of stock trading at UBS Warburg. The market has been grasping at straws for evidence of a recovery, but the Fed was blunt and pessimistic.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615295","date":"2001-08-22","texts":"NEW YORK -- Treasurys, particularly short maturities, rallied after the Federal Reserve cut short-term interest rates by a quarter percentage point, as expected. The two-year-note yield -- which moves inversely to its price -- fell to about 3.63, the lowest level since the Treasury began issuing the maturity in 1972. Because policy makers appeared to leave open the possibility of further easing, Treasurys could continue to rally, even after strong gains recently, analysts said. The Treasurys market will return to economic fundamentals and focus on falling business profits and the effects of global weakness, pushing yields downward, said Sadakichi Robbins, head of global fixed-income trading at Bank Julius Baer in New York. At 4 p.m. Eastern time, the benchmark 10-year note was up 1132 point, or 3.44 per 1,000 face value, at 101 432. Its yield fell to 4.856 from 4.900 late Monday.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617347","date":"2001-08-23","texts":"YOU CAN ALMOST feel sorry for Microsoft Corp. Last year, when the company was looking like the techno-has-been of the Internet age, its antitrust problems seemed to be fading. But now, with the upstarts put down -- and with interesting new products on the horizon -- Microsoft's business prospects have been revived. So, too, have its antitrust woes. Antitrust scrutiny seems to be an inevitable byproduct of success. I suspect that as long as we keep doing a good job, the level of interest in our business will not go away from competitors nor from appropriate government authorities, complains Chief Executive Steve Ballmer. Much of Microsoft's problem is of its own making. The company's exclusionary contracts and other competitive practices were custom-made to attract the scrutiny of antitrust cops. But much, too, may be an inevitable outgrowth of the kind of business Microsoft is in. It's increasingly clear that products whose primary value lies in intellectual property -- products such as software, pharmaceuticals, movies, records and many of the other things that drive today's economy -- are fundamentally different from staples of the industrial economy such as autos and steel, or service-economy products such as banking and insurance. And those fundamental differences are wreaking havoc with traditional notions of economics that underlie antitrust laws, patent laws, copyright laws and indeed, the whole public policy underpinnings of today's economy. Businessmen, economists and policymakers are struggling with the profound implications of those differences. Mr. Gates took a stab at describing them in a speech he gave during his CEO summit in May.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616177","date":"2001-08-27","texts":"LOOKING INTO the stands at their racetracks, horse-racing executives see two things that bother them thinning crowds and thinning hair. They are counting on the Internet to remedy both. The sport's total handle -- the amount bettors wagered -- was about 14.2 billion last year, up from 8.3 billion a decade earlier. But competition from casinos and an aging fan base have slowed horse racing's growth in the past two years, and the industry is scrambling to put the sport online in hopes of attracting a young and growing Web-savvy market. In the past few years, track owners, gambling companies and entrepreneurs have launched a half-dozen major horse-racing Web sites. With names like YouBet.com, eBetUSA.com and WinTicket.com, the sites offer the chance to wager on races at dozens of tracks around the country and watch the races via live video feeds. Some feature prerace commentary from professional handicappers and, for an extra fee, more sophisticated betting advice. The heyday of horse racing was in the 1950s since then, the industry periodically has had to find new ways to lure fans and bettors. Off-track betting, on-track simulcasting of races from other venues, and telephone betting all have met with some success. But racing executives have even higher hopes for the Internet.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613788","date":"2001-08-28","texts":"TORONTO -- Facing an industry slowdown, Canadian laser eye-surgery provider TLC Laser Eye Centers Inc. agreed to acquire rival Laser Vision Centers Inc., St. Louis, for 98.7 million in stock, creating North America's biggest operator of laser eye-surgery clinics. The deal brings together TLC's strength in urban centers with Laser Vision's share of the market in smaller towns and rural areas of the U.S., said TLC Chairman and Chief Executive Elias Vamvakas. The combination also will create about 10 million a year in cost savings and growth opportunities, said John J. Klobnak, Laser Vision's chairman and CEO. The industry has seen a slowdown, and the street has been begging for consolidation in this industry, Mr. Klobnak said. Laser Vision has taken a step toward consolidation by agreeing to acquire closely held ClearVision Laser Centers, Lakewood, Colo., earlier this month for an amount that wasn't disclosed. TLC said it is offering 0.95 of its shares for each Laser Vision share. Shares of Laser Vision jumped 62 cents, or 21, to 3.63 in 4 p.m. trading on the Nasdaq Stock Market, while TLC shares fell 33 cents, or 7.6 to 4.01. Both companies' shares trade at a fraction of their historic highs. In 1999, Laser Vision reached 37 a share, while TLC hit 53 a share. Demand soared in the late 1990s for laser treatment to correct astigmatism, nearsightedness and farsightedness, but it has leveled off during the past year. Analysts and industry officials say the economic slowdown has prompted consumers to delay the elective procedure, which is deemed cosmetic and isn't covered by most insurance plans.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982454","date":"2001-08-31","texts":"Stock prices tumbled for the fourth straight day yesterday amid fears that corporate profits are unlikely to rebound anytime soon and consumer spending may finally be slowing. For the first time since early April, the Dow Jones industrial average closed below the 10,000 mark. Yesterday's 171.32-point drop left the Dow at 9919.58, down more than 500 points for the week. The Nasdaq composite index, which topped 5000 at the height of the high-tech boom, ended the day below 1800 for the first time since April. The index closed at 1791.68, down 51.49. Investor confidence is completely broke, said Thomas Galvin, chief strategist at Credit Suisse First Boston. People believe that the economic recovery is going to be later, not sooner, and that is adding downward pressure on stock prices. By day's end, many analysts were predicting that stock prices would fall even further in the coming weeks as the market tests how low stock prices have to go before investors finally think it's safe to become buyers again.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830983633","date":"2001-09-08","texts":"The 2,500 layoffs that ended in July at the Motorola cell phone manufacturing plant are still fresh in the minds of residents of this town of 8,000 just south of the Wisconsin border. Motorola Inc. factory had been here just five years and employed some 5,000 workers. Restaurants like Nick's Cozy Nook -- where daily soup-to-dessert specials cost 4.95 -- filled up with Motorola workers during breakfast and dinner breaks. We had so many good years in a row. Everyone knew a downturn was coming, but we really were not ready when it got here, he said. There were a lot of couples who had just bought a house, or couples that had just got married or had children. With the latest figures showing an unexpected surge in the nation's unemployment rate to 4.9 percent, there is anxiety throughout the American heartland that the good times are indeed coming to an end. The downturn goes beyond stock market losses and the dot-com crash, worrying manufacturing workers across the country. It's a very nervous feeling out there these days, said Margaret Blackshere, president of the Illinois State Federation of the AFL- CIO. The security of the industrial sector is long gone. Even with the boom in the building sector, they are all nervous. They're wondering, 'Can we plan' and 'Am I going to have a job next week' ","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614814","date":"2001-09-18","texts":"WASHINGTON -- Moving to bolster confidence even before the stock market opened, the Federal Reserve cut its target for short-term interest rates by one-half percentage point and promised to continue to supply unusually large volumes of liquidity to the financial markets, as needed, until more normal market functioning is restored. The Fed's move was followed by the European Central Bank as well as the Canadian and Swiss central banks, but not by the Bank of England. Following the terrorist attacks on the U.S., the ECB said, using blunter language than the Fed, uncertainty about the U.S. and the world economy has increased. The Fed left the door open to further rate cuts, emphasizing the weakness that had been seen in employment, production and business spending even before last Tuesday's terror, and the economic risks ahead. The size and timing of the central bank's next move depends on the course taken by the economy and financial markets in the coming weeks. Any projections about what the economy and the Fed will do in coming months need to be taken as even more tentative than usual, economists at UBS Warburg said, even as they predicted a one-quarter-point interest-rate cut at the Fed's Oct. 2 meeting and another of the same size in November.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615399","date":"2001-09-18","texts":"The market didn't crash. The 684-point fall doesn't even make history's top 10 percentage declines. And so we may conclude that if Congress now does the right thing quickly on tax policy, the market will rise. Problem is, the early indications we're getting is that Congress may enact a new tax bill using conventional means, such as tax credits, mainly to shore up the largest corporations. Incentives at the margin will be minimal. That is, half a loaf. The outlook would be considerably more worrisome had the market's indices spent the whole of yesterday in a steady, precipitous decline. The reality is that most of the day's 7.13 loss occurred in the first hour of trading, and remained fairly flat through the day. A 684-point drop is a rough ride, and the burden on the market at the opening bell was substantial. The economy before last week was already in the doldrums, with little upside evident so far from a series of interest rate cuts, or for that matter the tax rebate. Much of the airline industry has suffered for years from fixed union costs that leave little room for sustained profitability. The closure of the air transport system may have merely pitched several airlines toward inevitable dissolution, which would be reflected in yesterday's trading. That said, share prices generally rose in Europe, and Asia's losses were modest. It is a small miracle that trading in New York opened at all most likely operations will smooth in the weeks and months ahead. Most importantly, all available evidence suggests that the men and women who make up the American economy are prepared to move heaven and earth to prove that their system will not be defeated by homicidal barbarism.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616879","date":"2001-09-19","texts":"ECONOMIC RIPPLES from last week's terrorist attacks are being felt in all regions of the U.S. But the force of the impact will depend very much on where you live. Among the hardest hit will be states and cities built on tourism, including Florida and Las Vegas. They were holding up best amid a slumping economy before the attacks. But now that air travel has been hobbled by security fears, sharply reduced visits by vacationers and business travelers have dimmed those economic bright spots. A few regions may weather the storm better oil-producing economies such as Houston and Louisiana defense-contracting strongholds such as Southern California and northern Virginia and areas where displaced Manhattan firms are setting up temporary or permanent offices, most notably New Jersey, which could gain as many as 100,000 jobs. Still, few places, if any, will escape unscathed. There is no part of the country whose outlook has not worsened, says Mark Vitner, economist for First Union Securities in Charlotte, N.C. The impact of the attacks will whack from one to more than three percentage points off anticipated growth in output over the next nine months, depending on the region and whether the expected U.S. military response is relatively quickly resolved or protracted and uncertain. Overall, the U.S. gross national product -- the value of all goods and services produced -- would grow only 1.5 between the second quarters of 2001 and 2002 under the more optimistic scenario and contract 0.05 under the more pessimistic assumption, according to Economy.com, a West Chester, Pa., economic-consulting firm. That compares with a pre-attack forecast of 2.55 growth.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984360","date":"2001-09-19","texts":"They started lining up before dawn Monday outside the unemployment office in Alexandria, and it hasn't let up. Most had worked at hotels, at companies that refuel or make meals for airplanes, or in restaurants at the shut-down Reagan National Airport. The agency has had to borrow vacant office space to handle the crowds -- the biggest since the early 1990s, said Nancy Dean, who manages the city's branch of the Virginia Employment Commission. We're just trying to keep them moving through here, she said. Aftershocks of last week's terrorist attacks on the Pentagon and in New York are being felt in every part of the local economy. One expert said a third of the area's 150,000 hospitality jobs are at risk, as the closed airport and the security measures in downtown Washington keep tourists and business travelers away. US Airways' plan to lay off thousands of workers will contribute to what economists expect to be the first large jump in the region's unemployment rate in years. Business leaders worry that there will be longer-term ramifications if Washington, once considered one of the dynamic markets in the country, is now seen as a viable target for terrorism.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615451","date":"2001-09-21","texts":"Corrections & Amplifications THE BLUE CHIP ECONOMIC INDICATORS survey last week didn't cover the unemployment rate. A page-one article Friday, which said that the scenario painted by the Blue Chip forecasts would send the jobless rate toward 7, incorrectly implied that the survey covered the unemployment rate. WSJ Sept. 24, 2001 Unable to fly home from a management huddle in Lake Tahoe, Nev., last week, a dozen executives of Park Place Entertainment Corp. commandeered one of the resort company's shuttle buses and drove to Las Vegas, with Chief Executive Tom Gallagher behind the wheel for much of the 500-mile trip. Along the way, the executives made a critical decision They shelved plans for a new 450 million, 900-suite luxury hotel tower for Caesars Palace in Las Vegas, a move announced publicly this week. The thought was, let's keep our powder dry a little longer, says Mr. Gallagher. The next few months are going to be rugged. The nation's economy, already stalling prior to Sept. 11, is heading into recession. The consensus of forecasters surveyed Wednesday by Blue Chip Economic Indicators is that the recession will last through the end of this year. What happens then is in dispute. Three-quarters of the forecasters think the recession will be no worse than the mild 1990-91 downturn a quarter think it will be worse.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617354","date":"2001-09-24","texts":"Investing in stocks can be risky, sometimes very risky. While that may seem obvious after the Dow Jones Industrial Average posted its worst weekly percentage loss in 61 years, of 14.25 and its worst-ever weekly point loss, 1,369.70 points, it wasn't something that many investors probably spent enough time thinking about during the bull market run of the 1990s. Now, with the Bush administration warning of a lengthy battle against terrorism, investors say that the risks associated with owning stocks -- as opposed to safer securities with more predictable returns, such as bonds -- are poised to rise. This is what analysts call a risk premium as it gets higher, investors require a greater return from stocks compared to bonds. For most analysts, it is not a question of whether stocks are riskier today than they have been for years. Rather, they are asking how much riskier And for how long will this period of heightened risk continue I am worried this crisis is going to be systemic in the sense that, at least for a while, it has changed the world, Barton Biggs, global equity strategist for Morgan Stanley, wrote in a report following the terrorist attack. The risk premium for equities -- and maybe for all long-term assets -- is going to rise.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984832","date":"2001-09-25","texts":"The day after the World Trade Center was destroyed by terrorists, White House economic adviser Lawrence B. Lindsey received a call from the chief executive of a major airline. The carrier's credit line was being yanked by a financial institution. Lindsey is a fervent believer in free markets and market-driven solutions. But with airplanes grounded and the U.S. stock markets closed after the Sept. 11 attacks, he and other members of President Bush's economic team chose government intervention instead of a laissez-faire approach. Lindsey called the head of the financial institution. This is an issue of national importance, he told the banker. You might want to think of the broader picture. He argued that this was only a temporary jam for the carrier and suggested that Congress would likely do something to assist the industry. Lindsey put down the receiver. He didn't want to find out what happened to the credit line. There were limits to bending the rules of the free market. The Bush economic team tested those limits in the first week after the attacks. Interviews with sources familiar with the events show that key members of the team involved themselves in details large and small in an effort to keep the economy from seizing up, even going so far as to urge Americans to buy stocks. What follows is an account of that first week -- from the day of the attacks until the next Monday, when the stock market reopened -- six days when the economic team focused not on the economy's long-term fundamentals but rather on the operational emergencies of the moment.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615302","date":"2001-09-26","texts":"HONG KONG -- If the time to buy is when nobody else likes a particular sector, this is the week to snap up shares in Hong Kong residential real-estate developers. Then again, all of those people bidding down the stocks are probably right to sell, at least if they want to make a profit in the next year or so. This is a sector with problems Most of the tycoons who own the companies have yet to weigh in with anything positive, such as share purchases, and real-estate prices in Hong Kong remain stuck about 50 below their 1997 peaks. Prices had looked as if they were bottoming out two weeks ago. But then came the terrorist attacks in the U.S., which analyst Andrew Lawrence at Deutsche Bank says knocked 5 to 10 off prices of used apartments. So, while Hong Kong property may still be expensive by world standards, by the city's measure it is going cheap. Gloom emanates from the city's boardrooms. This was Ronnie Chan, chairman of the Hang Lung Group, reporting results Monday for one of the few stocks in the sector analysts seem to like In view of the very weak market with much uncertainty, land acquisition must be done with extreme caution. Prices, profit margins and transaction volumes are all falling and will likely stay low for the foreseeable future.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615926","date":"2001-09-27","texts":"SAN JOSE, Calif. AP -- Burned by the dot-com blowout and costly growth investments, Web-hosting concern Exodus Communications Inc. filed for bankruptcy protection, but said its business will continue to operate. Exodus, a Santa Clara, Calif., provider of services to major sites including Yahoo and eBay, has warned for months that it was quickly running out of cash and needed additional financing to stay afloat. In addition to the Chapter 11 filing in U.S. Bankruptcy Court in Wilmington, Del., Exodus said it received a commitment for up to 200 million in debtor-in-possession financing from General Electric Co.'s GE Capital. We will now be able to devote efforts to solidifying and executing on a go-forward operating plan that is based on tough-minded fiscal discipline and focuses on managing Exodus to profitability, said L. William Krause, Exodus' chief executive. It wasn't immediately clear whether the filing would lead to customer defections. Yahoo Inc. officials were looking into the situation, spokeswoman Shannon Stubo said. EBay Inc. didn't return a telephone message.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617216","date":"2001-09-27","texts":"WASHINGTON -- President Bush was up around 530 a.m. as usual on Tuesday, the two-week anniversary of the terrorist attacks. He walked his dogs Barney and Spot, thumbed through the morning papers and -- unwilling to wait an hour for breakfast with congressional leaders -- ate a bowl of cereal. Even in the tumult of these times, it is a point of pride for this control-conscious president to maintain an ordinary schedule early to bed, early to rise. But as the rest of his day shows, the president and his presidency have been forever changed. The president often appears more serious, more stern and more conscious of the image he projects, here and abroad, according to lawmakers and aides who have spent time with him. A unilateralist for much of his first eight months in office, he has found himself relying on numerous foreign leaders, phoning them from the Oval Office in the morning, and from his residence after sundown. Remarkably, for a man who came to office unschooled in foreign affairs and with scant experience abroad, Mr. Bush has embraced the foreign-policy imperative and, aides say, shows far less interest in the domestic matters that had preoccupied him up to now. He has winnowed his agenda to bipartisan-only legislation. In the conduct of domestic and international affairs, he has formed the kind of alliance with Democrats in Congress that he talked about in his 2000 campaign, but hadn't forged in office. The terrorist attacks impacted him personally and impacted his agenda, says Dan Bartlett, a top aide. His days have changed.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982474","date":"2001-09-27","texts":"Most days, Maria Salientes works the gates and ramps for US Airways Express at Reagan National Airport. Today, she is sitting at home with her three children, out of work and unsure whether she can return to the only U.S. airport that remains closed after the Sept. 11 terrorist attacks. Salientes, 29, is but one face of about 10,000 National Airport workers whose lives have been turned upside down by the Bush administration's decision to close indefinitely an airport that is an anchor of the region's economy. About 45,000 people a day used National. Until federal officials determine whether to reopen it, workers such as Salientes are in turmoil, trying to figure out their next step. US Airways Express, a network of 10 airlines that ferry US Airways passengers between hubs and cities, retains 150 people at National. Of those, 120 -- including Salientes -- are collecting unemployment. I want to get my employees back, said Salientes's boss, Daryush Mazhari, the US Airways Express station manager at National. These were tragic incidents, and we understand. But you can't safeguard against everything all the time. The planes didn't come from National.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984582","date":"2001-09-27","texts":"Most days, Maria Salientes works the gates and ramps for US Airways Express at Reagan National Airport. Today, she is sitting at home with her three children, out of work and unsure whether she can return to the only U.S. airport closed after the Sept. 11 terrorist attacks. Salientes, 29, is but one face of about 10,000 National Airport workers whose lives have been turned upside down by the Bush administration's decision to close indefinitely an airport that is an anchor of the region's economy. About 45,000 people a day used National. Until federal officials determine whether to reopen it, workers such as Salientes are in turmoil, trying to figure out their next step. US Airways Express, a network of 10 airlines that ferry US Airways passengers between hubs and cities, retains 150 people at National. Of those, 120 -- including Salientes -- are collecting unemployment. I want to get my employees back, said Salientes' boss, Daryush Mazhari, the US Airways Express station manager at National. These were tragic incidents, and we understand. But you can't safeguard against everything all the time. The planes didn't come from National.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984112","date":"2001-09-28","texts":"If Federal Reserve Chairman Alan Greenspan has his way, the nation's schoolchildren will soon be adding monetary policy to their courses on reading, writing and arithmetic. The Fed yesterday unveiled a new Web site, www.federalreserveeducation.org, which is designed to teach how the central bank affects the economy through its conduct of monetary policy. The Federal Reserve has actively promoted economic education and better public understanding of the roles of the Federal Reserve for many years, Greenspan said in a statement announcing the new site. This Web site is intended to improve the information resources available to educators, students and others with an interest in the Federal Reserve and how it works, Greenspan said. The site was to supplement high school and college economics and social studies classes. But Fed officials said it was also created with the hope that its format will be accessible for students of all ages.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984056","date":"2001-09-29","texts":"The Freedom Forum, the Arlington-based media foundation that operates the Newseum, announced yesterday that it is scrapping its international division, closing five offices and significantly reducing staff following stock market losses that have eaten away about 30 percent of the foundation's endowment in the last two years. Charles L. Overby, chairman and chief executive of the Freedom Forum, said in a statement that the market downturn, which has cost the foundation 300 million, forced it to choose which priorities we will emphasize over the next several years. In 2000, the Freedom Forum paid 100 million to the D.C. government for a property on Pennsylvania Avenue and Sixth Street NW. It plans to construct a building for foundation offices and the Newseum, a journalism history and current events museum now located near the Freedom Forum's Rosslyn headquarters. The project also includes a restaurant, retail space and condominiums. The foundation is planning to move to its new D.C. site in 2005. The Freedom Forum will conduct a major reorganization this fall, designed to look ahead to our move to Pennsylvania Avenue, the statement said. This reorganization signals the beginning of the transition to our new facility.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985364","date":"2001-09-29","texts":"QWhile refinancing our home, I saw that mortgage interest rates were declining. I called my potential lender and we agreed that I would let the interest rate float rather than lock it in. My loan officer advised me that rates were not down at his company. When I told him that I was offered a lower rate when I called the financial institution's toll-free number, the loan officer just shrugged this off, saying, That was probably just to draw new business. I was told that I could not get a lower rate because I was already in the system. Is this usual or ethical AWe either have the classic situation of bait and switch, or your loan officer was just trying to make you keep a higher mortgage rate. However, your question has confused me. If your loan was not locked in, that is, you were to obtain a floating rate, then why did the loan officer indicate that you were already in the system, supposedly at a certain rate Let's look at the basic difference between a floating rate and a locked-in rate. Take your chances that when you actually go to closing, the then- current mortgage interest rate will be equal to or less than the rate at the time you made the loan application. Lock in the rate so that whether rates go up or down, you are guaranteed to get the rate you have agreed upon. The first choice is often referred to as a floating rate the second is a lock-in rate.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616789","date":"2001-10-02","texts":"Today, the Bush administration and Congress will start squinting their collective eyes at a bunch of proposals to cut taxes on business. They are responding to the fact that the current economic weakness started back with a steep fall-off in business investment. That fall-off has likely accelerated after Sept. 11, and their hope is to produce a tax package that will encourage capital spending. The two hottest ideas at the moment are speeding up depreciation on plant and equipment, as well as a cut in the corporate income tax rate. Both are sensible for establishing conditions for economic growth, although both ideas could be improved upon -- Faster depreciation or, even better, immediate expensing. Currently, business investment cannot be fully expensed in the year it is made, but must be depreciated over time. Depending on asset class, that time can be anywhere from several years to almost three decades. This delay leaves the value of the write-off exposed to twin evils losses in the time value of money a dollar in hand is worth more than a dollar promised and losses due to inflation. If, however, businesses could write-off the entire value of a capital investment in the year it is undertaken -- expense the investment -- the erosion and risk associated with long depreciation schedules would disappear. If immediate expensing weren't possible, even faster depreciation would reduce those dangers. Either way, capital investment would look more attractive to business and, accordingly, more such investment would be undertaken. This could be the start of a virtuous cycle in which more capital formation increases labor productivity that, in turn, raises wages.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616189","date":"2001-10-03","texts":"THE BLUE CHIP ECONOMIC INDICATORS survey didn't include a forecast on the U.S. unemployment rate. An article on job uncertainty in Monday's edition incorrectly said the survey forecast that the U.S. unemployment rate would approach 7. See Economy Jobs Become Scarce In Areas That Rely On Travel, Tourism -- WSJ Oct. 1, 2001 --- HONEYWELL INTERNATIONAL Inc. has announced 7,600 layoffs since Sept. 11. A table accompanying a Marketplace article yesterday incorrectly put the figure at 15,800, a total which includes layoffs announced earlier in the year. See Is It Unpatriotic to Lay Off Workers When the Nation Faces a Crisis --- Some CEOs Say Job Cutbacks Help Keep Firms Strong Others Say It's Wrong Signal -- WSJ Oct. 2, 2001","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616677","date":"2001-10-03","texts":"The Federal Reserve, delivering the lowest short-term rates since John F. Kennedy was president, is pursuing its most aggressive campaign in recent history to stimulate the economy. But it's a campaign whose goal seems more elusive with each passing day. Yesterday, the Fed cut the target for its benchmark federal-funds interest rate to 2.5 from 3, and left the door open to further rate cuts. The terrorist attacks have significantly heightened uncertainty in an economy that was already weak, the Fed said in a statement explaining its action. Though the Fed's move was widely anticipated, investors reacted positively. The Dow Jones Industrial Average jumped 113.76 points, 1.29, to 8950.59. Including its emergency rate cut just before the nation's stock markets reopened on Sept. 17, the Fed has chopped U.S. rates a full percentage point since Sept. 11, and by a whopping four percentage points since the start of the year. But lower interest rates work only if they induce consumers and businesses to borrow -- and then spend -- more. And since the Fed began cutting rates, the growth in business borrowing has ground to a halt, and consumer-credit growth has slowed sharply. Only home mortgage lending is still growing at a healthy pace, and even that has taken a hit in the wake of the terrorist attack.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615545","date":"2001-10-04","texts":"Correction An editorial page article, The Agony of the Left Oct. 4, incorrectly stated where a Salman Rushdie article had appeared. It ran in the Washington Post, not the New York Times. WSJ Oct. 16, 2001 One of the most telling things I have seen since the Sept. 11 massacre was an early peace movement e-mail. It listed three major demands stop the war stop racism stop ethnic scapegoating. A liberal friend had appended a sardonic comment to the bottom. Any chance we could come out against terrorism as well One of the overlooked aspects of the war we are now fighting is the awakening it has spawned on the left. In one atrocity, Osama bin Laden may have accomplished what a generation of conservative writers have failed to do convince mainstream liberals of the illogic and nihilism of the powerful postmodern left. For the first time in a very long while, many liberals are reassessing -- quietly for the most part -- their alliance with the anti-American, anti-capitalist forces they have long appeased, ignored or supported. Of course the initial response of left-wing intellectuals to Sept. 11 was one jerking of the collective knee. This was America's fault. From Susan Sontag to Michael Moore, from Noam Chomsky to Edward Said, there was no question that, however awful the attack on the World Trade Center, it was vital to keep attention fixed on the real culprit the United States. Of the massacre, a Rutgers professor summed up the consensus by informing her students that We should be aware that, whatever its proximate cause, its ultimate cause is the fascism of U.S. foreign policy over the past many decades. Or as a poster at the demonstrations in Washington last weekend put it, Amerika, Get A Clue.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982546","date":"2001-10-05","texts":"The nation's governors, alarmed by a steep decline in revenues last month, appealed yesterday to Congress and the Bush administration for emergency assistance. Unless help comes soon, they warned, states will have to slash their spending, thereby increasing the risk of a serious recession. Michigan Gov. John Engler R, the chairman of the National Governors Association, told reporters in a conference call from Lansing that since the Sept. 11 terrorist attacks, many states have seen a double-digit drop in tax receipts compared with a year ago. The governors suggested steps they would like to see included in the stimulus package being drafted on Capitol Hill, with the blessing of the Bush administration. In addition to expanded unemployment, health and other benefits for families of laid-off workers, they asked for relief from some federal regulations and the suspension of state matching requirements on major federal highway, airport and other construction programs. Engler and Kentucky Gov. Paul E. Patton D, who is vice chairman of the governors association and presented the program to members of Congress yesterday, emphasized that unless help comes soon, balanced- budget requirements in most state constitutions will force program cuts and layoffs, deepening the economic slump.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983484","date":"2001-10-05","texts":"Pennsylvania Gov. Tom Ridge starts work next week as the nation's director of homeland security, but some lawmakers question whether he will have the power to get much done. Senior members of the House's new terrorism subcommittee introduced legislation yesterday that would give him authority to reject other agencies' counterterrorism budgets and require his confirmation by the Senate. President Bush named Ridge to his new post in the wake of last month's terrorist attacks. He needs the force of law, more than just the bully pulpit, said Rep. Jane Harman Calif., the subcommittee's ranking Democrat. Rep. Jim Gibbons R-Nev., the subcommittee's vice chairman, said, Without this legislation, Governor Gov. Ridge cannot do the job that President Bush has tasked him to do. Harman said supporters may try to have the legislation considered as part of the broad anti-terrorism package the House is expected to consider next week.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830981712","date":"2001-10-07","texts":"Treasury Secretary Paul H. O'Neill loves tossing out ideas, some half-baked or even alarming to his foes, just to gauge the reaction. He revels in speaking bluntly, sometimes rattling markets and members of Congress. Wit and sarcasm, along with a little profanity in private, are essential tools in his verbal arsenal. But last week, sitting in his office, which had been recently redecorated in a vivid blue, O'Neill seemed almost wistful as he considered the battering his image has taken in the press. When it's portrayed that you're out of the loop and all that kind of stuff, I think it really does have some impact on your effectiveness, he said. The conventional wisdom in Washington is that O'Neill is some sort of supernova, a spectacular, doomed explosion. The truth is more fascinating and complex -- and also revealing about the Bush White House. Within the Bush administration, O'Neill appears to have not only survived, but thrived. His zest for combative language and his zeal for new ideas has made him a favorite of President Bush, though his style has rankled some officials. The president meets with him privately for a half-hour about once a week, a privilege that President Bill Clinton did not grant his Treasury secretaries for fear it would give them an unfair advantage in interagency discussions. O'Neill is also a key member of the president's war cabinet. The president likes his big thinking, even when it's way out of his realm of responsibility, said a senior White House official directly involved in policymaking. The chemistry between him and the president is very good.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616054","date":"2001-10-09","texts":"IF THE WORLD HAS changed, maybe your portfolio should, too. In the wake of last month's terrorist attacks and the current U.S. military response, I wouldn't radically revamp your investment mix. Instead, the idea is to tweak your portfolio, cutting back here, adding a little money there, to reflect some of the startling changes of the past 18 months and especially the past four weeks. Consider what has happened. The Federal Reserve has cut short-term interest rates, hoping to avert a recession but raising the specter of renewed inflation. Stocks have shed 30 of their value, yet remain richly valued. Bonds and money-market funds have fared far better, but today offer paltry yields. What does all this mean for your portfolio As you reassess your investment mix, try these four steps Step 1 Take a Stand","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614943","date":"2001-10-10","texts":"Economic Diversity A Tale of Two Cities Anaheim, Calif., and Orlando, Fla., seem to have a lot in common Both are major tourist destinations thanks to amusement parks -- Disneyland and Disney World, respectively -- owned by Walt Disney Co., Burbank, Calif. So, with tourism tanking following the Sept. 11 terrorist attacks, why have Anaheim's bonds been placed on Standard & Poor's CreditWatch, with negative implications, and Orlando's have not The answer, according to S&P managing director Colleen Woodell diversity of revenue streams and size of reserves. Being placed on CreditWatch is considered a red flag about changing conditions, and doesn't necessarily lead to changes in credit ratings. But the different treatment of the two cities provides a lesson in fiscal policy. Anaheim's vulnerability comes from its heavy reliance on tourist-dependent revenues, specifically hotel-motel and sales taxes, which make up about 54 of total revenues. In contrast, tourist-sensitive taxes, mainly sales taxes, account for only about 13 of revenues in Orlando, which also has strong collections from property taxes, utility taxes and business fees.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615238","date":"2001-10-10","texts":"NEW YORK -- The ailing U.S. economy could soon get a much-needed boost from an unexpected source falling energy prices. Immediately after the Sept. 11 terrorist attacks in New York and Washington, some economists expected oil prices to rise on fears that a war in the Middle East would disrupt the supply of oil. Instead, prices of gasoline, heating oil and natural gas have all fallen as concerns have grown that a possible global recession could drastically cut demand for energy. In the short run, those declines should act like a tax cut for consumers, freeing up funds for additional spending. They should also help cut costs at companies that have big fuel bills, including those in some of the hardest-hit industries, including airlines, trucking companies and manufacturers. In total, the recent declines could produce tens of billions of dollars in savings for companies and individual users of fuel, says Tom Robinson, senior director at Cambridge Energy Research Associates, a Cambridge, Mass., consulting firm. While that alone won't keep the country out of recession, it certainly will act as a salve in the wounds from the recession we're in, adds Richard Berner, the chief U.S. economist at Morgan Stanley.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983588","date":"2001-10-10","texts":"Mayor Anthony A. Williams petitioned the White House yesterday for 736 million in federal relief -- about five times what officials originally proposed -- to help the District recover from the Sept. 11 terrorist attacks and overhaul the city's emergency preparedness system. In addition, the city wants 182 million for grants to protect streets, schools and technology infrastructure, according to a copy of the proposal provided to The Washington Post. In all, the city wants more than 900 million in federal aid. The request submitted late yesterday was far more ambitious than the 150 million in federal assistance aired by Williams D at a D.C. Council hearing Friday. Council members assailed the sum as far too low for a city forced to confront massive costs for the exigencies of 21st-century terrorist threats and economic losses that followed the calamity. The District is asking for 233 million for emergency preparedness and 503 million for economic recovery. Congress is already talking about a major stimulus, already talking about homeland security, the mayor said in an interview. Obviously, the downside of this is that it's a significant amount of money.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614970","date":"2001-10-11","texts":"The wide-ranging investigation into money-laundering tied to the Sept. 11 attacks has put a big strain on Wall Street legal departments, which have been working overtime to meet demands for trading records and other information. In recent weeks, regulators and investigators have inundated securities firms with requests for customer-account documents and other records they believe are vital to tracking down a money trail that could show how various terrorist groups fund their activities. These records include blue sheets, or trading records, and other types of customer data. The large number of requests has some Wall Street firms up in arms, and could make it more difficult for investigators to track down the money trail leading to terrorist groups. Securities firms grouse that they have received requests for money-trail information from eight or nine different agencies, including the Federal Bureau of Investigation, the Securities and Exchange Commission, the Commodity Futures Trading Commission and the National Association of Securities Dealers. We're getting the same requests from five different entities, says a lawyer from a major Wall Street firm. So last week, federal officials and Wall Street firms sought to iron out their differences. At a series of meetings -- one at the Federal Reserve Bank of New York, and the other in the New York offices of Prudential Securities, a unit of Prudential Insurance Co. of America -- investigators agreed to better coordinate their data requests to prevent duplication, and Wall Street firms have pledged their full cooperation in the probe.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616857","date":"2001-10-11","texts":"WASHINGTON -- The House Ways and Means Committee will introduce its economic-stimulus package tomorrow -- in the form of a blank sheet of paper. The unusual move allows members to offer their pet stimulus proposals by amendment. It also assures that the bill submitted to the full House will be heavily seasoned with Republican priorities, including a capital-gains tax cut and possibly corporate income-tax breaks. Republicans outnumber Democrats on the panel by nearly 2 to 1. The approach, offered by Chairman Bill Thomas R., Calif., is unprecedented in recent memory. Since Republicans took control of the House in 1995, party leaders have tightly controlled Ways and Means, often dictating the parameters of crucial bills. That has repeatedly frustrated Democrats and even Republicans on the panel who, despite their prized assignment, get little chance to push their own priorities. By setting up a free-for-all, Mr. Thomas is allowing conservatives to play a more prominent role in the debate. Their priorities have gotten short shrift in recent negotiations between Congress and the White House. Starting tomorrow, Mr. Thomas said, There's nothing on the table or off the table. We're going to let the committee build the product. He is unclear if House rules would allow him to start from scratch -- Democrats insist he at least needs a bill number and a title -- but if they do, he said, My goal is to bring in a blank piece of paper.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982376","date":"2001-10-14","texts":"Boston College 20Virginia Tech quarterback Grant Noel thrust both arms over his head with unprecedented enthusiasm after completing a touchdown pass to Andre Davis just more than five minutes into tonight's game. Noel wasn't just celebrating the lead, which No. 6 Virginia Tech promptly turned into a 34-20 win over Boston College. Rather, his jubilance came in response to months of questions -- despite the Hokies' undefeated record -- not only about his productivity but, more pointedly, his ability to throw the deep ball. The 37-yard strike to Davis in the right corner of the end zone on the Hokies' opening drive quieted those concerns and ignited the sold- out crowd of 53,662 at Lane Stadium. It also sent Noel and the rest of the players on the sideline into a frenzy and prompted smiles from the three Rose Bowl representatives who were in attendance at a Virginia Tech game for the first time in school history. That's about as good as it gets, Noel said. It was a great feeling. It was exactly what we needed to set the tempo for the game. Noel added two more throws of 29 and 19 yards on the ensuing drive to move the Hokies 6-0, 3-0 Big East into scoring position, and then ran it in himself from one yard to extend their lead to 14-0 with 7 minutes 56 seconds to play in the opening quarter. That's when Virginia Tech's defense -- which was irritated this week by comments made by several Boston College offensive lineman who all but guaranteed a 100-yard performance by junior tailback William Green -- took over.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985054","date":"2001-10-14","texts":"Until Friday, Wall Street seemed to be staging its own version of a patriotic rally. After the Sept. 11 attacks on the World Trade Center and the Pentagon, an already battered stock market went into near free fall. At the market's bottom, 10 days later, the Dow Jones industrial average had tumbled more than 14 percent, the Nasdaq had slumped 16 percent and the Standard & Poor's 500-stock index had dropped nearly 12 percent. But then the market reversed course. By the end of the day Thursday -- one month after the attacks -- both the Nasdaq and the S&P 500 had recouped all of their post-Sept. 11 losses. On Friday, the rally took a breather, with most of the major indexes posting modest losses, weighed down by a disappointing report on retail sales and higher-than-expected producer prices. At one point Friday, the Dow plunged 100 points in just a few minutes after the first report of a case of anthrax at NBC News in New York, reaching a loss of more than 200 points. But the Dow clawed its way back late in the day, closing with a loss of just 66 points the Nasdaq actually closed a little higher Friday. The bullish camp theorizes that things have gotten as bad as possible, that there's no place for the market to go but up. The country is, after all, already in a state of war. The economy clearly has fallen into a recession. Earnings will be bad this quarter and next. And the tech sector remains mired in a slump that's now more than a year old. But the markets already have adjusted for all of that. On the other hand, the market likes the fact that the early days of the war have gone without a hitch, with no U.S. combat deaths or injuries. Meanwhile, both Congress and the Federal Reserve have shown a determination to prop up the faltering economy. Following two half- point cuts in the past month, the federal funds rate now stands at 2.5 percent, or slightly less than the inflation rate, and there is no reason to think the Fed is finished slashing. Jeffrey Applegate, chief U.S. market strategist at Lehman Brothers, figures we could get down to 1.5 percent to 2 percent short-term rates by sometime next year, the lowest level since the late 1950s. At the same time, Congress is brewing up an incentive package of tax cuts and spending programs that should add further fuel to the economic fire. Applegate notes that in every recession since 1950, the market rebounded before the economy did, driven by the combined effects of rate cuts, falling inflation and, in some cases, tax cuts. The key variable for the stock market is how much stimulus does the market think is in the pipeline, he said. And the truth is there's a lot, with more to come.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615838","date":"2001-10-15","texts":"WASHINGTON -- Consumer sentiment bounced back a bit this month as the nation began to adjust to both the aftereffects of the Sept. 11 terrorist attacks and the U.S. air strikes on Afghanistan. The University of Michigan's consumer-sentiment index rose to 83.4 in mid-October from 81.8 at the end of September and well above the low of 72 recorded in one week late in September. The latest number was close to the 83.6 reading in mid-September. The university's survey showed that consumers are feeling more optimistic about the future, with the index for consumer expectations rising to 77.9 in mid-October from 73.5 at the end of September and 77.2 in mid-September. The latest economic numbers, meanwhile, seemed to tell less about where the country is headed than where it had been after the terrorist attacks. Wholesale prices rose 0.4 in September from August, according to the Labor Department. In a separate report, the Commerce Department said retail sales plunged 2.4 last month, which was largely expected because of the terrorist attacks. Everyone was home watching television the week of the 11th, said Bryan Jordan, an economist with Banc One Investment Advisors. If we're looking for a silver lining in these numbers, it's that pipeline pressures continue to be well-behaved, and I think that does signal lower inflation. The Federal Reserve's policy-making committee isn't likely to see September's producer prices as a significant factor when it meets next month, Mr. Jordan said. He predicted at least one more round of interest-rate cuts as policy makers continue to try to prod the economy toward recovery.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615900","date":"2001-10-15","texts":"BERLIN -- When the last recession hit Europe in 1993 in the aftermath of the Gulf War, corporate profits shrank by more than 20 from two years earlier. Now, fears are mounting that the Sept. 11 terrorist attacks and the weakening U.S. economy may tip an already slowing Europe into another recession. Is a similar profit squeeze expected Hardly. The latest earnings consensus forecasts 30 growth from the end of this year through 2003, according to Merrill Lynch. A compilation of estimates done nine days after the attacks expects European profits to grow by 14.6 next year. That actually is up slightly from the August consensus The compilation was done by IBES, a financial-research firm. That comforting outlook could mean one of two things European companies are reasonably well fortified against the worsening economic climate which likely won't turn into a recession and could signal a stock-market rally in the months ahead. Or, it could mean these companies and investors are in for a rude surprise.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617166","date":"2001-10-19","texts":"Most stocks fell for a second straight day, in what some investors called an overdue pullback. Although the current stock weakness has been sparked by the report of more anthrax exposure, in New York and on Capitol Hill, a more fundamental reason is that stocks have come back sharply since hitting bottom on Sept. 21 and now are consolidating, these investors believe. We think we are in a two-step-forward, one-step-back mode, said John Meara, president of St. Louis money-management firm Argent Capital Management. With the Dow Jones Industrial Average still up 11 since bottoming out on Sept. 21, and with the immediate prospects for the economy and the antiterrorism campaign still uncertain, some investors are taking profits on their recent gains. Although the Nasdaq Composite Index rebounded 0.39, or 6.38 points, to 1652.72 following Wednesday's 4.4 slide, most stocks fell on both the New York Stock Exchange and the Nasdaq Stock Market. The industrials were down 0.76, or 69.75 points, at 9163.22, while the broad Standard & Poor's 500-stock index declined 0.79, or 8.48 points, to 1068.61. Bonds were little changed and the dollar fell.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983392","date":"2001-10-20","texts":"The U.S. Postal Service is reeling from the effects of the Sept. 11 terrorist attacks and the ongoing anthrax scare, with declining mail use and rising costs threatening the financial viability of the venerable institution, according to analysts. Mail volume was down 5 percent in September over the same period last year. Revenue in the first three weeks after the attacks was as much as 500 million below forecast. Costs associated with damage to a post office near the World Trade Center are at 63 million and mounting. Postal Service officials express faith that the institution will recover, but others say the government-created monopoly is spending money it can ill-afford to increase security, combat the anthrax threat and ensure safe and timely mail delivery. No one knows how much the fear of anthrax-tainted mail will lead to further declines in volume. It's unprecedented, Postal Rate Commission analyst Robert Cohen said. This was a direct attack using the mail as a weapon. It is making everybody rethink the role of the Postal Service. The rate payer will wind up paying a lot more money for this. What's likely to happen is the debt will keep growing and growing, and, ultimately, it could be up to Congress to bail them out. Even before Sept. 11, the Postal Service was expecting a 1.65 billion deficit for fiscal 2001. It had announced it would seek its third rate hike in less than a year. It had cut 21,000 positions. It was 11 billion in debt, fast approaching the 15 billion ceiling set by Congress. It froze most capital projects. Its premier product, Priority Mail, was declining after years of exponential growth.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983536","date":"2001-10-20","texts":"MARYLAND OFFICIALS were saying proudly a couple of months ago that they expected the state to run a modest surplus in the current fiscal year. Now they're looking at a deficit instead. To begin to ward it off, Gov. Parris Glendening this week ordered more than 200 million in budget cuts, and it's likely there will be more if, as expected, the Sept. 11 attacks accentuate the economic slowdown that was already underway. The same pattern is evident in Virginia, though there, officials struggling to protect the governor's irresponsible car tax repeal have been slower to respond. The state was giddily projecting 7.5 percent revenue growth for the fiscal year. In fact, in the first quarter of the year, from July through September, revenue collections were down 2.4 percent from the year before, and that too was mainly before the September attacks. The District is in a similar bind. The attack on the Pentagon, the temporary closing of Reagan National Airport and the drop-off in tourism have delivered sharp blows to the city's economy. As D.C. chief financial officer Natwar Gandhi announced yesterday, it seems possible that local sources of revenue could be reduced by as much as 90 million to 100 million in fiscal 2002 compared with the fiscal 2002 budget estimate. And there's a good chance the current revenue estimate for fiscal 2003 will also need to be reduced. The District's difficulties are compounded by its debt burden, the second highest in the nation among cities. That heavy load limits the city's borrowing capability. And the city's problem is more basic a long-term structural imbalance between its revenue base and required expenditures, brought on by restrictions on the city's taxing authority. Five years of economic good times masked that imbalance, as Mr. Gandhi said yesterday. With the economy souring, the imbalance will become glaringly apparent, he said. All over the country, state and local governments are having to cut back, or else raise taxes. They have no choice their revenues are down and they are bound by law or tradition to balance their budgets. But the squeeze occurs at precisely the wrong time. By cutting back, the states amplify the downturn that afflicts them, and the amplification is the greater because the cuts come just as more people are qualifying for unemployment benefits, welfare and Medicaid spending goes down when it ought to be going up. This time around, state and local officials, particularly in such areas as this, face sharply increased security costs as well.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613767","date":"2001-10-23","texts":"WASHINGTON -- The Conference Board's index of leading indicators fell 0.5 in September, another sign that the economy could be sliding closer to recession. September's drop followed a revised 0.1 decline in August, a smaller drop than the 0.3 decline initially reported. That followed three monthly increases, which appeared to signal the economy might have stopped slowing. It looked like things were bottoming out and starting to look a little bit bitter, said David Wyss, chief economist at Standard & Poor's. Obviously, September has changed that. The drop in the leading index in September is the largest one-month decline since January 1996, said Ken Goldstein, economist at the Conference Board. Without the aggressive expansionary policy being adopted by the Federal Reserve, this drop would have been much deeper, he said. Six out of the 10 indicators fell in September. The largest negative contributors to the index were stock prices and initial claims for unemployment insurance. The most significant positive contributors were money supply and interest rate spreads.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614660","date":"2001-10-23","texts":"U.S. stocks surged as investors focused on hopes for an economic and corporate upturn, rather than on news of more anthrax exposure in Washington. The major indexes once again finished the day close to their highest points since the Sept. 11 terrorist attacks. People are kind of adopting a stiff upper lip here, like the British in World War II, said stock trader Michael Driscoll at Credit Suisse First Boston. They are focusing on the future and not looking at the past or the present. People are looking out six to 12 months and thinking that they don't see anything that will get a lot worse. Technology stocks led the gains, with the Nasdaq Composite Index rising 2.2, or 36.77 points, to 1708.08, just above its close of 1695.38 on Sept. 10, the day before the terrorist attacks. The index is almost back to the Oct. 16 level of 1722.07, the highest mark since last month's attacks. Older industrial stocks in the Dow Jones Industrial Average also put in strong gains, as did bank stocks. The Dow industrials advanced 1.88, or 172.92 points, to 9377.03. That still is more than 200 points below the industrial average's Sept. 10 close of 9605.51, although it is close to the average's highest post-attack close, 9410.45, on Oct. 11.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982191","date":"2001-10-25","texts":"State transit officials say many Charles County residents have complained about a plan to double the tolls for some motorists using the Harry W. Nice Memorial Bridge, but they still defended their decision this week before the county commissioners. On Nov. 1, the toll for a regular two-axle vehicle will jump from 1.50 to 3 when crossing the Potomac River from Charles County on Route 301. The rate for each additional axle will also increase from 1.50 to 3. Commuters will still be able to buy a 15 pass that allows 25 trips through the gates and is valid for 60 days. Tom Osborne, executive secretary of the Maryland Transportation Authority, said the increases are necessary to help fund 4.7 billion in capital improvements included in the authority's 20-year plan. Because the state first decided to increase tolls on Interstate 95 in Baltimore, Osborne said increasing tolls on Route 301 became a necessary byproduct. We felt that we had to address Route 301 or else it could become a bypass corridor for all those seeking to avoid the tolls, Osborne said.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982156","date":"2001-11-01","texts":"The terrorist attacks of Sept. 11 helped cause the already weakened U.S. economy to contract slightly in the July-September period, the first such decline in more than eight years, the Commerce Department reported yesterday. Some economists said the decline in the nation's output of goods and services signaled that the U.S. economy has entered its first recession in more than a decade. Others said the outlook remains uncertain. If it's not a recession technically, it really doesn't matter, because growth is so far below the country's potential to grow that unemployment is rising, corporate profits are falling, and business spending on new plants and equipment is plunging, said economist James Glassman of J.P. Morgan Chase Securities. President Bush said the report confirmed that the attacks hurt the U.S. economy, and he appealed to Congress to quickly pass legislation to stimulate economic growth. The attacks affected our workforce and affected our business base, Bush said in a speech to business executives. People are having tough times in America. People are losing their jobs. . . . It's time for our government to act in a positive and constructive way. The Congress needs to pass a stimulus package and get it to my desk before the end of November.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617156","date":"2001-11-05","texts":"EUROPE Euro-Zone Economy Is in Early Stages Of a Mild Recession A growing number of economists say they believe Europe is in the early stages of a mild recession. Sharp falls in manufacturing activity, business confidence and employment on both sides of the Atlantic since the Sept. 11 terrorist attacks in the U.S. have convinced some economists that the euro-zone economy is shrinking slightly this quarter and will continue to do so in the next, meeting the conventional definition of a technical recession, or two quarters of economic contraction. Goldman Sachs slashed its euro-area growth estimate for next year to 0.6 from 1.7, and in a report to clients predicted the economy would shrink at an annual rate of 0.5 to 1 this quarter and next. Citing a massive hit to earnings expectations in October, Lehman Brothers in a research note cut its forecasts and said two quarters of contraction are now possible. Credit Suisse First Boston last week increased its estimate of chances of an outright recession for the euro zone to one in three.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613700","date":"2001-11-06","texts":"CALGARY, Alberta -- Think Canadian natural gas will easily and cheaply cover a U.S. supply shortfall Think again. With U.S. gas producers finding it tough to boost output, Americans are looking north to help satisfy demand. Canada supplies about 16 of the natural-gas consumed by its southern neighbor, up from 11 in 1995. But with its own productive capacity peaking, Canada isn't likely to provide a sustained fix for U.S. gas consumers, specialists here caution. That could lead to a supply crunch when a U.S. economic recovery takes hold. According to most analysts, U.S. demand for natural gas probably will expand steadily in the long term, due mainly to the fuel's increasing use in electricity generation, while domestic supply stays flat. Even in its latest short-term forecast for natural-gas demand -- revised to reflect economic fallout from the Sept. 11 terrorist attacks -- the U.S. Energy Information Administration projects domestic demand rebounding by 3.9 in 2002 after falling 2 this year. To address anticipated demand growth, U.S. energy companies have been snapping up natural-gas companies and assets in Canada, made cheaper by low natural-gas prices and the strong U.S. dollar. In October, for example, Burlington Resources Inc., Houston, offered 2.1 billion for Canadian Hunter Exploration Ltd., Calgary. But doubts are growing about Canada's ability to keep boosting its gas exports in the long run.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983585","date":"2001-11-06","texts":"The whereabouts of Vice President Cheney have been something of a state secret off and on since Oct. 7, when the United States commenced its assault on the Taliban and Osama bin Laden. Citing security concerns, White House officials generally decline to discuss the veep's comings and goings. No wonder Saturday Night Live suggested in a recent skit that Cheney -- like the elusive bin Laden - - is living in a cave in Afghanistan. Yesterday morning, White House press secretary Ari Fleischer told inquiring reporters I don't have the vice president's location. But now the mystery is solved. The Post's Mike Allen reports that Cheney has spent the past two days hunting pheasant in South Dakota. Aides confirmed the expedition -- which one called an annual buddy thing and an extended weekend -- after the Associated Press and the Dakota News Network revealed that Air Force Two had landed in Pierre, S.D., at 2 p.m. Sunday. Cheney's pilots gave away the game when they started handing out official souvenir postcards to children in the terminal -- to say nothing of the huge motorcade outside. Aides said Cheney visited his home in Jackson Hole, Wyo., last week, then moved on to a pheasant preserve near Pierre to keep a long- standing hunting date with friends -- an annual tradition, as one aide described it. But Allen reports that Cheney wasn't all play and no work Yesterday he received his daily intelligence briefing by videoconference and spoke by secure phone with Algerian President Abdelaziz Bouteflika, who was in Washington conferring with President Bush. The vice president also hunted the weekend before last in Poughkeepsie, N.Y., where his quarry was duck. He hunts everything, an aide told Allen. In one corner of the Greenbelt Marriott were the Washington Redskins at Sunday brunch, loading up on football fuel before their winning game against the Seattle Seahawks. In the other corner were happy conventioneers -- some in tight leather and black lace stockings -- in town to trade info on dominance and submission, bondage and discipline, fetishism and cross-dressing. While the Skins got up for the game, an overflow crowd from the Black Rose 2001 conference at the nearby Ramada New Carrollton attended workshops and lectures with such titles as Foot Fetishism - - It Ain't Just for Bottoms Anymore, Blood Art, Discipline, Obedience, Punishment and Atonement and No End in Sight -- Beyond the Basics of Bondage.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615368","date":"2001-11-08","texts":"Why is MetLife Inc., a New York-based company with a large number of insurance customers in the World Trade Center, fretting about folks in the heartland Because it expects to pay disability claims to customers far from ground zero. That includes the worker in Kansas City who is having some nervous disorder just because they watch the war on terror on CNN, says Rob Henrikson, president of MetLife's institutional life-insurance business. MetLife has established 83 million in reserves, largely to cover that type of disability claim, though it won't give a specific breakdown. Although the life-insurance industry has taken a relatively light hit from the Sept. 11 terrorist attacks, it nonetheless has been affected by the strikes and their aftermath. Analysts estimate life-insurance companies will have losses of between 3 billion and 6 billion related to Sept. 11, much smaller than the estimated 40 billion to 70 billion in insured losses expected to be paid by property-casualty insurers. Of course, the biggest cost for the industry will be paying life-insurance claims for people killed in the attacks. But the industry is also bracing for an increase in disability claims, and not just from workers hurt in downtown Manhattan. MetLife, which reported a 33 drop in its net income on Tuesday, said disability claims rise anyway during recessions. When the economy worsens there tends to be a pickup in incidents, adds Joan Zief, a life-insurance analyst at Goldman Sachs. The cynic might say that when people are worried about losing their jobs they are more apt to go on disability to maintain an income.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983809","date":"2001-11-08","texts":"Nearly two months after the Sept. 11 attacks, with the United States tumbling into recession, Congress and the White House remain mired in partisan wrangling over a package of tax cuts and spending increases to revive economic growth. Analysts now warn that if the political stalemate continues past Thanksgiving, the lack of a fiscal stimulus package would deepen the recession and render the eventual recovery less robust while sending stock prices tumbling again on Wall Street. If we're going to limit the severity of a recession, we need to quickly nip this in the bud, said Princeton University economist Alan S. Blinder, a former vice chairman of the Federal Reserve. Otherwise, you get a set of dynamics where one layoff leads to another, and the economy can spiral down rather quickly. Economic forecasters differ on how much a package of additional tax cuts and spending increases would boost an economy now weakening faster than most had expected, but all agree it would help. At the most optimistic end, Macroeconomic Advisers of St. Louis calculates that every dollar in additional spending and tax cuts will add 1.50 to economic output over the next 18 months. If another 90 billion in stimulus is added to actions already taken -- roughly the amount in both House and Senate packages -- the U.S. gross domestic product should grow by 3.2 percent next year, up from current projections of a 1.6 percent growth rate without, according to economist Chris Varvares.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983148","date":"2001-11-09","texts":"Federal Reserve officials concluded early last month that the Sept. 11 terrorist attacks had pushed the nation into a recession, according to minutes of an Oct. 2 policymaking session released yesterday. Details of the minutes, including the policymakers' conclusion that the economy is in a slump, reinforced the view among many economists that the Fed is not done cutting rates. The economists generally expect the Fed to lower its target to 1.5 percent, probably in two quarter-point steps at meetings scheduled for mid-December and late January. The economy appeared to have been growing very little, if at all, prior to the terrorist attacks, and the dislocations arising from the attacks seemed to have induced a downturn in overall economic activity, the members of the Fed's top policymaking group, the Federal Open Market Committee, concluded, the minutes said. Looking ahead, the members generally saw a relatively mild and short contraction followed by a gradual recovery next year as a plausible forecast but one that was subject to an unusually wide range of uncertainty, notably in the direction of a potentially much weaker outcome in the nearer term, they said. The minutes are a summary of the officials' discussions, not a transcript, and the word recession does not appear in the minutes. But the officials clearly were referring to a recession when they used the words, downturn in overall economic activity and said they foresaw a short contraction of the economy.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830984983","date":"2001-11-09","texts":"The government is stepping up its investigation of 1.8 million Jeep Grand Cherokees after receiving hundreds of complaints that the sport-utility vehicle can shift suddenly from park to reverse. Five deaths have been reported. Safety regulators said the investigation involves all Grand Cherokees built in model years 1993 through 2002. Chrysler, which makes the vehicle, said it is investigating the complaints but has found nothing to explain the problem. Most people reported the Grand Cherokee would suddenly go into reverse shortly after they shifted to park and while the vehicle was idling. An investigator with the National Highway Traffic Safety Administration was able to duplicate the problem while testing one of the vehicles at a Chrysler-Jeep dealership in Virginia. Lucent Technologies said scientists at its Bell Labs unit built a transistor from one molecule, a breakthrough in miniaturization that may lead to faster and cheaper computer chips. A billionth of a meter long, the device is less than one-tenth the size of any other transistor, which switches and amplifies signals in the circuits found in every electronic machine, the company said. By shrinking the size of transistors, manufacturers can produce more powerful, less expensive chips for computers, consumer electronics and networking gear. The number of laid-off workers drawing jobless benefits has reached an 18-year high, although fewer Americans filed new claims for state unemployment assistance. The Labor Department said new jobless claims fell by a seasonally adjusted 46,000, to 450,000, in the workweek ended Nov. 3. The number of laid-off workers continuing to receive unemployment benefits rose to 3.72 million in the workweek ending Oct. 27, the highest level since April 23, 1983. Palm chief executive Carl Yankowski has resigned, the Santa Clara, Calif., maker of handheld computers announced. Chairman Eric Benhamou will take his place until a permanent replacement is named. The Federal Communications Commission is reexamining its radio ownership rules to decide whether it should limit future combinations in small and medium-size markets. A 1996 law raised the number of stations a company may own to between five and eight in a single market, depending on a city's size, from a previous limit of four. Critics say consolidation that followed the adjustment should lead the FCC to update the merger review process. The commission also voted to speed up reviews of pending sales of stations that in some cases have been stuck for years.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984708","date":"2001-11-13","texts":"When the 1996 welfare reform bill was being debated in Congress, there were numerous predictions from scholars, editorial page writers and politicians that a welfare system that demanded work, imposed sanctions and operated under time limits would result in huge declines in family income and increases in poverty and homelessness. Now comes the U.S. Census Bureau with its data on family income and poverty for 2000, thereby permitting informed judgments about whether welfare reform is driving poor families into the Grate Society. For the seventh year in a row, poverty was down. Further, black and Hispanic households had their lowest poverty rates ever, and the overall child poverty rate was lower than in any year since 1976. Similarly, black and Hispanic households both set records for all-time high incomes. How is the nation making such remarkable progress against poverty and low income The Census Bureau report shows that an important part of the answer is that welfare reform has led to huge increases in work and earnings by single mothers and a revolution in how government helps the poor. No longer does government help the poor primarily by giving them welfare benefits. The new approach is to encourage, cajole and, if necessary, force poor and able-bodied parents to take jobs. Then, once they are employed, government provides help through a system of work supports that includes cash earnings subsidies, primarily through the Earned Income Tax Credit EITC, medical insurance, food subsidies, child care and housing. The Census Bureau data show how this new approach works. Consider the group of about 2 million families headed by mothers with incomes under 13,000. In 1993 this group earned on average only 1,400 and had welfare benefits primarily cash and food stamps of 4,400 all figures are adjusted for inflation. By 2000, their earnings had increased by 130 percent, to 3,100, and their welfare benefits had declined by a quarter to 3,300. In addition, they enjoyed a 300 percent increase in EITC income. The net effect was that total income for these mothers and children rose by a quarter, to 8,600. Now consider the group of 2 million mothers with incomes between 13,000 and 21,000, a group that includes many mothers leaving welfare. Earnings increased from 4,900 in 1993 to 11,700 in 2000. Similarly, EITC income increased by nearly 200 percent. Although the welfare income of mothers in this group fell by nearly 60 percent, their total income increased by more than 4,000, to 17,600.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982870","date":"2001-11-17","texts":"Gov.-elect Mark R. Warner D expressed surprise today at the severity of state government's fiscal problems but also confidence that the Virginia economy will rebound strongly from an economic recession expected to last at least until summer. Warner, speaking with reporters after a budget briefing by aides to Gov. James S. Gilmore III, said the nearly 1 billion projected budget shortfall disclosed by the Republican administration this week was larger than he expected before he won the governorship 10 days ago. Warner succeeds Gilmore on Jan. 12. This is clearly more challenging than, I think, any of us would have anticipated a few weeks ago, Warner said. But he added We're going to get through this. . . . Virginia will come out of this process stronger. Warner offered no immediate or specific recommendations for closing the budget gap, leaving much of that preliminary work to Gilmore, who will present a final spending plan to the General Assembly shortly. However, the Democrat said he would consider using a Gilmore- endorsed arrangement to win nearly 260 million in Medicaid funds from the federal government. Warner said he would insist on all that money being used for health care, rather than overall budget- balancing.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985493","date":"2001-11-23","texts":"As holiday shoppers shift into high gear, finding the fastest computer has gotten a little more confusing. It used to be simple. All you had to do was compare three numbers - - the processor speed listed on the box, the price listed on the tag and the balance in your bank account -- and purchase accordingly. Now, however, chipmaker Advanced Micro Devices is arguing that one of those figures is misleading. While many of us look at a system's processor speed measured in megahertz or, more recently, gigahertz first and foremost, Sunnyvale, Calif.-based AMD says that number doesn't tell the full story. The controversy started with Intel's new Pentium 4 processors, which top out at a faster clock rate than the latest AMD Athlon XP processors. Intel's fastest Pentium 4 runs at 2 GHz, while the Athlon XP maxes out at 1.6 GHz. But the Pentium 4 uses a new architecture that, analysts say, works less efficiently than that of its predecessor. So even though the Pentium 4 runs at a faster clock rate, it's getting slightly less done per clock tick than an AMD chip with the same clock speed -- or even a Pentium III with the same clock speed.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984662","date":"2001-11-25","texts":"Since Sept. 21, the Nasdaq composite index has roared back 34 percent and the Dow Jones industrial average is up 20 percent, nearly to 10,000, where it had not been since August. Is the market anticipating an economic rally next year Is the country more confident because of military success in Afghanistan Can this stock market recovery last The different answers come from three camps bull, bear and a third group that wonders why the questions are being asked at all. Since the Sept. 11 attacks made the whole world, including the stock market, riskier, some think that valuing stocks at their pre- attack levels is unjustified. For now, the market has moved too far, too fast, said Alan Ackerman, chief investment strategist at Fahnestock and Co. A contraction in the market now would be neither unexpected nor unhealthy. My hesitancy about this market is that absolute valuations are still absurdly high, whether you look at price-to-book ratios, price- to-earnings. . . . They're all off the chart, said Jim Paulsen, chief investment officer at Wells Capital Management.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842616005","date":"2001-11-28","texts":"WITH Chelsea Property Group Inc.'s business driven by two things heavily impacted by the Sept. 11 attacks -- tourism and retail sales -- one might expect the outlet-center owner's stock to plummet and the company to lower its earnings projection. But surprisingly, the company has emerged as one of a small number of real-estate investment trusts this year to publicly announce satisfaction with earlier earnings projections. And its total return -- stock price plus dividend paid to shareholders -- has risen 5 since trading resumed after Sept. 11, according to the Morgan Stanley REIT index. REITs overall have risen an average 4 in the same period. To be sure, the Roseland, N.J., REIT looks especially vulnerable, as fears of flying keep would-be travelers -- and shoppers -- home and as the economy has sunk into a recession. But investors seem to be focusing more on Chelsea's earnings, which have risen, than on same-space sales, which have fallen. Chelsea reported 9 growth in per-share, third-quarter funds from operations, a commonly used measure of REITs' financial performance, beating analysts' estimates compiled by Thomson FinancialFirst Call. In addition, company officials expect an immediate earnings boost from Chelsea's 180 million acquisition of 31 retail properties from Konover Property Trust Inc., Raleigh, N.C. The deal was completed Sept. 25. It's a good news, bad news thing, says Lee Schalop, analyst at Banc of America Securities in New York, with the good news winning out. They have some bad news on sales but they bought some assets at incredibly attractive prices, with extremely high returns. Those high returns will flow through their bottom line in 2002.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613838","date":"2001-11-29","texts":"The House of Representatives will soon vote on the question of granting the president Trade Promotion Authority, also known as fast-track approval. Some in Congress have argued that now is not the time to take up legislation that has encountered such fierce protectionist opposition in recent years. But in the wake of the terrorist attacks of Sept. 11 and the current economic slowdown, it is all the more important that Congress move quickly to approve this vital measure. This bipartisan action would inspire confidence in global capital markets. It would allow America to be seen as continuing to lead the open trade and globalization that has been so vital to the prosperity of both developed and developing countries. And it would send a powerful message that the president and Congress speak with one voice, and are committed to advancing freer trade as part of the war on terror. Indeed, approval of TPA would signal that the U.S. is not only seeking a military coalition, but an economic one. The benefits of trade hardly need illuminating. America's exports accounted for approximately one-third of our extraordinary economic growth over the past decade, and exports now support over 12 million American jobs nearly three million more than a decade ago. Jobs supported by exports typically pay 13 to 18 more than comparable employment. Trade brings real economic benefits to the U.S. The North American Free Trade Agreement, and the completion of the previous round of trade negotiations the Uruguay Round, now generate annual income gains of 1,300 to 2,000 for the average American family of four. Trade is also fundamental to economic growth in the developing world. A recent World Bank study shows that nations open to trade grow 3.5 times faster than nations closed to trade. The recent experience of countries such as South Korea, China and Chile underscore that trade is a pathway to prosperity. Trade is a two-way street, and imports also benefit the U.S. They provide consumers with more choices and lower prices on a wide variety of goods. Imports also force our industries to constantly improve and innovate in order to remain competitive with foreign exporters.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982904","date":"2001-12-02","texts":"DAYTON, Ohio -- Two competing grocery stores have been creating traffic jams with an old-fashioned gas war -- and old-fashioned prices, as low as a dime a gallon. Kroger Co., the nation's largest grocery chain, opened a new store on Thursday about a quarter-mile from a Meijer store. Both stores, as part of a growing trend toward one-stop shopping, have gas pumps outside. The price war began heating up within a few hours of the Kroger store's opening. As soon as one station dropped its price, the other countered with a lower price. You have to take advantage of it while you can, Matt Harris said. Gas may never be this cheap again. On Friday morning, the price of gasoline at the Meijer was back up to 1.12 a gallon. But by noon, it was down to 71 cents a gallon, and it fell to 51 cents by early evening.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616516","date":"2001-12-04","texts":"INDIANAPOLIS -- Kathy G. Reehling is the accidental entrepreneur, running a 30 million-a-year temporary-staffing and technical-services firm essentially because she keeps saying yes to one very big client. Keeping that client, Eli Lilly & Co., the big pharmaceutical concern, happy the past 10 years has been all-consuming for Ms. Reehling and her firm, Crew Corp. But now, with 130 employees and facing her first recession as a boss, Ms. Reehling is being forced to confront her overdependence on Lilly and consider whether the worker-friendly policies that helped build Crew can survive in a downturn. About 85 of Crew's revenue today comes from Lilly. They're an absolutely fabulous customer, Ms. Reehling says, but Lilly's too big a piece of our business. That realization, and the recession, are forcing Ms. Reehling, 42 years old, to attempt to think and act strategically about her business -- as opposed to merely reacting to her dominant customer's needs. The work for Lilly remains strong. But can Ms. Reehling attract other customers to diversify Crew's revenue base Can she avoid layoffs and thus maintain Crew's high worker-retention rate in an industry plagued by turnover Should she sell the business to one of the many temporary-services firms looking to merge that come calling Many entrepreneurs come to such a crossroads after a long run of growth. And which road they take can make or break a successful company. It's easier, of course, when the business was actually started with a plan and a vision. Ms. Reehling wasn't thinking of starting a temp business when she went to work for Lilly.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616317","date":"2001-12-05","texts":"SINGAPORE -- There was bad news almost everywhere they looked yesterday but investors chose instead to focus on the bright side in Asia, pushing many regional stock markets to healthy gains amid hopes of a U.S. recovery in the new year. Those gains came on a day when the ripples from the demise of energy giant Enron Corp. continued to spread, Japan saw its sovereign credit rating downgraded to the same level as Italy by Moody's Investors Service Inc. and Argentina's troubles again raised the question of a contagion effect for emerging markets in Asia. But it was evidence of renewed consumer spending in the U.S. that sent investors into the markets to buy technology stocks in places like Taiwan, where the local index rose 2.6 to a three-month high of 4766. A 2.9 rise in U.S. consumer spending in October, plus optimistic signs in construction spending data and a key purchasing managers' report, led some to see momentum building toward a U.S. recovery in the second quarter of next year. Add the belief of many that Asian technology stocks have hit bottom and you have the elements for a sustained rally in regional markets, suggests Markus Rosgen, Asia strategist for ING Barings in Hong Kong. It's a real move up because there's a much higher likelihood of a recovery in the U.S. than there was three months ago, he said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982164","date":"2001-12-05","texts":"The U.S. Postal Service posted a 1.7 billion loss for the fiscal year that ended Sept. 30, despite productivity gains, chief financial officer Richard Strasser said yesterday. The Postal Service delivered mail to 1.7 million new addresses with fewer workers and work hours than last year. It has cut 22,500 jobs in the last two years. But mail volume declines, a delay in carrying out the latest rate increase, and costs associated with the Sept. 11 terrorist attacks contributed to the loss, he said. Despite the deficits, the Postal Service is awarding 124.5 million in pay for performance bonuses to 52,000 supervisors and managers who have met various productivity and safety targets, Strasser said. The bonuses average 1,500 per participant, he said. Osama bin Laden, al Qaeda, the Taliban, Afghanistan and Iraq are named as defendants in a public interest law firm's 210 million lawsuit in U.S. District Court here on behalf of the estate of a woman killed in the World Trade Center attack. Drawing on media reports and recent books by journalists, the conservative law firm Judicial Watch said Mohammad Atta and other Sept. 11 terrorists had met with Iraqi officials and that bin Laden had run a training camp near Baghdad.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982734","date":"2001-12-08","texts":"The nation's jobless rate jumped to 5.7 percent last month, the highest level in more than six years, as the recession drove employers in most industries to shed workers and cut costs. Nearly a half million people joined the ranks of the unemployed in November, bringing the total to 8.2 million, the Labor Department reported yesterday. The increase from 5.4 percent in October was evidence of the continued sharp deterioration of the job market since the Sept. 11 terrorist attacks. As the economy slowed over the past year, unemployment had been rising slowly, from a three-decade low of 3.9 percent in October 2000, before shooting up in the past two months, when 1.1 million more people lost their jobs. The layoffs continued even as signs mounted that the recession that began last spring may be close to running its course, according to several forecasters, some of whom have begun predicting that the economy may start growing again early next year. Even if the recession does end soon, many forecasters expect the unemployment rate to continue rising for several months, reaching 6.5 percent or so next year before it begins to come down. That's because at the end of a slump, as demand picks up, employers can usually boost production without having to hire more workers, which they usually don't want to do until they are sure how strong the recovery will be.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615037","date":"2001-12-10","texts":"The U.S. economy might not be getting back on its feet quite as quickly as some investors have come to believe. The unemployment rate jumped to 5.7 in November, its highest level in more than six years, the Labor Department said Friday. Employers cut payrolls by 331,000 on a seasonally adjusted basis, taking steam out of some economists' predictions that the U.S. economy had begun to crawl out of recession. Those predictions have helped to fuel a rally in the stock market, but the market lost ground Friday in the face of the bearish economic data, which was one of the first full glimpses of how the economy fared in November. Economists said the jobs report removed any lingering doubts that the Federal Reserve will reduce interest rates for the 11th time in the past 12 months when it meets tomorrow. We're still in a recession and the door is still open to easing monetary policy, said Richard Berner, Morgan Stanley's chief U.S. economist. He, like many others, expects the Fed to reduce the benchmark federal-funds rate by one quarter of a percentage point to 1.75, its lowest level since 1961.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615556","date":"2001-12-11","texts":"Corrections & Amplifications A SURVEY by Blue Chip Economic Indicators found that 70 of respondents believe the recession will end by April. An article yesterday incorrectly reported that 70 of the respondents predicted the recession wouldn't end until April. WSJ Dec. 12, 2001 NEW YORK -- Just two weeks ago, a recession was officially declared to have begun in March. Now a small group of bullish economists is declaring that it already is over, or nearly so. The group, led by Ian Shepherdson at High Frequency Economics and Ed Hyman at ISI Group Inc., is decidedly out on a limb. Most other economists are forecasting that the economy will continue to contract during the current quarter, and a recovery will begin in the spring or summer at the earliest. The Federal Reserve, meeting today, is expected to cut its target for short-term interest rates for the eleventh time this year to 1.75 from 2 amid concerns over economic weakness. With unemployment rising and the global economy on the ropes, Fed officials are expected to indicate they remain more inclined to lower rates than raise them. There was little reason to be optimistic after Friday's release of the employment report for November. Among other things, the report said the unemployment rate jumped to 5.7 last month -- the highest level in six years -- while the economy lost 331,000 jobs.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616309","date":"2001-12-11","texts":"LENNOX, CALIF. -- Something strange washed over this area following the terrorist attacks on Sept. 11 quiet. With planes grounded across the U.S., residents of this crowded community abutting Los Angeles airport weren't assaulted by the sound of jet engines for the first time in anybody's memory. The sudden silence was so at odds with the usual deafening roar that kids were scared by it, says Maria Van Deventer, assistant principal at Jefferson Elementary School. Today, planes are once again buzzing just 300 feet above the heads of the people of Lennox. But something even scarier has befallen them. The meltdown in the travel and tourism business has claimed thousands of their jobs. As much as any place in America, this 1.3-square-mile unincorporated area of Los Angeles County has been the victim of post-Sept. 11 economic fallout. Because this is practically a company town, with many of its 23,000 residents employed at the third busiest airport in the world and related businesses, Lennox has become a ground zero of sorts for the devastated travel and tourism industry. The impact of the near collapse in the industry has left a broad footprint. Airline industry revenue should decline 30 in the fourth quarter over the year-earlier period, estimates Kevin C. Murphy of Morgan Stanley, and PKF Consulting estimates that room revenue at hotels in major urban centers will be down 17.5. Other travel-dependent firms, from airline caterers to airport concession owners, have also been hit hard.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985458","date":"2001-12-11","texts":"Waiting for Congress to pass the much-needed economic stimulus bill is beginning to look like waiting for Godot. Fortunately for the U.S. economy, two large private industries -- automobiles and homebuilding -- have stepped up to provide the stimulus that the government has thus far failed to deliver. There is a great irony here. A clear function of government -- combating recessions -- is being performed by the private sector. But there's actually a double irony, for government policies have been instrumental in enabling each of these industries to accomplish what it has. The auto industry's contribution has been more spectacular but will be less durable. Right after the terrorist attacks, industry executives saw some pretty bad-looking handwriting on the wall and reacted quickly -- in what they perceived to be their companies' best interest. They offered buyers 0 percent financing, a head-turning discount that filled the nation's showrooms and produced record sales just when the economy most needed the additional spending. Thank you, Detroit. I don't pretend to know whether 0 percent financing made good business sense for GM, Ford and Daimler-Chrysler. After all, it's costly -- the auto finance companies that lend you money at no interest do not get their funds for free. But it did succeed in driving auto sales to record highs while other categories of consumer spending were slumping, which is quite a feat. The 0 percent financing programs thus amounted to a kind of privatized stimulus policy -- wonderfully timed, well-targeted and effective. Would that Congress had done so well. But notice that the Federal Reserve's aggressive interest-rate cuts made it all possible. If short-term interest rates were as high today as they were in January, free auto loans would probably have been too expensive for Detroit. I doubt that people at the Fed were thinking about 0 percent financing when they started cutting interest rates back in January. But monetary policy sometimes works in unexpected ways. The story in housing may be less dramatic, but it is much longer lasting. As the economy weakened before the terrorist attacks, observers marveled at how well the housing sector was holding up. This industry acted as a pillar of strength supporting the U.S. economy in at least two ways. First, homes continued to be built in large numbers even while much of the rest of the economy slipped. Second, millions of American households obtained immediate cash by refinancing their mortgages at lower rates they then spent some of this money on consumer goods.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983275","date":"2001-12-12","texts":"A French Moroccan man was charged yesterday with helping Osama bin Laden and the 19 hijackers plan the Sept. 11 attacks. Zacarias Moussaoui was already in jail when the terrorists struck on Sept. 11. He had tried to take flying lessons last summer, but flight schools officials were suspicious of the reasons he gave for studying flying and called the police. Soon after, he was arrested and charged with breaking U.S. immigration laws. The government says that Moussaoui had been trained in terrorist camps run by bin Laden's al Qaeda terrorist organization in Afghanistan. Moussaoui was charged three months after the attacks. He was the first person to be charged with a crime connected with Sept. 11. The Federal Reserve, the part of the government that orders coins to be minted, ordered too many. There are 2.4 billion pennies, 480 million nickels, 470 million dimes, 1.8 billion quarters, 62 million half-dollars and 192 million Sacagawea golden dollars stuffed into government vaults and armored cars around the country.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615781","date":"2001-12-13","texts":"Yahoo Inc. made an unsolicited offer to buy HotJobs Inc. for 436 million in cash and stock, topping a friendly all-stock bid from TMP Worldwide Inc. that was announced at the end of June. Yahoo made its offer in the form of a bear hug, in which a would-be buyer sends a letter to the target and then discloses it in an effort to pressure the target to negotiate. It is Yahoo's first unsolicited takeover effort. HotJobs, New York, declined to comment. TMP Worldwide President and Chief Operating Officer James Treacey said, We have a binding contract with HotJobs that we intend to fulfill. New York-based TMP isn't worried about Yahoo's bid. What Yahoo is thinking, I don't know, Mr. Treacey said. The latest offer, which values HotJobs, an Internet help-wanted site, at 10.50 a share, comes as Yahoo is seeking to broaden its offerings beyond advertising, which makes up about 80 of its annual revenues. Advertising in general is in the midst of one of the worst slumps in a decade, and the Web-portal company's revenue has fallen precipitously this year, partly due to the slump. Yahoo's move to wrest HotJobs from TMP, which runs the Monster.com jobs Web site, comes as that deal is undergoing intense regulatory scrutiny.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614142","date":"2001-12-14","texts":"NEW YORK -- Small-capitalization stocks fell as the technology and telecommunications sectors tumbled following a wave of profit warnings and layoff announcements. The overall Nasdaq market also slid sharply lower, with the Nasdaq Composite Index of both large and small stocks posting the steepest declines of the major stock-market measures. Several leading tech and telecom companies let it be known that their fourth-quarter results will be weak, with several announcing job cutbacks. While most of those companies are large-caps, their roles as industry leaders causes their outlooks and action to reverberate throughout the tech and telecom sectors, which are key components of the small-cap market. The Russell 2000 index of small-capitalization stocks fell 6.64, or 1.40, to 468.67, and the Nasdaq composite, at 1946.51, lost 64.87, or 3.23. The latest round of layoff announcements and profit warnings, are causing people to be concerned about the extent of the recession, said Alan Ackerman, market strategist at Fahnestock & Co. Stocks had run up the past few weeks on the idea that the worst of the economic downturn has passed, and that a recovery was imminent. But it appears that the market has run too far, too fast, Mr. Ackerman said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616427","date":"2001-12-14","texts":"The Wall Street JournalNBC News poll WAR AND RECESSION don't shake Americans' belief the U.S. is on track. Seven of 10 say the nation is headed in the right direction in a poll for The Wall Street Journal and NBC News, hardly changed from the record 72 who said so in a pre-Sept. 11 survey. It's a remarkable finding, says Republican Robert Teeter, who conducts the poll with Democrat Peter Hart. Both hail Americans' perspective amid tumult. Bush enjoys a majority coalition, Teeter says. The president's job approval remains high at 85, and 80 have positive views of him personally. Even 72 of Democrats approve of his performance 61 have a positive view of him. Congress scores higher, too 57 approve of the job it is doing.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983939","date":"2001-12-16","texts":"The collapse of the stock market -- of any stock market -- is one of the few truly predictable events in this life. With remarkable certainty, we know that prices will rise to ridiculous peaks and then plunge or collapse to ridiculous lows. The timing, alas, is a mystery. We have learned, however, that just before crashes and prolonged bear markets, the country often gets happy, even giddy over the market's doing so well so long. Shrewd market watchers take this as the surest sign that a bull market is in the throes of death, even before the decline becomes visible. Maury Klein's Rainbow's End recounts the national zaniness that coincided with the decision by millions of Americans to step into the stock market for the first time in the mid- and late 1920s. Many argued that the country's economy had entered a new era of prosperity, as President Calvin Coolidge expressed it. Who, after all, could argue with what Frederick Lewis Allen later called a ceaseless flow of new delights the automobile, the telephone, movies, radios, refrigerators, record players In corporate boardrooms, something called scientific management was taking hold to replace the apparently unscientific management of days gone by, when managers simply did what they thought would make money. For the first time in the 1920s, Wall Street firms marketed stocks to the public en masse. The number of investment trusts, the precursors to today's mutual funds, increased sixfold, with more attention paid to the big names running the funds than to the funds' potential risks and benefits. The number of Americans owning stocks shot from about 500,000 to 15 million. On Oct. 15, 1929, Yale professor Irving Fisher declared infamously, in hindsight that stocks have reached what looks like a permanently high plateau. Nine days later, the Dow Jones Industrial Average began a long and steep plunge that stripped the market of 40 percent of its value in three weeks and continued, with a few interruptions, into 1932. All I lost was two hundred and forty thousand dollars, Groucho Marx said later. I would have lost more but that was all the money I had. The apparent parallels between the period before the crash of 1929 the New Era and the period that led to the market collapse of 2000 and early 2001 the New Economy are obvious and have been noted ad nauseum anecdotally in the financial press for two years. Klein, a historian of business and finance, evidently thought it beyond his mission to use the opportunity to explore the similarities, which would have made the book more pointed and useful as a vivid reminder of the ever-present risks intrinsic to equities, which are casually ignored as professionals strive to keep alive the mythology that however bleak the moment, everything will be fine if investors just hold on long enough. One wonders how many investors are aware that after 1929, the Dow didn't regain its pre-crash level until 1954. Twenty-five years is a lot of holding on. Klein's book is not the best place to absorb the market's history. It's painfully slow. It advances no particularly new angles or theories. In its lack of analysis, it doesn't demonstrate why the crash is a pivotal moment in American history fit for inclusion in the Oxford University Press's series of the same name. The author could not resist the common tendency to see every event as either causal or emblematic of the main event of the '29 crash. Klein suggests, for example, that the fad of flagpole sitting and the craze for flying in the '20s were somehow symbolic of the idea that the market could defy gravity. He is equally unconvincing in his efforts to connect everyone from Babe Ruth to evangelist Aimee Semple McPherson to a mood of escapism somehow connected with the stock market.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617021","date":"2001-12-20","texts":"NEW YORK -- The Securities Industry Association sees 2002 as a recovery year for the brokerage and investment-banking sector. In a conference call, Frank A. Fernandez, SIA's chief economist and director of research, said the securities industry hit a trough during the third quarter and is beginning a recovery in the fourth. Economic recoveries in the securities industry tend to happen about six to nine months before the overall U.S. economy, he said. For the first time in quite some time, we have some good news, Mr. Fernandez said. The securities industry is in a recovery mode from a severe downturn. Mr. Fernandez said the industry's turnaround was facilitated by the speed with which the industry responded to the events of Sept. 11, most notably how quickly the markets reopened. World-wide holding-company profits of U.S. securities industry for 2001 are expected to reach 28.2 billion, down 51 from 58 billion last year. Profits for 2002 are expected to improve by 14, however, to 32.1 billion.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983194","date":"2001-12-20","texts":"The retiring Republican governor goes on an end-of-term spending spree to make his successor look like a tight-fisted Scrooge. And the emboldened speaker of the House of Delegates reconfigures his expanded GOP majority to maximize its strength in the General Assembly. The Democratic governor-elect must watch where he treads after outgoing Gov. James S. Gilmore III and House Speaker S. Vance Wilkins Jr. are finished with their pre-inaugural maneuvers. The audacious governor has been merrily spending money he doesn't have, while the wily Wilkins is making it much easier for his GOP leadership team to exert even more control over state affairs. Warner is outwardly unfazed by the Republican scheming, although he did flash a little exasperation Monday when Gilmore stepped all over his successor's story of the day -- naming Virginia's new Democratic education secretary -- by adding yet another item to his unusually long list of Christmas wishes. That day, Gilmore was asking for passage of a constitutional amendment to erase the car tax from the books once and for all -- and to replace that 1 billion of annual income to localities with a permanent share of income taxes. It looked defensible on paper, but Warner and even some Republicans at the county level started asking tough questions right away about the long-term reliability of that funding to local governments. The governor has been acting as though Jan. 12 is the start of his second term, not Warner's first. Armed with the magic credit card of state bonding capacity, Gilmore said he would include in his final budget tens of millions of additional dollars for historically black colleges, anti-terrorism plans, teacher raises and college construction. And then he dared to ask for what he called the capstone to car-tax relief, its permanent repeal in the form of a constitutional amendment.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985627","date":"2001-12-20","texts":"Alan Cowan said he's never been late paying his credit card bills. So he was surprised this spring when he opened his First USA bill and found an important notice that said in small print that his 9.99 percent interest rate was going up to 19.49 percent. No reason was given for the increase, but when Cowan called for an explanation he was told that in spite of his spotless record at First USA, he was delinquent and had high balances with other creditors. Cowan disputed the delinquencies and said that high balances were declining as he paid them off. When First USA declined to change his rate back to 9.99 percent, he closed his account. The California computer consultant is one of a growing number of credit card customers who have discovered a not-so-fine reality in the fine print of most credit card issuers. It doesn't matter if consumers are current on one credit card if they fall behind -- or become too indebted -- to another company, the first credit card firm may, and often does, raise its rate. If we see you're becoming delinquent with other creditors, there's a chance you may become delinquent with us, Citibank spokeswoman Maria Mendler said. First USA spokesman David Webster said We think it's a prudent lending practice. You must provide your product based on the risk that exists, and if that risk changes, then a lender needs to make changes to accommodate that.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984758","date":"2001-12-23","texts":"Curled up on sidewalks and jammed into crowded shelters, the masses of homeless men, women and children in this city have reached record numbers, surpassing the worst levels of the last recession. About 29,400 homeless live in city shelters and hot-plate hotel rooms each night, including 12,500 children. They are the face of a poor New York that supposedly vanished after the early 1990s. Now they are everywhere. A decaying economy and, even more important, a severe lack of affordable housing have driven the current crisis. In the past few years, housing costs in New York's poor neighborhoods have spiked sharply, rising far faster than in wealthy districts. Homelessness has jumped 13 percent nationwide this year. In Chicago, homelessness jumped 22 percent, in San Francisco, 20 percent. In Washington, the number of homeless families has risen by 32 percent -- after four years of decline. D.C. Village, the city's intake shelter for families, is at capacity, and about 600 men and women bed down each night on city streets. The problem is most pronounced in the Northeast, where rental housing costs are among the nation's highest. In Massachusetts, there has been a 40 percent rise in homeless families since August 1999. It's exploded on us, said Dick Powers of the state's homeless agency. The reason is very simple There's no affordable housing.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982905","date":"2001-12-24","texts":"Once the uncool cousin to high-flying dot-coms, government contractors adopted a new swagger in 2001. The industry continued a trend toward consolidation that strengthened already large companies going after ever-larger federal contracts. Nearly across the board, stock in such companies surged after Sept. 11. An extreme example was CACI International Inc. of Arlington, the stock price of which nearly doubled before a 2-for-1 split in November. Expectations for the sector are high. Before the terrorist attacks, the federal government was expected to spend 46.3 billion on information technology this fiscal year, which ends next September. Now, the Government Electronics and Information Technology Association predicts that federal spending on information technology will jump to 49 billion this fiscal year and reach 65 billion in fiscal 2007. As the government focuses on homeland security, federal agencies are considering how to secure their computer networks and continue to offer more services to the public on the Internet.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983830","date":"2001-12-26","texts":"The other day I visited my local bank and bought 30 each of French francs, German marks and Italian lire. I have no immediate need for them or the Spanish pesetas, Greek drachmas or Dutch guilders that I might also have purchased. I just wanted some historic mementos, because after Jan. 1 the national currencies of 12 European countries with 305 million people are scheduled to disappear in favor of the euro. Although I have long doubted the euro's benefits, the moment is undeniably historic. Never before have so many people in so many countries simultaneously adopted a new money. Since 1999 stores and banks have priced in both euros and national currency now people get the real stuff. The conversion is a massive operation. The European Central Bank ECB has minted 52 billion new coins 170 for each person in the euro area and printed 14.9 billion bank notes 49 per person. The total value is 649 billion euros, which, at present exchange rates 1 euro equals about 90 cents, is about 584 billion. Throughout history, money -- its creation or destruction -- has always been a political act. The euro has been controversial precisely because it engages vast political ambitions. To critics, it represents a step toward a European super-state that will submerge the individuality of the European nations in an unwieldy federation, hobbled by bureaucracy that imposes a crippling burden of regulatory and other costs on Europe's economies, wrote one British commentator. Having reservations, three of the European Union's 15 members -- Britain, Denmark and Sweden -- have so far rejected the euro. To its enthusiasts, the euro means economic vitality and political unity. Companies won't have to convert all those different currencies. Easier cross-border price comparisons will compel firms to become more efficient. As cross-border investment rises, money will increasingly go to the most deserving companies. Economic success will strengthen a European consciousness. Let's hope so. But I'm skeptical, because I fear that a the euro won't create major economic gains and that b it will trigger a political backlash. So much economic power is being centralized in Frankfurt and Brussels -- the homes of the ECB and the European Commission -- that local and global economic discontent may focus increasingly on Europe as the villain.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616546","date":"2001-12-27","texts":"Apple Computer Inc., in a bid to increase its retail presence and boost market share, said it plans about 200 million in capital expenditures in the current fiscal year. According to the Cupertino, Calif., computer maker's annual report filed with the Securities and Exchange Commission, Apple's capital expenditure for fiscal 2002 will go toward replacing existing capital assets, improving its corporate infrastructure and developing more Apple-branded retail stores. Apple, which launched 27 of its own retail stores across the country this year, devoted about 92 million to the initiative during its fiscal 2001 ended Sept. 30, out of total captial spending of 232 million, according to the filing. More Apple stores are being planned for fiscal 2002, the filing states, but didn't specify how many. Apple's total capital-expenditure plans, while down from a year earlier, underline its effort to continue reaching out to customers through company-owned stores. The computer maker, which has world-wide market share of about 5, has long maintained that customers need to feel and touch its Macintosh systems in order to fully appreciate the products. Since Apple opened its first stores in May 2001, the company has followed a model of locating stores in high-traffic locations such as urban shopping districts and malls. In addition to selling its own computers, Apple's stores also carry a variety of third-party software and devices such as video cameras and hand-held computers. The company originally anticipated that its stores would break even by early next year, but modified those expectations after the Sept. 11 attacks. Apple now expects the stores to generate a small loss for fiscal 2002, the filing states.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982072","date":"2001-12-29","texts":"Video production editor Fritz Flad, 34, was taken aback last month when his boss called him into the office and terminated his job. It was the first time Flad had ever been laid off. He got another surprise when District officials directed him to the AFL-CIO union headquarters, two blocks from the White House, to file his claim for unemployment benefits. When they told me to go to the AFL building, I thought that must be a mistake, Flad said in an interview last month, as he filled out the paperwork in a large room normally used as the union officials' lunchroom. Flad said that it was his first contact in his professional life with a union and that previously he had viewed unions with disdain. Now, he is rethinking that attitude, he said. A lot of white-collar jobs are turning into electronic sweatshops, said Flad, who lives in Rockville. Sooner or later, I think more of them will turn to unions. The AFL cafeteria-turned-unemployment center is one example of many around the country where unions have begun offering services to members and to other needy workers who lost their jobs after the terrorist attacks of Sept. 11 devastated an already troubled hospitality industry. These services help unions as they struggle to maintain links to workers who might otherwise leave the fold. In Los Angeles, the County Federation of Labor is dispensing 3 million in aid to unemployed hotel and airport workers to help them keep their health insurance current and pay utility bills.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614975","date":"2002-01-04","texts":"Deep into the all-important year-end renewal season for insurance contracts, big insurance buyers in many cases are choosing to either carry no terrorism coverage or opting for low-level coverage, leaving themselves vulnerable in the event of future attacks. The big reason buyers are turning down the specialized coverage, whose value was illustrated by the Sept. 11 terrorist attacks, is it has become simply too expensive, in many cases costing more than a company's basic commercial coverage. There is terrorism coverage available, but it's at outrageous prices, said Bob Spadaccia, senior vice president for the Northeast at USI Insurance Services Corp., a San Francisco insurance broker. Real-estate companies and any other entities that are required, either by law or, in some cases, by lenders, to buy the terrorism coverage are choking on the numbers, he said. Prior to the Sept. 11 attacks, which are estimated to be costing the insurance industry at least 40 billion, such terrorism coverage was included as part of a standard policy. Now, terrorism coverage is being stripped out of the policies offered to most large businesses and owners of properties viewed by insurance companies as the likeliest targets, including tall office buildings, sports stadiums and shopping malls. These businesses are being offered the chance to buy back the coverage, but only at the steep prices. USI estimates only about one in 10 such clients is opting to buy back the coverage. Smaller, lower-profile businesses are less affected by the insurance industry's retrenchment. They are generally still able to get terrorism coverage as part of a basic package, albeit at higher prices than they paid last year, brokers said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616391","date":"2002-01-04","texts":"NEW YORK -- On your mark. Get set. Go . . . slowly. The nation's hopes for a fast start aside, forecasters don't expect the U.S. economy to be off to the races this year. Although they see America breaking out of recession, most believe the pace of the recovery will be subpar. This will be a year of convalescence, and the debate in my view is not whether recovery is coming, it's how strong it will be, says Richard Berner, chief U.S. economist at Morgan Stanley Until recently, Morgan Stanley was among the more bearish firms on Wall Street regarding the economy. But yesterday, the company issued a report saying the recession appears to be ending. The consensus estimate of the 55 economists who participated in The Wall Street Journal's economic-forecasting survey calls for real gross domestic product -- the value of the nation's output, adjusted for inflation -- to rise at an annual rate of just 0.87 during the first quarter and 2.4 during the second quarter. But the forecasters see the economy picking up momentum during the second half of the year, with growth rising 3.6. The government won't release estimates for growth in the just-ended fourth quarter until later this month, but most economists are expecting a contraction of more than 1.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616961","date":"2002-01-04","texts":"The U.S. Postal Service and the country's largest mailers are close to agreeing on a compromise that would boost postage rates as soon as June but stave off an even bigger increase threatened by the post office in the wake of the Sept. 11 terrorist attacks and the recession. The deal, which includes accepting the Postal Service's proposal of late September to raise the price of a first-class stamp to 37 cents from 34 cents, follows two months of negotiations aimed at avoiding skirmishes that usually cause the rate-setting process to drag on for about a year. The settlement calls for the higher rates to take effect at least three months earlier than the October implementation the Postal Service originally projected, giving the agency a much-needed revenue infusion. The agency reported a 1.7 billion loss for the fiscal year ended Sept. 30, 2001, and it has predicted a similar result for the current fiscal year. The compromise still must clear several hurdles and could fall apart if not enough of the 58 companies, industry groups and other parties in the pending rate-increase case support the deal. A Postal Service spokesman said about two-thirds of the parties had indicated by yesterday's deadline they would go along with the settlement the agency's board will decide early next week whether to endorse the deal, which it is expected to do. Jerry Cerasale, senior vice president of government affairs at the Direct Marketing Association, the largest trade group for the direct-mail industry, said there are a significant number of major parties that have at least informally stated that they would sign the agreement . . . or will not oppose it. Mr. Cerasale's group agreed to the compromise after the Postal Service abandoned its push for a settlement that would have boosted postal rates June 2, instead of the current plan of no sooner than June 30, giving mailers more time to prepare for the rate increases.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615701","date":"2002-01-08","texts":"EINDHOVEN, the Netherlands -- The head of Philips Electronics NV is aiming to make 2002 a lot better than 2001. Europe's largest consumer-electronics company suffered like many others from the global economic downturn and a plunge in consumer spending that worsened after the terrorist attacks in the U.S. Next month, the company is expected to report its first full-year loss in nearly a decade. Its stock has lost 15 of its value over the past 52 weeks, closing yesterday at 33.60 euros. But Chief Executive Gerard Kleisterlee intends to revive Philips, partly with a restructuring that he says will save the company several times what it expected to save when announcing the plan in November. Philips has not grown in the past 10 years, he said in an interview, and my aim in the New Year is to stop this decline. For starters, he said, the restructuring planned for this year -- which aims to curb costs and cut about 12,000 jobs -- could save the company as much as one billion euros 895 million a year, compared with the 300 million euros initially projected. Mr. Kleisterlee said additional job reductions are in the works, and that Philips is looking for a buyer for its contract-manufacturing services business, which analysts figure could fetch as much as 800 million euros.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615908","date":"2002-01-09","texts":"Senate Majority Leader Tom Daschle has now staked out his and his party's economic policies, and -- in tune with the styles of today -- they're retro. The Bush tax cuts, he says, could actually be making the recession worse. To a veteran of the Reagan administration, all of this sounds pretty familiar. In 1981, shortly after the enactment of the Reagan tax cut, the economy slid into a serious recession. The tax cut, combined with the recession, resulted in a substantial deficit in 1982, and deficits as far as the eye could see thereafter. Ronald Reagan's economic plan -- based on supply-side theory -- was a relatively new idea at the time, and the severe recession spread alarm through the political community. The deficits, it was thought, would bring back inflation, cause interest rates to rise, worsen the recession and slow or defer any recovery. The president was implored to back a tax increase, not just by the Democrats -- who wanted desperately to repeal or defer the tax cut -- but also by Republicans, who feared that the recession would decimate their ranks in the 1982 election. Even members of the president's staff lost their nerve, with leaks from the White House complaining that Mr. Reagan would not listen to reason, and budget director David Stockman being quoted in a magazine article to the effect that Mr. Reagan didn't know what he was doing. Alone among the president's advisers, Treasury Secretary Donald Regan made the obvious point It's absurd to raise taxes in the midst of a recession. Mr. Reagan, bless his stubborn heart, agreed with his treasury secretary and, as he put it, stayed the course. Sure enough, the economy didn't just recover -- it boomed. Despite the deficits, which did indeed continue at historic peacetime levels through Mr. Reagan's two terms in office, inflation and interest rates declined. The nation shook off the strange combination of slow growth and inflation that characterized the Carter years and grew at a healthy rate through the rest of the 1980s. The stock market, recognizing that a new and different economic policy had taken hold in Washington, surged to unprecedented levels.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615931","date":"2002-01-09","texts":"WASHINGTON -- Federal Reserve officials appear to be less optimistic about economic recovery than many private analysts, and that suggests interest rates could remain low for a while or even fall again. I believe recovery will occur around mid-2002 -- a few months later than the median forecast predicts, Anthony Santomero, president of the Federal Reserve Bank of Philadelphia, said in a speech. He was one of five Fed officials to speak so far this week. Their comments, while more upbeat than they have been for months, suggest they are less impressed with the run of positive economic reports, ranging from capital-goods orders to home sales, than private forecasters and investors. Mr. Santomero, for example, said it may take longer than expected for companies to rebuild inventories, something optimistic analysts are counting on to generate higher production and an imminent recovery. He said consumer spending, though resilient so far, could retrench if big layoffs persist. A Wall Street Journal poll of 54 forecasters found that two-thirds expect the economy to grow in the current quarter, and almost all expect growth in the next quarter. But Fed officials see more risks. Richmond Fed President Alfred Broaddus said in a speech that while the consensus forecast is the most probable outcome . . . I think there's a good chance that the economy may be at least a little softer than the consensus over the next year or so. He cited the risk that continued weak profits will hold back business investment. On Monday, Atlanta Fed President Jack Guynn said the economy would probably contract for another quarter or two. While he cited several positive forces for significant recovery, including low energy prices and interest rates, he projected second-half growth of around 3, less than the 3.6 consensus, at an annual rate.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615787","date":"2002-01-10","texts":"Merrill Lynch & Co., taking strong medicine to deal with a weak market, announced one of the steepest retrenchments on Wall Street in recent years. The nation's largest securities firm said it will take a 2.2 billion fourth-quarter charge partly to pay for about 9,000 job cuts it says were necessary to reduce expenses amid a business slowdown. Though the restructuring was expected -- The Wall Street Journal reported on the large potential job cuts and charge in October -- yesterday was the first time Merrill confirmed the move. Merrill says the work-force reduction is part of a plan to cut costs by 1.4 billion a year, a move it hopes will boost profitability. Most of the job cuts, representing nearly 14 of its work force, came in the last three months of 2001. In total, the firm cut 15,000 positions in 2000 and now employs about 57,000 people. About 1.2 billion of the charge is related to staff severance costs. The nature of this process we don't anticipate repeating, Thomas Patrick, Merrill's chief financial officer told analysts yesterday in a conference call. The charge came as no surprise to investors. In a recent research note, Bear Stearns Cos. analyst Amy Butte predicted a charge of as much as 2.1 billion was in the works. At 4 p.m. in New York Stock Exchange composite trading, Merrill shares were up 1.49, or 2.6, to 57.93.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616553","date":"2002-01-10","texts":"Led by government and enlightened, focused civil-rights leaders, African-Americans have made extraordinary progress. Forty years ago many couldn't vote, eat at public lunch counters, or earn a decent wage. Problems do persist, however. Blacks only make 70 as much as whites almost seven in ten African-American babies are born to a single mother and minorities are twice as likely to be without health insurance. The black unemployment rate last month was over 10, double that of whites, and one third of African-American teenagers looking for work are jobless. So how are two of the most visible national black politicians, Jesse Jackson and Al Sharpton, spending their time Protesting against supposed slights to Harvard's Afro-American studies professors. This shrill and silly conduct reinforces the political bankruptcy of these national black politicos. Jesse Jackson has made important contributions to politics and civil rights now he looks like a headline-hunting ambulance chaser. Al Sharpton may be shrewd, but this performance, coupled with his past demagoguery, makes it impossible to treat his threatened 2004 presidential run seriously. The Harvard furor emerged a few weeks ago when it was leaked that a member of the university's prized Afro-American Studies Department, Cornel West, was offended by a session with Harvard's new president, Larry Summers. Mr. Summers reportedly urged Professor West, one of only fourteen University Professors at Harvard, to engage in more scholarly research and join in the battle against grade inflation. Mr. West's recent major work had been a rap CD, while more than 90 of Harvard undergraduates receive honors and almost half the grades given out are As.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616832","date":"2002-01-11","texts":"CAN PRICES GO any lower in San Francisco Will war benefit home sellers in Los Angeles And how much more expensive will homes nationally be this year than last The answers Yes, maybe and just a bit, according to the most recent Home Price Forecast done by Case Shiller Weiss, a Cambridge, Mass., research firm, for The Wall Street Journal. But while many industries across the country are still hurting from the recession, the economists think real estate may be leading the way back up. Home prices nationally will once again climb over the coming year, by an average of 2.8. In fact, out of the 20 cities tracked, only two won't see prices rise, the forecasters say. Still, the upswing will be remarkably varied across the country, with some cities, such as San Diego, barely squeaking ahead prices are expected to go up by just 0.8 there, while others, like Washington, D.C., should boast a robust jump of more than 7. And though prices usually go up in the spring, Case Shiller Weiss predicts that in most places they won't climb until the second half of the year. We're not out of the woods yet, says the firm's Karl Case, who takes into account past sale prices, the number of homes on the market and the number of people setting up new households when making his predictions. Patrick and Sharon Brem discovered that for themselves when they recently tried to sell their loft in downtown San Francisco. That market has been one of the hardest hit in recent months and the economists say prices will drop by an additional 5.7 this year, making it the only city in the survey where they'll actually fall. The Brems were asking 969,000 for their place, but settled for 730,000 -- or exactly what they paid for it two years ago. We consider ourselves lucky to get out when we did, says Mrs. Brem, an Internet developer. A lot of people haven't been able to find buyers The number of sales there fell by 27 in November from the year before. Home prices were flagging even before Sept. 11 -- in the first quarter of 2001, the National Association of Realtors found that prices had started downward in more than a quarter of the 128 major metro areas it tracks. And they were down in the immediate aftermath of the attacks -- September median new home prices dropped 5.1, while those of existing homes fell 3.6. But overall, the housing market has held its ground remarkably well despite the shaky economy, propped up by numerous interest-rate cuts and consumer faith in the housing market. During the third quarter of last year, inflation-adjusted prices nationally rose 6.1 from a year earlier, according to the federal government.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616645","date":"2002-01-14","texts":"Freed from its tether to the U.S. dollar for the first time in more than a decade, the Argentine peso is expected to come under renewed pressure this week as the government works out how to untangle bank-account restrictions and financial institutions become more active in foreign-exchange markets. The peso lost about 40 of its value Friday, the first day of trading since the government last week replaced Argentina's one-to-one peg with the dollar with a dual exchange-rate system. Under the new system, trade and some financial transactions will be covered by a fixed exchange rate of 1.40 pesos to the dollar, while Argentines seeking to buy or sell dollars for other transactions will have to do so on the open market where the peso will float freely. In Friday's trading, the peso closed around 1.70 pesos to the dollar, but the bulk of activity was at the small exchange houses that had languished during the past decade when the dollar and peso were used side by side. Banks received rules from Argentina's central bank on how the new foreign-exchange market would function about 12 hours before markets opened, and opted to sit out the session. Meanwhile, the financial system has already been struggling to cope with operational complications resulting from the restrictions on cash withdrawals imposed at the start of December and limits on account movements imposed subsequently. Demand for dollars, so far, has been muted because people are short of cash in pesos for buying groceries and paying routine bills. Some economists are forecasting the peso will slump this week to 1.8-2.0 to the dollar as banks become more active in the foreign-exchange market and the government considers reversing recent decisions to slowly lift the bank limits. Leaving the limits on too long is likely to exacerbate a recession already in its fourth year and spark greater social unrest suddenly scrapping them could cause the banking sector to collapse. Late Thursday night, residents of several middle-class neighborhoods took to the streets again to protest further banking restrictions introduced by the administration of President Eduardo Duhalde. Over the weekend, Argentine press reports said the government was considering allowing account holders to access frozen funds to make big-ticket items, such as cars or homes, in order to perk up consumption. The government is also considering providing such special access to pay off credit-card debts and other obligations that cannot be postponed, the reports said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616598","date":"2002-01-15","texts":"In the theater, there's sometimes a play within a play. Now Madison Avenue has the plug within a plug. To lower its costs amid the crippling advertising recession, General Electric Co.'s NBC is bringing commercial marketing to a new level by inserting other companies' products into its own promotions for the Winter Olympics. In a new ad campaign to promote the games, for example, NBC has inserted several prominent mentions of the rerelease of the 1982 movie E.T. The Extra-Terrestrial from Vivendi Universal SA's Universal Studios. For viewers, the result is in effect two ads in one, and they see billboards that don't really exist. The ad campaign, which is aimed at drawing young viewers, was created by the network's internal agency. It revolves around a chase scene involving two Olympians, the snowboarder Chris Klug and Cammi Granato, a hockey player who helped the U.S. team win the gold medal at the 1998 games. In the spots, Mr. Klug zooms through a mountain of fresh powder as police and state troopers chase him for speeding. After a pretty girl shows up on the slopes, Mr. Klug crashes through a window into a hockey arena, disrupting a game being played by Ms. Granato, then boards away down the mountain and runs into the pretty girl again. As the police zero in on him, a helicopter appears. Meet me in February in Salt Lake City, Mr. Klug tells the girl as he grabs a rope thrown to him by his helicopter rescue team and is whisked away. Careful viewers are likely to notice a billboard on the mountain plastered with an enormous ad for E.T. The Extra-Terrestrial. Halfway through the chase, Mr. Klug slides by another sign for the movie on the side of the ice rink. The technique, called virtual video advertising, is commonly used to project stadium billboards during baseball games, but hasn't been widely used in commercials. It allows advertisers to reach viewers who avoid commercial breaks.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614990","date":"2002-01-16","texts":"BUENOS AIRES -- The Argentine economic team, trying to find its footing following the devaluation of the peso, got a look at neighboring Brazil's playbook yesterday. At the invitation of Argentine colleagues, Brazilian Central Bank Gov. Arminio Fraga visited Buenos Aires yesterday to share the story of how Brazil pulled itself out of a similar financial crisis in 1999. Mr. Fraga met with Argentine Economy Minister Jorge Remes Lenicov to discuss how Brazil managed a significant devaluation of the Brazilian real, which boosted exports, while keeping inflation to single-digit rates. The talks were punctuated by the sound of demonstrators beating drums, chanting and blocking traffic outside government ministries in this bankrupt capital city. Meanwhile, in the far north, gangs of the unemployed broke windows at utility and bank offices. Argentina, after linking its currency 1-1 to the U.S. dollar for a decade, last week devalued the peso by 29 to an official rate of 1.4 pesos to the dollar. Since then, the peso has dropped even more on a parallel free market. It closed at 1.85 to the dollar yesterday, down from 1.70 Monday. In the meantime, the new government of President Eduardo Duhalde is scurrying to put together an economic plan that will allow angry Argentines to access bank accounts that have been partially frozen for the past six weeks. Yesterday, Mr. Fraga discussed Brazil's experience in 1999 moving from a fixed to a floating exchange rate and Brazil's experience with inflation targeting, said Thais Heredia, a spokeswoman for Brazil's central bank. Within six months of the devaluation, Mr. Fraga formally implemented a system of using inflation targets to govern interest rates. When prices rise faster than expected, the central bank raises interest rates to cool off the economy.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615243","date":"2002-01-28","texts":"For the past two years, with the major stock indexes plummeting, investors have searched for places to hide. And they found them in the form of small and middle-size stocks. As the broad Standard & Poor's 500-stock index of large stocks was falling more than 15 over the past two years, the S&P's indexes of small stocks and of medium-size stocks were rising more than 15 each. Similarly, when stocks rebounded following the terrorist attacks, small stocks rose 28 and middle-size stocks rose 26, eclipsing the 19 gain put in by large stocks. The Russell 2000 small-stock index finished the full year in the black, up 1, compared with declines at big-stock indexes such as the S&P 500, which fell 13, and the Dow Jones Industrial Average, down 7. But this year, the run has reversed itself, at least for now. Small stocks, which typically get a boost at the start of a new year, have been falling. The Russell 2000 small-stock index, in fact, has been among the year's weaker performers, down 1.9, compared with a drop of 1.3 for the S&P 500. Small-stock fans, who multiplied as the group moved into the lead last year, insist the problem is a temporary, technical one -- essentially a pause after a great finish to 2001. But they also acknowledge that they expect small stocks to cool a bit this year. And some analysts have begun to warn that small stocks, which trailed large stocks for most of the 1990s, may be returning to days when they do no better than big stocks.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613926","date":"2002-01-29","texts":"JACKSONVILLE, Fla. -- Officials at CSX Corp.'s railroad business are accustomed to receiving complaints from customers about poor rail service. But lately they are starting to hear something new praise. They are doing things better, says Craig Huss, vice president of transportation at Archer-Daniels-Midland Co., the Decatur, Ill., grain-processing company. After years of service and merger-related problems, the Eastern railroad is taking a different course these days -- running a reliable railroad. Under Michael Ward, who became president of the railroad business CSX Transportation Inc. in 2000, CSX has cleared up its worst service problems and started winning over customers. While still trailing other railroads in overall efficiency, CSX is moving toward running its freight trains on a more precise schedule. It is trying to change the old adversarial railroad culture that created internal friction. And it is winning some freight business away from trucks and securing higher rates from customers for improved rail service. Customers were actually telling us the truth when they said if we gave them more consistent service, they would give us more business and pay us more, Mr. Ward says.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614262","date":"2002-01-30","texts":"Fox News Channel beat rival 24-hour cable news channel CNN in total viewers for the month of January, the first time the upstart News Corp. channel has attracted more viewers than CNN for a full month in both the prime-time and 24-hour time periods. Fox News has been closing the ratings gap with AOL Time Warner Inc.'s CNN for some time, but this is the first full month that Fox has beaten CNN by both measures. Although January isn't over until Friday, the broadcast industry considers the month over Jan. 27. Fox News averaged 656,000 viewers over a full 24-hour time period in January, an increase of 109 from the prior year, according to Nielsen Media Research. CNN averaged 596,000 viewers, up 51. MSNBC, a joint venture of Microsoft Corp. and General Electric Co.'s NBC, averaged 296,000 viewers, up 23. In prime time, Fox News averaged just over one million viewers, compared with 921,000 for CNN and 358,000 for MSNBC. The battle among the cable-news channels is fiercest for 25- to 54-year-olds, since this is the main group advertisers are trying to reach when they buy ads on cable news. Among this group, Fox News averaged 277,000 viewers during the 24-hour period, an increase of 159 CNN averaged 202,000, an increase of 64 and MSNBC averaged 150,000, an increase of 25. Also at issue is the battle to translate ratings into revenue increases during a recession. Industry executives estimate CNN's main domestic channel still enjoys at least double the advertising revenue of either MSNBC or Fox News, reflecting the premiums CNN has built into its rates over time. Executives estimate CNN ad revenue for its main U.S. service at more than 250 million, compared with more than 100 million apiece for MSNBC and Fox News. CNN Headline News also is estimated to pull in more than 100 million in ad revenue.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616346","date":"2002-01-31","texts":"One day after accounting worries sparked a broad stock selloff, investors regained some of their confidence, bidding stocks up again amid upbeat signals from the Federal Reserve. The Dow Jones Industrial Average and the Standard & Poor's 500-stock index both registered their biggest point and percentage gains of the year. Nearly two billion shares changed hands on the New York Stock Exchange, the most since Sept. 21, shortly after stocks resumed trading following the terrorist attacks. After falling 2.51 on Tuesday, the Dow industrials rebounded 1.50, or 144.62 points, to 9762.86, after the Fed said that the outlook for recovery has become more promising. The broad S&P 500 rose 1.17, or 12.93 points, to 1113.57, while the Nasdaq Composite Index, dominated by large technology stocks, rose rose 20.45 points, or 1.08, to 1913.44. The Fed ended its two-day policy meeting by leaving its target interest rates unchanged for the first time since it began making a series of 11 rate cuts more than a year ago. Investors were encouraged that the Fed felt it was safe to stop stimulating the economy, and were heartened by the central bank's suggestion that the nation's painful economic downturn may be ending. Many traders, however, attributed the market rebound to an announcement by Tyco International, which has been hammered in recent days on complaints that its accounts are hard to understand, that its chairman and chief financial officer would buy some Tyco stock.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982116","date":"2002-02-03","texts":"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. 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. 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. 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. 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.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982912","date":"2002-02-03","texts":"President Bush warned Congress and the nation that the country will long remain vulnerable to terrorism, as he pledged to devote the second year of his presidency to combating the recession at home and enemies abroad. In his first State of the Union address, Bush laid out a justification for a longer and broader war against terrorism that would expand into a campaign to encourage education and democratic values in the Islamic world. The president portrayed the threat in stark terms, disclosing that U.S. forces in Afghanistan have found diagrams of U.S. nuclear power plants and that tens of thousands of trained terrorists are still at large. And he said hostile nations, including North Korea, Iraq and Iran, represent an axis of evil that is attempting to develop nuclear, biological and chemical weapons. Seeking support for the largest increase in defense spending in 20 years, Bush said The United States of America will not permit the world's most dangerous regimes to threaten us with the world's most destructive weapons. Bush also outlined his strategy for prodding the United States back to prosperity. He said he would strive to create new opportunities for work, cushion the impact of unemployment, and foster a new ethic of volunteerism within communities.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616636","date":"2002-02-04","texts":"NEW YORK -- To some outside observers, U.S. consumers and corporations appear to have gorged themselves on debt. Yet neither sector of the economy seems to be crumbling as a result. Among bond-market participants, there is a growing perception, reflected by price action in different fixed-income sectors, that so long as borrowers have obtained cheap financing in a climate of low interest rates, they can stomach a hefty amount of debt. Treasury bonds, which have performed well during the U.S. economic downturn, are starting to wilt, while corporate bonds stand to do better if the U.S. economy improves, as expected in 2002. Even those Treasury-market strategists who had been consistently warning about an impending meltdown of consumer spending are changing their tune in light of stronger economic reports in the past month. If there was going to be a day of reckoning for the consumer, I would have thought it would have happened by now, said Mary Ann Hurley, senior Treasurys trader in Seattle for brokerage D.A. Davidson. Consumers account for roughly two-thirds of U.S. economic activity. Ms. Hurley sees selective opportunities in riskier corporate bonds whose valuations benefit as consumer spending gears up.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615436","date":"2002-02-05","texts":"Limited Inc., reversing a seven-year-old decision to separate Intimate Brands Inc., said it is offering nearly 1.5 billion in stock to buy back the 16 it doesn't already own in the company. Limited, based in Columbus, Ohio, offered part of Intimate Brands, parent of Victoria's Secret and Bath & Body Works, to the public in 1995 in a move designed to highlight the value of the businesses. At the time, Intimate Brands accounted for 70 of Limited's operating income but less than 60 of the company's stock-market valuation. Today, the two measures are more in line. Limited gets more than 90 of its operating income from Intimate Brands and about 95 of its market capitalization. The most significant factor in the Board's decision to take this action is the belief that a recombination of the businesses at this point will allow us to achieve greater growth, Leslie Wexner, chief executive of both companies, said in a statement. This clearer, simpler structure will allow us to fully develop the potential of our best brands across merchandise categories and distribution channels. Under terms of the proposal, Limited is offering 1.046 Limited shares for each Class A share of Intimate Brands. In 4 p.m. composite trading on the New York Stock Exchange, shares of Limited were down 70 cents at 17.75, while Intimate Brands slipped 40 cents to 17.50. The exchange offer values Intimate Brands at 18.57 a share, only a 6.1 premium to Intimate's current trading price. Intimate Brands hit a 52-week-high of 19 about one year ago today. The stock price of Limited, whose brands include Limited stores, Express, Structure and Lerner New York, closely tracks that of Intimate Brands.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616702","date":"2002-02-05","texts":"In a high-stakes race to bring a new type of cancer drug to market, two companies have gained important ground after the leading company, ImClone Systems Inc., failed to clear regulatory hurdles. To get to the market quickly, ImClone tried a high-risk strategy to seek regulatory approval with one small, unusually designed clinical trial. But the Food and Drug Administration in December refused to review its application. The resulting mess -- a rash of shareholder lawsuits, embarrassing publicity, and investigations by Congress and regulators -- has been a nightmare for ImClone and its officers and directors. But ImClone's stumble may have created an unexpected opportunity for AstraZeneca PLC and OSI Pharmaceuticals Inc. in the multibillion-dollar market for this new class of cancer drugs. AstraZeneca may now lead the pack On the very day ImClone announced the FDA's decision, Dec. 28, AstraZeneca said it had completed its application with the agency for its drug. Whoever is on the market first will dominate for a long period of time, says oncologist Eric Rowinsky, director of clinical research at the Institute for Drug Development in San Antonio, where he has run clinical trials on five rival drugs to ImClone's drug, Erbitux. Eagerly anticipated by oncologists and patients, ImClone's treatment was expected to be the first of a new class of drugs that tries to stop cancer from spreading by interfering with the chemical signals -- most notably the activation of substances on the outside of cells called epidermal growth factor receptors -- that seem to tell cells to proliferate. Most solid-tumor cancers -- colorectal, lung, pancreatic, and head-and-neck -- appear to grow using the chemical signaling the medicines aim to block. Although each of the new drugs might be approved initially for different types of tumors, they are expected to compete because oncologists routinely use drugs on many types of cancers besides the approved ones.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984084","date":"2002-02-05","texts":"Appropriations -- 1030 a.m. VA, HUD and independent agencies subc. Firefighting and local preparedness issues. 124 Dirksen Office Building. Armed Services -- 930 a.m. Fiscal 2003 budget request for national defense. Defense Secretary Donald H. Rumsfeld and Joint Chiefs of Staff Chairman Gen. Richard B. Myers. 216 Hart Office Building. Armed Services -- 430 p.m. Meeting with members of Canadian Senate Committee on National Security and Defense. 236 Russell Office Building. Banking, Housing and Urban Affairs -- 930 a.m. Financial illiteracy. Federal Reserve Board Chairman Alan Greenspan, Treasury Secretary Paul H. O'Neill, Securities and Exchange Commission Chairman Harvey L. Pitt. 106 DOB. Commerce, Science and Transportation -- 930 a.m. Science, technology and space subc. Bioterrorism preparedness. 253 ROB.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983099","date":"2002-02-10","texts":"From coast to coast, governors are tiptoeing around gaping deficits in state budgets. They have appeared suddenly, like sinkholes in tapped-out oil fields 12.5 billion in California, 1.4 billion in Michigan, 533 million in Kentucky. These shortfalls are small by federal standards. But unlike the government in Washington, state governments must balance their budgets every year Virtually all are forbidden, by law or constitution, from running deficits. As a result, 40 states must close a collective 40 billion in deficits for fiscal 2002, according to the National Association of State Budget Officers. But this being an election year, the story doesn't end there. From Hartford to Sacramento, these gaps are generating significant political tension. Virtually every state chief executive has ruled out the most potent revenue-raising weapon in his or her arsenal income tax increases. And that's a mistake. Governors are turning their backs on the most ready source of revenues -- as well as the fairest and most painless way of raising funds. It wasn't always this way. During the last recession, in the early 1990s, governors and big city mayors faced much the same challenge. Many of them, Democrats and Republicans alike, took what seemed to be the easy route. They simply cut spending and pushed through income tax hikes. Presidents George H.W. Bush and Bill Clinton pursued essentially the same strategy, boosting marginal income tax rates on the highest-earning Americans. But while the income tax increases of a decade ago proved to be solid fiscal successes, they were abject political failures. And as a result, today's governors treat income tax increases the way members of the Texas congressional delegation treat Enron. They shudder even to mention the powerful force that until recently provided them with immense benefits even though, from a fiscal perspective, it makes the most sense to tax the richest vein of revenues. Never mind the hoary debate over regressive sales taxes and progressive taxes on income. Raising taxes on income simply doesn't enter the vocabulary of today's governors, regardless of their party. Instead, today's fiscally challenged governors are earnestly pledging to cut spending, commandeering funds from the tobacco settlement, and placing big bets on two fiscal long-shots a swift economic recovery and increased federal aid. Those who are raising revenues are embracing less politically painful -- and likely less effective -- taxes on cigarettes, telephones, sales and services.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982211","date":"2002-02-11","texts":"CORRECTION The Washington Investing column in the Feb. 11 Business section incorrectly reported the status of Ernst & Young's consulting practice. Ernst & Young sold its global management and information technology consulting practice in May 2000. Published 21202 Last week, the big accounting firms all said that having seen the light of Enron, they will somehow segregate their accounting and consulting operations. The consulting conflict is obviously not the only thing that's wrong with corporate accounting, but building a barrier between auditing and consulting or splitting them into separate companies is a good start. Cutting apart the two businesses, as the accounting firms well know, will be radical surgery, requiring the companies to fundamentally change the way they manage, operate and market their services. The separation anxiety will be greatest at Ernst & Young, Deloitte Touche Tohmatsu and PricewaterhouseCoopers. The need for the split was recognized years ago by KPMG and what was then known as Arthur Andersen.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616096","date":"2002-02-15","texts":"In the wake of Sept. 11, rich countries are being exhorted to spend more money on foreign aid. If income inequality has spawned terrorist movements, the thinking goes, then rich countries should shell out more to make the world safer. But enormous sums of aid for development have already been wasted over past decades. And different countries have different needs Afghanistan's request for peacekeeping forces is a far cry from Argentina's entreaty for a financial bailout. Easy as it might be to succumb to the cheap grace of writing checks, the Bush administration is proposing a more thoughtful approach to foreign aid. Its goals, to emphasize quality over quantity and to focus on measurable results, will no doubt antagonize the United Nations, the World Bank and the International Monetary Fund, who prefer to help the world by soliciting more funds for their own budgets. Under the Bush plan, recipient nations will be asked to assume greater responsibility for their own economic decisions. Call it the tough love approach to global development. One of the first steps is recognizing that economic growth must begin in the soil of basic security and the rule of law. In countries besieged by war and political instability, few have the luxury of focusing on improving their own prospects. I receive daily delegations from all over Afghanistan, notes Afghanistan's interim leader, Hamid Karzai. They all ask for security and peace more than education, health and development. Financial assistance that fights crime and promotes a functioning legal system is money well spent. But it can only succeed where a nation is committed to transparency and good governance. Helping improve nations' productivity is another area where foreign assistance can help. Access to health care and education allows individuals to become contributors to the global economy rather than be left behind or remain perpetual burdens. Enrolling girls in school can literally double the potential work force. Likewise, money to provide vaccinations against infectious diseases or prevent the spread of AIDS not only relieves human misery, but changes the social and economic dynamics of stricken nations. In South Africa, the AIDS tax the epidemic's cost on business is as high as 10 per year. Still, as nice as it all sounds, humanitarian aid to improve peoples' lives and give them the chance to be productive is an empty victory without opportunities for nations to capture the rewards of upgraded skills and lift themselves out of poverty. And much of that responsibility falls to local governments. No one is indifferent to scenes of desperate people in Argentina being injured or killed in riots caused by money meltdown and financial chaos. But as Treasury Secretary Paul O'Neill points out, Argentine officials received some 60 billion in emergency assistance from the IMF and other sources, yet they just didn't reform. It is irresponsible to continue giving money to a government that violates the most basic commitment to its citizens.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613780","date":"2002-02-19","texts":"Oddsmakers give the recession a short duration. Even dour Fed chairman Alan Greenspan has detected a few signs of early recovery. But not everyone is yet convinced. Clearly, stock and bond investors have hedged their bets All the averages are way below their optimistic thresholds. The bankruptcies of Enron, Kmart, Global Crossing and others have cast serious doubt about the sustainability of recovery. And lingering in the background is always the threat of another terrorist attack, Mideast war, or Third World currency collapse. As Joseph Stiglitz, chairman of President Clinton's Council of Economic Advisors and later chief economist for the World Bank, warned way back in November, this recession might turn out to be the worst in 20 years. As Professor Stiglitz sees it, a deep recession like 1981-82 is the best we can hope for. In that 16-month recession, output fell by 12.3 and unemployment soared to a post-war high of 10.8. By contrast, in the 1990-91 recession, output fell only 2.3 and unemployment peaked at 6.5. That is the kind of short, shallow recession the optimists are hoping for this time around. Despite the spate of warning signs, the optimistic outlook still remains strong. The optimists' case rests not only on the usual array of indicators -- rising consumer confidence, abnormally low inventories, cheap money, and fiscal stimulus -- but also on a wild card few observers have noticed.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613930","date":"2002-02-19","texts":"LINTHICUM, Md. -- Ciena Corp. agreed to acquire ONI Systems Corp. in an 850 million stock deal, creating a powerhouse in optical-networking equipment and possibly sparking further industry consolidation. Hugh Martin, ONI's chairman, president and chief executive, said the companies are a perfect match, since Ciena specializes in equipment for long-haul networks while ONI provides gear for metropolitan networks. Mr. Martin said he initiated the deal, partly because ONI's telecommunications-carrier customers had expressed some concern about breadth of product line and customer support from ONI as a stand-alone company. Although Ciena has increased its market share over the past year, the Linthicum, Md., company -- like its competitors -- has been hit hard by plummeting demand for networking gear, as telecommunications carriers rein in spending or struggle to stay in business. Ciena recently warned of sharply falling revenue and a substantial loss for its fiscal first quarter, ended Jan. 31. Ciena's top competitors include Nortel Networks Corp., Lucent Technologies Inc., Alcatel SA and others. Demand for metropolitan network equipment, however, is holding up much better than the long-haul network segment, said Gary Smith, Ciena's president and chief executive. The combination of the companies' product lines stands to be compelling from a customer point of view, he said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985338","date":"2002-02-23","texts":"Northern Virginia Republicans in the House of Delegates rallied support today for a local income tax to fund school construction in their region, an option they view as a prime source of money now that the House speaker is poised to kill a Senate bill for statewide education assistance. With House Speaker S. Vance Wilkins Jr. R-Amherst planning the demise of the statewide bill on Monday, GOP delegates from Northern Virginia scrambled to line up support for a replacement bill for education improvements back home -- and to fund them through a new income tax that would require the approval of local county boards. I'm working my darnedest to see what I can do, said Del. Jeannemarie A. Devolites Fairfax, who was taking the lead role of rounding up votes for the income tax measure. This is the better way to go It would keep every dollar raised at home. After winning Wilkins's permission in a 9 a.m. meeting, Devolites and other suburban Republicans spent the day trying out the income tax concept on colleagues. Devolites, one of Wilkins's lieutenants on the House floor, said the reception was mixed. Some rural Republicans complained that without the Senate bill, school systems in their districts stood to win no new money at all. Wilkins and Gov. Mark R. Warner D have been sparring for several days over Senate Bill 170, sponsored by Democrat Charles J. Colgan of Prince William County, which would place two issues affecting Northern Virginia on the Nov. 5 election ballot. One would be a statewide referendum to raise the state's 4.5 percent sales tax by a half-cent to fund education programs the other, for Northern Virginia only, would raise the sales tax locally by the same amount and earmark the proceeds for regional transportation projects.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984644","date":"2002-02-26","texts":"President Bush today will propose a revision of the landmark 1996 law that overhauled the welfare system, by increasing work requirements on people who get government assistance, while giving states new subsidies to encourage marriage and continuing a ban on welfare payments to immigrants, administration officials said yesterday. Bush's plan, to be announced at a Washington Catholic church, would increase the percentage of welfare recipients required to have jobs or take part in related activities by 5 percent a year, raising it from 50 percent to 70 percent. The plan would require a 40-hour workweek, instead of 30, with accommodations for parents with infants or other special circumstances. As a concession to governors and congressional Democrats, the plan would let states count 16 hours of education or other job preparation toward the 40 hours of required work. I think work ought to be the core of welfare reform, Bush told a meeting of governors at the White House yesterday. In order to make sure that welfare reform works, that there's flexibility at the states, that there's recognition people need training or drug rehabilitation. But work ought to be the centerpiece of a good welfare law. In highlights of the plan released by the administration last evening, the White House made clear for the first time that it does not intend to restore the ban on welfare benefits for immigrants who entered the country legally after 1996. Those immigrants were one of the main groups that lost benefits under the welfare law six years ago. Democrats are joining welfare rights groups and immigrant advocates in urging that those benefits be restored. A White House document labels its decision on that issue, Safeguarding Against Welfare Dependency Among Non-Citizens. As Bush aides have previously said, the plan calls for legal immigrants to receive food stamps five years after entering the United States.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614373","date":"2002-02-28","texts":"Alan Greenspan had upbeat words for investors, but not upbeat enough to sustain much of a stock rally. After being up as much as 1.38, or 139.98 points in the morning, while Mr. Greenspan was speaking to the House Financial Services Committee, the Dow Jones Industrial Average finished up only 0.12, or 12.32 points, at 10127.58. In his comments, the Federal Reserve chairman said he sees increasing signs that the nation's recession is ending, though he cautioned that any recovery this year is likely to be mild. Some traders said a turning point for stocks was the midday announcement from Wachovia Securities that it was cutting earnings forecasts for Cisco Systems, which finished the day down 8 on the news. Cisco isn't a component of the Dow industrials, but it is an influential part of the Nasdaq Composite Index, which is dominated by large technology companies. After being up as much as 1.52 early in the day, the Nasdaq composite turned down sharply after the Wachovia announcement, finishing down 0.85, or 14.98 points, at 1751.88. Stock investors also were disappointed that Mr. Greenspan didn't see a stronger economy, and some decided to cash in their recent profits.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984691","date":"2002-03-01","texts":"When President Richard M. Nixon's ambassador to France got roaring drunk and began groping the flight attendants on a trip home from Paris, Nixon didn't see that much to get excited about. Look, people get drunk, the president said after a Jack Anderson column regaled readers with a graphic account of Ambassador Arthur K. Watson's behavior on a March 1972 flight to Washington. People chase girls. And the point is, it's a hell of a lot better for them to get drunk than to take drugs. It's better to chase girls than boys. Now that's my position and let's stop this crap, Nixon declared at a March 14, 1972, Oval Office meeting with his chief of staff, H.R. Haldeman. Understand The episode, which prompted Democratic congressional demands for an investigation and Watson's resignation, is one of thousands chronicled on 426 hours of White House tapes released yesterday, the biggest release to date. The new batch deals with the tumultuous first half of 1972, which included Nixon's historic trip to China, a fierce battle for the Democratic presidential nomination and an assassination attempt that crippled Alabama Gov. George C. Wallace at the height of his popularity. It also included what the White House sought to dismiss as a third-rate burglary at Democratic National Committee headquarters in the Watergate complex. At one point, in a discussion with national security adviser Henry A. Kissinger about intensified bombing of North Vietnam, Nixon abruptly suggested a nuclear strike. But he may have just been trying to get a rise out of Kissinger, who quickly played down the idea.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984943","date":"2002-03-01","texts":"Express commuter buses, new routes in areas hungry for transit, and high-tech devices to allow buses to zip past cars were among the initial recommendations offered yesterday by consultants working on a 2 million bus study for Metro. The study, the first comprehensive analysis of the region's bus system in 30 years, began two years ago and is focused on Metrobus as well as more local bus service, such as Ride On and Fairfax Connector. One of our goals is to improve the bus image, to make people want to ride it, said Rick Stevens, Metro's director of business planning and development. That means improving reliability, enhancing amenities so you're not standing in the rain waiting for your bus. . . . This is about making it a premium service, like rail. The study analyzed existing service, relying on a raft of data, including a customer survey of 40,000 riders and a telephone survey of 1,000 riders. It found good service and coverage on weekdays but crowding on many District routes and poor productivity -- meaning few riders -- on some suburban routes, said Larry Englisher, of MultiSystems Inc., a consultant to Metro. Increasing frequency, extending evening and weekend service, improving feeder service to subway stations and reducing crowding on District buses were among the ideas Englisher presented to Metro directors yesterday.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983984","date":"2002-03-04","texts":"People say that global poverty's a shame, but there's just no way to fix it. People say they'd welcome bigger aid programs, but aid is mostly wasted. Here is why these pessimists are utterly mistaken. The doomsters say that pro-market policy reforms, supported by aid donors and especially by the World Bank, have been a failure. But two decades of reform have actually succeeded. Since 1980 the number of people living on less than 1 a day has fallen by about 200 million, even as the world's population has risen by 1.6 billion. That is a stunning achievement given that the ranks of the poor previously had swollen steadily at least since 1820. The doomsters say that however much you throw aid at schools or health clinics, you never see much progress. But the adult illiteracy rate in the poor world has halved during the past three decades, and life expectancy has grown by 20 years during the past four. Again, a stunning achievement. The previous 20-year jump in longevity had taken since the Stone Age. The doomsters say that even if some developing countries did well, there's no evidence that aid was the reason. But economists can measure aid's role by analyzing aid levels, growth rates and other variables across countries. The World Bank calculates that 1 billion in extra aid lifts more than 250,000 people above the 1-a-day line. The doomsters say that even if aid has some effect, it's unproductive by the standards of advanced economies. Well, the World Bank's private-sector arm, which lends to businesses in the developing world, reports that the median project in its portfolio between 1998 and 2000 earned a post-tax return on capital of 10 percent. That compares well with the productivity of many multinational companies. At Alcoa, for example, the post-tax return on capital has averaged 9.6 percent during the past half-decade.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984642","date":"2002-03-04","texts":"On This Date The Constitution of the United States went into effect 1789. Vermont became the 14th state 1791. Labor Secretary Frances Perkins became the first woman to serve in a president's cabinet 1933. On This Date Five colonists died when British troops opened fire in Boston, an event that became known as the Boston Massacre and helped spark the American Revolution 1770. Birthdays Basketball's Shaquille O'Neal 1972. Former D.C. mayor Marion Barry 1936. Federal Reserve Chairman Alan Greenspan 1926. Artist Michelangelo 1475. On This Date The Alamo in San Antonio, Texas, fell to the Mexican army after a 13-day siege 1836. In its Dred Scott decision, the Supreme Court held that a slave could not sue for his freedom in federal court 1857. Birthdays Arlington KidsPost reader Alexander Cox 1994. Herndon KidsPost reader Shannon Shelley 1992. Olney KidsPost reader Sara Consolino 1991. Auto racer Janet Guthrie 1938. Painter Piet Mondriaan 1872.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982425","date":"2002-03-05","texts":"John Turner wonders about people who complain that student grades today are inflated. His small rural school in east Texas gave him A's for doing very little, he says, while his son Stephen, a junior at Langley High in Fairfax County, has to master math and chemistry at the level I had in my freshman year at Rice University. Wanda Radowitz feels the same way. Her ninth-grade daughter at Georgetown Day School in the District has been writing research papers with bibliographies and footnotes since the fourth grade. When Radowitz was in high school, she spent her study time doing her hair, listening to the Beatles and reading CliffsNotes to get B's. Now her daughter and friends form study groups to review French verb tenses or to discuss themes and characterization in 'The Odyssey.'  Most experts agree that colleges have let grading standards slip, but many teachers and parents believe that it's tougher to get a good grade in high school these days -- and a new study seems to back them up. After examining mathematics grades and standardized test scores of 23,900 high school students, researchers for the Santa Monica, Calif.- based Rand Corp. found no large-scale, substantial grade inflation, at least in mathematics, between 1982 and 1992. Better measures and models could lead to somewhat different estimates, but it seems unlikely that they would lead to a dramatically different finding, researchers Daniel M. Koretz and Mark Berends said in the report commissioned by the College Board. The researchers even saw hints of possible grade deflation, in that 1992 students received slightly lower grades than 1982 students with the same test scores. Koretz and Berends said there was no way to tell whether the courses are actually harder or easier than they used to be.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615905","date":"2002-03-06","texts":"Mortgage Rates and Weather Give a Boost Existing-home sales increased briskly in most regions in the fourth quarter of 2001, even compared with strong sales a year earlier, thanks to low mortgage rates for buyers and unseasonably warm weather for builders. East South Central and Great Lakes states showed the biggest gains as their stabilizing manufacturing sectors prompted workers to go ahead with delayed home-buying plans. Similarly, sales in Rocky Mountain states were boosted by workers' confidence in some of their dominant industries, such as New Mexico's defense contractors. But sales were sluggish at best in economies more tied to the information-technology sector, notably Pacific and New England states that were overbuilt with expensive homes prior to the industry's meltdown in 2000. The good news there Some prices are down, making some of the nation's highest-priced markets more affordable. --- Percentage change from year earlier in existing-home sales 4th Qtr. 2001 vs. 4th Qtr. 2000","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616876","date":"2002-03-08","texts":"Stocks pulled back and Treasury bonds plummeted after Alan Greenspan sparked fears of an interest-rate increase with an unexpectedly upbeat speech. The stock decline was mild, with the Dow Jones Industrial Average falling 0.46, or 48.92 points, to 10525.37. The pullback probably had more to do with profit-taking after a big run-up than with anything the Federal Reserve chairman said to the Senate Banking Committee. But bonds fell sharply, sending the yield on the 10-year Treasury note to a level it hasn't seen for eight months. The reaction appeared to be a direct result of Mr. Greenspan rewriting the speech he had delivered last week to the House Financial Services Committee. Last week, Mr. Greenspan said simply that the recession seemed to be bottoming out. Yesterday, he made several revisions, saying that an economic expansion is already well under way. Some bond investors took that as a signal that the Fed could move to control the economic expansion by raising its target interest rates as soon as the second half of the year. The fact that his first speech was so dovish and his second speech changed over the course of just a few days really took the market by surprise, said Scott Gewirtz, head of U.S. Treasury trading at Deutsche Banc Alex. Brown. Mr. Gewirtz said futures prices now suggest that the Fed is going to raise interest rates about two percentage points over the next year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617005","date":"2002-03-08","texts":"By some measures, the maker of the popular video game State of Emergency has one of its own. Take-Two Interactive Software last month restated earnings downward for seven consecutive fiscal quarters, disclosed that the Securities and Exchange Commission is investigating its accounting practices and announced its chief financial officer's resignation after two months on the job for personal reasons. A little later, the New York company, which makes video games, said there was an error in a portion of its restated earnings. The reaction from Wall Street Numerous analysts praised the company, and investors have bid up its stock 8 since Take-Two made its announcement. An anomaly in a market that supposedly is more attentive to accounting issues in the wake of the alleged accounting irregularities at collapsed Enron Not really. Take Hanover Compressor, a company with similar problems. It said last month that it, too, would restate lower seven quarters of earnings, that the SEC is reviewing its accounting for a partnership, and that it also had appointed a new chief financial officer. But the company's stock has soared 27 since breaking the news. Moreover, although the company recently lowered 2002 financial targets, analysts have become even more bullish about the stock.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982006","date":"2002-03-08","texts":"At the core of Marion Barry's quest for political revival are true believers like Benjy Little. In Barry's four terms as mayor, he funded Little's recreation center, employed his parents and gave him a series of summer jobs. I call him my father, said Little, 30, of Anacostia, who survived a bout of drug addiction to become a school mediation counselor and start a small music magazine. Marion Barry is the only person I had. But more than 20 years after Barry first rose to power, Washington has fewer and fewer Benjy Littles, with direct personal and economic ties to the political machine Barry built as the dominant power in city politics over decades. As Barry mounts his latest comeback attempt, he faces a city that is wealthier and whiter -- and a government that is less devoted to political patronage -- than it was in his heyday. And much of his traditional constituency has moved to what Washingtonians jokingly call Ward 9 -- Prince George's County. That Barry is still regarded as a formidable force is testimony to the enduring power of his politics. They are populist and personal, giving him a fighting chance to overcome demographics and voting patterns that are shifting against him.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983884","date":"2002-03-08","texts":"In her Feb. 19 front-page article, HUD Loses Faith in Housing Program, Carol D. Leonnig misstated and omitted facts. In six months, the Church Association for Community Service renovated and sold 21 homes with happy homeowners. More than 80 percent of these homes were sold to low- to moderate-income families at affordable prices. Despite the efforts of midlevel Housing and Urban Devlopment officials, the Bush administration looked beyond partisan politics, saw the merits of the project and allowed it to move forward. Otherwise, 21 new homeowners and 14 soon-to-be homeowners would not own a home, and there would be 300 boarded-up houses in Washington instead of 265. This project is proof that faith-based solutions do work. Also, we applaud D.C. Mayor Anthony Williams's support for affordable housing, including this project. Ms. Leonnig misstated information on the fees earned by our company and by the Church Association. GLM will be paid only its costs plus a 10 percent fee. GLM has yet to recover its costs, and the Church Association has poured all of the money back into the project. We are the only African American and self-sustained Asset Control Area Agreement operating with HUD. Also, we are the most cost- effective agreement others received sizable grants. We hope race is not the issue here, but we wonder. Ultimately, we rest our case on results -- 21 sold and 14 under contract -- completed in six months. The Post articles on District community development corporations front page, Feb. 24 and 25 overlooked the tremendous contributions that CDCs have made to neighborhoods that others, including the private sector, had long since written off.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983326","date":"2002-03-09","texts":"Lockheed Martin Corp. has reached a tentative contract agreement with workers at two of three factories that had threatened to strike, but the local union at the company's plant in Marietta, Ga., recommended rejecting the settlement offer. Union officials at two plants in California -- an airplane development center in Palmdale and a missiles and space facility in Sunnyvale -- have expressed support for the package. The company's final offer was announced yesterday after nearly 36 hours of negotiations with the aid of federal mediators. Members of the International Association of Machinists and Aerospace Workers at all three of the plants are to vote on the offer Sunday. Earlier this week, about 6,000 of the workers voted to strike on Monday if there was no agreement. Strikes now appear unlikely in California, but Jim Carroll, president of the union's Local 709 in Marietta, said the contract for the Georgia workers contains different language. Among other concerns, Carroll said the proposed contract would let Lockheed Martin outsource work now being done by employees. Outsourcing and job security have been particular concerns in Marietta, where the company builds the F-22 fighter jet and the C- 130J military transport -- aircraft with relatively high price tags and low production runs. The local union's membership has dropped from 7,000 workers in 1990 to about 2,700 now.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984149","date":"2002-03-09","texts":"An 800-page compendium of charts, factoids, images and essays, it was produced by Harvard graduate students under the wing of Dutch architect Rem Koolhaas. The academics sought to document how shopping became the engine of 20th-century urban growth. They contend shopping is now the defining activity of public life. We shop at the airport, we shop at church. The train station is now a mall. McDonald's is also a toy store. Former military bases are being reconditioned as theme parks with shopping malls. We can buy embryos at the hospital. Museums make more money from their shops than from any other single source. And we are happy to treat ourselves to cultured gift wrap. Urbanization is commerce. Few consumers would deny that their lives -- and the local landscape -- have been affected by mall sprawl, Big Box empires, entertainment zones and outlet villages. The real-life mystery is why so many serious architects didn't involve themselves at every step in their creation. Koolhaas, of course, is the Pritzker Prize-winning creator of such high-profile design ventures as the Guggenheim Las Vegas and Prada's SoHo boutique. As an architect and thinker, he has long sought to meld high and low culture. The shopping project met that test Koolhaas turned Harvard's elite into mall rats. More than a dozen master's degree candidates fanned out over three continents to conduct field research, gather statistics and compile histories and anecdotal evidence. Their data, gathered during the 1997-1998 school year, have been reproduced on hefty stock and published by Taschen. The launch itself was an adventure in high-low culture The guide was introduced in Europe with a tony event at London's Tate Modern. Last week New Yorkers were invited to a Chinatown restaurant.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613986","date":"2002-03-13","texts":"While the U.S. economy bounced back in the fourth quarter, Europe's own gross domestic product shrank for the first time since 1993, according to the chief European statistics agency. Still, evidence is mounting that a recovery on the Continent is under way. Among the 12 countries that share the euro, GDP, the total value of goods and services, contracted by 0.2 in the fourth quarter from the third, Eurostat reported. Growth was dragged down by corporate retrenchment in the face of slackening global demand. But just as it followed the U.S. in its downturn, Europe appears to be moving upward now as well. Surveys show that Europe's overall economic mood, as measured by the European Economic Sentiment Indicator, is now at its best since September, and inflation is on the whole falling. Spaniards are building. Italians are using more phone services and burning more electricity. The French keep buying. Lufthansa, the German airline, recently lifted a hiring freeze on cabin and ground crew as it prepares for more flights to the U.S. this summer. Indicators increasingly point to improvements in economic conditions, Wim Duisenberg, president of the European Central Bank, said last week. In its latest growth forecasts, the European Commission agreed. The European Union's executive body predicted yesterday that growth this quarter would be between 0.1 and 0.4, from last quarter, and would improve further to 0.4 to 0.7 next quarter. These forecasts confirm that the slowdown is over but suggest that the recovery will be moderate, the commission said in a statement. There is a wrinkle. The budding European economy is also unfolding at different rates in different countries. That isn't unusual for a large region, but part of the problem stems from the euro zone's very reason for being Europe's common currency regime, which limits how much laggard countries such as Germany can spend to jump-start their economies.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985433","date":"2002-03-13","texts":"James Tobin, 84, a Yale University economics professor who won the 1981 Nobel Prize in economics for his analysis of investments and financial markets known as portfolio selection theory, died March 11 at a hospital in New Haven, Conn., after a stroke. Dr. Tobin, who was said to have been among the most influential and creative economists of his time, served on the Council of Economic Advisers in John F. Kennedy's administration. He was a major contributor to theories of investment, consumption, money and banking and economic growth, and he was widely known in academia and business as a leading apostle of the economic thinking of British economist John Maynard Keynes that tax and budget policies can be used effectively to regulate an economy. As a Keynesian economist, Dr. Tobin feuded with monetarists who argue that controlling the supply of money and credit is the best way to regulate an economy. His sharp attacks on Milton Friedman, the winner of the 1976 Nobel Prize in economics and widely recognized as the dean of monetarists, were particularly well publicized, as were his criticisms in the early 1980s of Federal Reserve Board Chairman Paul A. Volcker. Volcker's single-minded effort to curb inflation with tough monetary policy, Dr. Tobin told a congressional subcommittee, was likely to result in damage to the real economy in terms of unemployment, low production, recession, low investment and so on. Economics, Dr. Tobin once told a meeting of the American Economic Association, inevitably blends ideology and science. Describing the portfolio selection theory that helped him win a Nobel Prize, he said it sets forth the principle of not putting all your eggs in one basket because then, if something goes wrong, you lose them all at once. This theory was said to have been influential in the willingness of investors to diversify holdings. Hobart Rowen, the late Washington Post business editor, wrote that Tobin's work for the first time showed the relationship of financial assets to the development of government financial policy.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985586","date":"2002-03-13","texts":"He was elected in 2000 and began serving just 14 months ago, so he has not yet absorbed the lesson that in Washington, symbolism is far more important than substance. Even though he served an apprenticeship in the House of Representatives more than a decade ago, his eight years as the Democratic governor of Delaware ruined him. Carper, like other governors of both parties, became accustomed to being judged on the results he produced for his state, not on his rhetoric. That is why he was able to defeat a popular incumbent, William Roth, in their gentlemanly Senate election campaign. And it is why he looked at the so-called stimulus bill that whisked through Congress last week and was signed by President Bush on Saturday with such a skeptical eye that he was one of only 12 legislators in the entire House and Senate to vote no. He explained to his constituents that he could not be part of the game when Congress passed a bill that spends money we don't have to fight a recession that is already over. Four hundred and seventeen representatives -- all but three of those who voted -- and 85 of the 94 voting senators disagreed, and many of them spent the past weekend at home, bragging about the help they delivered. The new law extends unemployment benefits in most states an additional 13 weeks, provides rapid tax depreciation as an inducement for business investment, funnels aid into the New York City area hit by terrorists last Sept. 11 and keeps in place a few random tax provisions that otherwise would have expired.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982978","date":"2002-03-15","texts":"It is possible to view the indictment of Arthur Andersen as the simple story of a few rogue document-shredders in the firm's Houston office, or an act in the larger Enron drama, or a turning point in a morality play at one of the world's great accounting firms. There are those here in Washington who see it as the first of a five-part series on the corruption of the accounting profession. But in the broadest sense, Andersen may be seen as just one tragic character in the boom-and-bust saga of the 1990s -- a victim as much as a protagonist in the unfolding drama of cheap capital, fast fortunes and stock-price addiction. It is the story not just of Andersen and Enron but Global Crossing and MicroStrategy, WorldCom and Qwest, the dot-com bust and the two-year bear market and even the global recession. In Andersen's case, the path toward criminal indictment began on Wall Street, which by the mid-1990s was awash in money looking to be profitably invested A surge in retirement savings of baby boomers a tidal wave of investment capital from overseas investors unimpressed with opportunities at home hordes of cash generated by newly efficient and profitable U.S. corporations. In time, this excess supply drove stock and bond prices through the roof, encouraging companies to rush out with new offerings to soak up the billions of dollars. And with their inflated shares, companies found they had a sought-after currency with which to buy other companies, secure loans, pay back creditors and compensate employees. In time, the stock-fueled demand drove up the price of everything from Park Avenue condos to the wages of hamburger flippers at McDonald's. For Andersen, Wall Street's boom presented both challenge and opportunity. In attracting and retaining key professionals, firms like Andersen compete with investment banks, consulting and law firms and large corporations. And by the late 1990s, the compensation for this talent was soaring. MBAs right out of the best business schools could command six-figure packages while top partners came to believe they deserved nothing less than seven.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984018","date":"2002-03-16","texts":"Every weekday at the Erie Neighborhood House on this city's North Side, feisty 4- and 5-year-olds file into classrooms that bear names such as Sunflower and Daffodil to play with Legos and dinosaurs and receive their daily lessons in Spanish and English. Their parents, depending on the family income, pay as little as 4.33 a month for the all-day child care that costs as much as 250 a week on the open market, an enormous sum for the many who are recent immigrants working two or three jobs to survive. But the sounds of children playing and learning in these classrooms may soon be silenced as part of a belt-tightening proposal by Gov. George Ryan R that would do away with a 184 million early childhood grant that subsidizes pre-kindergarten classes for 220,000 low-income children around the state. Illinois, like nearly every other state, is facing lean times for the first time in years. Tax revenue is well below expectations, the cost of health care is exploding and higher costs for unemployment claims and new security initiatives are taxing already thin budgets. Everything is on the table -- including tax incentives for businesses, public education money and programs aimed at the poor, disabled and elderly -- as governors and state lawmakers try to make up more than 40 billion worth of budget shortfalls. In Maryland, the state Senate yesterday gave preliminary approval to a new austerity budget that would slow spending after years of dramatic increases while preserving a scheduled 2 percent income tax cut. Virginia, with an annual budget of about 25 billion, approved new spending plans last week that cut social programs and other services while increasing fees and college tuitions to close a budget gap estimated at 3.8 billion for the next 2 12 years.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614297","date":"2002-03-20","texts":"NEW YORK -- Treasurys ended mostly higher after being whipsawed both before and after the Federal Reserve said it was leaving interest rates unchanged, while shifting to a more balanced view of the risks facing the economy. At 4 p.m., the benchmark 10-year Treasury note was up 432 point, or 1.25 per 1,000 face value, at 96 2932. Its yield fell to 5.279 from 5.296 Monday, as yields move inversely to prices. The 30-year Treasury bond, the weakest maturity, was unchanged from Monday at 95 132 to yield 5.728. Treasurys had been lower for most of the session. But the market rallied after the Fed's decision to keep the federal-funds rate at 1.75 was announced at 219 p.m. EST. In a statement, the central bank said that against the background of its long-run goals of price stability and sustainable economic growth and the information currently available, the risks are balanced with respect to the prospects of both goals. But the Fed also sounded a note of caution about future activity, mentioning that the outlook for final demand -- seen as the linchpin for a sustainable recovery -- remains unclear.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616839","date":"2002-03-20","texts":"The Dow Jones Industrial Average reached a new high for the year following a generally upbeat assessment from the Federal Reserve, which left interest rates unchanged. The Fed signaled that the prospects for the economy are improving, helping to keep stocks up across the board even though the rate decision was anticipated. Many investors said they were relieved the Fed didn't signal excessive nervousness about inflation, though it did give one of its first indications that it might raise interest rates later this year if the economic turnaround continues. The Dow Jones Industrial Average closed up 0.54, or 57.50 points, at 10635.25. That's just above the previous high for the year, hit a week ago, of 10632.35. The Standard & Poor's 500-stock index climbed 0.41, or 4.74 points to 1170.29. The Nasdaq Composite Index rose 0.20, or 3.81 points, to 1880.87. Bond prices edged higher and the dollar was up. Stocks dropped slightly after the Fed's announcement at 220 p.m. EST but managed to fend off afternoon selling pressure and close in positive territory.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982144","date":"2002-03-20","texts":"Federal Reserve officials left their interest rate target unchanged at a meeting yesterday and signaled that they may be in no rush to raise rates as long as the economic outlook remains uncertain. The central bank's top policymaking group, the Federal Open Market Committee, said the economy is expanding at a significant pace but then noted that the rate of growth later this year is still uncertain. The burst of strong economic data in recent weeks caused the FOMC to shift its assessment of the risks facing the economy. At the committee's last meeting, in late January, it had concluded that the risk of further economic weakness outweighed that of added inflation. Yesterday, however, the officials said they believe risks to their long-run goals of price stability and sustained economic expansion are now balanced. This shift is a first small step in the direction of raising the FOMC's 1.75 percent target for overnight rates later this year -- assuming the rebound from last year's recession does not falter significantly. Many investors and analysts believe the first rate hike will come at the next FOMC meeting on May 7.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613599","date":"2002-03-25","texts":"Washington -- Contrary to popular belief, Federal Reserve Chairman Alan Greenspan is capable of speaking clearly. A case in point was earlier this month, up on Capitol Hill, when he held forth on the mundane but vital issue of pricing. A striking feature of the current economic cycle, the Fed chairman said, has been the virtual absence of pricing power across much of American business. Well said, Mr. Chairman. Raising prices has always been an art form, but these days it is approaching the status of a lost art form. Yes, there are the usual suspects that can achieve pricing power in good times and bad. They tend to be the rare service providers without global competition universities that raise tuition hospitals jacking up fees or near monopolies such as cable-television operators. Indeed, cable-TV giant Comcast Corp. has raised prices steadily all through the economic downturn, and in some markets, Comcast prices are up 15 since mid-2000. But for every business operating in a Comcast-type world these days, many more operate in what might be called a Wal-Mart world of flat or falling prices. Wal-Mart is famous for extracting ever-lower prices from its global army of suppliers. In turn, this forces suppliers to stay profitable by means of productivity gains instead of price increases. It's a powerful force that James Smith, an economist at the University of North Carolina, dubs the Wal-Martization of the U.S. economy. Thus, as the economy gathers strength, there's a big question looming. When will the discounting, rebating and price-cutting reverse course What happens if industries shutter excess factories around the world or if inventories are trimmed What happens to prices if industries become more concentrated oligopolies","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982010","date":"2002-03-26","texts":"The new federal long-term care insurance program features three prepackaged benefit plans but also allows government employees and retirees to tailor the plans to meet their individual needs, the Office of Personnel Management said yesterday. The benefit options and premiums were announced at the kickoff of an early-enrollment season for the program. In all, an estimated 20 million Americans are eligible to apply -- civil service and postal employees and retirees active-duty and retired military personnel and spouses, survivors and certain other family members. The program provides a way for government employees and retirees to obtain insurance to cover such costly long-term services as nursing home care, assisted-living care and adult day care. Employees and retirees who sign up gain security because they have the peace of mind knowing that they can maintain their financial independence and personal dignity if they one day are unable to take care of themselves, OPM Director Kay Coles James said. Families gain security because they know they will have the best possible options available to them in the event that they have to make one of life's most difficult choices regarding the care of their parents or loved ones. The program has been in the making for 18 months, and Frank Titus, the OPM official in charge of the program, said the early- enrollment period is being offered in response to pent-up demand from employees and retirees who feel that they need to enroll as soon as possible.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615388","date":"2002-03-27","texts":"Stocks and bonds rose on a spate of positive economic news, even as many investors remained on the sidelines, contributing to lower-than-average volumes. The Dow Jones Industrial Average managed the largest gain for the day, rising 0.7, or 71.69 points, to 10353.36. The Nasdaq Composite Index followed suit, rising 0.64, or 11.68 points, to 1824.17, and Standard & Poor's 500-stock index rose 0.58, or 6.62 points, to 1138.49. Traders said the day's minirally in stocks, which fizzled somewhat as the day went on, was led in large part by two promising pieces of data the Conference Board's consumer-confidence index, which climbed to 110.2 in March from 95 in February and statistics from the Department of Commerce indicating that orders for durable goods, or items meant to last several years, rose 1.5 from January to February. Both numbers suggest the economy might be recovering from recession. We had a little boost from consumer confidence, said Steve Bliss, co-head of Nasdaq trading for Cantor Fitzgerald. While Treasury bonds might normally drop on strong economy data, Treasurys rallied because traders interpreted Federal Reserve officials' comments as meaning the Fed won't raise rates soon. Though share volume was higher yesterday than it was Monday, the lightest-volume day on both the Nasdaq Stock Market and the New York Stock Exchange so far this year, trading traffic was still below average on a year-to-date basis.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982716","date":"2002-04-05","texts":"Arthur Andersen said yesterday that it has tentatively agreed to transfer much of its U.S. tax practice to accounting rival Deloitte & Touche LLP in what would be the first major step in its effort to shed non-audit businesses. Andersen said it is following a reform plan outlined by former Federal Reserve chairman Paul A. Volcker, which calls for the firm to stop providing services that conflict with its auditing. Volcker, who heads an internal oversight board at Andersen, has said that the firm should not provide aggressive advice to audit clients on how to reduce their taxes. The agreement calls for a significant number of Andersen's U.S. tax specialists to join Deloitte as soon as April 30, Andersen said. It would provide continuing career opportunities for a significant number of our people, Andersen managing partner Larry Gorrell said in a statement. At the same time, Andersen tax partners are negotiating with a venture capital firm to get 400 million to create stand-alone firm, an Andersen source said. Some partners are hesitant to invest their capital and future in another audit firm. In a conference call yesterday with leaders of the U.S. firm, Andersen partners were told that management is preparing to lay off a third of the firm's audit personnel and make smaller cuts in its consulting and tax practices.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984937","date":"2002-04-06","texts":"The nation's jobless rate rose last month, but the number of payroll jobs increased and there were other signs that U.S. labor markets are stabilizing after last year's recession. The unemployment rate increased sharply late last year after the Sept. 11 terrorist attacks. The rate reached a peak of 5.8 percent in December, fell to 5.6 percent in January and 5.5 percent in February before going up to 5.7 percent last month, the Labor Department reported yesterday. Meanwhile, non-farm employers added 58,000 jobs to payrolls last month, the first increase in eight months, after cutting them by 2,000 in February. The February figure was revised downward significantly from the original estimate of a 66,000 gain. Lois Orr, acting commissioner of labor statistics, said in a prepared statement that the payroll figures for March and February provide a marked contrast to the average monthly job losses of 144,000 that prevailed from March 2001 through January 2002. The jobless rate and number of payroll jobs can move in different directions for several reasons, including the fact that they result from separate surveys. The unemployment rate comes from a monthly survey of about 60,000 U.S. households, the payroll figures from a survey of roughly 350,000 businesses. Labor experts generally regard the payroll numbers as the more accurate measure of changes in the labor market, but the unemployment rate receives more public attention.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616900","date":"2002-04-08","texts":"New York -- The terrorist attacks of Sept. 11 were followed by understandable predictions of a plunge in consumer spending. Those forecasts were based partly on various readings of consumer sentiment, which dropped sharply. Goodbye to one of the few pillars holding up a wobbly economy, observers prematurely concluded. Truth turned out to be stranger than fiction. October 2001 will go down in economic history as the month Americans purchased the greatest number of autos -- ever. While that was largely attributed to auto makers' 0 financing offers, it still leaves unanswered why supposedly depressed Americans were plenty willing to visit -- of all places -- car dealerships. Harder to explain still is why the level of retail spending, after falling in September, has been higher in every succeeding month than it was in August. Indeed, even excluding autos, retail sales grew in every month during the past half-year compared with a year ago. All this while the most closely watched of the two main confidence gauges still hasn't topped pre-Sept. 11 heights. Could it be that consumer sentiment isn't so closely tied to spending behavior after all And if so, what does that mean for the U.S. economy now Carl Steidtmann, chief economist of Deloitte Research, jointly owned by the accounting firm Deloitte & Touch and Deloitte Consulting, believes he has an answer. Mr. Steidtmann compared changes in consumer confidence and consumer spending over the past 20 years. His finding There is very little, if any, relationship between confidence and spending. There are a number of possible explanations for the disconnect, but the most important is that spending and confidence are driven by a different set of factors, he says. Specifically, politics, disasters and war drive confidence, Mr. Steidtmann concludes, while cash flow drives spending. The twain may or may not meet. After Sept. 11, consumer sentiment was buffeted by the terrorist attack, the anthrax mailings and fear of a second blow. But at the same time, cash flow was bolstered by lower interest rates, tax rebates, mortgage refinancings and lower energy prices.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985396","date":"2002-04-08","texts":"Some people look forward to daylight savings time. Others await baseball's opening pitch. Loop Fans, of course, look forward to the annual presentation of the Congressional Pig Book, with its listing of the most egregious pork-barrel projects from this year's appropriations bills. The 12th annual rollout on Tuesday, complete with hogs of the four-legged variety and a list of the Dirty Dozen -- 12 states that have received the most pork per capita from 1995 to 2002 -- promises to be the best ever. That's because we're hailing record- breaking amounts of pork, 8,341 projects, and a record total of 20.1 billion in chops, ham, roasts and bacon, according to the watchdog group Citizens Against Government Waste. 14 million for the appropriately named Hollings Marine Laboratory in South Carolina -- as in Sen. Ernest F. Hollings D- S.C.. The small but wonderful 350,000 for the University of Mississippi National Library of the Accounting Profession. 420,000 for Hawthorne Elementary and Junior High School and 249,000 for Schurz Elementary School, both in Nevada, to buy each student a laptop computer.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614621","date":"2002-04-09","texts":"THE PUBLIC RELATIONS business could use a bit of PR help itself these days. For years, the world's largest advertising-agency holding companies have raced to acquire PR firms as an insurance policy of sorts. With Wall Street clamoring for earnings that wouldn't be rocked by the loss of major ad accounts or cutbacks in ad spending, Omnicom Group Inc. snapped up Fleishman-Hillard Inc. WPP Group PLC bought Hill & Knowlton Inc. and Interpublic Group of Cos. purchased GolinHarris International, among other deals. The ad holding companies and industry analysts said they believed that marketing-services companies such as PR agencies were resistant to economic downturns. Some even considered the sector countercyclical, since companies often need more PR help when they are financially troubled than when times are flush. But as the advertising business suffers through the worst drought in media spending since the Depression, PR firms are struggling, too. Overall revenue for the 4.2 billion U.S. public-relations industry fell 10 to 15 last year, according to the Council of Public Relations Firms. The biggest firms are laying off employees, slashing their prices for the first time in five years and chasing small accounts that they wouldn't have bothered with in the late 1990s boom.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617335","date":"2002-04-12","texts":"NEW YORK -- Wall Street faced its first big earnings test as General Electric posted first-quarter results. Judging by how the market acted in the trading session, GE failed the test dismally. GE fell 3.45, or 9.3, to 33.75, as 78 million shares changed hands, triple the volume of a typical session. Investors found themselves stung by the quality of the conglomerate's earnings report, which featured lighter revenue in the quarter than analysts anticipated. Investors also were disappointed the company didn't deliver a more robust outlook for the rest of the year than they heard on the conference call executives hosted. In technology, Yahoo sank 2.99, or 16, to 15.45 at 4 p.m. in Nasdaq Stock Market trading, after the Internet company posted first-quarter results that matched Wall Street's forecast and raised its revenue estimate for this year. But analysts faulted Yahoo for not outperforming expectations and reiterated lingering worries about Yahoo's exposure to the advertising market, which continues to struggle. Meanwhile, Wall Street maintained its bearish posture on the outlook for a profit recovery in the telecommunications sector, driving share prices in one of the market's hardest-hit areas even lower. Verizon Communications, which this week projected weaker earnings than Wall Street has been expecting, fell 2.08, or 4.7, to 41.82, a 52-week low. Sprint dropped 1.23, or 8.3, to 13.62, and SBC Communications sank 1.90, or 5.3, to 33.75, posting a 52-week low of its own. Other concerns only served to compound the problems that Wall Street had with first-quarter results. A research company that tracks the activities of the Securities and Exchange Commission reported that the agency has launched an inquiry into International Business Machines. The shares slid 4.82, or 5.4, to 84.19e, notching a 52-week low.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985595","date":"2002-04-13","texts":"One important measure of U.S. inflation rose sharply last month as the surge in world oil prices since mid-January began to work its way through the economy, the Labor Department reported yesterday. Producer prices for finished goods rose 1 percent last month, the largest monthly increase since the beginning of last year, principally because of a 5.5 percent jump in energy prices. That included a 21.3 percent increase in the prices refiners charge for gasoline following a 4.5 percent rise in February. However, the rising cost of energy -- evident in recent weeks to motorists at the gas pump -- so far does not appear large enough to derail the U.S. economic recovery. It would take a much larger and more sustained oil price shock to seriously damage the economy, partly because it is significantly less dependent on oil than in the past, analysts said. Moreover, in the past 10 days, world oil prices have fallen by nearly 4.50 a barrel, erasing more than half of the increase that began earlier this year. By one measure, crude oil prices peaked this year at just under 28 a barrel 10 days ago, driven upward largely by rising tensions in the Middle East, the prospect of growing oil demand because of the U.S. economic rebound and the possibility of disruptions in oil shipments from Venezuela because of political turmoil there.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982199","date":"2002-04-14","texts":"Jeffrey Osborn says he was surprised at how cheap it was to sway Loudoun County's elections. The builders have been buying the county for just dirt, he says. So Osborn, a venture capitalist, set out to beat them at their own game by pumping more than 50,000 into the campaigns to support eight slow-growth candidates for the county board of supervisors in 1999. They all won. Stunned by the defeat, pro-development interests in the Washington suburb have vowed to unseat the new board, which has sliced more than 80,000 houses from county plans. If you are a major player in a billion-dollar industry, are you going to let your industry evaporate asked Bryan Brooks, a local developer. The developers' response Up the ante. That's no small threat in Virginia, known nationally as the Wild West of campaign finance. There are no contribution limits for state or local offices here, making anything possible. If you want to give 6 billion to some guy who's running for sheriff or local delegate, you can do it, says Steve Calos, executive director of the Richmond-based Center for Open, Ethical and Accountable Government. Big money goes small town You betcha. Americans are used to thinking of national politics as the place where the big decisions get made -- and where the big money gets spent. That premise drove the campaign finance reform legislation President Bush signed last month. But that ballyhooed legislation did nothing to stem the flow of money to local and state campaigns. Local politics are just as fortified -- some say corrupted -- by cash as federal ones, and often more so. From the Blue Ridge mountain foothills of Loudoun to Laguna Hills, Calif., the excesses of K Street are flourishing on the Main Streets that lead to the nation's state houses, city halls and county buildings. The most intimate arena of our democracy can also be the easiest to manipulate. A little money can go a long way in local contests. The rules are looser, and fewer people are watching to see if those rules are followed. Voter turnout is often lower, giving one-issue champions and special interest groups greater influence. As on Capitol Hill, contributions often make great investments. People don't give money to honor America or show their love of democracy. They are buying something, says Calos. Money buys results.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982799","date":"2002-04-15","texts":"The Bush administration is poised to complete the biggest increase in government spending since the 1960s' Great Society, the result of conducting the war on terrorism while substantially boosting the education and transportation budgets, according to a detailed analysis of government spending patterns. Spending on government programs will increase by 22 percent from 1999 to 2003 in inflation-adjusted dollars, according to the analysis by The Washington Post and vetted by budget experts in both parties. The president's 2003 budget proposals, combined with spending approved in the first year of his administration and the last two years of the Clinton administration, dwarf the spending increase from any four-year period since President Lyndon Johnson fought the Vietnam War while launching a war on poverty. Other periods of substantial increases in domestic spending, including the Nixon and Carter administrations, were accompanied by cuts in military spending. President Ronald Reagan boosted money for the mili- tary while trimming the domestic budget. In the short term, the latest spending hike is one factor helping to pull the nation out of recession. But over the long run, some experts say, most of the spending will be a drag on the economy, heighten the risk of sustained budget deficits and limit the maneuvering room of policymakers when, 10 years from now, the government must help fund the baby boomers' health care and retirement needs. We should be very concerned, said John Cogan, a budget expert at the Hoover Institution who advised the Bush campaign. Clearly, the defense and national security increases are warranted. The failure to offset those increases with reductions should be a source of concern. The wrong thing to do is not confront those choices.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842614707","date":"2002-04-16","texts":"WASHINGTON AP -- U.S. companies, keeping a close eye on the economic recovery, whittled excess stocks of unsold goods in February for the 13th consecutive month. Stockpiles of unsold goods on shelves and back lots dipped by a seasonally adjusted 0.1 in February, the Commerce Department reported yesterday. That pushed the value of inventories down to 1.13 trillion, the lowest level since November 1999. The drop in inventories came even as businesses' sales slid by 0.9, the biggest decline in three months. With inventories getting lean, prospects are raised that factories, which are already slowly boosting production after a sharp cutback, will need to crank it up more in the coming months, economists said. That's something that would help the country as it recovers from a recession. As the economy stages a comeback, companies are working hard to gauge consumers' and businesses' appetite for their products, something that can be especially tricky when the economy is in transition, economists said.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615234","date":"2002-04-16","texts":"MEMO TO EMPLOYERS Guess who's starting to call the shots again As the economy shows signs of a nascent recovery, some job seekers are taking an increasingly bold -- and sometimes manipulative -- approach to finding work. Disillusioned by the sweeping layoffs and corporate penny-pinching of the past 18 months, they are employing tactics typically reserved for more robust times, such as accepting two job offers at once and then playing one prospective employer off against the other. Some keep searching for jobs after starting a new post and then jump ship when they find something better. Others, meantime, are holding two good positions at one time, a split of loyalties they hope might blunt the blow of future layoffs. After 10 frustrating months of unemployment, Sandra Gesburg accepted a sales representative job in early February at Advanced Toxicology Network, a Memphis, Tenn., laboratory that provides workplace drug testing. But just three weeks later, she was offered a better position and 25 salary increase from Professional Resources Screening Inc., a Concord, Calif., provider of pre-employment screening. Although the company had turned her down for a job once before, that was no matter -- 48-year-old Ms. Gesburg immediately took the post. They made me an offer I couldn't refuse, she says matter-of-factly. Stuart Bogema, Ms. Gesburg's old boss and ATN's chief executive, says he wasn't too happy with Ms. Gesburg's quick departure. She hadn't even worked long enough for us to see if she was going to be an able employee or not, says Dr. Bogema. When someone leaves after only a few weeks, that level of trust disappears. The attitude shift among employees comes after months of turbulent times. Companies from Cisco and Lucent to WorldCom have slashed thousands of jobs since early 2001. Others have re-assigned employees at random, delayed start dates and forced job seekers to jump through all sorts of hoops before extending an offer. More recently, the scandals at Enron Corp. and Arthur Andersen, which have cost thousands their jobs and retirement savings, have intensified employee cynicism -- and validated their efforts to look after themselves.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615708","date":"2002-04-25","texts":"Short interest at the Nasdaq Stock Market reached its highest point in four months, as the market's composite index dropped. The number of short-selling positions not yet closed out edged up 1 to 4,124,763,193 shares in the month through April 15 -- up from 4,085,825,647 shares on March 15. Investors who sell securities short borrow stock and sell it, betting the stock's price will fall, and they will be able to buy the shares back later at a lower price for return to the lender. Short interest often is considered an indication of the level of skepticism in the market. Short interest reflects the number of shares that have yet to be repurchased to give back to lenders. In general, the higher the short interest, the more people are expecting a downturn. Some investors will allocate part of their portfolio to a professional short seller to hedge, or protect, their assets in case the market falls. Investors also may rely on short selling for other purposes, including a hedging strategy related to corporate mergers and acquisitions, hedging convertible securities and options, or tax-related reasons. The next Nasdaq short-selling report will be published in The Wall Street Journal on May 27.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983172","date":"2002-04-25","texts":"It was a bumpy year for So Others Might Eat, the District-based charity known as SOME, which provides food, clothing, medical care and other services to those in need. Just months before the charity was to open a glossy building in Northwest Washington, the Sept. 11 attacks occurred, and SOME's donations plummeted 30 percent as Americans turned their attention - - and wallets -- to that cause. Then came the anthrax postal scare, and the charity group's mail dried up for several weeks. For a nonprofit organization that gets more than half its funding in small donations through the mail, it was a staggering one-two punch, said development coordinator Shonna Milliken Humphrey. But last week, the 30-year-old organization finally got some good news. Employees participating in the workplace fundraising campaign of the United Way of the National Capital Area had designated 1.4 million for SOME -- a whopping 40 percent more than in the previous year. The news was a big relief to the organization. The picture has similarly brightened for some other charities that were predicting hard times in the fall. After donating almost 2 billion to Sept. 11 funds nationally, Americans seem to have returned to supporting their usual causes. Although not all charities have rebounded to their pre-Sept. 11 levels, many now report that their worst fears never came to pass.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983645","date":"2002-04-29","texts":"DESCRIPTION NVR is far and away the largest builder in the Washington area and one of the top 10 builders of single-family homes in the country. It offers condominiums and single-family homes in 18 areas in 11 states. DEVELOPMENTS Over the past year NVR rode the strong housing market, with its low interest rates and strong buyer demand, and earnings grew accordingly. For fiscal 2001, NVR earned 236.79 million, compared with 158.25 million in 2000. Gross revenue for 2001 was 2.62 billion, compared with 2.32 billion the year before. Executives at the builder attributed the increase to favorable market conditions and the company's focus on controlling costs. NVR is regarded as the country's most financially efficient home builder. It tends to earn a higher return than other builders because it doesn't tie up large amounts of capital in land purchases, choosing instead to buy options on lots. The company's present backlog of orders should ensure a revenue stream for a long time, analysts said. In a survey by the California research firm J.D. Power & Associates, consumers ranked Ryan Homes, an NVR affiliate active in the Washington market, the second-best builder in the country in terms of customer satisfaction. Approximately 48 percent of NVR's home settlements during 2001 occurred in the Washington-Baltimore region, which amounted to 59 percent of NVR's 2001 home-building revenue. NVR is thus heavily dependent on the economy and the demand for housing in the Washington area, which stayed relatively strong throughout 2001.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984572","date":"2002-04-30","texts":"The Bush administration has proposed ending fixed-rate consolidations of federal student loans just as interest rates are forecast to plunge to record lows. With lower interest rates, student borrowers could save thousands of dollars over the life of their loans. White House officials raised the idea of ending the government- subsidized consolidations as part of a supplementary spending bill for the current fiscal year being developed by the House Appropriations Committee. The proposal is one of three preliminary suggestions forwarded by the White House to deal with a 1.3 billion shortfall in the Pell Grant program for low-income students. It ran into immediate opposition from congressional Democrats, some Republicans and student advocates who said it would effectively raise interest rates for the estimated 700,000 borrowers who consolidate, or refinance their total federal student loan debt, each year. At a time when we are looking for ways to make college more affordable, it is inconceivable that the Bush White House would send a proposal to Congress that would make it harder for working families to pay tuition bills, Sen. Robert G. Torricelli D-N.J. said yesterday. Rep. George Miller Calif., the ranking Democrat on the House Education and Workforce Committee, called the proposal grossly unfair to students who borrowed billions with the promise they could consolidate and get a better interest rate. Now, when they have to pay back the loans, the Bush administration wants to change the rules and increase repayment costs to graduates.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984348","date":"2002-05-01","texts":"Outside the Montgomery County Council office building, dozens of people pushing baby strollers gathered yesterday to protest the elimination of a parenting program. Inside, the council had just approved costly police and fire labor agreements that could make paying for such services even harder. The situation underscores what County Council analysts say is a fundamental problem faced by budget writers The spiraling cost of labor agreements negotiated by County Executive Douglas M. Duncan D and approved by the council is forcing sharp reductions in a host of other areas, from pothole filling to recreation programs. Employee salaries and benefits, which before two years ago accounted for about 60 percent of the county government's budget, will eat up 66 percent next year. That's an increase of 47.3 million. Although the county's population continues to grow, the increase wasn't driven by adding legions of positions During that time, the workforce grew by 2.7 percent. So what's going on Over the past few years, as health costs have grown and the economy has slowed, Duncan and the council have approved costly wage increases and sweetened retirements for police, fire and general government workers. Next year, for instance, retirement benefit costs will increase 15.7 million, 34.1 percent over this year, largely because of bargaining agreements approved in 2001. Council staff director Stephen B. Farber called that jump extraordinary.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983773","date":"2002-05-02","texts":"This ought to be a glorious moment for the telecommunications industry. Around the world, people are spending record amounts of money to use its networks to talk and e-mail and exchange gobs of information. The pace of technological innovation is positively breathtaking. Trillions of dollars have been invested in its growth. Instead, the industry is in the midst of a financial meltdown. The ouster this week of founder Bernard J. Ebbers as chairman of WorldCom Inc. is but the latest twist in a saga that almost certainly will involve more resignations, more bankruptcies and a period of painful industry consolidation. The ripples from the telecom implosion extend well beyond the industry. It has become a significant factor holding back the economic recovery, not just in the United States but also globally. The stock market's current funk stems in significant part from concern over telecom stocks, which drove the late-'90s rally but since their peak have generated paper losses of more than 1 trillion, by some estimates. The amount of telecom debt and equity investments already written off by banks, bondholders, venture capitalists and private equity funds approaches 500 billion and continues to rise. Without expectations of robust growth in this debt-ridden, risky, increasingly competitive sector, the economics of the telecom sector simply don't work, declared Scott Cleland of the Precursor Group research firm in Washington, who sees no revival in sight. In the boom years, there seemed no limit to telecom's prospects. Success bred success, confidence led to more confidence, growth produced growth. Now the same feeding-on-itself dynamic is at work in reverse, dragging with it not only weak companies but the strong as well.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616420","date":"2002-05-03","texts":"Everyone has his favorite household remedy. Mom is partial to chicken soup, Uncle Pete prefers a shot of Jack Daniels and over at the National Association of Manufacturers they like to prescribe a weak U.S. dollar. With the U.S. trade deficit still large, the weak-dollar boys are back selling their elixir to Congress. Our old friend Jerry Jasinowski, head of NAM, was his typically laid-back self this week, explaining that an overvalued dollar is decimating U.S. manufactured-good exports, artificially stimulating imports and putting hundreds of thousands of American workers out of work. How it managed to cause all of this mayhem while the economy was growing by some 5.8 in the first quarter must constitute a miracle. Either that, or maybe a strong greenback isn't quite the economic disaster he claims. The U.S. had a robust currency all throughout the 1990s when times were flush. The same was true for most of the 1980s, though we recall similar moaning about the Reagan dollar. The worst recent decade for U.S. economic policy was the 1970s, when the Nixon and Carter Treasuries decided to take NAM's advice and debase the dollar. Nirvana did not arrive. NAM's argument isn't economic policy so much as special pleading. Its members have to cope with rugged foreign competition, and they're looking for some government relief. They figure that the inefficient steelmakers got theirs -- tariffs -- so it's only fair that they now get a similar break. A dollar devaluation would be a kind of universal tariff on imports. You'd think Mr. Jasinowski would worry about the company he's keeping here. His allies include the AFL-CIO, that free-market paragon, and in the Senate the likes of Maryland's Paul Sarbanes, who has never met a tax or regulation he didn't like. He's only too happy to flack for NAM when it gives him a chance to whack foreign imports.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983814","date":"2002-05-03","texts":"MeriStar Hotels & Resorts Inc. of the District said it is merging with Interstate Hotels Corp. of Pittsburgh in a deal valued at 68 million that will make it one of the largest independent hotel- management companies. The combined company will be called Interstate Hotels Corp. and will be based in the District. It will have estimated pro forma revenue of 340 million for 2002 from the 412 hotels in the United States, Canada and Europe that it will operate. The deal, whose value is based on MeriStar's closing stock price of 1.21 on Wednesday, is expected to close by the summer. MeriStar runs 277 hotels in 42 states, the District and Canada, as well as Doral resorts and conference centers and one of the world's largest corporate housing systems. Interstate operates 135 hotels in 37 states, the District, Canada and Russia. Under the deal, each MeriStar share will be swapped for one share in the new group. Interstate shareholders would get 4.6 shares for each share they hold.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617056","date":"2002-05-16","texts":"Adelphia Communications Corp., the nation's sixth-largest cable-television concern that has come under regulatory scrutiny for possible improper accounting, said its founder John J. Rigas resigned as chairman and chief executive and the company launched an internal investigation amid allegations of additional improper business dealings with the Rigas family. Mr. Rigas's departure, at the behest of two of the cable company's outside directors, was an apparent effort to shore up investor confidence in the Coudersport, Pa., company, whose stock has withered in recent weeks. But the move may be too late to save Adelphia from a cash crunch and bankruptcy proceedings, according to credit-ratings agencies and people familiar with the situation. Adelphia must make a 50 million interest payment on its 14 billion debt this week. Adelphia also is scheduled to appear today at a hearing before the Nasdaq Stock Market over its possible delisting, a move that would allow bondholders to require Adelphia to pay out 1.4 billion in cash. Yesterday, both Moody's Investors Service and Standard and Poor's Corp. downgraded Adelphia's credit rating, already below junk status. Moody's in a statement said, The prospect of a potential bankruptcy filing is more likely and may ultimately be unavoidable. The company named Erland E. Kailbourne, a board member and former executive of Fleet National Bank, to be chairman and interim chief executive. Adelphia disclosed in April that the company had co-guaranteed 2.3 billion in loans to entities owned by the Rigas family. A portion of the funds was used by the family to buy Adelphia stock. The Securities and Exchange Commission is conducting a formal investigation of Adelphia and the loan agreements.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616419","date":"2002-05-20","texts":"THE U.S. STOCK MARKET is showing some signs of recovery, but there is a problem lurking in the background foreigners. Foreign investors, whose purchases in 2000 almost equaled those of U.S. equity mutual funds and who were steady buyers even last year, have pulled their horns in. They aren't quite net sellers yet, but their net buying has almost dried up. That helps explain why the market has been soft -- especially the stocks of big, well-known companies favored by foreign investors -- and why the dollar has been under pressure. The risk is that the disenchantment with U.S. stocks could continue and that foreign investors could even become net sellers, further hurting the U.S. market. Foreign demand for U.S. assets is coming under strain, says Paul Meggyesi, a senior foreign-exchange analyst at Deutsche Bank. With little sign of improvement in the U.S. asset market this is a problem which we believe will continue for some time to come. Last week, stocks rose led by continued demand for technology shares in particular. The Nasdaq Composite Index jumped 8.8, or 140.54 points, to 1741.39 following five straight days of gains. The Dow Jones Industrial Average, meanwhile, was up 4.2, or 413.16 points, from a week earlier to 10353.08. The Standard & Poor's 500-stock index also gained 4.9 for the week.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617092","date":"2002-05-23","texts":"Intel Corp. Chief Executive Officer Craig Barrett entered the public debate over stock-option accounting by suggesting that companies list as expenses only options given to top executives. The chip maker, at its annual shareholders meeting in Santa Clara, Calif., also said it would formalize a CEO performance review that was handled more casually in the past. The new policy came as Intel went to great lengths to distance itself from the accounting controversies and management improprieties ensnaring companies such as Enron Corp. Mr. Barrett said his accounting proposal wouldn't penalize companies such as Intel that grant most of their options to employees outside the executive suite. But it would minimize abuse at the top, he said. He suggested that only options given to the company's top five officers be listed against income. The prospect of having to account for options as an expense is controversial in Silicon Valley, where companies commonly use stock grants as employee incentives. The concerns are reflected in a bill, introduced by Senators Carl Levin D., Mich. and John McCain R., Ariz., that would force the accounting changes. Options costs currently are listed as balance-sheet footnotes and don't affect quarterly income statements.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614009","date":"2002-05-29","texts":"THE CURRENT STATE of the bed-and-breakfast business belies the belief that bigger is better. When sized up against their larger brethren in the lodging industry, bed-and-breakfast inns, which typically have 25 rooms or fewer, appear to have fared better since the recession hit the U.S. economy last spring. And they bounced back quicker from the vacancies brought on by the events of Sept. 11. To a certain extent, bed and breakfasts are shielded from recessionary effects, says Robert Mandelbaum, research director at PKF Consulting, a hospitality advisory firm, who helps the Professional Association of Innkeepers International compile data from its biennial industry survey. Guests of bed-and-breakfast inns tend to be affluent leisure travelers who are less likely to be susceptible to change during a recession, he says. Average occupancy or room-rate data for the bed-and-breakfast sector is difficult to come by. Jerry Phillips, executive director of the Professional Association of Innkeepers, estimates there are about 18,000 bed-and-breakfast and country inns in the U.S., with about 36 in the Northeast, 28 in the West, 20 in the South and 15 in the Midwest. Many inns, particularly those within driving distance of New York City, fared well after the attacks as people canceled their vacations and opted instead for getaways that didn't involve hopping on an airplane, says Bill Oates, a consultant in Brattleboro, Vt.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616733","date":"2002-05-29","texts":"Mutual-fund managers are seeking shelter from a rainy market in home-building stocks these days. But the sector's foundation might be cracking under the weight of steep gains and all its newfound fans. The number of mutual funds owning small and midsize home-building stocks like Lennar Corp. and Centex Corp. has risen sharply, doubling in some cases, since the start of last year. And it's easy to see why Consumers taking advantage of low interest rates to buy, refinance and remodel their homes have boosted these companies' fortunes, pushing up the average price of the sector's small-cap and midcap stocks by 171 over the past two years through Friday's close, according to BaselineThomson Financial. Faced with slumping growth-stock categories such as technology, telecommunications and pharmaceuticals and with 40 of U.S. stock funds in the red over the past three years, some battered fund managers also have piled into shares of larger home builders and related outfits such as home-improvement retailer Lowe's Cos. and mortgage titan Freddie Mac. Some see the home builders as a rare haven for cheap valuations and better-than-average growth in lean times. But others worry the small and midsize stocks have risen too high, too fast and that quick-trading managers of mutual funds and hedge funds who have hopped on the bandwagon could be just as quick to jump off. Their heavy selling can cause the prices of these smallish stocks to sink. I've met with about 40 hedge-fund managers last week and if it's going up they're buyers, but they'll be just as quick to leave too, says Jeffrey Saut, chief equity strategist at Raymond James. They do look attractive but this is usually when you want to sell them. You buy pessimism and sell optimism. Hedge funds are private partnerships for large investors and seek quick profits by putting huge sums in global currency, stock and bond markets.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614819","date":"2002-06-05","texts":"WASHINGTON -- The median U.S. household income rose almost 8 faster than inflation during the booming 1990s, reaching 41,994 by 1999, according to newly released census data. The overall percentage of Americans living in poverty, however, fell only slightly to 12.4 from 13.1 in 1989, by the federal definition that set the income limit at 16,895 for a family of four in 1999. The percentage of Americans 65 and over with poverty status dropped to 9.9 from 12.8. The information, some of the most detailed yet from the 2000 Census, was compiled from long-form questionnaires that were given to roughly 17 of all U.S. households. They offer a glimpse into a variety of demographic trends, including the types of jobs people have, their education level, and how many cars they own. Short-form data, released last year, pertain mostly to population counts, housing and race. The long-form data show, for instance, that homes where only English is spoken dropped to 82.1 from 86.2, while the percentage of Americans with a bachelor's degree or higher rose to 24.4 from 20.3 a decade earlier. The new income data show that poverty rates fell in parts of the South and the Midwest, though many rural areas continued to be some of the poorest communities, according to an analysis by the Associated Press. Without adjusting for inflation, the median income rose almost 40 from 30,056. The percentage of households earning more than 150,000 nearly tripled, to 4.6.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982370","date":"2002-06-05","texts":"The economic boom of the 1990s raised the incomes of the poorest Americans, held the size of the middle class steady and swelled the ranks of those with six-digit incomes, according to census data released yesterday. The figures confirm a long-term momentum that has given millions of Americans significantly more income since 1980, the share of the U.S. population earning more than 100,000 annually has doubled, after adjusting for inflation. That upward income mobility was so broad that, when the census was taken two years ago, 5 out of 6 Americans lived in counties in which the lowest niches -- those with incomes of less than 15,000 -- were shrinking. But there were notable exceptions, places where the middle class shrank while the ranks of the rich and poor expanded. They included a swath of major metropolitan areas from Washington through Baltimore, Philadelphia and New York, as well as large parts of Southern California. Poverty may have grown in those areas because of high numbers of immigrants from poor countries, experts say, or in some cases, an ailing local economy. It's a positive picture overall, said John Logan, a sociology professor at the State University of New York in Albany, who compiled his own study of census data for metropolitan areas.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613576","date":"2002-06-11","texts":"Adelphia Communications Corp.'s woes continued to mount as the cable concern disclosed it overstated revenue and cash flow by about 500 million over the past two years. Two of the company's newest board members resigned over the ongoing serial disclosures of wrongdoing at Adelphia. The news comes as Adelphia moves closer to filing for Chapter 11 bankruptcy protection, something many analysts expect to happen by the end of next week, given Adelphia's cash constraints and a looming 50 million interest payment it must make by Saturday. Adelphia has begun discussions with banks about potential bankruptcy financing of as much as 1 billion or more, which would allow the company to continue operating under bankruptcy protection, according to people familiar with the matter. In a regulatory filing with the Securities and Exchange Commission, Adelphia provided some results from its own internal review launched several weeks ago after it was disclosed that the founding Rigas family had benefited from more than 3 billion in loans from the company. In its filing, Adelphia blamed former management, which included the Rigas family. The company said that current management believes information provided by prior management, including the amount of the company's cable system that has been rebuilt, was unreliable and said Adelphia plans to correct the information, where material, as current management develops information it considers reliable.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616956","date":"2002-06-18","texts":"THE PROBLEM What happens when an expected tidal wave of business reveals itself to be a brief splash Mark Kolb, chief executive of Taratec Development Corp., of Bridgewater, N.J., is the first to admit he was unprepared for the spring of 2000. Spending for our services just dried up, he says. We were caught off guard. Though he didn't realize it at the time, Taratec, an information-technology consultant to large pharmaceutical companies, had been an unwitting beneficiary of the Y2K computer crunch. Through the late 1990s, big corporations, including his clients, shoveled piles of cash at software and hardware consultants, anticipating computer snarl-ups when the digital calendar turned to the year '00. Even though Taratec did little Y2K work, by 1999, Mr. Kolb employed 100 and was looking at record revenue of 17 million. He told his partners to prepare for a public offering in 2000. He was proud that a business launched from his living-room coffee table in 1984 had reached this grand juncture. But in the first quarter of 2000, new business evaporated. The stock market tanked. Y2K was a nonevent. We didn't realize how much of our 1999 revenue was driven by Y2K budgets, he says. For the first time ever, annual revenue fell.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614090","date":"2002-06-19","texts":"STOCKS MANAGED to avoid a retreat following Monday's big gain. Many investors had feared a pullback after stocks put in big gains on Friday afternoon and again on Monday, when the Dow Jones Industrial Average gained 213.21 points. Instead, the industrial average yesterday rose an additional 0.19, or 18.70 points, to 9706.12. That means that the blue chips now are up 445.13 points since hitting an intraday low of 9260.99 during trading on Friday. Considering the gains we had from the worst of Friday through Monday, it is a pretty positive sign that the market didn't give it back, said Larry Lawler, head of stock trading at New York mutual-fund group Dreyfus. Now, the market is taking a pause and people are stepping back to see what shakes out and where we are headed. The Standard & Poor's 500-stock index rose 0.09, or 0.97 point, to 1037.14, leaving it down 10 this year. Technology stocks fell back, however, pulling the Nasdaq Composite Index down 0.67, or 10.33 points, to 1542.96, down 21 so far this year. The Dow industrials are down 3 this year.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830981765","date":"2002-06-20","texts":"Charles County Chamber of Commerce 301-932-6500, offering business assistance, computers, phones and other help. The People's Place Comprehensive Service Center Open 7 a.m. to 8 p.m. at Somer's House, County Government Building, La Plata. Federal Emergency Management Agency 800-621-FEMA. Individuals, families and business owners seeking federal disaster aid may register by calling FEMA. Maryland Emergency Management Agency 877-MEMA-USA or 410-517- 3600. Charles County MEMA 301-645-0630. Calvert County MEMA 410- 535-1623. Maryland Small Business Development Center 888-246-6736, assists companies with the process of applying for Small Business Administration low-interest loans.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982707","date":"2002-06-25","texts":"A Harvard University study to be released today projects continued healthy growth in the national housing market, prompting economists to insist there is no bubble in residential real estate. The report also underscored the opinion, widely held among economists, that housing was a major reason the recent economic recession was so mild. Last year marked the first time in at least a century that housing remained healthy in an economic downturn, according to Nicolas Retsinas, director of Harvard's Joint Center for Housing Studies, which will issue the report. Economists credit a sharp imbalance in supply and demand as the main reason for the market's remarkable resilience, on top of historically low interest rates. The housing sector is poised to set new records for production, sales and aggregate home equity in the years ahead, said the Joint Center's annual State of the Nation's Housing report. The report predicts that strong growth in immigrant and minority households will result in 22 million more homeowners in the next 20 years. Last year, existing home sales reached a record 5.3 million and the value of single-family home construction rose to a record 206 billion, the report noted. Price appreciation pushed the aggregate value of U.S. homes to a record high of 12 trillion and home equity to a record 6.7 trillion.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615967","date":"2002-06-26","texts":"NEW YORK -- WorldCom Inc.'s audit committee uncovered what could be one of the largest accounting frauds in history, with the discovery of 3.8 billion in expenses improperly booked as capital expenditures, a gimmick that boosted cash flow and profit over the past five quarters. Without the transfers, WorldCom, one of the biggest stock market stars of the past decade, said it would have reported a net loss for 2001, as well as the first quarter of 2002. WorldCom reported a profit of 1.4 billion for 2001 and 130 million for the first quarter of 2002. In turn, WorldCom yesterday fired its longtime chief financial officer, Scott Sullivan, and accepted the resignation of David Myers, its senior vice president and controller. Neither Mr. Sullivan nor Mr. Myers could be reached to comment. Clearly, WorldCom's survival is in question. WorldCom said it intends to restate its financial statements for the five quarters in what could be among largest restatement in corporate history. The telecommunications firm already has been hobbled by firm already has been hobbled by an industrywide meltdown, a Securities and Exchange Commission probe and 30 billion in debt. WorldCom is one of the world's largest telecom companies, with 20 million consumer customers, thousands of corporate clients and 80,000 employees. The company said an irregularity was initially picked up during a routine internal audit conducted soon after the ouster of WorldCom's chief executive, Bernard J. Ebbers, in April. WorldCom officials said they then turned the matter over to the company's audit committee and its auditors, newly hired KPMG LLP, who determined that the issue was serious enough to alert the SEC. The agency already had launched its own investigation into WorldCom in February.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985282","date":"2002-06-26","texts":"A major accounting firm convicted of obstructing justice. A leading brokerage caught misleading its clients. Imperious chief executives falling like flies. Huge corporations tumbling into bankruptcy. Business pages that read like the crime blotter. Now, according to economists and market analysts, these still- unfolding corporate and accounting scandals have begun to weigh heavily on the stock market, the dollar and the U.S. economy. And the effects are likely to linger at least through the end of the year. Just last night, WorldCom Inc. fired two executives and announced that it had mischaracterized expenses for more than a year, wiping out at least 1.6 billion in reported profits. Its shares, already below 1, plunged as low as 26 cents in after-hours trading. The economy and markets right now are in the midst of a full- blown corporate governance shock, said Stephen Roach, chief economist and resident pessimist at Morgan Stanley. To presume somehow that it's over or the worst is behind us is naive. Yesterday, the tech-laden Nasdaq composite and the much broader Standard & Poor's 500-stock indexes closed the day just a whisker above their low points after the Sept. 11 terrorist attacks, effectively wiping out the gains from last winter's rally. Analysts said the reversal reflects a growing skepticism among investors about the accuracy of corporate financial reports.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616916","date":"2002-06-27","texts":"Today's Market Forecast Prescription for the Market Investors dodged a stock-market bullet yesterday, but still worry that trouble lurks around every corner. What will it take to turn things around Unfortunately, there's no single event, but rather an accumulation of upbeat news. Here's what has to happen to break the cycle Corporate earnings must improve. Wall Street wants proof that life is looking up. So far, 26 of the S&P 500 companies have reported results for the second quarter. Nineteen of those topped Wall Street's expectations. Two missed and five matched. ThomsonFirst Call expects that'll be the pattern this quarter, a potentially good sign for stocks, as earnings ultimately drive prices.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830981896","date":"2002-06-28","texts":"The House narrowly voted to raise the ceiling on the national debt by 450 billion late yesterday, just hours before the government was due to bump up against its borrowing limits. The nearly straight party-line tally of 215 to 214 came after a rousing debate in which Democrats blamed President Bush's 2001 tax cut for the return of deficits and Republicans blasted Democrats for big spending. Both sides agreed the clash provided a warm-up for an election-year argument over the management of the economy. Without the action, Bush administration officials warned, the government could have reached the limits of its borrowing authority this weekend. Jitters in the U.S. bond market were dramatized when Moody's Investors Service warned it might lower the credit rating on some U.S. government debt unless Congress acted, according to Bloomberg News. With the possibility that Congress would adjourn for its 10-day Fourth of July recess without acting, Treasury Department officials hustled throughout the day to come up with fiscal maneuvers that could provide some breathing room until next month. The Democratic-controlled Senate earlier approved an identical increase, raising the limit to 6.4 trillion. In the House, however, GOP leaders faced opposition to the action by fiscal conservatives in their own party, and from a Democratic bloc eager to highlight the return to government borrowing under a Republican president.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615559","date":"2002-07-01","texts":"Economists were blindsided by the economy's surprisingly strong growth rate during this year's first quarter. But Daniel Laufenberg did better than most. Mr. Laufenberg, chief U.S. economist at American Express Financial Corp., was the most accurate prognosticator in The Wall Street Journal's semiannual forecasting survey, coming within a hair's breadth in his forecasts for interest rates, currency movements, inflation and unemployment. He predicted 2.5 growth in inflation-adjusted gross domestic product in the first quarter -- well below the actual 6.1 growth rate, but still ahead of the consensus forecast of just 0.9. Mr. Laufenberg had started stressing the economy's resilience shortly after Sept. 11, when most other economists were racing to slash their growth estimates. He went against the grain and said the economy would be growing again before the year was over. He proved to be on the mark. By December, he says, I was saying the recession was over and it was the mildest one on record. Joining the ranks of top forecasters in the latest survey were newcomers Robert Shroud and Robert Fry, a tandem from DuPont Co. Henry Wilmore of Barclays Capital David Resler of Nomura Securities International Ram Bhagavatula of the Royal Bank of Scotland and Saul Hymans of the University of Michigan at Ann Arbor. The winner of the last survey, Brian Wesbury, of Griffin, Kubik, Stephens & Thompson Inc., sank to the middle of the pack because he stayed a bear too long. James Smith, of the University of North Carolina at Chapel Hill, had the best forecast for gross domestic product. He projected 5.4 growth in the first quarter. However he saw long-term bond yields falling far more than they did and was off the mark on currencies, helping to keep him out of the top spot. Mr. Hymans was among the two best forecasters on interest rates. He projected the yield on three-month Treasury bills would finish June at 1.7, and it finished at 1.68. He also projected the 10-year treasury bond would finish June at 4.7 and it finished at 4.8. Mr. Hymans was kept out of the top spot because like so many others, he underestimated economic growth early in the year. He projected just 1 growth for the first quarter. In retrospect, the strong first-quarter gr owth shouldn't have come as too much of a surprise. On average during the past nine recoveries, gross domestic product has jumped by 12 in the first three months of the rebound. The economists were correct in seeing that things were different this time around and assuming the economic rebound would be subpar when compared with those past rebounds. But they went overboard in marking down their estimates. I wasn't quite sure when the inventory turnaround was going to kick in, Mr. Laufenberg says, explaining his miss on GDP. Inventory building accounted for more than half of the first-quarter economic rebound, but Mr. Laufenberg expected the inventory turnaround later in the year. Nobody gets it perfect every time, he says.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617058","date":"2002-07-01","texts":"WASHINGTON -- Many investors will get a first look today at trading information for some corporate bonds, long viewed as a dim corner of the fixed-income market. Detailed information on investment-grade, high-yield -- or junk -- and convertible corporate bonds becomes available with the launch of Trace, a new price-reporting system provided by the National Association of Securities Dealers. The system expands on and supplants the existing FIPS reports for high-yield bonds. Trace fulfills NASD's mission to bring greater transparency to debt markets, said Douglas Shulman, NASD's president of regulatory services and operations. In today's business climate, it's more important than ever for regulators and investors to have access to more information. Unlike in U.S. Treasury and municipal bonds, investors haven't had ready access to comprehensive information on the 3.9 trillion corporate-bond market, prompting former Securities and Exchange Commission Chairman Arthur Levitt to push for a price-reporting system in 1998. Proponents of price-transparency pointed out that corporate bonds account for roughly 20 of the overall market, yet little public information is available on trade volume or pricing. The SEC finally approved Trace last January, requiring NASD members to report eligible corporate-bond trades to the self-regulatory organization. The NASD will use the information to assist in market surveillance, and will distribute the information on a real-time and delayed basis.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614956","date":"2002-07-03","texts":"NEW YORK -- Yesterday's stock-market rout again demonstrated how strong investors' contempt for corporate America's creative accounting and earnings misfortunes has become. French entertainment company Vivendi Universal's American depositary shares sank 4.69, or 21, to 17.76, sliding to a fresh 52-week low, after a news report in France said the company tried to bolster profits in 2001 through aggressive accounting of some assets. The slide came amid a pickup in volume, with 12 times the average daily volume in Vivendi securities changing hands in New York. Investors also lashed out at other names in the media and entertainment sector. The selloff took a special toll on companies that have aggressively consolidated media assets during the years. Shares of AOL Time Warner fell 99 cents, or 7, to 12.52, slumping to a 52-week low. USA Interactive eased 1.59, or 7, to 20.66 on the Nasdaq Stock Market. Online-advertising concern DoubleClick fell 98 cents, or 15, to 5.45 on Nasdaq, trading in range of the 52-week low of 5.23, set Sept. 27. Shares of Cardinal Health sank as much as 18 intraday in response to what company officials called an erroneous rumor about its dealings with former accounting firm, Arthur Andersen. Cardinal Health, which finished the day off 2.89, or 5, at 54.41, insisted that there was nothing wrong with its accounting practices. It isued a news release saying, We find ourselves in an unprecedented time of suspicion and lack of trust in the capital markets. It's important that companies are taking steps like this, trying to send a message that they are not tone deaf to what investors are concerned about, Richard Cripps, chief market strategist at Legg Mason, said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982236","date":"2002-07-04","texts":"CORRECTIONS A District Extra article July 4 about making city government services more accessible to residents who do not speak English incorrectly referred to Hien Vu of Boat People SOS as a man. She is a woman. Published 71102 The District has fallen short in efforts to make government services more accessible to residents who do not speak English, and simply translating more forms and brochures is not enough, witnesses testified recently. Residents who speak languages other than Spanish are particularly disadvantaged in trying to communicate with the city, witnesses told the D.C. Council subcommittee on Human Rights, Latino Affairs and Property Management during a recent hearing. Under laws dating to the 1970s, city government agencies must translate written material such as application forms into Spanish if they are related to the health, safety and welfare of the Latino population. The 2000 Census put the number of Hispanic residents in the District at nearly 45,000, about 8 percent of the overall population.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983071","date":"2002-07-06","texts":"Unemployment rose and job growth was slight in June, the Labor Department reported yesterday, providing new evidence that an economic recovery that roared to a start early in the year has stalled. Joblessness rose to 5.9 percent last month, from 5.8 percent in May. The nation added 36,000 jobs but analysts had expected a gain of 75,000, and there still were 1.4 million fewer jobs than in June 2001. To many economists, the report suggests that the slumping stock market and corporate scandals of the past six months are making companies reluctant to hire -- bad news for the 8.4 million Americans who were looking for work last month. Businesses are reluctant to become aggressive and expand again, said Mark Zandi, chief economist of consulting firm Economy.com Inc. The economy is treading water. Clearly, the tremendous setbacks in the stock market have spooked businesses, said Sung Won Sohn, chief economist of Wells Fargo & Co. By the reckoning of most economists, the recession ended in December. Indeed, stunning growth in economic output in the first quarter of this year boosted hopes that a quick recovery was underway. But seven months into the year, many businesses are finding the recovery to be tepid -- and, as a result, aren't hiring more people.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615427","date":"2002-07-12","texts":"Veeco Instruments Inc., a maker of micromanufacturing gear, agreed to purchase FEI Co. for just under 1 billion in stock, signaling further consolidation in the semiconductor-equipment market. The deal, expected to be announced this morning, marks the latest in a string of acquisitions for Veeco, Woodbury, N.Y., and gives the company a larger presence in the business of microscopic measurement systems used to make semiconductors, data-storage devices and other electronics products. Like the chip business itself, makers of related production equipment have been whipsawed by the volatile swings in the industry due to excess manufacturing capacity. Lately, shares of most companies in the field, including Veeco and FEI, have been hurt by fears that a rebound driven by expected chip demand will be slower than expected. The deal is designed, in particular, to consolidate the companies' position in the emerging field of metrology -- equipment used to measure the microscopic layers of metals and other materials on chips, disk drives and other products. The combination of Veeco and FEI, based in Hillsboro, Ore., will create the sixth-biggest maker of semiconductor-manufacturing equipment in the U.S., with more than 825 million in revenue. Applied Materials Inc. remains the industry leader, with 5.9 billion in revenue. Eager to take on the the top five players, Veeco has made 11 acquisitions or technology investments over the past five years.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616591","date":"2002-07-15","texts":"WASHINGTON -- In a surprise move aimed at silencing a rising chorus of criticism about their financial disclosures, Fannie Mae and Freddie Mac agreed for the first time to submit themselves to scrutiny by federal securities regulators. The Securities and Exchange Commission will oversee only the government-sponsored mortgage giants' existing common stock, however, under an agreement reached Friday with the SEC and Treasury. That means the companies have sidestepped -- for now, at least -- their biggest worry full-scale securities regulation. The deal excludes direct government oversight of the debt and mortgage-backed securities the companies issue on Wall Street. Fannie and Freddie will have to submit the periodic financial statements, proxy statements and reports that other issuers file with the SEC. But they already provide similar information to investors, so the immediate practical effect is relatively small. Still, in broad terms the agreement with the Bush administration is a milestone for the two companies. Created decades ago as government agencies to increase the efficiency of the U.S. mortgage market, Fannie and Freddie later were privatized. But they maintained many of their ties to the government, including a line of credit to the Treasury and exemption from SEC oversight. The companies are reluctant to give up those benefits because they contribute to a common perception that Fannie and Freddie are backed by the federal government, and therefore worthy of preferred status with investors. Some economic policymakers and rivals in the financial-services industry worry that Fannie and Freddie are taking advantage of this implied government backing -- which enables them to borrow more cheaply than their rivals -- to grow too large and crowd out competitors. More recently, critics have warned that the lack of SEC-required disclosure of Fannie's and Freddie's mortgage-backed securities leaves investors in the dark about exactly what they are buying.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982861","date":"2002-07-16","texts":"Republican gubernatorial candidate Robert L. Ehrlich Jr. said today that Maryland could raise as much as 400 million a year by legalizing slot machines at three horse tracks and that he would devote most of that money to improving public education. Ehrlich's comments came in sharp contrast to the position of Democratic gubernatorial candidate Kathleen Kennedy Townsend, who has staunchly opposed expanding legal gambling options to erase a projected 900 million revenue shortfall next year. Instead, Townsend proposes to help balance the budget through freezing most state spending. Ehrlich, in addition to endorsing slot machines, said he would need to chop 4 percent off the budgets of most state agencies, capture more federal funds and raise some state fees. The gaming issue surfaced again as a key political rift between the two candidates today, just as Maryland's largest gaming venues, its horse tracks, were undergoing a major transition. The owner of Pimlico Race Course and Laurel Park, the state's two premier thoroughbred racetracks, announced that he would be selling control of his company to a Canadian entertainment firm. Owner Joseph A. De Francis said the sale would further galvanize the debate over legalizing slot machines in Maryland. We have the opportunity to bring our policy leaders the perspective of an international company that has operations in three countries and over a dozen states.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614993","date":"2002-07-17","texts":"NEW YORK -- A late-session dive by stocks dragged the dollar lower against its major counterparts, despite comments by Federal Reserve Chairman Alan Greenspan that were interpreted as an attempt to quell the recent turbulence in currency markets. In his semiannual testimony before Congress, Mr. Greenspan surprised many people in making specific statements on the currency markets, warning against reliance on predictions of their movements. A considerable volume of market commentary in recent weeks has suggested that concerns about earnings prospects and the proliferating revelations of serious governance and accounting issues have contributed not only to lower equity prices but also to a decline in the foreign-exchange value of the dollar, Mr. Greenspan said. But, given the recent intense interest in the future course of the dollar, I would like to raise a technical issue and a flag of caution regarding those forecasts -- or for that matter, any forecast of exchange rates he added. Currency experts interpreted those remarks as an effort to provide a sense of calm to what has been a nervous market.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615922","date":"2002-07-17","texts":"When the Senate acts in unanimity you can be sure you're getting a substandard product, as with Monday's 97-to-0 bill on accounting reform. But much worse may be coming. Now is when false dogmas are born, such as the universal belief that the Great Depression was caused by the stock market crash of 1929 rather than gross policy errors originating out of Washington. Herewith, some of the canards that are likely to harden into myths, though at the moment they merely exist as lies. Myth CEO stock options led to telecom overinvestment. How can this be true when virtually every major company in the country uses stock options, yet we don't have groaning overcapacity in the supermarket business or kitty-food industry Indeed, the most visible trend in the economy has been toward leaner inventories and more efficient use of resources aka higher productivity. What happened in telecom was an aberration but not a novelty -- the same overinvestment and shake-out were seen in the early PC industry, the early auto industry, the early railroad industry, etc.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613505","date":"2002-07-18","texts":"Corrections & Amplifications WACKER SILTRONIC IS the unit of Wacker-Chemie GmbH that makes silicon wafers. An article yesterday about suppliers to the semiconductor industry incorrectly spelled the name Wacker Siltonic. WSJ July 19, 2002 WHEN TIMES are bad in the chip industry, as they are now, there is usually a sector that experiences even more pain -- the companies that supply equipment and materials to semiconductor makers. And they are feeling it now. Opening an annual trade show in Silicon Valley, an organization representing chip-industry suppliers yesterday predicted that revenue for semiconductor-manufacturing equipment would decline 19 this year to 22.8 billion, on the heels of a 41 plunge in 2001. Revenue for materials used in making chips is expected to drop nearly 13 to 22.6 billion in 2002, following a 6 drop last year, the group said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615976","date":"2002-07-18","texts":"New York -- HOW ANONYMOUS are mystery shoppers if store employees know they're coming In response to criticism of its consumer-lending practices, Citigroup Inc. almost two years ago said it would send undercover personnel to vet its consumer-finance branches, which included those of the newly purchased Associates First Capital Corp. and its own CitiFinancial unit. Soon after the program was announced, CitiFinancial telegraphed the visits to its employees. We will begin a Mystery Shopping Test in December and complete in January, said a November 2000 CitiFinancial memo to regional managers in the Southeast, according to a copy recently submitted to regulators. A minority and a caucasian will visit the same or separate branches and request an identical loan. The mystery shoppers were one of several reforms that Citigroup, the nation's largest financial-services firm, said at the time it would introduce to answer criticism of its purchase of Associates, a Dallas-based subprime lender to people with spotty credit records who are often turned away by mainstream banks. Citigroup officials cite those reforms as evidence that its own CitiFinancial subprime lending operation, into which Associates was merged, is the cleanest of its kind in an industry long-sullied by dodgy practices such as frequently refinancing loans to generate fees. They add that notification to employees about mystery shopping is an effective way to keep workers alert at all times.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983331","date":"2002-07-21","texts":"Is it Morning in America, Again President Bush seems to think so. But the type of morning he has in mind is, well, not exactly bright and cheery. We've been on a binge, the president declared last week in Birmingham, and we've got a hangover. What a difference two years make. As late as mid-2000, no less an authority than Federal Reserve Chairman Alan Greenspan had a very different view. We were, he wrote, living through a technological transformation that could permit full employment, balanced growth and low inflation to continue for a long time. Bush has rejected Greenspan's view. For this, given the news, he can't be blamed. But what about the image of binge and hangover Does it succeed as diagnosis -- and as a guide to what we should now do Were the '90s lived in a stupor, and is recovery merely a matter of sleeping it off Is a drinking problem, in short, a good metaphor for our economic problem We do know that the tech boom was mainly bubble. Its scientific component was vastly oversold. Huge capital sums were raised, and wasted. Meanwhile, throughout corporate America, profits were overstated under the relentless pressure of the markets. And billions were diverted to the pockets of corrupt directors, officers and CEOs. But the fact that profits were lower than we thought is not all bad news. Living standards were actually higher than many realized at the time. The '90s were a good time for American workers, who enjoyed full employment, rising wages and unprecedented access to credit. Poverty fell during these years, health improved, crime declined and inequalities in pay though not wealth diminished. Home ownership reached record levels. These things, unlike profits, cannot be faked.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616539","date":"2002-07-24","texts":"WITH SOME MORTGAGE RATES at record lows, borrowers are starting to do something odd They are agreeing to higher monthly payments. An increasing number of affluent homeowners are swapping traditional 30-year mortgages for 15-year loans, which carry monthly payments that can be hundreds of dollars a month higher. In return, however, they're getting the lowest 15-year loan rates on record, and a chance to pay off their mortgages by the time their kids go to college or they retire. On top of that, 15-year mortgages carry far lower interest expense over the life of the loan. The shorter time frame can save a borrower more than 100,000 in total interest payments on a 200,000 loan. The heightened interest in the shorter mortgages is yet another byproduct of the falling stock market. For homeowners capable of handling the higher monthly payments, the 15-year mortgages may present a more attractive use of extra cash than the market. In essence, they're choosing to pay off their debts rather than risking their money in the uncertain market or investing in low-yielding vehicles like savings accounts. A year ago, the last thing people wanted to do was pay more mortgage each month, says Michael Menatian, president of Sanborn Corp., a West Hartford, Conn., lender. But now, he says, that has completely changed. People are saying, Where else am I going to put my money'  Mr. Menatian says about a fourth of his refinance clients are opting for 15-year mortgages, compared with 10 last year. It's easy to see why some borrowers might be tempted. Rates for a typical 15-year loan fell last week to a record low 5.93, according to Freddie Mac. As recently as 1995, rates on 15-year loans were nearly 9.0.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615008","date":"2002-07-25","texts":"FOR A TIME, there was a reassuring story to tell about the stock market and the economy. Stocks rose in a speculative frenzy, and then fell. But the U.S. economy recovered surprisingly quickly from Sept. 11, aided by the irrepressible American impulse to shop, plus a round of interest-rate cutting. The market was sick. The economy wasn't. Silicon Valley paper millionaires stopped buying Porsches. The rest of us kept buying Chevrolets. The magnitude, the speed and the circumstances of the stock-market decline are threatening that comforting story. Unless the market touches bottom soon -- and despite yesterday's spectacular bounce in stock prices, there is no assurance of that -- it is going to yank the economy down with it. We may not sink back into recession. But if we have a few more bad weeks on Wall Street, you can rip up those forecasts about the economy growing at a 3.5 annual pace in the second half. Instead, the economy will slow so much that unemployment starts climbing again and the much-delayed resumption of business capital spending will be delayed still further. History offers lots of lessons at a time like this. It's just hard to tell which ones to apply. After the 1987 stock-market crash, consumers paused for a bit, but the economy barely faltered. In 1998, the stock market dropped, and two fantastic years followed. Seven of the 14 bear markets since 1929 didn't coincide with recessions. But seven did, and the damage that a bursting bubble did to Japan is a reminder of how badly things can go awry even in a wealthy, modern economy. The economic fundamentals in the U.S. are still strong. The White House and Alan Greenspan are right about that they aren't mindlessly reciting Herbert Hoover's memoirs. The very resilience of the U.S. economy, so far, has been impressive. And technology's productivity-producing benefits haven't evaporated with all those dot-coms.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613739","date":"2002-07-29","texts":"REMEMBER THE BEST-SELLING book, Dow 36,000 The New Strategy for Profiting From the Coming Rise in the Stock Market With stocks plunging, and many giddy investors who swore by the book now burning it, the authors must be sheepishly admitting how foolish and wrong they were, right Well, no. Even though the Dow Jones Industrial Average has fallen 24 below where it was when Dow 36,000 was published in September 1999, the two authors -- financial writer James K. Glassman and economist Kevin A. Hassett -- insist the stock market will prove them right. Someday. They're just not saying when. Oh, yeah, definitely. I'm just not going to give you a date, responds an unapologetic Mr. Glassman, when asked whether Dow 36000 is still on the horizon, even though it topped out, on a closing basis, at 11722.98 on Jan. 14, 2000.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984841","date":"2002-07-30","texts":"Leading Democrats launched a series of stinging attacks on President Bush here today, challenging his handling of the economy, response to corporate accountability scandals and conduct of the war on terrorism while charging there is a leadership deficit in Washington that they are prepared to fill. The across-the-board critique, including pointed questions about the war in Afghanistan, reflected a growing belief among Democrats that voter anxiety over the economy makes the president and the Republican Party more vulnerable than at any time since the terrorist attacks of Sept. 11. Chiding Republicans for trying to pin the economy's current problems on the binge days of the 1990s, Sen. Hillary Rodham Clinton D-N.Y. declared that the prosperity of the previous decade was not a fluke or a bubble but the result of sound economic policy. When it comes to fiscal responsibility and economic growth, this administration is all blame and no game plan, all response and no responsibility, she said at the summer meeting of the centrist Democratic Leadership Council DLC. Democrats sought to place the blame on Bush and his big tax cut for a return to federal budget deficits and a downturn in the economy, claiming that he is presiding over a jobless recovery and stock market volatility that has left many Americans worried about their retirement security. The economy is in trouble and there is no economic leadership coming from the White House today, Senate Majority Leader Thomas A. Daschle D-S.D. asserted. It's time for the administration to stop being cheerleaders and start being leaders. But if they won't lead, Democrats will.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615860","date":"2002-07-31","texts":"WASHINGTON -- President Bush's latest two nominees to the Federal Reserve Board said they expect the economic recovery to continue and see little risk of deflation, suggesting they think the Fed may have no need to cut interest rates again. Ben S. Bernanke and Donald Kohn, who would fill two remaining vacancies on the Fed's seven-member board of governors, told the Senate Banking Committee the economic outlook remains bright despite growing worries about the U.S. financial system. I think we're in a situation where vigilant optimism is probably the right approach, said Mr. Bernanke, a Princeton University economics professor who sits on a national committee that determines when recessions begin and end. The economy is recovering, but there's no sign of inflation, he said. Asked if continuing weakness could lead to Fed rate cuts, he said that -- despite already-low rates -- if necessary, we could do so. Mr. Bernanke, 48 years old, also said the recent decline of U.S. stock prices has done large and serious harm to national wealth that could hurt economic growth for the rest of the year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614342","date":"2002-08-01","texts":"CHICAGO -- Soybean prices closed sharply higher yesterday amid a rare agreement in weather forecasts suggesting hotter and drier-than-normal weather is likely to become entrenched during the first half of August. While soybeans can handle some heat and dryness in July, August is the time frame when U.S. soybean yields are determined. After one of the hottest summers since the drought of 1988, soybeans' recuperative powers have been curtailed already this season. On the Chicago Board of Trade, the most actively traded November soybean futures contract jumped 18.50 cents a bushel to 5.3650. While some skeptical soybean-market bears said some of the rally was a function of end-of-the-month commodity fund positioning, many believe the recent increased volatility is likely to remain a feature of this market into the South American harvests through next May. Today's rally was the culmination of three different factors, explained Dale Durchholz, a market analyst for the farm marketing firm of AgriVisor Services Inc. in Bloomington, Ill.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616399","date":"2002-08-02","texts":"Manufacturing growth slowed sharply in July, undercutting an industrial rebound that had given many economists confidence in the broader economic recovery. The Institute of Supply Management's index of manufacturing activity dropped to 50.5 for July from 56.2 a month earlier. The July reading, the lowest since January, suggests the manufacturing sector continued to grow, but just barely. A reading below 50 implies contraction in the sector. Particularly disturbing in the July report was a sharp drop in an index of new orders, an indicator of future activity. The index, which had been suggesting a healthy growth in orders, posted its largest monthly drop since October, implying orders are now flat. For many weeks, economists cited the manufacturing rebound as evidence the economy could continue to recover, despite growing uncertainty created by accounting scandals, falling stock prices and an uneven profit outlook. Overall industrial output increased for six straight months through June, according to the Federal Reserve. But uncertainty appeared to take its toll on manufacturers in July. It might just be a temporary pause, but, coming on the heels of weak economic-growth data, the news will heighten worries the recovery is in jeopardy. Some supply executives indicate that business is improving, but question whether it will continue, the report said. Others are experiencing declines and question if we have hit the bottom. The index was based on responses from 280 executives who handle purchasing activity in industries ranging from textiles to electronics to steel. Many of the executives cited budget cuts, plans to move production to cheaper locations abroad and concerns about the outlook for the rest of the year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984631","date":"2002-08-03","texts":"For the past several months, Americans have watched the stock markets drop, watched their 401ks and mutual funds shrink and raged at corporate executives who defrauded investors and employees for personal gain. It's reassuring to see that as a nation we are adjusting to these problems, making needed repairs and moving forward. President Bush has signed legislation to improve corporate accountability and auditor oversight the Securities and Exchange Commission has sharpened its focus and executives and directors in boardrooms across America are scrutinizing and improving their practices to ensure accurate information for investors. The enduring performance of our economy -- even following terrorist attacks on our political and financial capitals, corporate scandals and the end of the dot-com bubble -- has been a testament to the character of our nation. Confidence in our financial markets, in turn, does not come from talking heads on television. It derives from the economic fundamentals, which today are strong. Our economy is growing, and inflation and interest rates are low. Homeowners are refinancing their mortgages, giving them more cash to spend each month, and our economy has created additional new jobs for two months in a row. When the economic fundamentals are strong, personal incomes rise and our prosperity is more secure. President Bush has been focused on these fundamentals since he took office, emphasizing the principles of economic freedom simpler and lower taxes, freer trade, homeland security and fiscal restraint. Quick action last year, when the president cut taxes and the Federal Reserve cut interest rates, shortened and reversed a recession. Today our recovery is underway, and Americans are going back to work. And the president is continuing to reinforce the foundations to strengthen our recovery and to protect the savings that working Americans set aside for their economic security. First, we are continuing to improve our tax system, by working to make tax relief permanent and to simplify our tax code. Predictability and simplicity should be our bywords. Predictability so that families, investors and small business owners can invest for the future and hire new workers without fear of surprise new costs imposed by the government. Simplicity because our overwrought tax code is an abomination. It diverts vital resources away from job creation and productive investments, puts U.S. employers at a competitive disadvantage and raises prices for consumers.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614977","date":"2002-08-05","texts":"As government regulators and prosecutors investigate various accounting practices by AOL Time Warner Inc.'s America Online unit, AOL's relationship with Homestore.com Inc. also is drawing attention from angry Homestore investors. A lawsuit filed last week by the California State Teachers' Retirement System -- the nation's third-largest public pension fund, which lost about 9 million on Homestore shares -- alleges that Homestore boosted revenue through complex third-party transactions involving AOL. The suit, filed in U.S. District Court in the Central District of Los Angeles, doesn't name AOL as a defendant, but it claims that AOL was a party to the transactions. An AOL spokesman said its auditors, Ernst & Young, have reviewed and approved the accounting related to Homestore. A Homestore spokesman declined to comment. The Securities and Exchange Commission is investigating AOL for a series of unconventional transactions that occurred in 2000 and 2001, which were highlighted in a series of Washington Post articles last month. One issue in the probe is whether AOL's online division improperly booked revenue from some of its dot-com partners. For example, America Online booked as advertising revenue 27 million that it received from cashing in stock warrants of a small Las Vegas software company called PurchasePro.com Inc. AOL says its accounting was appropriate. Two senior AOL executives, Myer Berlow and David Colburn, already have been questioned by the SEC about AOL's relationship with PurchasePro. AOL executives say that the SEC requested interviews as part of its investigation into PurchasePro, but a PurchasePro spokesman denies any existing investigation. PurchasePro also said it had recently complied with an SEC request to hand over documents about its relationship with AOL.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615431","date":"2002-08-07","texts":"VANCOUVER, Wash. -- Jag Media Holdings Inc., which streams market news over the Internet, is dragging the nation's largest brokerage companies into a Texas court in an effort to halt a short-selling campaign that management claims has nearly destroyed the company. Stocks of thinly traded upstarts such as Jag Media are prime targets for short sellers. Companies that feel victimized by the shorts have tried to squelch them in court before without success. But this lawsuit opens a new front by alleging that sloppy bookkeeping by the nation's brokerage companies abets the shorts by letting them sell short more shares than they can legitimately control. In June, Jag Media Holdings filed suit in District Court in Harris County, Texas, against more than 100 brokerage companies, including Merrill Lynch & Co. and the Brown & Co. unit of J.P. Morgan Chase & Co. alleging fraud, negligent misrepresentation and violations of securities law. The suit alleges the brokerage firms failed to properly close short sales by identifying and borrowing shares and taking possession of shares as required by securities regulators. Short sellers borrow a stock and sell it in hopes of replacing the shares at a lower price in the future and pocketing the difference.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616348","date":"2002-08-07","texts":"The International Monetary Fund and the U.S. Treasury have abandoned their short-lived policy of benign neglect and come galloping back into Latin America. Treasury Secretary Paul O'Neill, in the region this week, is no longer talking tough love. With the recent bailout of Uruguay and a deal for Brazil in the works, he's no longer practicing it either. Will they never learn After more than 250 billion of assistance to debtor countries in the swinging 1990s, new management at the IMF and Treasury took a new tack. No more bailouts of badly run economies No more money to defend exchange rates Losses would teach the virtues of due diligence and careful risk evaluation. This was not a punitive, small-minded assessment. The judgment was that the IMF rescue operations, assisted or even developed by Treasury, had increased risk by encouraging too much borrowing. Instead of taking in risk capital by offering equity, companies in emerging markets could hold on to their equity and leverage earnings by borrowing dollars from local banks. The local banks borrowed dollars from foreign lenders but lent in local currency. This added a currency risk to the banks' default risk. When foreign lenders became nervous about the size of the borrowing country's or banks' repayment obligations, they did not renew their loans. A run soon started against local banks, currency and government debt. This policy reached a peak in the Clinton years, when Mexico, Russia, Korea, Thailand, Indonesia, the Philippines, Brazil, Argentina, and others received massive IMF, Treasury, and multilateral loans to bail out banks and pay off foreign lenders. Often, the foreign banks renewed their loans, on more profitable terms, after the IMF put in new money. Wall Street worshipped at the Robert Rubin-Larry Summers shrine. The bankers collected fees for renegotiating the debt. They declared these policies successful because they were repaid, even though countries like Mexico, Korea, Thailand and Indonesia suffered deep recessions and ended with larger debts.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985209","date":"2002-08-07","texts":"At 76, Alan Greenspan is the oldest Federal Reserve chairman in history, and almost daily new rumors circulate that he is about to fade into the wings after his long run on stage as the world's premier central banker. In all probability, the rumors are wrong. Greenspan clearly still relishes his powerful position, and he shows no sign of leaving anytime soon, according to colleagues at the Fed, Bush administration officials and others who see him, most of whom spoke on the condition that they not be identified. But given Greenspan's age and other factors, including the current turmoil in world financial markets, there is a slowly growing sense of unease in the markets and among policymakers over the fact that at some point someone else will have to take over his role. Early this year senior administration officials began assembling lists of possible candidates, but the process has gone no further, an official said. And while economists have speculated publicly about the chances of several possibilities -- including Treasury Undersecretary for International Affairs John B. Taylor, New York Federal Reserve Bank President William J. McDonough and White House economic adviser Lawrence B. Lindsey -- none of these figures has emerged as a likely choice, for now. Among the reasons for unease is that there's no script for a successor to follow. Greenspan's leadership of the Fed has been highly personal, like that of many of his predecessors. Several books and countless articles have been written about him, the way he has operated, and the success or failure of his actions. But there's no Greenspan method, no ready formula for a successor to apply. That has caused some economists and one or two Fed officials to argue that the central bank should adopt some type of rule, such as setting an explicit inflation target, to guide its policy in the future.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613850","date":"2002-08-08","texts":"Corrections & Amplifications THE SIZE OF THE U.S. BOND market is 19 trillion. The figure used in yesterday's Credit Markets column was 16 trillion. WSJ Aug. 9, 2002 LIKE MANY HOMEOWNERS, Bill Kwitman spends his days looking for a cheaper mortgage. And that is keeping some of the biggest financial companies in the country up at night. Five times in the past year, Mr. Kwitman, an attorney in Portland, Ore., has refinanced mortgages on different rental properties he owns, saving hundreds of dollars in monthly interest payments. He checks in with an online mortgage lender as often as twice a day, eyeing his next refinancing. With rates tumbling again close to their lowest levels in decades, homeowners such as Mr. Kwitman are gearing up for a new wave of refinancings.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614202","date":"2002-08-08","texts":"The International Monetary Fund agreed to provide a 30 billion rescue package aimed at restoring investor confidence in Brazil, the linchpin of a continent that is rife with financial trouble in this summer of unrest in world markets. The unusually large loan is intended to forestall a possible default on Brazil's 264 billion public debt. It is also intended to insulate Brazil's vulnerable finances from the uncertainty of an October presidential election, in which left-wing candidates are both leading the polls and shaking the markets. The agreement represents a significant shift by the Bush administration, which had previously advocated a tough-love approach toward debtor nations and refused to back further aid to Argentina after it defaulted on its loans and scrapped its IMF-endorsed economic plan late last year. The Bush administration's view has changed significantly in the last few weeks. Some analysts speculate that officials finally gave in to mounting pressure from U.S. bankers, who argued that a Brazilian default could devastate economies in Latin America and and have repercussions in the U.S. At a time when unrest in the U.S. stock market is threatening an economic recovery, the White House seems less inclined to take the risk that turmoil in Latin America might send ripples northward. The Brazil agreement is the most significant evidence so far that the Bush administration, which came into office arguing that big-money bailouts merely encourage high-flying investors and irresponsible governments, is now embracing those emergency loans as one of the few tools it has to deal with emerging markets gone sour. Brazil has the right economic policies in place to maintain stability so that the economy can continue to grow, the Treasury Department said in a written release as Secretary Paul O'Neill flew home last night from a visit to Brazil, Uruguay and Argentina -- the crisis hotspots. The United States stands ready to support Brazil as it continues to implement these policies.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985608","date":"2002-08-08","texts":"Virginia is a hothouse sprouting PACs this summer. There's a political action committee for nearly every big-name politician and seemingly every cause, solidifying the state's image as the Casbah of campaign cash and oiling the perpetual-motion machine of campaign fundraising. Worried about the economically distressed Southside region and its representation in the General Assembly Donate to the Class of 2002 Southside Leadership Fund, founded in June by three up-and- coming Republican delegates contemplating long careers in Richmond if reelected in 2003. Want to help House speaker-designate William J. Howell R- Stafford mend a GOP caucus badly bruised by the scandal that ousted S. Vance Wilkins Jr. Howell is launching his Dominion Leadership Trust with a fundraiser Sept. 16 in Washington, a Virginia Beach event three days later and a breakfast in Richmond the day after that. Howell's DLT should not be confused with Wilkins's Dominion Leadership Fund, which churned through more than 680,000 in its short life as the speaker's personal political treasury. He was methodical as the GOP's main money man, carefully screening candidates before bestowing 5,000, 10,000 and more on lucky ones who, once they won election as most did, owed him their allegiance. Wilkins elevated the boutique PAC to a mighty instrument of power, fully on par with several PACs controlled by former Gov. James S. Gilmore III, who worked with Wilkins and the state GOP to build a General Assembly majority. Wilkins and Howell are quarreling over disposition of about 160,000 left in Wilkins's fund.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984879","date":"2002-08-11","texts":"This is the math of a regional economy correcting itself Sixteen of the 40 technology companies in the Washington area that first sold stock to the public in the past five years are sold, in bankruptcy or out of business. Many that remain have stock trading at pennies a share. Technology businesses created more than 100,000 jobs here from 1995 to 2001, according to an analysis of government statistics by Economy.com. But in the past two years, they have laid off about one- fifth that number. The late '90s boom in the business of technology helped create the Washington area as we now know it. Debates over growth in Loudoun County, the construction cranes that dotted the skyline of the Dulles Corridor and even the traffic back-ups on the Capital Beltway are all traceable to the explosion of growth in the private sector. Now a local business culture that prized aggressive growth is focused on steady work for steady cash. The flashy telecommunications and software firms are gone or foundering. It's a return, say local business veterans and economists who study the region, to the kind of slow, reliable economic expansion that Washington had for decades. I think we'll be returning to steady growth in all the sectors of this marketplace, rather than the meteoric growth in a single sector we had during the late '90s, said John R. Tydings, who headed the Greater Washington Board of Trade for three decades before becoming a consultant last year.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842614633","date":"2002-08-20","texts":"Is the economy slipping back into recession The most forward-looking economic indicators hint it could be heading in that direction, though not convincingly. The Conference Board, a New York nonprofit business research organization, reported its monthly index of leading economic indicators fell 0.4 in July, its third decline in four months and its largest decline since September, when terrorist attacks in New York, Washington and Pennsylvania sent stock prices and consumer confidence tumbling. Falling stock prices were a culprit for the July decline as well, accounting for 0.3 percentage point of the overall drop. Of the 10 leading indicators tracked by the conference board, four were pointing up in the month -- the growth in money supply, manufacturers' orders for capital goods outside of the defense sector, orders for consumer goods, and weekly claims for state unemployment insurance benefits. Some of the down indicators, such as the stock market, have shown signs of firming in August. The S&P 500 index, for example, was up by 2 in the month through Friday. The latest monthly decline comes after several weeks of negative economic news had already increased concerns that corporate accounting scandals and the weak stock market had led to a sharp slowdown in economic activity. Several other leading indicators are also pointing down. The Economic Cycle Research Institute, another private research organization, said its weekly index of leading indicators is down 3.2 from late May. Meanwhile, the Organization for Economic Cooperation and Development said its monthly index of leading indictors among industrialized economies in North America, Asia and Europe turned down in June after rising for seven straight months. Leading indicators offer an imperfect glimpse at the outlook for future economic activity. They range from consumer expectations to manufacturers' orders for capital goods to permits granted for future home construction.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983708","date":"2002-08-21","texts":"Two of the Democratic contenders in Maryland's 8th Congressional District turned up the heat yesterday, accusing each other of misleading voters through campaign advertising. The campaign of state Sen. Christopher Van Hollen Jr. Montgomery accused state Del. Mark K. Shriver Montgomery of using political inflation to bolster his record on health care reform. Meanwhile, the Shriver campaign pointed to what it called an inflated claim in Van Hollen's first television commercial, which began airing this week. Democrats in Montgomery and Prince George's counties will pick a nominee Sept. 10 from a field of four candidates. In addition to Shriver and Van Hollen, former Clinton administration trade negotiator Ira Shapiro and lawyer Deborah Vollmer are vying for the chance to take on Rep. Constance A. Morella R. With few philosophical differences among the candidates, the Democratic primary race has largely come down to a battle of resumes and, increasingly, disputes over campaign tactics. In the latest semantic wrangling over campaign advertising, Van Hollen's campaign took issue with a Shriver brochure that hit mailboxes across the district this week. The brochure states that as a state delegate, Shriver compiled a record of hard work, determination and expertise on health care issues that helped changed lives. The brochure lists specific pieces of legislation, including bill numbers and dates.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982336","date":"2002-08-22","texts":"Prince George's Community College President Ronald A. Williams has a simple message for this year's candidates in the race for county executive Help In a letter sent to the contenders, Williams, starting his fourth year at the helm of the 36,000-student college, appealed for increased financial support after the election. In case the candidates had any doubts about the college's needs, Williams detailed four funding initiatives for the 2002 political campaign platform. One of the things that struck me as the campaign has gone along is that even though education is central to what every candidate sees as important, I don't think the community college has had a sufficiently high profile in that conversation, Williams said in an interview. I have a concern about the minimalist approach the county has taken for 40 years in providing resources for the college. It's all about money. But it's also about the increasing role the college has come to play in the life of the county, with more than 47 percent of college-bound Prince George's students enrolling there. Since Williams's arrival in 1999, enrollment has risen 8 percent. At the same time, county funds account for 22 percent of the college's operating budget, down from 27 percent six years ago. That's the lowest level of local aid to a community college in the state, Williams wrote.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616690","date":"2002-08-23","texts":"HSBC Holdings' takeover this week of Mexico's fifth-largest bank offered the latest evidence that South America's financial crisis hasn't soured global perceptions of Mexico, or enthusiasm for investment in that market. But some analysts are raising concerns that the stock market faces near-term pressure from the Mexican economy's reliance on the sluggish economy in the U.S., where Mexico sends more than 90 of its exports. The worry for Mexico is U.S. contagion, says Christian Stracke, an emerging-markets analyst for the research group CreditSights. Indeed, the Mexican government yesterday reported that retail sales fell 0.4 in June from a year earlier, frustrating forecasts that the figure would rise a healthy 2.8. The news, which dulled some of the optimism from last week's positive gross domestic product numbers for the second quarter, weighed on the stock market. Mexico's IPC Index ended down 0.5 yesterday at 6239.49, despite a rally on Wall Street. Asian markets, meanwhile, closed mostly higher, and European stocks bounced back strongly. Overall, the Dow Jones World Stock Index increased 1.03, or 1.56 points, to 153.14. Excluding the U.S., the index advanced 0.62, or 0.7 point, to 113.44.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615192","date":"2002-08-29","texts":"NEW YORK -- Energy companies have been among the most aggressive at taking advantage of a reopening of the corporate-bond market recently. Since the beginning of last week, seven energy-related companies have sold bonds. Those issuers were looking to fund continuing capital programs at a point when improving market sentiment had opened the borrowing window. They present a stark contrast to energy companies such as Dynegy Inc. and Williams Cos., which have been selling assets in a bid to stave off further deterioration of credit ratings. Yet a report Wednesday by Standard & Poor's analyst Suzanne Smith cautioned that it is not only struggling companies that command attention. S&P's current focus is on liquidity for all companies in the power and energy industry. S&P said the energy sector is under a cloud of some 30 billion in shorter-term loans used to finance initial power-plant construction that will need to be refinanced within the next 18 to 24 months. It added that the power and energy industry faces an unprecedented confluence of operational and financial challenges, making ample liquidity a much more important component of credit analysis.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984503","date":"2002-09-01","texts":"There is no single Big Fix to the crisis of corporate governance that has brought down markets, rattled and embittered investors and employees alike, and shaken American politics. One remedy, however, would do much to change the circumstances that helped create the crisis and would be a very practical step toward restoring confidence in the equity markets issuing and increasing dividends. Dividends have become second-class citizens in the worlds of corporate finance and investing. Yet their rehabilitation would offset the cult of quarterly performance and stock appreciation and all-else-be-damned. It would change the rules and incentives in the boardroom. A return to dividends is also something to which individual investors should pay considerable attention. It would be of immense importance to the coming generation of 401k retirees, who are now making a bigger and riskier bet on the stock market than they recognize. But bringing about this change requires a fix of its own - - ending the double taxation of dividends. As a topic for debate, dividends are not likely to fire up congressional hearings or light up the television news. They seem old-fashioned, suggesting a bygone era of gentility, perhaps even inherited wealth that has seeped down through the generations. In the boom market of the late 1990s, advocates of dividends came to sound more and more like grumpy old men and women who just didn't get the new economy such as the idea that market cycles had been abolished. A whole generation of younger investors has grown up never even thinking about dividends. But since the markets tanked, options went into disrepute and some high-profile corporate executives got caught misbehaving, dividends are starting to get a little air time. They even managed a walk-on role at last month's Waco economic summit.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985321","date":"2002-09-01","texts":"Personal finance software shows how computing can actually improve your life, not just make it more complicated. Sure, an automated checkbook register is handy, but the real value of this software -- pioneered by Intuit's Quicken -- is the perspective it yields on your money. With all the numbers in one place, combined with powerful analytic tools, you can see where you've been earning it and spending it, as well as how much you may have later on. This insight makes it easier to control your finances instead of having them control you. That's pretty powerful stuff. This year's versions of Quicken and its main rival, Microsoft Money, go about that goal in different ways, not all of which work. Finally, a real upgrade Intuit's Quicken 2003 Win95 or newer Win2000 or newer, 30 Basic, 60 Deluxe, 80 Premier Mac OS 9.2.2 or newerMac OS X 10.1.4 or newer, 60 represents a major improvement over earlier offerings. Quicken's user setup has become friendlier, and the program no longer imitates a Web page so slavishly -- secondary windows open in separate frames, so you can refer from one to the other. The more flexible account bar shows more information and organizes it better, and My Data pages deliver convenient one-page reports on your accounts.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982659","date":"2002-09-02","texts":"Of course, Turner wasn't exactly a high-ranking executive. The Cibolo, Tex., man was one of the 17,000 WorldCom employees laid off on June 28. And one of many workers confused about how their companies allocate severance pay. How do companies determine how much severance an employee receives The question is important for many young workers who sought or are seeking jobs in the tech sector, which has, to put it mildly, been a volatile place to build a career. Knowing how much severance you can expect will help you plan your next move if you are ever laid off. First of all, severance is not guaranteed. There is no federal law that says an employer has to give you anything when it sends you and your favorite red Swingline stapler packing. Other countries have laws authorizing severance, however. In Canada, for example, if you have been with your employer for at least five years, you may be entitled to a week's pay for each week you were with the company, up to 26 weeks' salary. Severance packages are fairly common in this country. A 2001 survey of 925 U.S. companies by the outplacement and career services firm Lee Hecht Harrison of New Jersey found that 79 percent had severance policies for their full-time employees. Contract workers were not usually covered.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615564","date":"2002-09-03","texts":"Even though wavering U.S. stock and job markets gave consumers the jitters during the summer, they kept spending freely on cars and housing, and a new consumer-spending index produced by Deloitte Research helps to explain why. Carl Steidtmann, Deloitte's chief economist, says economists spend too much time watching wiggles in monthly consumer-confidence measures -- which have recently slipped -- to try to gauge the outlook for spending. The more important indicator of the outlook for spending, he says, is long-term trends in the actual cash going into and out of people's pocketbooks. His index of cash flow is pointing up -- thanks to factors such as tax cuts, wage gains and increases in home prices -- suggesting that spending could strengthen, at least for the next few months. Consumers are wallowing in cash, says Mr. Steidtmann. Deloitte Research is a unit of Deloitte Touche Tohmatsu, an accounting and consulting partnership. Data released by the government Friday underscored this argument. The University of Michigan said its monthly index of consumer confidence fell in August to 87.6 from 88.1 in July. A separate measure of confidence produced by the Conference Board was also down in August. But consumer spending picked up after slowing down during the spring. In July, consumption rose 1 from the previous month, the Commerce Department said, largely because of a new outburst of spending on cars backed by 0 financing deals. Spending in July grew at a 6.7 annual rate from the second quarter, according to calculations by UBS Warburg.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614473","date":"2002-09-05","texts":"BEGINNING NEXT MONTH, speculators bored with trading mortgages, credit-card receivables and heating-oil futures will be able to bet directly on the number of Americans who have jobs. At first, this sounds like a bad idea, one that strips away all subterfuge and truly turns Wall Street into a betting parlor. Imagine the bearish trader celebrating as wire services report that U.S. employers cut their payrolls in September. The more layoffs, the more he makes. He cheers. Cue the angry mobs. Although individual investors won't be able to participate just yet, this may be a step toward something more socially useful a way for ordinary Americans to insure against risks such as falling home prices, a sinking economy or a resurgence of inflation. The sharing of economic risk is one of society's deepest concerns, and rightly so, Yale University economist Robert Shiller says. To the extent that inequality is created by pure luck, it's not only painful, but a shame. Sharing harm from bad luck is the reason for life insurance and government insurance against temporary unemployment. Global financial giants offer big companies ways to hedge the risks of unwelcome turns in interest rates, currencies and commodity prices. So why, Mr. Shiller asked in a 1993 book, doesn't our increasingly sophisticated market system allow more ordinary folks to share their largest economic risks The short answer No one institution is wealthy enough to shoulder these risks, and most early attempts to develop markets to spread the risks have flopped. The Coffee, Sugar and Cocoa Exchange's attempt to establish a futures market in the consumer-price index, essentially insurance against inflation, died in the early 1980s as a result of lack of interest. The London Futures and Options Exchange's experiment with betting on real-estate prices collapsed in the early 1990s amid reports that false trades had inflated trading volume.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615297","date":"2002-09-05","texts":"NEW YORK -- A snapback rise in some of the sectors hit in the recent selloff allowed blue-chip stocks to post their first gain since Monday of last week. Shares of telecommunications-service and -equipment providers, among the worst-performing sectors both this year and over the past week, finished among the market leaders. SBC Communications, which closed Tuesday within 1 of its low for this year, climbed 1.20, or 5.2, to 24.30. AT&T rose 50 cents, or 4.5, to 11.70. Equipment maker Tellabs gained 42 cents, or 7.9, to 5.76 in Nasdaq Stock Market trading. Shares of cable-television service operator Comcast gained 99 cents, or 4.6, to 22.54, also on Nasdaq. Financial-services providers, crushed Tuesday on concerns about corporate conduct as well as exposure to deteriorating global economic conditions after a stock-market setback in Japan, scaled the Wall of Worry yesterday. Citigroup, down 10 Tuesday, recovered 91 cents, or 3.1, to 30.30. Bank of New York increased 93 cents, or 2.9, to 33.18. Goldman Sachs Group added 1.75, or 2.4, to 75.50. As a consequence of the blue-chip recovery, the Dow Jones Industrial Average halted five sessions of losses, adding 117.07 points, or 1.4, to 8425.12 a big slug of the gains came in the final hour.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615508","date":"2002-09-05","texts":"CONSUMER SPENDING on electronics had ridden out the falling economy fairly well as shoppers trekked to electronics stores for big-screen TVs, DVD players, digital cameras and other gadgets. But then this summer store traffic stopped as if someone had pulled the plug. Yet the retailers don't blame the stock market for the problem. Their culprit car makers. No-interest financing and other payment plans are enticing consumers to spend their money on cars instead of electronics or other gadgets. The retailers, such as Best Buy Co. and RadioShack Corp., hope the sales slump is merely temporary, but are bracing for something worse. Wendy Smith, a 34-year-old homemaker in Crofton, Md., roughly doubled her monthly car payments to 430 when she bought a Saturn wagon in late June, upgrading from a three-door coupe. But she and her husband decided to wait until next year to replace their six-year-old home computer. The zero-percent financing is what got us there, Ms. Smith said. We're just cutting back on other purchases.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981681","date":"2002-09-06","texts":"A series of discouraging reports on the economy, showing that productivity growth was slowing and that retail sales fell short of hopes, sent stocks into a sharp decline today. The sell-off more than offset the market's big advance on Wednesday, which analysts had attributed to bargain hunters, not a solid investor commitment to stocks. Everyone is definitely looking at the data on the economy, and they really want to see some glimmers of hope that we are going to get a pickup in profit growth, said Joseph Keating, chief investment officer at AmSouth Asset Management in Birmingham. The Dow Jones industrial average closed down 141.42 points, or 1.7 percent, at 8283.70. The loss wiped out Wednesday's 117.07- point gain, the Dow's only advance in seven sessions. The broader market also dropped sharply. The Nasdaq composite index sank 41.31, or 3.2 percent, to 1251.00, its fifth loss in seven days. The Standard & Poor's 500-stock index fell 14.25, or 1.6 percent, to 879.15, its sixth loss in seven days.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842616122","date":"2002-09-12","texts":"NEW YORK -- There were commemorative speeches, moments of silence and a song. Then 93-year-old Michael Pascuma, the American Stock Exchange's oldest trader, stepped up to the podium overlooking the exchange floor. Raising a gavel, Mr. Pascuma struck the opening bell 10 times, once for every Amex member lost during the Sept. 11 terrorist attacks -- including his son. Then Mr. Pascuma, a trader since 1927, and his colleagues got to work, as the nation's stock and options exchanges began trading after an opening delayed by ceremonies marking the anniversary of the Sept. 11 attacks. Two blocks north at Ground Zero, a memorial service worked its way through a reading of victims' names. On the exchange floor, it was the start of another trading day. I think it's important for us to stay open today, to come to work, said Joseph Stefanelli, Amex's executive vice president for derivatives. An Amex options trader said, It's just September but I almost feel like it's the beginning of a new year after today. Some investors seemed to agree, as bullish calls traded actively on hopes of a rally, as well as the covering of short positions ahead of economic addresses from President Bush and Federal Reserve Chairman Alan Greenspan. At the Chicago Board Options Exchange, the ratio of equity puts traded to calls fell to 0.49, compared with 0.57 Tuesday and 0.67 Monday. A put is an option to sell a security at a specified price, and a call is an option to buy a security at a specific price.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617309","date":"2002-09-12","texts":"The hotel industry is holding up better than expected in the post-Sept. 11 downturn due to low interest rates, flexible bankers and, in the case of smaller owner-operators, a growing reliance on Small Business Administration loans. About 19.2 of hotels didn't generate enough revenue to pay their debt in 2001, according to an analysis of nearly 4,000 hotel financial statements by Hospitality Research Group, a division of PFK Consulting. About 2.5 to 5.5 of the properties surveyed defaulted. That's a sharp contrast to the last big hotel recession in 1992, when about 16 of hotels in the U.S. defaulted and many owners lost their properties. While the lodging industry isn't expected to recover until at least 2003, owners and analysts alike say they don't expect the foreclosure rate to grow substantially this year and the next. It's not nearly what we expected when we first did this analysis last year, said Jack Corgel, managing director of the PFK division. We expected a lot worse. Low interest rates have been the key to the industry's survival during a downturn that has seen occupancy rates slide and revenue per available room -- the standard industry measurement of profitability -- plummet in some cases. More than three-quarters of the sampled hotels refinanced last year, reducing their interest expenses by an average 9. And while lenders have been hesitant to grant new loans, they have generally been flexible and have allowed hotels to restructure their obligations.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983609","date":"2002-09-13","texts":"Federal regulators have launched a major review of the nation's top banks to ensure compliance with rules barring firms from linking the price or availability of loans to a corporate client's use of the bank to underwrite its stock or bond offerings. Companies covered by the review include Bank of America Corp., Citigroup Inc., JP Morgan Chase & Co., Bank One Corp. and Wachovia Corp. Each owns a commercial bank that makes traditional business loans and an investment bank that provides securities services such as selling stocks and bonds to the public. The government's interest in the tying of loans to securities underwriting stems from fears among regulators and legislators that bankers are being pressured to weaken their lending standards to win other, more profitable business from commercial clients. Regulators worry that weaker loans could imperil the overall health of the banking industry, whose deposits are insured by an industry-funded reserve run and backed by the federal government. The review coincides with broader scrutiny of financial conglomerates and their tying of services, such as issuing favorable analyst reports to help win stock and bond business. The review by banking regulators was detailed in a Aug. 3 letter, made public yesterday, from Federal Reserve Board Chairman Alan Greenspan and Comptroller of the Currency John D. Hawke Jr. -- the nation's two top banking regulators -- to Rep. John D. Dingell D- Mich., the ranking Democrat on the House Energy and Commerce Committee.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614012","date":"2002-09-17","texts":"Osama bin Laden said that the Sept. 11, 2001, attacks struck deep at the heart of America's economy. He was wrong. The U.S. economy was scraped and bruised on that terrible day, but it is clear that the heart of the American economy is still beating strongly. Despite an estimated 120 billion of damage and a great deal of anxiety, one year after the attacks an economic recovery is underway. In fact, the three-quarter recession that began in early 2001 ended within 45 days of 911, and real GDP has now expanded for three consecutive quarters. By early October 2001, consumers and businesses were back up and running. After seeing weak sales in mid-September, automobile manufacturers instituted 0 financing and auto sales soared in October to an annualized rate of 21.3 million units, a record high. Other retailers experienced similar results. Excluding autos, retail sales fell 1.2 in September, but rebounded by the same 1.2 in October. To complete the pattern, durable goods new orders fell 6.8 in September, only to rebound 9.2 in October. Real GDP fell by less -0.3 in the third quarter of 2001, which included the impact of the attacks, than it did in the second quarter -1.6, just before the attacks. While the airline and hotel industries are still experiencing a depressed level of activity, other spending has not only recovered, but more than offset travel-related losses.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982725","date":"2002-09-17","texts":"In a country filled with yellow and orange terrorism alerts, fears of biological and chemical attacks, and pronounced discomfort with Muslims, Islam and the Koran, it would seem that there are certain untouchable topics that fashion has no business exploring. In the days and months following last year's terrorist attacks, which put an end to fashion week here, the industry responded much like the rest of the country -- with anger, shock and bold strokes of patriotism. With a harsh gravitas woven into daily life, the industry questioned once-prosaic decisions about putting camouflage, artfully wrecked garments or aggressive images on the runway. Designers softened their fashion show soundtracks. Or used no music at all. There was a greater awareness of how even the most modest examples of frivolity might be perceived in a world racked by grief and fear. For reasons of sensitivity and practicality, the fashion industry scaled back subsequent runway presentations, deciding that it would be inappropriate to condone shoving crowds, sharp tongues and prancing models on a set worthy of a Vegas showgirl. Designer boutiques opened without fanfare instead of popping champagne corks. Parties were downscaled to dinners. At the time, those seemed like the correct decisions. The business of fashion would carry on, but the silliness of it, the pretensions, the hype would be packed away for later consumption. All that anyone really wanted was the solace of beauty. The spring 2003 New York runway presentations begin today. Now that a year has passed, questions of appropriateness are more difficult to answer. Many of the responses that struck just the right tone 12 months ago now seem like cliches or are clouded by ambivalence. A year ago, people were implored in one resounding voice to go shopping and prove that the terrorists could claim neither a cultural nor an economic victory. On the anniversary of the attacks, stores here shut down for several hours some locked their doors for the entire day. Others stayed open continuously.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614678","date":"2002-09-20","texts":"WASHINGTON -- White House officials said they aren't yet close to agreement on a package of investor tax breaks, more than a month after President Bush embraced the idea at his economic forum in Waco, Texas. That suggests the administration isn't likely to introduce its own proposal this year. Congressional time pressure and political concerns among some vulnerable Republican candidates are contributing to the delay. White House budget director Mitchell Daniels Jr. said this week that none of the various packages put together by advisers have met the administration's requirements of helping the economy without hurting the budget, which is now back in deficit. Maybe the greater reality is simply the shortness of time, and the crowded calendar, he said. But while equities markets sag, White House officials, including Mr. Daniels, won't say they have scratched the item off the administration's agenda. On Capitol Hill, die-hard GOP tax cutters including Rep. Tom DeLay of Texas again pushed the idea this week in party meetings. The back-and-forth over Wall Street tax breaks has prompted renewed criticism of Mr. Bush's economic team among some Republicans. At the Waco conference in August, Mr. Bush enthusiastically touted two big tax breaks an increase in the amount investors can deduct for stock-market losses, and a reduction in the so-called double-taxation of corporate dividends.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981688","date":"2002-09-21","texts":"The Food and Drug Administration last night approved a long- awaited drug for a form of viral hepatitis, expanding treatment options for a disease that afflicts more than 1 million Americans. The action was a significant boost for Gilead Sciences Inc., a Foster City, Calif., biotechnology company that has built a strong portfolio of antiviral drugs. Gilead already sells one of the country's fastest-growing AIDS treatments, and analysts have said the new hepatitis B drug, known as Hepsera or adefovir dipivoxil, could bring revenue of 200 million a year or more. Hepatitis is a slow-to-develop but life-threatening ailment that can lead to cancer or catastrophic liver failure. Many liver doctors had been awaiting the action the FDA took last night. Unsatisfied with two drugs already on the market, which have severe limitations, the doctors held off treatment for many patients healthy enough to wait. They also had been seeking a new treatment for seriously ill patients who have exhausted all other options. It works dramatically in many patients for whom another antiviral drug, lamviudine, has stopped working, said Eugene Schiff, head of the Center for Liver Diseases at the University of Miami School of Medicine and a consultant to Gilead. It's not a perfect drug, but there's no question it's an advance in hepatitis B. The new drug is one of a growing number of spinoffs from the nation's investment in AIDS research. It was originally developed as an AIDS drug but proved too toxic in that use and was turned down by the FDA. However, it proved effective against the hepatitis B virus at far lower, and therefore safer, doses. It works by blocking reproduction of the virus.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613914","date":"2002-09-23","texts":"We've caught heck from the sages of Wall Street for suggesting over the past year that Fannie Mae was exposed to too much interest-rate risk. Well, all of a sudden a lot of investors seem to agree with us. They've been selling off the nation's largest mortgage buyer after Fannie disclosed last week that what it once called its superior risk management is coming undone. Fannie shares closed off nearly 3 on Friday, to 64.60, despite a rising overall market and the continuing housing boom, and are now trading at levels not seen in two years. Louisiana's Richard Baker, Congress's leading Fannie overseer, is concerned enough that he's now asked the company's regulator to deliver weekly reports on the mortgage giant's status. Specifically, Fannie reported last week that its duration gap -- a measure of how successful its interest-rate risk is hedged -- has been widening beyond its target range of plus-or-minus six months. In July, Fannie's duration gap was a negative nine months in August it careened to 14 months, the largest ever reported. A negative number reflects falling interest rates, a positive number reflects rising ones. So what happened The problem is clear Falling interest rates have encouraged a record number of home refinancings and therefore of mortgage prepayments. In other words, Fannie's assets are being paid off faster than expected by homeowners.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613944","date":"2002-09-23","texts":"Corrections & Amplifications SOLECTRON Corp.'s 50 debt-to-capital covenant pertains to two credit lines, which the company says it hasn't drawn down. Yesterday's Heard on the Street column didn't specify which of Solectron's sources of funds contained the covenant. WSJ Sept. 24, 2002 WHEN COMPANIES take big charges to earnings to write down goodwill they often urge investors to ignore the charges as mere accounting entries that don't affect their operating performance or financial stability. But bankers may not be so easily spun. Potential write-downs of goodwill assets by several big companies are looming -- and may place them in jeopardy of violating covenants on their borrowing agreements. By itself, this doesn't mean that any of these companies will be pushed into default on their debt. But it could give banks leverage to win concessions from the borrowers, such as higher interest rates and fees, the pledging of assets as security or agreements by the companies to pay off their loans sooner.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615176","date":"2002-09-24","texts":"NEW YORK -- Call trading picked up during the first session after last week's expiration of September options, but it wasn't because investors were making bullish bets on a stock-market bounce. While some traders braced for a possible short-term correction, much of the call volume appeared driven by investors selling new calls against stocks after prior short-call positions had expired. In Siebel Systems, for instance, an investor sold thousands of October 7.50 calls, while another investor bought a good portion of them. The call seller earned about 45 a contract and either doesn't expect Siebel stock to exceed 7.50 by Oct. 18 or is prepared to sell stock at that price. Even with the Nasdaq skidding to 1996 levels, investors weren't positioning for a recovery. There wasn't a whole lot of call buying, said one trader of the options on the Nasdaq-100 Index Tracking Stock. I think investors are really waiting for the market to show a clearer direction before they are willing to commit. At the Chicago Board Options Exchange, the ratio of equity puts traded to calls eased to 0.76 from last week's string of readings above the high 1.0 mark. While some contrarians regard a reading above the 0.75 level as a bullish signal, few were swayed enough to buy. A put is an option to sell a security at a specific price a call is an option to buy a security at a specific price.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614197","date":"2002-09-25","texts":"NEW YORK -- Federal Reserve policy makers voted to keep short-term interest rates unchanged, choosing to do little now to alleviate the increasingly bearish sentiments in the option market. Option investors have adopted a more defensive posture, but traders say they have yet to see the kind of acute fear that contrarians say marks stock-market bottoms. The option market's fear gauge, the Chicago Board Options Exchange's market volatility index, or VIX, edged up 0.67 point to 45.38, but remains far shy of its intraday peak of 56.74 on July 24. Meanwhile, major stock indexes are hovering near their late-July lows. In the heavily traded options on the Standard & Poor's 500-stock Index, for instance, investors are more willing to pay up for downside protection than for bullish upside bets, traders said. They also have noticed a skew between the implied volatility of just out-of-the-money puts compared with comparable calls. The slope of the implied volatility skew, which measures the extra premium investors are willing to pay for out-of-the-money puts relative to out-of-the-money calls, has likewise increased and is near its one-year high, Edward Tom, a Credit Suisse First Boston strategist, said in a report. Investors looking to increase their exposure to stocks might consider option plays like risk reversals -- or selling puts and buying calls on the same stock or index -- to take advantage of this skew in premiums, rather than buying stocks outright, he said. International Business Machines' puts traded briskly as its stock slipped to another 52-week low following the downgrade of competitor Electronic Data Systems. One analyst also warned that declining returns on IBM's pension-plan assets can cut into the company's cash if the markets don't improve, while raising questions about whether Big Blue can meet year-end earnings estimates.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983380","date":"2002-09-26","texts":"Activists began trickling into Washington yesterday as the numerous players on the city's protest stage -- organizers, downtown office workers, police -- searched for housing, prepared to shut some buildings and mobilized their forces for tomorrow's curtain- raising. Protesters, organizing for demonstrations targeting this weekend's annual meetings of the International Monetary Fund and the World Bank, offered street medic training, set up the Anti- Authoritarian Babysitters Club and scrambled for bed space in churches, hostels and friends' homes. Police prepared for the arrival of 1,700 out-of-town officers to help create a force of about 3,200. They also ordered city crews to remove benches, newspaper boxes and cigarette urns from some downtown sidewalks and urged commuters to stay off the roads in the District tomorrow. Police officials said they would establish a fenced perimeter tonight around the World Bank and IMF headquarters in Foggy Bottom. Police preparations focused on a mix of permitted and unpermitted demonstrations, including a call to bring traffic and business activity in the District to a standstill tomorrow and to prevent IMF and World Bank delegates from leaving their meetings Saturday. District officials have said the city will remain open for business, but some offices took extra security steps.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613893","date":"2002-09-27","texts":"The eroding value of TV Guide, once the premier weekly publication in the country, continues to haunt Gemstar-TV Guide International Inc. as the company disclosed it was taking another charge against earnings -- of 1.3 billion -- because of the write-down of the magazine to its fair market value. The noncash charge triggered a loss of 953.8 million, or 2.32 a share, for the second quarter as the Pasadena, Calif., publisher of TV Guide and owner of patents for on-screen television-program guides finally released financial results for the quarter. In the first quarter, the company took a 5.3 billion charge against earnings related to its 2000 merger with TV Guide Inc. The second-quarter loss widened from a loss of 134.8 million, or 33 cents a share, a year earlier. Gemstar failed to certify its financial results by the Securities and Exchange Commission's Aug. 14 deadline, as auditors continued to review its books for possible accounting problems. Gemstar's results remain uncertified until the auditors finish their review. For the quarter, revenue fell 15 to 271.7 million. Gemstar had revenue declines at both its TV Guide and patent-licensing units, but revenue was up at its interactive unit because of increased e-commerce revenue and wagering activities on its horse-racing channels. Once boasting a market capitalization of more than 25 billion, Gemstar now is struggling to remain listed on the Nasdaq Stock Market as its stock has collapsed to under 5 a share and a market cap of almost 2 billion. Gemstar executives met yesterday with Nasdaq officials in hopes of preventing its stock from being delisted. In 4 p.m. trading, Gemstar shares were off 10, or 34 cents, at 2.90.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983844","date":"2002-09-29","texts":"Had investors and voters known more about the wretched excesses in executive pay and fringe benefits that have come to light in the last few months, some long-needed reforms of corporate compensation might already be in the works as part of the recent legislative and regulatory crackdown on fraudulent accounting and finance. Only the most blase boosters of unfettered free markets can look at these revelations without feeling some measure of amazement and outrage. After the grotesque 100 million pay packages lavished on chief executives of failing companies such as Adelphia Communications and Enron came the spectacle of extravagant fringe benefits -- one of the most prominent being the Medici-like retirement package of former General Electric CEO Jack Welch which included an 80,000-a-month Manhattan apartment, plus cash for flowers and groceries. Then, last week, it was revealed that Tyco, the scandal-riddled conglomerate, had agreed to pay a severance package of 45 million to an executive even though he was already under criminal investigation by a grand jury that later indicted him for fraud and theft. There's been muted criticism of corporate pay and perks for years, but these recent revelations have produced a wave of public revulsion that extends to institutions rarely thought of as critics of American capitalism, such as the Federal Reserve system and the editorial page of the Wall Street Journal. But while nearly everyone agrees that executive compensation in America has become absurdly excessive, there's less agreement about what -- if anything -- can be done about it. As it turns out, the most effective regulation may be imposed by the companies and the CEOs themselves, driven by the infamy that we now see enveloping those whose excesses are brought to light. While chief executives of big corporations worldwide have always been paid princely sums, hard data show that U.S. executives have been paid more like kings and that in recent years they have become even more Croesus-like. By 1996, according to one study, total compensation of American CEOs was more than twice as high as that of their Japanese and European counterparts, even allowing for the benefits and perquisites, such as company cars and clothing allowances, that tend to be more common overseas. The first problem with trying to control corporate compensation is practical. Even if Congress decided to outlaw excessive pay and perks, defining what is excessive would be at best difficult -- and at worst impossible. How much, for instance, has Bill Gates been worth to Microsoft He started the company from scratch in 1975 and, even in today's depressed stock market, it's worth about a quarter of a trillion dollars. Microsoft's directors and managers, along with hundreds of thousands of shareholders, might reasonably argue that Gates has been worth every penny of the billions he has made. How could a lawmaker or regulator determine what level of compensation is excessive for someone like him It's even conceivable that some people might forgive Jack Welch his Pharaonic excesses for similar reasons.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982674","date":"2002-09-30","texts":"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. 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. 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. 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. 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.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842614579","date":"2002-10-01","texts":"Global markets ended the third quarter much the same way they began marked by confusion and volatility that left investors searching for a bottom. 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. 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. 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. 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.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615713","date":"2002-10-01","texts":"TWO-AND-A-HALF YEARS have passed since the antiglobalization protesters last dropped their trousers in front of the Georgetown Gap outlet. They haven't changed a bit. But the world certainly has. Last time around, columnist Michael Kelly derided the protesters as being between the last body-part piercing and the first IPO. Mr. Kelly's phrase perfectly captured the moment At the time, the market religion held such strong grip that Mr. Kelly assumed everyone, including the motley strippers, eventually would succumb to its lure. But even as those earlier protesters were shedding their clothing, the Nasdaq was plunging, eliminating the opportunity for 29-year-old kids to strike it rich off their first good idea. Then came Sept. 11, reminding all that security is one thing people aren't willing to leave to the marketplace. And finally came a wave of corporate scandals, in which greed-stricken chief executives were shown to have manipulated the market to boost their own, already obscene salaries. Corporate apologists still say the problems are limited to a few bad apples. But that argument was undercut by revelations that even the business world's most revered icon, Jack Welch, enjoyed a lifetime supply of cut flowers and skybox tickets at General Electric Co. shareholders' expense. This weekend, the protesters returned. Their zeal is undiminished. But to a degree many of them still don't recognize, they have won the argument. Capitalism now has the black eye they tried so hard to give it. Writing in the Washington Post last week, Robert Weissman of Mobilization for Global Justice exulted","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616614","date":"2002-10-01","texts":"FANNIE MAE'S RECENT portfolio problems raise an inevitable question Why hasn't Freddie Mac, its smaller sibling, suffered the same fate For years, investors have treated the two massive mortgage companies as if they were interchangeable, and in many respects, they are. Both are government-chartered companies that buy mortgages to boost the flow of capital through the housing market. Both have the same set of special -- and controversial -- advantages, including exemptions from some taxes and a lower cost of borrowing than other companies. And both, according to their critics, represent a potential threat to the economy if they mismanage their gigantic loan portfolios. But at a time when Fannie Mae is scrambling to recover from a flood of mortgage refinancings, Freddie Mac appears to be doing fine, in part because of its more aggressive use of derivatives and other hedging instruments. Although both companies use such instruments to protect against rare market upheavals -- like today's extraordinarily low-interest-rate environment -- Freddie Mac uses more of them, theoretically giving it more protection. As of June 30, Freddie Mac's portfolio of derivatives had a notional balance of 704 billion, while Fannie Mae had just 594 billion in derivatives, even though it is a much larger company. Among those derivatives are so-called interest-rate swaps and swaptions, or options on swaps, which the companies use to help balance their assets and liabilities during periods of stress. Through the use of interest-rate swaps, for example, the companies can restructure their debt whenever interest rates shift, keeping their debts in line with their assets. Both companies rely heavily on so-called callable debt, which can be reissued whenever interest rates change. Nevertheless, Freddie Mac estimates 75 of its fixed-rate assets are funded with such debt or other option protected hedging instruments, while the comparable figure at Fannie Mae is closer to 60, according to an analysis by UBS Warburg.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616663","date":"2002-10-01","texts":"BOSTON -- Fidelity Investments, its business taking a hit in the stock-market tumble, said it would lay off 1,695 employees, or 5 of its work force. The nation's largest mutual-fund company said the job cuts would focus primarily on market-sensitive operations, such as its big online brokerage unit. But Fidelity said it wouldn't be dismissing any money managers or research analysts. Fidelity's assets under management, now 776 billion, have fallen 22 since their peak of 1 trillion on Aug. 31, 2000, a drop that will slash the company's revenue and profit. A Fidelity spokeswoman said the company's work force swelled when the market roared in the '90s, and now the company needed to adjust its resources to reflect the sharp decline. Overall, the company's employment will be down 12, including attrition, after the latest job cuts from a peak of 33,369 in January 2001. In 2001, Fidelity announced layoffs of 1,114, or about 3 of its work force, mostly from its brokerage units, which had seen a sharp slowdown in trading. In the current round, about half the jobs eliminated will be in Boston, where the company is based, and suburban Marlborough, Mass.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616687","date":"2002-10-01","texts":"A steep stock-market plunge in July, the threat of war with Iraq, a sputtering economy and a series of corporate-accounting scandals all combined to slow the pace of securities underwriting in the third quarter. Global underwriting volume fell 12.6 to 774 billion in the quarter from the third quarter of 2001, which was itself hard hit by the terrorist attacks of Sept. 11, 2001, according to Thomson Financial, which tracks securities transactions. But some Wall Street executives say they have seen some signs of a pickup in the past few weeks, since the passage of the attacks' first anniversary. The impact of events in the third quarter was even more severe on disclosed underwriting fees, a more-telling barometer for Wall Street. Fees fell 21 to 2.31 billion amid a falloff in more-lucrative stock deals, such as initial public offerings. The tiny number of just seven IPOs by U.S. issuers in the quarter was the lowest since the first quarter of 1980, noted Richard Peterson, chief market strategist at Thomson Financial. My sense is that corporate America was very distracted in the third quarter, particularly by the mandate for chief executives to certify their companies' financial results to the Securities and Exchange Commission by mid-August, said Jay Chandler, head of equity syndicate at Merrill Lynch & Co. Strategic discussions slowed down dramatically, and financing discussions almost came to a standstill, Mr. Chandler added. Jon Anda, co-head of global capital markets at Morgan Stanley, attributed the 43 dropoff in the U.S. volume of equity and equity-linked securities issuance in the quarter partly to the stock-market decline. The Standard & Poor's 500-stock index was down about 18 for the quarter, and you don't find many quarters like that, Mr. Anda said. The S&P 500 was off 13.7 in the second quarter. It was a very difficult quarter. We would all like to see this as a market bottom, but a bottom has been elusive.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616891","date":"2002-10-02","texts":"Fannie Mae said an important measure of the company's interest-rate risk narrowed in September, easing concerns that it was struggling to weather a massive surge of mortgage refinancing. But a top Federal Reserve policy maker kept the heat on, pressing for more financial disclosure from the company and calling on Congress, as others have, to focus more attention on Fannie Mae's growing size and leverage. The government-sponsored company, which buys mortgages from lenders to boost the flow of capital in the housing market, has suffered unusually intense scrutiny lately. Two weeks ago, the company rattled markets when it disclosed that its so-called duration gap, a measure of its success at managing interest-rate risk, ballooned to minus-14 months in August due to heavy refinancing activity. A negative duration gap effectively means that Fannie Mae's assets are paying off faster than its debts. In an unexpected move yesterday, however, Fannie Mae said its duration gap narrowed to minus-10 months in September, suggesting it is improving its position. The company normally announces its duration-gap figures in the middle of the month, but it released its September data just hours after the month ended because of greatly heightened interest from investors and others, according to a statement. Although a minus-10 month duration gap is outside of the company's preferred parameter of plus- or minus-six months, the move toward a smaller gap relieved investors. At 4 p.m. yesterday in New York Stock Exchange composite trading, Fannie Mae jumped 5.68, or 9.5, to 65.22. The gain was the largest one-day percentage gain for the company since Oct. 21, 1987. The Treasury market slumped, as investors unwound positions they had bought in anticipation of Fannie Mae's possible need to buy Treasurys and related investments to better hedge its portfolio. The fact that Fannie Mae was able to reduce its gap shows their business model is working, said Robert Napoli, an analyst at Minneapolis-based US Bancorp Piper Jaffray. In an appearance on CNBC yesterday, Fannie Mae chairman Franklin Raines said the company reduced its gap in large part by buying more mortgages, which would have had the effect of extending the life of Fannie Mae's loan portfolio. Market analysts speculated that the company also reconfigured some of its positions in derivatives markets.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614872","date":"2002-10-03","texts":"WHITE SULPHUR SPRINGS, W. Va. -- Chief executives of some of the nation's largest corporations anticipate slower growth for the economy next year and beyond, but are a bit more upbeat about their own companies' outlooks. While a lapse back into recession isn't expected, the survey of about 75 CEOs, released yesterday by the Business Council, offered a fairly downbeat assessment for the economy over the next decade. For example, 65 of the chief executives predicted the U.S. economy would grow between 1.5 and 3 in 2003, down from the 3.2 annual growth rate in gross domestic product recorded during the first half of this year. They aren't much more optimistic about growth for the next 10 years, with most expecting an average annual pace of 2 to 3, compared with an average of 3.5 over the past decade. For their own firms, slightly more than half of the executives predicted sales growth would accelerate somewhat, though 18 anticipated either slowing growth or sales declines next year. Many said their companies' profit margins would be stable 43 of respondents or improve 38 in the coming year. They are less optimistic about being able to raise prices Less than one-quarter of participants expected their firms' pricing power to increase. Moreover, the executives said the souring stock market is making them hesitant. Half of the respondents said the weak markets have caused them to delay or alter business plans. Nearly a third said their firms' long-term strategies have changed because of weak markets.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613459","date":"2002-10-04","texts":"NEW YORK -- Indecision marked the dollar's tone, as traders paused for breath, awaiting a critical monthly U.S. employment report for release today. The dollar ended the New York day slightly weaker against both the euro and the yen. Market participants were also reluctant to make major bets on the yen, following a stream of more rigorous-sounding statements from top Japanese officials about the issue of bank reforms. Late yesterday afternoon in New York, the euro was at 98.77 cents, slightly stronger than its 98.68-cent level late Wednesday. Against the yen, the dollar was trading at 122.59 yen, down modestly from 122.84 yen. Against the Swiss franc, the dollar was at 1.4782 francs, unchanged, while sterling was changing hands at 1.5698, up from 1.5689. The euro managed to raise its head briefly above 99 cents during New York trade, for the first time in roughly four weeks, taking advantage of some softness in stock markets and some worries about the state of the U.S. economic recovery ahead of the employment report.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615557","date":"2002-10-04","texts":"MATT ANDRESEN, THE 32-year-old chief executive of the electronic trading firm Island ECN, said he is leaving to become head of global trading at Sanford C. Bernstein & Co., the Wall Street firm known primarily for its independent stock research. The move surprised some traders, coming less than two weeks after Island, the firm Mr. Andresen helped to build into a trading powerhouse, completed its merger with Instinet Group Inc. As the head of Island and a major advocate of the company's merger with Instinet, Mr. Andresen was widely expected to play a critical role in integrating the two firms and helping them battle for additional market share against the Nasdaq Stock Market and the New York Stock Exchange. In 4 p.m. trading on the Nasdaq Stock Market, Instinet was down nearly 13, or 38 cents, to 2.62. By resigning his new position as chief operating officer of Instinet and chief executive of its Island unit, and reporting to Bernstein's Manhattan offices here for his first day today, he leaves that battle to others. Bernstein is a unit of Alliance Capital Management LP. In an interview, Mr. Andresen stressed that his decision was based solely on the merits of the new job at Bernstein and that he had no doubts about the prospects of Instinet or his role there. The ability to have a top position at a firm that is the best in its field, and help bring that company to an even higher level, is an opportunity I can't resist, he said. The hardest thing was giving up the opportunity to continue to work with, among others, Instinet Chief Executive Ed Nicoll and Will Sterling, who ran Island's technical operations.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614838","date":"2002-10-14","texts":"Corrections & Amplifications THE NAME of Guatemala's U.S. ambassador, Ariel Rivera, was incorrectly given as Alvaro Colom in Monday's World Watch column. WSJ Oct. 18, 2002 EUROPEMIDEAST Germany's Henkel","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616829","date":"2002-10-18","texts":"The latest idea to help cash-strapped state governments and resuscitate the U.S. economy Revive former President Richard Nixon's plan for sharing federal revenues with the states. Alice Rivlin, a senior fellow at the Brookings Institution and former Clinton administration budget director, floated the idea this week, with a twist. From 1972 to 1980, the federal government sent unrestricted cash to the states regardless of the economic climate. Ms. Rivlin proposes creating a trigger to automatically start the payments when the economy enters a recession. This way, the federal government could come to the aid of states, helping them avoid poorly timed tax increases and social-service spending cuts. But Mr. Nixon's fellow Republicans long ago disowned his idea, and Congress is unlikely to embrace it. Indeed, for nearly a year, states have lobbied Congress for aid only to come away empty-handed. There was bipartisan support in the Senate for a plan to temporarily raise the federal share of funding for Medicaid, a health plan for low-income and disabled people jointly paid for by the states and federal government. The idea has slowly died in the Republican-controlled House. More recently, states have failed so far to get an agreement to increase funding for cash assistance and welfare-to-work programs. Why can't the states get any help from Washington A majority in Congress, mainly Republicans, don't want to approve new spending because of the growing federal deficit -- exactly what killed general revenue sharing 20 years ago. They would rather approve spending for which they can take credit. Some argue that states helped to create their own crisis by unrealistically relying on uninterrupted tax revenue fattened by '90s personal income-tax and other gains while also enacting spending programs and reducing taxes.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983757","date":"2002-10-20","texts":"The nation's electorate is rapidly graying, with the cadre of older Americans who plan to take part in the Nov. 5 elections outnumbering people younger than 30 by more than 2 to 1, creating a distorted national politics in which the issues that dominate campaigns and Capitol Hill reflect an ever-smaller slice of the country. This underrepresentation of young voters is becoming more acute If current trends continue, the number of people 65 and older who vote in midterm elections is likely to exceed that of young adults by a 4 to 1 ratio by 2022. These findings emerge from a study conducted by The Washington Post, the Henry J. Kaiser Family Foundation and Harvard University, which surveyed the political beliefs and behavior of Americans of different ages and created a forecast of future elections based on population patterns and recent voting habits. The study shows that young adults hold beliefs quite distinct from those of their parents and grandparents -- more conservative in many of their views of government, more tolerant in many of their social values -- and yet are not expressing them at the polls. The net effect is an accelerating cycle of political disengagement. If young people don't vote, their issues don't get addressed, which further diminishes their incentive to participate in the process and keeps the downward spiral going, said Thomas E. Patterson, a Harvard political scientist, who studied public attitudes during the last presidential campaign. We've got a real disconnect between the rational strategies for candidates to win elections and good strategies for maintaining a healthy democracy.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984301","date":"2002-10-21","texts":"The voters here have the chance to create the first universal health care system in the nation -- where everybody would receive medical coverage for everything, from massage therapy and marriage counseling to brain surgery and long-term care. The sponsors of the November ballot initiative acknowledge their plan is audacious, but they contend that the health care system is headed toward a meltdown brought about by rising numbers of uninsured individuals and spiraling costs. They are pressing their case with an army of 4,000 phone-banking volunteers on a shoe-string budget of 22,000, led by unpaid campaign and media directors, both age 22. The measure could pass The most recent polling, by the Portland Tribune, found that 36 percent approved of the plan, 39 percent opposed it, and 25 percent were undecided, with a margin of error of 4 points. The initiative was winning among Democrats and women, and trailing with men, independents and Republicans. An earlier poll by the Oregonian newspaper found 49 percent against the measure and 40 percent for it, with the remainder undecided. The next week will be crucial, because Oregonians vote by mail their ballots must be received by Nov. 5. The organized groups opposing the health care experiment have yet to run television spots, though they have about 400,000 on hand and are expected to start their ads any day.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615107","date":"2002-10-23","texts":"NEW YORK -- Finishing a rough road to the public markets, U.S.I. Holdings Corp. traded flat in its IPO yesterday. U.S.I., an insurance broker based in San Francisco, was forced to cut the initial public offering's price and switch its home stock market last week -- from the New York Stock Exchange to the Nasdaq Stock Market -- but eventually did sell nine million shares at 10 apiece, the low end of estimates of 10 to 11 a share. As of 4 p.m. in Nasdaq trading, USI shares stood at 10 each. The company originally had hoped to sell 11.4 million shares at 13 to 15 a share, but those expectations were cut last week. The reduction also meant that U.S.I. fell below market-capitalization requirements of the NYSE hence, it switched to Nasdaq. U.S.I. focuses on small to midsize businesses, traditionally companies employing between 20 and 1,000 people. It has been built mainly through the acquisition of smaller, independent firms, and the offering was designed to help the company trim some of the debt accumulated through those transactions. The company is using proceeds from the offering, which was led by Merrill Lynch & Co. and J.P. Morgan Chase & Co., to lower its debt to 150.7 million from 229.2 million.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982043","date":"2002-10-23","texts":"The sniper murdering at will in the Washington area is a metaphor for the defining characteristic of our new era. It is not terrorism, not an unsteady economy, not the threat of a new war in Iraq -- not even the danger of random assassins. It is risk. Though risk never vanished, we forgot about it in the 1990s. We effectively abolished large national risks -- though not small private risks -- through a series of public myths. We presumed that we could control our surroundings in ways that would provide a permanent security and allow most of us to retreat into our private worlds. Because this was a fantasy, we have become victims of our own delusions. Myth number one was that, as the sole remaining superpower, we were gradually molding the world in our image. After the Cold War, American ideas of democracy and economic freedom emerged triumphant. Global problems were increasingly distant and decreasingly dangerous, because more nations were thinking and acting like us. A second myth was the new economy. Economic anxieties declined as the stock market rose and unemployment fell. People felt liberated from traditional economic fears. Politics receded in importance -- it seemed less essential to people's well-being -- and became increasingly regarded as entertainment. For a while, it focused on the constitutional consequences of the president's sex drive. All this involves, of course, breathtaking generalization. During these years, there were issues that mattered and dangers that intruded. We waged a small war in Kosovo AIDS continued to advance crime remained Asia suffered a financial crisis. But in some ways, the exceptions seemed to confirm the retreat of risk. The air war in Kosovo was fought without American casualties new drugs combated AIDS crime declined and the economy seemed resilient to Asia's crisis.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615179","date":"2002-10-25","texts":"TOKYO -- Japan's tenuous recovery is relying more and more on a part of the world many Japanese view as their gravest economic threat China. That contrarian view was supported by data released yesterday. Japan's merchandise-trade surplus grew 1.1 in September from a year earlier, to 1.05 trillion yen 8.43 billion, the seventh rise in as many months. Exports to China soared 40 in the month, the Finance Ministry said, driven by strong sales of semiconductors and cars. That outpaced the 3.8 rise in shipments to the U.S., Japan's largest market. The nation's overall surplus barely grew, because imports by Japan rose faster than exports. More troubling, September's trade surplus fell a seasonally adjusted 2.3 from August. Exports were weaker than expected, said J.P. Morgan economist Ryo Hino, and they are clearly trending down. The slackening expansion of the trade surplus is the latest sign that Japan's export-fueled recovery could run out of steam. Expanding the surplus is critical for the world's second-largest economy. The main potential drivers of growth -- spending by consumers and investment by businesses -- continue to slump amid poor corporate profits and pessimism over slipping wages and bleak job prospects. Japan snapped a string of four quarterly contractions in its gross domestic product, its worst postwar recession, only after strong exports helped the economy expand at an annualized pace of 1.9 in the April-June quarter. Many economists say they expect Japan to start contracting again before year's end. The International Monetary Fund predicts Japan's GDP will shrink 0.5 in 2002 and grow 1.1 in 2003.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982102","date":"2002-10-26","texts":"PUBLISHED CORRECTIONS The Mortgage Bankers Association of America corrected its forecast of U.S. home-loan volume for 2003 to 1.77 trillion. An article in the Oct. 26 Business section reported the association's erroneous forecast of 1.57 trillion. Published 10 2902 Capitalizing on the best mortgage rates in about 40 years, home buyers and owners sent sales of new and existing houses to new highs last month and refinanced at an unparalleled pace, according to three reports released yesterday. Sales of new houses rose 0.4 percent in September to a record seasonally adjusted rate of 1.021 million, the Commerce Department reported. The new rate beats a record of 1.017 million units set in August and should result in a year-end total higher than the annual record of 908,000 set last year, according to the National Association of Home Builders. Sales of existing homes rose last month at an even stronger pace - - 1.9 percent -- to a seasonally adjusted annual rate of 5.4 million units, according to the National Association of Realtors. The rate in August was 5.3 million. The trade group predicts home resales will also hit an all-time high this year of about 5.5 million units. That would beat the 2001 number by 3.2 percent. The low mortgage rates have also led to the biggest refinancing boom ever. The combination of buying and refinancing led mortgage lenders to sharply revise their forecasts of loan volume.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616410","date":"2002-10-29","texts":"Is the U.S. destined to follow Japan down the deflation rabbit hole Not if Alan Greenspan and his associates move to pump liquidity into the system at next week's Federal Open Market Committee meeting. Providing enough extra monetary liquidity by a reduction in the target Fed funds rate from 1.75 to 1.25 would enhance pricing power and ward off what is now a mild case of deflation. Complacency is deflation's friend. The cure for deflation lies in aggressively changing the stance of monetary policy. For years the Bank of Japan underestimated the needed infusion of liquidity and chose to fall behind by substituting a prolonged cut in overnight interest rates to zero and then complained that they had done all they could do. Not so. The BoJ could and can use a price-level proxy, such as the yendollar exchange rate, as a guide to buying more central-bank assets. Their choice to proclaim zero-rate helplessness was a political not a monetary policy decision. Mr. Greenspan and the FOMC should learn from the BoJ's mistakes. But before they can cure the disease, they must first diagnose it. Incredibly, the Fed seems more concerned with the potential dangers of inflation than the current effects of deflation. Inflation is easy to recognize partly because we have had so much experience with periods in which the purchasing power of our money has declined. The essence of inflation is that business leaders believe they have pricing power. They expect households to accept another price increase as they always have done. Both business and household decision-makers expect that the central bank will provide the liquidity to keep up the growth of output of goods. The essence of deflation is that business leaders know they do not have pricing power. Yet in the first several years that business leaders experience a lack of pricing power they are apt to view the condition as temporary -- they believe that it is the result of a recession or cyclical downturn. They expect that pricing power will return with a recovery. This is precisely what's happening in the U.S economy today. Nevertheless, Mr. Greenspan and the patient crowd at the Fed remain unconvinced. It is easy for them to point out recent increases in the cost of living of between 1 and 2 as measured by consumer price index as evidence of inflation, not deflation. What they fail to realize, however, is that the cost of living can actually rise in a period of mild deflation.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984782","date":"2002-11-01","texts":"Maryland Gov. Parris N. Glendening has been almost invisible while his fellow Democrat and political partner of eight years, Lt. Gov. Kathleen Kennedy Townsend, has campaigned to succeed him. But starting this week, he will be reappear, courtesy of Townsend's Republican opponent, Rep. Robert L. Ehrlich Jr. Ehrlich unveiled a television ad yesterday that prominently features Glendening, a move clearly intended to exploit the governor's eroding popularity. The spot opens with Glendening saying Lt. Gov. Kathleen Kennedy Townsend and I are proud of our record. We're very proud of our record. A voice-over follows, describing the state's 1.7 billion budget deficit, its troubled criminal justice system, and a recent failure to complete background checks for some gun owners. Bob Ehrlich is a candidate who started his campaign on a negative note, who has stayed negative the entire campaign and who is getting nastier and nastier as we get close to Election Day, said Peter Hamm, a Townsend spokesman. Hamm added, If Bob Ehrlich thinks he's running against Parris Glendening, he's going to be very surprised when he loses to Kathleen Kennedy Townsend next Tuesday.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613730","date":"2002-11-04","texts":"TOKYO -- The world is likely to find out this month just how hard Japan is willing to shake its economy to get it back on track. Banking Minister Heizo Takenaka has pledged to draw up a timetable in November for implementation of his plan to revive the nation's biggest lenders. So far, economists have been wary in appraising the plan, saying the details aren't clear enough yet to tell whether it calls for bolder action than before to clean up bad debts. The tougher the bank measures, the harder companies will be pushed to become profitable or fold, and, so the theory goes, the faster Japan will end its slump. One key point will be how Mr. Takenaka proposes to bring banks' loan valuations into line with market valuations -- a step pledged in the current bank-cleanup plan and in previous ones. Mr. Takenaka has proposed a method widely used in the U.S. for valuing loans based on the borrowers' future cash flow. Japan's banks have protested. Yet even if this method is implemented for big borrowers, as the plan urges, analysts say its effect will depend on how far into the future loan inspectors look, and what interest rates they use for their calculations. Another question is how Mr. Takenaka's plan will strengthen bank capital, another old pledge. Mr. Takenaka said Friday he will study an overhaul of the tax code and a possible restriction on the amount of tax credits banks can count as capital, steps long urged by rating agencies. Yet this is controversial, since after years of write-offs, big banks' capital is so depleted that a significant accounting change could wipe it out, leading to nationalization of the lenders. If Mr. Takenaka opts for tough implementation of such steps, analysts say that some major lenders could fall under government control. The current version of the plan does mention the possibility of new legislation that would let the government inject capital into certain lenders, and it talks of a new category of special support financial institutions, although it doesn't say how regulators will decide which banks need support.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617350","date":"2002-11-04","texts":"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. 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. 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. 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. 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.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613861","date":"2002-11-07","texts":"FRANKFURT -- The Federal Reserve's hefty interest-rate cut adds to the mounting pressure on the European Central Bank to follow suit today to boost the flagging euro-zone economy, but stubbornly high inflation and national politics are putting the world's No. 2 central bank in a bind. Inflation isn't falling significantly despite the slowdown, and remains above the ECB's target of 2. In addition, inflation rates among the 12 nations in the euro zone are diverging. This makes a one-size-fits-all monetary policy more difficult to practice and pits the interests of small, higher-inflation countries against those of the large nations that would likely benefit from lower rates. At today's meeting, the ECB will weigh whether the bad news on the economy warrants a shift in focus from fighting inflation to supporting growth, a move that could by extension aid the U.S. and global economy. Over the past month, further evidence of a halting recovery has continued to pour in. Just yesterday, Germany reported that orders to its manufacturing industry fell a monthly 2.5 in September, dimming the prospects of Europe's largest economy. And in France, the region's second-largest powerhouse, industrial demand fell in the third quarter of this year, and a survey showed that business executives expect a further drop in the fourth. The Fed's decision also underscores the weakness of the U.S. economy, which Europe traditionally counts on to pull it out of a slump. Already this year, the ECB did an about-face on its attitude toward inflation. During the summer, the bank was gearing up to raise borrowing costs but had to quickly retract that plan as the recovery and stock markets faltered. Still, during the past few days, public statements from ECB officials suggested the 18-member governing council hadn't yet reached an agreement to cut rates as early as today. The ECB has surprised markets before, however. Some economists believe that if the ECB holds rates steady today, it will simply postpone the inevitable, miss a chance to appear proactive, and come under fire from the politicians, banks and media. What do they win or lose by waiting another four weeks said Julian von Landesberger, an economist with HVB Group in Munich. Until now the ECB was much too optimistic with regard to growth next year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614922","date":"2002-11-07","texts":"Global investors are hoping that the U.S. Federal Reserve's half-percentage-point interest-rate cut will spur other central banks to follow with rate cuts of their own. If that happens, some investors suggest, global stock markets could see the monthlong rally continue. But if the Bank of England and the European Central Bank, which both meet today, show no inclination to ease monetary policy, the markets are likely to respond negatively. That would indeed be bad news for global equities, said Markus Hansen on the European equities sales desk at SG Cowen in New York. But I think the possibility of an ECB rate cut has increased. Overseas markets were mixed yesterday, with Asian and European exchanges closing before the Fed's rate move. Stocks in the Far East trended higher in anticipation of a U.S. rate cut, though most analysts were expecting only a quarter-percentage-point reduction. European markets, meanwhile, drifted lower after a recent run-up. But pharmaceutical stocks were generally higher on the belief that the Republican victory in the House and Senate would lead to health-care legislation that is favorable to the industry. Latin American markets were mixed. Overall, the Dow Jones World Stock Index rose 0.46, or 0.66, to 145.08. Excluding the U.S., the index fell 0.2, or 0.21, to 106.12.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613658","date":"2002-11-08","texts":"Finally, there is some good news about the U.S. economy. After weeks of troubling reports that suggested the U.S. economy stalled at the end of the summer, the Labor Department said nonfarm business productivity grew at an impressive 4 seasonally adjusted annual rate in the third quarter. That was more than double the 1.7 rate of the previous quarter, and a good indication that the underlying potential of the economy remains strong. In the 12 months through September, nonfarm productivity grew 5.3, its fastest rate in 19 years. Economists have attributed the gains to increased efficiencies from computers and the Internet, as well as the fact that employees that remain after a wave of layoffs tend to be more skilled. Although labor costs are rising, output is rising more than enough to compensate. Such strong productivity doesn't necessarily change the short-term economic outlook, which remains somewhat gloomy. But it does suggest that corporate profits will continue to improve and that inflation will remain in check -- both of which are important if the economy is to get back on track. When a company boosts productivity, it can squeeze more output from its existing workers without drastically increasing costs. At the same time, it helps keep a lid on inflation, as companies grow without incurring new expenses that they would otherwise pass on to customers.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614206","date":"2002-11-13","texts":"Fannie Mae, the mortgage company behemoth, is not having a good year. Shareholder equity has been evaporating -- down 27 at the end of the third quarter or down 47 if one ignores Fannie's accounting shenanigan. Worse, there are more difficulties on the way. Aside from skating on thin ice with investors, there is political risk from politicians who are looking at its operations with growing crankiness. In the immediate post-Enron period, investors went on orange alert when increased scrutiny revealed that Fannie has serious problems with corporate governance, financial disclosure and reporting. More recently came revelations that Fannie was having trouble managing its huge portfolio of assets. A bad guess on the direction of interest rates exposed a giant mismatch between the maturities of its assets and liabilities, and demonstrated how vulnerable Fannie is to interest-rate risk. The bizarre thing is that Fannie willingly and happily exposes itself to interest-rate risk. There is nothing in its government charter that even remotely requires Fannie to borrow great gobs of money to purchase and hold a huge portfolio of mortgages. Fannie does it because it is wildly profitable. Because of the implied government guarantee of its debt, Fannie can borrow at very low rates and then lend out that money at higher rates by retaining or repurchasing the mortgages it has securitized. This opportunity to borrow low and lend high is so seductive for profits, it's almost a form of entrapment. It's such a good deal, in fact, that Fannie has issued an amazing amount of debt. Currently its outstanding debt is around 800 billion. Moreover, Fannie's debt relative to its small capital base gives it enormous leverage. Fan's required core capital is 2.4 of on-balance sheet assets and 0.45 of outstanding mortgage-backed securities and other off-balance sheet obligations. This is well below levels necessary for FDIC-insured commercial banks even government securities dealers carry capital around 5 of assets. Fannie is running with this huge leverage about 54-to-1 because it can -- shareholders, at least until this year, didn't seem to care. What about its creditors Well, considering taxpayers are the ultimate creditors, they should probably care more than they seem to. At the end of the third quarter, Fannie's combined debt and its mortgage-backed securities held by outside investors totaled 1.8 trillion.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983044","date":"2002-11-13","texts":"-- If there's a threat of dangerous deflation -- a general fall in prices -- the causes lie as much in Europe and Japan as in the United States. The inevitable collapse of America's speculative boom would not have been especially damaging if the world's other advanced economies had been healthy. Their expanding appetite for imports would have bolstered the United States and emerging-market countries, from Brazil to South Korea. The trouble is that other advanced economies aren't healthy. Far from offsetting the U.S. slowdown, Europe and Japan -- almost a third of the global economy -- are aggravating it. Jim O'Neill, Goldman Sachs's chief economist in Europe, forecasts that the European Union's economy will grow only about 1 percent in 2002, compared with 2.4 percent for the United States. Japan's economy will decline by about 1 percent. The Federal Reserve's decision to cut interest rates last week implicitly recognizes an unspoken reality America's recovery has received almost no support from abroad. Deflation could be the result of simultaneous slumps in the world's three major economies. Prices drop because there's too little global demand chasing too much global supply -- everything from steel to shoes. Japan's ills are well known. An economy dependent on exports stagnated once exports faltered. Its banks are awash in bad loans. Less understood is the fact that Europe's troubles stem significantly from Germany. It's the engine that drives other countries Its population 82 million is about a fifth of the EU's its gross domestic product about 2 trillion is almost a quarter. The engine is sputtering. In 2001 German GDP grew a meager 0.6 percent this year it is expected to grow 0.4 percent. Since 1991 unemployment has averaged about 8 percent the number of jobs today is roughly what it was a decade ago. Worse, things won't get better soon. German underperformance could easily persist for another decade or more, concludes a study by economists Dirk Schumacher and David Walton of Goldman Sachs. As they diagnose it, Germany has two major problems. One is common in Europe overregulation, especially of labor markets. Laws make it hard to fire workers, so companies are reluctant to hire. Generous unemployment benefits discourage the jobless from seeking work. Wage bargaining remains too centralized companies have too little flexibility to fashion contracts that fit their needs. High payroll taxes raise labor costs.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615232","date":"2002-11-14","texts":"Why did the Democratic Party lose so badly last week It's simple. We didn't give people any real reason to vote for us and we gave them far too many reasons to vote against us. We set ourselves up to be taken down by a popular president who figured out a way to exploit both of those weaknesses. Look at what the campaign became in the last week, played out live on the evening news. First, we saw President Bush, flying from state to state urging Congress to make his tax cut permanent and to create his homeland security department, and accusing Democrats of foot-dragging or outright opposition to both. Then we saw former President Clinton and Vice President Gore, flying from state to state, urging the old Democratic base to get out and vote against Mr. Bush . . . or in the case of Florida, against two Bushes. At a time when people are hurting, we Democrats some how managed to turn an election that should have been about making people's lives better into a grudge match between our aimless opposition and Mr. Bush's vision. We lost the Senate, big. Why To start with, we didn't get anything done. After all the noise in the 2000 presidential election, we still don't have a prescription drug plan. More than a year after the terror of Sept. 11, we still don't have a Department of Homeland Security. Nearly two years into an economic downturn, we still don't have a clear economic agenda and -- when we're not opposing tax cuts outright -- our party still doesn't have a clear position on tax relief.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614810","date":"2002-11-15","texts":"INVESTORS FOUND MORE REASONS to buy stocks, as stronger-than-expected retail sales and weekly employment figures helped send the Dow Jones Industrial Average back above 8500 -- and sent Treasury bonds sharply down. Investors were emboldened by news that London-based banking group HSBC Holdings is acquiring consumer lender Household International. The takeover boosted confidence in consumer spending and in U.S. stocks. I don't think we are out of the woods, but the market has a better tone, said Robert Harrington, head of listed trading at brokerage firm UBS Warburg. The takeover gives you confidence that if another company is willing to buy that business, maybe there is some value there, and maybe there is some value in other places that have been depressed. The Dow Jones Industrial Average jumped 1.7, or 143.64 points, to 8542.13, now up 17 since hitting a five-year low Oct. 9. It still is down 15 this year and is 27 off its January 2000 record. The 10-year Treasury note plunged 1 2332, or 17.1875 for each 1,000 invested, as money shifted back toward stocks. The note's yield, which rises when price falls, jumped back above 4 to 4.047.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614401","date":"2002-11-18","texts":"U.S. gasoline prices rose last month by an average five cents a gallon even as production increases by the Organization of Petroleum Exporting Countries drove down crude-oil prices. The culprits bad weather and production problems. But despite average pump prices last month of 1.45 for a gallon of regular unleaded, prices have begun to taper off, and economists said the gasoline-price rise likely has run out of steam for the rest of the year. The recent jump in gas prices will turn out to be a blip, said Dave Costello, an economist with the Energy Information Administration, an arm of the Department of Energy. Barring a war with Iraq -- which could crimp global crude-oil supplies to refineries -- prices should remain around 1.40 a gallon through December, Mr. Costello said. Hurricanes in the Gulf of Mexico and other production problems drove up wholesale prices during October. In the Northeast, a shortage of methyl tertiary butyl ether, an additive used to reduce emissions and add octane to gasoline, put pressure on prices. MTBE prices jumped to 1.31 a gallon in October, compared with 70 cents last year, before falling to 1.10 a gallon this month. Overall average spot gasoline prices rose five cents nationally, or 6, according to EIA data. The Labor Department's producer price index showed an even bigger, seasonally adjusted jump of 18 in wholesale prices. Mr. Costello said the index doesn't include the last week of October, when spot prices were falling.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616559","date":"2002-11-18","texts":"NEW YORK -- To the relief of some bond investors, Fannie Mae's exposure to interest-rate volatility fell significantly last month, suggesting it has made more progress in correcting a big mismatch between its assets and liabilities. Fannie Mae, a publicly traded government-sponsored enterprise, said its duration gap -- a measure of how well cash flows from assets and liabilities match up -- narrowed during October to negative six months from negative 10 months for September and negative 14 months for August. Duration measures how sensitive bonds are to moves in interest rates. A negative duration gap suggests cash flow from Fannie Mae's assets will drop more quickly than the stream of payments it owes its debtholders. August's figure of negative 14 months was the largest gap ever and prompted concerns among investors about Fannie Mae's ability to meet its obligations. It also sparked a rally in the Treasury market, as investors anticipated Fannie Mae would need to buy a large amount of Treasurys to cover its gap. Although Fannie Mae still had a gap for October, the figure fell just within its target range. Spokeswoman Janis Smith declined to say specifically how Fannie Mae narrowed the gap, citing a policy of not commenting on specific market activity. But, she said, our mortgage commitments, mortgage purchases, hedging with swaps and swaptions options on swaps, and callable securities are all vehicles we used to manage the duration gap. People in the market said Fannie Mae aggressively bought mortgage securities to adjust its portfolio duration. By buying mortgages, Fannie Mae took cash flows of faster prepaying mortgages and reinvested it in newer, lower coupon mortgages. The newer mortgages, which carry lower rates, aren't likely to be refinanced soon, and that helped narrow the duration gap.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613474","date":"2002-11-19","texts":"The outlook for business investment appears to be improving, but business spending is still likely to be weak through the end of this year. The G7 Group Inc., a closely held political and economic consulting firm, said the latest preliminary reading of its quarterly index of business investment improved to a minus 25 in the fourth quarter from minus 37 in the third quarter. An index measure of minus 33 or lower suggests that business fixed investment is contracting in the current quarter. An index reading between zero and minus 33 indicates growth, but at slower rates than the historical average of 5. Results greater than zero indicate above-average business investment. More specifically, the minus 25 reading is consistent with a 1.1 increase in business investment in the fourth quarter on a seasonally adjusted, annualized basis, G7 Group said. If business investment does grow at a 1.1 annual rate this quarter, it would be a step up from the third quarter, when capital spending increased at a 0.6 annual rate, the first gain in two years. But it is also well below the robust levels of the late 1990s, and weak enough to keep pressure on consumers to continue spending to keep the economy afloat -- a tall order given that many economists believe the approaching holiday season will be a disappointment.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615913","date":"2002-11-21","texts":"You know things are getting desperate when capitalists start thinking that a banking nationalization is better than the status quo. That's what it's coming to in Japan, where even sober analysts are starting to bet on a government takeover of the country's troubled banks. It's also what happens when a country prefers to sweep its problems under the rug for a decade or so. By now there could be as much as 1.5 trillion in bad loans at Japan's banks, an additional 1 trillion in insurance companies and a similar amount in the postal saving system. That's a total of 3 trillion to 4 trillion of loans that are uncollectible or troubled, says Japan-watcher Anthony Miller, writing in The Asian Wall Street Journal this week, or between 75 and 100 of Japanese GDP. America's S&L crisis, which involved an amount equivalent to less than 5 of U.S. GDP, pales in contrast. But the difference is that the U.S. faced the S&L problem squarely, albeit with the usual political messiness. Some careers were ruined Fernand St Germain, and some people went to jail Charlie Keating, but the failures were liquidated, depositors were paid off and the market found a bottom. In Japan, by contrast, the system hasn't enforced any accountability and so the banks have been allowed to roam the landscape like financial zombies. Tokyo's stock market is signaling that crunch time may now finally be approaching for several of these walking dead. The share price of UFJ Holdings, Japan's fourth-biggest bank by assets, is down 50 this month. Mizuho Holdings, the world's biggest bank, is down 40. With the new banking minister pressuring banks to come clean about their nonperforming-loans, first-half earnings reports could contain some nasty surprises next week.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985268","date":"2002-11-21","texts":"L. Douglas Wilder is a fairly benign spirit, bringing glad tidings of great budget savings -- or at least some help in closing a 1 billion shortfall. Wilder, governor in the early 1990s and chairman of a special Warner commission on government efficiency, is a fellow Democrat and on-again, off-again chum of Warner's. Their friendship is on at the moment. The other, more worrisome specter is that of James S. Gilmore III, whose tax-cutting legacy from the late 1990s is costing state government 1 billion a year and rising. Gilmore's Republican tax cut is the gift that keeps on giving -- or, in Warner's case, that keeps on taking a major bite out of the state treasury that's been limping along for a year. Gilmore and Wilder couldn't be more different, but their budget experiences hold some powerful lessons for their younger successor, especially in this gloomy fiscal season. Five days before Christmas, Warner will unveil a state budget that, because he has no other options, will cut once-inviolate programs so deeply that advocates for schoolchildren, the poor and the sick will run screaming from Richmond. To borrow the earthy imagery of Warner's senior finance adviser, sacred cows will be slaughtered on Dec. 20. Things will get ugly in the halls of the General Assembly. In 1990-91, Wilder was in a similar jam, scratching his way through a recession and determined to survive without raising taxes. As the nation's first elected black governor, Wilder became a hero to Virginia's conservative white establishment by surpassing all expectations, shedding his big-spending Democratic ways and cutting the budget to the bone.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985372","date":"2002-11-21","texts":"Maryland Gov. Parris N. Glendening laid out a plan to balance the state budget yesterday that would cut more than 172 million from programs and services, drain nearly 200 million from the state's reserve fund and cancel bonuses for highly paid state workers. The plan also would rely on more than 100 million in one-time accounting maneuvers, such as withholding an extra 1.50 a week from most Marylanders' paychecks. While taxpayers eventually would get the money back through tax refunds, the state would temporarily gain 45 million to help see it through the worst economic crisis since the early 1990s. Glendening D said his plan would avoid layoffs and other drastic measures employed in other states facing similarly sharp declines in tax revenue. In Virginia, Gov. Mark R. Warner D has cut more than 4 billion from the state's two-year 50 billion budget, in part by laying off more than 1,800 state workers. This month, Warner told local governments to brace for reductions in state aid. Glendening would make no cuts to local governments or public education in the plan that he said would save about 500 million in the current fiscal year, 100 million shy of the projected deficit. But the plan does little to address a projected 1.2 billion shortfall in the following year's budget. And it drew mixed reviews from state leaders who would have to approve key elements.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617198","date":"2002-11-22","texts":"WASHINGTON -- Federal Reserve officials are taking pains to assure the public that if its key interest rate keeps dropping all the way to zero, there will still be plenty of ways to boost the economy. Fed Chairman Alan Greenspan has said the central bank can buy bonds, thereby driving down long-term interest rates. Yesterday, Fed Governor Ben Bernanke said if that didn't work, the Fed could lend directly to banks or help finance a tax cut. Two weeks ago, the Fed cut its target for the federal-funds rate, charged on one-day loans between banks, to a 41-year low of 1.25, from 1.75. The move fueled talk that the central bank might be running out of ammunition in its fight to keep the economy growing, and spurred a related fear that inflation might give way to deflation, or generally declining prices. Since interest rates can't go below zero, deflation would cause the real, or price-adjusted, cost of borrowing to rise. Mr. Bernanke said yesterday that with the funds rate at zero, the Fed would lose its traditional means of stimulating spending, but it has most definitely not run out of ammunition. It isn't assured that the steps Mr. Bernanke and Mr. Greenspan outlined would be effective if the U.S. were in a deep recession marked by deflation and the unwillingness of businesses and consumers to borrow at any interest rate.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984445","date":"2002-11-22","texts":"Major stock indexes climbed 2 percent or more yesterday, sparked by hints of a tech recovery and sustained by promising economic news. The Dow Jones industrial average rose 222.14 points, or 2.6 percent, to 8845.15, and the Standard & Poor's 500-stock index rose 19.61 points, or 2.2 percent, to 933.76. The tech-heavy Nasdaq did particularly well. Responding to better- than-expected earnings from Hewlett-Packard, the index surged 48.20 points, or 3.4 percent, to close at 1467.55, its highest level since June 19. The hardware and software maker reported strong sales in its printer division and posted a 390 million profit for the quarter, compared with a 505 million loss a year ago. Fourth-quarter earnings of 24 cents per share, excluding charges, beat analysts' expectations by 2 cents. That news, coming on the heels of Analog Devices' announcement of increased demand for its microchips and IBM's pledge to invest 1 billion in selling research services, signaled to investors that things in tech land weren't as bad as previously perceived, said Ned Riley, chief investment strategist for State Street Global Advisors.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830982452","date":"2002-11-24","texts":"The Republican dominance in this month's elections ensured that President Bush got his Department of Homeland Security. One of his most consequential choices now is the selection of the department's first secretary. Although Tom Ridge appears to be the president's choice, among others Bush should consider is former Virginia governor Jim Gilmore. Elected in 1997 largely on the strength of his promise to cut the car tax, Gilmore was nearly run out of town four years later when he insisted on keeping his promise. The economy had weakened, and the state Senate demanded that the governor renege on his pledge. Gilmore refused and was widely blamed for the budget impasse that followed. But what most Virginians may have forgotten is that in 1999 Gilmore was tapped to head a national commission on terrorism. For two years before the subject was blurred by primacy, proximity and politics, Gilmore's commission studied potential avenues of terrorist attack and the best means of prevention and response. In December 1999, the panel reported that a catastrophic attack in the United States was inevitable and that the nation should prepare by coordinating strategy among federal, state and local responders. A year later, the commission presented dozens more recommendations, many of which were adopted by the Bush administration after the Sept. 11, 2001, attacks creating an executive branch office charged with combating terrorism strengthening first-responder services and improving intelligence- gathering and communication among investigative agencies. Having spent three years anticipating terrorism and devising ways to counter it, Gilmore is one of the few people who could bring applicable experience to the Department of Homeland Security. Moreover, former governors are among the most suitable candidates for the job because they are experienced in supervising convergent agencies.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614612","date":"2002-11-27","texts":"Investors were net sellers of stock mutual funds in October, even as the market rallied strongly in the month's latter half. Investment Company Institute data show stock mutual funds experienced net withdrawals of 7.7 billion, as new money added to stock accounts of 74.9 billion was overwhelmed by redemptions of 77.5 billion. An additional 5.1 billion was withdrawn from stock funds because of exchanges into other fund categories. October's net outflows were well under the 16 billion investors had withdrawn in September. During October, the stock market reversed its downward trend started during the summer. The Dow Jones Industrial Average had its best month since January 1987, soaring 11. But investors' skepticism over stocks persisted. Taxable bond funds continued to snare money, receiving net new cash of 7.8 billion. But the pace of the net sales slowed from September's 13.1 billion. Year-to-date through the end of October, taxable bond funds grabbed a net 109.6 billion, while stock funds have had 26.5 billion in net withdrawals. Among other types of funds, hybrid mutual funds, which invest in both stocks and bonds, reported net redemptions of 1 billion after net withdrawals of 650 million in September. Investors took out a net 1.5 billion from municipal-bond funds, a significant change from September, when they added 2.3 billion.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982741","date":"2002-11-29","texts":"Google, the popular Internet search engine, offers a page called Google News, a summary of what's going on in the world produced entirely by computers. Well, I say entirely, but Google's computers don't actually gather the news. What they do is scan thousands of other Web pages and, using a secret formula, decide what the top stories are. Then they cleverly lift headlines and other material from different news sources, add links to these and other sites, and come up with what appears to be the Web site of an extremely cosmopolitan newspaper. It's slightly a bluff. Who knows why the computers chose to feature a New Zealand news site the other day as a way of covering the Miss World imbroglio in Nigeria But you have to suspect that the explanation lies in the crudeness of the computer's judgment, not its sophistication. Google concedes that its choices of stories and news sources are occasionally unusual and contradictory, but insists with uncharacteristic pomposity, it is exactly this variety that makes Google News a valuable source of information on the important issues of the day. Which is humbug. People still do it better. But not by much. The day is clearly approaching when editors can be replaced by computers. This requires some urgent rethinking. Throughout the revolution of technology and globalization that has been going on for two decades, responsible mainstream commentators, pundits, analysts and miscellaneous gasbags including this one have taken the view that progress is a good thing. Some people are unfortunately caught in the gears of change, but society as a whole benefits. It's not very complicated if you know a bit of economics. You've got your invisible hand that's free markets, you've got your comparative advantage that's free trade, you've got your perennial gale of creative destruction that's competition and new technology, you've got your can't make an omelet without breaking eggs that's attributed to Joseph Stalin, but never mind. The losers in this process deserve sympathy and help, but special pleading must not be allowed to thwart or slow this process. We must distinguish, however, between special pleading and legitimate alarm about deeply troubling developments. It is one thing to sacrifice textile workers and auto workers on the altar of progress. It is quite another to start throwing journalists into the flames. And the difference is Well, it's very different. Completely different. Couldn't be more different, quite frankly, my good madam, because . . . because . . . well, it occurs to me that I'm a journalist. This puts the situation in a new perspective.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982652","date":"2002-12-01","texts":"Fifty years ago, shortly after my wife, Sara, and I were married, my father gave me some unconventional advice about how to organize my family budget. At the time, I thought he was joking. But over the years, I began to understand what my father was really saying You'll have no trouble handling your major expenses. Your problem will be your miscellaneous expenses. If you can't control them, they'll wreck your family finances. My father's advice, I have discovered, is especially relevant as the holidays approach and we get ready for a season of celebrating and spending. When we go shopping for holiday gifts, we may vow to be prudent, but we are often overwhelmed by the many temptations to spend frivolously. The need to keep a lid on spending is a concern that many people share, but it is a special challenge for retirees who, like myself, live on fixed incomes, in my case augmented by my freelance writing. That challenge has become even tougher lately because the value of our investments has declined sharply during the 212-year bear market. Sara and I, for instance, felt more comfortable when our stock in General Electric Co. was worth 55 a share than we do today with the stock trading at less than half that. Sara accumulated the shares when she worked at GE, and they have been a mainstay of our savings.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982702","date":"2002-12-01","texts":"Wal-Mart Stores Inc., the world's largest retailer, rang up record sales the day after Thanksgiving, suggesting that holiday shoppers will be a price-conscious bunch. The discount chain yesterday reported 1.43 billion in sales at its domestic stores, supercenters and neighborhood markets on Friday. That was its highest single-day total ever, outpacing the 1.25 billion showing at the same time last year, when consumers were still stunned from the Sept. 11 attacks. The Bentonville, Ark., company is the only major discount chain so far to report sales for Black Friday, the official start of the holiday shopping season and a day retailers traditionally have used to gauge whether they will go into the black for the remainder of the year. Like Wal-Mart, many retailers and mall operators reported strong foot traffic Friday. But they did not know whether the turnout translated into sales, or whether it will stay strong for the remainder of the selling season. America's Research Group in Charleston, S.C., presented some evidence that shoppers on Friday did make purchases. After scanning crowds at 15 malls nationwide, the research firm found 3 out of 5 people were carrying shopping bags, compared with 2 out of 5 a year ago.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613882","date":"2002-12-04","texts":"NOT LONG AGO, investors would scoff at an investment that promised only a 3 return, even a guaranteed one. These days, plenty of investors would be happy to settle for that. And therein lies a problem for the insurance industry. With record-low interest rates and slumping stock prices, insurers say it's getting hard to provide the minimum guaranteed return on fixed annuities, which is set by law in many states at 3. Every drop in interest rates, such as November's half-point cut by the Federal Reserve, makes fixed annuities even more attractive to customers -- sales were up 56 in the third quarter to 30 billion -- and more difficult for insurers to finance. What the latest rate cut shows is that the low interest-rate environment we were in a year ago continues, and is more and more problematic, says Bruce Ferguson, vice president of state relations for the American Council of Life Insurers, the insurance industry's trade group. To solve the problem at least temporarily, the insurance industry has an answer Lower the 3 minimum guarantee on new policies to 1.5. Sounds simple enough, but because fixed annuities are insurance products regulated by states, insurers can't just cut the return across the board. Rather, they must go from state to state seeking permission from regulators, and then try to get state legislatures to pass a new minimum. Even then, any changes would apply only in the states that passed such a change.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615216","date":"2002-12-05","texts":"DIVIDEND-PAYING stocks are already on a roll, and the Bush administration's plan to cut individual taxes on dividends would give them another boost. While reaction on Wall Street was muted yesterday because of the plan's uncertain future, several details emerged. At a minimum, an administration plan would likely provide tax relief for dividends not only on common stock but on preferred stock as well. Dividends passed on to holders of mutual funds, often in the form of additional shares of the fund, would also get taxed less. However, dividends paid by many small and family-owned businesses probably wouldn't be affected. For investors, the likely inclusion of preferred stock is welcome news. Preferred stock, while technically stock, carries a high dividend and functions almost like a bond in people's portfolios, providing a steady stream of regular income. While preferred stock is often held by institutions, reducing the tax would spur more individual investors to buy it -- especially given its large dividends. Proposals are being floated in Washington about how best to accomplish the administration's goals. One approach is eliminating the dividend tax altogether. Another would reduce the tax rate on dividends to equal that on capital gains, typically 20. Currently, dividend payments are taxed at ordinary income rates, as high as 38.6. Yet a third possibility would exempt some amount of dividends, say, 1,000, from taxes. If the proposal becomes law, corporations would come under increasing pressure to change their approach to dividends. Companies that already have dividends would be pushed to boost them. And companies that have never paid dividends, such as Microsoft, Dell Computer and Cisco Systems, would face pressure to start paying them.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614574","date":"2002-12-12","texts":"NEW YORK -- Companies recently had to start swearing to the accuracy of their financial statements to keep regulators happy. Now, the owners of stock indexes might kick out companies that don't do so. At least that is how it will work for the Nasdaq Stock Market's Nasdaq 100 index, a closely followed barometer of the market's large nonfinancial stocks -- an index that was the star of the tech-stock boom of the 1990s. Investors have about 30 billion linked to the Nasdaq 100 index, mostly through shares of the Nasdaq-100 Index Tracking Stock, an exchange-traded fund. The yearly rebalancing of the Nasdaq 100 index is under way, and the index's members and candidates that can't attest to the honesty of their financial figures won't be allowed aboard. The move -- whether more for symbolism or substance -- is the first of its kind among overseers of major indexes, with the Nasdaq's rule saying it will prohibit securities from being included if the annual financial statements of the issuer of the securities cannot currently be relied upon. Officials of Nasdaq, a unit of the National Association of Securities Dealers, said they plan to police the requirement by monitoring companies' financial filings, keeping tabs on corporate news releases and by following comments made by company executives. It is understood that the market won't require the companies to file special affidavits with Nasdaq.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615596","date":"2002-12-12","texts":"Is anti-Americanism surging around the world in response to the Bush Administration's aggressive pursuit of the war on terror Judging from the headlines about the latest Pew Research Center survey on global attitudes, you'd think so. But while the poll, based on 38,000 interviews in 44 countries earlier this year, does show U.S. favorability ratings slipping slightly in a number of countries, the real story is the overwhelming level of support that America still enjoys. Consider Kenya, where a drop of 14 points since 19992000 still leaves the U.S. with 80 approval. Or France, where favorability has actually risen one point to 63. And remember all those worries about NATO expansion and the Administration's scrapping of the ABM Treaty Support in Russia is up 24 points to 61. Nor does the U.S. rate poorly in the Muslim world as a whole. The U.S. gets high favorable marks in Indonesia 61, Nigeria 77 and Uzbekistan 85. The one immediate cause for concern is Turkey, where support has fallen 22 points since 19992000 to just 30. This is surely due in part to Turkey's economic crisis, which many blame on the International Monetary Fund and by extension the U.S.. Repeated rebuffs to Turkey from the European Union probably haven't helped encourage pro-Western sentiments either. While recent U.S. lobbying of Europe on Turkey's behalf is a good start at a fix, the U.S. will have to give on something such as textile tariffs too.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615055","date":"2002-12-13","texts":"Alan Murray's Dec. 3 column Political Calculus Bush Now Embraces a Stimulus Package suggests that the administration's economic-stimulus plan is largely politically motivated and would have only a moderate short-term economic impact. Isn't it a little early to start criticizing a plan that is still being developed Though we are encouraged by some recent signs of a rebound, the economy is recovering at half the rate of past recessions. A carefully crafted consumer, investor and business tax package would provide the synergies needed to push the economy into high gear and help ensure durable economic growth. In a recent letter to the president, we suggested cutting consumer taxes, allowing larger depreciation write-offs and reducing the double taxation of dividends. Our studies show that allowing companies to deduct 50 of corporate dividends would add one-half a percentage point to average GDP growth through 2005. Similarly, our study shows that this change would accelerate productivity growth to 2.4 over the next three years, compared with 2 without this change. A phased reduction of the double tax on corporate dividends would encourage firms to rely more on equity financing, leading to higher investment spending and a larger capital stock. One of the most effective ways to spur business investment and continued technological advances that promote productivity growth is through an enhanced capital-cost recovery system. Finally, accelerating the tax cuts enacted in June 2001 will help ensure that consumer confidence and spending remain strong. Because many small businesses pay taxes at the individual rate, they also will benefit from accelerated rate cuts. Jerry Jasinowski","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616864","date":"2002-12-13","texts":"WASHINGTON -- Retail sales continued to grow briskly in November, easing concerns that U.S. consumers, who have underpinned global growth recently, are hunkering down. Still, it is too early to tell whether holiday sales will remain strong, as more recent chain-store reports have been less robust. Consumer spending depends on employment, and a jump in new claims for unemployment insurance last week, though muddied by measurement difficulties, suggests the job market remains a weak spot. And the current-account deficit -- the broadest gauge of the nation's global trade -- continued to reflect Americans' huge appetite for foreign-made goods, remaining essentially unchanged from the second quarter at a steep 127 billion. Retail sales rose 0.4 in November from October, the U.S. Commerce Department reported yesterday, a significant acceleration from October's 0.1 increase. Excluding auto sales, which have weakened from their incentives-charged summer pace, retail sales rose an even more encouraging 0.5 in November, though that was off from October's 0.8 pace. The data suggest this holiday retail season will outperform early dour expectations, said Susan Polatz, an economist at Banc of America Securities. Consumer spending is being helped by the continued rise in inflation-adjusted after-tax income and by mortgage refinancing, she said. Sales were especially strong for furniture, up 2.3 building materials, up 1.2 and electronics and appliances, up 0.9. People appear to finally be furnishing all the homes they have been buying, said Lehman Brothers economist Drew Matus. But clothing sales sank 1.3, corroborating weak reports from many store chains. That suggests it is too early to assess the strength of holiday sales. A late Thanksgiving may have pushed some sales that normally occur in November into December.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982850","date":"2002-12-14","texts":"Q Now that interest rates are quite low, we have been exploring the idea of refinancing our 7.5 percent mortgage. Are there costs associated with refinancing Is there a formula that tells us whether refinancing makes sense A In recent years, many homeowners have made refinancing almost an annual ritual. Interest rates, which are near an all-time low, have been steadily dropping, and consumers have taken advantage of these lower rates. There are some costs, though, just as there were when you obtained your original mortgage. The only differences between a purchase and a refinance are that there is no buyer or seller present at closing, and no real estate broker is involved. Your refinance lender, even if it is the same lender who holds your current loan, has to start from scratch. The lender must obtain current financial information about you, contract for an updated appraisal of the property and receive an updated title report. Just because everything was acceptable several years ago when you obtained your mortgage does not mean that everything is acceptable today. You should shop around. Contact several mortgage lenders and brokers to determine what interest rates you can obtain. Determine what the various rates will be for a fixed 30-year mortgage, and compare those rates with a fixed 15-year mortgage as well as with an adjustable-rate mortgage.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842614716","date":"2002-12-16","texts":"FRANKFURT -- After years of criticism for being overly strict, the European Central Bank is planning to reassess its inflation target. A possible change could result in lower interest rates and stronger economic growth for the world's second-largest economy, providing firmer support for the U.S. and the world. The ECB aims to keep annual rates of inflation below 2, the most austere goal of any major central bank. Over the past two years, the ambitious objective kept the bank from trimming interest rates as swiftly as the U.S. and the U.K., even as the economy slowed sharply. Despite the effort, inflation overshot the target for three of the four years since the birth of the ECB and the currency it manages, the euro. The ECB recently announced it would review during the first half of next year the strategy it uses for setting interest rates. But Lucas Papademos, the ECB's vice president, confirmed in an interview during the weekend that the analysis will also encompass the bank's most sacred tenet its own definition of price stability. Mr. Papademos cautioned that the assessment that is going to take place need not imply a change. Nor should the study imply the ECB has any doubts about the strategy and goals it has pursued so far, he said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616679","date":"2002-12-30","texts":"INFLATION. DEFLATION. Disinflation. The economic lexicon is garbled with so many 'flations these days, it's getting a little hard to make sense of them all. During the 1970s, '80s and '90s, Washington policy makers waged a persistent battle against inflation, broadly defined as rising consumer prices. But for most of this year, as the inflation rate has fallen closer to zero, economists began to worry about the opposite trend -- the possibility that the U.S. could face Japan-style deflation, or falling consumer prices. As we enter 2003, here comes a new watchword reflation. The term refers to government efforts to pump up -- or reflate -- an economy that is stuck in a slump by flooding that economy with money. Essentially, reflation is the intentional effort by governments to ward off deflation by boosting demand and underpinning prices. Though it isn't quite the same as inflation, reflation can spark inflation problems if policy makers go too far. The term is popping up often. In a recent report titled The Reflation Trade, Morgan Stanley Co. chief economist Stephen Roach argued that policy makers are now in a full-scale frontal assault on the perils of deflation. That has made him more bullish on the stock market in the months ahead. James Grant, in his twice-monthly newsletter, Grant's Interest Rate Observer, writes about a global reflation program being led by the U.S. and spreading world-wide. That, he said, explains why prices for gold -- a hedge against inflation and his favorite investment -- are on the rise. SOME ECONOMISTS who have been beating deflation drums are doing an about-face. There has been an important shift. The financial community is talking more about reflation . . . it is the thing to watch in 2003, says Paul McCulley, chief economist at Pacific Investment Management Co., the California bond-fund manager that recently advised clients that government-bond yields will rise as result of today's reflation tilt. Behind the reflation focus is blunt talk by Federal Reserve officials. Earlier this month, Fed Chairman Alan Greenspan told economists in New York that while deflation is only a remote possibility, the central bank is extraordinarily sensitive to the potential perils associated with it and is prepared to forestall it if the economy moves further in that direction. In November, Fed governor Ben Bernanke laid out a series of unusual steps the Fed could take to get out of Japan-style deflation if it did happen -- such as lending more aggressively to banks to drive down private borrowing costs or buying foreign government bonds, which could weaken the dollar and boost exports.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982943","date":"2002-12-30","texts":"CHICAGO -- As Illinois Gov. George Ryan decides whether to commute the sentences of some death row inmates, more than 400 law professors said in an open letter to Ryan that he would be justified in granting clemency to all of them. Ryan stopped the state's executions nearly three years ago after courts found that 13 death row inmates had been wrongly convicted since the state resumed capital punishment in 1977. He is reviewing clemency requests from more than 140 of the state's 160 death row inmates and has said he will rule before he leaves office Jan. 13. In 1986, New Mexico Gov. Toney Anaya commuted the sentences of all his state's death row inmates. Arkansas Gov. Winthrop Rockefeller did the same thing in 1970. NEW YORK -- Milton Glaser, the graphic artist who designed the I heart NY logo, has proposed a new slogan Together for the City We Love. He said the new phrase, which he has submitted to City Hall, could help New Yorkers bond during tumultuous times. MINNEAPOLIS -- The airplane crash that killed senator Paul D. Wellstone D-Minn. may have been caused by the plane's slow speed as it prepared to land, the Minneapolis Star Tribune reported. The Beechcraft King Air A100, carrying Wellstone and seven others, was traveling as slow as 85 knots -- equivalent to 100 miles per hour on land -- as it approached a small airport in northern Minnesota on Oct. 25, according to a study of radar data by the National Transportation Safety Board. Pilots and investigators said the plane should have been flying at a speed of at least 120 knots.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842616333","date":"2003-01-02","texts":"Movie-ticket sales in the U.S. totaled about 9.3 billion last year, up at least 11 from 2001, thanks to hits such as Spider-Man, Harry Potter and the Chamber of Secrets and 20 other movies that each generated more than 100 million at the box office. While Hollywood is crowing it had another record year, admissions rose a more modest 8 when adjusted for ticket-price inflation. Moreover, the higher ticket sales and attendance figures were due to the proliferation of expensively promoted franchise movies and sequels, masking what otherwise would have been a bleak year for most studios. The estimated 11 increase in ticket sales comes from Exhibitor Relations Co., a closely held firm that analyzes and distributes box-office data it receives from the studios. The explosion in sales of digital videodiscs during 2002 will help mitigate any miscalculations the studios made in coming up with more original movies. DVD sales increased 50 to 8.1 billion in 2002, according to Adams Media Research, as consumers showed a willingness to buy low-price discs at mass retailers rather than rent movies. With the new format gaining favor, sales of VHS format videos, which peaked in 1996 at 6 billion, fell to 4.3 billion. The rise in ticket sales and attendance also was helped by theater operators increasingly packing 15-plus-screen cinemas with multiple showings of the same movie on opening weekend. This resulted in large opening-weekend box office for movies, but in many cases also led to a steep drop in ticket sales in the following weeks as the next big-event movie rolled into theaters.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614133","date":"2003-01-03","texts":"In November, John Dillon, chairman of the Business Roundtable, said a survey of the group's 125 blue-chip members found most planned to freeze or cut capital spending in 2003. Yet Mr. Dillon's company, International Paper Co., isn't one of them -- and it could be in the vanguard. After paring capital spending by a third over the last four years, the company expects to boost it 10 to 15 in 2003 from last year's level. During hard times, you can cut back on capital improvements, Mr. Dillon, International Paper's CEO, says. But over time you have to spend to improve your competitiveness. With cash flow rising, the company overhauled machinery in Arkansas that makes juice containers and plans to upgrade its online-order-management system to speed answers to customer queries. A resilient economic expansion may be in the making, starting in the same place that the slump began corporate boardrooms. The U.S. economy of 2002 may be remembered for its resemblance to the economy of 1992 stuck in a rut, depressed about its prospects, damned by Democrats -- yet poised for an impressive takeoff. A business-spending bust drove the economy into recession in March 2001 and has hobbled the recovery ever since. But now, the pieces required for a rebound are falling into place Profits are recovering. Balance sheets are stronger. Investor panic is subsiding. And perhaps most important, businesses are finding it harder to keep postponing new investment. Just yesterday, a closely watched survey found that manufacturing activity rebounded in December, as new orders surged to a nine-month high, according to the Institute for Supply Management. The news helped send stocks soaring on the first trading day of the new year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615568","date":"2003-01-09","texts":"In your Dec. 27 editorial Flacking for Rubinomics you misinterpreted the nature, analysis and conclusions of our research paper on The Economic Effects of Fiscal Discipline. The main point of our paper is that standard economic reasoning, present in almost all macroeconomic textbooks, implies that budget deficits reduce national saving and therefore reduce the future income and living standards of American households. For example, under conservative assumptions and a methodology developed by Harvard professor Greg Mankiw, we show that the 5 trillion decline in projected 10-year surpluses over the past two years translates roughly into a reduction in future income of 1,500 per household per year. That is the real cost of a lack of fiscal discipline. These costs occur regardless of whether budget deficits raise interest rates, which reduces Americans' domestic investment, or cause a capital inflow, which reduces Americans' net investment overseas. Therefore, the debate about deficits and interest rates is a bit of a red herring. Nonetheless, recent evidence supports the view that deficits affect interest rates. This evidence comes from almost all major macro-econometric models, almost all studies done since 1990, and in particular from studies that properly focus on the relation between interest rates and expected future deficits rather than current deficits. These facts were somehow omitted in your editorial. Contrary to the what you wrote, we emphasize the distinction between the deficit itself and the policies that create the deficit. Thus, for example, the 2001 tax cut had positive effects on economic growth from cutting marginal tax rates, but negative effects due to the increase in the deficit. On balance, all of the existing studies show that the negative effects largely offset and may even outweigh the positive effects. As a result, the net effect of the tax cut on growth is likely to be small and could be negative.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617424","date":"2003-01-14","texts":"LONDON -- If you're a bungee-jumping type of investor it could be the right time to consider buying a European technology fund. European technology stocks suffered another terrible year in 2002, turning in one of the worst performances in the region as they tumbled more than 50. Yet as in the U.S., European technology, media and telecommunications shares enjoyed an impressive comeback in the fourth quarter as investors sought out good bargains among the rubble. Even with those gains, some analysts argue that a number of tech stocks are poised to climb higher and that investors should consider at least some exposure to the sector. They also note that Europe is home to some of the world's technology leaders, from Finnish telecom equipment maker Nokia to Dutch electronics manufacturer Philips. For a diversified portfolio one should consider looking at tech funds again, says Anthony Yadgaroff, group-managing director at independent investment adviser Allenbridge Group in London, who personally bought a small position in a tech fund a few weeks ago. Mr. Yadgaroff does warn that any tech position should be small in an overall portfolio. Tech holdings should never be more than 5 of a portfolio, he says.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617385","date":"2003-01-15","texts":"The Internet continues to claim victims, the latest being Steve Case of AOL and Sony Music's Tommy Mottola. Executives get bounced all the time for leading their companies and shareholders into disastrous deals. Mr. Case is getting bounced for cutting too good a deal for shareholders of the former AOL. His Time Warner colleagues can't forgive themselves for buying at the top of the Internet bubble, a regret for which there is no cure. Let it be recalled, though, that like a lot of bubble misanthropes, Time Warner's board and executives went into the deal with eyes open. Gerald Levin, then CEO, remarked at the press conference that he accepted the market capitalizations in the Internet space as something profound. Whether they were profound or not, they certainly proved short-lived, the Nasdaq beginning its dive a few weeks later. Last week was an opportune moment for Mr. Case to beat a retreat. AOL's new turnaround plan is so screwed up by internal Time Warner compromises that it seems doomed to fail. He wasn't doing anybody any good by sticking around and putting his imprimatur on it. Only by exploiting preferred carriage on Time Warner's own cable systems could AOL Broadband hope to achieve enough critical mass to demonstrate to other cable and DSL providers that AOL could help them generate better revenues than they could on their own. But this would mean cannibalizing Time Warner's pre-existing Road Runner broadband service, something the Time Warnerites evidently were unwilling to do.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615096","date":"2003-01-23","texts":"Siebel Systems Inc. Chairman and Chief Executive Thomas Siebel, who has been criticized for his large stock-option awards, voluntarily has canceled all the stock options he has received since 1998. Separately, the company reported a fourth-quarter net loss of 38 million, or eight cents a share, including a 95.9 million restructuring charge. That compares with net income of 65.9 million, or 13 cents a share, a year earlier. Revenue fell 19 to 394.7 million, from 487.8 million a year earlier, while revenue from licensing software plunged 37 to 157.4 million. Mr. Siebel, who lowered his salary to 1 for each of the past two years as his software company stumbled, returned options covering 25.95 million Siebel shares. He hadn't exercised any of the options, some of which were out of the money, but the company had issued underlying shares to cover any eventual exercise by Mr. Siebel. The move lowers his stake in the nine-year-old company he founded to 10.7 from 13.5. The move is the latest in a series of steps the San Mateo, Calif., company has taken to restructure its compensation and options programs. In September, Siebel Systems allowed employees to swap about 28 million out-of-the-money stock options for cash or restricted stock. The move also comes after a Louisiana teachers' pension fund sued the company last year, alleging the board had improperly awarded nearly 1 billion worth of options to Mr. Siebel over the years. Siebel Systems has said the suit is unfounded. Mr. Siebel, who has been under scrutiny for his large options grants, was upset at being included in critical news coverage about executive compensation, according to a person familiar with the situation. Company spokesman Patrick Dillon said, He is making a rather large and sweeping statement by canceling options that go back to 1998. If anything, this is a pretty big reality check not only for this company, but for CEOs in general.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615633","date":"2003-01-29","texts":"BEIJING -- China's big insurance companies, gearing up to list outside the mainland, will give investors a chance to buy into one of the world's fastest-growing insurance markets. Even as the companies ride a flood of new premiums, they must grapple with the impact of nonperforming investments and high-interest obligations. The top three insurance companies -- China Life Insurance, People's Insurance Company of China and Ping An Insurance -- are scrambling to be the first of their number to issue shares abroad, most likely in Hong Kong and possibly in the U.S. While the companies declined to provide details of the planned initial public offerings, industry executives say China Life and Ping An want to raise 1 billion to 2 billion each and People's Insurance less than 500 million. Some of the IPOs could take place as early as the first half of the year. The offerings will give investors an entree into China's dynamic insurance market, which saw revenues from premiums surge nearly 50 in 2002 over the previous year. That is even as other insurers world-wide were battered by the worst stock-market decline in three decades, following the Sept. 11, 2001, terrorist attacks on the U.S. But while Chinese insurers may be enjoying booming growth, they face their own set of challenges as they prepare for listing. These include high ratios of nonperforming assets, tight government restrictions on investments and increased foreign competition as China opens its market under World Trade Organization rules. People are attracted by China's growth, but the companies face typical China problems of poor governance, disclosure and weak management, says Fred Hu, a managing director at Goldman Sachs in Hong Kong. How successful the IPOs will be will depend on whether the companies will really be able to turn a new leaf. Goldman Sachs Group Inc., which with Morgan Stanley and HSBC Holdings PLC have a combined 24 stake in Ping An, is likely to be a lead underwriter in Ping An's planned listing. Many Chinese insurers are burdened by troubled assets, including speculative property investments made in the late 1980s through 1995, when Beijing banned such deals. Mr. Hu estimates that nonperforming assets account for 20 to 30 of Chinese insurers' total investments.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617052","date":"2003-01-31","texts":"Home values keep climbing across the U.S. But we looked at 500 neighborhoods -- and found slowdowns in some surprising spots. June Fletcher tours the towns to watch. THEY'RE UP 16 in a Washington, D.C., suburb, but losing steam in Denver. And just outside Los Angeles, home prices in the hillside town of La Canada Flintridge have shot up more than 23 from a year earlier. We've been discovered, says Michael Braverman, who expects to get 500,000 more for his home than he paid five years ago. Forget watching the stock market. The best -- and maybe the only -- game in town these days is the remarkably resilient real-estate market. Last year alone, amid all the bad news, home prices still rose by 7 nationally -- and some economists believe things will be almost as strong this year. And yet, many homeowners are holding their breath, worrying about the bubble and asking What about my town We've got some answers. In an exhaustive town-by-town survey, we looked at home prices in more than 500 upscale ZIP Codes, taking a snapshot of prices last year and comparing them with the year before. We found that nobody in Greenwich, Conn., or Southern California is losing sleep. But who'd have thought duplex-lined Beach Haven, N.J., would be in the top 10 nationally for growth -- or that so many other overlooked communities would be so strong introducing . . . Mattapoisett, Mass.. In last place No, it's not Silicon Valley. But our biggest surprise, given all the news, was just how many hot markets seem to be cooling off. Indeed, according to our survey by housing specialists Fiserv Case Shiller Weiss, the growth rate of prices in fully a third of our towns has slowed from the same time frame a year earlier. There's just air coming out of the market, says David Lereah, chief economist for the National Association of Realtors, who expects price growth to slow nationally to about 4 this year.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614752","date":"2003-02-05","texts":"American International Group Inc.'s announcement of a 2.8 billion increase to its insurance claims reserves sent shivers through the markets yesterday and rattled a property-casualty insurance industry that already has added more than 7 billion to its reserves this year. As of 4 p.m. in New York Stock Exchange composite trading, AIG shares sagged 3.63, or 6.6, to 51.70. AIG's announcement, made late Monday, is the latest in a series of hits taken by the industry. The bulk of earlier reserve additions, however, have been related to lingering asbestos liabilities and claims from the Sept. 11, 2001, terrorist attacks. AIG's new reserves, linked to business written between 1997 and 2001, are for a broader array of policies, and thus the announcement is expected to prompt other insurers to once again re-evaluate the adequacy of their own reserves. This is an indictment of the entire industry's balance sheet, said William Yankus, a property-casualty analyst at Fox-Pitt, Kelton. The question being asked now is this, Mr. Yankus said If AIG's underwriting wasn't adequate, how bad are the problems at other companies Another big property-casualty insurer, Chubb Corp., said yesterday it was taking a charge of 100 million related to its reserves for European directors-and-officers liability business. At the same time, Chubb said its net income for the fourth quarter was 56.6 million, or 33 cents a share, roughly double the 28.7 million, or 16 cents a share, a year earlier. Chubb shares were down 2.97, or 5.4, to 51.60 on the Big Board.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985046","date":"2003-02-06","texts":"Activity in the service sector increased at a slightly stronger pace in January than in December, the Institute for Supply Management said. The group reported that its non-manufacturing index rose to 54.5, from the downwardly revised 54.2 in December. Index readings above 50 indicate expansion of activity and prices. The non- manufacturing employment index rose for the first time since February 2001, to 50.3, from 46.9 in December. After suspending the sale of dollars for two weeks because of a crippling general strike, Venezuelan President Hugo Chavez announced a new fixed currency exchange rate to help bolster the country's flagging foreign reserves. The new policy fixes the currency rate at 1,596 bolivars to the dollar, Chavez said. Chavez said the freeze on foreign currency trading would end with the establishment of the new system. The bolivar closed at a record low of 1,853 on Jan. 21, the last day of currency trading, and trades for 2,500 per dollar on the black market. The decline, in turn, sent inflation past 30 percent, and many economists forecast a 25 percent recession this year. Federal safety regulators ordered new inspections of Boeing 747 fuselages as a result of the investigation into the China Airlines crash in the Taiwan Strait in May. The plane broke into four pieces in flight, killing all 225 aboard. The Federal Aviation Administration ordered U.S. operators of 747s to check to see whether a metal repair patch, or doubler, was used to cover scratches or cracks on the underside of the fuselage near the aircraft's tail. Investigators found scratches and a 15-inch crack under a doubler that had been attached to the China Airlines plane after the tail hit a runway in 1980, according to the FAA. Delta Air Lines said it will reduce the pay of most executives by 8 percent and the wages of chief executive Leo F. Mullin and President Frederick W. Reid by 10 percent on March 1. Delta also may lower employee pay to keep pace with wage cuts at airlines that have filed for bankruptcy protection, Mullin said. Bank of America said it is slashing about 1,000 jobs in technology and operations during the first quarter amid a continued economic slump. The cuts follow the elimination of about 900 jobs in technology and operations in November and December. After the job reductions are complete, the total number of workers in those areas will be 20,000.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985145","date":"2003-02-08","texts":"U.S. stocks fell, leaving benchmark indexes with their longest weekly losing streak since October, as an unexpected drop in unemployment failed to relieve investor concern that a war with Iraq would slow economic growth and crimp corporate profits. The Dow Jones industrial average fell 65.07, or 0.8 percent, to 7864.23, and the Nasdaq composite index fell 19.26, or 1.5 percent, to 1282.47. The Standard & Poor's 500-stock index dropped 8.46, or 1 percent, to 829.69. Stocks climbed after a Labor Department report that the unemployment rate fell to 5.7 percent in January from an eight-year high, but the market turned south after Attorney General John D. Ashcroft said terrorist attacks on Americans are more likely this month and raised the domestic threat indicator to the second- highest level. Microsoft, the biggest software company and most valuable stock, shed 84 cents, to 46.58. American International Group, the largest insurer, fell 1.50, to 46.70. Pfizer, the world's biggest drugmaker, slumped 48 cents, to 29.30. Johnson & Johnson, the second-largest health-care company, shed 28 cents, to 51.84. The drugmaker may pay about 2 billion or 45 a share, to buy Scios, an unprofitable biotechnology business, the Wall Street Journal said, citing people familiar with the matter. That amounts to 30 percent more than Thursday's closing price for Scios, which sells the heart drug Natrecor. Scios surged 7.51, or 22 percent, to 42.20.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830982419","date":"2003-02-09","texts":"When Defense Secretary Donald H. Rumsfeld sought to draw a distinction recently between the Old Europe represented by France and Germany and the New Europe of the fledgling democracies in the east, he stirred up a hornet's nest of criticism among Europeans who believed he was trying to divide the continent into skeptics and supporters of American policy toward Iraq and the Middle East. Rumsfeld's observation was the right answer, but to the wrong question. There is no simple dichotomy in Europe as to who supports military action against Baghdad. Just as in the United States, you can find liberals in every corner of Europe who want to see Saddam Hussein overthrown, by force if necessary, and conservatives who think a U.S.-led military campaign would be disastrous for Western interests. Where Rumsfeld's comments struck closer to the mark was in the implied notion that Europe's center of gravity is shifting east. In the postmodern European order, where war is now largely unthinkable, power is no longer measured by military arsenals but by economic vigor. Next year, when the European Union embraces 10 new members, the 25-nation group will include 450 million relatively prosperous citizens and account for more than one-fifth of global economic activity. But as the EU expands toward Russia's doorstep and consolidates its economic power, the locus of Europe's future economic dynamism will lie with the former communist societies of Central and Eastern Europe. Over the next decade, Europe's fastest growth rate and biggest income surge are projected to occur in the eastern swath, stretching from the Baltic states to Bulgaria. American and European companies are beginning to pour investments into the region, seeking to capitalize on the desires of youthful populations eager to raise their living standards to match those in the West and to take advantage of labor costs that are one-fifth those in Germany. Jeffrey Immelt, chief executive officer of General Electric, says the new eastern states entering the EU will be a key corporate target over the next five years and could prove, in the short term, to be a more lucrative market than China. The attraction of New Europe is not hard to understand. Deprived of material comforts during four decades of communism, tens of millions of Central and Eastern Europeans are determined to make up for lost time by acquiring the emblems of prosperity -- fast cars, stylish furniture, chic clothes and second homes -- that their cousins in the West have long taken for granted. The consumer frenzy gathering momentum in the east has not been witnessed on the continent since the go-go '50s, when Germany's postwar economic miracle bolstered the rest of Western Europe.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984819","date":"2003-02-09","texts":"President Bush has embarked on a far-reaching campaign to transform the federal government's relationship with the nation's poor, seeking to tip control over social services to the states, reduce the funding of some programs, and require more proof that low- income people are eligible for public help. The 2.23 trillion budget that Bush proposed to Congress last week would loosen federal standards and hand states vast new authority, if they want it, over housing subsidies, unemployment benefits, health insurance and a preschool program for children from disadvantaged families, which is known as Head Start. It would also make outright cuts in some poverty programs, such as a reduction by a fourth in the amount the government devoted last year to community services grants for dispossessed neighborhoods. At the same time, the president is seeking nearly 1.5 trillion in tax cuts that would largely benefit the wealthy while potentially squeezing social spending for years to come. White House officials contend that such cuts would ultimately help the poor more than direct government aid because they are supposed to spur faster economic growth, which would raise wages and pull more people into the workforce. In effect, they say, pro-investment tax policy is Bush's boldest anti-poverty program. Small changes in long-term growth have very large effects on our standards of living, said R. Glenn Hubbard, chairman of the White House's Council of Economic Advisers. Once you realize that, everything else is secondary. Affecting many federal agencies, the changes Bush wants to make in anti-poverty efforts reveal a bold aspect of his vision of government that he seldom discusses publicly. The proposals were not among the positions he staked out during the 2000 presidential campaign.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614086","date":"2003-02-19","texts":"MAKE WAY for private REITs. Private real-estate investment trusts are increasingly becoming a popular way for individuals to invest in commercial real estate. Like public REITs, they offer investors a way to reap fatter yields than they are likely to get in any other sector of the stock market these days. And like public REITs, they buy everything from office buildings to shopping centers to warehouses. But private REITs have a few things that some investors might find more appealing than public REITs. They also have a few traits that some investors might find turnoffs. At the end of the day, deciding to invest in publicly traded REITs or private ones comes down to the style of investing and amount of liquidity you prefer. Shares of public REITs trade on stock exchanges so investors can buy and sell shares as they please, which offers them liquidity as their shares can easily be converted into cash. Meanwhile, shares of private REITs, which are sold through financial advisers, aren't traded on a stock exchange. There is no public trading market for these companies' shares. Depending on the fund, investors can only cash out a few times a year, when the value of their stake is determined by REIT management. In other cases, they can only redeem shares.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983489","date":"2003-02-19","texts":"David Rudat keeps running the numbers, looking for ways to lessen the fiscal pain he knows is on the way. Maybe he can spare libraries from cuts. But would that wipe out funds for senior centers He might be able to maintain full police staffing -- but only if he delays road and building repairs. Rudat, who manages Orange's city government, says that almost all of his options look grim. But something has to give in this meanest of budget seasons. Or maybe everything. The nation's most populous state is flirting with financial disaster, again. Two years after getting walloped by a long and costly energy crisis, it is now saddled with a staggering, unprecedented deficit bigger than the entire annual budget of any state except New York. Somehow, California will have to come up with as much as 35 billion this year to balance its books without tripping up its already wobbly economy, one of the largest in the world. Many other states are trying to close deficits by reducing spending or increasing taxes, but none appears to be facing cuts as deep and widespread, or tax hikes as broad, as those being contemplated here. California's shortfall represents about one-third of the state's annual spending. Hardly anyone will be spared as state aid to cities and towns dries up. About a half-million poor residents could lose all or part of their subsidized health care because the state says that it no longer has money. Overcrowded public schools are being forced to abandon plans to reduce class size. At least 1,900 state workers are getting pink slips. Tuition at community colleges may double. Hundreds of nursing homes are threatened with bankruptcy.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614126","date":"2003-02-20","texts":"NEW YORK -- You now have another way to pay for Junior's Ivy League education. A new type of prepaid-tuition plan, known as an Independent 529 Plan, will allow parents to pay for future tuition at private colleges at discounted rates. It is similar to existing state prepaid tuition plans, but, in this case, families don't have to pay penalties if they choose schools outside their states. You're simultaneously purchasing an interest in all of the colleges in the program, said Timothy Lane, vice president of tuition financing at TIAA-CREF, the pension-fund firm that manages the investments for the program. A group of nearly 300 universities including Ivy League schools and regional institutions is expected to participate in the Independent 529 Plan. The plan was approved by the Securities and Exchange Commission earlier this month and is expected to be launched July 1. Participants can buy a piece of a private college's tuition at current rates that can be redeemed as payment at any one of the schools that participate in the program. The amount of tuition that participants can prepay will depend on the school the higher the school's tuition, the lower the percentage the money buys.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614636","date":"2003-02-21","texts":"NEW YORK -- The dollar weakened against all of its major rivals with the exception of the pound, stung by a report showing a surprisingly large U.S. trade deficit. For all of 2002, the trade deficit reached a record 435.22 billion, a significant widening from the 2001 deficit of 358.29 billion. This has serious implications for the U.S. because the country needs to attract some 1.5 billion a day to fund its current account deficit, which is largely made up of trade in goods and services. With foreign direct investment into the U.S. having tailed off significantly, the U.S. relies largely on foreign purchases of stocks and bonds to fund its deficit. But with the White House finding itself increasingly isolated in the court of world opinion for its tough stance towards Iraq, global distaste for risk is on the rise, making it more difficult for the world's largest economy to attract the funding to meet its deficit financing needs. Late yesterday in New York, the euro was trading at 1.0819, up from 1.0747 late Tuesday. The dollar was valued at 118.30 yen, down from 118.74 yen. Against the Swiss franc, the dollar was worth 1.3572 francs, down from 1.3682 francs Wednesday, while the pound was changing hands at 1.5936, down from 1.5967.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983986","date":"2003-02-22","texts":"At least four of Maryland's public universities will furlough their faculty and staff for as many as three days this spring in an attempt to balance their budgets after deep state funding cuts. The furloughs, authorized by the state Board of Regents yesterday, will be staggered across the workforce so that no classes will have to be canceled and other campus services will suffer only minimal disruption, officials said. University leaders said the furloughs -- the first since the early 1990s -- are the only way to prevent layoffs in light of a 67 million cut from the current academic year's appropriation. The university system earlier imposed a hiring freeze and the first midyear tuition increases in more than a decade. Every institution has taken a deep breath and decided this is what we have to do, said Calvin Lowe, president of Bowie State University, one of the furloughing schools. The others are the University of Maryland Baltimore County, the University of Maryland- Eastern Shore and Frostburg State University. A fifth campus, Salisbury University, will probably furlough employees next academic year, system officials said. Employee unions vowed yesterday to fight the furlough, while faculty complained they could have lasting effects on staff morale. The long-term effect of furloughs is to destroy collegiality and educational quality, said David L. Parker, a mathematics professor at Salisbury and president of the Council of University System Faculty.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615654","date":"2003-02-27","texts":"WASHINGTON -- Prospects for raising deposit-insurance limits sank yesterday when an influential senator invited the Bush administration to propose a law that would probably exclude such an increase. Senate Banking Committee Chairman Richard Shelby R., Ala. asked the administration to submit a legislative proposal on overhauling the Federal Deposit Insurance Corp. The administration strongly opposes raising coverage from its current 100,000 per depositor per institution. The move jeopardizes competing proposals, one that passed the House overwhelmingly last year and has been reintroduced by House Financial Services Committee Chairman Michael Oxley R., Ohio this year, and another sponsored by Sen. Tim Johnson D., S.D.. Both would boost the limit to 130,000 and index coverage thereafter for inflation. Coverage increases pose a serious threat to taxpayers that could far outweigh the marginal benefits to depositors or the banking system, Mr. Shelby said after hearing testimony from the Treasury and the four federal banking regulators, including Federal Reserve Chairman Alan Greenspan. Except for FDIC Chairman Donald Powell, all oppose increasing coverage limits, arguing it would encourage banks to lend recklessly with the taxpayer underwriting the risk. All, however, agree on giving the FDIC more freedom to charge insurance premiums on banks that currently don't pay any, tailor premium levels to a bank's riskiness, limit the tendency of premiums to fall in good times and rise in bad times, and merge the bank and thrift insurance funds.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615272","date":"2003-02-28","texts":"WASHINGTON -- The White House is putting final touches on a framework for overhauling Medicare that would make a prescription-drug benefit much more widely available than first envisioned. The plan, outlined in a private meeting on Capitol Hill by Health and Human Services Secretary Tommy Thompson, is designed to be the starting point for House and Senate deliberations on the issue. The administration is leaving many of the specific details to Congress, including how to structure the politically sensitive proposal. But it appears to have backed away from an earlier plan that would have required beneficiaries of Medicare, the federal health-care insurance program for people aged 65 and over and the disabled, to switch to private insurance if they wanted to receive a drug benefit. Mr. Bush is expected to unveil the White House framework soon, perhaps as early as next week when he is scheduled to address the American Medical Association. The plan, beyond establishing the principles for a drug benefit, calls for changes that would increase the role of private health plans in the federal insurance program for the elderly and disabled. Mr. Bush anticipates the combined changes would cost about 400 billion during the next decade. The decision to focus on a broad framework, and not details, reflects a major shift in strategy by the White House. In early January, Bush aides had hoped to write a comprehensive plan and let the president drive the debate on an issue that has split Republicans and Democrats in the past two elections.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983517","date":"2003-03-01","texts":"Roxanne Roberts's paean to Kuwait's envoys Diplomatic Duo, Style, Feb. 26 breathlessly acclaims Rima Sabah's tall, blond, stilettoed looks and her husband's dapper cosmopolitanism as the new face of the Middle East. Meanwhile, the ambassador's family, which rules Kuwait, has failed to give women the right to vote, as your front page reminds us Democracy in Kuwait Is Promise Unfulfilled, Feb. 27. Apparently, the best Arabs are those who fit into Washington's cocktail circuit. A prelude to the White House's plans for Baghdad A Feb. 23 graphic on Page A23 sets out to educate the rest of us on Why Flat Roofs Overload, providing instead a snow job of its own. The text of the graphic states that snow weighs 60 pounds per cubic foot, which is approximately correct, adding that snow weighs much more if it's soaking up rain. As Winston Churchill would have put it, that adjunct constitutes a terminological inexactitude, as well as a gross misrepresentation of the facts. Anyone who dabbled in high school physics knows that water weighs 62.4 pounds per cubic foot. That is roughly what snow weighs when it has melted to occupy a cubic foot of space, and thus is the limit of what a mix of snow and water occupying one cubic foot must weigh. A given volume of snow mixed with water cannot weigh more than the same volume of water, especially as water expands when it freezes.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616452","date":"2003-03-05","texts":"WITH CORPORATE and war news continuing to occupy investors, blue-chip stocks fell to their lowest level in nearly five months, reinforcing some traders' views that the market is unlikely to turn around soon. In one of the lightest trading sessions of the year, the Dow Jones Industrial Average fell 132.99 points, or 1.7, to 7704.87 -- its worst performance since Oct. 10. Other indexes mirrored the Dow industrials' performance. The Standard & Poor's 500-stock index dropped 1.54, or 12.82 points, to 821.99, and stands less than five points above what would be a low for the year. Approaching the third anniversary on Monday of its all-time closing high of 5048.62, the Nasdaq Composite Index fell nearly 1, or 12.52 points, to 1307.77. The index is now 30 points away from its 2003 low point and that milestone of three years ago seems like a dream. Nasdaq volume fell to 1.21 million from 1.24 million. A bunker mentality is governing the markets, said John O'Donoghue, a managing director of trading at Credit Suisse First Boston. Volumes are still anemic, he said, and anything that even had a whiff of safety to it is just being sold as well.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830981996","date":"2003-03-05","texts":"A ruling from the Internal Revenue Service yesterday could end control of United Airlines by its employees after nearly a decade, according to United and its parent, UAL Corp. Separately, the airline reported in a filing with the Securities and Exchange Commission that it lost 382 million in January. The airline also said it had 1.18 billion in operating revenue and 1.51 billion in operating expenses. United said the IRS ruled that the trustee for its employee stock ownership plan may sell an additional 3.9 million shares on employees' behalf. If the trustee -- State Street Bank -- sells the shares, employee ownership of the airline could fall below 20 percent, ending the ESOP. United said the change in ownership could occur within the next few weeks. If employees lose their controlling interest, board representatives of United's pilots and machinists unions would lose their influential voting rights on acquisitions, appointments of chief executives and divestitures. The IRS ruled that State Street could sell the additional shares without jeopardizing substantial tax benefits, called net operating loss carryforwards, that United feared would be lost if its ownership changed.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982795","date":"2003-03-07","texts":"D.C. Police Chief Charles H. Ramsey said yesterday that he intends to fire five police officers and two civilian employees because their failures allowed the first 911 calls about a fatal house fire in Dupont Circle to be placed on hold. Acting after weeks of complaints from neighborhood residents, Ramsey said he has recommended the firing of five police operators who were on duty but were unplugged instead of answering 911 calls when the fire began Jan. 15. He also moved to fire two of the operators' direct supervisors, one of whom is a police officer, and urged that two more supervisors face sanctions. The chief's actions cover four of the five supervisors and five of 13 operators working at the city's emergency communications center the morning of the fire -- meaning that, in his view, half the police staff handling 911 calls during that shift made mistakes. It is a very serious issue, and I think we're taking it very seriously, Ramsey said yesterday. He said that 911 is literally a lifeline to the community, and people need to take it seriously. You never know when that call is going to come in. Ramsey's announcement marked another step in retreat by city officials, who at first denied that problems with 911 had delayed their response to the predawn fire that killed Christopher Smith, 24. Since then, they have acknowledged that neither the police department nor the fire department had enough operators answering 911 calls and determined that the first three people who called about the fire were put on hold.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616388","date":"2003-03-10","texts":"Today's Market Forecast What's Down, Doc Economists keep talking about things being on hold. It's increasingly looking as if they mean it in the Wile E. Coyote sense of being frozen just after he's run off the cliff. After the huge payroll drop on Friday of 308,000 jobs, cages were rattled. The unemployment rate ticked up only a tenth of a percentage point to 5.8, but that understates the weakness in the labor market. For more texture to how bad a jobs market it is, look at the conference board survey, the Manpower survey, the employment component of the ISM index and the four-week moving average of weekly jobless claims. All point in the same foreboding direction. Merrill Lynch's David Rosenberg said GDP growth in the first quarter looks as if it will barely be 1 and now expects the Fed to cut rates a quarter point at both the March 18 and the May 6 meetings. To that prospect, investors will have the worrying thought Been there, but that done squat.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983700","date":"2003-03-10","texts":"Maryland House Speaker Michael E. Busch had a single question for a delegate who recently compared his crusade against slot machine gambling to the ancient tale of Horatius, the man credited with preventing the Etruscan army from conquering and pillaging Rome. Legend has it that Horatius single-handedly staved off attackers by defending a strategic bridge until it could be destroyed, then jumped into the Tiber River. But versions differ as to whether he reached safety and was duly rewarded by a grateful city or drowned before reaching the bank. In the modern world of state politics, Busch D-Anne Arundel is the chief obstacle to a proposal that would dramatically expand legalized gambling in Maryland. The affable new speaker has pitted his House of Delegates against Gov. Robert L. Ehrlich Jr. R, who has made legalizing slot machines a centerpiece of his first year in office, and against Senate President Thomas V. Mike Miller Jr., a Democrat and pro-slots veteran with a proven ability to manipulate the levers of power. In the coming days, Busch's political acumen will be put to the test. He will bring to the House floor a proposal to study the gambling issue for a year. He will settle on a package of tax increases and budget cuts to fill a gap estimated at more than 400 million. He will have to move those proposals through two key finance committees, where leaders would rather use slot machine revenue to backfill at least a portion of the shortfall. And then he will have to persuade a majority in the House to vote for the budget plan the following week. A plan to close corporate tax loopholes could raise about 200 million but would still require deep cuts to balance the budget. Two other options, raising the sales tax by a penny or temporarily increasing the income tax for top earners, would raise more money. But Ehrlich has promised to veto both, meaning delegates might be forced to take a politically difficult vote for naught.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984291","date":"2003-03-10","texts":"Varsity Group Inc. had only been public a month when founder Eric J. Kuhn walked into a March 2000 board meeting with a doomsday declaration. Unless we make radical changes we're going to be out of business in six months, Kuhn told the assembled board members. The Internet textbook seller had gone public at 10 a share, but by the end of the month it was trading at less than half that, with most of its 207 million market value wiped out. Kuhn did not know it then, but Varsity Group's debut came at the peak of the Nasdaq Stock Market's composite index, which hit 5,060 three years ago today. As the market slid to its dramatic crash April 14, Varsity found itself rocketing down the same curve. The company managed to transform itself and survive, unlike many of its Internet and technology brethren. While others were gobbled up by competitors or failed spectacularly, those that endured did so by taking dramatic action They abandoned business models, hoarded cash and cut workforces to the bone.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983113","date":"2003-03-11","texts":"The 30-year Treasury bond has long been the symbol of reliability in the credit markets, the bond everybody wants for long-term safety. Its interest rate is also used in pension law to make two key calculations in traditional plans the present value of promised future benefits -- a plan's liabilities -- and the size of a lump- sum payment when a worker chooses one instead of a lifetime stream of income, known as an annuity. Now, the stability of the long bond, coupled with its dwindling supply since the Treasury stopped issuing it, has driven its price up and its interest rate to historic lows. For corporations, that is bad news. The low interest rate means higher pension liabilities and larger lump-sum payouts. Companies that operate defined benefit pension plans are pressing Congress to change the rate used in federal pension law from the 30-year bond to a rate based on high-grade corporate bonds - - which typically carry higher interest rates. That would mean lower pension liabilities for companies and lower lump-sum payments for workers. The debate takes place as more employers are dropping traditional pension plans in favor of 401ks, which don't guarantee a particular benefit. And it highlights the tightrope the government must walk in seeking to keep pensions safe without encouraging companies to drop their plans.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983747","date":"2003-03-12","texts":"War fears have sent stock markets around the world down to levels not seen in years, complicating efforts by major economies to reverse sluggish growth. Japan's Nikkei index closed yesterday at 7862.43, its lowest since 1983. Major European indexes, such as Britain's FTSE 100, Germany's DAX, and France's CAC 40 index, have reached six- or seven- year lows. U.S. stock markets are trading near their 2002 lows. Investors in global markets face fragile economies in every major stock market, and there is no region that can be counted upon to pull the rest of the world out of its slump, which at various times the United States, Europe and Asia have done. The plunge in global stock markets has intensified the banking crisis in Japan, making any economic recovery there extremely difficult. In Germany, where growth also is slow, the stock market decline has particularly hit banks and insurance companies, which often hold a much higher proportion of there reserves in equities than similar U.S. institutions. Analysts said investors in Asia and Europe have looked for the United States to lead a revival, but recent news -- including an unexpected plunge in U.S. payroll jobs, rising oil prices and concerns about war -- sent the Dow Jones industrial average and Nasdaq tumbling.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982322","date":"2003-03-13","texts":"Antiwar activists are gearing up for a march on Washington on Saturday, the latest for a global peace movement that has mobilized with increasing frequency as the nation prepares for a war with Iraq. In Burke, psychologist Suzanne Doherty, 56, has worked to assemble a squad of grandmothers to join her on Saturday. This is not exclusively a young person's movement, said Doherty, founder of the Northern Virginia chapter of Grandmothers for Peace. In Philadelphia, Betsy Payet has taken an avalanche of calls from protesters looking for seats on 20 charter buses. The people in this so-called democracy are being ignored, she said. And in Princeton, N.J., the Rev. Robert Moore has helped fill a five-bus caravan of homemakers, students and retirees. They realize that this is our last best chance to try to avert a war, said Moore, 52, pastor of two United Church of Christ congregations. The demonstration is part of a loose-knit local, national and global campaign to oppose the use of military force to disarm Iraq. The march and rally are part of an effort that will stage simultaneous rallies in San Francisco and Los Angeles as well as in other nations.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616730","date":"2003-03-14","texts":"WASHINGTON -- Prospects dimmed significantly for President Bush's proposed dividend-tax repeal, after four pivotal senators put in writing that they wouldn't support a tax-cut package larger than 350 billion. Unless the White House can change their minds or win over other allies, the elimination of dividend taxes for stockholders -- the centerpiece of the administration's 10-year, 725 billion economic plan -- is in jeopardy. Republican Sens. Olympia Snowe of Maine and George Voinovich of Ohio, and Democratic Sens. Max Baucus of Montana and John Breaux of Louisiana, sent a letter yesterday to Senate leaders committing to the 10-year 350 billion cap. The four centrists were considered crucial swing votes for Mr. Bush. The two Republican senators defected despite heavy lobbying by administration officials. Neither was inclined to abandon Mr. Bush on the eve of war, but concerns about the growing budget deficit proved to be stronger. The commitments by Sens. Breaux and Baucus are also significant because the two were the leading Democratic supporters of Mr. Bush's 2001 tax package. It's a breakthrough for those of us who are concerned about the debt, Mr. Baucus said. Senate Finance Committee Chairman Charles Grassley R., Iowa said that if he is limited to crafting a 350 billion package, Mr. Bush's dividends component -- which carries a 10-year price tag of nearly 400 billion -- likely would be dropped. They basically have limited my committee's leeway, he said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985007","date":"2003-03-15","texts":"ARIES Mar. 21-Apr. 19 Romantic affairs draw more than usual attention someone pops the question. Despite independent nature, you may be ready to settle down. Think it over carefully TAURUS Apr. 20-May 20 Element of deception exists it's not best day for real estate transactions, signing of leases. There are apt to be hidden clauses, plus plumbing, roofing problems. Bide time GEMINI May 21-June 20 Short trips, dealings with relatives, siblings indicated. You hear of a bargain for automobile, boat or other motorized equipment. Remember All that glitters is not gold CANCER June 21-July 22 Past investments pay dividends, more than originally expected. You might cash in a bond, collect on an insurance settlement. You have wherewithal for desired journey. LEO July 23-Aug. 22 You gain the spotlight a party is planned in your honor. You bask in the love, admiration of cohorts introduction to an attractive member of opposite sex leads to something big.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615288","date":"2003-03-18","texts":"Washington -- The much-feared Law of Unintended Consequences is alive and well in Washington, as evidenced by the fact that Congress is about to consider a White House economic plan that could compromise one of the nation's most effective community revitalization tools and put some of the most vulnerable members of our society at risk. Currently, the federal Historic Preservation Tax Credit HPTC offers a significant tax break for the rehabilitation of income-producing historic buildings. Another program, the Low-Income Housing Tax Credit LIHTC, provides a similar incentive for the creation of affordable housing. These two credits are often combined to leverage private-sector investment in projects that create affordable places to live. HPTC alone has sparked the renovation of more than 27,000 buildings and generated more than 18 billion of investment in the future of America's communities. Statistics show that in terms of job creation, increased household income and retail sales, 1 million spent on rehabilitation offers more benefits to a community than does the same amount invested in new construction -- and rehabilitation is exactly what the credit encourages. What's more, HPTC has spurred the creation or reclamation of almost 225,000 housing units, including more than 30,000 new units for low-and moderate-income residents. In terms of their impact, HPTC and LIHTC go far beyond the usual range of federal alphabet-soup laws. These credits help make historic rehab and low-income housing projects viable for profit-minded developers who might otherwise opt for less risky ventures. But they do something else as well -- something essential to the social and economic health of the nation They put a roof over people's heads and bring new life to residential and commercial areas from coast to coast. Despite the fact that they have helped stabilize neighborhoods, create businesses and jobs, and boost tax revenues in small towns and big cities alike, these incentives are in danger of being marginalized by the current White House proposal. By allowing shareholders to receive tax-free dividends only on corporate profits that are fully taxed, the Bush plan could force companies to make a choice Take the tax credit, or forgo it to offer tax-free dividends that will make shareholders happy. Many companies are likely to choose the latter option -- and even those that remain willing to invest in tax-credit projects are likely to invest less.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614719","date":"2003-03-19","texts":"Tokyo -- JAPAN'S NEW central bank chief, who takes office tomorrow, could immediately face his first test -- bracing his country's economy against the shock of a U.S.-led war in Iraq. But the crisis also could offer incoming Governor Toshihiko Fukui an unexpected opportunity to fight an enemy closer to home deflation. Mr. Fukui takes the helm of the central bank of the world's second-largest economy on the same day as the U.S. deadline for Iraqi President Saddam Hussein. War fears have helped to drive Japan's stocks to 20-year lows, threatening banks and other corporations with losses just weeks before the fiscal year ends March 31. Yesterday, in his first public questioning in the Japanese Parliament, Mr. Fukui signaled a readiness to take emergency liquidity-boosting measures similar to those of his predecessor, Masaru Hayami, following the Sept. 11, 2001, terrorist attacks. At that time, the Bank of Japan injected more than two trillion yen 16.88 billion into money markets in less than two hours, then pumped trillions more into money and currency markets during the next several weeks. The BOJ must get into war mode, Mr. Fukui told lawmakers. If war breaks out, we must prevent an excessive shock to the market. Yet opening the yen floodgates during a Middle East crisis could also offer the 67-year-old Mr. Fukui an opportunity to attack the deflationary pressures that have contributed to Japan's long-running economic funk, economists say. Mr. Fukui could continue a war-driven, expansionist monetary policy even after war subsides, effectively letting him back into a looser stance without seeming to break completely with past bank policy.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983365","date":"2003-03-19","texts":"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. 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. 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. 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. 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.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616445","date":"2003-03-20","texts":"NEW YORK -- Treasurys ended lower for a third straight day as investors braced for war in Iraq. Government securities are viewed as a safe haven at uncertain times, and Treasurys have been losing ground since Monday, when investors decided that war looked inevitable and began wagering that it would be a short one. But analysts said the market's outlook would depend largely on initial reports on the conlict. I think the downside for prices is somewhat limited from here in the short term, said Tony Crescenzi, chief bond-market strategist at Miller Tabak & Co. in New York. He cautioned that much depends on the developments after troops move into Iraq. Yields will move up only if there are no complications on the ground, he said. At 4 p.m., the benchmark 10-year note was down 1832 point, or 5.63 per 1,000 face value, at 99 432. Its yield rose to 3.983 from 3.914 Tuesday, as yields move inversely to prices.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983319","date":"2003-03-21","texts":"The government ran up a deficit of 193.9 billion in the first five months of the 2003 budget year, nearly three times the deficit for the same period a year earlier. The latest figures, released yesterday by the Treasury Department, highlighted the deteriorating federal fiscal situation. Record deficits are forecast this year and next. The total so far this fiscal year, from October through February, compares with 67.7 billion a year earlier. Revenues were down by 8.2 percent, to 704.8 billion, for the five months. That partly reflected lower tax revenue from the sagging economy. Individual income tax payments totaled 331.5 billion, an 11.4 percent drop from the previous year. Corporate tax payments plunged to nearly 33 billion, compared with 63 billion.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614229","date":"2003-03-26","texts":"The Senate dealt America's wartime economy a blow yesterday by voting to chop President Bush's tax-cut proposal by more than half, to a maximum of 350 billion over 10 years. The excuse, at least for the TV cameras, was that America can't pay for a war and cut taxes at the same time. We've heard some whoppers out of Washington, but this one deserves its place in history. Montana Democrat Max Baucus also made some history of his own by asserting that the U.S. has never cut taxes during wartime. It's not the American way, he actually said, forgetting that America's first war more or less started over the issue of taxes. He also forgot the Cold War, which was finally won in the 1980s with a combination of Ronald Reagan's tax cut to spur the economy and defense buildup to show the Soviets they couldn't win. It also ignores the experience of the 1960s, when JFK cut taxes and spurred a boom that helped finance war in Vietnam as well as the Great Society, at least until LBJ decided he had to pay for the war by passing his growth-inhibiting surtax. This week White House spokesman Ari Fleischer cited JFK on this point, from 1962 at the height of the Cold War, and the words are worth reprinting We shall, therefore, neither postpone our tax cut plans, nor cut into essential national security programs. This Administration is determined to protect America's security and survival. We are also determined to step up its economic growth. I think we must do both. Three GOP Senators -- Lincoln Chafee of Rhode Island, Olympia Snowe of Maine and George Voinovich of Ohio -- preferred the Baucus view of history Three GOP Senators -- Lincoln Chafee of Rhode Island, Olympia Snowe of Maine and George Voinovich of Ohio -- preferred the Baucus view of history and voted with the Democrats. They can now stand up and take a bow for making the elimination of the double taxation of dividends far more difficult to achieve, if achievable at all. And if the economy fails to emerge from war as sprightly as we all hope, we'll also know whom to blame.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984346","date":"2003-03-28","texts":"A second group of antiwar and anti-globalization protesters sued the District and its police department yesterday, repeating claims of earlier plaintiffs that the mass arrests in Pershing Park in September were unconstitutional, unnecessarily harsh and based on false charges. The suit, which seeks class-action status to represent the more than 400 people arrested Sept. 27 at the downtown park, says that the true purpose of the Pershing Park mass arrests appears to have been to disrupt and prevent political demonstrations, a violation of basic First Amendment rights. No one was breaking the law, no one trying to shut down the city, no one was trying to block the streets, no one was throwing bricks, said Arthur Spitzer, legal director for the local chapter of the American Civil Liberties Union, who is helping to represent the plaintiffs. Police can't arrest people because they think they're going to break the law at some point in the future, he said. The arrests, made during a weekend in which some demonstrators vowed to cripple the city with waves of protests, have come under close scrutiny in recent months.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982181","date":"2003-03-30","texts":"The financial news for Maryland keeps getting worse. The latest estimate of the budget deficit is 450 million. Next year, the figure is expected to exceed 1 billion. A study by the Maryland Budget and Tax Policy Institute found that the state has one of the leanest governments in the nation. Still, the deficit means that the legislature will have to cut the budget and find greater efficiencies in the delivery of services. It also will need to find additional revenue to meet the state's constitutional requirement to balance the budget. House Bill 87, which I am sponsoring, would help with additional revenue by doing what Maryland hasn't done in decades -- raise the state excise tax on alcoholic beverage products. The last time Maryland increased the tax on hard liquor, gasoline cost 23 cents a gallon, per capita annual income was 2,047 and Dwight D. Eisenhower was in his first term as president. Maryland's population was half what it is now. The year was 1955. The last time Maryland increased its tax on beer and wine, gas cost 36 cents, per capita income was 5,291 and President Richard Nixon was in his first term. Four million people lived in Maryland. The year was 1972.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616576","date":"2003-04-01","texts":"NEW YORK -- Defensive puts traded actively across many sectors as investors worried about the economic consequences of a prolonged war and the impact on corporate earnings. Stocks slipped as investors found few reasons to buy. The Chicago Board Options Exchange market volatility index, or VIX, rose 1.19 to 33.37. This fear gauge had eased when the war in Iraq began, although the decline slowed last week as investors confronted the prospects of a longer-than-anticipated war. Puts traded briskly in eBay Inc. The online retailer had risen to a 52-week high of 90.44 last week, prompting some market watchers to question whether the stock is overvalued. The jitters were exacerbated when the company said its PayPal operation is under investigation by the Justice Department for possible violation of the Patriot Act. The stock fell 3.98 to 85.31 in 4 p.m. Nasdaq Stock Market trading. Its April 85 puts traded 11,319 contracts, compared with open interest of 10,197 contracts, and gained 1.40 to 2.75 at the CBOE. Altria Group's options were among the most heavily traded, with some nervous investors buying puts and selling calls after its Philip Morris USA division said it can't afford a 12 billion court-ordered bond to appeal a tobacco judgment in Illinois.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981663","date":"2003-04-02","texts":"The Securities and Exchange Commission approved new rules yesterday that will increase the power and responsibility of corporate audit committees, in an effort to make it harder for managements to cook their books. The commissioners voted unanimously to require that directors on audit committees -- and not management -- hire and fire outside auditors, and that no audit committee members be allowed to have consulting relationships or other financial ties with the corporation. As accounting scandals have exploded over the past year, corporate governance experts have said that aggressive, independent audit committees, composed of financial and accounting experts who can deal directly with accountants, are necessary if directors are to spot red flags in financial reports. The audit committee is the bedrock on which corporate governance is built, said SEC Chairman William H. Donaldson. This was his first public meeting since taking office earlier this year. My hope is that this rule will help audit committee members to become more engaged, more inquisitive and better stewards of shareholders' property, said SEC commissioner Paul S. Atkins.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616158","date":"2003-04-03","texts":"NEW YORK -- As the U.S.-led combat against Iraq continues, 401k participants seem to be letting the war news slightly sway their transfers in and out of equity investments. Granted, the moves represent moderate levels of activity given the total 75 billion in 401k assets tracked, according to Hewitt Associates, a global outsourcing and consulting firm in Lincolnshire, Ill. Nevertheless, they are significant because in general, participants don't tend to trade actively in their retirement plans. In fact, according to 2001 Hewitt data, only one in five participants makes any change to 401k plans in a given year. Yet, on March 21, as news came out that U.S. troops were moving toward Baghdad, 0.16, or 120 million, of total 401k balance was transferred. This is roughly double the average transfer activity of 0.08 a day. Most of this money flowed into equities, a move that followed the Dow Jones Industrial Average's rise that day of about 2.8. Again, on March 24, as word of perceived minor setbacks to U.S. troops leaked out, 0.15, or 112.5 million, of total 401k balances was transferred, much of that into fixed-income investments, according to Hewitt. The Dow average closed that day down 3.6.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616939","date":"2003-04-03","texts":"Today's Market Forecast Beware the Laggards Investors today will get a look at weekly jobless claims, and by all accounts the number will be ugly. Economists surveyed by Dow Jones and CNBC anticipate a rise of 8,000 claims to 410,000, keeping the four-week moving average well above the 400,000 mark. The disappointing jobs number continues a string of dismal data that stretches back to February, prompting intensifying discussion about whether the economy is going into another prolonged funk. But measuring the economy's strength during a time of war, especially one that could end sooner rather than later, is tricky business. The Fed, in its most recent pronouncement, essentially said it couldn't give a read on things until war clouds clear. Economists are busy sorting the temporary effects of war from more durable indicators to try to determine what kind of growth to expect this year.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615440","date":"2003-04-10","texts":"Washington -- PRESIDENT BUSH NOW sits at the very political crossroads his father occupied more than a decade ago. Military victory in Iraq seems assured, but the domestic U.S. economy is deteriorating. How Mr. Bush handles it between now and November 2004 is likely to determine whether he wins re-election or is voted out after one term, as his father was. Just hours after watching Iraqis clamber on a fallen statue of Saddam Hussein, Mr. Bush brainstormed yesterday with Chief of Staff Andrew Card and legislative liaison David Hobbs to figure out a way to salvage his 725 billion tax-cut package, under siege on Capitol Hill. He's in the catbird seat, says Princeton University's Fred Greenstein, a presidential historian. But it ain't over till it's over. The president and his Republican Party clearly have reason to celebrate. The administration's war plan appears to have succeeded without triggering bloody and protracted urban warfare, a spike in oil prices or use of weapons of mass destruction. If history is any guide, Mr. Bush will see a boost in public-opinion polls that will lengthen his advantage over prospective 2004 opponents. Mr. Bush still faces big challenges in Iraq. They include the prospect of continued sporadic fighting and casualties, and the complicated task of overseeing humanitarian relief and reconstruction in Iraq. The White House's insistence on taking the lead in rebuilding Iraq could undermine the very government they help create and further alienate European allies, whose financial assistance will be critical to a process some estimate could cost an annual 25 billion for many years to come. The administration's approach already has irritated some fellow Republicans in Congress -- and provided a target for the Democrats running to oust him from the White House next year.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982354","date":"2003-04-11","texts":"Money manager T. Rowe Price Group Inc. warned investors yesterday to expect a sharp drop in its first-quarter earnings because the stock market's decline sent the value of the firm's mutual funds and the fees it earns on those holdings sharply lower. George A. Roche, T. Rowe Price's chairman and president, said first-quarter earnings per share would be about 30 percent lower than the 41 cents per share the company earned for the same period last year. Investment advisory fees dropped 10 percent from the first quarter of last year, Roche said, addressing shareholders at the company's annual meeting in Baltimore. The falling stock market is having a direct effect on the bottom lines of mutual fund companies because funds usually charge customers based on a percentage of the dollar value of their investments. At Price, the nation's eighth-largest mutual fund family, those fees made up about three-quarters of total revenue last year. It had 140 billion in total assets under management at the end of the quarter, down 12.4 percent from a year ago. Management can't do all that much right now, said Kenneth Worthington, an analyst for CIBC World Markets. This comes down to market conditions improving and the stock market going up and people putting more money in mutual funds, he said.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842615128","date":"2003-04-16","texts":"THE SECURITIES AND Exchange Commission named William J. McDonough to head the new accounting oversight board, installing a veteran regulator with a reputation for integrity to shape up the battered accounting industry. Mr. McDonough, currently president of the Federal Reserve Bank of New York, said he plans to step down from that post as soon as he passes a background check and is formally appointed by the SEC. In choosing Mr. McDonough, the SEC has picked a Democrat who is known as a tough negotiator willing to push people to get them to come to consensus on issues. In 1998, Mr. McDonough helped to orchestrate the controversial Wall Street bailout of Long-Term Capital Management, a large hedge fund whose collapse threatened global financial stability. He has also been an outspoken critic of lavish executive pay packages. Mr. McDonough will be paid handsomely in his new post, earning an annual salary of 556,000. That may be modest compared with the pay packages of many top accounting executives, but it's one of Washington's biggest salaries Mr. McDonough's salary at the New York Fed was 313,300 in 2002. In exchange, Mr. McDonough must give up all ties to the public and private sectors, including his nomination to sit on the board of the New York Stock Exchange. Bill appreciates deeply the need to restore public confidence in our capital markets, and he's willing to take tough positions, said Peter Peterson, chairman of the Federal Reserve Bank of New York.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984048","date":"2003-04-17","texts":"Three years of plunging stock prices and rising benefit liabilities have thrown many of the largest pension plans in corporate America deeply into deficit -- a situation that will siphon away billions of dollars in cash and reported earnings in the next few years unless the market rebounds sharply. That's the picture painted by a survey released yesterday, covering 100 of the largest corporate pension plans, by Milliman USA, a benefits consulting firm. It is based on figures included in companies' annual reports. The plans, run by such giants of industry as General Motors Corp., International Business Machines Corp., Boeing Co. and AT&T Corp., have been hit by a perfect storm of declining asset values and declining interest rates, said John W. Ehrhardt, an actuary with Milliman. Lower interest rates caused liabilities to rise because of the way their value is calculated, and falling stock prices reduced the assets available to pay them. The report shows that collectively these companies' pension plans went from a funding surplus of 183 billion at the end of 2000 to a deficit of 157 billion at the end of 2002. Together their assets dropped from 124.5 percent of their liabilities to 82.4 percent. The largest deficit it found, 25.4 billion, was at General Motors, which last year contributed 5.1 billion to shore up its plan. Others with large deficits included Ford Motor Co. with 15.6 billion, Exxon Mobil Corp. with 11.3 billion, IBM with 6.4 billion and Delta Air Lines with 4.9 billion.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982365","date":"2003-04-19","texts":"The modern sports labor negotiation starts with an assumption by players that commissioners are liars who cook the books and hide the money, and an assumption by commissioners that the players are greedy layabouts who want to make 20 million per year to sit out half the season with spasms. Into this Samuel Gompers nightmare comes the WNBA, a profitless but feel-good league for which there is no previous example, and the future of which remains in question. The WNBA has a chance to do things differently, to correct the excesses and inflations that plague its brother league -- or it has a chance to disappear entirely. Before yesterday, it was locked in labor strife because the players don't get that they aren't the NBA. Neither does the guy they chose to negotiate for them, NBA labor rep Billy Hunter. With some patience and sound business sense, maybe one day the WNBA players can argue with the league over some real money, but that day hasn't come yet. It's a fact, and a lousy one, that WNBA veteran salaries are around 40,000, while their NBA counterparts are making 4 million and up. It's another lousy fact -- but a fact nonetheless -- that the WNBA remains a money loser that is subsidized by the NBA, and owners increasingly begrudge it. This isn't a Title IX issue. Pro sports aren't about gender equity, they're about the marketplace, and the stone cold reality is that the WNBA relies on the fervent support of Commissioner David Stern in backing the league, against the wishes of a good many NBA owners who view it as a drain. So what is fair compensation for WNBA players when the league only exists because Stern likes it and believes in it This is the core issue that could sink the league in the long term. And it will rear its head again. The deadline drama was just window dressing compared with the central problem that without Stern to continually persuade and lean on NBA owners, the league wouldn't exist.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617169","date":"2003-04-24","texts":"A number of large companies are setting aside millions of dollars to protect pensions of top executives, even as they forgo contributions to financially strained pension plans for other workers. The issue of inequity in pension plans is heating up in the airline industry, amid recent disclosures that AMR Corp., Delta Air Lines and UAL Corp. had poured millions into special pension trusts for executives. That angered workers who have seen their own pension plans ravaged by weak stock markets and low interest rates. At AMR's American Airlines, employee outrage over the issue is threatening delicate labor talks that are crucial to keeping the company from filing for bankruptcy protection. Some other companies that also have established such pension trusts for executives include Motorola Inc., Owens-Illinois Inc., TXU Corp., Altria Group Inc. formerly Philip Morris, and Abbott Laboratories, according to regulatory filings. Companies that contribute to pensions for executives -- while choosing not to fund regular pensions -- aren't breaking any laws. Federal rules require companies to make minimum contributions if their pension plans become excessively underfunded. That occurs when liabilities exceed assets by too great a margin as defined by the Internal Revenue Service. But companies can coast for years with pensions that have just two-thirds or three-quarters of the money they would need to pay their future obligations. The practice illustrates the growing gap in retirement security between most employees and those at the very top. As senior executives rely more on their special pensions, they have less incentive to ensure that the regular pension plan offers adequate benefits -- or is adequately funded. Executives' special pensions also are increasingly being sheltered from their companies' financial troubles, including bankruptcy.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983391","date":"2003-04-25","texts":"Orders for durable goods unexpectedly jumped last month and first- time claims for unemployment benefits rose last week to the highest in a year, adding to evidence that a jobless economic recovery is under way. Orders for items made to last at least three years increased 2 percent, to 173.6 billion, after dropping 1.5 percent in February, the Commerce Department said. The Labor Department reported states received 455,000 applications for jobless benefits, up from 447,000 in the prior week. The Paris Club of creditor nations agreed to conduct an in-depth study of Iraqi debts and said they stood ready to engage on Iraq's debt. Baghdad owes the club's 19 members, including the United States, Japan, Germany and Russia, an estimated 26 billion. But that includes only principal, not interest that has gone unpaid on most of the debt since the 1970s. President Bush plans to nominate Harvey Rosen, a Princeton University economics professor and a deputy assistant Treasury secretary in the first Bush administration, to serve on his Council of Economic Advisers. If confirmed by the Senate, Rosen will replace Mark McClellan, who was named in October to be commissioner of the Food and Drug Administration. Johnson & Johnson won FDA approval to sell its drug-coated stent called Cypher, a device expected to revolutionize the treatment of clogged arteries in heart patients by preventing them from later re- clogging with scar tissue. The Securities and Exchange Commission unanimouslyvoted to prohibit executives, creditors, customers and others from trying to misrepresent a company's finances by manipulating or coercing the auditor. The new rule gives the SEC greater latitude to prosecute cases in which an attempt to derail an audit wasn't successful.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830984342","date":"2003-04-28","texts":"As might be expected, the recent list of 10 reasons to avoid a government career drew more comments from Federal Diary readers than did the 10 reasons to take up the cause of public service. Far and away, readers pointed to outsourcing as a topic that deserved special mention as a downside to federal employment. I have just been informed that after 20 years of federal service, my job will be contracted out, an Air Force civil service employee wrote. If it can happen to me, it can happen to anyone A federal employee in the technology field said Under the outsourcing policies of our department, our positions are to be competed every three to five years. Our work is not considered to be inherently governmental. So, for anyone presently thinking about working for Uncle Sam, you better ask the question, Is this position inherently governmental If not, be prepared to find another job on a moment's notice. Employees at the Internal Revenue Service and the Food and Drug Administration expressed concerns that the procedures used to determine which jobs could be contracted out did not seem fair to federal employees. Often, they said, agencies don't seem to tally up all the costs involved in switching to contractors. Where's the oversight one employee asked. For too long, one Defense Department employee said, the government has engaged in downsizing and outsourcing federal jobs. It creates an atmosphere of job insecurity, he said.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614397","date":"2003-04-30","texts":"DON'T lose interest. Worried that the bond market is vulnerable after the heady gains of the past few years You might be tempted to withdraw to the safety of a money-market fund. The problem is, that means giving up the 4 or 5 interest rate available on bonds and substituting the wretched 0.7 yield now offered by money funds. Want to do better Here are two ways to reduce your bond portfolio's risk, while still clocking decent gains. -- Sounding the Retreat If economic growth accelerates, inflation is likely to perk up, driving interest rates higher. That would be bad news for bond prices, which move in the opposite direction from interest rates. Indeed, 10-year Treasury-note prices have edged lower this year as stocks have climbed modestly. Even without a big economic rebound, inflation and interest rates could climb. After all, the tumbling dollar is likely to shove up the price of imported goods. Inflation could also be re-ignited by ballooning government spending, as Washington aims to cut taxes while also grappling with the cost of the Iraq war and its aftermath.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614830","date":"2003-04-30","texts":"WASHINGTON -- Some of the most popular provisions in President Bush's tax-cut package could get whittled down as Senate Republicans try to make room for the White House's top priority repealing the tax that individuals pay on corporate dividends. One benefit in Mr. Bush's proposal would boost the child tax credit to 1,000 from the current 600. The jump is expensive -- nearly 90 billion through 2013, official estimates show. By limiting the increase to one year, as some Senate tax writers are now considering, the price tag would shrivel to about 15 billion. Another provision Republicans may target would triple the expensing limit for small businesses. The annual cap today is 25,000 under Mr. Bush's proposal, it would immediately rise to 75,000, carrying an estimated cost of about 29 billion over the next 10 years. Republicans are eyeing cheaper options, such as only doubling the cap and letting it to expire after a few years. The changes are necessary if the Senate is to stay within its budget limit of a 350 billion, 10-year tax-cut package. If tax writers can find ways to offset extra costs, the final figure could grow to 400 billion. Despite the 350 billion lid -- set by Republican moderates who worry about the ballooning federal deficit -- Mr. Bush wants Congress to approve the dividend-tax repeal that is the centerpiece of his economic-growth plan. That package, unveiled in January, has a 10-year price tag of 725 billion, more than half for dividend-tax relief.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613611","date":"2003-05-01","texts":"WASHINGTON -- The Bush administration has drafted sweeping plans to remake Iraq's economy in the U.S. image. Hoping to establish a free-market economy in Iraq following the fall of Saddam Hussein, the U.S. is calling for the privatization of state-owned industries such as parts of the oil sector, forming a stock market complete with electronic trading and fundamental tax reform. Execution of the plan -- which is expected to be complicated and possibly contentious -- will fall largely to private American contractors working alongside a smaller team of U.S. officials. The initial plans are laid out in a confidential 100-page U.S. contracting document titled Moving The Iraqi Economy From Recovery to Sustainable Growth. The consulting work could be valued at as much as 70 million for the first year. The U.S. Agency for International Development plans to award part of the work to BearingPoint Inc., a Virginia-based consulting firm known previously as KPMG Consulting, an AID official said. BearingPoint, which received a similar 40 million job to do economic work in Afghanistan, was approached as a sole-source bidder. AID plans to open the larger share of the work, including privatization and small-enterprise development, to a limited pool of competitors likely to include Booz Allen Hamilton Inc., Deloitte Touche Tohmatsu and International Business Machines Corp.'s recently acquired PricewaterhouseCoopers' consulting unit. Unlike some of the construction companies that have won contracts, BearingPoint has made few political contributions to either party in the past two years. AID has been criticized by some in Congress for the secretive way it has awarded other Iraq reconstruction contracts over the past two months. But AID officials said these contracts will be awarded under the same expedited rules to launch work as quickly as possible.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616289","date":"2003-05-01","texts":"THE DOW JONES Industrial Average slumped below the 8500 level yet again, but it and other major indexes still finished April with their biggest monthly gains this year. In heavy end-of-month trading, the Dow industrials slipped 22.90 points, or 0.27, to 8480.09, up 6.1 for April and up 1.7 since the year began. It was their biggest monthly gain since October. Stocks had bounced up and down throughout the day following a soft reading on manufacturing activity in the Chicago area and an inconclusive comment on the economy from Federal Reserve Chairman Alan Greenspan. Speculation that the Fed might cut target interest rates as soon as next week to stimulate the economy helped push Treasury bond prices up sharply. Stocks appeared poised for a small gain until a surge of month-end profit-taking knocked them down just before regular trading ended. You would expect to see some people step in and make some sales. A lot of these stocks are up 25, 35, 40 since the beginning of March, said Robert Harrington, head of listed trading at brokerage firm UBS Warburg.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982608","date":"2003-05-01","texts":"With federal budget deficits soaring, the Treasury Department yesterday announced a major expansion of its sales of securities to finance the shortfall. The budget outlook has been deteriorating so rapidly that Treasury plans to borrow 79 billion more money in the April-June period, a quarter in which a flood of tax receipts arrives. That figure is a swing of more than 100 billion in Treasury borrowing plans from just three months ago, when officials expected to pay down 25 billion of debt. Treasury also said it expects to borrow another 76 billion in the third quarter. Neither quarterly figure includes the money that would have to be raised if President Bush's jobs and growth package of tax cuts is passed, even in a reduced form. With the budget already deeply in the red, any reduction in taxes will have to be financed with borrowed money. Analysts' predictions of the deficit in fiscal 2003, which ends Sept. 30, range up to 425 billion, including the cost of additional military spending in Iraq and a large income tax cut. The largest deficit in history was 290 billion in fiscal 1992, which was equal to 4.7 percent of the gross domestic product. With GDP likely to top 10.7 trillion this year, the 1992 percentage won't be topped -- nor would be the record percentages of the mid-1980s, which reached 6 percent of GDP. Next week Treasury officials will sell 58 billion worth of three- , five-, and 10-year notes, the most ever in a quarterly refunding. In the process, they will be resurrecting the three-year note, which was dropped in 1998 when the government began running annual budget surpluses and Treasury began paying down the national debt.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983198","date":"2003-05-04","texts":"Michael Mierzewski, a Washington lawyer, noticed last spring that the room rate at the Big Sur resort he and his wife, Kathy, were visiting was down from previous years. He couldn't help noticing the freebies. The Ventana Inn & Spa currently 410 to 1,077 per night for a double was offering a daily free spa session. His choice, a massage. I suspect once the economy picks up and people are less afraid to travel, that we'll go back to more normal pricing of hotel rooms, and the free amenities will become less available than they are now, Mierzewski, 51, said recently. But some hotels may be hoping for guests who don't notice everything, such as amenities that have disappeared. At some Ritz- Carlton hotels, the bath butler -- who draws a guest's bath and sprinkles aromatic oils or a few flower petals into it -- is gone from the menu of services. For the luxury chain, it's not a must- have. In order to save people's jobs in the last few months, we had to temporarily discontinue things in a few hotels, company spokeswoman Vivian A. Deuschl said. And it is a temporary thing. It can be no surprise to anyone who pays attention to the news that travel and tourism have yet to recover from a two-year triple whammy of recession, terrorism and severe acute respiratory syndrome. Airlines are going belly-up, and hotels and resorts the world over are complaining about low occupancy rates. Most hotels or resorts with more than 100 rooms are aiming for the meeting and convention business, industry officials say, but the business traveler seems to have fallen off a cliff back in 1998 and has yet to reappear on the scene. The uncertainty of the world tourism market has sent luxury hoteliers off in various directions looking for the right formula that will let them attract customers but also stay healthy financially. Some are offering package deals they once never contemplated. Others are concentrating on the important amenities while cutting back the nonessential. When resorts feel squeezed, says John S. Fareed, director of the consulting firm Resort Marketing Partners, fresh-cut flowers, free newspapers, shoeshine mitts and brand-name shampoos disappear. Even towels in the room may be less plentiful.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615154","date":"2003-05-05","texts":"Companies continued to shed workers in April, and the latest data gave little indication that a significant job-market rebound is imminent. In its latest monthly employment report, the Labor Department said U.S. nonagricultural companies eliminated 48,000 payroll jobs last month, following a combined decline of 477,000 jobs in February and March. Although the decline wasn't as steep as some had expected, other statistics in the report clearly suggested that the labor market is weaker than many economists anticipated. For example, job losses in the manufacturing sector were enormous jobs fell 95,000 in April. The unemployment rate, meanwhile, rose to 6 from 5.8. Most troublesome, the average workweek fell 0.3 hour, an indication that companies don't have enough work to occupy even those employees that remain after the latest cuts. Many economists say hiring will pick up only after there is an uptick in hours worked, since companies generally try to make their existing employees work longer before they hire additional people. In Washington, President Bush used the jump in the unemployment rate to spur members of Congress to pass a robust tax-cut package to stimulate the economy. Speaking to defense workers in California, the president took the issue of the rising jobless rate, a potential political liability, and turned it to his advantage. The rising unemployment rate, he said, should serve as a clear signal to the United States Congress we need a bold economic recovery package so people can find work. Since the jobs report shows no sign of the postwar pickup that Federal Reserve Chairman Alan Greenspan has been predicting, it will probably make some already-pessimistic Fed officials even more convinced an immediate cut in interest rates is needed. However, Mr. Greenspan told Congress last week that only limited information is available on the economy's performance since war uncertainty began to lift, though he already knew the job market had weakened further in April. That suggests he will counsel patience at tomorrow's central-banking meeting, rather than advocate cutting short-term rates from their current, 42-year low of 1.25.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616563","date":"2003-05-06","texts":"The service sector expanded in April after contracting in March, a sign that some companies boosted activity after the end of the war in Iraq. The Institute for Supply Management said its nonmanufacturing index of purchasing managers rose to 50.7 in April from 47.9 in March. Index readings above 50 indicate expansion of activity, while readings below 50 show contraction. The group recorded increases in new orders for services, and noted that falling oil prices were lowering price pressures. The service-sector ISM report contrasts with a slew of recent economic data that have been on the weak side. Last Thursday, the ISM reported broad-based weakness in its manufacturing index for April, in a release dominated by more job losses and a decline in new orders for manufactured goods. Meanwhile, the government said Friday that U.S. companies shed 48,000 payroll positions in April and the unemployment rate ticked up to 6 from 5.8 the month before. The Federal Reserve has argued this year's weak economic activity can be traced to anxiety about the war in Iraq. Its officials expect the end of the conflict to bring better economic performance in the months ahead as the economy's fundamental strength begins to show through.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614416","date":"2003-05-07","texts":"Today's Market Forecast The Ernie Banks Economy Soon it will become harder and harder to believe in the coming of a strong second half. That's the fabled time when all the outlooks are strong, the CEOs are good looking and the quarterly earnings are above average. It's when recoveries happen, not just in technology or travel or retail, but also for the whole economy. We are in danger of turning into a nation of ever-hopeful Cubs fans, observes Paul Kasriel, an economist at Northern Trust. Course, the Cubs always fold in the second half, the Chicago economist points out.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617290","date":"2003-05-07","texts":"WASHINGTON -- The Federal Reserve left interest rates unchanged. But in a profound shift from half a century of preoccupation with fighting inflation, the central bank signaled that it may cut interest rates later to ward off even the possibility of deflation. Over the next few quarters, the Fed said in a statement, the probability of an unwelcome substantial fall in inflation, though minor, exceeds that of a pickup in inflation from its already low level. The words suggest that even if the Fed doesn't cut interest rates soon, it will keep them low for a long time. That realization helped send bond yields sharply lower and drove the dollar to a multiyear low against the euro. Stocks initially sold off but ended the day higher. Futures markets -- which can provide an indication of what investors believe will occur weeks, or even months, from now -- put the odds of a quarter-percentage-point cut by August at about 75. The Fed statement, termed masterful by Goldman Sachs economists, cheered the bond market by suggesting that the central bank is a long way from raising rates, without spooking the stock market. The central bank kept its target for the federal-funds rate, charged on overnight loans between banks, at 1.25, as widely expected.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616661","date":"2003-05-08","texts":"Would you pay 15,000 for a car Most of us would consider the question odd It depends on which car. In the current tax cut debate, 10-year revenue costs of 350 billion and 550 billion are being debated, but the question should be for what President Bush's tax cut was designed to provide short-term growth insurance and enhance long-term growth. Does it deliver If you listen to the political rhetoric, the most controversial of the president's tax proposals is the elimination of the double tax on corporate income. This would not be the case if scientific analysis were introduced into the debate. So far, neither the administration nor the Joint Committee on Taxation has provided an element-by-element evaluation of the different proposals. Name-calling tends to break out when there is no substance to discuss. When the Council of Economic Advisers considered the economic benefits of the president's entire proposal, the agency emphasized demand-side effects on consumer spending and investment in the near term. Using a conventional forecasting model, effects of the tax plan on job prospects, household disposable income, and incentives to invest were projected to raise real GDP by about 670 billion over the next five years. This increase in output would raise revenues by 133 billion over that period. But even that analysis omits the long-run supply-side benefits. The dividend tax reduction has the strongest economic merits. Ending the double tax raises long-term income by increasing capital formation and improving the use of existing capital. The first thing to track is the direct effect on investment. The dividend tax cut significantly reduces the cost of financing new investments. If businesses invest more, economic growth increases. The connection between the cost of finance and business investment is one of the least contentious areas of economic science, and cautious applications of the results from studies of tax policy and investment suggest that eliminating dividend taxation should add about a quarter of a percentage point to real GDP every year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617188","date":"2003-05-09","texts":"General Electric Co., which has sold appliances and light bulbs to consumers since its earliest days, is aggressively moving into a risky consumer arena unsecured personal loans. Starting this month, GE plans to send about one million letters during the next year offering unsecured personal loans of as much as 25,000. Marketed as the GE FlexPlus Account, the loans are similar to credit lines and carry interest rates ranging from 7.99 to 18.99. Consumers can either pay them off in a specified period or draw down on them again after repaying a portion of the principal. The new venture is part of GE's strategy to extend its U.S. consumer-finance business beyond primarily private-label credit cards -- in which GE is a third-party provider for retailers like Gap Inc., Retail Brand Alliance Inc. unit Brooks Brothers and J.C. Penney Co. -- to direct interaction with customers. The Fairfield, Conn., company, which has seen profits fall amid the current economic climate, is seeking new growth engines as some businesses, including its power-generation unit, see slower growth. GE has offered such loans in Europe and Asia for nearly a decade. But in the U.S., GE will enter a fiercely competitive business in a market already saturated with loan and credit-card offers, including some that have 0 interest rates for the first six to 12 months. GE's lowest rate of 7.99 is reserved for its best customers. Moreover, GE is entering the business at a tricky time. Consumer defaults have been increasing along with rising unemployment, calling into question the quality of consumer credit and how much demand there is among debt-laden consumers for even more types of credit. Personal bankruptcy filings have jumped as well.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614087","date":"2003-05-15","texts":"FEDERAL REGULATORS relax TV-station ownership rules. Analysts predict a feeding frenzy of deals as broadcasters race to take advantage of liberalized ownership rules. Paxson Communications chief Bud Paxson says he feels like the prettiest girl at the dance. Sound like headlines from this week No. That was the story in August 1999, the last time the Federal Communications Commission changed the television-ownership rules. With the FCC preparing to further deregulate the industry, the market seems to be following the same script. In an interview yesterday, Mr. Paxson even repeated his prettiest girl description of his company. Some investors in small broadcasting companies are pulling out their rabbit-ear antennae, hoping to hear signals from the big networks. Indeed, stocks of independent station groups like Sinclair Broadcasting Group, Hearst-Argyle Television and Granite Broadcasting have made gains in recent weeks in anticipation of the changes. Buyers might be getting ahead of themselves, however. The frenzy didn't materialize in 1999, and there is no guarantee it will happen this time around, either. Hearst-Argyle, for instance, was expected to be a buyer after the 1999 changes. It ended up adding just two stations, including one it already managed. Its current station count is 27 including stations it manages but doesn't own. The general consensus is that the 1999 rule changes didn't go far enough to prompt more sweeping consolidation, and while the expected changes this time will create some activity, just how much won't be clear until the details of the new rules are clarified in several weeks.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984547","date":"2003-05-15","texts":"Consumer spending dipped in April as shoppers were more concerned about their jobs than the easing of tensions with Iraq, increasing prospects that economic growth will be tepid at best in the second half of the year. The Commerce Department reported yesterday that April retail sales fell 0.1 percent from March, when pent-up demand created by February's snow storms helped boost sales 2.3 percent. Consumers are tapped out, said Sung Won Sohn, chief economic officer at Wells Fargo & Co. They've done a marvelous job of supporting the economy, but they are basically done . . . We need something else to pull up the slack. A large portion of the overall sales decline came from consumers spending less on gasoline. Gas purchases fell 5.9 percent from late March to late April as gas prices slid by about a dime on average. But shoppers also held back on their purchases of clothing, furniture and garden supplies because of uncertainty about holding on to their jobs or finding new ones, if necessary. The jobless rate is 6 percent today, compared with slightly over 4 percent a year ago. Consumers' hesitancy was a big factor preventing the postwar bounce that economists had expected.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614098","date":"2003-05-16","texts":"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. 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. 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. 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. 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.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984676","date":"2003-05-21","texts":"A coalition of labor and civil rights leaders gathered at Freedom Plaza yesterday to denounce the Bush administration's efforts to turn more federal work over to the private sector. Between chants of No privatization by members of federal unions, speakers contended that the administration's competitive sourcing initiative would take federal jobs away from minorities, women and veterans and weaken a civil service that protects the integrity of federal programs for all Americans. We perform our jobs in the public interest, not in the interest of profits or to promote any political agenda, Leora Rosen, a social science analyst at the Justice Department, told the crowd. President Bush has said agencies should compete with companies for as many as 850,000 government jobs that are considered commercial in nature. The administration says it does not care who wins the right to perform the jobs because the competition will drive agencies to become more efficient and lower costs. Directives from the Office of Management and Budget for agencies to put up half of their commercial jobs for bid over the next few years have roiled the federal workforce and created morale problems in some agencies. OMB hopes to issue streamlined rules for job competitions in the next few weeks, but the new procedures seem unlikely to ease employee concerns.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615091","date":"2003-05-22","texts":"Washington -- PRESIDENT BUSH IS POISED for a tax-cut victory on Capitol Hill, but he is losing on the issue with the American people. A Wall Street JournalNBC News poll shows the high-profile, postwar debate on tax policy in recent weeks has moved public opinion -- away from the White House position. Not only have Americans drifted away from Mr. Bush's cherished repeal of taxes on stock dividends, but majorities also assign tax cuts a lower priority than other measures to spur the economy and spending on health-care benefits. The tax cuts are clearly not viewed as the answer to a weak economy, says Republican pollster Robert Teeter, who conducts the JournalNBC poll with his Democratic counterpart Peter Hart. The president has banked everything on selling the tax cut, but he hasn't sold it, Mr. Hart adds. Mr. Bush continues to receive strong personal ratings, though his standing has receded after jumping after the U.S. victory over Saddam Hussein's regime in Iraq. Some 62 of Americans approve of his performance as president, while 31 disapprove, matching Mr. Bush's standing from just before the war. Roughly two-thirds of Americans credit the president with strong leadership qualities, fueling his robust leads over major Democratic candidates in potential 2004 election matchups. That personal strength also is spilling over to benefit Mr. Bush's Republican Party. By 49 to 30, Americans express positive feelings about the Republican Party, a stronger showing that the Democrats' 36 to 33. The survey of 1,000 adults, conducted May 17 to 19, has a margin of error of plus or minus 3.2 percentage points.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984452","date":"2003-05-22","texts":"Virginia's public colleges and universities and their students have been financially whipsawed over the past 15 years by an erratic economy, according to a new report from state officials that calls for better long-range planning for public higher education. The report, by the State Council of Higher Education for Virginia, notes that although education is more affordable today than it was a decade ago, sharp declines in funding during two recessions and subsequent tuition increases have made it difficult for families to plan for college expenses. And although Virginia's institutions have maintained their prominence in many national rankings, their per-pupil budgets and faculty salaries have slipped well below the average among their national peers, according to the report. Higher education support is on a slippery slope, Carl N. Kelly, the state council chairman, said in a statement released yesterday. What took years to build we stand to lose, and it will take a long time to rebuild a nationally reputable system of higher education. The report was released at a time when many of the governing boards for the state's public colleges are moving to raise tuition and fees substantially for the 2003-04 academic year -- the third round of increases since state officials ended a five-year tuition freeze last spring.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982122","date":"2003-05-24","texts":"It was almost, but not quite enough, this week on Capitol Hill. Millions of moderate-income and first-time home buyers almost received a major new deduction from the giant federal tax-cut package under consideration by Congress. But in the end, a Senate-approved new tax rule allowing more than 10 million home-mortgage borrowers to take deductions on their monthly mortgage insurance premiums did not make it into the final compromise package. Supporters, including civil rights, union, housing and mortgage industry groups, say they'll try to get the plan included in any follow-up federal tax legislation that Congress takes up later in the year. Here's what happened The Senate's original tax-reduction bill included a major reversal of decades-long IRS policies on mortgage- related write-offs. It would have allowed home buyers and owners who pay Federal Housing Administration mortgage premiums, private mortgage insurance premiums, or other forms of mortgage insurance to begin taking write- offs on those payments immediately.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830981827","date":"2003-05-25","texts":"If there were such a thing as a hospice for software, WordPerfect would have checked in a long time ago. Its fall from the summit to the cellar of the productivity-software market has few parallels in the business. But the program -- owned by Corel since 1996 and now sold mostly as part of an office suite -- has soldiered on. In the past two years it's even gained ground, thanks to aggressive bundling deals that put it on the hard drives of computers from Dell, Gateway, Hewlett-Packard and Sony. The new WordPerfect Office 11, however, isn't about to win any more converts. It offers few major changes and fewer still that are relevant to home users while leaving long-standing flaws. If you get a copy free on your next computer, you won't be terribly disappointed, but I can't recommend buying it over the competition. Let's start with WordPerfect itself, the heart of the suite and the component that home users probably spend the most time with. As a tool for everyday writing, it's perfectly usable, but it's also entirely unremarkable. Version 11's most hyped new feature, the ability to save a document in XML, or extensible markup language, is meaningless for home users. Its second most hyped addition, a Classic Mode that mimics the simple text-based interface of DOS versions of WordPerfect, mainly illustrates how grotesquely complicated word processors have become. It may also cause flashbacks to long-ago temp jobs and internships use with care. WordPerfect 11 continues to lack conveniences offered by competing programs, such as the ability to select separate blocks of text. Its word-count function is hidden in the File menu, where most people won't think to look for it. If you want to add photos or images to a document, the dialogue box to select a picture file lacks a preview pane to indicate which graphic you're about to select.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984447","date":"2003-05-27","texts":"The euro broke its all-time high against the U.S. dollar this morning in Tokyo, reaching 1.1885, up from 1.1814 late Monday. The euro previously peaked at 1.1884 on Jan. 4, 1999, three days after its launch. The dollar has slid rapidly against the European currency in the past two weeks after remarks by Treasury Secretary John W. Snow that markets interpreted to mean Washington was happy to see the dollar fall. Snow's remarks sped a 16-month dollar slide caused by investor disenchantment with the prospects for the U.S. economy and stock market. German business confidence rose in May from a 16-month low, a survey of 7,000 executives showed, reducing the risk that Europe's largest economy will slip into its second recession in as many years. The Munich-based Ifo economic institute said its index for western German sentiment rose to 87.6, from 86.6 in April, its lowest reading since December 2001. Economists had expected a decline. Germany's 2.4 trillion economy contracted in the first quarter. Wal-Mart, the world's largest retailer, said May sales at U.S. stores open at least a year are within its forecast for a gain of 1 to 3 percent. Hong Kong airport managers, hoping to restore air traffic devastated by the SARS outbreak, unveiled a 12.8 million package of lower landing fees and other incentives. Airlines that restore services can pay half the regular landing fee on flights that are 20 percent full or less. Flights that were not canceled can get discounts if they boost passenger numbers. Swiss International Air Lines may cut as much as 41 percent of its 112-plane fleet to slash costs amid dwindling travel, a spokesman said. The airline, which has cut 10 percent of its workforce this year, plans to finish a new business plan by the end of June.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614287","date":"2003-05-28","texts":"SINGAPORE -- Asian companies already are scrambling to compete with the low-cost manufacturing centers of China. Now, a dropping U.S. dollar on world currency markets may help China become an even tougher competitor. U.S. Treasury Secretary John Snow has recently redefined Washington's longstanding policy of support for a strong dollar, a move currency markets have taken to mean that the U.S. is willing to see the dollar continue to weaken against other currencies. That is worrying in itself to many Asian companies and governments. A weaker dollar forces Asian exporters to the U.S. to either increase prices or swallow dwindling revenue when they convert sales into their own currencies. But what is worse to some is the effect the dollar's slide is having on China's yuan, which Beijing keeps virtually pegged to the U.S. currency. Most other Asian countries also try to manage their currencies to maximize stability and minimize gains against the dollar. The difference is that the yuan doesn't trade freely in global currency markets like most other Asian currencies. Asian countries can't hope to hold out against the 1.5 trillion-a-day currency markets for long when the trend is running against them. As the yen, the won, the baht and the Singapore dollar strengthen against the U.S. dollar, they also strengthen against the yuan. A weakening U.S. dollar will help China boost exports, says Li Yushi, vice director of the Chinese government's Academy of International Trade and Economic Cooperation.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982785","date":"2003-05-28","texts":"When leaders of the major industrial countries gather in Evian, France, this weekend, they'll face a stark choice. The so-called G-8 leaders can continue their recent practice of avoiding self-criticism, patting themselves on the back for a few recent actions and declaring the economy is on the mend -- thereby confirming that these gatherings are just expensive photo ops. Or they can acknowledge that the global economy is facing a real risk of slipping into recession-cum-deflation that can be avoided by taking bold, coordinated actions. This isn't just a columnist's view or an American view, or one that reflects a particular ideology. With both Japan and Germany already in the soup, there is a growing sense of urgency among economists and policy experts about what many view as the most serious threat to global prosperity in 20 years. The G-8 has come to appear both ineffective and illegitimate, warns a blue-ribbon advisory group, the Shadow G-8, that includes former foreign and finance ministers.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613652","date":"2003-05-29","texts":"Fourth in a Series Economist Robert Hall has been puzzling over a thorny question for nearly a year What do you call an economy that has started expanding again but keeps destroying jobs Mr. Hall heads a committee at the National Bureau of Economic Research, an academic group in Cambridge, Mass., that declares when U.S. recessions begin and end. In May of last year, Mr. Hall and his colleagues believed the latest recession might be over. Consumers were spending more and economic output was rising. All that the committee members needed to see was a few months of uninterrupted job growth to announce the end of the recession. It seemed like the timing was imminent, he says. But Mr. Hall is still waiting. Instead of expanding employment, companies are continuing to shed jobs at a furious pace -- 525,000 nonfarm payroll positions in the past three months alone. Since March 2001, when the recession began, the U.S. economy has lost 2.1 million jobs. The total number of people unemployed -- including discouraged workers who would prefer to work but have stopped looking -- is about 9.2 million. And the number of people who are working part time because they can't find full-time work is 4.8 million, up 46 since 2001, according to the Bureau of Labor Statistics. In short, the U.S. is experiencing the most protracted job-market downturn since the Great Depression. It has left behind a remarkably broad swath of workers -- from young to old, and from high-school dropouts to the highly educated -- even as the economy has started growing again.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614739","date":"2003-05-29","texts":"After a spring of extraordinary diplomatic rancor, world leaders gathering this weekend in Evian, France, for the annual economic summit are facing rising concerns about their broad commitment to a globalized economy. The summit isn't expected to lead to any significant economic accords. Rather, it will be watched to see if the leaders of the world's largest economies, who had split badly over the Iraq war, can come together symbolically. That could make a difference to markets, who worry that the divisions of foreign affairs and military strategy would spread into the economic sphere. The world economy already faces a variety of concerns ranging from the falling dollar to the spread of deflation in Asia and the threat of it in Europe and North America. A continuing split between the U.S. and Britain on the one hand, and France, Germany and Italy on the other would undermine confidence that those governments could put together a unified economic strategy. One clue to look for Whether the summit participants agree how the rebuilding of postwar Iraq should proceed now that United Nations sanctions have been lifted. There was a tendency in the '90s to feel that globalization would very likely continue, said Robert Rubin, the former U.S. treasury secretary in the Clinton administration and now a Citigroup executive. But there is obviously a much greater backlash than expected and more uncertainty about it moving forward. In some ways, the world is similar to when economic summits began 28 years ago. During the first summit in November 1975 in Rambouillet, France, trade-liberalization talks had collapsed India had exploded a nuclear bomb the year before, heightening fears of nuclear proliferation and the dollar was falling after the U.S. abandoned the gold standard several years earlier.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614609","date":"2003-06-03","texts":"WASHINGTON -- In one of the first signs of a postwar economic bounce, new orders for manufactured goods expanded in May after two consecutive monthly declines, a survey of purchasing managers showed. The Institute for Supply Management said its overall index of manufacturing activity, based on the survey, rose to 49.4 in May from 45.4 in April. While it was the third month below 50, which marks the dividing line between an expanding and contracting industrial economy, components of the index were more upbeat. For example, the subindexes for new orders and production rose above 50 for the first time in three months, and the subindex for the backlog of orders topped 50 for the first time in 11 months. However, employment contracted again, for the 32nd month in a row, the survey found. Supply managers' comments seem to be split among those who are starting to see improvement, those who see no improvement in sight, and those who are uncertain as to the direction, said Norbert Ore, chairman of the ISM's manufacturing-survey committee and a purchasing executive at Georgia-Pacific Corp. This is not really unusual when the economy is at a crossroads. The index hardly suggests the robust activity of a normal recovery. After expanding most of last year, manufacturing had sunk into a recession in recent months. While Federal Reserve Chairman Alan Greenspan blamed jitters and high energy prices caused by the conflict with Iraq, others blamed the continuing adjustment of consumers and corporations to the decline in asset values and excess capacity, a legacy of the burst stock bubble of the 1990s.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614795","date":"2003-06-04","texts":"INTERNATIONAL BUSINESS MACHINES announced an accounting investigation by the Securities and Exchange Commission and, to the surprise of many stock traders, the market shrugged off the news. The Dow Jones Industrial Average, which includes IBM, still rose 25.14 points, or 0.28, to 8922.95 -- a gain that would have impressed no one on an ordinary day. But yesterday, it was taken as a sign of the market's resilience, reflecting how much market psychology has changed in the past year. Last summer, that kind of news would have tanked the market, traders said. IBM obviously was negative news and the market fought it off, said Todd Leone, head of listed trading at New York brokerage firm SG Cowen. We have had a lot of other accounting scandals crush the market, but this time people said it was isolated at IBM. Investors were buoyed by another cautiously optimistic comment on the economy from Federal Reserve Chairman Alan Greenspan, which fueled hopes that the Fed will hold interest rates down to push the economy ahead. Some analysts think the Fed will cut its target short-term interest rates at its policy meeting later this month and could buy back bonds in the open market to prevent bond yields from rising. The benchmark 10-year Treasury note jumped in price and its yield, which falls when the price rises, hit 3.333, virtually back to the 45-year low of 3.326 set last month. The Nasdaq Composite Index, which doesn't include IBM but includes most other tech stocks, pushed through the 1600 mark to its highest close in more than a year, rising 0.81, or 12.81 points, to 1603.56. It is up 20 this year and up 26 since the market began its most recent run on March 11.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616512","date":"2003-06-04","texts":"WHENEVER MY KIDS marvel at a neighbor's humongous house or fancy car, I always trot out my standard response. That doesn't mean they have a lot of money, I scoff. That means they spent a lot of money. But recently, when I was once again tossing off this parental platitude, it got me to thinking What if I never had children What if I let myself go and loosened the purse strings Here's what my financial life might look like in those two scenarios -- No Kidding Occasionally, in this column, I mention that raising children is a costly undertaking. That usually triggers a truckload of hate mail from folks who berate me as a cynical, soulless, childless, self-indulgent yuppie. Childless I don't think so.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983900","date":"2003-06-05","texts":"Rep. Michael G. Oxley R-Ohio apparently got what he wanted a prominent Republican at the Investment Company Institute, which represents the mutual fund industry. My colleagues Jim VandeHei and Kathleen Day reported earlier this year that congressional and industry sources said Oxley, who chairs the House Financial Services Committee, and members of his staff were pressuring ICI to replace Democrat Julie Domenick with a Republican as its top lobbyist or hire a Republican to work with her. At the time, Oxley was ramping up an investigation into whether mutual funds overcharge customers and provide enough information to investors. The effort also was part of a larger campaign by Republicans -- now that the White House and both chambers of Congress are controlled by the GOP -- to persuade trade groups and companies to hire Republicans for their top lobbying jobs. ICI did resist the pressure -- somewhat. The group did not oust Domenick, who has strong ties to Rep. John D. Dingell D-Mich. and is the group's executive vice president. But ICI did hire a Republican recently, Daniel Crowley, general counsel to then-House Speaker Newt Gingrich R-Ga.. Tellingly, Crowley, who was vice president and managing director of the government relations office of Nasdaq Stock Market Inc., was hired as chief government affairs officer to lead a team of professionals in representing Institute views and policies, according to an ICI release. ICI said Crowley will report to ICI President Matthew P. Fink and Domenick. Crowley starts June 16. Asked whether ICI was signing on Crowley because of Oxley, ICI spokeswoman Elizabeth Powell said Crowley was hired because of his experience with the securities market and his experience on the Hill. Dan will lead a talented group of dedicated professionals and we are delighted that he will join us in this key position, Domenick said in the release.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982396","date":"2003-06-06","texts":"Stocks rose yesterday as sales increases at Wal-Mart Stores and J.C. Penney lifted the shares of retailers and renewed optimism that consumer spending will bolster the economy. Retailers' May sales reports caused the market to bounce back from early losses after a report showed an unexpected increase in initial claims for unemployment benefits. The consumer is fine, so the market is not overly concerned with the employment numbers, said Doug Cote, who helps manage 40 billion in assets at ING Aeltus Asset Management Inc. in Hartford, Conn. You have a lot of investors and money managers who have a greater fear of missing the market turn than the next down leg. The Standard & Poor's 500-stock index rose 3.90 points, or 0.4 percent, to 990.14, its highest close since June 27, 2002. The Nasdaq composite index advanced 11.36, or 0.7 percent, to 1646.01. Microsoft fell 78 cents, to 24.09, weighing on the Dow Jones industrial average, after chief executive Steve Ballmer said the firm faces significant challenges. The Dow rose 2.32, or 0.03 percent, to 9041.30.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830982263","date":"2003-06-08","texts":"David Gunn, 65 and a glutton for punishment, left retirement to run Amtrak. His office is in magnificently restored Union Station, a relic of something Gunn knows is gone forever -- the era of glamorous railroading. He explains his challenge by taking a visitor on a walk back to the 1930s. He walks to the end of Union Station's passenger platform, looking north up the Washington-New York-Boston corridor. Almost everything that strikes the eye, Gunn says, from the transformers to the poles holding overhead electric power wires, was here in the 1930s, if not 1910. The foundations of more than 9,800 poles in the corridor are, Gunn says, in trouble. Deferred maintenance cannot forever be deferred for this railroad that two years ago mortgaged part of Penn Station in Manhattan to meet 300 million in expenses. Gunn's predecessor then said he was absolutely confident that Amtrak would reach operational self- sufficiency by the congressionally mandated deadline in 2003. Fanciful is Gunn's dismissal of the idea that Amtrak can end its deficit. Fanciful, too, is the idea that the government will quit subsidizing Amtrak operations in the Northeast Corridor. Without subsidies, those operations would end for 1.1 million passengers a month, who would be put into the corridor's already congested highways and air space. Furthermore, it is fanciful to think Congress will subsidize the Northeast Corridor without legislative logrolling to guarantee continuing subsidies of long-distance trains routes of at least 500 miles beyond the corridor, where five-sixths of Americans live. Trains such as the Sunset Limited, which is not crowded on its runs from Orlando to Los Angeles via New Orleans. Or the Texas Eagle, which, according to the Wall Street Journal, lost 38.4 million in 2001 1.70 for every 1 of revenue on its 33-hour runs -- its meanderings, actually it averages 39 mph -- between Chicago and San Antonio. Amtrak accounts for only three-tenths of 1 percent of intercity travel. Do at least Amtrak's Northeast Corridor operations make money There are two answers Don't be daft. And Yes, if you disregard sufficient expenses. The same is true of the 12 daily trains that carry 200,000 passengers a month -- up 25 percent over last year -- in the San Diego-Los Angeles-Santa Barbara corridor. But by performing valuable services in congested regions, these services may help force the government to quit pretending that self- sufficiency is just over the horizon and to decide what kind of intercity rail service it wants to pay for.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982835","date":"2003-06-08","texts":"Every year thousands of young people join the intimidating new world of Money. In an area like Washington, with about 130,000 university students and governmental institutions that attract up- and-comers, they land in predictable waves, spilling out of schools and into the mainstream. At work, in the newspaper, on the radio, these newcomers to adulthood are bombarded with news of tax credits, itemized deductions, 401ks, Roth IRAs, premiums, deductibles, interest rates, credit card fees, credit reports. The list is never-ending, yet always vaguely remote and often decidedly unhelpful. Its topics are advanced, and when it comes to the subject of personal finance, these graduates are still freshmen. This primer is for all the young men and women who are wondering why their financial education went directly from supervised deposits into their piggy bank to the intricacies of retirement plans in 60 seconds flat. Yes, of course they should sign up with their employer's 401k plan. But first they have to find the job. And a place to live. And maybe a car get around in. The guide is not meant to be comprehensive but to hit the highlights of decisions that have to be made by people who are suddenly on their own. In short, it is a sampling of the things that tend to sink a twentysomething's bank account with a loud splash -- things such as taxes, car payments and student loans. The tips tend to ask young people to examine the trade-offs of financial decisions that have to be made immediately. For example, income tax rates differ significantly between the District, Maryland and Virginia. Young people can probably guess that it costs more in taxes to be minutes from the night-life strip in Adams Morgan, but they can find out exactly how much in the chart above.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615401","date":"2003-06-09","texts":"Q When you put money into a 529 plan for a child, is that considered part of the annual 11,000 gift limit Tom Beck Wildwood, Mo. A Contributions to these state-sponsored college savings plans indeed count toward the annual limit on the money you can give away to a single individual without triggering gift tax. But there is a special rule that can help people, including many grandparents, who want to give a larger sum right away. You can make five years' worth of contributions to a 529 plan all at once -- meaning that a married couple could together give as much as 110,000 per child this year. One caveat If a donor dies before the fifth year, part of that gift is added back into the donor's estate for tax purposes.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983066","date":"2003-06-10","texts":"PUBLISHED CORRECTIONS A June 10 Style article incorrectly reported when the Nasdaq composite index reached its record high. It was 2000. Published 61303 We'd follow our dreams right into the luxury midlife we once renounced. With the Dow Jones average at 36,000, we'd slow down and live it up, trading our K Street law practice for a bed-and- breakfast in Vermont, our Dodge Caravan for a Lexus SC 430. We, the magnificent Dr. Spock babies, would send our even more magnificent progeny to Princeton and Stanford. We were born from 1943 to 1964, depending on who's talking. We were going to live forever, watched over by angels of infinite possibility. What happened How did it all go so wrong so fast in an era of unprecedented progress, prosperity and peace Earlier generations have suffered more -- think of the damage done in the Depression or World War II -- but typically, boomers act as if they've cornered the market on turmoil. Maybe it's not economics or war, though. Maybe it's just the sense of the earth moving under our feet, the way it used to feel on the observation deck of the World Trade Center.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614605","date":"2003-06-11","texts":"This year's jump in natural-gas prices looks likely to be protracted, and yesterday, Federal Reserve Chairman Alan Greenspan raised the possibility that those prices could become an increasing drag on the U.S. economy. Natural gas is used to generate electricity, heat homes and manufacture a variety of chemicals, plastics and fertilizers that in turn are used to make thousands of other products. Mr. Greenspan, appearing before the House energy and commerce committee, said higher natural-gas prices have knocked a couple tenths of a percentage point off profit margins for U.S. companies, which are a key determinant of business investment, currently the economy's weakest spot. At the same time, the costlier fuel is likely to mean higher bills for consumers, taking spending money out of their pockets. Mr. Greenspan said there is little prospect for natural-gas prices to fall much in coming months. If we stay at these very elevated prices, we are going to see some erosion in a number of macroeconomic variables. The Fed is already worried about the sluggish pace of economic growth and the risk that low inflation, excluding energy prices, could turn into deflation. It may trim short-term interest rates later this month as insurance against further weakness and deflation. The price of natural gas for July delivery rose 1.6 cents to 6.33 per million British thermal units on the New York Mercantile Exchange, more than twice the typical summer price.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983972","date":"2003-06-17","texts":"U.S. stocks rose for a fourth day in five, sending the Standard & Poor's 500-stock index to its first close above 1000 in almost a year, after the Federal Reserve reported that business is picking up for manufacturers in New York. The report triggered buying by money managers after investors last week put more money into mutual funds than they withdrew for a 13th straight week. Investors don't want to miss out on a three- month rally in stocks that has lifted the S&P 500 by 26 percent. The Dow Jones industrial average gained 201.84, or 2.2 percent, to 9318.96, its highest close since July 5. The Nasdaq composite index added 40.09, or 2.5 percent, to 1666.58. The S&P 500 jumped 22.13, or 2.2 percent, to 1010.74, the first close above 1000 since June 20, 2002, and its biggest rise in 212 months. A factory index compiled by the Buffalo branch of the New York Fed climbed to 26.8 in June, the highest since the measure started in July 2001. The index was 10.6 in May. Readings greater than zero indicate the majority of manufacturers reported an improvement in business.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614789","date":"2003-06-18","texts":"PARIS -- Vivendi Universal SA said it was considering an initial public offering of 25 to 30 of its U.S. entertainment businesses because of the rebound in stock prices, putting bidders looking at the assets on notice that it has other options should their offers be too low. Vivendi raised the possibility of an IPO as it reported first-quarter earnings that showed declines at both its Universal Music Group unit and the U.S. television and film businesses it is auctioning. Despite the weaker entertainment-business results, Vivendi's overall first-quarter figures were better than expected due to the strength of its telecom units. The company's net loss shrank to 319 million euros 377.6 million from 815 million euros a year earlier. Revenue dropped to 6.2 billion euros from 14.6 billion euros, although most of the decline was due to Vivendi's sale of its controlling interest in its utility arm last year. Universal Music, the world's largest music company, swung to an operating loss of 28 million euros in the quarter. Vivendi Universal Entertainment, the TV and film venture being auctioned, had an operating profit of 213 million euros, down 23 from last year on a pro forma basis, which assumes the acquisition of USA Networks had occurred at the start of last year. At least six potential buyers are expected to submit bids for some or all of Vivendi's U.S. entertainment assets on Monday, the deadline in what is likely to be the first round of a prolonged auction. Companies submitting bids are expected to include Liberty Media Corp., Viacom Inc., General Electric Co.'s NBC, Metro-Goldwyn-Mayer Inc., a group of investors led by oil billionaire Marvin Davis and another group led by Edgar Bronfman Jr.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615731","date":"2003-06-18","texts":"Today's Market Forecast Sticky Situation Ah, that sweltering feeling of the season. Moist palms, soaked-through shirts, sweating brows. Welcome to the bond market. After an intense tryst with deflation, the bond market has grown wary about its love affair with falling prices during the past several days. Last week, the yield on the 10-year Treasury moved so low -- the lowest in 45 years -- that one of two scenarios seemed plausible Either a nasty deflationary cycle was looming good for Treasurys or the bond market had turned Bubblicious not. As the herd focuses on whiffs of economic stirring, rather than on the nervous utterings of Fed Chief Sir Alan Greenspan, the stickier version of events seems more plausible. Yields on the 10-year, have risen smartly during the past two sessions. Given how richly priced bonds have become, it doesn't take much to rattle the market.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616460","date":"2003-06-18","texts":"NEW YORK -- It is the world's largest software company and accounts for 10 of the Nasdaq 100 Index, but Microsoft has been overlooked by the recent rally. The stock is basically flat for the year, compared with a 26 jump for the Nasdaq 100 and 15 rise for the Standard & Poor's 500-stock index. That lag has caught the attention of options traders and strategists, some of whom are seeking ways to position for a possible rebound of the software company relative to the broad market. Neil Herman, Lehman Brothers' software analyst, said he believes the Redmond, Wash., company is well positioned for the coming quarter. Although summer can be a slow season for software revenue, Microsoft remains a good defensive play, he said in a research note after all, it isn't clear if technology spending will pick up to the extent many investors had hoped as they loaded up on more volatile tech stocks. Other strategists pointed out how Microsoft has underperformed compared with sectors such as biotechnology and semiconductors and could catch up if investors believed these other sectors were becoming overbought. Meanwhile, implied volatility of three-month options on Microsoft is a bit below average levels during the past year, making its calls relatively inexpensive, Lehman options strategist James Hosker said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984870","date":"2003-06-19","texts":"Howard County companies, along with those in the rest of the Baltimore region, have sharply curtailed hiring plans for the third quarter because of the shaky economy, according to a new employment survey. Fewer employers in the Baltimore region, including the City of Baltimore, portions of Baltimore County and Howard, expect to hire more workers during the next three months, compared with the second quarter, Manpower Inc., a Milwaukee staffing company that tracks hiring trends, reported Tuesday. From July to September, 16 percent of companies interviewed, including 23 in Howard, said they plan to hire more employees, down from 40 percent the previous quarter. Seven percent expect to lay off workers, and 66 percent do not expect to change their staffing. Eleven percent said they are unsure of their hiring plans. Deborah Provencher, Manpower's Howard County branch manager in Columbia, said that although the county has many technical and health care companies, such as Magellan Health Services in Columbia Gateway, many do not plan to expand their staffs. There's a lot of technical companies located off Gateway Drive, but most of them are being conservative in hiring, if they're hiring at all, Provencher said. My sense from them is that they're being extremely cautious.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983041","date":"2003-06-23","texts":"Howard County companies plan to slow down their hiring in the third quarter because of the shaky economy, according to a new employment survey. Manpower's most recent survey of hiring projects at Baltimore- area firms, including 23 firms in Howard County, found that 16 percent of companies interviewed said they plan to hire more employees in the third quarter, down from 40 percent the previous quarter. Seven percent expect to lay off workers, and 66 percent do not expect a change in staff. Deborah Provencher, Manpower's Howard County branch manager in Columbia, said many of the county's major business employers do not plan to expand their staffs. There's a lot of technical companies located off Gateway Drive, but most of them are being conservative in hiring, if they're hiring at all, Provencher said. My sense from them is that they're being extremely cautious. Nationally, 20 percent of companies plan to increase their workforce, while 9 percent expect staff reductions, Manpower said.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842614332","date":"2003-06-24","texts":"STOCKS SUFFERED their second 100-point decline in three trading days as the long rally lost some momentum and investors took more profits before the quarter ends. With the year not even half over, many money managers were showing bigger gains than they had expected for the full year. Since the outlook for the economy and corporate earnings remains uncertain, some sold stocks to lock in profits. We had 16 weeks of rally, said Brian Pears, head stock trader at Victory Capital Management, the money-management arm of KeyCorp in Cleveland. The market is a little tired here and it feels as if a period of consolidation is going to be necessary before the market takes the next step. The Dow Jones Industrial Average, which was above 9300 a week ago, fell 127.80 points, or 1.39, to 9072.95, its sharpest one-day decline in more than a month. That followed a 114-point decrease Thursday. Although the blue-chip average remains above 9000, the two declines left some investors worried the rally has lost its momentum. Treasury bonds, which had been in a slump last week, rebounded sharply as some investors moved money toward bonds ahead of the Federal Reserve monetary-policy meeting today and tomorrow. Analysts expect the Fed to stimulate the economy by cutting its target short-term interest rate by a quarter- or half-point, to its lowest level in 45 years.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983002","date":"2003-06-24","texts":"Idec Pharmaceuticals Corp. and Biogen Inc. announced yesterday that they would merge in a 6.8 billion deal that will create a powerhouse in the biotechnology industry, with the new company earning profits from two of the biggest biotech drugs on the market. It's the second-biggest biotech merger ever, after Amgen Inc.'s 10.8 billion acquisition of Immunex Corp. in 2002. To some degree, the deal reflects the extraordinary dependence of even the largest biotech companies on a handful of products. Stock valuations of both Biogen and Idec were driven by a single blockbuster drug for each company, and sales growth for those drugs had leveled off recently. The companies had no immediate prospects for delivering the earnings growth that Wall Street is demanding of top-tier biotech companies. Neither company has a great pipeline, said John McCamant, editor of the Medical Technology Stock Letter in Berkeley, Calif., using the industry term for a portfolio of experimental drugs. Both companies see an opportunity to leapfrog some of the competition and become the clear No. 3 biotech. The companies' managements emphasized, however, that the long- range future of their combined organization will be bright. The merged company will have strengths in some of the hottest areas in medicine these days, with particular focus on cancer treatment and on the many serious diseases that involve overactivation of the immune system.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614721","date":"2003-06-27","texts":"WASHINGTON -- The number of U.S. workers filing first-time applications for unemployment benefits dropped to a three-month low last week, validating the Federal Reserve's judgment that the long-depressed labor market is stabilizing. Initial jobless claims declined 22,000 to 404,000 last week from 426,000 the previous week, the Labor Department said. The four-week average, which smooths out weekly fluctuations, fell to a one-month low of 428,250. The drop was more than Wall Street economists expected, but it supported the Fed's statement Wednesday that labor and product markets . . . are stabilizing. The central bank on Wednesday cut its key interest rate to a 45-year low of 1 from 1.25 and suggested it will keep the rate low as long as necessary to ensure an economic recovery. The Fed's assertion that the labor market was stabilizing surprised some observers, but it may have been influenced by the latest jobless claims data. During the past 2 12 years, the U.S. economy has lost more than three million private-sector jobs, and the unemployment rate has climbed to a nine-year high of 6.1. The number of initial claims for unemployment benefits, moreover, has remained above 400,000 for 19 consecutive weeks. Economists regard any number above 400,000 as suggestive of a deteriorating jobs market. But for the past three weeks, the volume of initial claims has declined consistently, and economic forecasters say they expect job losses to end soon. The total number of workers drawing unemployment benefits for more than a week rose 43,000 to 3,741,000, reversing half of the previous week's decline. The unemployment rate for workers with unemployment insurance climbed 0.1 percentage point to 3.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830985401","date":"2003-06-28","texts":"We're going to pay a little visit to our friends, said activist Will Ward yesterday afternoon, seconds before a busload of protesters chanting, Criminal offender, predatory lender, descended on the Silver Spring branch of Wells Fargo Financial. Angry, shouting people soon filled the office, including an 11- year-old girl wearing a foam shark suit. The demonstration, led by the Association of Community Organizations for Reform Now, was one in a series of rallies nationwide this week to protest what the group considers exploitative lending practices of San Francisco-based Wells Fargo & Co., the nation's largest provider of mortgage loans. Members of ACORN, a nonprofit community advocacy group that has chapters in 51 cities, also stopped at the Federal Reserve's headquarters and the Office of the Comptroller of the Currency in Washington to voice their concerns. ACORN claims Wells Fargo fails to provide sufficient lending services in low-income and minority communities and that Wells Fargo Financial and Wells Fargo Funding, separate units of the company, charge excessive fees and interest rates to borrowers with poor credit histories.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985311","date":"2003-06-29","texts":"Congratulations, the e-mail Adkins is reading starts off, and that first word alone is enough to flood him with an emotion he hasn't felt in nearly two years. Later, he will describe it. Jubilation, he will say. But for now, he reads what comes next -- on successfully advancing to Level 2 of the Trade Chief Assessment -- and sits, just sits, overcome. A 38-year-old single man, Adkins represents what in Washington is the political issue of what to do about the more than 9 million Americans who are either jobless or underemployed and an economy that has been described as slow and adrift. In Newark, Ohio, though, Adkins is simply one of the sadder stories around. Once a lawyer, he lost his job in June 2001 when his company downsized because of the worsening economy, and has seen his life collapse. He has exhausted his savings and retirement. He had to sell his house and the 40 acres he lived on and everything else he owned except a car, a bed, two chairs, a laptop computer and a TV. It took 18 months to find the part-time job he has now, which, to add to the sting, is at the local unemployment office helping people find jobs. He works in a cubicle that belongs to a woman on extended sick leave. The family pictures are hers. The decorations are hers. The bottle of water is his, and the day planner, and that's it. That's what two years have brought. But now comes word that, for the first time in hundreds of attempts, Adkins has made it to the second round for a job, a permanent, full-time position with the state, and after reading the e-mail, he goes to tell his supervisor, Patty Ernest, who is so happy for him that she comes around from her desk and gives him a hug. Poor Stuart, she says after he has returned to his cubicle. He's been through it, I'll tell you that much.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615958","date":"2003-06-30","texts":"Tokyo -- NOW THAT FALLING interest rates make it harder for U.S. fund managers to keep the coveted 1 share price on money-market funds, a look at Japan, where base rates have been zero for four years, provides some important lessons. Some U.S. money funds have had to waive at least part of their management fees to ensure a constant 1 price on money funds as returns from short-term investments drop, a situation exacerbated last week after the Federal Reserve's latest rate cut. Each drop in rates puts further cost pressure on fund-management companies, sparking the question of how low can rates go before U.S. fund firms decide they are unwilling or unable to keep propping up the 1 share value of their money funds. Japan's experience shows that the despite the expense of operating in a low-rate environment, fund companies are likely to exhaust all other possibilities before allowing fund share prices to fall below their stable-value levels. As the Japan industry has learned first hand -- and as many analysts predict would happen in the U.S. -- failure to maintain a stable share price can spark massive withdrawals by both individuals and institutions, who treat money funds like bank accounts that aren't supposed to drop in value. The Japanese industry is divided into two segments one ran into serious problems in 2001, and the other is facing a potential crisis. So-called money-reserve funds, which are tightly regulated and are similar to U.S. money funds, have never declined from their steady 10,000-yen 83.50 share price since they were introduced in 1997, even as Japanese interest rates have dwindled to zero. Almost all companies that operate money funds in Japan pay a price in doing so, executives say, because fees, which are linked to fund yields, have shrunk to almost nothing. A 1 billion fund can bring in as little as 1,000 in annual fees.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985258","date":"2003-06-30","texts":"Looking at the latest report from Freddie Mac on its accounting problems, I could not suppress a perverse thought I'd almost feel better about Freddie Mac if the place had been run by the same kind of crooks who caused the Enron and WorldCom scandals. You can understand how crooks could screw up a company's books so thoroughly that scores of accountants, after working for six months, still haven't figured up how much money Freddie has been making. But Freddie's finances apparently are in chaos not because of nefarious intent, but because some of the smartest people in the mortgage business and some of the best accountants didn't know what they were doing. They've given a range of estimates -- 3 billion apart -- of how much income wasn't reported. After taxes, it might have been 1.5 billion more than reported, it might have been 4.5 billion. Freddie's finances are such a mess that the accountants are reexamining several hundred thousand transactions, because they don't know what they are.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613797","date":"2003-07-01","texts":"STOCK INDEXES finished the quarter with a whimper, but still turned in one of their strongest quarterly performances in years. With a decline of 3.61 points, to 8985.44 yesterday, the Dow Jones Industrial Average failed to return to the 9000 level. Yet its red-hot spring rally left the blue-chip index up 12 for the past three months and up 7.7 for the first half of the year. It was the first time the industrial average has finished a first half with a gain since 1999, the last year of the bull market that ended more than three years ago. U.S. stock mutual funds jumped an average of more than 17 for the quarter, the strongest performance since the fourth quarter of 1999, according to preliminary numbers calculated by Lipper Inc. through Friday. Lipper completes the final quarterly tally today. Some market analysts view the recent rally as a positive sign for those hoping the indexes can break a three-year streak of annual losses. But analysts also noted that stocks now seem to be drifting sideways after hitting a peak on June 17. For much of the spring, professional investors bought stocks in hopes that government stimulation would provoke an economic recovery. Now, increasingly, money managers are in a show me mode, looking for signs of the recovery. Major companies are poised to begin announcing second-quarter results in about a week, at which time they also will be providing investors with readings on whether business conditions really are improving.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615389","date":"2003-07-09","texts":"THE BOOMERS' RETIREMENT dreams are about to go bust. I don't have much tolerance for doom-and-gloom pundits. Still, as I think about the rapidly approaching retirement of the baby boomers, those born between 1946 and 1964, one thought comes to mind It's going to get ugly. Don't worry, I am not about to bore you with some wild-eyed financial forecast. Rather, my pessimism is rooted in three entirely predictable developments. -- Losing Steam Bulls and bears argue fiercely over whether stocks, bonds and real estate are over or undervalued. But whichever side you favor, it is pretty clear returns in the decade ahead won't match the heady gains of the 1980s and 1990s. That means boomers will find it tougher to retire in comfort. This forecast isn't based on any fancy economic analysis. Rather, it comes down to one simple fact The fuel of falling interest rates is almost spent.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983744","date":"2003-07-11","texts":"The arbiter of when U.S. economic recessions begin and end, the Business Cycle Dating Committee of the National Bureau of Economic Research, has laid the groundwork for calling an official end to the slump that began in March 2001. It could be weeks or months before that happens, but the committee has found a way around the fact that its key monthly indicator, payroll employment, has continued to decline long after the economy resumed growing. The committee designated March 2001 as the beginning of the recession primarily because that was when the number of payroll jobs began to drop, a decline of 2.6 million so far. If the committee were to rely on the same indicator to date the end of the slump, the recession would already have lasted for two years and three months, making it the longest since the vastly more serious downturn that began in 1929 and became the Great Depression. Until the 2001 recession, the employment number and other indicators used by the committee have done a generally good job of tracking the rise and fall of the nation's economic output. This time, however, changes in payroll employment have not been a good proxy for economic growth, because productivity -- the amount of goods and services produced for each hour worked -- has continued to increase through the economy's contraction in 2001 and sluggish expansion since. That has allowed companies to increase production while cutting their workforces.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616075","date":"2003-07-14","texts":"STOCK OPTIONS long have been the compensation expense that the tech world avoided treating as a compensation expense -- relegating the cost to footnotes, bypassing the income statement. Now that Microsoft Corp., with the granddaddy of such compensation programs, has decided to ditch stock options in favor of restricted stock -- which the accounting rules say must be expensed -- the accounting purists have won. Not so fast. Check out the earnings news releases of Amazon.com. In a less widely heralded move, the Internet retailer late last year moved from stock options to restricted stock, which it said would better align employee and outside shareholder interests. Following the accounting rules, Amazon does indeed expense the cost of the restricted shares it issues to employees. But it continues to encourage Wall Street to ignore the large cost. How so Along with net income, it uses a pro forma, or as if, version of its earnings that backs out the cost. While it isn't clear if Microsoft will take the same approach, accounting specialists predict Amazon's method will become commonplace as more companies move to expense stock-related compensation in their income statements. More such expensing is likely to occur because some companies will follow Microsoft's example and accounting rule-makers are expected eventually to require all companies to treat options- based compensation as an expense, possibly as early as next year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981734","date":"2003-07-16","texts":"PUBLISHED CORRECTIONS The headline on a July 16 Business article about Fannie Mae's second-quarter results was incorrect. The company reported a profit for the quarter. Published 71703 Fannie Mae reported a big drop in second-quarter earnings due to changes in the value of derivatives contracts, even though its business expanded significantly. The mortgage-finance giant also said that it will reduce its interest rate risk and that it will be less profitable in the second half of the year. The Washington-based firm, the biggest buyer of home mortgages, said the total volume of its business -- the amount of mortgages it owns plus the value of the mortgage-backed securities it has issued or guaranteed -- grew 29 percent in the second quarter as homeowners refinanced at record levels. But declining interest rates triggered a paper loss of 1.9 billion on Fannie Mae's portfolio of derivatives. The company said its core business earnings, which exclude these paper losses, grew substantially. Fannie Mae earned 1.1 billion 1.09 cents a share in the three months ended June 30, down from 1.46 billion 1.44 in the same quarter of 2002. Not including the accounting impact of the paper loss on its derivatives, which Fannie Mae uses to hedge against the risk of interest rate swings, the company said would have earned 1.86 billion in the quarter, compared with 1.57 billion a year earlier. Fannie said core business earnings better reflect the economic reality of its performance because the losses booked on its derivatives -- accounting rules require it to carry interest rate hedges at market value -- are not realized. The mark to market accounting rule, since it was established in January 2001, has caused wide swings in the reported net income of Fannie Mae and its smaller rival, Freddie Mac.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985073","date":"2003-07-16","texts":"The administration's budget update, released yesterday, shows the economic recovery is picking up steam. It also shows a budget deficit for 2004 of 475 billion. The budget deficit is a concern, and the president is determined to see that it comes down as forecast in the mid-session review. Even so, the current deficit must be kept in proper perspective. Three points are salient. First, it is a textbook principle of prudent fiscal policy that budget deficits are appropriate in times of war and recession. Without doubt, the war on terrorism and the lingering effects of the recession continue to exert a large influence on the federal budget. To insist on budget balance in difficult times would mistakenly sacrifice the greater goals of economic growth and full employment. Second, the deficit must be evaluated relative to the size of the economy. The federal budget deficit represents 4.2 percent of the nation's 11 trillion economy. Such a deficit is very manageable. The economy handled larger deficits in six of the past 20 years -- all in the aftermath of recessions. Third, under the president's proposals, the deficit will shrink from 4.2 percent of gross domestic product in 2004 to 1.7 percent in 2008. The key to achieving this is more-rapid economic growth, which will bring in more tax revenue, together with restraint in the growth of government spending. Because the deficit is shrinking, the accumulated level of national debt is not expected to become problematic In 2008 it will represent 40 percent of annual GDP, which is almost exactly the average since 1950. Like most private forecasters, the administration expects the economy to improve. With the Jobs and Growth Economic Bill now taking effect and workers keeping more of what they earn, we project that the pace of economic growth will accelerate from approximately 2.2 percent over the past four quarters to 3.9 percent over the next four. Faster growth will translate into more jobs.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615715","date":"2003-07-17","texts":"Dow Jones Newswires NEW YORK -- Most Treasurys ended higher on a modest relief rally after the conclusion of two days of congressional testimony by Federal Reserve Chairman Alan Greenspan. But analysts viewed yesterday's relative calm as largely a pause after a sharp correction from oversold levels. Last month, yields, which move inversely to prices, fell to historic lows after the Fed in early May cautioned about the risks of deflation. The market rallied strongly through mid-June, in part on speculation the Fed might use unconventional methods, such as buying longer-dated Treasurys, to ease monetary policy if the need arose. But since late June, economists said, Fed officials seem to have tried to respond to what appeared to be a bubble-like appreciation in Treasurys. David Greenlaw, an economist at Morgan Stanley in New York, pointed to a statement by the Fed after a policy meeting in late June. We've certainly seen the lows in yield of this cycle, Mr. Greenlaw said, adding that the selloff in July has recorrected the Treasurys market back to where it was before deflation talk took hold.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982092","date":"2003-07-17","texts":"New Prince George's County schools chief Andre J. Hornsby has significantly altered the hours of the school day in an effort to save 1 million in transportation costs. Hornsby changed the start times of the majority of the county's 195 schools, with most adjusted by 15 or 30 minutes. Some schools' start times will change by as little as five minutes, while a few will experience a 105-minute change. In making the changes, Hornsby streamlined the system's schedule from 28 different start times to seven, which will help reduce the number of school buses and save money on fuel and bus maintenance. This change will provide a more orderly day for our children, and shift dollars towards the classroom, he said yesterday in a statement. Since he arrived last month, Hornsby, who succeeds Iris T. Metts as county schools chief, has set out to cut costs in a school system that faces a 15 million budget deficit. Already, he has cut mandatory summer school, reduced the number of retired teachers rehired by the school system and cut the amount of money available for employees' cost of living raises.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982787","date":"2003-07-17","texts":"Nia Janyska had an assortment of wicker baskets in front of her, along with colorful votive candles, chocolate bars, packets of tea and small framed samples of her meticulous cross-stitch. Put them in neatly, nice and neatly, the 34-year-old said as she filled the baskets. Make sure the decoration shows, so the customer buys them. Janyska was explaining her technique for arranging gift baskets, but she was also using a business strategy for Uniquely Nia, a novel enterprise for a young woman with autism. Janyska is hoping businesses will find her gift baskets appealing enough to buy them for clients. Janyska wants to be able work out of her Linthicum home in northern Anne Arundel County, and she has already thought about how to spend her earnings. Buy ice cream, buy some candy, buy some snacks, she said. I want to go to Disney World if there's not too many people and it's not too crowded. Until recently, even the experts would have doubted that people with autism could become successful entrepreneurs. But Janyska and a handful of others with developmental disabilities are trying to do just that in a three-year-old program in Anne Arundel and Howard counties. If successful, the program could become a model for other jurisdictions in Maryland -- and an economic prospect for the developmentally disabled, many of whom face a lifetime of unemployment or underemployment.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983385","date":"2003-07-19","texts":"U.S. stocks advanced yesterday for the first day in four as Microsoft raised its fiscal 2004 revenue forecast and an analyst said sales growth at McDonald's has accelerating this month. The Standard & Poor's 500-stock index climbed 11.59 points, or 1.2 percent, to 993.32. More than 80 percent of the index's members closed higher. The Dow Jones industrial average rose 137.33, or 1.5 percent, to 9188.15. Twenty-seven of the Dow's 30 members advanced. The Nasdaq composite index increased 10.48, or 0.6 percent, to 1708.50 as Ericsson, the world's largest maker of wireless equipment, said its quarterly loss narrowed more than analysts predicted. The overall tone of business results is good, said Erick Maronak, who helps manage 2 billion for KeyCorp's Victory NewBridge unit. I don't think they're stellar, but I think they're good enough reports that the rally we've experienced so far this year should be sustained.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614740","date":"2003-07-21","texts":"Today's Market Forecast Number Crunching Stock prices are higher, the merger market is percolating, and bonds are in retreat. The bulls are starting to show teeth in their widening grins. But Richard Bernstein, a longtime bear, can't quite believe it. The Merrill Lynch strategist, trained in the quantitative arts, sees red flags for stocks every time he cranks up his computer. Valuations are historically high. In May and June, nearly two-thirds of the economic reports he tracks came in below the consensus forecast. Most troubling, inflation barometers are losing momentum, and his calculations hint earnings growth may already have peaked. These findings would shock the smiling bulls. People aren't really looking at the data, Mr. Bernstein says. Instead, stocks are reacting to the Greenspan put low short-term rates, the Bush put hyperactive fiscal policy and an overwhelming fear of getting left behind.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983215","date":"2003-07-24","texts":"The Republican Party certainly controls the seat of Calvert County government, with four of the five county commissioners being members of the GOP. But -- contrary to a notice in a newsletter distributed by Calvert Republicans -- the party hasn't been so brazen as to set up a fundraising office in the county treasurer's office. Barbara Burton, chairman of the Calvert County Republic Central Committee, said the newsletter had mistakenly suggested that contributions to the Young Republican Fundraiser could be dropped at the county office. Burton said the notice was just an honest mistake made by someone filling in for the person who regularly compiles the newsletter. A computer glitch, Burton explained, ended up merging an item about Calvert Treasurer Novalea Tracy-Soper with a request for funds to send members to the Young Republican National Convention held in Boston this month. The merged item read If you would like to contribute, you can see your favorite Young Republican drop off a check to Nova Soper, treasurer's office, or by mail PO Box 1621, Prince Frederick, MD, 20678.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614861","date":"2003-07-28","texts":"Dow Jones Newswires NEW YORK -- Anything big caps can do, small caps can do better, some analysts say. While many investors are talking about large-stock indexes gaining in 2003 after three years of declines, small stocks are outperforming big stocks so far this year and could continue their run, say strategists who follow small-cap stocks. The analysts cite the strong showing the Russell 2000 index of small-capitalization stocks has made, after beginning the year on a down note, with a burst so powerful that the small-cap barometer has surpassed the large-cap Dow Jones Industrial Average and the Standard & Poor's 500-stock index so far this year. It's been quiet a substantial rally over the last couple of months, said Steven DeSanctis, chief small-cap strategist at Prudential Equity Group. And the showing gives me confidence small stocks will end up doing better for the year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615577","date":"2003-07-28","texts":"Dow Jones Newswires WASHINGTON -- There are signs that the long downward spiral of the U.S. manufacturing sector may have hit bottom. The Commerce Department reported Friday that orders for durable goods, items meant to last three years or longer, rose a stronger- than-expected 2.1 in June, the largest gain in nearly a year. Shipments rose 1.3 in June and unfilled orders increased 0.1. Orders for May, meanwhile, were revised upward to unchanged from a previously estimated decline of 0.4. While the improvement in orders is hardly enough to signal that manufacturing is out of the woods, it may suggest that the long- suffering industry could be poised for better times ahead. I think manufacturing has turned the corner, said Ken Mayland, economist at ClearView Economics in Cleveland. Economists had expected durable- goods orders to show strong growth in June based on improvement in several regional manufacturing surveys. However, the size of the June gain was larger than most had anticipated. David Rosenberg, chief North American economist at Merrill Lynch & Co., said the durable-goods report, when combined with other recent positive economic news, means that economic growth in the third quarter will show an improvement compared with the anemic second quarter. The third quarter is looking good, he said. Not great, but good.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614033","date":"2003-07-29","texts":"The much-anticipated second-half rebound in economic activity shows signs of materializing. Some key real-time economic indicators improved during the early weeks of July. Wal-Mart Stores Inc. said yesterday that sales in July are tracking at the high end of management's expectations. The company is expecting that stores open at least one year will report a 2 to 4 monthly increase in sales from a year earlier. The company said it is making up for weaker seasonal sales recorded in May and June. The Northeast is especially strong. Meanwhile, the Economic Cycle Research Institute, a private research institute, said its weekly index of leading economic indicators climbed in mid-July to its highest level since early April 2000. The index -- which tracks a range of financial and economic indicators -- is growing at its fastest rate since 1987. The window of economic vulnerability that the index picked up earlier in the year has slammed shut, said Lakshman Achuthan, the group's managing director.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982238","date":"2003-07-31","texts":"The U.S. economy showed signs of faster growth in the past six weeks, including an increase in manufacturing, the Federal Reserve said in its survey of regional economies. Most of the Fed's 12 districts that were surveyed suggested stronger growth in their regions. Consistent with the generally more positive assessments of current economic activity, several districts noted increased optimism about economic prospects in coming months, the report said. Three districts -- Chicago, St. Louis and San Francisco -- characterized economic activity as sluggish. Atlanta described business conditions as mixed. The Fed's report said that housing sales remained strong across various districts, helped by low mortgage rates. Pillowtex -- maker of Cannon, Fieldcrest and Royal Velvet towels, bed linens and other home furnishings -- closed its 16 plants, eliminated 6,450 jobs and filed for Chapter 11 protection from creditors. The company said it planned to wind down its business and dispose of its assets. Pillowtex had tried to find a buyer as a big debt-repayment deadline approached. Equifax agreed to pay 250,000 to resolve allegations that it did not do enough to answer calls from consumers inquiring about their credit reports. The Federal Trade Commission had accused the company of violating an earlier settlement with the agency that imposed performance standards. In settling, the company did not acknowledge breaking any law. Impath, a New York company that analyzes cancer tests for doctors, said it is investigating whether it improperly overstated money owed by customers and may report a loss this year. It said it will hire an independent lawyer and a forensic accountant to help with the investigation. It also said its vice president of finance and controller have resigned, but it declined to identify them three other top executives have left in a little more than a year. Canada's economy expanded 0.1 percent in May. Car sales were good. Gross domestic product, or the total value of goods and services produced, rose to an annualized 712.6 billion, Statistics Canada said in Ottawa. A drop in manufacturing tempered gains and signaled that the economy hasn't fully recovered from a 0.2 percent contraction in April.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983228","date":"2003-07-31","texts":"Franklin D. Raines, the chief executive of mortgage funding giant Fannie Mae, said yesterday that an accounting scandal at rival Freddie Mac has unfairly tarred his company and has contributed to higher interest rates for consumers. I think it's been devastating to the reputation of these firms, and I think it has caused material harm to consumers, Raines said at a news conference. I've jokingly said to friends that I now know what the definition of collateral damage is, and we have suffered a lot of that, I think unfairly, Raines added. Unlike Freddie Mac, we didn't do any of these things. Fannie and Freddie, which share a special federally chartered status, are both in the business of buying mortgages from lenders and repackaging them into securities for sale to investors. They and their private-sector competitors play a major role in the housing market by replenishing the funds lenders can provide to people buying and refinancing homes. Freddie Mac disclosed last month that it is correcting 1.5 billion to 4.5 billion in accounting errors. The company engaged in complicated, multibillion-dollar transactions with minimal business justification to deliver the smooth earnings growth that Wall Street favors, and made elaborate efforts to circumvent a new accounting rule and obscure its impact, according to a report commissioned by Freddie's board of directors.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617253","date":"2003-08-01","texts":"EUROPEMIDEAST Mideast Road Map Encounters New Obstacles JERUSALEM -- The U.S.-backed road map to peace encountered new hurdles as Israel announced plans to expand a Jewish settlement in the Gaza Strip and negotiators failed to agree on further Israeli pullouts from the West Bank. The announcement on Gaza came two days after Israeli Prime Minister Ariel Sharon defied pressure from President Bush to stop construction of a controversial security fence separating Israel from the West Bank, which the Palestinians say is grabbing land from their future state. The setbacks reinforced a growing sense of gloom about prospects for the internationally brokered plan, just days after visits by the Israeli and Palestinian prime ministers to Washington and a claim by President Bush that the two sides were making pretty good progress toward peace.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982732","date":"2003-08-02","texts":"The U.S. labor market continued to weaken last month as businesses shed jobs, workers put in fewer hours and about half a million people gave up looking for work, the Labor Department reported yesterday. The jobless rate declined to 6.2 percent, from 6.4 percent in June, entirely because of the drop in the size of the workforce -- a person must be actively seeking a job to be counted among the unemployed. And while the economic recovery appears to be gaining strength, economists warn that it could be many months before growth becomes robust enough to generate significant numbers of new jobs. Overall, payroll employment dropped by 44,000 jobs in July, the sixth monthly loss in a row, as gains in a few industries partially offset larger declines elsewhere, including a huge 71,000 loss in manufacturing jobs. Payroll job losses in May and June also were larger than reported earlier, the department said. The number of factory workers has now fallen every month for three years, for a total decline of 2.7 million, nearly 16 percent since the middle of 2000.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830982757","date":"2003-08-11","texts":"About 220 blue-collar federal employees at Fort Meade will lose their jobs because a contractor has won the competition to provide support services at the Maryland base. Col. John W. Ives, the base commander, announced the results of an outsourcing study to employees Friday. Ives said he will do all he can to help in the transition process for our affected employees, according to a statement the Army issued. The contract to take on the work of the base's public works and logistics directorates was awarded to Johnson Controls Inc. of Milwaukee, the Army said. The work includes grass cutting, water treatment, road repair, waste disposal and maintenance at the base. Several of the employees have worked at the base for 25 years or longer and some began to cry when told their jobs were being outsourced, a Fort Meade employee said. The workers were stunned to learn they had lost the competition, the employee said. They had put together a proposal for a most efficient organization and believed they would have the upper hand in the competition because of security concerns. Fort Meade is the home of the super-secret National Security Agency, which collects foreign intelligence information, and employees doubted the Army would want to take on the cost of security checks for a contract workforce, the employee said.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842614463","date":"2003-08-12","texts":"WHILE MANY INVESTORS got hit by the bond market's recent selloff, a small bond-focused mutual fund that uses complex derivatives strategies took a particularly rough beating. FBR Total Return Bond Fund returned a negative 19.08 in the month of July, the worst performance among more than 3,900 bond funds tracked by Lipper Inc. The fund bounced back to a peer-beating 8.60 gain in the first week of August, but its negative 15.53 return so far this year, through Friday, still ranks as the worst bond-fund performance of 2003. Yesterday, the fund was down a further 2.42. Investment professionals have speculated that other bond portfolios, possibly including some hedge funds, may have been bloodied in the bond-market tumble, but so far no significant examples have emerged. As interest rates surged and bond prices fell, the month of July saw taxable-bond mutual funds post their worst monthly loss in 16 years, since April 1987, Lipper said. However, the negative 2.51 monthly return on the average taxable-bond fund pales in comparison with the FBR fund's results. The average taxable bond fund is up 3.86 so far this year, through Friday. Patrice Milton-Blue, co-manager of the 29 million FBR fund, says the fund's recent decline wasn't a complete surprise given the portfolio's investment strategy, which combines holdings of U.S. government bonds with transactions in fixed-income options and futures. In time periods when the bond market is particularly volatile, which it has been in spades these past several weeks, the portfolio is going to be significantly more volatile than the market itself, Ms. Milton-Blue says. Still, some investors in the FBR fund might have been caught unawares by the fund's recent beating. The fund's prospectus says the manager uses options and futures in an effort to boost return or to protect the fund from adverse interest-rate movements. That also was the way the use of those derivatives instruments was pitched to fund investors in late 2001, when the fund's adviser sought and obtained shareholder approval to modify the fund's strategy to include use of options and futures.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614525","date":"2003-08-15","texts":"A 220-BILLION-PLUS weight could be lifting -- at least a bit -- off the stock market. Thanks to a drastic turnaround in interest rates and improved stock- market returns, the prognosis for the health of corporate pension plans isn't quite as gloomy as many investors feared just weeks ago. In recent months, many analysts and investors have focused on the combination of falling interest rates, which had sharply boosted the present value of what companies owe current and future pensioners, and three years of miserable stock-market performance, which had sharply depressed the assets in the plans. Everybody talked about the perfect storm, says Jack Ciesielski, editor of Analyst's Accounting Observer newsletter in Baltimore. And the storm seemed poised only to worsen. As recently as mid-June, Standard & Poor's cautioned that the underfunding of pensions in its S&P-500 stock index had jumped, in less than six months, an additional 7 -- to 226 billion from 212 billion at year end. That year-end figure represented a big reversal from the year before 2001, when there was a 5 billion surplus.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617240","date":"2003-08-15","texts":"THE DOW JONES Industrial Average rose for the sixth time in the past seven trading sessions, pushing back above 9300 and nearing a 12-month high. But trading could be affected today by the massive power outage yesterday. The late-afternoon power outage in the Northeast disrupted afterhours trading, as rattled investors sought the relative safety of Treasury bonds. They pushed some stock futures down and bid Treasurys up. Following the power outage, the 10-year Treasury note, which had been up 932, or 2.81 per 1,000 invested, at 4 p.m. EDT, soared to a gain of more than 1 332. It then fell back somewhat amid reports that the outage appeared to be a result of natural causes. Stocks began the day with mild declines, following disappointing quarterly results from retail chain Target. But they quickly rebounded on favorable economic news and on the announcement, late in the day, that the accused organizer of last year's deadly nightclub bombing in Bali, Indonesia, had been captured. The Dow finished regular trading up 38.80 points, or 0.42, at 9310.56. It recovered all of the previous day's pullback and moved almost to the 12-month high of 9323.02 that it hit in June. The blue- chip average now is up almost 12 since the year began.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983164","date":"2003-08-15","texts":"Upbeat economic news reassured investors that business is improving, sending stocks moderately higher on a day when a giant power outage struck the Northeast just after the market closed. The blackout sent stock exchanges scrambling to switch to backup generators. Major exchanges said they were prepared to open as scheduled on Friday, using backup power if necessary. Stocks recouped some of their losses from Wednesday, when a big sell-off in the bond market spilled over to the equity market. As bond prices fall, yields rise, which can make bonds more attractive than stocks. Still, the gains were modest, which analysts said was due to investors feeling more cautious with the major indexes near their highs for the summer. The Nasdaq composite index rose 13.73, or 0.8 percent, to 1700.34, and the Standard & Poor's 500-stock index advanced 6.48, or 0.7 percent, to 990.51.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985360","date":"2003-08-16","texts":"QWe signed a contract to buy our first home in late July, and settlement is scheduled for next week. Before the contract was signed, we took your advice and shopped around for the best mortgage. After the real estate contract was signed, we contacted the lender we had selected and made a formal application. Rates were still low, and the lender asked us if we wanted to lock in. Since this is our first house and we have no understanding of the way the mortgage market works, we did not understand his question. However, he explained that if we signed a loan lock-in document, the rate the lender quoted would be guaranteed, as long as settlement took place by the time specified in the sales contract. Today, we were advised that the lender will not be able to honor his commitment. The excuse he gave us was rather lame, in our opinion Underwriting couldn't be completed in time. The lender offered us a new rate, which is somewhat higher than the original locked-in rate, but lower than the current rate. Is there any way that we can demand that our lender honor his commitment, or should we just accept his new offer","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830981999","date":"2003-08-17","texts":"The American Enterprise Institute's Trade Policy Series discusses the upcoming World Trade Organization ministerial in Mexico. Sens. Rick Santorum R-Pa. and Charles E. Schumer D-N.Y, along with former House speaker Newt Gingrich, debate health-care policy at the Capitol. Attorney General John D. Ashcroft speaks on the war on terrorism at the American Enterprise Institute. Treasury Department and Internal Revenue Service's Taxpayer Advocacy Panel meet to discuss systemic changes to the IRS's approach to small business. Economic indicators July housing starts and new building permits, University of Michigan consumer confidence survey.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985417","date":"2003-08-17","texts":"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. 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. 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. 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. 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.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616132","date":"2003-08-18","texts":"Last week's massive blackout could be the shock to the system needed to draw attention to critical flaws in the nation's power grid. It won't be clear for a while exactly what triggered the cascading collapse that removed enough power from an eight-state, two country system of generating plants, substations and high-voltage power lines to leave millions of people in the dark. For now, the leading theory is that power lines failed in the Cleveland area -- perhaps coincidentally with plant shutdowns in the Midwest -- causing disruptions that rippled toward the Northeast. But the crisis, which knocked out twice as much power as during the last big U.S. blackout in 1996, and lasted far longer, highlights weaknesses in the electricity system that could produce more traumatic events. That's particularly true if the economy picks up steam, increasing demand for power. The main defects are transmission systems badly in need of improvement and a chaotic combination of regulated and deregulated markets. The unsteady regulatory situation, among other factors, inhibits the investment that is critically needed to improve transmission equipment. The nation is stalled in the middle of a massive but incomplete shift from old-fashioned state-regulated utilities -- which generate their own power, move it over their own transmission lines, and sell to local customers -- to a system in which ownership of plants and transmission lines is broken up among a variety of players, and government oversight is fractured.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613896","date":"2003-08-26","texts":"Wal-Mart Stores Inc. boosted its August sales-growth forecast and said it may post its largest monthly sales gain in more than a year, a sign that consumer spending continues to accelerate despite setbacks such as the blackout that struck much of the Northeast and Midwest two weeks ago. The world's largest retailer said sales at stores open more than a year should increase 4 to 6, somewhat better than its previous estimate of 3 to 5. Although modest, the sales gains would be the largest such increase for the retailing giant in more than a year. The improved forecast is the latest evidence that a nascent economic recovery is under way. Although battered by terrorism, war and economic uncertainty following the collapse of the Internet bubble, consumer spending has been a mainstay of the weak U.S. economy, fueled most recently by low interest rates that sparked a home-refinancing boom. Wal-Mart attributed the improved forecast to a greater-than-expected number of shoppers and larger average purchases, bolstered by a cut in tax withholding and tax-refund checks of as much as 400 a child. People seem to be more inclined to shop right now, said Tom Williams, a spokesman for the Bentonville, Ark., discount retailer.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982624","date":"2003-08-26","texts":"Sales of existing homes around the country soared to a new record in July as buyers rushed to take advantage of historically low interest rates. But some economists said the frenzy signaled the peak of the bull housing market. This is the last hurrah for housing, said David A. Lereah, chief economist of the National Association of Realtors, a trade group that compiles the monthly home resale numbers that were released yesterday. When we look back to this July, we'll say, 'Housing peaked then.'  The Realtor group said sales of existing homes shot up 5 percent in July to an annualized 6.12 million units -- an all-time high -- from 5.83 million units in June. The national median existing home price -- 182,000 -- was up 12.1 percent in July from the same month of 2002. The July sales reflect the steep drop in interest rates on mortgages in June -- when rates were at their lowest levels in decades -- because the sale of an existing home is recorded only when a property has gone to settlement. Buyers settling in July would typically have entered into a purchase contract in May or June. And the fact that interest rates have jumped more than a percentage point since their June lows is what's prompting economists to warn that a softening in the housing market may be inevitable.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616530","date":"2003-08-27","texts":"Dow Jones Newswires AUCTION RESULTS Here are the results of the Treasury auction of four-week bills. All bids are awarded at a single price at the market-clearing yield. Rates are determined by the difference between that price and the face value. Applications .............................. 49,930,864,000 Accepted bids ............................. 26,000,114,000","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981680","date":"2003-08-30","texts":"The Commerce Department reported yesterday that consumer spending in July rose by 59.7 billion, or 0.8 percent, compared with 44.5 billion, or 0.6 percent, in June, the largest increase in four months. The department's Bureau of Economic Analysis also said personal disposable income increased 120.3 billion, or 1.5 percent, up from a 30.6 billion, or 0.4 percent, increase one month earlier. Consumer spending accounts for roughly two-thirds of the nation's economy, and economists viewed yesterday's news as more support for recent reports that suggest the once-sluggish pace of the economy is picking up. Consumers are really the locomotive pulling the rest of the country forward, and the fuel for that locomotive at this moment is the tax cut and the fuel derived from mortgage refinancing, said Sung Won Sohn, chief economic officer for Wells Fargo & Co. in Minneapolis. Economists attributed the increase in consumer spending in large part to the third tax cut by President Bush and Congress since 2001, but they also cited spending on new cars spurred by generous rebates, as well as continued mortgage refinancing because of low interest rates. But Richard Berner, chief U.S. economist for Morgan Stanley in New York, warned against giving too much weight to the idea that consumer spending has been driven by cash generated by mortgage refinancings driven by low interest rates. There's no mistaking the fact that lower mortgage payments have helped some consumers, he said, but not all consumers have refinanced their mortgages, and not all consumers have mortgages.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984573","date":"2003-08-31","texts":"William Greider is wise. A former editor at The Washington Post and Rolling Stone, now national correspondent for the Nation, he wrote Secrets of the Temple, the best book ever on the Federal Reserve. In The Soul of Capitalism he quotes John Maynard Keynes and Thorstein Veblen, seeks out gurus like Clair Brown of Berkeley, David Ellerman of the World Bank and Ron Blackwell of the AFL- CIO -- original minds who wander off the beaten track. Greider's starting point is that the United States has solved the economic problem. Scarcity is no longer prevalent. Food, clothing, housing and entertainment are abundant. Markets, he believes, are intrinsically fair and efficient. Government, he accepts, tends to screw things up. Our remaining problems -- the rat race, the master-servant work relation, corporate greed, environmental decay -- are at bottom questions of values. For Greider, true American values are rooted in small-town Protestantism, descending from prairie yeomen of our agrarian past communitarian, work-centered, custodial. The challenge is to express these values through the market system. This can be done, he believes, by realizing the full potential of institutions that already exist, within capitalism, on a small scale. Workers can be empowered through partnerships, cooperatives, Employee Stock Ownership Plans and the ownership potential of their pension funds. Investors with the virtues of Warren Buffett can tame the corporation. Ecologically responsible investor funds can save the prairies and the forests. The Soul of Capitalism proceeds by case and anecdote. We meet Avis Ransom, an idealistic MBA graduate who left her business consulting career to manage Solidarity, a cooperative Baltimore temp agency. There is amazingly David Stockman, Greider's one- time breakfast partner, who in his earlier capacity as budget director under the first Reagan administration, scandalized Washington in a tell-all profile that Greider published in the Atlantic Monthly, but who has now reinvented himself as a labor- friendly turnaround consultant to companies battered by recession and the fallen market. There is William McDonough, an architect who is presently consulting Nike on how to make a running shoe that will be biodegradable. It is all quirky, entertaining and hopeful. Yet as you meet each new member of Greider's inspired band, you can only wonder Are they anything more than fringe cases, stitched into a quilt that exists, mainly, in the author's mind A few supporting statistics would have helped, but Greider, who has previously woven tight empirical narratives around everything from presidential budget policy to global currency speculation, here pretends to dislike numbers. In a passage on the potential of socially conscious investing, he writes that commonsense logic may be more reliable than mathematical formulas. A moment's thought explodes the notion. It is certainly possible for a well-chosen subset of socially conscious companies to outperform the average. But if everyone chose socially conscious portfolios that exceeded the average, would the return stay high Can the average outwit the average Of course it can't. By construction, socially conscious investing is a fine art, as are many of the other activities Greider describes in The Soul of Capitalism.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984064","date":"2003-09-02","texts":"George F. Will dismisses the idea that it is America's duty to repair the world's broken nations op-ed, Aug. 17. But this strike against a fringe position seems merely a diversionary tactic, his real targets being Tony Blair, George W. Bush and neoconservatives who hope to bring democracy to the Middle East as an antidote to terrorism. Such an approach is folly, says Will, because the social experience of Middle Easterners is so different from that of Anglo- Americans whose attachment to freedom is . . . the product of complex and protracted acculturation by institutions and social mores that have evolved over centuries that prepared the social ground for seeds of democracy. To believe that democracy can be made to grow in the soil of the Middle East is to believe that either national cultures do not significantly differ, or they do not matter or they are infinitely malleable under the touch of enlightened reformers. Although Will strikes a pose of historicity, he ignores most relevant experience. To be sure, it was 561 years from the Magna Carta to the birth of the American republic, the first modern democracy. But over the next 200 years, democracy spread to more than one-third of the world's nations. Then, in the past 30 years, the trend accelerated sharply. Today, according to the authoritative count of Freedom House, 121 of 192 recognized states have freely elected governments. Granted, only 89 of these 121 meet all the criteria for what Freedom House calls a free country. The other 32 are rated as only partly free. These fledgling democracies may lack a reliable judicial system or a fully free press or may be plagued by corruption or civil strife. Nonetheless, the rulers are chosen in competitive elections, and there is reason to anticipate that democracy will deepen just as it did in the United States after highly imperfect beginnings. Whether one counts electoral democracies or the shorter list of free countries, one finds that democracy has spread far from its cultural origins. There are 30 electoral democracies in Latin America and the Caribbean of which 21 are rated free 24 in Asia and the Pacific of which 18 are free and 20 in Africa 11 free.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615152","date":"2003-09-03","texts":"Dow Jones Newswires NEW YORK -- Small-capitalization stock indexes pushed to 15-month highs after a sign of strength in the manufacturing sector of the economy. Factory-equipment makers saw their shares climb after the Institute for Supply Management said its manufacturing index rose to 54.7 in August, up from 51.8 in July, and better than analysts' expectation of 53.5. Small-cap Milacron led the group higher with its advance of 18 cents, or 8, to 2.42, on the New York Stock Exchange, followed by Nordson's gain of 1.37, or 5.5, to 26.24, and Regal-Beloit's Amex rise of 98 cents, or 4.3, to 23.60. Computer issues also showed strength after Goldman Sachs raised its investment opinion of the enterprise-hardware sector to neutral from cautious, saying many technology companies are poised to meet or exceed fourth-quarter estimates. Among small stocks, Computer Network Technology gained 70 cents, or 8.9, to 8.60, Concurrent Computer advanced 24 cents, or 6.8, to 3.75, and Advanced Digital Information climbed 68 cents, or 5, to 14.18.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616954","date":"2003-09-04","texts":"No initial public offerings of stock are scheduled to hit the market this week, which is typical during the late-summer slow period for IPOs. Still, there were 14 IPOs that had debuts during July and August, and several more are in the pipeline, assuming the stock market doesn't weaken. --  Change From -- Offer Yesterday's Offer First-Day IPO Company Symbol Price Close Price Close Date Ashford Hospitality Trust","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616379","date":"2003-09-05","texts":"CHINA MAY NOT be the only player in the Asian currency game. With U.S. business -- and American policy makers -- still smarting from Beijing's decision to put off any currency adjustment, there's evidence that other Asian currencies could soon be moving up, which would be good news for many U.S. corporations. For American companies complaining that an artificially weak yuan harms their competitiveness in China, a rally in other Asian currencies would ease their pain by boosting profits throughout the fast-growing Pacific Rim region. In a new report, Merrill Lynch & Co. argues that a currency shift beyond China could well be underfoot. As economic growth picks up, Asian central banks should be less worried that a stronger currency will harm their exports, and could feel less pressure to intervene. The report also points to incipient signs of inflation in Asia, which would make stronger currencies more palatable. And despite this week's rebuff from Beijing, speculation that China will adjust its currency peg sometime next year -- allowing the yuan to strengthen -- is expected to boost other Asian currencies in anticipation.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983341","date":"2003-09-07","texts":"Hood College, beset by financial woes that threatened its survival, has won permission to use 10.5 million of its endowment funds to pay off its most serious debts in a move that some experts called unique. The private college in Frederick, which admitted men to its residential program for the first time this year, had defaulted on loans to two banks and was on the verge of having to consider closing when it took the unusual step of seeking a judge's approval to tap into its 50 million endowment, according to court records. The bulk of Hood's endowment is made up of funds earmarked by donors for special purposes -- such as scholarships or new buildings -- that generally cannot be touched for regular operating expenses. But Hood officials argued in their petition to Frederick County Circuit Court that the institution would have to shut down if not allowed access to the restricted funds. Hood's actions were first reported in the Baltimore Business Journal. Like many small, private liberal arts colleges, Hood has been buffeted in recent years by a flagging economy and the sharp decline in enrollment experienced by many other women's colleges. That trend prompted Hood's decision last year to go fully coeducational starting with the current academic year. President Ronald J. Volpe said last week that the unconventional endowment disbursal is one of several moves he believes have set the institution on the path to fiscal rejuvenation. Hood recently laid off about 30 non-teaching employees to reduce expenses. Meanwhile, enrollment has risen in the past two years from 1,500 to 1,700 full- and part-time students, and Hood last week sold part of a large off- campus property in a deal that will provide a 3 million cushion for the coming academic year.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616257","date":"2003-09-10","texts":"Dow Jones Newswires NEW YORK -- Hurt by continued concern about the stubbornly weak U.S. labor market, the dollar slid sharply against its main rivals apart from the yen, thanks only to another round of apparent intervention by Japanese monetary authorities. Strong bids from Japanese and U.S. financial institutions -- some out of Tokyo -- lifted the dollar from its lows during New York trading, preventing it from sinking below 116.00 yen, a level market participants say Japanese authorities are determined to protect. I don't know for sure, but it looks official -- big time, said a dealer in New York when the dollar started rallying. The chief dealer at a Japanese bank in New York said certain U.S. banks were buying large amount of dollars as the dollar started to turn around. To be sure, this was virtually the only respite the dollar got all day. Against the euro, Swiss franc, sterling -- and until the apparent intervention, the yen -- the currency was consistently under heavy selling pressure.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983483","date":"2003-09-14","texts":"Earlier this year, Christie's auction house offered for sale an unusual work of art -- a mountain of 10,000 fortune cookies stacked in the corner of a room. It was conceived by Felix Gonzalez-Torres, a Cuban-born minimalist who died in 1996. Other works in his oeuvre include a carpet of candies neatly packaged in cellophane, a photograph of an unmade bed and strings of faint light bulbs suspended from a ceiling or draped across a wall. The asking price for the cookie installation 600,000 to 800,000. Vaunting the art, a Christie's executive conjectured that fortune cookies, with their cheerful adages, inject a measure of optimism into an often dismal world. It's a fascinating if pompous notion, but hardly one that would have occurred to me during my Brooklyn childhood in the 1930s, when my parents, brother and I gathered on Sunday evenings with uncles, aunts and cousins for supper at the Pearl Dragon, as our favorite Chinese restaurant was grandly titled. Catering to its heavily Jewish clientele, the restaurant disguised wonton as kreplach on the menu and only closed twice a year -- on Yom Kippur and Rosh Hashanah. The gargantuan dinners ran the spectrum from egg drop soup, moo goo gai pan, chicken chow mein and shrimp in lobster sauce, to barbecued spareribs, pepper beef, fried noodles and bowls of steamed rice. But they always culminated with the ubiquitous fortune cookie. Over cups of fragrant jasmine tea, we would crack them open and gleefully recite their saccharin maxims Hard work reaps rewards, You will ride the train to success, Honesty is the best policy and, of course, Romance awaits you. Subsequently, as I developed an interest in Chinese cuisine, I learned that fortune cookies are as American as apple pie a la mode. One version holds that they were invented in 1916 by a Los Angeles noodle manufacturer, David Jung, who purportedly drew his inspiration from a surreptitious practice reaching back to the 14th century, when the Mongols still ruled China. Dissidents struggling to oust the barbarians communicated with each other by concealing messages inside moon cakes, festival pastries typically filled with lotus seed paste. Thanks to their clever gimmick, they triumphed and founded the Ming dynasty. Jung, who was looking for items to expand his repertoire, figured that these buns could be Westernized.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830981629","date":"2003-09-15","texts":"Ted Nigh wants his friends to know that life in the nursing home is all right and that they shouldn't hesitate to visit him. He is getting good care and gets along well with the staff. Nigh is 20 years old, a 2002 graduate of Falls Church High School. He is also a quadriplegic with cerebral palsy. With no programs available to help Nigh after graduation, his father, a single parent, felt he had little choice but to put his son in a nursing home that accepts Medicaid patients. Sam Nigh, 54, who was recently laid off from his job at an insurance company, said he hopes that some alternative will come through next year. They're doing a good job taking care of me, Ted Nigh said of the 180-bed nursing home in Manassas where he has lived since May. But his stay is becoming too long, he added. You just get aggravated. . . . I don't want nursing home life to become a regular habit. Like all states, Virginia is required by federal law to provide special education to disabled students such as Nigh. But increasingly, advocates say, the millions of dollars spent on this education are going to waste as budget cuts whittle down the programs that allow special education graduates to transition to jobs and more independent lives. This creates added burdens for parents, who sometimes must sacrifice their own jobs to stay home and care for their disabled children. Recent budget crunches and tax cuts have further stressed a system that is already very inadequate, said Kathy May, lead advocate for The Arc of Northern Virginia, a local affiliate of the national advocacy group The Arc, which promotes the rights of people with mental retardation and other developmental disabilities.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617164","date":"2003-09-16","texts":"Dow Jones Newswires NEW YORK -- The dollar failed to stage much of a comeback against the euro yesterday, ahead of a Federal Reserve rate-setting meeting, hurt by indications that U.S. industrial production is growing at a slower pace than anticipated. Meanwhile, the Swedish krona fell sharply following a vote by Swedes to resoundingly reject membership of European Monetary Union, although it recouped some of its losses. Late yesterday in New York, the euro was trading at 9.1439 kronor, sharply higher than 9.0760 kronor late Friday, but well below the 9.20 kronor it had reached on the back of the rejection. Observers said the result illustrates the gap between the goals and visions of the E.U.'s political and business elite on one hand and the mindset of their constituents on the other. In the major currencies, the dollar was able to extend its gains modestly against the yen, as investors remain wary of currency-market intervention after the seemingly heavy presence of the Bank of Japan, which acts on behalf of the government, last week. Japan has been a dominant force in currency markets this year as it seeks to stop the yen from hitting 115 yen, a level thought to be the pain threshold for many exporters.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616550","date":"2003-09-18","texts":"Best Buy Co. said its fiscal second-quarter profit and sales rose sharply, boosted by back-to-school shoppers and tax rebates, while its rival Circuit City Stores Inc. said its losses widened because of charges. Best Buy, of Richfield, Minn., which has been outperforming its peers all year, said its net income for the quarter ended Aug. 30 more than doubled to 139 million, or 42 cents a share, from 62 million, or 19 cents a share, a year earlier. The results were at the top of its August forecast of 37 cents to 42 cents a share. Revenue rose 17 to 5.4 billion from 4.62 billion a year earlier. The company was optimistic about the remainder of the year, saying it expects comparable-store sales, or those at stores open at least 14 months, to climb 6 to 8, above its prior expectations. Bradbury H. Anderson, vice chairman and chief executive officer, said in an interview that consumer spending is very aggressive right now -- more so than we expected. However, he cautioned some of the demand may slow as last month's child-tax rebates are spent. Mr. Anderson said a good portion of its comparable-store gains came from personal-computer sales, which had been falling. Circuit City reported a fiscal second-quarter loss of 124.2 million, or 60 cents a share, compared with a loss of 11.2 million, or five cents a share, a year earlier. Slow to respond to industry trends favoring self-service and large product selection, the Richmond, Va., retailer has been remodeling and relocating stores to adapt to the trends. Expenses for refurbishing and moving stores totaled seven cents a share.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983833","date":"2003-09-21","texts":"Todd Buchwald took a week off after each of his two sons was born. But when he and his wife were about to have their third child, in September 2001, Buchwald decided he wanted more time to spend with the boys and the new baby. So the high-level lawyer with the State Department finally asked the decision-makers at his job if he could take off six months, using a combination of unpaid leave, vacation time and sick time permitted under the Family and Medical Leave Act. His bosses' answer was a simple yes. I work very hard, and I think the fact that I asked for it, people must have perceived it was very important to me, he said. Many companies and organizations are beginning to take extended leaves, both paid and unpaid, seriously. Giving a valued employee such as Buchwald a long leave promotes worker retention, morale and loyalty. And in today's economy, employees may have a better chance than in previous years to get that leave because companies providing a career break can cut back on costs. Granted, leaves can mean more work for the other employees, as we've discussed recently in this space. But those who fill in will often get a turn, too. Sometimes, the decision to give grant leave comes down to whether someone can be found to cover the work. As a lawyer in the legal adviser's office in political military affairs at the State Department, Buchwald delayed his leave when his daughter, Elizabeth, was born just days after the Sept. 11, 2001, terrorist attacks. Beyond how horrible Sept. 11 was, it was also an incredibly intense time at the State Department. If 911 hadn't happened, I would have gone on leave earlier, he said. Instead, he waited until January to take his six months off to bond with his infant daughter between escorting his sons to school and coaching Little League. His colleagues filled in for him and made him feel fine about taking a break. People in the office were incredibly supportive, he said. They already have tight schedules, but they pitched in and got everything done.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616320","date":"2003-09-23","texts":"Dow Jones Newswires NEW YORK -- Treasurys prices ended sharply lower, though well above the day's worst levels, on fears of less foreign demand for U.S. government securities. Over the weekend, finance ministers of the world's seven largest industrialized nations called for more flexibility in exchange rates . . . based on market mechanisms. Asian central banks, notably the Bank of Japan and the People's Bank of China, have managed the valuations of their nations' currencies through covert market interventions and, in China's case, by a narrowly defined band. Bank of Japan interventions have involved buying dollars against yen, and many of the dollars accumulated through such purchases have been channeled into the U.S. Treasurys market. Investors now fear that if the central banks were to refrain from buying dollars to keep their currencies weak, they would need to purchase fewer U.S. Treasurys.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616681","date":"2003-09-30","texts":"Americans appear to be plowing a large chunk of their tax cuts back into the economy. The Commerce Department reported that consumer spending rose by a robust 0.8 in August from July, following a 0.9 increase the month before. The latest figures pointed to a remarkably strong 7.4 annualized gain in inflation-adjusted consumer spending through the first two months of the third quarter, according to Bear Stearns estimates. If that spending pace was sustained through September -- final data won't be available until next month -- it would be the largest quarterly spending increase since 1985. Massive tax relief has boosted disposable income and real consumer spending, Steven Wood, an economist with Insight Economics, said in a note to clients. This fiscal stimulus will provide a strong boost to third-quarter growth. It is still too early to say whether the latest spurt of spending will be sustainable. Consumer-confidence surveys remain soft, in part because companies haven't started hiring en masse, and that is restraining wages and salaries. Some economists warn that the recent jump in spending will wane as the initial impetus of tax cuts wears off. However the latest reports suggest the tax cuts at least helped set the tone for a summer of sizzling consumer spending. People are slowly starting to get more and more confident, says Myron Markewycz, general manager of One Sixtyblue, a fine-dining restaurant in Chicago that has seen sales of 32 Delmonico steaks and 100 bottles of wine pick up sharply in the past two months.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617113","date":"2003-10-01","texts":"LIKE MANY OTHER fund managers, Michael Kagan, a managing director at Salomon Brothers Asset Management, has been optimistic about the economy. In September, he filled his portfolio with paper companies and makers of heavy trucks, companies that do well when the economy is growing. This is a classic cyclical recovery, he says. While share prices have moved up, so have earnings. Valuations, he adds, are exactly where they were at the beginning of the year.We have just had the most massive stimulus ever, Mr. Kagan notes, referring to the windfall combination of low interest rates, rapid monetary growth and generous tax cuts. But the feel-good factor seen through the summer could easily be replaced by renewed doubts. It is a fairly abnormal environment, says Bruce Kasman, chief U.S. economist for J.P. Morgan Securities. Low interest rates have some medicinal effects. They help, but they aren't a permanent fix for everything. Still, even after the recent stock-market declines, the alternatives are lousy. Bank deposits earning less than 2 No thanks. A return on 10-year Treasurys under 4 Please. Besides, Chevron Texaco Corp. pays a dividend close to that, and the tax on that dividend has just been cut to 15. Investors are no longer seeking a hiding place, says Jeffrey Knight, chief investment officer for global asset allocation at Putnam Investments in Boston. Every indicator we see suggests that there is low regard for risk.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616481","date":"2003-10-07","texts":"In their debate on economic policy last month, every Democratic candidate for president called for rolling back all or part of George W. Bush's tax cuts. All politics aside, and with the economy showing signs of recovery, perhaps now is the right time to revisit the rationale behind tax reductions and what seems to be an excessive fear of budget deficits. Proposals for tax reductions during periodsof a weak economy are inevitably followed by discussion of the stimulus effects that such cuts will have on economic activity over the next year or so. Less often is the focus on the more important issue, which is whether a tax cut helps in the long run. Tax cuts make sense for two reasons. First, government spending responds to tax revenues, so that lower revenues imply lower government spending. Second, economic growth depends on both human capital and physical capital, and investment in human capital, as well as physical capital, is responsive to tax rates. Consider each in turn. Like any company or household, government spending is constrained by its revenue. The sum of present and future public spending, discounted by the rate of interest on government bonds, must equal the sum of present and discounted future tax revenues. This government budget equation has been recognized by economists since the pioneering work on taxation by economist David Ricardo in the early 19th century. Typically, economists take government spending as given by the needs of society, and assume that taxes, including taxes on money balances generated by inflation, adjust to this spending in order to balance the government budget equation. Yet economic theory and empirical evidence suggest that spending often adjusts to available tax revenue rather than the other way around. Government spending responds to the ongoing political battles between taxpayers and the interest groups that benefit from government spending. Developments in the federal budget since the early 1980s illustrate the dependence of spending on tax revenue. The Reagan tax cuts of the '80s helped promote longer-term growth, but they also increased federal deficits and subsequent interest payments on the debt. The Bush tax cuts will also help future growth, and possibly have already begun to stimulate the economy","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617126","date":"2003-10-07","texts":"This month, Esquire is celebrating its 70th anniversary with a special issue. The Greatest Issue . . . Of All Time is a teaser on the cover. It's an odd milestone. Waiting five years for the 75th anniversary would have made more sense. One possible explanation for popping the champagne corks so early is that owner Hearst Corp.'s marketing department insisted on the idea to gin up advertising pages in a still-recovering economic environment. A more likely scenario, in my view, is that Esquire editor David Granger had dinner many months ago with his deputies and over cocktails hatched the ill-conceived plan. In any case, Mr. Granger forged ahead. The results aren't pretty. Esquire, of course, is one of a small number of iconic magazines in the U. S. Like the New Yorker, Playboy, the Atlantic Monthly and Time, for example, it navigates through periods of alternating brilliance and irrelevance. Mr. Granger's six-year tenure as editor has seen it fall, unfortunately, into the latter category. After reading the self-aggrandizing issue, I was left with one question. Why would Mr. Granger want to magnify Esquire's current shortcomings by showcasing snippets of the magazine's glory days under co-founder Arnold Gingrich and then the legendary 1960s team of editor Harold Hayes and cover designer George Lois","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617102","date":"2003-10-09","texts":"The Republican party has a powerful new superhero. But Arnold Schwarzenegger's surprisingly strong victory in California also flashes some warning signs for President Bush and his party. Mr. Schwarzenegger ousted Democratic Gov. Gray Davis with ease and cut deeply into Democrats' traditional union and Hispanic base. He brings the Republicans a star quality that recalls another former actor and California governor, Ronald Reagan. And Mr. Schwarzenegger represents an instant asset in the nation's largest state as Mr. Bush gears up for his re-election campaign. Yet Mr. Schwarzenegger prevailed by stoking voters' frustration with those in power and the desire to oust them -- troubling sentiments for Republicans who control all levers of power at the national level. The California revolt began with a failure to resolve a big budget deficit, one of the problems at the top of Mr. Bush's list of woes. And Mr. Schwarzenegger's broad appeal came in part from his moderate stands on abortion, gay rights and gun control -- positions sure to set off nasty fights at any national Republican gathering. Moreover, Mr. Schwarzenegger's campaign offered no real clue about how he will deal with his most pressing problem keeping his promises to cut an unpopular auto tax, raise no other new taxes, increase education spending and somehow close California's yawning deficit all at the same time. With the intense national spotlight that now shines on the Golden State, Republicans badly need him to succeed. Mr. Schwarzenegger didn't flesh out his plans in any more detail in his first postelection news conference yesterday afternoon. He reiterated his campaign-trail vow that I will not raise taxes. But he also said he'd just learned that the state's budget deficit may turn out to be 20 billion rather than the previous estimate of 8 billion, though the reason he alluded to -- a pending legal action to halt the sale of some state bonds -- has been well-known to state officials and observers for some time. He said only that he'll arrange an independent audit of state government's books and then work with the Democratic-controlled Legislature to close the gap.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614699","date":"2003-10-10","texts":"California, the first state to pull the plug on electricity deregulation, may now be the first to hop back on the deregulation bandwagon under new Gov. Arnold Schwarzenegger. Aides to Mr. Schwarzenegger and the governor-elect's own position papers say the new Republican administration will take California back in the direction of open electricity markets, most notably by giving big energy consumers the right to choose among suppliers. Big users were stripped of thatright after Gov. Gray Davis signed 43 billion of long-term energy supply contracts in 2001. Those contracts were aimed at stabilizing a market that had been thrown into chaos by a combination of the poorly designed deregulation policies of former Gov. Pete Wilson's administration and aggressive moves by big energy traders like Enron Corp. Mr. Davis let a problem become a crisis, Mr. Wilson, now a top adviser to Mr. Schwarzenegger, said yesterday. The new governor wants to move to a free market in power. That's still the future for the state. Any such move by the Schwarzenegger team will be closely watched by other states. Many states backed away from energy deregulation in the wake of California's 2000-2001 crisis, which brought blackouts and billions of dollars in added energy costs, and felt their misgivings confirmed by this summer's blackout in the Great Lakes region, Northeast and Canada. Mr. Davis's handling of the California power crisis, coupled with the state's mushrooming budget deficit, fueled the recall effort that swept him from office.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614966","date":"2003-10-14","texts":"Washington -- POLITICIANS HERE profess a strong desire to expand Medicare to cover prescription drugs, but getting the job done is proving difficult, with a handful of divisive issues threatening the legislation. In hopes of prodding both sides toward an agreement, congressional leaders had set a tentative -- if overly ambitious -- deadline of Friday for major progress on pending legislation. With lawmakers scheduled to meet several times this week, that could happen. But fundamental disagreements over the long-term direction of the Medicare program remain. Conservative House Republicans are insisting on major changes that liberal Senate Democrats oppose. The loss of either group could doom the legislation. Still, there is a growing sense of what a compromise might look like and what each side might have to give up to reach agreement. Negotiating such a deal won't be easy, especially in a deteriorating political climate characterized by partisan disputes over the federal budget deficit and foreign policy. It's going to be tougher today to convince people to support a solid bipartisan bill . . . because of the increased tension, says Sen. Edward Kennedy, a Massachusetts Democrat who helped shepherd the Senate bill through the chamber. I set the bar high. The other side set the bar high. It's too early to predict the outcome. Everyone agrees on one thing Unless negotiators produce compromise legislation by next month, they won't have much of a shot at getting the bill through Congress this year -- and with the presidential campaign revving up, next year would be even tougher. Here are some of the major issues in the attempt to revamp the federal health program, which covers about 40 million Americans","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613776","date":"2003-10-16","texts":"Most technology companies are considering cutting back their use of stock options to reward employees or changing to other forms of stock compensation, in a further sign that the glory days of stock options are past, according to a survey of top executives in the high-tech industry. In the survey of top corporate executives at 196 companies by the technology, media and telecommunications practice of consulting firm Deloitte Touche Tohmatsu, 65 of tech companies overall and 83 of public companies say they are looking at alternatives to stock options, which grant employees and executives the right to buy company stock at a fixed price during a specified period. Instead, most public technology companies, 63, plan to issue restricted stock or stock units -- actual awards of stock or promises to grant such stock in the future. The results of the survey show the extent to which technology companies are shifting away from a form of compensation that made fortunes for many tech workers in the 1990s. Options have fallen out of favor among rank-and-file employees as stock-market declines made many options worthless. At the same time, investors and regulators have blamed option plans for their role in scandals at companies like Enron Corp., where executives cashed out large numbers of options before bad news broke. Already, high-profile tech companies such as Microsoft Corp. and Amazon.com Inc. have stopped issuing options to employees in favor of restricted stock units. Another factor in the changes, the Deloitte survey says, is a coming drought in options Seventy-two percent of the survey's respondents expect to run out of shares to grant to employees within two years. New rules adopted by the New York Stock Exchange and Nasdaq Stock Market this year require shareholder approval of new stock compensation plans. Many technology companies continue to resist dropping options, in part because favorable accounting rules have allowed them to exclude option expenses from their financial results. Accounting regulators are expected eventually to require companies to treat options as an expense. Still, 92 of public tech companies surveyed by Deloitte said they aren't expensing stock options yet.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616245","date":"2003-10-16","texts":"Dow Jones Newswires NEW YORK -- Stocks pulled back a bit despite a strong profit report from Intel, a component of the Dow Jones Industrial Average and Nasdaq Composite Index. The Dow Jones Industrial Average fell 9.93 points, or 0.1, to 9803.05 the Nasdaq Composite Index shed 4.09, or 0.21, to 1939.1 and the Standard & Poor's 500-stock index dropped 2.72, or 0.26, to 1046.76. Shares of tech bellwether Intel rose 68 cents, or 2.2, to 31.76 following the company's report after the close of trading Tuesday that third-quarter profit more than doubled on 20 revenue growth, which topped the company's own raised expectations. With yesterday's gain, Intel's stock price is up 100 this year. Other semiconductor-related stocks did well, including Novellus Systems, advancing 1.12, or 3, to 38.54 on the Nasdaq Stock Market after the chip-equipment maker reported earnings of four cents a share before items, beating Wall Street's prediction that the company would break even for the period.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983856","date":"2003-10-16","texts":"Timothy F. Geithner, a high-ranking official at the International Monetary Fund and a former Treasury undersecretary for international affairs, yesterday was named president of the New York Federal Reserve Bank, one of the most influential positions in the Fed system. For the past two years, Geithner, 42, has been director of the IMF's Policy Development and Review Department, which plays a key role in the design and implementation of the organization's policies. He will assume his new job in the middle of November, succeeding William J. McDonough, who resigned in June to become chairman of the Public Company Accounting Oversight Board. Peter G. Peterson, chairman of the New York Fed's board of directors, announced the appointment. The bank's board names the president, with the approval of the Federal Reserve Board. Geithner, who joined the Treasury Department as a civil servant in 1988, was the first such employee to hold an undersecretary's job there. He became a deputy assistant secretary in 1995, then assistant secretary and finally undersecretary in 1998. At Treasury he represented the United States at international meetings and helped negotiate assistance packages that helped calm financial crises in South Korea, Brazil and other countries. He was also involved in major negotiations about financial services trade among nations.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983521","date":"2003-10-22","texts":"Tuition costs at public colleges rose more rapidly last year than at any time over the past three decades, according to a report released yesterday. After adjusting for inflation, costs were up 13 percent for the year and 47 percent for the past decade. The annual report by the College Board, which collects data from more than 4,000 institutions, said tuition and fees also rose substantially last year at private colleges and universities, but at a slower rate than in the public sector. If room and board costs are included, the average student now pays 26,854 a year to attend a private university, and 10,636 to attend a public university in his or her own state. College tuition and fees are getting out of control, and we need to do something about it, said Rep. Howard P. Buck McKeon R- Calif. who has proposed legislation that would penalize institutions that repeatedly engage in exorbitant tuition hikes. According to the College Board, the 13 percent real increase in tuition at public colleges last year was the highest in at least three decades. It followed an inflation-adjusted increase of 8 percent the previous year, a growth rate that had not been seen for 20 years. The College Board survey suggests that the rise of tuition costs has been particularly rapid in mid-Atlantic and midwestern states, as universities scramble to plug deficits caused by declining state appropriations. The University of Maryland increased its prices by 21 percent last year and has proposed an 11 percent increase for next year. Costs at the University of Virginia are nearly 30 percent higher than they were last fall.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616529","date":"2003-10-23","texts":"MERCK & CO., in a dramatic reflection of the pharmaceutical industry's profit woes, said it will fall short of 2003 earnings targets, and announced plans to lay off 4,400 workers in the face of lower-than-expected sales of some big drugs. At the same time, Wyeth reported a third-quarter loss after setting aside 2 billion more to cover already sky-high claims of heart damage from diet drugs that came off the market in 1997. The news came amid a flurry of third-quarter earnings reports from six major drug makers that offered a sobering checkup on the pharmaceutical sector's flagging health. Almost every drug company is beset with expiring patents for major products and a shortfall in new blockbusters. Competition from generics and a recent wave of over-the- counter versions of some prescription drugs are intensifying the pain at several companies. Pfizer Inc. and GlaxoSmithKline PLC, the world's No. 1 and No. 2 two drug companies, respectively, posted stronger results than their rivals, but they continue to cut costs in the wake of megamergers that may buy them time until a new crop of blockbusters emerges. Eli Lilly & Co said net income rose 4.5. The results cast a pall over the stock market. Merck was down 6.5, or 3.19, to 45.72 in 4 p.m. New York Stock Exchange composite trading, helping to drag down the Dow Jones Industrial Average. Pfizer fell 88 cents to 30.62 while Wyeth slipped 5.5, or 2.50, to 43.30 and Schering-Plough Corp. lost 88 cents to 15.12 and Lilly fell 1.72 to 60.78, all in Big Board trading. Glaxo's American depositary shares fell 1 to 42.92, also on the NYSE.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614995","date":"2003-10-24","texts":"Beijing -- FROM STEAK TO IRON ore to cotton to diamonds, China's rising urban incomes, changing consumer tastes and increased exports are reshaping the world's commodity markets. The country's emergence as a major importer of raw materials is driving global prices higher and catching some suppliers flat-footed. Consider the Texan Bar and Grill in Beijing, tucked away in a cavernous Holiday Inn. The waiters wear cowboy hats, boots and blue jeans to serve Beijing diners the restaurant's signature dish grilled U.S. rib-eye steak. In a sign of the prosperous times in China, a growing number of Chinese can afford a substantial steak lunch, and have developed a substantial taste for one as well. China's beef imports hit record levels last year. And global beef exporters are licking their chops. U.S. and Canadian agricultural officials expect China to import 30,000 metric tons of beef next year -- and more than 350,000 tons in 10 years, making China our No. 1 engine of growth, says Ted Haney, president of the Canada Beef Export Federation. Similarly, on a small island near Shanghai, Baogang Steel Group Co., the nation's biggest steel producer, has carved a new deep-water harbor to accommodate huge freighters from Brazil and Australia supplying iron ore, a crucial material used in making the steel for the auto and construction industries. This year, China will import 150 million tons of iron ore, surpassing Japan as the world's largest consumer of the commodity. China has sucked the cupboard bare of raw materials, says Jim Lennon, executive director of commodities research at Macquarie Bank Ltd. in London. Because of its fast growth, Mr. Lennon cautions, China is starting to place severe strains on the global raw-materials supply chain. Those strains are driving commodity prices sharply higher.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984783","date":"2003-10-27","texts":"Some of the chief complainers about the Washington region's notorious traffic jams are business leaders who blame congestion for delayed deliveries, missed meetings and employees sapped of energy from stressful commutes. They push for billions of dollars worth of new or widened highways and extended subway service -- projects that have gotten stymied in years of studies, public debate and budget battles. But many traffic experts say businesses, federal agencies and other employers could do far more to help reduce traffic backups almost immediately and relatively cheaply by allowing more employees to work from home or from a telework center even one day a week. I think out of all the options we have, it's one of the easiest things we could do to reduce traffic delays, said Laurie Schintler, a George Mason University assistant professor who researched the potential of telecommuting in the Washington region. Even with promising data on time savings, increased productivity and greater accessibility to high-speed Internet from home computers, the idea hasn't taken hold with most employers.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984489","date":"2003-10-31","texts":"PUBLISHED CORRECTIONS In an Oct. 31 article on economic growth, a quotation about the number of payroll jobs lost from June to September was incorrectly attributed to Rep. Fortney Pete Stark D-Calif.. The number cited was also incorrect The correct figure is 41,000. Published 1101 03 The U.S. economy, firing on all cylinders, grew this summer at the fastest pace in nearly two decades, even as it was losing jobs. The Commerce Department reported yesterday that the economy expanded at a roaring 7.2 percent annual rate in the July-to- September period as a result of large gains in consumer spending, business investment, housing construction and exports. It was the highest growth rate since the first quarter of 1984. Defense spending was flat in the third quarter, despite continuing military operations in Iraq. This spring, defense spending skyrocketed and contributed substantially to the second quarter's 3.3 percent economic growth rate. Late last year and early this year, the economy grew at a weak 1.4 percent annual rate. Fueled by personal-income-tax cuts that became effective in July and a record surge in home-mortgage refinancing that gave homeowners more cash to spend, consumer purchases rose at a very strong 6.6 percent annual rate in the third quarter, by far the strongest factor in the overall gain in the nation's economic output, or gross domestic product. Businesses also got new tax incentives to invest.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830984437","date":"2003-11-05","texts":"U.S. stocks declined yesterday on concern that share prices already reflect prospects for earnings growth. There is some news that suggests the torrid pace of the third quarter will not be maintained intact in the fourth, said J. Thomas Madden, vice president of investment management at Federated Investors. That's given investors some cause for pause. The S&P 500-stock index fell 5.77 points, or 0.5 percent, to 1053.25. The Nasdaq composite index slipped 9.74, or 0.5 percent, to 1957.96. The Dow Jones industrial average dropped 19.63, or 0.2 percent, to 9838.83, its first drop in seven days. Aon shares fell 1.17, to 20.97, after the insurance brokerage reported a decrease in quarterly profit. Kodak climbed 10 cents, to 24.31, after a Federal Trade Commission document showed that billionaire Carl C. Icahn has received regulatory approval to buy as much as 500 million worth of Kodak in securities or assets.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983301","date":"2003-11-07","texts":"Federal Reserve Chairman Alan Greenspan, in his most upbeat assessment of the U.S. economic outlook in years, said yesterday that the economy should soon start producing the kind of job growth that has been missing since the end of the 2001 recession. Significant employment gains would provide a critical missing element of the nation's recovery from the recession, a period in which sluggish economic growth has given way in recent months to a sizzling expansion, climbing stock prices and rising business spending. An improving job market would also provide a big political boost to President Bush as he heads into an election year. Greenspan sounded cautious about the job market earlier this year, as the economy weathered uncertainties related to the war in Iraq, concerns about corporate scandals and the unwillingness of businesses to make new investments. But yesterday, Greenspan said the economy appears poised for sustained growth strong enough to generate more hiring. The odds increasingly favor a revival in job creation, the Fed chairman said, via satellite, in a speech to the Securities Industry Association in Boca Raton, Fla. At the same time, the Fed chairman expressed dismay at projections showing large continuing federal budget deficits that could cause economic disruptions down the road.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615692","date":"2003-11-11","texts":"CHRIS PORTER, a 26-year-old computer technician with a master's degree, works for a temp agency. Every day, the agency sends him out to customize Dell computers. That puts Mr. Porter on the front lines of Dell Inc.'s next major business push. Dell is applying the low-cost techniques that put it atop the PC industry to the computer-services business. It is tapping a glut of trained technicians and hungry-for-work service companies, aiming to make the unsexy business of maintaining and servicing computers for corporations its next big moneymaker. The low-cost structure mirrors the way Dell revolutionized the PC business a decade ago. While competitors designed their PCs with special bells and whistles and filled warehouses with them, Dell bought components off the shelf and built the computers to customers' orders, reducing overhead and keeping prices low. With services, we can do it differently, insists Dell President Kevin B. Rollins. He says Dell's approach results in service costs that are 20 lower than rivals', and predicts the fast-growing business will contribute 10 billion in annual revenue within a few years, up from about 1.5 billion today. By contrast, such services contributed 9.5 billion to Hewlett-Packard Co.'s revenue and 25.1 billion to International Business Machines Corp.'s last year. Yet unlike IBM and H-P, Dell won't repair other manufacturers' equipment, focusing instead on the nearly 90 million computers it has sold in the past five years. That could lessen the appeal of its services operation to customers that own many brands of gear. Dell, though, expects to take customers away from H-P and IBM as these clients buy Dell equipment.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613762","date":"2003-11-17","texts":"WASHINGTON -- Alfred Broaddus, president of the Federal Reserve Bank of Richmond and one of the Fed's most independent voices on monetary policy, plans to retire on Aug. 1. It has been a great privilege to serve the Federal Reserve, and, most importantly, the public in this role, Mr. Broaddus said. He turns 65 in July, when Fed policy requires its bank presidents to retire. He has led the Richmond Fed since Jan. 1, 1993, and has been on the bank's staff since 1970. He is currently a voting member of the Federal Open Market Committee, the Fed's monetary-policy panel. Mr. Broaddus's shifting views on the risks of inflation and deflation have symbolized a transformation in the entire central bank. After becoming Richmond Fed president, he became one of its staunchest inflation hawks, repeatedly dissenting from his colleagues to press for higher interest rates to stem inflationary pressure. But beginning a few years ago, he concluded the Fed had finally reached its goal of price stability and began to worry that the Fed might be slow to recognize the risk of deflation, or falling prices. In the past year, Mr. Broaddus has traveled an interesting path from being a well-known and fierce inflation hawk to being one of the Fed's most prominent warriors about the dangers of deflation, said Tom Schlesinger, executive director kept of the Financial Markets Center, a Virginia-based Fed watchdog group. I think it reflects well on him that he's taken this intellectual journey and done so in public.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616020","date":"2003-11-17","texts":"Automobile makers raised prices and reduced dealer incentives on 2004 car models in October while California, the nation's biggest auto market, increased car taxes -- moves that prompted consumers to cut back on purchases. That was the upshot of a slew of government data released Friday. The Bureau of Labor Statistics reported that producer prices rose a larger-than-expected 0.8 on a seasonally adjusted basis in October from the month before, largely because of higher auto prices. Meanwhile, the U.S. Census Bureau reported retail sales slipped 0.3 in October, largely due to declining auto sales. Manufacturers are adjusting incentives in part to see how well their products can do without incentives as the economy strengthens, said Robert Schnorbus, chief economist at J.D. Power & Associates, a market research company. Consumers, being finicky as they are, just don't like to see incentives go down, and they're pulling back. The Federal Reserve also reported that industrial production rose for the fourth straight month in October, but the pace of increases was curtailed by a slowdown in motor vehicle assemblies. Some auto makers responded by fattening incentives in November. This is leading some economists to predict the October sales slowdown and the spike in prices will be temporary. It is the pregnant pause of a wiser consumer, said David Littman, chief economist of Comerica Bank in Detroit. Underscoring expectations of a pickup in consumer spending later in the year, the University of Michigan's index of consumer sentiment rose to 93.5 in early November, stronger than the late October reading of 89.6.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613802","date":"2003-11-18","texts":"You might think that the very first thing the American taxpayer has the right to expect from a financial institution dedicated to maintaining monetary cooperation and the international balance of payments would be some honest bookkeeping. Especially when Uncle Sam is its largest contributor. Think again. Forget about looking for the answer in the U.S. budget. America's contribution to the International Monetary Fund is an off-budget item. And Congress has long preferred to pretend that the billions of dollars in loans that the U.S. makes to the Fund cost the U.S. taxpayer, as Treasury Secretary Robert Rubin put it in 1998, not one dime. Naturally, this line of thinking is just fine with the IMF, which is happy to avoid the closer scrutiny that would be sure to follow if Congress ever admitted that its U.S. funding is not cost- free. Though such logic not to mention such arithmetic was always suspect, a new study shows just how flawed it really is. The U.S. contribution to the IMF, says Adam Lerrick of the Gailliot Center at Carnegie Mellon University, has cost the U.S. an average of 1.5 billion a year since 1991. This year those costs will reach 1.9 billion. It sure would be nice if Congress noticed. Mr. Lerrick reaches his conclusions using a set of facts that are difficult to argue with. Start with the fact the Fund makes large loans at low interest rates to such risky economies as Argentina or Indonesia or Russia -- countries that aren't like to repay soon if ever.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615724","date":"2003-11-19","texts":"Washington -- CONGRESS, RESPONDING TO the mutual-fund trading scandal, is revving plans into high gear for the most extensive new regulation of the fund business in more than 60 years. At a hearing yesterday, the Senate Banking Committee discussed plans to introduce -- likely early next year -- broad legislation that could raise criminal penalties for rule violations, increase board controls and require more disclosure of fees. It also will consider creating a mutual-fund oversight board similar to the new accounting board Congress set up to oversee auditors in the wake of recent corporate accounting scandals. Securities and Exchange Commission Chairman William Donaldson, testifying at the hearing, acknowledged his agency was slow to spot and react to mutual-fund problems, and he pledged to speed up consideration of new SEC rules to strengthen investor protections, including steps that would inhibit market timing and effectively eliminate late trading of mutual-fund shares. Meanwhile in the House, Rep. Michael Oxley R., Ohio, chairman of the Financial Services Committee, said the full House is expected to vote today on a mutual-fund bill introduced by his panel. He's confident he has the votes of two-thirds of the members, which is necessary to pass the legislation, said Peggy Peterson, Mr. Oxley's deputy staff director. The bill had been stalled after passing the committee in July, but has gained momentum after state and federal regulators recently uncovered abuses. Passage of the bill is expected to spur the Senate to act on similar legislation to eliminate abusive trading practices in the 7 trillion fund industry. The House version would provide investors more fee information, strengthen director oversight of brokerage-fee arrangements and mandate that boards have two-thirds independent directors.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616463","date":"2003-11-19","texts":"I HAVE DISCOVERED the root of all financial evil and it isn't stockbrokers, the tax code or even credit cards. Instead, the real culprit is the big house. Hyperbole Of course, it's hyperbole. But there is a nugget of truth here. Bear with me while I explain. -- More for Less According to the U.S. Census Bureau, newly constructed single-family homes had a median size of 2,114 square feet in 2002, up from 1,520 square feet in 1982. That's a 39 increase in 20 years. Existing homes would also have grown in size, as homeowners tacked on additions, but the increase wouldn't have been as much as 39. How much is all this extra space costing us At first blush, it doesn't seem to be costing much at all. The reason Even as homes have ballooned in size, interest rates have tumbled. To illustrate what a bonanza this fall in rates has been, consider the monthly mortgage payments on two homes, a smaller 1,520-square- foot house costing 130,544 and a larger 2,114-square-foot house valued at 188,141. These estimated home values are based on national averages. Prices for either home would obviously be much higher in some parts of the country. In both cases, assume you put down 20 and borrowed the other 80 through a 30-year fixed-rate mortgage.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984743","date":"2003-11-23","texts":"Stephen Fuller has studied the habits of consumers and commuters for more than 40 years, and he has come to a conclusion Emotion, more than reason, determines how much people value their time. They sit in massive traffic jams on their way to and from work each day, he believes, because they don't bother to calculate what their non- working time is worth. Now Fuller, a public policy professor at George Mason University and director of the Center for Regional Analysis, has forced a small group of people to make that calculation. His survey of Fredericksburg area residents who work elsewhere -- an estimated 40 percent of the workforce -- was commissioned by an economic development group hoping to lure higher-paying businesses to the region, which relies heavily on retail and other low-skilled jobs. The almost 1,500 commuters were asked How much would you be willing to cut your salary in exchange for a shorter drive to work About 31 percent said they were willing to take an annual pay cut of 5,000 to 6,000 in exchange for a commute that was 30 minutes shorter each way. About 17 percent said they would forgo 10,000 a year for that extra daily hour. People generally think the commute is just part of the cost of living, like going to the dentist or raking leaves It's just something you have to do, Fuller said. They don't think about it until they're pressed. We try to get them to put some value on their time.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984793","date":"2003-11-23","texts":"Lester Thurow's Fortune Favors the Bold is one of the most maddening books written on the international economy in many years. A Big Think book that offers few specific ideas about building a lasting global prosperity and leaves many key analytic dots unconnected, this latest popular work by the noted MIT economist nonetheless has much to teach anyone concerned about his or her pocketbook, the future of capitalism and everything economic in between. By far the most important dots left inadequately connected by Thurow concern the mind-numbing international economic imbalances that the United States has piled up for roughly the last decade. Every presidential candidate -- especially the incumbent -- should read Thurow's discussion of these deficits and the nation's resulting international debts. For the author argues with unusual force and clarity that they represent mortal threats to the economic health of the United States as well as the rest of the world. Yet he overlooks what may be the main cause of these deficits. The U.S. economy remains so strong that most Americans understandably ignore or simply don't know how deeply in debt the nation has sunk, and thus how heavily their living standards now depend on borrowing from abroad. This dependence results from Americans buying so much more from other countries than they sell to them, and from foreign creditors' willingness to provide affordable loans to fill the gap. America's unique advantages have permitted prime-rate borrowing to continue despite these towering debts. In addition, much American borrowing during the 1990s was invested -- in theory promoting robust future growth. More recent borrowing has been spent largely on consumer goods in a frenetic national shopping binge. America's economic and business establishment still believes that the debts can be managed without triggering national and worldwide recessions or worse. Thurow's greatest achievement is systematically demolishing the case for a so- called soft landing.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984944","date":"2003-11-23","texts":"Y ou are doing a disservice to your readers, a man I called Ursa Major, the Great Bear, told me a while back. He was referring to my perennial bullishness, my buy-and-hold obsession. Specifically, he pointed to an article that said, The best way to approach the market is simply to go along for the ride wherever it leads. Ursa Major's view at the time was that the ride was headed off a cliff and that I should have been warning of the imminent catastrophe. What was happening in the stock market, he told me, was crazy, and it doesn't end happily. My conversation with Ursa Major became the focus of a column, published on July 23, 1998, that presented the bearish case for stocks -- Ursa's case, not mine. It appeared a little less than two years before the tech-stock bubble popped and a widespread bear market began. At the time, I emphasized that I didn't believe that the intelligent bear's case, however convincing, should lead readers to dump shares of good companies that they bought for the long haul. As it turned out, the case was not only intelligent but prescient -- although not quite as prescient as you might think. I am glad I published it. My only regret was that Ursa Major discouraged me from using his real name.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615300","date":"2003-11-24","texts":"Nov. 24, 2003 PERIOD SCHEDULED PREVIOUS CONSENSUS INDICATOR COVERED RELEASE ACTUAL FORECAST GDP 3Q2003 Tue 7.2 7.8 Chain-wgtd. price index 3Q2003 Tue 1.7 1.7","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614029","date":"2003-11-28","texts":"Dow Jones Newswires WASHINGTON -- A barrage of sunny economic data poured in Wednesday, led by an upbeat regional report from the Federal Reserve's latest anecdotal survey of the economy. The Federal Reserve's survey of business activity found that economic conditions were improving across the country and appear to be reasonably broadly based, with most areas noting growth in a number of industries. Eleven of the 12 regional Fed districts reported faster growth, except the Atlanta district, which said the pace of economic growth was stable in October and early November. Labor markets across the nation generally improved or remained stable, with several districts noting a slowing in layoffs, the Fed said. Temporary workers are in increasing demand in the Boston, Minneapolis, Chicago and Richmond, Va., districts, the Fed said. But several districts reported that companies are waiting for sustained increases in orders before hiring permanent workers. Also Wednesday, there were two upbeat reports on the U.S. manufacturing sector, which was the hardest-hit part of the economy during the 2001 recession. Orders for big-ticket items surged in October and a regional manufacturing index soared to a nine-year high in November. The factory sector is on fire, said Stephen Stanley, senior market economist at RBS Greenwich Capital.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617179","date":"2003-12-01","texts":"JIM PAULSEN, the chief investment officer at Wells Capital Management, ticks off the ingredients needed for a mean batch of inflation. I would flood the system with money far in excess of economic growth, I would take interest rates to the lowest levels possible, I would have the government spend like a banshee, I would drop the value of the dollar, and finally I would take any capacity growth or additional supply growth and stop it, he says. As a garnish, he'dadd rising commodity prices and a growing trade deficit mixed with some rising trade tensions. Sound familiar As investors close the books on 2003 and look out into next year, some are worrying that inflation, which had been banished in the past few years, is poised for a comeback. Were that to happen, it would terrify bond investors and shake up the stock market, while giving a boon to some manufacturers, which finally would be able to raise prices. Last fall we were all worried about deflation, says Mr. Paulsen. What could happen by summer is everyone could be panicked about inflation. That panic may be based more on emotion and expectations than on anything else. There are lots of good reasons why inflation should remain tame, mainly the lack of a strong jobs market. But as investors spend much of their time trying to divine the future, expectations are what will drive stocks and bonds.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985052","date":"2003-12-06","texts":"General Motors, whose 19.3 billion pension deficit was the biggest in the United States last year, may eliminate the shortfall by the end of the year because of rising stock markets, higher contributions and an asset sale, a company spokeswoman said. The Detroit-based carmaker contributed 14.4 billion to its pension funds in 2003 and will add 4 billion more if the sale of its stake in Hughes Electronics to News Corp. is completed this year, the spokeswoman said. Scott H. Miller, the former senior vice president of finance at Las Vegas software firm PurchasePro, was sentenced in federal court in Alexandria to 10 days in prison, three years of probation and 150 hours of community service. Miller, who pleaded guilty in September to impeding a federal criminal probe into deals involving PurchasePro and America Online, is cooperating with the ongoing investigation of AOL. The Brotherhood of Locomotive Engineers, representing 36,000 engineers at Union Pacific and other North American railroads, approved a merger with the Teamsters. The engineers join a 1.4 million-member, Washington-based union that also includes truck drivers, dockworkers and airline employees. U.S. consumer debt increased in October at its slowest pace in four months, restrained by a decline in borrowing for vehicle purchases, Federal Reserve statistics showed. Borrowing through credit cards, auto loans and other non-mortgage personal debt increased 941 million, or 0.6 percent, to 1.977 trillion, the Fed said. In September, consumer credit rose a revised 17 billion, the largest increase since January. Smithfield Foods, the nation's largest hog producer and pork processor, is being sued for fraud and breach of contract by a company it took over earlier this year. Pennexx Foods is seeking 226 million in compensatory damages and other unspecified punitive damages for Virginia-based Smithfield's actions leading up to the June takeover. Smithfield, which previously owned 41 percent of Pennexx, seized Pennexx's assets after it could not pay back 11.9 million in loans.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983052","date":"2003-12-11","texts":"The 2001 recession, already among the mildest in modern U.S. economic history, was even slightly shallower than earlier estimated, according to a comprehensive revision of national income and production figures released yesterday by the Commerce Department. The drop in the nation's gross domestic product from the first quarter of 2001 to the fourth quarter, when the recession ended, was only 0.5 percent rather than 0.6 percent, according to the revisions, which are done every five years. However, the update also shows that the economy contracted slightly in the July-September period of 2000, as well as in the first three quarters of 2001. The latest figures revised were those for the second quarter of this year. For the third quarter, the department has estimated that the economy grew at an 8.2 percent annual rate after adjustment for inflation, but it will revise that figure late this month. The Commerce Department's Bureau of Economic Analysis, which is responsible for producing the national income and GDP numbers, altered several definitions and methodologies in an effort to track the rapid changes in the complex U.S. economy. The new figures paint much the same picture as the old ones -- for the past 10 years, the average growth rate of the economy is still 3.2 percent a year -- but several important details for the past year or two are different. For example, U.S. corporate profits last year were 904.2 billion, nearly 120 billion higher than previously estimated. The upward revision was primarily the result of an adjustment in the treatment of stock options and when they are reported as an expense on corporate books. In the second quarter of this year, this profit measure, which is adjusted for capital consumption and inventory gains, was 1.0228 trillion on an annualized basis.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614249","date":"2003-12-12","texts":"FINANCIAL PLANNER Joseph Lyons recently moved client assets out of a Putnam Investments mutual fund whose manager allegedly made improper trades in its shares. Mr. Lyons didn't move it out of the stock market. He chose another stock mutual fund, managed by Morgan Stanley. Like many others, he wants to avoid funds tainted by the sprawling mutual-fund trading scandal that erupted in early September, but he isn't giving up on stocks. It's hard to resist a market that seemingly keeps going up. Enthusiasm for stocks pushed the Dow Jones Industrial Average through the 10000 mark yesterday, the highest level in 18 months. After a family discussion of the issues, 43-year-old Mr. Lyons, who works with investment firm Linsco Private Ledger, in Walnut Creek, Calif., shifted his wife's retirement holdings from several Putnam Investment funds to some Fidelity Investments portfolios. He's out to protect his clients' -- and his family's -- interests. As long as the stock market is doing well, people will keep investing, says Steve Henningsen, a financial adviser with the Wealth Conservancy in Boulder, Colo. It's kind of weird this scandal hasn't chased people from funds. Although many irate individuals and institutions have unloaded holdings of funds run by Putnam Investments, which has settled federal charges in the matter, and Strong Capital Management, which is under investigation but hasn't been charged with any wrongdoing, and other firms implicated in the scandal, money flowing into the fund industry as a whole has been surprisingly robust. From the start of September through the end of last month, stock mutual funds took in more than 63 billion, their highest three-month intake since early 2000 when stock prices peaked, according to flow-tracker AMG Data Services. This money has helped fuel the stock market's rise.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982666","date":"2003-12-12","texts":"Federal Reserve Chairman Alan Greenspan yesterday questioned whether the rapid increase in imports from China and the fact that the Chinese government has pegged the value of its currency at a low level compared with the dollar are significant factors in the weak U.S. labor market. Challenging what he labeled a strain of so-called conventional wisdom, Greenspan said in a speech in Dallas The story on trade and jobs, in my judgment, is a bit more complex, especially with respect to China. . . . If the renminbi were to rise, presumably U.S. imports from China would fall as China loses competitive position to other low-wage economies. But would, for example, reduced imports of textiles from China induce increased output in American factories the Fed chairman asked. Far more likely is that our imports from other low-wage countries would replace Chinese textiles. The Bush administration has been pressing China, whose exports to the United States have increased 20 to 25 percent both last year and this year, to move to a flexible exchange rate regime rather than keep its yuan, also called the renminbi, pegged at about 8.28 to the dollar, as it has been for nearly a decade. Under a flexible regime, the yuan's value would be determined primarily by financial markets. With it rapid growth and substantial foreign exchange reserves, China is now in a position to show leadership on the important global issue of exchange rate flexibility, John B. Taylor, the Treasury undersecretary for international affairs, told a congressional hearing a few weeks ago.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985418","date":"2003-12-13","texts":"China on Friday sharply criticized the Bush administration's decision to consider imposing protective tariffs on imports of Chinese bedroom furniture, assailing the investigation as a new front in an escalating trade dispute between the two countries. We strongly protest the U.S.'s decision to proceed with the probe, said Chong Quan, a spokesman for China's Ministry of Commerce, in a written statement, asserting that the U.S. action breaks the rules of the World Trade Organization. China's admonition came in reaction to the U.S. Commerce Department's decision to open an investigation into the sales of about 1 billion worth of Chinese bedroom sets in the United States, following complaints from American producers that these goods are being sold at below fair market prices -- a practice known as dumping. In petitions, U.S. furniture manufacturers have asserted that they have been unfairly harmed by a surge of such goods. The furniture spat comes amid continuing signs that trade may intensify as a political issue in the months before next year's presidential election in the United States. On Friday, the Commerce Department reported that the U.S. trade deficit climbed in October to a record high of 41.8 billion while running at an annual rate of more than 490 billion -- far larger than last year's record trade deficit of 418 billion. At the center of the tension sits China, whose trade surplus with the United States is expected to swell beyond 120 billion for the year. The Bush administration has put much of the blame for the loss of some 2.8 million American manufacturing jobs on China.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842615064","date":"2003-12-17","texts":"REAL-ESTATE buyers are being forced to learn how to stack up. First-mortgage lenders have become more restrictive on the amounts they're willing to lend to property buyers in the form of mortgages. That's partly because in some cases so-called cap rates -- a property's annual net operating income divided by the property's price -- have been falling below levels that lenders consider acceptable. Low interest rates and strong demand for premium properties have driven prices sky-high, so the gap between the price and the annual net income has widened. Banks are starting to say cap rates have gotten too low for them to be comfortable with, says Timour Shafran, managing director of Capin & Associates Inc., a New York-based brokerage firm. At the same time, lenders, including banks and life-insurance companies, want to meet the strong investor demand for funds. So both lenders and real-estate investors have been using some creative ways to lend and borrow more. For investors, the methods involve stacking up, basically layering debt on top of debt, sometimes from one lender, sometimes from a number of them.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616992","date":"2003-12-17","texts":"PARIS -- Cap Gemini Ernst & Young warned that sales and profitability would fall short of earlier guidance because of delays in signing contracts, triggering a sharp selloff in shares of Europe's largest technology-services company. Shares in the French company fell more than 13 in Paris trading to 35.83 euros 44.11. The stock price had more than doubled since last winter, amid tentative signs of an improvement in technology spending and Cap Gemini's own prospects. In a high-profile win over U.S. rival Electronic Data Systems Corp., Cap Gemini last week took home a 10- year outsourcing contract from Britain's tax authority valued at over GBP 3 billion 5.2 billion. But yesterday's profit warning, the company's second this fall, prompted analysts to question its financial reporting and ability to capitalize on any upturn in business technology spending. Chief Executive Paul Hermelin had earlier blamed inadequate reporting systems for a series of revenue warnings following Cap Gemini's 2000 acquisition of Ernst & Young LLP's consulting activities, and vowed that those days were over. Questions are resurfacing. Pauline Cieutat, an analyst with CIC Securities, said the company's latest warning shows the fragility of the group's financial communications and of its reporting system.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614522","date":"2003-12-19","texts":"As Christmas lights go up on homes around the country, you've probably noticed that the displays seem to get more elaborate every year. No longer does decorating a single evergreen in the front yard suffice. Every tree demands its own ropes of light, wrapping trunks and branches. Ubiquitous icicle lights drape even the most generic tract home in sparkling abundance. Arbiters of taste may clash over the merits of white versus colored bulbs, and energy Puritans may denounce the inessential use of electricity. But even stylistic snobs can't entirely deny the appeal of a thousand points of holiday light. Today's displays do more than brighten the night. They tell a story of economic progress. Like the electronic gadgets aimed at gift buyers, the tiny lights outlining roof lines illustrate new sources of growth and prosperity. Aesthetic pleasure, they tell us, is an increasingly important source of economic value and hence of new jobs and business opportunities. And the same trends that boost living standards in other areas also make Christmas lights more abundant. A holiday-lighting dollar goes a lot further than it used to. Homeowners buying Christmas lights benefit from the same intense competition that has driven down prices and improved reliability in so many other industries, raising our standard of living. When he was a teenager in the mid-'80s, David VanderMolen's job was to buy and install holiday lights for his family's Charlotte, Mich., home. Each year his parents would give him 10, enough for two 35- light strings, each 20 feet long, from Kmart. If the weather wasn't bad, a string would last three years. He eventually built up a collection of 350 light-strings, enough to make his house the most elaborately decorated in the neighborhood. Today, it would be nothing special. You can buy a 100-light string, 50 feet long, for 2.44 at Wal-Mart. Even without adjusting for inflation, that old 10 annual budget would cover more lights in a year than one could accumulate over seven years in the '80s. Today's cheaper lights, mostly made in China, also last longer. In our advanced economy -- in which innovation and competition are pushing the prices of goods ever lower and their quality ever higher -- it's more affordable than ever to make your house into a winter wonderland. Go ahead, light up your life.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614450","date":"2003-12-21","texts":"THIS WEEK Vital Signs The economy's pulse will be taken Tuesday as final figures for third-quarter gross domestic product are unveiled. November's estimate put the quarter's growth at a sizzling 8.2 annual rate. This quarter, economists think the U.S. economy is growing at a 4 to 4.5 rate they expect healthy gains through next year. Christmas Closings The stock and bond markets will be closed Thursday for Christmas Day. On the eve of the holiday Wednesday, the stock market closes at 1 p.m. Eastern time and the bond market at 2 p.m. Friday, the stock market closes at 1 p.m. On the Road Nearly 59.6 million Americans will travel 50 or more miles away from home during the holidays, a 2.4 increase from last year, says AAA. Air travel alone is forecast to be 8 higher than last year. And there's good news for motorists Gasoline prices have fallen three cents a gallon since Thanksgiving, with the average price at the pump now 1.47 a gallon.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981986","date":"2003-12-23","texts":"Stocks pushed to new 52-week highs Monday as investors cautiously picked up shares on expectations of stronger growth in 2004. A heightened terror alert limited gains though. Trading was choppy and light as many investors got an early start on the Christmas holiday. The stock market will be open for a half session Wednesday, closed on Thursday and open for a half-day session Friday. There's a little bit of caution given the security alert, said Russ Koesterich, U.S. equity strategist at State Street Corp. in Boston. That might be holding back what normally would be some follow-through from last week's gains. At the close Monday, the Dow Jones industrial average was up 59.78 points, or 0.6 percent, at 10,338.00, its highest level since May 17, 2002. The Nasdaq composite index gained 4.78, or 0.3 percent, to 1955.80, having edged up 0.1 percent last week.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985232","date":"2003-12-26","texts":"With the economy expanding smartly, interest rates low and inflation in check, President Bush is sailing into the presidential election year with perhaps only a single dark economic cloud on the horizon the shrinking U.S. dollar. Whether that cloud produces a nourishing rain shower -- in the form of swelling U.S. exports and a recovery of manufacturing jobs - - or a deluge of rising interest rates and soaring budget deficits is the subject of increasingly heated economic debate. Recent news of rapid third-quarter economic growth, rising consumer spending and climbing personal incomes did little to budge the dollar from its record lows against the 12-nation euro. The dollar has fallen about one-third against the unified European currency over the past three years -- 15 percent this year alone. In the past 23 months, the dollar has slid 11 percent against all the world's currencies, according to Stephen S. Roach, chief global economist at Morgan Stanley & Co. For now, economists say, the decline has on balance been a boon to the U.S. economy, pushing the price of American-made goods and services lower on the international market, stimulating exports while trimming imports. Indeed, the economic forecasting firm Global Insight Inc. has calculated that the dollar's decline has saved as many as 700,000 manufacturing jobs since the slide began in earnest two years ago. And as long as inflation stays low, there will be little pressure on the Federal Reserve to raise short-term rates from their historic lows. But concerns are growing, especially on Wall Street, that the dollar's slide will inevitably drive up long-term interest rates, and some analysts think the decline could even force the Fed to raise the rates it targets. That could slow the nascent economic recovery, swell the already-record federal budget deficit and possibly resurrect an economic problem unseen for nearly 20 years inflation.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830985131","date":"2003-12-28","texts":"The United States has backed away from several of its more ambitious initiatives to transform Iraq's economy, political system and security forces as attacks on U.S. troops have escalated and the timetable for ending the civil occupation has accelerated. Plans to privatize state-owned businesses -- a key part of a larger Bush administration goal to replace the socialist economy of deposed president Saddam Hussein with a free-market system -- have been dropped over the past few months. So too has a demand that Iraqis write a constitution before a transfer of sovereignty. With the administration's plans tempered by time and threat, the U.S. administrator of Iraq, L. Paul Bremer, and his deputies are now focused on forging compromises with Iraqi leaders and combating a persistent insurgency in order to meet a July 1 deadline to transfer sovereignty to a provisional government. There's no question that many of the big-picture items have been pushed down the list or erased completely, said a senior U.S. official involved in Iraq's reconstruction, who spoke on the condition of anonymity. Right now, everyone's attention is focused on doing what we need to do to hand over sovereignty by next summer. The new approach, U.S. diplomats said, calls into question the prospects for initiatives touted by conservative strategists to fashion Iraq into a secular, pluralistic, market-driven nation. While the diplomats maintain those goals are still attainable, the senior official said, ideology has become subordinate to the schedule. The Americans are coming to understand that they cannot change everything they want to change in Iraq, said Adel Abdel-Mehdi, a senior leader of the Supreme Council for the Islamic Revolution in Iraq, a Shiite Muslim political party that is cooperating with the U.S. occupation authority. They need to let the Iraqi people decide the big issues.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616229","date":"2003-12-29","texts":"The Wall Street Journal Online For a star-gazer, Robert Arnott has decidedly humdrum advice for investors. The amateur astronomer and chairman of First Quadrant LP, a money- management firm in Pasadena, Calif., thinks the glut of economic stimulus from the Federal Reserve's interest-rate cuts and President Bush's tax cuts have given equities a short-term boost. But he worries those moves might also spur inflation. So he is forecasting zero return from stocks, after inflation, over the next few years, and betting instead on bonds. Mr. Arnott, who also oversees the 825 million Pimco All Asset Fund, has the majority of the fund's assets stashed in government Treasury Inflation-Protected Securities. TIPS are Treasury bonds whose prices are tied to the consumer-price index, thus offering fixed-income investors a high- quality bond that won't lag behind inflation if the cost of goods and services skyrockets. Why does Mr. Arnott see little reason to own stocks, with the average stock mutual fund up nearly 30 since Jan. 1 His answers.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613957","date":"2004-01-07","texts":"The year 2003 was fabulous for Europe's fledgling currency, the euro. Against the dollar, the euro advanced some 19 from the first to the last day of the year. And as 2004's trading year starts in earnest, it looks like more of the same. One would think European Central Bank officials would be dancing in the streets because of the euro's obvious success. But on the contrary -- there is much nervous fretting and fussing in Frankfurt that the currency is too high, that its ascent has been too fast, that something might have to be done about the strong currency, and other such nonsense. In today's Europe, it seems, nothing fails like success. There are, in fact, two reasons why the euro is appreciating. The first is the combination of relatively strong U.S. economic growth and Alan Greenspan's refusal to raise interest rates. The stronger the U.S. economy, the bigger the external deficit -- and the greater the need for higher interest rates to attract sufficient capital inflow into the U.S. to finance the deficit. Without the rate hike, the dollar goes down because the capital inflow will not be sufficient to finance the trade imbalance. The Europeans long have stressed the need for dollar devaluation to correct the U.S. current account imbalance. Now that the correction has come, many are having second thoughts. The second reason for the euro's strength is the credibility of the ECB's monetary policy. Because the ECB's Governing Council has been doing such an outstanding job of pursuing a price-stability-based monetary policy, central banks throughout the world -- but especially in Asia -- are converting dollars into euros.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615485","date":"2004-01-07","texts":"TOKYO -- As Japanese manufacturers voiced concern over the dollar's plunge, government officials reiterated their resolve to fight an excessive yen surge. The policy makers fired a round of verbal intervention after Japan's suspected direct yen-selling in foreign-exchange markets Monday failed to stop the dollar from setting a 40-month low of 106.07 yen. There is no change to our stance in that we will take proper action when the market moves rapidly, Finance Minister Sadakazu Tanigaki said. His top currency deputy, Vice Finance Minister for International Affairs Zembei Mizoguchi, said further yen gains against the dollar are unwarranted in light of economic fundamentals. The U.S. economy is strong, and the foreign-exchange market, sooner or later, is going to reflect that, Mr. Mizoguchi said. Tokyo has struggled for months to fight the dollar's decline against the yen, fearful that further falls could throw cold water on Japan's economy, which some economists say is finally emerging from a recession. A strong yen hurts exports, one of the main drivers of Japan's recovery, by making them less competitive overseas. It also hits corporate profits by reducing the yen-value of manufacturers' overseas earnings. We must beware of a further strengthening of the yen, Sony Corp. Chief Executive Nobuyuki Idei said at a New Year's gathering of Japanese business leaders, expressing concern that the dollar's weakness could threaten U.S. and global growth.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982208","date":"2004-01-07","texts":"With the Palestinian Authority on the verge of collapse, the United States is coming under growing pressure to revive the deadlocked Middle East peace process -- or face the prospect that its partners will begin looking for alternatives, according to European and U.N. diplomats. The United Nations, the European Union and Russia, the other three parties in the diplomatic quartet that sponsors the road map for peace launched by President Bush in June, now fear that 2004 will be a lost year in the peace process because of the U.S. presidential election, the officials said. Charging that the road map is completely paralyzed and the quartet held hostage by a moribund process, a senior European diplomat said yesterday that frustrated U.S. allies are interested in looking at other options, including the unofficial Geneva accord outlined by former Israeli and Palestinian negotiators. We're so frustrated with the constant delays, said the European diplomat. We don't accept putting the idea in the fridge for months. . . . If the United States says it does not want to do anything, then maybe we should organize an alternative. In the vacuum, the Bush administration's partners in the peace process are also warning that U.S. inaction would strengthen Prime Minister Ariel Sharon's hand and allow Israel to unilaterally create a de facto Palestinian entity on about 40 percent of the West Bank and Gaza.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616604","date":"2004-01-08","texts":"Bank of America Corp., facing community-activist opposition to its 46 billion acquisition of FleetBoston Financial Corp., said it will lend and invest 750 billion over 10 years in communities for programs such as affordable housing. Some consumer advocates have been against the acquisition because of concerns that Bank of America wouldn't make affordable housing a priority. Opponents of the bank's plan said yesterday the pledge is shy of details such as how much money might be invested in a specific community such as Boston, where FleetBoston is based. Those opponents said they will make their opposition known at public hearings that the Federal Reserve Board has scheduled next week in Boston and San Francisco. The Fed extended the original Dec. 19 deadline for public comment to allow for next week's hearings because of opposition from groups that want to ensure that Bank of America, of Charlotte, N.C., commits to lending to low- and moderate-income groups. Still, the acquisition isn't expected to be derailed. After what was then NationsBank Corp. agreed to acquire BankAmerica Corp. in 1998, the combined Bank of America pledged to invest 350 billion over 10 years. The bank said yesterday it has completed the fifth year of that pledge. Since 1999, the bank said it has loaned and invested 230 billion in economic-development initiatives. FleetBoston is in the last year of its own five-year, 14.6 billion commitment that ultimately exceeded that amount by about 4 billion. The new pledge replaces both of those commitments, but activists want more from the bank.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983876","date":"2004-01-16","texts":"U.S. retail sales increased for a second straight month in December and inflation remained tame for holiday shoppers. The labor market improved last week, with the second-lowest number of initial jobless claims in three years. Retail sales rose 0.5 percent from the previous month to 325 billion after a revised 1.2 percent increase in November, which was the highest since July, the Commerce Department said. Consumer prices edged up 0.2 percent in December, capping a year in which costs excluding food and energy rose by 1.1 percent, the smallest increase in 43 years. Increased demand has encouraged companies to keep more workers, helping push initial jobless claims down 11,000, to 343,000, last week. Since the recovery began in November 2001, the economy has shed 1.1 million jobs. What all this shows is that the economy is doing quite well and we're heading for a sizable amount of job creation, said Lyle E. Gramley, a former Federal Reserve governor who is now senior economic adviser at Charles Schwab Capital Markets LP in Washington. I wouldn't be surprised if it turns out that job growth has been substantially more than has been reported. Holiday season sales of clothing, books, music, furniture and other general merchandise increased 5.2 percent to 216.3 billion in November and December, from 205.6 billion a year ago, the National Retail Federation trade group said yesterday.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842615030","date":"2004-01-19","texts":"IBM DOCUMENTS SHOW the company expects to save 168 million annually beginning in 2006 by moving several thousand high-paying programming jobs overseas. A programmer in China would cost about 12.50 an hour versus 56 for a comparable U.S. employee. Cost-cutting pressures are driving the outsourcing trend, which critics link to the jobless recovery at home. --- GE's fourth-quarter net rose 47 to 4.56 billion, bolstered by rising industrial orders. The conglomerate retained its 2004 earnings- growth outlook at 3. --- Lord Black agreed to sell his control of Hollinger International to Britain's Press Holdings in a deal valued at 326.3 million.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615108","date":"2004-01-21","texts":"His drubbing in Iowa won't change one thing Howard Dean set the tone of the Democratic campaign on an issue even beyond Iraq, and that's insisting George Bush is uniquely beholden to corporate interests. Here is Mr. Dean blaming the president for the landmark business scandals of our time Our business culture is a disaster in this country. And this president's largely responsible for it . . . He just winks and nods. Every candidate has now adopted this line. John Edwards paved his way to New Hampshire this week with a TV commercial accusing Mr. Bush of letting Enron felons escape punishment I mean really, if somebody goes down to the grocery store and steals a half-gallon of milk, they end up in jail. But here we go with George Bush's friends. Get in trouble, they don't go to jail. Never mind that Enron, Tyco, WorldCom and the like actually took place on Bill Clinton's watch. Never mind that the clean-up has been unprecedently speedy under the Bush Justice Department, with two dozen Enron culprits already in jail or indicted. Never mind that the previous record accounting fraud, Cendant, blew up halfway through Mr. Clinton's second term and we're still waiting for the principals to face trial later this year. It turns out the lessons of Enron are as applicable to politics as they are to business You can fool all the people some of the time. Mr. Dean set the tone with a game plan worthy of any Wall Street pump and dump artist. What you do is crank the heck out of your base, he said, get them really excited and crank up the base turnout and you'll win the middle-of-the-roaders. He also happens to be a fan of George Lakoff, a Berkeley professor of cognitive linguistics who argues that, in appealing to voters' need for a mommy and daddy, the right symbolic language is more important than making sense.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982264","date":"2004-01-21","texts":"JERUSALEM -- Israeli troops tore down part of a synagogue at a West Bank settlement outpost on Tuesday but made no attempt to move adjacent trailer homes, prompting accusations the government is not serious about meeting U.S. demands to dismantle dozens of the outlawed sites. Meanwhile, Israeli army bulldozers smashed 25 houses and flattened a mosque in a Palestinian refugee camp in the Gaza Strip, leaving 400 people homeless, local officials said. The military said it targeted buildings from which shots were fired at Israeli forces, but did not know how many structures were demolished. BOMBAY -- Starving North Koreans have been publicly executed for stealing food and others have died of malnutrition in labor camps, Amnesty International said in a report. The human rights group urged the North Korean government to ensure that food shortages are not used as a tool to persecute perceived political opponents.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614466","date":"2004-01-23","texts":"HINDSIGHT IS A wonderful thing. If last year held any lessons for investors, surely one of them was to buy anything China needed. Another lesson was to invest in commodities, particularly metals. Best of all was to combine the two. Michael Kaufman, founder and managing partner of MAK Capital, New York, has managed to take such trades one step further by noting that investors also should shun exposure to companies that compete with the rising global juggernaut of China. That means not all steel companies are created equal -- or are affected equally by the global recovery. In his latest letter to investors, Mr. Kaufman describes his newest so-called pair trade, which plays on all these themes by adopting a bullish position on U.S. Steel Corp. while taking a bearish position on Nucor Corp. My interest in U.S. Steel is primarily as a hedge for Nucor, which may turn out to be one of the better shorts of 2004, Mr. Kaufman says. The fund manager was referring to short-selling, a common strategy whereby a hedge fund or other investor sells borrowed shares, expecting that the price will fall by the time those shares need to be replaced. In the latest monthly short-selling tally released yesterday by the New York Stock Exchange, the outstanding short position in Nucor was 5.5 million shares, up 10 from 4.9 million shares a month ago.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982681","date":"2004-01-27","texts":"Discussing the falling dollar at a panel of the World Economic Forum here, a former U.S. senator said the greenback's decline was just a blip. The abiding fact was that for more than a century, in good times and bad, the world's investors have been in love with the American economy. And that ardor continues today. Yes, responded a Chinese economist, but love affairs always end. And, he might have added, new infatuations always begin -- as now seems to be the case with the Chinese economy. Their exchange framed two key themes of this year's annual meeting of global economic leaders first, the remarkable durability of the U.S. economy, which is surging again this year even though the dollar is weak, just as it did in the late 1990s, when the dollar was strong and, second, the inexorable rise of China as a global economic superpower. U.S. economic strength is probably the most important fact in this election year. On paper, the Bush administration's economic policies may seem profligate and potentially ruinous. But there was a consensus among business executives here that the falling dollar has been good for the U.S. economy. The cheaper dollar will stimulate demand for U.S. exports abroad and in theory at least reduce America's demand for imports. That should gradually lower the towering trade deficit. The mood was upbeat even at a panel titled What if the Dollar Declines Another 20 Percent The biggest worry was how a plummeting dollar would affect other economies. A former senior official of the Federal Reserve predicted a global redistribution of demand toward the United States and away from rising currencies such as the euro.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614595","date":"2004-01-30","texts":"WASHINGTON -- The Federal Reserve's top policy makers reached a consensus as far back as six weeks ago that they needed to amend their commitment to keep interest rates low for a considerable period and replace it with more-conditional language, central-bank documents released yesterday show. The documents, minutes of a Dec. 9 meeting of the Federal Open Market Committee, show that all of the members saw merit in replacing the language with words associated more clearly with economic conditions . . . as opposed to having it appear to be linked only to the passage of time. But the FOMC opted at the time to retain the phrase because a majority of its members preferred to keep it at least for now. The FOMC finally dropped the controversial phrase this week, replacing it with a more-vague assurance that it can be patient about raising interest rates as the economic recovery gains steam. The decision surprised Wall Street, causing stock prices to sink and bond yields to surge. Investors promptly advanced their expectations of just how soon the Fed will adjust interest rates, betting the increases will begin by June. The December minutes, however, cast doubt on Wall Street's interpretation of the Fed's intentions. At their meeting last month, Fed policy makers said it would be unwise for them to begin raising interest rates in advance of clear signs that inflation was shooting up. The Fed has historically sought to be pre-emptive about fighting inflation because inflation becomes harder to control at higher rates. But that posture could be risky in a climate of virtual price stability, the policy makers said. The Fed will eventually need to raise interest rates should the apparently vigorous expansion continue over time and promote fuller utilization of resources such as labor, they said, according to the minutes.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617019","date":"2004-01-30","texts":"Second ina Series DONGGUAN, China -- Frank Lin joined fellow Chinese furniture makers at a hotel here last summer to discuss some alarming news from America U.S. furniture companies were asking Washington to investigate illegal Chinese trade practices and restrict Chinese sales to the U.S. Among the petitioners was one of Mr. Lin's longtime customers, Virginia-based Hooker Furniture Corp. Mr. Lin's dismay turned to confusion days later when he received an e-mail from Hooker's chief executive. Hooker looked forward to an exciting future doing business with China, said the message, and wanted to continue the extraordinary growth we have had in the last few years with Asian imports. Indeed, thanks largely to the imports, Hooker has boomed. It closed a factory in North Carolina last summer but has boosted profits and dazzled investors with a stock that more than quadrupled in two years. I just don't understand what they are doing. It makes no sense, Mr. Lin said after receiving the e-mail in August. On his desk lay designs sent from America. Lining the wall, newly crafted chairs stood ready for inspection by U.S. buyers. If they don't import, they die. They need us. So why do they want to hurt us Mr. Lin wondered.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983769","date":"2004-01-30","texts":"Capital One Financial Corp. said yesterday that regulators have ended an agreement under which the company's internal controls were scrutinized by federal and state regulators. The memorandum of understanding had been in place at the McLean- based issuer of credit cards since July 2002. It meant that the Office of Thrift Supervision and other regulators were taking a hard look at whether the firm had insufficiently guarded against financial and other risks during its rapid expansion over the past decade. Under the 2002 agreement, the company was made to classify sub- prime loans -- those with high credit risk -- more conservatively and spend heavily on technology infrastructure, internal audits and contingency planning. We're back to normal conversations and interactions with our regulators, said Tatiana Stead, a Capital One spokeswoman, referring to the OTS, Federal Reserve Bank of Richmond and Virginia Bureau of Financial Institutions. The day after the company announced the agreement, the price of its shares, which had been trading at more than 50, plummeted 40 percent, prompting worries among analysts that the additional regulation could crimp Capital One's growth. Since then, its share price has rocketed back up, closing at 69.60 yesterday.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614505","date":"2004-02-04","texts":"Paris -- TO PARAPHRASE the title of the Jack Nicholson movie Is this as good as it gets To many, it looked that way for the dollar late last month, when the U.S. currency staged a brief comeback after its long and steep decline against the world's other currencies, especially the euro. The dollar at one point climbed to 1.2338 to the euro from an all-time low of 1.2897, set earlier in January. Many sages said the time was just ripe for a brief dollar recovery and that the dollar's downward creep would continue soon afterward. The dollar's brief boost, they say, was simply caused by European officials jawboning in its favor, the Federal Reserve hinting that U.S. interest rates could be headed higher and finance officials from the Group of Seven industrialized nations preparing for their meeting this weekend. Indeed, that consensus appeared to be right when the dollar's decline started again a little less than two weeks ago. In late New York trading yesterday, the euro was changing hands at 1.2545, less than 3 below its record high. After all, nothing much has changed in underlying fundamentals, says Carl Weinberg, chief economist at consulting firm High Frequency Economics in Valhalla, N.Y. Is that consensus too pessimistic about the dollar's prospects While many certainly back the dollar-will-weaken view, there are some good arguments worth airing as to why the dollar's selloff may have gone too far, meaning the U.S. currency could actually strengthen against the euro this year.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615923","date":"2004-02-06","texts":"RIO DE JANEIRO -- One of the major triumphs of Brazilian President Luiz Inacio Lula da Silva's first year in office was coordinating a coherent economic policy from a highly diverse team, including former leftist radicals, industrialists and an ex-banker. But in year two of Mr. da Silva's tenure, notes of discord within the administration are becoming increasingly evident, rattling markets at a delicate moment The U.S. Federal Reserve has signaled an interest-rate policy shift that is creating a less favorable backdrop for emerging markets. Brazil's policy makers recently have issued conflicting statements on interest-rate policy, the extension of an Amazon free-trade zone, a public-sector hiring program and other matters. On Wednesday, Central Bank President Henrique Meirelles, a former FleetBoston Financial Corp. banker who has faced sniping from elsewhere in the government over his hawkish anti-inflationary stance, felt compelled to publicly address rumors of his impending resignation, which he dismissed as nonsense. Mario Mesquita, chief economist at ABN AMRO Brazil, wrote yesterday that the buildup in political noise surrounding economic policy and key policy makers seems to be getting out of hand. One camp within the government, which has held sway until now, emphasizes eradicating inflation to please financial markets the other camp, which is becoming more vocal with municipal elections scheduled later this year, puts greater emphasis on priming growth to more quickly satisfy Brazilian workers.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983673","date":"2004-02-08","texts":"The nation's unemployment rate fell slightly last month, and job growth picked up a bit, the Labor Department reported Friday, indicating that the weak labor market is continuing its slow recovery. The unemployment rate slipped in January to 5.6 percent, the lowest level in more than two years, and non-farm businesses added 112,000 jobs, on a seasonally adjusted basis, boosting their payrolls for the fifth consecutive month. While the movement was in the right direction, the degree of improvement was disappointing to economists and others who keep waiting for what otherwise appears to be a strong economic expansion to fuel a takeoff in hiring. And the signals of progress appeared alongside signs of continuing stress, as the average length of unemployment grew and manufacturing businesses shed 11,000 jobs, for a 42nd consecutive month of declines. The report displayed only minimal improvement, said Peter E. Kretzmer, senior economist with Bank of America Corp. While a healthier result than December's dismal report, it still demonstrated only very gradual job growth, with continued manufacturing payroll declines. Many economists had forecast job gains of 175,000 or more in each of the past two months, citing rising business and consumer optimism and declines in new claims for unemployment benefits.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842616155","date":"2004-02-09","texts":"Dow Jones Newswires NEW YORK -- Wall Street stock underwriters are taking a breakfast- buffet approach to the IPO market this year. Last week marked the first big-volume push for initial public offerings of stock, with 11 deals raising 3.08 billion, according to data from Dealogic LLC in New York. To date, there have been 17 IPOs, raising 3.73 billion. This time last year, there had been just one IPO, raising 26.3 million, according to Dealogic. The deals come from a range of industries, such as insurance, biotech, auto parts and retail. And this range of sectors is likely to continue throughout the year, assuming the economy and the markets continue to improve. In a broadly based strengthening economy that benefits a variety of sectors, you should have an IPO market with a diversity of sectors and names, said Marc Baum, managing director of Seaport Group, a broker- dealer in New York. Such diversity is also healthy, he said, given that bubble periods, such as the tech-stock boom of the 1990s, are often driven by momentum investors chasing a single sector.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617235","date":"2004-02-10","texts":"Dow Jones Newswires NEW YORK -- Euro-zone officials seemed to score a victory at the weekend meeting of the Group of Seven industrialized nations, securing a warning against volatile currency moves. That is, until financial markets second-guessed them yesterday, giving the nod to the U.S., whose bond market and economy continue to reap the rewards of a weak dollar. By continuing to exert downward pressure on the U.S. currency, investors ensure that foreign central banks will remain heavy buyers of U.S. Treasurys. The U.S. benefits, as a soaring budget deficit stimulates growth, a weak currency spurs exports, and low yields encourage consumer demand. The U.S. is definitely winning -- no doubt about it, said Richard Gilhooly, senior bond strategist at BNP Paribas in New York.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613587","date":"2004-02-11","texts":"Since the 1970s, currency values have been swinging wildly, with immense impact on economies and lives. Just since 1999, the dollar has moved from 1.17 per euro to 0.83 in 2001, and to 1.27 today, matching moves in the dollar's value in terms of gold and commodities. The impact of this volatility on U.S. farmers and manufacturers, developing countries, tourism, and investment flows has been immense and disruptive. At last weekend's G7 meeting, the powerful group of finance ministers and central bankers accepted this, asserting that exchange rates should be flexible and reflect economic fundamentals. The U.S. hopes the G7 language will form a lasting consensus and be viewed as a set of long-term currency principles. But there's a hitch Rather than reflecting fundamentals, the exchange rate is itself a key fundamental. It affects capital flows, jobs, inflation, and interest rates. Currency changes harm the relationship between debtors and creditors and dominate the profitability of many companies. Without considering the exchange rate, there is not even a ballpark economic definition of a country's fundamentals -- one can't tell whether monetary policy is tight or loose, or inflation likely to rise or fall. If the idea is that strong economic fundamentals cause a strong currency -- as the Clinton administration argued -- it is unclear why the Bush administration seems so comfortable with the two- year weakness in the dollar. It surely doesn't agree with the dollar- bears' claim that U.S. fundamentals have deteriorated substantially due to the tax cuts and fiscal deficits. My view is the opposite. U.S. fundamentals are much better now than in 2000, in large part due to the change in the value of the dollar and the improved tax structure. The fundamentals are reflected in important new records in GDP, total employment according to the household survey, corporate profits, productivity and disposable personal income. The U.S. potential growth rate in coming years is one of the best on record, and hard to explain if the current value of the dollar is thought to reflect economic fundamentals. The irony in the fascination with the G7's exchange-rate language is that the causal relationship from economic fundamentals to currencies works so poorly. The dollar reached its peak value in 2001 after the recession started. Dollar strength wasn't the sole cause -- lax regulation plus high tax rates, interest rates, and oil prices contributed -- but the dollar certainly didn't reflect U.S. fundamentals.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615801","date":"2004-02-11","texts":"Dow Jones Newswires JOHANNESBURG, South Africa -- South Africa is becoming a serious player in the international battle to attract companies from abroad to set up cost-effective customer call centers on its shores. The country has attracted at least 15 foreign companies and several are currently considering cities such as Cape Town and Johannesburg as alternatives to Indian and Chinese venues. Last week, U.K. short-term insurance broker Budget Insurance said it has invested around 100 million rand 14.7 million in a 200-seat call center in Cape Town with plans to treble its size. U.S.-based investment manager State Street Corp., meanwhile, unveiled a plan to develop a back-office operation in Cape Town for its custodial services.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616671","date":"2004-02-11","texts":"THE ENTIRE real-estate world is on fire with investors right now, but one of the hottest corners is private REITs. These obscure real-estate companies invest in all types of commercial properties from office buildings to apartments to malls. Their shares don't trade on any exchange, and they shouldn't be confused with the much larger public real-estate investment trusts. Private REITs, which are being heavily marketed, are sold almost exclusively through financial planners and advisers. Unlike public REITs, they have a fixed price of 10 a share. After a set period of time -- usually seven to 14 years -- private REITs are either taken public or liquidated and the proceeds are distributed to investors. In the meantime, investors usually receive a hefty annual dividend of approximately 7 to 8 -- higher than most public REITs pay currently. About 7 billion was invested in private REITs in 2003, compared with the 4 billion invested in 2002. That, in turn, was double the 2 billion invested in 2001, according to the Investment Program Association, a trade group based in Washington, D.C. One big downside with private REITs Investors pay hefty initial fees of between 5 and 16. Much of this goes toward paying commissions to planners who peddle the REITs. That means as little as 84 cents out of a dollar invested go for the actual real estate.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981995","date":"2004-02-13","texts":"The Senate voted 76 to 21 yesterday to approve a 318 billion transportation bill, but the legislation faces White House opposition over its price tag, and it differs from a costlier bill pending in the House. The six-year measure would fund highways, bridges, road improvements, mass transit and safety programs. It is the successor to a 218 billion transportation bill passed in 1998 that expired last year but has been extended through the end of this month. The local transportation projects the bill would finance are politically popular with lawmakers and their constituents. But the cost cannot be covered completely by the federal Highway Trust Fund, which is supported by the gasoline tax. The price tag has alarmed fiscal conservatives at a time of rising budget deficits and calls from President Bush to rein in spending. After losing an 86 to 11 vote that ended their filibuster of the bill early yesterday, GOP conservatives tangled with other Republicans who were willing to accept higher spending in return for the 1.6 million jobs they say the bill will create. Never get between a congressman and asphalt, because you will always get run over, said Sen. Rick Santorum R-Pa., who opposed the bill. A bunch of us are about to be roadkill. . . . The bottom line is, we're spending a ton of money and we're not paying for it.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982275","date":"2004-02-13","texts":"President Bush, visiting this industrial state to tout his prescriptions for employment growth, distanced himself from his chief economist, who this week spoke approvingly of jobs moving overseas. The president, speaking Thursday at a high school here, did not mention the aide by name but expressed his concern about the expatriation of jobs. There are people looking for work because jobs have gone overseas, he said. And we need to act in this country. We need to act to make sure there are more jobs at home, and people are more likely to retain a job. On Monday, N. Gregory Mankiw, chairman of the Council of Economic Advisers, said in releasing the annual Economic Report of the President that the offshoring of U.S. service jobs is the latest manifestation of the gains from trade that economists have talked about for centuries. Outsourcing is just a new way of doing international trade, he told reporters. More things are tradable than were tradable, in the past and that's a good thing. The report, similarly, said that when a good or service is produced more cheaply abroad, it makes more sense to import it than make or provide it domestically. Several economists, including some Democrats, have defended Mankiw, a Harvard economist, for speaking the economic truth. But his remarks have become a political liability for the president. Even House Speaker J. Dennis Hastert R-Ill., a Bush ally, joined the criticism Wednesday.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982867","date":"2004-02-13","texts":"Sen. John Edwards, who has had perfect rhetorical pitch in this year's presidential campaign, altered the opening of his stump speech this week. The change is a warning to free-traders Guys, you'd better wake up. There's rebellion in the country, a justified revolt by workers who cannot understand why the economic recovery has produced so few new jobs. Edwards told the tale of a father coming home from his factory job to put his daughter to bed. He knows his night is over when he gives her a hug, Edwards said, speaking in Milwaukee Tuesday. But tonight . . . he'll be coming home to tell her that his factory is closing, that he's about to lose his job. It's worth hearing Edwards to understand the power of this issue. He's not telling an economic story. He's offering a morality tale about a decent American hammered by the system. It's not because he's done anything wrong, Edwards said. He's done what he's supposed to do, he's been responsible, he's worked hard, he's raised his family. Nor is the factory closing because the company decided to stop making its product. The problem is they're going to make it somewhere else, Edwards says. They're going to make it somewhere outside of his community, outside of his country. Why They only care about profits, they have lobbyists everywhere and they own this White House. The people in charge, he says, don't hear the other America. They don't see the face of this father who had to come home and tell his little girl that he no longer had a job.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615635","date":"2004-02-17","texts":"WHEN THE EXECUTIVE in the adjacent office returns from a two-week vacation minus any bags under his eyes or deep lines around his mouth, forget what he tells you about a certain Caribbean resort. Chances are, he has been under the knife. Cosmetic surgery, botox and other de-aging skin treatments are becoming de rigueur for baby-boomer executives of both sexes who fear being judged as over the hill. For many, including some top CEOs who haven't yet gone public, plastic surgery is the next step in their rigorous fitness and beauty regimens that include several hours a week at the gym, expensive personal trainers and diet consultants, and hair treatments. I can't tell you the number of men I know who no longer are gray or who have covered bald spots with hair transplants, says Pat Cook, president of Cook & Co., a Bronxville, N.Y., executive- search firm. In addition to vanity, these executives are driven by job insecurity. They believe that looking older in business now means looking vulnerable, not wise and experienced, as might have been the case in the past. So many 50-something managers have suffered layoffs and early retirement that survivors in this age bracket feel pressured to look and act as young as possible to hang onto their posts. And even 45-year-olds who are unemployed in today's tight market worry that wrinkles will cut them out of the running. They ignore the financial expense work on eyelids costs 3,000 to 6,000 and facelifts, 15,000 to 25,000 and the medical risks Novelist Olivia Goldsmith died last month at the age of 54 during a chin-tuck operation. A RECENT SURVEY of senior executives by ExecuNet, a networking and job-search service, found that 82 consider age bias a serious problem, up from 78 three years ago. And 94 of these respondents, who were mostly in their 40s and 50s, said they thought age had cost them a shot at a particular job.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613558","date":"2004-02-19","texts":"AT A TIME WHEN China commands more attention from investors than any other emerging market, many U.S. fund managers are starting to take a closer look at the other billion-person nation India. India has received only a fraction of the money that corporations have invested in China, but portfolio managers say India is in a number of ways the more attractive stock-market investment. The South Asian giant has spawned a greater number of companies that can compete on a global scale and whose management style more closely resembles their U.S. competitors. That list includes Indian software firms such as Infosys Technologies and Wipro and pharmaceutical companies such as Dr. Reddy's Laboratories, all of which trade in New York. Investors also credit India with having better corporate disclosure, stronger property rights, and a more investor-friendly legal system than China. India is about a dozen years behind China in liberalizing its economy, lowering tariffs, and opening up industry to foreign investors. But it is beginning to close that gap. Just recently, in fact, the government raised the ceiling on foreign investment in private banks and abolished foreign limits on private oil exploration and marketing companies. New Delhi is forecasting Indian economic growth of about 8 for the fiscal year ending next month -- on par with China's official growth forecast for 2004 -- and it has emerged as the world leader for outsourcing and call centers.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985017","date":"2004-02-20","texts":"Basic subway and bus fares could rise by as much as 15 cents and daily parking fees could increase as much as 2.30 under a proposal made yesterday by the Metro board of directors. The plan, which would take effect July 1, would mark the second straight year that Metro has become more expensive. Board members decided yesterday to hold public hearings on the proposed increases. Metro officials said they need more money from riders to close a gap of 28 million to 36 million in a 900 million operating budget next year, depending on how much local governments pay toward Metro service. Metro's operating costs are paid by a combination of passenger fares, revenue from advertising and other sources and subsidies from local governments. We're very cognizant that this is the second proposal for fare increases in two years, said Gladys Mack, who represents the District on the Metro board. It is absolutely essential if we are to continue our reliability and safety. We bring this out of need to make sure we have a balanced budget. Metro directors said that the proposal they are sending to the public is the maximum that would be approved and that they ultimately could decide on smaller increases. If the directors opt for the maximum increases, officials estimate that 15,300 of the 638,800 daily rail riders will stop taking Metro and that 11,900 of the 525,900 daily bus riders will stop riding.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985247","date":"2004-02-21","texts":"Gregory Mankiw spoke economic truth to the American people about offshore outsourcing and, of course, politicians from both sides of the aisle immediately attacked him and politicized the issue. What the editorial did not say, however, is why the politicians can so easily get away with their demagoguery the complexity of economics. For example, it is easy for people who have jobs to see those jobs being preserved by government interference and impossible for people who are looking for jobs to see jobs that were never created in the first place because of that same government interference. When we wonder about the slowness of the current job recovery, we should be thinking about all the government actions that interfere with job creation, including payroll taxes, protectionist quotas and subsidies to favored businesses, excessive regulations that weaken our companies, massive federal spending and deficits, and overly generous unemployment benefits that subsidize voluntary unemployment and discourage employment flexibility. In the long run, your editorial on outsourcing is correct. But as John Maynard Keynes said, In the long run, we are all dead. In the short run, a government of the people, by the people and for the people should ameliorate the worst effects of offshoring on U.S. workers rather than accelerate offshoring for the benefit of U.S. corporations.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842613817","date":"2004-02-25","texts":"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 insultfailure that can befall a dad He's lost his job 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. 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. 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. 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","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613963","date":"2004-02-25","texts":"THIS WEEK, no less an authority than Federal Reserve Board Chairman Alan Greenspan suggested that many Americans may have the wrong mortgage. In a speech to credit unions, Mr. Greenspan said that Federal Reserve Board research showed that many homeowners might have saved tens of thousands of dollars had they held adjustable-rate mortgages rather than fixed-rate mortgages during the past decade as rates tumbled. Yet the more expensive fixed-rate loans accounted for 81 of mortgage originations last year, according to the Mortgage Bankers Association. That's because most borrowers are risk-averse and fixed- rate mortgages protect them from the possibility that interest rates will rise over the life of the loan. The problem is that as home prices soar, choosing a long-term loan is an increasingly costly decision. In the current market, borrowers can cut the rate on their mortgage drastically by opting for an adjustable-rate mortgage instead of a 30-year fixed-rate loan. Currently, rates average 5.71 on 30-year fixed-rate mortgages while they average just 4.53 on mortgages that carry the same rate for the first five years and then adjust yearly, according to HSH Associates, a financial publisher. Lenders are increasingly pushing ARMs because they allow buyers to either trim their payments or buy more home for the same payment. At Washington Mutual Inc., ARMs accounted for 55 of home loan applications in the fourth quarter. At a time of rising home prices, the lower start rates on ARMs allow borrowers to maximize their buying power, says Greg Sayegh, Washington Mutual senior vice president.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981958","date":"2004-02-28","texts":"Rates on benchmark 30-year mortgages held steady at a seven- month low this week, while rates for other types of mortgages were mixed. The average rate on 30-year, fixed-rate mortgages was 5.58 percent, unchanged from last week, Freddie Mac said Thursday in its weekly nationwide survye of mortgage rates. The rate is at its lowest point since it was 5.52 percent for the week ended July 11. Rates on 30-year mortgages were at 5.21 percent in mid-June, the lowest level in more than four decades. Since then rates have been up and down. For 15-year, fixed-rate mortgages, a popular option for refinancing, rates rose to 4.89 percent this week, up from 4.87 percent last week. Rates for one-year adjustable mortgages, meanwhile, decreased to 3.50 percent, from 3.53 percent last week. There was very little movement either way this week, said Frank Nothaft, Freddie Mac's chief economist. And it looks like consumers are taking advantage of the low level of mortgage rates as applications for home purchases and refinancing are up for the last two weeks.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983766","date":"2004-02-28","texts":"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. 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. 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. 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. 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.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984004","date":"2004-02-28","texts":"With the Argentine economy showing signs of life again following the worst economic crisis in its history, President Nestor Kirchner's defiant proposal to repay only a fraction of the nearly 88 billion the country owes to creditors in the United States, Europe and Japan is rallying voters here and angering bondholders abroad. Argentina defaulted on the bonds in December 2001, deepening a long recession and leading to a sharp devaluation of the peso. Argentina's economy grew last year for the first time in five years, by nearly 8 percent. But with 1 in 5 workers unemployed, and more than half of the country's 38 million people living in poverty, Kirchner has not budged from his insistence that Argentina cannot afford to repay the defaulted bonds at anything close to their full prices. Kirchner's stance has come under increasing pressure from the Bush administration, the European Union and bondholders, who have begun to pursue legal action against Argentina in U.S. courts. The dispute over the defaulted bonds could jeopardize a pact reached last year in which the International Monetary Fund agreed to reschedule more than 31 billion in debt owed to the lender. A mission from the IMF is in Argentina this week for a six-month review of the country's efforts to comply with the terms of the deal. If Argentina defaults to the IMF as well as to private creditors it would join countries such as Sudan, Somalia and other failed states in becoming an international pariah. If they want to squeeze, let them, Kirchner told reporters last week. Here we have Argentines ready to build a new destiny, a new reality.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985457","date":"2004-02-29","texts":"-- Ken Mehlman, the head of President Bush's reelection campaign, is clearly right about one thing. This is a big-issue election, he said in an interview the other day. We are not talking about trivial differences. The truth of that statement is amply proved by the speech that Bush gave on Monday night, kicking off his campaign, and the response heard Thursday night in the Los Angeles debate from the leading Democratic candidates, John Kerry and John Edwards. The public recognition that the stakes are larger than usual explains why interest in Tuesday's primaries here and in nine other states is greater than anyone expected. Even though the candidates have barely had time to touch down in New York, California, Ohio, Georgia, Maryland, Massachusetts, Minnesota and the three smaller states also balloting, expectations are for big turnouts. Americans understand how much rides on the impending choice. As the president said, Great events will turn on this election. The man who sits in the Oval Office will set the course of the war on terror and the direction of our economy. The security and prosperity of America are at stake. That is more than rhetoric. Two factors have merged to make this election consequential -- much more so than most second-term decisions usually entail. One is the emergence of genuinely new forces in the world and at home, demanding tough policy decisions. The other is the way Bush has responded -- or failed to respond -- to these changes.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616538","date":"2004-03-02","texts":"Annualized interest rates on certain investments as reported by the Federal Reserve Board on a weekly-average basis WEEK ENDED Feb. 27, Feb. 20, 2004 2004","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615721","date":"2004-03-03","texts":"AIRLINES ARE INCREASINGLY paying other companies to do their maintenance for them. But it has become painfully clear that the Federal Aviation Administration doesn't spend enough time checking up on these outside repair shops. Last week, the National Transportation Safety Board cited sloppy maintenance and lax federal oversight as contributors to last year's fatal crash of a US Airways commuter flight in Charlotte, N.C., operated by Air Midwest. It's not the first time The safety board has also said federal maintenance oversight was an issue in the 2000 Alaska Airlines crash off the coast of California, which killed 88 people. Aircraft maintenance matters -- a lot. And while great safety strides have been made in many areas of aviation, the recent track record of maintenance oversight is a troubling one for travelers. In an effort to hold down costs, airlines now spend an average of 30 of their maintenance dollars at outside vendors. But the FAA has done little to keep tabs on all this work, according to a report last summer from the Department of Transportation's inspector general. Some 97 of inspections done by FAA officials who oversee specific airlines were of the carriers' in-house maintenance shops -- not third-party facilities -- in fiscal year 2002, the report said. While regional inspectors as opposed to airline-specific staff do get out to see more of the independent shops, they often have time for only cursory looks, the report said. Overall last year, the FAA says 16 of all its maintenance surveillance activities -- anytime an inspector looked at something -- were done at outside repair stations.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616551","date":"2004-03-05","texts":"Today's Market Forecast Idle Chatter At some point, they will be right. Economists keep forecasting that payrolls will have a decent month. This time, they expect the Bureau of Labor Statistics to report this morning that payrolls rose by 125,000 in February. But the poor dears won't forecast what they really believe, which is that it is finally time for the figure to be substantially higher. Hey, they might be right this month. Or not. They have been so wrong on the labor market for so long that they are gun-shy. If the figure comes in well above expectations, it could be the turn that the bond market has been expecting. Bond investors will likely think it means the Fed will move interest rates up sooner, and they will sell, at least for a few hours. This interpretation could easily turn out to be mistaken the Fed continues to signal its anomalous caution. It is hard to see the Fed feeling pressure to raise rates until the labor market has unambiguously improved over the course of several months and official measures of inflation rise. That argues for tightening next year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613953","date":"2004-03-08","texts":"The Bush administration hopes to use the American backlash against job outsourcing to press India into concessions in other trade disputes, but New Delhi is resisting. U.S. Trade Representative Robert Zoellick challenged Indian officials to lower trade barriers as a strategy to help defuse the U.S. jobs-protection debate raging in Congress and American state capitals. To keep U.S markets open to India, New Delhi has to open its markets, he said. The U.S. wants India to reduce its agricultural and industrial tariffs and quotas, liberalize its government-procurement rules and stiffen its intellectual-property protection. These have been longtime U.S. goals, but the Bush administration is betting India might be more amenable to doing so if it will stave off American legislative proposals to limit the flow of U.S. jobs to India. Last year, trade between the two countries totaled 18 billion. India had an 8 billion trade surplus with the U.S. last year, a 50 increase from five years earlier. The Senate put more muscle behind Mr. Zoellick's warning Thursday, when it approved a measure that would impose restrictions on government contractors to discourage companies from outsourcing American jobs overseas. The ban wouldn't apply to countries that have signed an international accord liberalizing government-procurement rules, but India and China haven't signed that pact.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615481","date":"2004-03-09","texts":"Tension is mounting within the National Association of Manufacturers, with many smaller members urging the big lobbying group to do more to fight the migration of jobs overseas even as many of its larger members embrace the trend. Such friction reflects a broader conflict in the U.S. economy as a whole. Smaller companies often feel squeezed by rising foreign competition and by the bigger manufacturers that the smaller companies supply, pushing them to cut costs. Many bigger companies outsource work to China or other low-cost nations to achieve those savings. This is probably the most difficult case of diverging interests that NAM has ever had to face, says Gerry Letendre, a member of NAM's board and president of Diamond Casting & Machine Co. a small Hollis, N.H., maker of aluminum parts for the electronics industry. Some smaller members have grown disenchanted and even are quitting the lobbying group. NAM, with 14,000 members, is a major voice for U.S. industrial interests and has been politically vocal on issues ranging from opposition to ergonomic workplace rules to lowering health-care costs. The group spends about 4.4 million a year on lobbying and has 32 registered lobbyists. Small and medium businesses pay about 30 of NAM's 21 million in annual dues, the bulk of the group's 22 million budget. Those companies account for two-thirds of its members.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984974","date":"2004-03-09","texts":"PUBLISHED CORRECTIONS The March 9 White House Notebook incorrectly identified the Democratic opponent of President George H.W. Bush in 1992. It was Bill Clinton, not Michael Dukakis. Published 31004 PUBLISHED CORRECTIONS The March 9 White House Notebook incorrectly identified the Democratic opponent of President George H.W. Bush in 1992. It was Bill Clinton, not Michael Dukakis. Published 31004 Senator Kerry, Bush said at a fundraising luncheon Thursday in California, has been in Washington long enough to take both sides on just about every issue. It was by far the earliest time an incumbent president has invoked the name of his opponent, even considering the rapid conclusion of the Democratic primary race. In 1992, a search of presidential records shows, Bush's father apparently waited until Aug. 17 before making an unprompted mention of Michael Dukakis. In 1996, Bill Clinton made his first unbidden criticism of opponent Bob Dole on July 2. And in 1984, incumbent Ronald Reagan waited all the way until Oct. 12, just weeks before the election, before identifying Walter Mondale, saying My opponent, Mr. Mondale, offers a future of pessimism, fear and limits, compared to ours of hope, confidence and growth. This is not a mere matter of calendar trivia. It is a sign that Bush has been put on the defensive and forced to join the political fray, long before he wanted to do. Indeed, Bush mentioned John F. Kerry five more times in a speech yesterday in Dallas. Democrats are delighted that they have forced Bush to abandon the Oval Office for the hustings.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982751","date":"2004-03-13","texts":"Mortgage rates fell sharply this week, with the rate on benchmark 30-year mortgages dropping to its lowest level since early July. The average rate on 30-year, fixed-rate mortgages was 5.41 percent, Freddie Mac said Thursday in its weekly nationwide survey of mortgage rates. This week's rate was down from 5.59 percent last week and marked the lowest rate since the week ended July 4, when rates averaged 5.40 percent. Rates on 30-year mortgages were at 5.21 percent in the middle of June, the lowest level in more than four decades. Since then rates have bounced up and down. Interest rates on 30-year fixed-rate mortgages edged closer to last year's record low figures, said Frank Nothaft, Freddie Mac's chief economist. For 15-year fixed-rate mortgages, a popular option for refinancing, rates averaged 4.69 percent this week, compared with 4.88 percent last week. Rates for one-year adjustable mortgages dipped to 3.41 percent, from 3.47 percent last week. This week's rate marked the lowest since Freddie Mac began tracking rates on one-year ARMs in 1984.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830984227","date":"2004-03-15","texts":"When President Bill Clinton raised taxes in 1993, the unemployment rate dropped, from 6.9 to 6.1 percent, and kept falling each of the next seven years. When President Bush cut taxes in 2001, the unemployment rate rose, from 4.7 to 5.8 percent, then drifted to 6 percent last year when taxes were cut again. It has become conventional wisdom in Washington that rising tax burdens crush labor markets. Bush castigated his political opponents last week for that old policy of tax and spend that would be the enemy of job creation. The fact of the matter is, we have much higher rates of employment today than we did in 1954, but our level of taxation is considerably higher, said Gary Burtless, a labor economist at the Brookings Institution. You simply can't look at total taxation to find employment levels. The issue has become particularly relevant as Congress debates budget resolutions that would extend tax cuts that otherwise would expire over the next five years, and as Bush clashes daily with Sen. John F. Kerry Mass., his Democratic rival, over tax policies and job creation. The Senate voted Wednesday night to place new barriers on future tax cuts. Republican economists -- and White House officials -- contend that higher marginal tax rates stifle business investment, hiring and the desire to work. Senior Treasury Department officials said the correlation is standard macroeconomics dating to the Kennedy administration. Last year's surge in economic growth can be timed to the week that tax refunds arrived in American mailboxes, they said.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614419","date":"2004-03-17","texts":"Dow Jones Newswires WASHINGTON -- Last week was a tough one for the stock market and for the shares of Fastenal Co. But while insiders at other companies held on to their wallets, top executives at Fastenal spent more than 500,000 on their company's shares. Three top officers at Fastenal -- the chief executive, the chief financial officer and the chief operating officer -- reported the purchase of a total of 12,000 shares for 529,398, an average price of 44.12 a share. Fastenal shares rose 73 cents, or 1.6, to 47.86 in 4 p.m. trading yesterday on the Nasdaq Stock Market. Fastenal, based in Winona, Minn., sells industrial and construction supplies, wholesale and retail. The company's shares were down 7.7 last week as the Dow Jones Industrial Average tumbled 3.4. According to data from Insiderinsights.com, insiders at 791 companies reported stock sales last week, compared with only 223 companies where insiders reported purchases. Fastenal Chief Financial Officer Daniel L. Florness said he was in Europe last week on a business trip, but he was following his company's stock. Our stock and the market in general last week took a bit of a beating, said Mr. Florness, who on Friday bought 1,000 shares at 44.06 each. We really just felt it was a good opportunity to buy some stock.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830985404","date":"2004-03-18","texts":"You can buy almost anything on the Internet auction site eBay, but there are certain things that, as one Annapolis man learned last week, you can't sell there among them, pirated pornographic videos. A month-long investigation by a task force of the Annapolis Police Department, the U.S. Secret Service and U.S. Postal Service inspectors culminated on March 9 with an early morning search of 48- year-old Hari Prasad's apartment in the 1000 block of Primrose Road. Police said a California resident bought two pornographic videos from Prasad on the Internet site and, when they arrived, was dismayed to find not originals but copies dubbed on generic tapes. The buyer tipped off authorities, and last month Detective Pete Medley of the Annapolis Police Department keyed in Prasad's e-mail address and ordered up a few of the titles. Authorities say that when they closed in on Prasad's home, at 630 a.m., they found what they were looking for. Among the evidence collected were 78 copy-protected original videos, 360 illegal copies, 120 blank VHS tapes and ledgers documenting the eBay sales.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616788","date":"2004-03-23","texts":"STOCKS TUMBLED on investors' concerns about terrorism, Asian stability and oil prices. The Dow Jones industrials ended down 121.85, or 1.2, at 10064.75, their lowest level since Dec. 15. Gold and Treasury bonds jumped. Taiwan's stock market plunged 6.7 after the legitimacy of the president's election was challenged by his opponent. --- Putnam's board concluded that three top executives knew about improper trading by fund managers in 2000 and should have reported it to fund trustees. Fund-trading scandals have hurt investors and inflicted long-term damage on the industry, the SEC's top fund watcher said. ---","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617241","date":"2004-03-26","texts":"WASHINGTON -- Democratic presidential challenger John Kerry, looking to capitalize on growing discontent over job losses, is proposing a broad restructuring of the corporate tax code to prod multinational companies to invest more in the U.S. The Massachusetts senator's plan, to be unveiled in a speech today in Detroit, would largely eliminate the tax break that lets U.S. companies defer tax payments on income earned abroad -- sometimes for a decade or more. That break costs the U.S. Treasury about 12 billion annually. Mr. Kerry would use the additional revenue to reduce the overall U.S. corporate tax rate to 33.25 from the current 35. The stick-and-carrot approach would encourage companies to shift more of their investments to the U.S., Mr. Kerry's aides said. Mr. Kerry also would offer U.S. companies a one-year tax break to repatriate earnings now held overseas, a pot of money that the Congressional Research Service estimates at around 600 billion. During that year, repatriated earnings would be taxed at a 10 rate. Congressional Republicans have proposed similar tax holidays. Kerry aides didn't have an estimate of the amount of revenue they expect would be produced by that gambit. But Mr. Kerry is counting on the money to pay for another part of his plan a two-year, 22 billion employer tax credit that would cover payroll taxes for new employees. The credit would be available to manufacturers, industries affected by outsourcing, and small businesses that employ fewer than 100 people.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984228","date":"2004-03-27","texts":"American consumers' incomes rose more sharply than their spending last month, the government reported yesterday. Personal income increased 0.4 percent in February, on a seasonally adjusted basis, slightly better than the 0.3 percent gain the month before, the Commerce Department said. Meanwhile, personal spending rose 0.2 percent in February, a pullback from the strong 0.5 percent increase the previous month. The numbers show consumer spending slowed in February, but remains on pace for solid growth this quarter, Peter Kretzmer, senior economist with Bank of America Corp., said in a note to clients yesterday. Strong consumer spending, fueled by low interest rates and a series of tax cuts, has largely propelled the economy's recovery from the 2001 recession. Many economists expect consumer spending to grow at a healthy pace in coming months, in part because of the tax refunds many households are receiving this spring, following the latest tax cut.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842615081","date":"2004-03-29","texts":"Private-equity firms Berkshire Partners LLC and Weston Presidio plan to acquire party-goods maker Amscan Holdings Inc. for about 140 million plus 400 million in debt, according to people familiar with the matter. Amscan, Elmsford, N.Y., makes party goods such as printed plates, napkins, and wedding and birthday gifts. It also is the world's largest maker of metallic party balloons. Last year, the company posted sales of about 400 million, up from 210 million in 1997. A Goldman Sachs Group Inc. private-equity vehicle took the company private in 1997, paying 290 million for its then-publicly traded stock. Since then, GS Capital Partners II LP has invested 77 million in the business, in part to purchase other balloon-making companies. The new buyers are expected to recapitalize the company, paying off 295 million in existing debt and, with borrowing arranged by Goldman Sachs, pay 245 million to the existing equity holders. An announcement could come as early as today, with the transaction closing midyear. The deal is the latest in a growing number of transactions between private-equity firms. With low interest rates, the firms have been able to stay competitive in bidding wars with corporate buyers. Indeed, a person familiar with the Amscan transaction says the private-equity group beat out potential strategic buyers.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616754","date":"2004-03-30","texts":"To the market's surprise the most recent Federal Open Market Committee statement didn't even hint at the threats implicit in the rise in commodity prices, especially oil, or the dollar's fall. These events have lowered the threat of deflation to virtually zero, but the Fed insists that deflation is still a slightly higher risk than inflation. Is the Fed keeping its head in the sand Is Alan Greenspan bowing to George Bush and the upcoming election Even before the Fed meeting, an increasing number of commentators insisted the Fed is too easy. Now such criticism has reached a crescendo. On the surface, the censure seems justified. Commodity prices are rapidly increasing the Commodity Research Bureau index of actively traded commodities is now at a level not seen since the inflation bubble of 1980. Oil stays stubbornly high, near 40 per barrel, and the Journal of Commerce Index of lightly processed commodities, once a favorite Greenspan indicator, has soared to an all-time high. And although the dollar has stabilized, it is down 25 against a basket of currencies since early 2002. Finally, the real Fed funds rate has been negative for two years and relative to real economic growth, the most negative since the inflationary '70s. But there are good responses to these points. The rising commodity prices are due to China, which is churning out lower priced goods that keep inflation in check. The dollar has indeed dropped, but two years ago economists were saying it was too high. Today it's at, or just below, its purchasing power parity level, consistent with the persistent current account deficit. Furthermore, the smart money in the oil futures market says that the price is coming down sharply. And there is also a good response to the low real rates, a key variable in the critics' argument. Inflation hawks have maintained that by keeping the after-inflation cost of money negative, the Fed is feeding the fires of future inflation. But if monetary policy were really too accommodating, wouldn't we see rising interest rates in the bond market Yet with the 10-year bond yield under 4, we see no such concern. Are those calling for higher rates saying that the bond vigilantes -- who have kept government and the Fed honest by pushing bond prices lower when the Fed's action has been inflationary -- are flat out wrong That would be a sharp reversal from the past when the bond market was routinely praised for warning errant governments of monetary and fiscal profligacy. With the 10-year indexed bond yielding a record-low 1.4, a zero or even negative real Fed funds rate -- what we have now -- looks about right. If the Fed raised short-term rates, it would risk flattening or inverting the yield curve, something very dangerous early in a recovery.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614705","date":"2004-04-01","texts":"Dow Jones Newswires NEW YORK -- Consolidation may pick up in the U.S. mortgage industry, as companies seek to deal with a drop in refinancing activity after last year's boom. Some smaller combinations so far this year -- including the 6 billion merger of Alabama-based Regions Financial Corp. and Tennessee- based Union Planters Corp. -- could herald a wider trend, analysts say. We're in a new phase in the mortgage industry right now, but it's a natural progression, given where interest rates are headed, said Sharon Haas, managing director in Fitch Ratings' banks group. I am anticipating many more consolidations going forward. Consolidation was under way well before the latest mortgage boom- and-bust cycle. But as the economy continues to recover this year, rates are expected to climb. That will erode new lending and refinancing activity, while pressuring firms to find new efficiencies, analysts say.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615317","date":"2004-04-02","texts":"Today's Market Forecast Looking for Work If they keep it up, Wall Street economists may be able to report personally on the jobs market from the actual unemployment lines. Wall Street expects that 125,000 workers were added to payrolls in March. This is certainly a case of things being down so long they are starting to look like up. Such a figure would be objectively weak, but the stock market would breathe more easily and the bond market could sell off if the number comes in at that estimate or higher. As in the past several months, economists and investors believe in their hearts that the number will be better than expected and that the jobs market is better than the government's figures suggest.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614307","date":"2004-04-06","texts":"The stock market reacted positively to Friday's strong jobs report, especially growth-sensitive Nasdaq, even though the bond market began to price-in earlier interest rate hikes. The report showed that more than half a million net new jobs were created in the first quarter. Stocks supposedly fear rate hikes and value companies that scrimp on employees. And they've already priced in all-time record corporate profits. So why the celebration The explanation for the stock rally after the jobs report is twofold. Despite its many flaws, the jobs report has become a key election issue -- the stronger the report, the better the chances for President Bush's re-election -- and this election will likely determine the taxation of equities, high or low, for years to come. The stock-market logic goes like this The 2003 tax cut lowered taxes on stocks, but only through 2008. The extension of the tax cuts is critical to the value of equities, which have added 3 trillion in market capitalization since the 2003 cuts were enacted. Because the candidates have been quite clear on their stance toward extending the key growth provisions of the 2003 tax cut, a Bush victory and Republican gains in the Senate likely mean lower taxes on capital, more capital and higher stock prices -- and the reverse if John Kerry wins. The second reason equities liked the strong jobs report is because it might finally break through the risk aversion still dominating corporate America's decision-making. Given the trauma of the 2000-2001 deflation, the stock market crash, the intense regulatory backlash and 911, established businesses like those surveyed in Friday's jobs report have been unusually cautious about the outlook. Though new surveys show rising business confidence, companies have preferred cash over inventory, investments and employees. In the aggregate, businesses normally invest more than their cash flow, adding debt as they grow. The last year has seen a remarkable degree of corporate caution, with growth in new investment falling well short of the growth in cash flow for the first time on record. This also shows up in the record-low level of inventories relative to sales in recent months, and in the reluctance of established businesses to hire when bad memories of the 2000-2001 downsizing are still fresh.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615198","date":"2004-04-06","texts":"With all the gratitude and acclaim surrounding Jack Valenti's recently announced retirement, no one dares confront the long-time president of the Motion Picture Association of America over the chief mystery of his 38-year reign What happened, Jack, to all those missing moviegoers Despite his unquestioned eloquence, elegance and charm, Mr. Valenti presided over history's most disastrous decline in the audience for feature films. In 1965, the year before he left the Johnson administration to assume his plush position as chief mouthpiece for the entertainment industry, 44 million Americans went out to the movies every week. A mere four years later, that number had collapsed to 17.5 million. In other words, some potent, puzzling force drove more than half of the nation's film fans to break the habit of movie going. That same mystical power served to suppress attendance for the next 20 years, with figures on ticket sales remaining flat until they began to rise moderately in the 1990s, reflecting the construction of thousands of new movie screens at multiplex theaters. Most recent figures from 2003 show weekly attendance today at just over 30 million. As a percentage of the nation's population, however, the numbers on movie attendance remain only slightly improved from the devastating trough of 1970 10.3 vs. 8.6 and still vastly lower than the robust box- office years of 1965 44 or 1960 45. It's amazing how many movie professionals remain altogether unaware of this long-term decline in film going -- or, when informed about the depressing but undeniable figures, wrongly attribute them to the advent of television. TV sets began appearing in living rooms in the late 1940s, of course, and by the time the audience for feature films started its sharpest slump in 1966, the tube had already arrived in nearly all American homes. Hollywood originally panicked that television would destroy its business by offering for free the sort of entertainment that cost money at the local Bijou, but during the fateful 10 years of the primary TV invasion 1950-60 the audience actually declined 34, compared with a 60 decline in those nightmarish four years of the late '60s. In later decades, the arrival of the VCR, cable TV and DVD actually corresponded to modest increases in the motion-picture audience, so no theory centered on technological alternatives can solve the mystery of the missing moviegoers.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616402","date":"2004-04-09","texts":"More than a quarter of executives in part of a manufacturing survey say shifting production offshore and buying more parts and products from abroad are among the factors most responsible for their unwillingness to add U.S. workers. But productivity gains remain the key factor keeping them from hiring. The survey, by Manufacturers AllianceMAPI, an Arlington, Va., association of large manufacturing companies, included responses from 37 executives at companies that aren't hiring about the factors impairing employment. While 27 cited the movement of production offshore and the same percentage cited the sourcing of more parts and finished goods from abroad, 84 pointed to productivity gains. Other factors cited by 8 of executives included the need to contain costs, pressure from customers for lower prices, and the consolidation of facilities. Those things could be interpreted as being linked to productivity gains, also, said Donald A. Norman, the group's economist. There's just a relentless pressure on them to be more efficient. The Manufacturers Alliance's regular quarterly business outlook, released yesterday, suggests that the recovery in manufacturing is gathering steam. The composite index of future business activity edged up from 77 in December to 78 in March, the highest in the survey's 32- year history. An index above 50 indicates manufacturing activity is expected to increase over the next three months.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617370","date":"2004-04-09","texts":"ECONOMISTS PREDICT BUSH will get more good jobs news. Payrolls are expected to rise an average of 177,000 every month for the next year, according to forecasts from 54 economists surveyed by WSJ.com. That is much less than March's 308,000 gain, but more than double the 75,000 average of the preceding six months. Kerry will react by focusing more on the middle-class burdens arising from stagnant wages and rising health and education costs. In a forthcoming Jobs of the Future speech, he will tout using broadband technology and hydrogen-powered vehicles to create high-wage employment. In a meeting this week to rebuild alliances, Kerry faced trade questions from Business Roundtable leaders. FRIST TRIES to break Senate gridlock by trading with Democrats.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983593","date":"2004-04-11","texts":"Terrorists buy a national election in Spain for the price of 10 backpack bombs and remove a crucial pillar of the Western coalition in Iraq. Predictably, op-ed columnists and talking heads raise the cry for the Bush administration to save the Western alliance. This is a knee-jerk response that reflects historical habit more than strategic logic. Clinging to the Western alliance isn't the way to win the global war on terrorism. In fact, it's a backward-looking approach that's certain to doom our efforts in this conflict. Combating transnational terrorism in the era of globalization will be a decades-long task, and anything that long and complex requires a genuinely grand strategy, something this country has lacked since the end of the Cold War. Grand strategy is about figuring out what kind of global future is worth creating, understanding which states have the incentive to build that future, and concluding the bargains necessary to keep them on board for the duration. The Bush administration has declared its intention to transform the Middle East, but beyond merely stating that goal and offering regimes there a to-do list for democracy, it remains unclear what constitutes the finish line in this global war on terrorism. Defining happy endings is important, because it can help America understand who its true allies in this great historical struggle should be -- not globalization's old core of Europe but its new pillars in Asia and elsewhere. During the Cold War, the United States was able to enlist the long-term support of Western Europe because those nations felt most under the gun from the Soviet bloc's military threat. All they had to do was to peer behind the Iron Curtain to envision the future they wanted at all costs to avoid. Europe today faces no such threat. All the Islamic terrorists demand is that Europe remain on the sidelines while they wage holy war against American imperialism in the Persian Gulf. Al Qaeda wants to drive the West out of the Middle East so that it can drive the Middle East out of the modern world. Osama bin Laden has seen our future and prefers Islam's past, and many in Old Europe are willing to agree to his offer of civilizational apartheid, preferring to concentrate on inwardly perfecting the European Union, where they have their hands full merely integrating the former East Bloc states. And if Turkey remains too different for that club, you can imagine how any effort to connect Iraq to the West seems like a bridge too far.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615007","date":"2004-04-12","texts":"Sharp increases in global commodity prices are beginning to push consumer prices higher in Asia, boosting the odds that inflation will be exported to the U.S. and elsewhere in the months ahead. Consumer prices had been holding fairly steady, or even declining, in much of Asia in recent years, as the region's economies worked off excess capacity amid the global downturn. But as Asia heats up again, price pressures are building, in large part because of China's ravenous appetite for raw materials. Oil prices have shot up and are hovering around 35 a barrel, while the prices of other raw materials, including scrap steel and copper, are double or more what they were just 18 months ago. As a result, consumer price inflation, while still extremely low in Asia by historical standards, has accelerated in recent months. The most significant turnaround has occurred in China. That country's inflation rate, though easing slightly in February, has jumped in recent months, including a 3.2 surge in January, compared with the year before. That comes after prices were nearly flat or declining through much of 2002 and 2003. Price increases are also cropping up in some of the region's other major economies. In Japan and Hong Kong, for example, it appears that a long stretch of price deflation may be coming to an end, as consumers are now paying more for some goods. In South Korea, the higher prices have been particularly pronounced among exporters, as domestic consumer demand remains slack. The pattern of rising prices is even more evident in Thailand and the Philippines. We're kind of at a turning point in consumer prices in Asia, says Rob Subbaraman, a regional economist at Lehman Brothers in Tokyo. Broad inflationary pressures are beginning to build.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617212","date":"2004-04-13","texts":"As John Kerry showed yesterday, there is a way to make lemons out of lemonade Mine government statistics to show that, all evidence of prosperity to the contrary, the country is actually going to hell in a hand basket. Voila -- the Kerry campaign's new misery index, which allows the Democratic presidential challenger to paint George W. Bush as the reincarnation of Herbert Hoover. The original misery index -- the sum of the unemployment and inflation rates -- leapt into the public consciousness when candidate Jimmy Carter attacked President Gerald Ford's record back in 1976. Back then the index was stuck at 13.5. Over Mr. Carter's White House tenure the country only suffered more, as the index shot up to 20.6. For the record, it's now at a historically low level of 7.7, eight points below when Bill Clinton sought a second term in 1996. Mr. Kerry's new misery index purports to tell a different story, and would have us believe that the middle-class way of life is profoundly threatened. Of the seven components, three are based on the price of goods and services that have been rising far faster than inflation college tuition, health care and gasoline. While these trends are worthy of discussion by themselves, they don't tell us much about the ability of a middle-class family to make ends meet. That's why statisticians use a basket of goods and services weighted according to the expenses of real households in order to calculate the inflation rate. No doubt Mr. Kerry's college audiences this week will be pleased by his pledges to hold down tuitions. But they might also consider whether his cherry picking of figures to get his desired answer would pass muster in their classrooms. Credit should be given where it is due, though, when it comes to gasoline prices. Sure, some of Mr. Kerry's answers to this problem are uninspiring -- work more effectively to ensure that OPEC increases production. And the suggestion that the Bush Administration's collusion with oil companies at the expense of conservation has somehow driven up gas prices is nonsensical. Nevertheless, it's encouraging that in recent days Mr. Kerry seems to have realized that excessive regulation in the form of the patchwork of rules on gas all over this country has driven up costs.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617242","date":"2004-04-15","texts":"Dow Jones Newswires NEW YORK -- Small-capitalization stocks underperformed the overall market, and interest-rate-sensitive stocks led the way down. Savings-and-loan stocks fell after fears of inflation and higher interest rates were fanned by news that consumer prices rose sharply in March. On the Big Board, Downey Financial fell 1.47, or 2.9, to 48.85 a share. First Sentinel Bancorp slid 53 cents, or 2.6, to 19.76, and Dime Community Bancshares sank 44 cents, or 2.3, to 18.90. The report of a jump in consumer prices, which came a day after strong retail-sales data, provides evidence of a strengthening economy. Some investors are concerned that a rise in inflation could force the Federal Reserve to raise interest rates this year, which could hurt stocks. Looking ahead, investors will be watching for changes in the yield curve and interest rates very closely for signs that the long bull run in small caps may be starting to wane, said Michael Sheldon, chief market strategist at Spencer Clarke. The Russell 2000 Index of small stocks fell 3.81 points, or 0.65, to 582.02, and the Standard & Poor's SmallCap 600 Index slipped 2.05, or 0.72, to 283.71. The Nasdaq Composite Index of large- capitalization and small-cap stocks sank 5.23, or 0.26, to 2024.85.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613521","date":"2004-04-20","texts":"MCI, the nation's No. 2 long-distance phone company, is set to emerge from Chapter 11 federal bankruptcy-court protection today, issuing new stock and bonds to pay off creditors. The company also will make a record 750 million payment that eventually will go to investors who were crushed by the company's 11 billion accounting fraud and subsequent record-setting bankruptcy filing. MCI, which changed its name from WorldCom Inc. and moved its headquarters to Ashburn, Va., from Mississippi during the bankruptcy, will fully rejoin a beleaguered telecom industry in which overcapacity has been driving prices down at a merciless rate. The company will pay the Securities and Exchange Commission 500 million in cash and 250 million in newly issued stock as part of its settlement today, though the proceeds likely won't be distributed to investors for more than a year as the court overseeing the settlement sets up a procedure for filing claims. Under the bankruptcy-court settlement, MCI will pay most of its former bondholders 36 cents on the dollar in stock and bonds to be issued today. The old WorldCom shares are worthless. MCI's new shares are expected to trade over-the-counter until it relists on the Nasdaq Stock Market in a few weeks. MCI has 15 days to file audited financial results for 2003 with the SEC.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983155","date":"2004-04-21","texts":"Federal Reserve Chairman Alan Greenspan said yesterday that the U.S. economy has picked up noticeably in recent weeks and that businesses are regaining their ability to raise prices. Things are changing since economic growth slumped in mid- winter, Greenspan said during a Senate Banking Committee hearing, in his most upbeat public comments about the economy since February. Citing recent upticks in employment, vehicle sales and new orders for big-ticket consumer items, he said, It's fairly apparent from the data since, that things have picked up. Greenspan said nothing about how such progress would affect the Fed's policy on interest rates. But stock and bond prices fell sharply after his remarks apparently convinced many investors that the central bank may move soon, perhaps as early as this summer, to raise its target for a key overnight rate, which influences many other borrowing costs for households and businesses. Investors also may have sold assets in anticipation of Greenspan's scheduled testimony today before the Joint Economic Committee, in which he plans to elaborate on his view of the economic situation. Greenspan's remarks yesterday came just two weeks before the Fed's policymaking group, the Federal Open Market Committee, meets to determine interest rate policy. The markets' reaction yesterday reflected jitters among investors who know that Greenspan might use his testimony today to prepare the public for any significant change he may intend.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613978","date":"2004-04-22","texts":"The following were among yesterday's offerings and pricings in U.S. and non-U.S. capital markets, with terms and syndicate manager, based on information provided by Dow Jones Newswires and Factiva. A basis point is one-hundredth of a percentage point 100 basis points equal a percentage point. CORPORATE Fannie Mae -- 5 billion of two-year benchmark notes was priced via lead managers Credit Suisse First Boston, Lehman Brothers and Morgan Stanley. Terms maturity June 15, 2006 coupon 2.5 price 99.929 yield 2.535 spread 34.5 basis points above Treasurys settlement April 23, 2004. GE Capital European Funding -- 800 million euros of seven-year floating-rate notes was priced, lead managers Dresdner Kleinwort Wasserstein and Lehman Brothers said. Terms maturity May 4, 2011 coupon 12.5 basis points above three-month euro interbank offered rate price 99.705 reoffer 99.705 payment May 4, 2004 guarantor General Electric Capital Corp. fees 0.35 ratings Aaa Moody's Investors Service Inc., triple-A Standard & Poor's Ratings Group listing Luxembourg, Dublin interest quarterly. International Finance Corp. -- 1 billion of global bonds was priced with the following terms, lead manager Nomura International and J.P. Morgan said maturity June 30, 2009 coupon 3.75 price 99.941 reoffer 99.941 payment April 28, 2004 fees 0.1 ratings Aaa Moody's, triple-A S&P listing Luxembourg interest semiannual.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985390","date":"2004-04-25","texts":"David Ellison took about three years to go from serving customers as a bank teller in upstate New York to helping Peter Lynch pick financial stocks in the 1980s for the Fidelity Magellan Fund, the biggest U.S. equity fund of the time. They saw I had bank experience on my resume so they said, you're the banking analyst, Ellison said in an interview. And then I got a look at the thrifts that Peter owned and started crunching numbers. Ellison, 46, left Fidelity Investments in 1996 and today manages the top-performing specialty-finance mutual fund of the past five years, according to data compiled by Bloomberg. The 646 million FBR Small Cap Financial Fund has risen at an annual rate of 22 percent since April 1999, led by holdings in companies including Washington Federal Inc. and Hawthorne Financial Corp. The banking industry and funds that own financial stocks have benefited from an increase in corporate takeovers and the lowest interest rates in 45 years, Ellison said. Lynch, 60, who quit as manager of the Magellan fund in 1990, taught Ellison to separate good companies from bad companies, and to maintain confidence in his stock picks even if the share prices dropped. Ellison focuses on companies with market values of less than 3 billion that have a low cost of capital and a low ratio of expenses to assets, rather than on companies that are reporting the highest revenue growth. He also scrutinizes a bank's borrowers to avoid risky lenders.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613578","date":"2004-04-26","texts":"AS THE U.S. has grown ever reliant on foreign central banks to finance its trade and budget deficits, the question arises Could foreign governments, like China's, one day use this clout to influence U.S. foreign policy Most experts say it's far-fetched. But some look at history and the state of modern markets and are worried. There is surely something odd about the world's greatest power being the world's greatest debtor, Lawrence Summers, Harvard University president and former U.S. Treasury secretary, said in a recent speech. He calls it troubling that the U.S. depends so much on inevitably political entities to finance its foreign debts. Last year, the U.S. ran a 542 billion deficit in its current account -- the balance of goods and services between the U.S. and the rest of the world -- which had to be financed by selling stocks, bonds, and other assets to foreigners. The U.S. has run such deficits for years, but most of the time they were financed by private investors and their purchases were seen as a sign of confidence in the U.S. economy. But in recent years, private inflows haven't kept pace with the growth in the current-account deficit and foreign central banks have stepped into the breach, buying more than 200 billion of U.S. assets, mostly Treasury bonds and bills, last year. They do this to hold the dollar's value up against their own currencies, which makes their exports more competitive. Foreign central banks, led by China's and Japan's, now hold close to 1 trillion of Treasury bonds and bills, almost a quarter of publicly held U.S. debt. That serves their economic interest, but it also gives them a potential financial lever. IMAGINE A standoff between the U.S. and China over Taiwanese independence. What would happen if China stopped buying U.S. bonds, or sold them outright As bond prices fell, their yields, which move in the opposite direction, would rise. Mortgage rates would rise, depressing home sales and weakening the economy.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615783","date":"2004-04-26","texts":"Financial crises usually come from left field. But that doesn't stop swamis from searching for the next trigger. Right now, the prospect of rising interest rates is focusing swamis on trouble in the bond market. Not a bad bet, since the past few years of falling rates have produced a ton of complicated ways to extract profits from fixed- income securities. Also not a bad bet since a forecast of higher rates is driving investors to unwind positions -- presenting a perfect moment to expose flaws in hedging and other strategies. So it's hardly surprising that concentration of risk is Topic One. Consider, for example, a recent speech by the new head of the Federal Reserve Bank of New York. In lovely Fed-speak, Timothy Geithner blended concerns about the increasing vulnerability of the financial system to the growth in Fannie Mae and Freddie Mac and the high degree of concentration in the market for interest-rate options. Mr. Geithner was vague in the extreme, but the details of his concern are laid out in a report from Credit Suisse First Boston. Here are the mechanics of a possible crisis scenario in which the particular nature of risk in the mortgage market becomes concentrated in the market for interest-rate options. The chain of transmission starts with the mortgage market. Bear in mind that, at some 7 trillion, this market is enormous. Mortgages are of course wondrous financial instruments. They allow people, even those with humble means, to own a big asset -- a house -- without having to pay the full price up-front. But mortgages have an almost as wondrous property -- they give home buyers the opportunity to pay off before maturity. This prepayment option allows homeowners to transfer interest-rate risk to mortgage holders. Holders of mortgage securities borrow money to buy those securities. If all goes according to plan, holders buy securities that yield more than they pay on their debt. However, when interest rates fall and homeowners prepay, mortgage holders find that cash flows have changed. What was a nice deal of, say, receiving 6 on mortgages and paying 5 on debt could become a less comfortable arrangement of receiving 5 on mortgages and paying 5 on debt. Not good. Or say that interest rates go up then homeowners keep their mortgages and holders could find themselves getting 6 on assets but paying 6 on debt. Also not good.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616680","date":"2004-04-26","texts":"MADRAS, India -- Last year, Terry Salo flew 22 hours from his home in Victoria, British Columbia, to this southern Indian port city for a partial hip replacement. Mr. Salo, a former commercial fisherman, faced a wait of a year or more for free care from Canada's national health service but the pain had become unbearable. Before airfare and other expenses, he paid 4,500 for the surgery at Apollo Hospitals Enterprises Ltd., a quarter of the cost for similar treatment in Europe and the U.S. People need to know that there are other options out there, says Mr. Salo, 54 years old, who was swinging golf clubs a month after the operation. Mr. Salo is one of 60,000 foreign patients who were treated at Apollo Hospitals over the past three years. Since its start as a single hospital in 1983, Apollo has grown to 37 hospitals with more than 6,400 beds, making it one of the largest private hospital chains in Asia. Apollo's emergence as a global health-care provider in many ways tracks India's economic trajectory over the past three decades. The company has capitalized on the high cost of health-care administration in the U.S. and demands of patients elsewhere, for fast, inexpensive treatment. Hundreds of Apollo's data processors work late-night shifts providing billing services and processing insurance claims for U.S. hospitals and insurers. Apollo laboratories perform clinical trials for Western drug companies, such as Pfizer Inc. and Eli Lilly & Co. Apollo even remotely evaluates X-rays and CAT scans.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984985","date":"2004-04-29","texts":"Job growth rose sharply in the Washington area in the first three months of the year, according to government statistics released yesterday, as the private sector finally started adding to its payrolls in large numbers. The numbers are the strongest signal yet that the region's economy, which has been growing modestly in the past three years largely because of federal spending, is entering a more robust recovery, with companies in construction, retail, leisure and hospitality adding significant numbers of jobs. The Washington area had 2.2 percent more jobs in March than a year earlier, a net gain of 60,600, after adding jobs at a 0.6 percent pace in 2003. The area's unemployment rate was 3 percent in March, the lowest of any major city and down from 3.2 percent in February and 3.7 percent in March 2003. With both the government and private sectors now expanding at a healthy pace, some forecasters expect the Washington area to generate 80,000 jobs in 2004, on par with the boom years in the late 1990s. The recovery has strengthened and broadened, said Mark Vitner, a senior economist at Wachovia Corp. who is one such forecaster. That's an unabashed positive.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842613550","date":"2004-04-30","texts":"Today's Market Forecast The Rising For those who missed the feverish religiosity of the New Economy, thank Google. Yea verily, Google has issued forth its S1 filing, and it is good. The San Jose Mercury News even said observers think the new IPO's effects will ripple through the valley . . . reigniting the region's entrepreneurial spirit. A CNN political commentator, Carlos Watson, wrote online that a successful Google IPO could spur the economy of Silicon Valley, create jobs, boost the national unemployment rate and thus may play a big role in helping to return President Bush to office this fall. For their next trick, founders Sergey Brin and Larry Page will heal the lame, end terrorism and rid e-mail of spam.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983372","date":"2004-05-03","texts":"When a Montgomery County man who'd been shocked by police with an electric Taser gun died last week, investors recoiled in fear. Within 24 hours after the incident, stockholders of the company that makes the Taser lost almost 100 million as the stock of Taser International Inc. plunged more than 9.50 a share. The death of Eric Wolle, 45, put Montgomery County in the crosshairs of a controversy that has riled police departments and investors nationwide. Cops everywhere have been rushing to buy Tasers, a weapon that shoots out a pair of darts linked by long wires to a powerful battery that jolts suspects into submission. And investors everywhere have been rushing to buy Taser International stock. By some rankings, TASR, traded on the Nasdaq Stock Market, has been the nation's No. 1 stock -- up more than 2,000 percent in the past 12 months. Taser stock jumped from around 1.50 a share to 120 before being knocked down by media reports about people who died after being shot by Tasers.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617426","date":"2004-05-04","texts":"AFTER TWO down months, stocks surprised investors with a rebound -- just as the Federal Reserve meets today to take what is expected to be a first step toward higher interest rates. Despite uncertainty about how soon and how much the Fed will raise rates, the Dow Jones Industrial Average rose 88.43 points, or 0.86, to 10314.00, still down 1.3 since the year began. Whether this proves to be a one-day bounce or a more lasting rebound depends heavily on whether the Fed damps investors' enthusiasm by signaling a sooner-rather-than-later rate increase. Investors widely expect Fed policy makers to leave their target overnight lending rate at 1, a 46-year low, for now. Low Fed targets have helped keep most market interest rates down, helping stocks and bonds for more than 18 months. Many expect the Fed today will end its promise to be patient about raising rates. Whether stocks and bonds rise or fall probably depends on whether the Fed signals plans to raise rates at its next meeting, in June, or instead to wait until its August meeting.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614044","date":"2004-05-05","texts":"Bhiwandi, India -- AS INDIA FACES criticism for luring white-collar jobs away from the U.S., what is sometimes lost is the larger challenge for India Generating enough work for its own citizens. The workers at the center of the outsourcing uproar -- software engineers, customer-service agents, claims processors -- now number roughly one million, a small fraction of the country's work force of more than 400 million people. So while India's economy has shown impressive growth over the past year, beneath the numbers lies a paradox. For many Indians, the economy's resurgence isn't translating into the one thing they want most -- a steady paycheck. In fact, India has seen a marked decline in the number of jobs at companies with more than 10 employees in recent years. Sarwan Kumar is typical. He is one of the hundreds of millions who work in the so-called unorganized sector, which accounts for 92 of India's jobs. They are farmers, street vendors, truck drivers, traders or, like Mr. Kumar, migrant laborers. All have little or no job security. Mr. Kumar, now in his 20s, left his home in North India to become a loom worker in Bhiwandi, a dusty industrial town outside Bombay. When the local candidate for India's ruling party came looking for votes here in the national election now under way, he didn't find many takers. For these migrant workers, little has changed during the present government's tenure.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615460","date":"2004-05-05","texts":"Dow Jones Newswires NEW YORK -- Long-dated Treasurys plummeted on fears that the Federal Reserve isn't acting aggressively enough to avert a rise in inflation. But two-year notes, which often weaken quickly amid concerns about Fed policy tightening, scarcely moved, reassured by the Fed's apparent pledge to move only gradually in raising interest rates. The market doesn't agree with the Fed's assessment on inflation, said Gerald Lucas, head of U.S. Treasury and agency strategy at Banc of America Securities. After concluding its meeting yesterday, the Fed's policy setting Federal Open Market Committee said in a statement that at this juncture, with inflation low and resource use slack, the committee believes that policy accommodation can be removed at a pace that is likely to be measured. That was a very, very benign statement, said Bill Quan, economist at Mizuho Securities in Hoboken, N.J.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984168","date":"2004-05-09","texts":"Foxfire, the nonprofit guardian of Appalachian history, is working to erase what remains of its own troubled past with hopes of reclaiming its former folksy glory. After decades of national acclaim, the pioneering history- keeping group has struggled since its high-profile founder's conviction for molesting a 10-year-old boy. Foxfire -- the all-encompassing name for an educational movement, a magazine, a publishing powerhouse and archives of the region's history -- began as a high school English-class experiment in 1966 to get kids interested in their work. It evolved into a nationally respected example of hands-on learning. For almost four decades, teenagers in Rabun County on the wooded border of Georgia and North Carolina have interviewed their family members and neighbors, documenting countless lives in stories and photographs for the magazine produced entirely by high school students. In the process, Foxfire has made stars out of the Appalachian old- timers. Their stories and memories of the old ways -- everything from fiddle-making and faith-healing to moonshining, bear hunting and hog dressing -- were turned into an acclaimed series of books that fueled a national frenzy over folk art.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842616501","date":"2004-05-10","texts":"Dow Jones Newswires NEW YORK -- Small-capitalization stocks don't do nearly as well when the Federal Reserve is raising interest rates, so what are small-cap portfolio managers doing to prepare Not a heck of a lot. The annual gain of the Russell 2000 Index of small stocks falls to roughly 3.5 when the Fed is raising rates, compared with its historical average advance of 12, according to James Furey, chief small-cap analyst at Lehman Brothers. The reasons for the falloff include smaller stocks being closely tied to the performance of the U.S. economy, which can be slowed by interest-rate increases. Also, smaller businesses face the prospect of having to pay more for loans, which could curb their expansion. When the Fed has raised rates in the past, defensive areas like energy and certain health-care stocks fared better, while economically sensitive shares, such as retailers, home builders and manufacturers lagged behind. But don't assume that portfolio managers are positioning themselves to follow the past performance.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982431","date":"2004-05-12","texts":"The Senate yesterday broke a two-month deadlock and approved a major corporate tax bill that would end a trade dispute with Europe and shower U.S. corporations with billions in new tax breaks. The bill, approved 92 to 5, would provide 170 billion in corporate tax cuts over the next decade to replace export subsidies previously granted to U.S. firms by Congress that prompted 4 billion in retaliatory tariffs by the European Union. A different House version of the legislation has been stalled for months by disagreements among Republicans. But key senators said they believe Senate passage would help break the House logjam in time for enactment of the legislation later this year, and several House aides said they agreed with this assessment. The Senate impasse ended after Democrats consented to limit debate in exchange for an agreement from Republicans to allow a vote on extending supplementary unemployment benefits for 13 weeks, an election-year priority for the Democrats. But the vote on the unemployment measure turned into an embarrassment for Sen. John F. Kerry Mass., the presumptive Democratic presidential nominee. The Senate voted 59 to 40 for the proposal, one vote short of the 60 needed for approval. Kerry, who favored extending jobless benefits, was campaigning in Kentucky and was the only senator to miss the vote.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984523","date":"2004-05-13","texts":"In 1990, when the county's piggyback income tax rate was 50 percent, the Montgomery County Council voted to place on the ballot a charter amendment limiting annual growth in county property tax revenues, not counting new growth, to 100 percent of the annual increase in the Consumer Price Index. The voters approved. For 11 years, the council adhered to the limit. Then in fiscal year 2003, the council voted to exceed the limit by 8 million, in FY 2004 by 30 million and now in FY 2005 it is considering 45 million. The camel's nose is in the tent here comes the camel Now, our supersized county government has increased the piggyback income tax rate to 60 percent, a 150 million annual increase. It has also doubled the telephone tax, tripled the energy tax, increased sewer, water and trash rates, and given us new cell phone and development taxes. The county's budget first broke 2 billion in FY 1998 but passed the 3 billion mark only six years later in FY 2004, while inflation was at record lows and the population was increasing only 8.5 percent. I have been unable to find any other U.S. county where the rate of increase in the budget was six times the rate of increase of population growth during this period. So, I have led a successful petition drive to place a question on this November's ballot, reenacting the County Council's own property tax revenue limit but eliminating its ability to override it which it now can do with seven of nine votes. While spending 10-hour days collecting the 15,000 signatures, I encountered a small but very aggressive minority bitterly opposed to any property tax limit. I would ask them if there was any tax they did not want to increase. Inevitably, they would answer no. The problem is that our group- think, spend-along-to-get-along county executive and council are all in this minority. They can govern only when revenues are rapidly increasing. If our question fails, they'll think they have a green light for more huge tax increases.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982538","date":"2004-05-23","texts":"Kevin Phillips once wrote that Americans achieve through presidential elections what in other countries it takes a revolution to accomplish. The noted intellectual provocateur was exaggerating, of course. But, on occasion, our quadrennial circuses do produce or certify durable shifts in power. Andrew Jackson's triumph in 1828 ushered in an age of mass parties based on the needs and prejudices of ordinary white voters. Lincoln's victory in 1860 led directly to the Civil War so much for elections substituting for armed conflict. Lashed to the Depression, Herbert Hoover lost the election of 1932 more than Franklin Roosevelt won it. But FDR, backed by a new multi-ethnic coalition, went on to build the modern welfare-warfare state that governs us still. James Chace would include the contest of 1912 in that select group. The election, he writes, introduced a conflict between progressive idealism . . . and conservative values that raged through the rest of the 20th century and continues today. Obviously, President George W. Bush now waves the banner of the right only a publisher's deadline kept the author from naming John Kerry the latest defender of the liberal alternative. To flesh out his claim, Chace offers a brisk, consistently entertaining narrative that is alive both to politics and personality. The four serious candidates in 1912 were all men of intellectual substance, able to debate the major question of the day how to sustain economic growth without widening the gulf between the corporate rich and everyone else. Republican President William Howard Taft and Socialist leader Eugene V. Debs occupied the right and left poles. The incumbent feared that a true crackdown on the mighty trusts that ruled the marketplace would endanger prosperity the radical wanted to abolish private capital altogether. Running on the Progressive ticket, Theodore Roosevelt favored strict regulation of big business Democrat Woodrow Wilson argued that the state should break up monopolies, not just force them to behave responsibly. Taft was never comfortable on the stump and spent more time that fall playing golf than giving speeches. But the other three contenders were gifted orators who drew huge, adoring crowds. Chace describes Debs reaching out his long, bony arms to working-class audiences, urging them to tear up privilege by the roots, and consecrate the earth and all its fullness to the joy and service of all humanity. He recounts how Roosevelt delivered a spirited hour- long address minutes after a would-be assassin shot him in the chest. He captures Wilson's success at shedding his Ivy League hauteur to emerge as a strong advocate of the rights of labor and small business.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984627","date":"2004-05-24","texts":"On a windblown field, 300 leathery men listened Saturday to speeches praising their past bravery in battle and their current contribution to peace. Behind them, standing in soldierly rows, were rocket launchers, artillery and machine guns the former fighters were reluctantly surrendering to international peacekeepers. Ten miles away, two dozen farmers watched sullenly from the edge of a neatly planted plot as a squad of government eradicators, wielding hoes and scythes, chopped down their carefully tended opium poppy shoots. On all sides, Afghan police and security guards hired by the U.S. Embassy stood watch against attack. The government has taken away our guns, and now it is destroying our livelihoods, protested Nasir Ahmad, 45, a sunburned farmer in the village of Kote Ashro. We have agreed to turn in our weapons in the name of peace, but we don't have enough water to grow any other crops but poppy. Why are they bringing this cruelty on us now By most standards, Wardak province should be a model for the rest of Afghanistan. It is the only place in the country where militia disarmament, poppy eradication and voter registration -- three efforts backed by the United Nations and Western governments - - are taking place simultaneously. But some residents say they feel this ruggedly beautiful, impoverished province is less a showcase than a victim. They complain that it has been singled out for unpopular projects demanded by international powers because it is close to Kabul, economically vulnerable and without a dominant leader to resist the pressure.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614439","date":"2004-05-26","texts":"WASHINGTON -- Brand-name prescription-drug prices are rising much faster than the overall rate of inflation, hitting senior citizens hard before they have access to a federal drug benefit, according to two consumer groups. Prices of the 30 drugs most popular among seniors rose more than four times the rate of general inflation from Jan. 2003 to Jan. 2004, said consumer-advocacy group Families USA. Some rose more. Pfizer Inc.'s cholesterol-lowering Lipitor and Bristol-Myers Squibb Co.'s Plavix for blood clots increased more than five times inflation during the period reviewed by the report. The biggest increase -- at 13.2 times inflation -- came in the price of chronic asthma treatment Combivent by Boehringer Ingelheim Pharmaceuticals Inc. Evista, an osteoporosis drug by Eli Lilly & Co., rose more than 10 times the rate of inflation. A separate report commissioned by the retiree-advocate group AARP found the prices drug makers charged wholesalers for 197 medications rose nearly 28 from 2000 to 2003, while inflation was 9.3. Such increases, if passed on to consumers, translate to an average spending increase of 101 in 2000 and 181 last year, for a person taking three medications, the report said. The price data renew the attention on high prescription-drug prices, an issue of huge concern to seniors who must wait until 2006 to get drug coverage from the federal Medicare program.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617308","date":"2004-05-28","texts":"The U.S. economy grew a little more briskly than originally thought during the first quarter, but the strong upturn in corporate profits of previous quarters showed signs of cooling. Gross domestic product, the broadest measure of economic output, increased during the January-March quarter at a 4.4 annual rate, slightly faster than the 4.2 rate originally estimated by the Commerce Department. The GDP estimates released yesterday are based on more data than were available for last month's advance estimates. The Commerce Department said inventory restocking and spending by state and local governments were higher in the first quarter than previously thought. Exports and imports were also stronger than thought, but business investment in equipment and software was revised down. The revised annual GDP figure, which fell short of many economists' expectations, marks a slowdown in growth from the second half of 2003 but is still well ahead of the nation's average growth rate of about 3.3 in the past 20 years. The Commerce Department also noted that while corporate profits of U.S. businesses continued to rise, they did so at a slower pace in the first quarter. Profits increased 1.2 from the previous three months, a figure that was substantially slower than the 7.2 growth in fourth- quarter profits and 9.9 growth in third-quarter profits. First- quarter profits were still up 31.6 from the year-earlier period. These figures are before taxes. Trends in after-tax profits of U.S. business were similar. During the first quarter, they increased 1.4 from the previous three months, down from fourth-quarter profit growth of 7.6 though still up briskly from a year earlier. The profit figure is the government's broadest measure of profits for the whole U.S. economy and includes listed and nonlisted companies. The government makes adjustments for changes in the value of inventories and for depreciation and changes in the value of capital equipment.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984773","date":"2004-05-29","texts":"The strengthening U.S. job market helped boost workers' incomes last month, but consumer spending did not rise as fast, according to government figures released yesterday. Personal income jumped 0.6 percent in April, up from 0.4 percent in March, for the biggest monthly increase since November, the Commerce Department reported yesterday. The figures rose primarily because more people are working, not necessarily because individual workers are getting pay increases, economists said. Consumers do have more buying power, and it is coming from more jobs, said Sung Won Sohn, chief economic officer of Wells Fargo Bank, referring to the addition of more than 600,000 U.S. payroll jobs in the past two months. However, consumers also became a bit more cautious, last month, he said. They increased their spending by 0.3 percent in April, a slower pace than the 0.5 percent gain the month before. Wages and salaries, the largest single component of personal income, rose 0.5 percent last month, up from 0.3 percent in March. The government also released revised figures since October and found that wage and salary growth was stronger during that period than previously reported.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985290","date":"2004-06-01","texts":"It is an ancient debating technique Caricature your opponent's argument, then knock down the straw man you created. In the 2004 campaign, Bush has been knocking down such phantoms on subjects from Iraq to free trade. In a speech on May 21 mentioning the importance of integrity in government, business and the military, Bush veered into a challenge to unidentified people who practice moral relativism. It may seem generous and open-minded to say that everybody, on every moral issue, is equally right, Bush said, at Louisiana State University. But that attitude can also be an excuse for sidestepping life's most important questions. On May 19, Bush was asked about a plan by his Democratic opponent, Sen. John F. Kerry Mass., to halt shipments that are replenishing emergency petroleum reserves. Bush replied by saying we should not empty the reserves -- something nobody in a responsible position has proposed. The idea of emptying the Strategic Petroleum Reserve would put America in a dangerous position in the war on terror, Bush said. We're at war. The president has used a similar technique on the stump, when explaining his decision to go to war in Iraq in light of the subsequent failure to find stockpiles of forbidden weapons. In the typical speech, Bush explains the prewar intelligence indicating Saddam Hussein had such weapons, and then presents in inarguable conclusion So I had a choice to make either trust the word of a madman, or defend America. Given that choice, I will defend America every time. Missing from that equation is the actual choice Bush confronted support continued U.N. weapons inspections, or go to war.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842615311","date":"2004-06-02","texts":"Dow Jones Newswires WASHINGTON -- Analyze this The Securities and Exchange Commission is looking to hire an organizational psychologist with the goal of improving employee attitudes and job satisfaction by reducing burnout, conflict and stress. The newly created full-time position would pay as much as 147,978 a year. Applicants must have a degree in psychology, preferably a master's or Ph.D. The SEC psychologist would be expected to make recommendations on productivity, team building and diversity, and develop innovative solutions to complex psychological issues. According to the SEC's job posting, the appointment is for two years, with a possible two-year extension. The online job posting has been circulated via e-mail throughout the SEC. Some employees said they find it so hilarious they feel compelled to share it with co-workers. Others privately grouse at the idea. They say hiring a psychologist is a waste of money, and they predict that disgruntled SEC staffers will quickly jump to better-paying private- sector positions once the job market picks up.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981915","date":"2004-06-03","texts":"Definition Once strictly an adverbial description of literal motion, now used to suggest progressive movement where the less hopeful fear there is none. Often used when incidents on the ground, another Stump Speech favorite, suggest post-Saddam Iraq might be, in fact, going backward. Recent examples Well, I think that the president made a serious detail presentation, Cleveland Plain Dealer reporter Tom Diemer says on CNN, speaking about President Bush's recent prime-time speech on Iraq, and I think what he was trying to convey was that things are under control, there is a plan, we're going forward. Or, from White House communications director Dan Bartlett, on Today, talking about the fact that we will have a new relationship going forward, and where the Iraqi people are making a lot of the decisions. In recent briefings, White House press secretary Scott McClellan has talked up a leading role for the United Nations in Iraq going forward on the political process, our strategy going forward, and, even aboard Air Force One, which goes forward very, very quickly, a reserve fund for military affairs to make sure that there is no disruption, in terms of funding or resources for our troops, going forward in Iraq. Antonyms Stalled, bogged down, as in Sen. Fritz Hollings D- S.C. telling Defense Secretary Donald Rumsfeld, You don't have security. In fact, we're bogged down. Or, even worse, going backward, as in likely Democratic presidential nominee John Kerry saying of the president, He can't go out and talk to people about making the environment better, because he's . . . going backwards on forest policy. Bush, who likes to measure the ground he's covering when he jogs, explained to a campaign audience in Prairie du Chien, Wis., the vagaries of economic recovery Starting in early 2001, we went through a recession. That means we're going backward.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984109","date":"2004-06-03","texts":"An off-duty D.C. police officer was shot to death early yesterday in a gunfight with a 16-year-old boy who tried to rob him in Prince George's County, authorities said. The youth, who officials said had run away from a group home, also was killed. Sgt. Clifton Rife II, 34, was flown by helicopter to Prince George's Hospital Center shortly after the 410 a.m. shooting in the 5400 block of Livingston Terrace in Oxon Hill. He was pronounced dead a short time later. Police said the youth, Jonathan M. Washington, was dead when officers arrived at the scene. Authorities said Rife, a 13-year member of the D.C. force, went to the Riverview Terrace apartments and was walking toward a friend's apartment when Washington, wearing a mask and carrying a pistol, said he was robbing him. They said it was unclear whether Rife said anything in response. The two exchanged gunfire, with Rife using his service revolver. Rife was shot in the chest and the youth was hit several times in the upper body, authorities said. Rife managed to tell his friend that he had been shot, and help was called, said Officer Debbie Sabel, a police spokeswoman. Washington, who lived with at least one relative at Riverview Terrace, had a juvenile arrest record, said police sources who spoke on the condition of anonymity because court records concerning minors are not public. The sources said Washington was charged this year with possession of heroin and was confined to a group home in the District. They said that he ran away from the home in January and that a warrant for his arrest was issued.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983580","date":"2004-06-04","texts":"The recent rise in oil prices is likely to throw some sand in the wheels of the U.S. economic recovery this year, but not enough to derail it, economists said this week. Even with crude oil prices around 40 a barrel, analysts said the recent increases just haven't been big enough to significantly brake a strongly expanding economy that is far less energy-reliant than it was in past decades, when soaring oil prices often preceded recessions. The forecasts assume no major terrorist disruption of key Saudi Arabian oil fields -- a notable caveat after the attack on foreigners there last weekend. If such an event sent prices skyrocketing to 60 to 70 a barrel, that would have much more damaging effects, depending on how long they would stay that high and how consumers and businesses would respond. The momentum of the U.S. economy now is so strong that it would have to be a major oil crisis to have a big impact, said Nariman Behravesh, chief economist for Global Insight Inc., an economic research firm. Crude oil prices would have to rise to around 50 a barrel for at least three to six months to qualify as an economic shock comparable to those of the 1970s, Morgan Stanley chief economist Stephen S. Roach said in a recent analysis by the firm's global economic team. After adjusting for inflation, current oil prices are only about half what they were in 1981-82, when they hit their record highs.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985185","date":"2004-06-05","texts":"As steel prices continue to rise, appliance maker Whirlpool Corp. has tried to fight back. It went to court and won a temporary restraining order preventing a steel supplier from raising prices above a contracted amount. But Whirlpool had no long-term contract covering the price of stainless steel, which has also climbed, so recently the maker of refrigerators, dishwashers and ranges raised its own prices by 1.5 to 2 percent on appliances containing stainless steel. When the price of steel spiked earlier this year, many manufacturers were stuck absorbing the full impact. But steel prices have continued to run high, and demand is up, so the cost increases are beginning to creep toward the consumer. Makers of construction materials, kitchen appliances, heating and cooling systems and other products with high steel content are raising prices for their distributors. Some economists think that could be an early sign of inflation. Shoppers have yet to see much impact, though pressure is mounting on retailers to raise prices. Home Depot Inc., for instance, has seen prices jump on merchandise containing steel but continues to use its scale and buying power to minimize price increases for consumers, according to a statement the company sent to store managers. As the Federal Reserve Board considers when to raise interest rates in the coming weeks, the price of steel -- and how that flows through to finished goods -- is likely to be a factor in the equation, said James W. Paulsen, chief investment strategist at Wells Capital Management.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983200","date":"2004-06-06","texts":"In and around the city where he presided over the end of the Cold War, where he defined an American conservative ethos and where he nearly lost his life to an assassin, Ronald Reagan was remembered yesterday as a towering, almost old-fashioned figure. He was a great man, a man of decision, said the Rev. Mupenda Muzumbi, 49, of Fort Washington, who was at Reagan National Airport, one of several Washington area institutions renamed in honor of the 40th president. The news of Reagan's death yesterday, though not unexpected, unleashed a great wave of nostalgia. More than just a man died, said Bill Enrico, 47, a self-described Republican who also was at the airport. An era of greater decency died. Like other admirers, Enrico saw Reagan's presidency as a time of personal opportunity for his family. He and his wife were able to buy a home after years of high interest rates during the Carter administration, he said. Thinking back on the Reagan era also produced a kind of longing in Enrico when Reagan was in charge, he said, politics seemed less bitter. But not everyone remembered the former president in such positive terms. In the liberal enclave of Takoma Park, Lisa Ripkin, 37, an employee of the Takoma Park Co-Op, said Reagan's death gave her inner peace. She felt that it closed a chapter in U.S. political history with which she disagreed.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982221","date":"2004-06-10","texts":"In November 1998, more than 75 percent of Arlington County voters approved 4 million in bond money to renovate or replace the aging Westover Branch Library. As is customary in a county known for communicating with residents, officials appointed a citizen committee, and plans emerged for an elaborate building. The building, a joint project with Arlington schools, would feature a library on the first floor, school offices on the second and an underground parking garage. Yet more than five years later, there is no new library, even though the county has already spent 450,000 in design funds. And with the project behind schedule and at least several million dollars over budget, Arlington school officials recently notified the county they were pulling out of the project because they couldn't justify the expense. That has left county officials scrambling to redesign a scaled-down building and stay on a construction schedule that is not even supposed to start until next spring. The best-case scenario a new library sometime in fall 2006 -- a full eight years after voters first went to the polls to approve money for the facility. They have already spent 450,000 on a building they have now figured out they can't afford to build. They might not be quite at square zero, but they are close, said Wayne Kubicki, a member of the county's Fiscal Affairs Advisory Commission who has been tracking the project.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616855","date":"2004-06-13","texts":"Many holders of beleaguered Qwest Communications International hope that the Denver company eventually will be taken over. But even that might not give them much cause for celebration. Qwest's main business, wireline phone service in 14 Western states, is in serious decline, and Qwest hasn't established much of a wireless presence. The lack of a bundled strategy makes it hard for Qwest to add new customers and keep old ones. And although Qwest has no earnings or dividend, it's one of the costliest regional Bell operating companies based on one key financial measure, enterprise value. Consisting of stock-market value plus net debt, this stands at 6.1 times earnings before interest, tax, depreciation and amortization -- versus 5.4 times for SBC Communications and 4.9 for BellSouth recently. Another problem Qwest, formed in 2000 from the marriage of fiber- optic telecom network Qwest and Baby Bell USWest, has been hurt by the legacy of past accounting practices that are the subject of continuing criminal probes. Qwest has a staggering 16 billion of debt, even after reductions under new CEO Richard Notebaert. That's going to sap a lot of free cash flow for a long time, says John Heinlein, a portfolio manager with Towson, Md., money manager Horan & Associates, who sold a Qwest position in the first quarter. Qwest stock is below 4, down from 66 before the telecom bubble burst four years ago. Though Mr. Notebaert, former chief of Ameritech, has mounted a gallant turnaround effort, the stock has slid 25 since he arrived two years ago. Qwest equity appears to us as barely more than an option, and an expensive one at that, Richard G. Klugman of brokerage firm Jefferies & Co. wrote in a research note. He has a price target of 2.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982082","date":"2004-06-13","texts":"Loudoun County is changing from a bedroom community to one where people can work where they live, according to new figures released by the county's economic development department. We are able to provide a lot of jobs for our residents, and they don't have to travel that far in the county or even out of the county to get to work, said Larry Rosenstrauch, the department's director. Now we're becoming more of an urbanized place with a broad range of services and jobs for people. It gives people more family time, more free time and more opportunity to spend their dollars in Loudoun County. Rosenstrauch's comments were based on his department's 2003 Growth Summary, a synopsis of demographic and economic trends in the county. The annual analysis is used by residents, businesses and policymakers to evaluate the county's development and to plan for the future. The report shows that 5,501 jobs were created in Loudoun last year. The figures echo those recently released by the Bureau of Labor Statistics, which said Loudoun's job-growth rate of 5.4 percent for the third quarter of 2003 was the second-highest rate of the nation's largest counties and compares with a national decline of 0.4 percent. Some of the people are coming for jobs, and some of the jobs are coming for people, Rosenstrauch said.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617221","date":"2004-06-15","texts":"WASHINGTON -- A trade deficit wider than expected and strong retail sales signaled that the economy remains on a solid upward trajectory but prompted concerns in the markets that inflation is heating up. The trade gap widened 3.6 to a record 48.3 billion in April, from March's 46.6 billion, according to the Commerce Department. The deficit reflected a decline in exports of 1.5 billion, while imports remained largely flat. The drop covered a broad range of exports, but a number of analysts dismissed it as a statistical aberration. Over the last year, exports were up 10 over the last three months, exports rose almost 20 at an annual rate, says John Ryding, chief U.S. economist for the investment bank Bear Stearns. The trend is unambiguously higher. The National Association of Manufacturers also dismissed the decline as a one-time correction. The widening trade deficit could put downward pressure on the dollar as investors lose confidence in the ability of the U.S. to repay its debts, boosting the prices of imports higher than they otherwise would be. But the deficit can also be a signal of economic strength. That is because the U.S. is growing more rapidly than other industrialized nations and absorbing more imports than its trading partners. Retail sales, which grew at a 1.2 pace in May, compared with a 0.6 drop in April, was another signal of a strengthening U.S. economy. May's growth drew on a healthier job market and aggressive discounting at car dealerships looking to counter higher gasoline prices. Light- vehicle sales among the Big Three U.S. auto makers rose 14.6 in May compared with the month before, the National Automobile Dealers Association said.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984358","date":"2004-06-15","texts":"Higher prices for gasoline, lumber and food helped boost the value of U.S. retail sales last month, adding to concerns that the Federal Reserve may have to raise interest rates rapidly to control inflation, analysts said yesterday. Retail sales rose 1.2 percent in May, reflecting consumers' willingness to spend more for a wide variety of goods, the Commerce Department reported. While that bodes well for the strengthening U.S. economic recovery, it also adds to the reasons Federal Reserve officials are warning that they may have to raise interest rates more aggressively than many investors had expected. The retail sales data dovetail with some heightened concern about inflation, said Raymond W. Stone, an economist with Stone & McCarthy Research Associates. The inflation outlook is worse now than six months ago. . . . Fed officials have to worry about whether that gets ingrained in expectations that prices will keep rising. More than half the increase in the retail sales figures probably resulted from consumers paying higher prices for goods, rather than from them buying more goods, according to Stone's analysis of the sales figures. The value of sales at gasoline stations alone rose 4 percent, accounting for about one-fourth of the total increase, he said.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614316","date":"2004-06-16","texts":"Beijing -- A CREDIT SQUEEZE gripping one of China's biggest investment companies is spooking investors and raising questions about the way business is being done in the country's stock markets. But there may be some buying opportunities for the brave-hearted. D'Long International Strategic Investment, founded in 1986 by four siblings named Tang from China's northwestern region of Xinjiang, rode years of easy credit to become one of the country's largest private conglomerates. Its holdings include one of the world's biggest tomato- paste makers, China's foremost heavy-truck manufacturer, and U.S. lawn-equipment company Murray. D'Long has stakes in more than 100 Chinese companies, including a dozen securities firms and commercial banks. This spring, Beijing's credit-tightening measures -- aimed at cooling a hot economy -- coupled with Chinese media reports questioning D'Long's financial health sent share prices of some of the company's listed affiliates spiraling. The developments set off a chain reaction that threatened to bring down the Tangs' empire and damped already-weak investor confidence in China's stock market. It also shined a spotlight on questionable practices that are seen as widespread in China's financial industry, from stock-price manipulation to the use of price-inflated shares as collateral for bank loans. D'Long's predicament tells us that there still exist big loopholes in China's equity-market structure and corporate governance, says Zhang Yong, an analyst for Great Wall Securities. Chinese prosecutors haven't charged D'Long with any wrongdoing, and there isn't any indication that the siblings have broken any laws. Some banks and other creditors have filed lawsuits against D'Long, however, and a Shanghai judge involved says the situation is under further investigation. Some Chinese media have suggested that D'Long ramped up stock prices and then tapped its financial institutions for funding to finance its ambitious expansion -- allegations that company executives have denied.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617377","date":"2004-06-16","texts":"Dow Jones Newswires NEW YORK -- The dollar suffered a broad-based setback after signs that inflationary pressures remain modest curtailed hopes that the Federal Reserve would move aggressively to raise interest rates. The dollar's selloff was sparked by the release of a May consumer- price index that came mostly in line with expectations. While the overall CPI registered the biggest monthly jump in 312 years, rising 0.6, the more closely watched core index, which excludes volatile food and energy costs, edged up 0.2. Expectations were for a 0.5 gain in the headline number, with a 0.2 rise in core prices. Federal Reserve Chairman Alan Greenspan threw even more cold water on speculation that U.S. rates were headed sharply higher when he played down the risk of inflation. The Fed chief, testifying in front of the Senate Banking Committee on his nomination to a fifth term as chairman, said the central bank's general view is that inflationary pressures are not likely to be a serious concern in the period ahead. Thus, Mr. Greenspan said, he still expects to be able to lift interest rates at a measured pace this year, though he reaffirmed that the Fed is prepared to raise rates more aggressively if necessary.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615955","date":"2004-06-18","texts":"Exxon Mobil Corp. and ChevronTexaco Corp. confirmed that they are among companies receiving a subpoena from the U.S. Attorney for the Southern District of New York investigating alleged improprieties in the United Nation's oil-for-food program in Iraq. A spokeswoman for Exxon, Irving, Texas, said the subpoena from the U.S. Attorney for the Southern District of New York requested documents related to the program, and that we are responding appropriately. A ChevronTexaco spokesman in San Ramon, Calif., said the company is cooperating to the extent that we are able. Neither company would comment further on the subpoenas, which are requests for information and don't indicate wrongdoing. U.S. refiners Valero Energy Corp., San Antonio, and Premcor Inc., Old Greenwich, Conn., which also are big purchasers of Iraqi oil under the U.N. program, said yesterday that they haven't received subpoenas from the U.S. Attorney's office.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982195","date":"2004-06-21","texts":"The Erie Labor Temple is an old, proud building that stands in the middle of downtown State Street, its location, like its name, proof of a time when unions lorded over the city. People still talk about the days when 15,000 union members worked at the General Electric locomotive plant -- more workers than all of the plants combined currently employ in Erie County. Saturday morning at the temple, AFL-CIO organizers set out doughnuts and coffee and held a meeting for workers willing to give up half a weekend to save union jobs. Their task would be to knock on members' doors to get the word out that this year's presidential election is crucial for jobs and health care, not to mention that the Democrat, Sen. John F. Kerry, is their friend. The hope was that 40 to 50 workers might show up. Instead, 90 people crowded a meeting room with faded walls and warped floors. They included steelworkers and carpenters, construction workers and assembly line crews, and people whose jobs were outsourced. Everyone seemed excited, but serious, about being part of the earliest, biggest, on-the-ground get-out-the-vote operation the AFL-CIO has ever mounted -- with more than 100 walks in 72 cities in 16 states during the four Saturdays in June. We're hitting more than 400,000 union households in Pennsylvania in June because this November is that important to us, David Keicher, a national field representative for the AFL-CIO's Northeast region, told the workers. He had brought a few foot soldiers from his home base in Buffalo, 89 miles away, and promised more next Saturday. With Pennsylvania on everyone's list of key battleground states President Bush has visited here more than two dozen times -- more frequently than any other state besides his own Texas, the workers knew that Republican groups are mounting their own walks. And, yes, they had heard that every political group in the country seems to have decided to go back to campaigning door to door.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615105","date":"2004-06-24","texts":"WASHINGTON -- Next week, the Federal Reserve is likely to end the easiest monetary policy in its modern history by raising interest rates for the first time in four years. And if all goes according to plan, the markets will barely blink. Fed officials are almost certain to boost their target for the federal-funds rate, charged on overnight loans between banks, to 1.25 from 1, when their two-day meeting ends Wednesday afternoon. They have labored for nearly a year to ensure that this increase, and those to follow, are fully anticipated. The approach reflects a tactical shift to an innovative communications strategy that is aimed at incrementally guiding markets toward the inevitable rate boost. There may yet be surprises next week. Fed officials are wrestling with whether to indicate, as they did after their May meeting, that future rate increases will be measured, a euphemism for moving in quarter-percentage-point increments. Some officials, mostly hawkish reserve bank presidents, see the risk of inflation accelerating and think the measured language limits their ability to raise rates faster if needed. More dovish officials argue that the term still reflects their likeliest course of action and that they can change their words quickly if inflation does pick up. The latter view likely will prevail, though the Fed may make it more explicit that the measured pace will be dropped if inflation risks rise. Some analysts, citing mounting reports of rising prices, say the Fed has waited too long to raise its rates. But Fed officials note that the mere anticipation of a rate increase has had the practical effect of an actual increase. Long-term interest rates, including those on mortgages, are up sharply since March, driving down new mortgage applications. Higher borrowing costs will restrain spending and inflation pressure. Stocks have mostly treaded water for two weeks, waiting for the move. While stock prices typically decline when the cost of credit rises, some analysts say investors have had so much time to prepare for higher rates that the market might strengthen on the news. Still, a half-point increase, though highly unlikely, or a hint of one to come, likely would squelch any such euphoria.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615622","date":"2004-06-24","texts":"Tuesday night was not a good one for Republican opponents of immigration reform and free trade. Primary races in South Carolina and Utah, respectively, saw protectionism defeated and the forces of rational immigration policy prevail. And by wide margins. Incumbent Congressman Chris Cannon of Utah, a vocal supporter of President Bush's guest-worker proposals for aliens, coasted to a 16- point victory over former state legislator Matt Throckmorton, who made immigration the central issue of the campaign. The Throckmorton thumping is noteworthy because national anti- immigrant activists -- a motley band of population-control zealots and nativists -- were hoping to make an example of Mr. Cannon and spent tens of thousands of dollars in a very small media market trying to unseat him. So divisive has the immigration issue become within the GOP see Tamar Jacoby's op-ed nearby that the Congressman even had to ward off direct attacks from a member of his own House caucus. Tom Tancredo of Colorado set up a political action committee and Web site to bash Mr. Cannon and other Republicans trying to fix our broken immigration system. Back in South Carolina, Representative Jim DeMint just as easily defeated former Governor David Beasley to win the Republican nomination for the Senate seat being vacated by retiring Democrat Fritz Hollings. Mr. DeMint is a free-trader in a state that not only is trailing the national economic recovery but has lost textile industry jobs to foreign competition. Nevertheless, Mr. DeMint stuck to his pro-growth principles and refuted his protectionist opponent's fair-trade agreements sophistry. He was rewarded with 59 of the vote. The results in Utah and South Carolina should convince Republican candidates that immigration reform and free trade can be political winners -- even in the least likely places. Moreover, these ideals help to define the GOP as a inclusive, pro-growth, forward-looking party.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615125","date":"2004-06-25","texts":"Dow Jones Newswires LESS, BUT more. Even though U.S. companies were cutting back on stock-option grants to top brass last year, chief executives still were making out handsomely, because the market value of their existing options soared. A review of a new crop of U.S. proxy filings by Watson Wyatt Worldwide, a Washington, D.C., consulting firm, lends fresh support to recent trends in compensation, including the escalation of restricted stock awards to compensate CEOs, while companies simultaneously scale back on stock options. The firm reviewed proxies of 373 companies where CEOs remained in their jobs over a three-year period. The most recent proxies were filed through the end of March, covering companies whose fiscal years ended between September 2003 and January 2004.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615280","date":"2004-06-30","texts":"Today's Market Forecast A Chill Wind With the Fed set to push up interest rates for the first time in over four years today, one little fact may have eluded many investors The economy's growth rate already seems to be slowing down. Start with consumer spending. When the Commerce Department released May spending figures Monday, it revised down its read on real personal consumption in April. This came hand in hand with warnings of slower June sales from General Motors, Wal-Mart Stores and Target, which account for about one-tenth of U.S. retail sales. In the wake of the surprisingly strong consumer-confidence reading yesterday, some may see this as a mere blip. But there is further evidence of sluggishness. Tucked inside of last week's generally dismal May durable-goods report were unexpected declines in capital- equipment shipments and orders.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614345","date":"2004-07-01","texts":"NOW INVESTORS can stop worrying about the Federal Reserve -- and start worrying about corporate earnings. Fed policy makers yesterday did exactly what the market expected them to do They raised their target short-term interest rate by a quarter point, the first increase in four years, and repeated their intention to be measured with future increases. Stocks reacted with mild gains, and the bond market, which is driven more heavily than stocks by Fed interest-rate policy, celebrated with a sharp uptick. The Federal Reserve has a new policy of transparency and has kept its word, wrote Wells Fargo economist Sung Won Sohn in a report to clients. The Dow Jones Industrial Average rose 22.05 points, or 0.21, to 10435.48 -- leaving it virtually unchanged both for the quarter and for the full year. Investors now are wondering whether second-quarter profit reports, which will be streaming out this month, will feature the overall gains of more than 20 that analysts are forecasting.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984455","date":"2004-07-01","texts":"Veteran Ward 8 political activist Philip E. Pannell finally found work after 19 months in the unemployment wilderness. But after just three weeks on the job, Pannell resigned in anger, accusing his new employer -- a nonprofit organization that serves public charter schools -- of improperly forbidding him to campaign against Ward 7 council member Kevin P. Chavous. The way Pannell tells it, he was hired in late May to serve as outreach coordinator for the PCS Center for Student Support Services, which informs D.C. residents about education options in the public school system. Three days after he started work, the center's executive director, Eve Brooks, got a call from an aide to Chavous, who chairs the council's education committee. The aide informed Brooks that Chavous was really angry that I'd been hired, Pannell said. Pannell has long maintained an adversarial relationship with Chavous. Most recently, he helped engineer a takeover of the Ward 7 Democrats on behalf of Vincent Gray, Chavous's strongest challenger in the Sept. 14 Democratic primary. Pannell said Brooks told him to be careful because Chavous is a good friend of charter schools. Pannell said Brooks also threatened to fire him if I find out you're doing anything for Vince Gray.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983930","date":"2004-07-02","texts":"The plan was a 400 billion federal budget surplus this year and a national debt of 2.1 trillion heading rapidly to zero. That was the plan back in January 2001, when President Bush took office. And not just the plan That was the official prediction of the nonpartisan Congressional Budget Office. Now we have a new plan. Instead of a 400 billion surplus, President Bush's budget calls for a 500 billion deficit. The national debt is 4.4 trillion and headed to more than 6 trillion over the next 10 years, according to the CBO. Interest on that debt will cost 156 billion this year. Bush says he'll cut the deficit in half in four years. The deficit, not the debt. It's a remarkably modest brag. And even so, almost nobody believes him. There are four ways to deal with a gigantic government debt. One is to live with it. But this is not a stable situation. Even if you're living within your current means and borrowing only to cover the interest payments, your debts will compound. When deficits turned into surpluses in the late 1990s, the achievement was especially impressive, because it required the government of the time not just to cover its own expenses but to pick up retroactively a lot of the expenses of the spendthrift 1980s. That is the second way to deal with a soaring national debt fiscal discipline. The third way is through an economic miracle -- an explosion of productivity that increases tax revenue painlessly. Fiscal discipline and a booming economy both helped in the late 1990s. But you cannot count on another economic miracle like that one. As for the prospect of fiscal discipline No one looking at the past four years can reasonably expect that from President Bush, and it hasn't exactly been a major theme for John Kerry either. Luckily -- or not -- there is a fourth way to deal with the national debt. That is inflation. Inflate the debt away. The temptation is enormous The United States government is a debtor that can borrow any amount of money and pay it back in a currency whose value the debtor controls. Other governments are forced to borrow in dollars, not in their own currencies, when lenders start getting suspicious. But Uncle Sam remains preapproved. In fact the process is already at work. Inflation is about 3 percent. So this year we're adding a half-trillion dollars to the national debt, but inflation is eroding the real value of that debt by 3 percent of 4.4 trillion, or . . . let me see where is that abacus . . . 132 billion. Is that right That's about a quarter of the deficit. Every percentage point of inflation slices the real value of the national debt by 44 billion. At about 11 percent, inflation starts to reduce the debt faster than we're increasing it. Keep going and you can wipe it out.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982226","date":"2004-07-04","texts":"PUBLISHED CORRECTIONS A July 4 article misstated the number of reconstruction projects underway in Iraq that are being funded by an 18.4 billion U.S. aid package. Approximately 500 projects are underway, according to the U.S. Project and Contracting Office in Baghdad. Published 7904 The U.S. government has spent 2 percent of an 18.4 billion aid package that Congress approved in October last year after the Bush administration called for a quick infusion of cash into Iraq to finance reconstruction, according to figures released Friday by the White House. The U.S.-led occupation authorities were much quicker to channel Iraq's own money, expending or earmarking nearly all of 20 billion in a special development fund fed by the country's oil sales, a congressional investigator said. Only 366 million of the 18.4 billion U.S. aid package had been spent as of June 22, the White House budget office told Congress in a report that offers the first detailed accounting of the massive reconstruction package. Thus far, according to the report, nothing from the package has been spent on construction, health care, sanitation and water projects. More money has been spent on administration than all projects related to education, human rights, democracy and governance.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983255","date":"2004-07-04","texts":"Franklin Foer, armed with a terrific idea, took six months off from his job as a staff writer at the New Republic to tour the soccer capitals of the world. He set out to observe soccer as a way to understand the consequences of globalization -- the increasing interdependence of the world's nations -- by studying a sport in which national borders and national identities had been swept into the dustbin of soccer history. The result is a travelogue full of important insights into both cultural change and persistence. Foer returned from this global tour convinced that globalization has not and will not soon wipe away local institutions and cultures. On the contrary, he suspects that the opposite has happened In response to the threat of global integration, local entities have launched counterattacks that are successful but not always in such a good way. Local blood feuds and corruption have proved to be remarkably persistent. So persistent, in fact, that Foer believes that globalization is not likely to deliver on the promise of a more humane world order that some of its proponents anticipate. That would require a liberal nationalism, a development necessary to blunt the return of tribalism. Soccer, at its best, shows how this might work. For Foer, the sport demonstrates that you could love your country -- even consider it a superior group -- without desiring to dominate other groups or closing yourself off to foreign impulses. Regarding the not so good ways that locals respond to globalism, Foer found much to worry about. The world of soccer can be quite ugly. In Serbia, fans of Red Star Belgrade became, as he puts it, Milosevic's shock troops, the most active agents of ethnic cleansing, highly efficient practitioners of genocide. The unfinished fight over the Protestant Reformation is kept alive in the stands in Glasgow. And, at least as he reports it, Margaret Thatcher was not far off the mark when she said that the hooliganism that emerged in soccer during the 1980s was a disgrace to civilized society. Foer argues that the gruesome antisocial fan behavior that occurs when soccer is at its worst is counterbalanced in other places where the sport plays a role in creating a more humane order. The most interesting and unlikely of these is Iran. During the Islamic Revolution of 1979, women were prohibited from attending soccer games at Tehran's 120,000-seat stadium. But, as Foer tells it, this banning never fully took effect, with some women sneaking into the facility dressed in men's clothes. Pressed by female soccer fans, the ruling Iranian clergy issued a new fatwa in 1987 that allowed women to watch games on television, though the ban on attendance remained in place. This compromise could not survive the jubilation that followed the Iranian national team's successful capture of a World Cup berth in 1997. The team itself was at least to some extent a participant in the liberal global order Its coach was a Brazilian who wore a necktie, an accessory that the ruling clergy considered a European imposition. But the victory celebration and its aftermath were even more important. Foer reports that many of the younger celebrants were women, some of whom danced with uncovered heads. Further, at the official celebration at the stadium, when women were denied entrance they mounted a demonstration. They shouted, Aren't we part of this nation We want to celebrate too. We aren't ants. Ultimately they broke through the police barriers and joined the mass victory party. Foer compares this football revolution to the Boston Tea Party. He notes that the event will go down as the moment when the people first realized that they could challenge their tyrannical rulers. As the United States looks for ways to encourage liberalism within Islam, an event such as this deserves attention. Its impact suggests that Paul Wolfowitz, if no one else, should read this account.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984646","date":"2004-07-06","texts":"We've just finished celebrating the Fourth of July. What better time than now to contemplate the state of our nation's independence Financial independence, that is. Here's the deal. The United States has the mightiest economy in the world, but we've become enormously dependent on foreign investors to lend us the money it takes to keep Uncle Sam's checks from bouncing. At least, that's how I interpret Treasury statistics that track the size and ownership of our national debt. The statistics show that foreign and international investors account for the entire increase in privately owned Treasury securities since George W. Bush took office. Issuing those securities is how the Treasury covered federal budget shortfalls. Privately owned Treasury securities are those that belong to investors, as opposed to those owned by federal government trust funds or the Federal Reserve Board. Private investors own about half our 7 trillion-plus of national debt the Fed and federal trust funds own the rest. According to Treasury data -- table OFS-2, if you want see for yourself, on the Web at www.fms.treas.govbulletin b24ofs.doc -- when the Bush administration started, we had 2.88 trillion of privately held national debt, of which 1.03 trillion was owned by foreign and international investors. As of March 31, the most recent data available, privately owned debt had risen to 3.5 trillion, of which foreigners owned 1.71 trillion. Now, a little math. Privately owned debt, as you can see, was up by 620 billion since the Bush administration started -- but foreigners' holdings were up by 680 billion. This means that foreigners accounted for the entire increase in privately held debt - - and then some.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614775","date":"2004-07-07","texts":"ADD SUGAR. That's the figurative advice real-estate brokers and investment advisers are dispensing to their clients, both buyers and sellers. With interest rates rising, some lenders tightening their standards for borrowers and prices for good-quality assets expected to remain high, experts say real-estate investors will need to sweeten the pot to close the gap between what sellers ask for and what buyers can afford. Some techniques being recommended are designed to keep the buyer's down payment low. Others allow buyers and sellers to work out a way for buyers to afford a property as higher rates make conventional loans more costly. While these methods aren't new, they are being recommended more forcefully these days. We're going into a period where money won't be as easy to get. . . . Interest rates and mortgage rates ticking up is going to make financing a little tighter, says Jim Lumley, a Realtor in Amherst, Mass. That means sometimes the sellers will have to be more flexible than they have in the past. Some of these techniques really speak to those sellers' flexibility. Here are some of the techniques and how they work. They aren't guaranteed and sometimes can be risky for the buyer as well as the seller. In fact, sellers could end up back at the drawing board if these techniques collapse -- with properties on their hands to sell. -- Rent Assignment. The buyer promises the seller the first month's or a few months' rent from the property instead of pocketing it himself. That money can then be put toward a down payment. Timour Shafran, managing director of Capin & Associates Inc., a New York- based real-estate brokerage firm, says buyers attempting this method better be sure to have enough money after assigning the rent to cover expenses, including debt service, if there is a mortgage on the property.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984728","date":"2004-07-10","texts":"Stock markets rebounded Friday as General Electric reported better-than-expected earnings, but profit warnings from other companies made for a largely subdued session. The major indicators recorded losses for the second straight week. The Dow Jones industrial average gained 41.66, or 0.4 percent, to 10,213.22, after posting declines in four of the past five sessions. The Nasdaq composite index added 11.01, or 0.6 percent, to 1946.33. The Standard & Poor's 500-stock index was up 3.70, or 0.3 percent, at 1112.81. For the week, the Dow was down 0.7 percent, the S&P 500 lost 1.1 percent and the Nasdaq fell 3 percent. Investors have become increasingly pessimistic as profit warnings pile up, notably from the tech sector. Most analysts remain upbeat, however, expecting earnings growth of 18 percent to 20 percent overall for the S&P 500.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616922","date":"2004-07-14","texts":"Dow Jones Newswires WASHINGTON -- U.S. house prices are likely to grow at the slowest pace in more than three decades as interest rates climb and land prices take a tumble over the next three years, researchers at the Federal Reserve have estimated in a new study. The study, published on the bank's Web site recently, asserts that if U.S. disposable income and short-term interest rates climb as much as Wall Street expects them to, nominal existing-house prices would increase a cumulative 2.6 over the next three years. That would mark the lowest rate since the government began keeping records in 1970. The number implies high odds that house prices will decline in inflation-adjusted terms. The conclusions validate the unease of many private economists who fear the U.S. housing market, having benefited recently from rapid price gains that helped maintain strong consumer spending through a recession, may become a source of economic instability as interest rates climb. Prices of existing homes rose by more than 20 cumulatively over the last three years, according to the National Association of Realtors. The association has been predicting only a modest slowdown for the next few years. Of primary concern to some analysts is whether the recent run-up in aggregate home prices will be somewhat reversed, much like the 1985-90 and 1990-1995 experience, when inflation-adjusted house prices declined in several major metropolitan areas, write the authors of the Fed study, Morris Davis and Jonathan Heathcote. Mr. Davis is a Fed economist, and Mr. Heathcote is an assistant professor of economics at Georgetown University.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615484","date":"2004-07-21","texts":"WASHINGTON -- The House, responding to lobbying by technology companies, overwhelmingly approved a bill that would limit the required expensing of stock options. The bill overrides a proposal by a national accounting-standards panel that would have required companies to expense the value of all stock options. In their 312-111 vote, the lawmakers instead approved legislation to limit the expensing rule to options granted only to the top five officers of a company. The Financial Accounting Standards Board had proposed earlier this year that companies subtract the value of all employee stock compensation from company profits. The House vote gives the tech lobby, led by Cisco Systems Inc. and Intel Corp., a significant victory over a weighty list of policy makers who argued against Congress intruding in standard-setting in the wake of major accounting-fraud scandals beginning with Enron Corp. Among strong supporters of stock-option expensing as a means to improve the accuracy of financial statements are Federal Reserve chairman Alan Greenspan, Treasury Secretary John Snow, and Securities and Exchange Commission William Donaldson. Mr. Greenspan warned Congress earlier this year it would be a bad mistake for the Congress to impede FASB, because the proposed accounting for stock options strikes me as correct. Still, the measure faces stiff opposition in the Senate. Even though a comparable bill is pending in the Senate with 25 co-sponsors, Richard Shelby R., Ala., who chairs the banking committee, has pledged to block any effort by Congress to meddle in rule-making by FASB, an independent accounting-standards body based in Norwalk, Conn.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984814","date":"2004-07-21","texts":"Federal Reserve Chairman Alan Greenspan said yesterday that the U.S. economy is going through a soft patch, but that it won't hold back a broadening economic expansion that has gained momentum this year. High energy prices in recent months have both boosted inflation and sapped consumers' spending power, Greenspan told members of the Senate Banking Committee at a semiannual hearing on Fed policies. But the recent flare-up in inflation should prove temporary, Greenspan said, adding that the Fed still expects to raise short- term interest rates only gradually in coming months. Those higher prices, by eroding households' disposable income, have accounted for at least some of the observed softness in consumer spending of late, a softness which should prove short- lived, Greenspan said. Despite such problems, he said, economic developments in the United States have generally been quite favorable this year. Not only has economic activity quickened, but the expansion has become more broad-based and has produced notable gains in employment, he said.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614812","date":"2004-07-22","texts":"Microsoft's announcement Tuesday of the largest dividend payout in history, 32 billion, followed by a 2 jump in its share price yesterday, is one of those headline-making events that illustrates a larger change. Reacting to last year's tax cut, American companies and investors are rediscovering the virtues of the dividend, which in turn is encouraging investment and powering economic growth. The timing of the Microsoft decision tells us something. In paying out a hefty chunk of its cash hoard to shareholders in December, the company was clearly concerned with the possibility that John Kerry might be elected President and carry out his promise to return dividends to their former status as ordinary income thus raising the dividend tax back to the nearly 40 Clinton-era top rate from today's 15. That sensitivity to change in the tax code jibes with statistics showing that other companies have also reacted to the new incentives. A new paper published by the National Bureau of Economic Research documents that the number of firms paying a regular dividend, which had declined steadily for the past two decades, started to rise precipitously last year. Authors Raj Chetty and Emmanuel Saez show that the aggregate level of dividends also jumped, as companies already paying them increased the amounts. The American Shareholders Association has noted the same phenomenon. Why is this common sense observation significant Well, the critics of the Bush dividend tax cut said it wouldn't happen. They argued that corporations don't consider the taxes that their investors face when making decisions about whether to retain earnings or pay them out. Furthermore, stock prices wouldn't be affected. There would thus be no net effect on the level of investment in the economy. The Bush Administration, in this view, was simply putting money into the pockets of the rich without any benefit to the wider economy. Well, just as the rising level of dividends and Microsoft's behavior give the lie to this theory, it's worth noting that the stock market hit bottom in March 2003 and began to recover once the tax cut looked like a political certainty. It passed in May. Stock prices reflect the present value of future corporate earnings, and if investors are able to keep more of those earnings it's no surprise that they would value stocks more highly.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615124","date":"2004-07-22","texts":"From THE WALL STREET JOURNAL By John D. McKinnon WASHINGTON -- Congressional budget analysts gave passing marks to two of the leading plans for restoring Social Security solvency through private accounts, including one proposed by a panel set up by President Bush. The findings by the Congressional Budget Office showed that the Bush panel's plan would produce sharp reductions in benefits by the middle of the century, and also would create huge costs for the government in the meantime, but would eventually put Social Security back on track toward long-term solvency. The analysis, which was requested by several lawmakers studying Social Security's financial problems, suggests that the Bush plan is so effective in reducing benefit costs that backers could afford to ease up a little. Democrat John Kerry's camp wasted little time in attacking Mr. Bush over the CBO report, focusing on the big cost to the federal government of setting aside a portion of payroll taxes to set up the private investment accounts. The president is about to start touting his proposal for the 'ownership society,' but the CBO analysis shows it's more like a debt society, said Kerry economic adviser Jason Furman. Its biggest impact is to increase debt by trillions of dollars . . . damaging our long-run budget outlook.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830985456","date":"2004-07-23","texts":"DISTANT, a moving character piece from Nuri Bilge Ceylan, clearly derives some of its sensibilities from the hallowed cinematic churches of Andrei Tarkovsky and Yasujiro Ozu and there's a little Chekhov, too, in his approach. Following the protracted tension between two lonely Turkish men, it at first seems to be about nothing, a minute-to-minute observation of two uneventful, frustrating lives. Ultimately, it becomes a movie about the feeling of being alive, the sensation of existence. It's a movie, in a way, about everything. One of the men is Mahmut Muzaffer Ozdemir, a bearded, quiet photographer in Istanbul who has divorced his wife. He has a job, taking shots of objects for a commercial business. But he's essentially alone and lonely. There is a woman with whom he spends time on occasion and he reaches for the odd porn video, too. Surrounded by books and photographs, he keeps a clean house. He's set in his ways and heading nowhere. When his younger cousin Yusuf Mehmet Emin Toprak comes to visit, Mahmut's comfortably self-contained routine is broken. The visitor, who hails from the same village as Mahmut, has lost his factory job. He hangs around the port, looking for any kind of work. His hope is to find a job on a luxury cruiser that travels around the world. He has no luck. There's a nationwide recession. Yusuf, not a particularly attractive man with an ungainly bump on the side of his face, is a slob who smokes all over the house, leaves food lying around and, when he's not looking for a job, starts following a woman around town who strikes his fancy.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982783","date":"2004-07-24","texts":"Rates on 30-year mortgages fell below the 6 percent level this week for the first time in three months, but economists said they don't expect rates to stay that low for long. Freddie Mac said Thursday in its weekly nationwide survey that rates on 30-year fixed-rate mortgages averaged 5.98 percent this week, down from 6 percent last week. The rate was the lowest since late April, when 30-year rates averaged 5.94 percent. Since peaking at a high for this year of 6.34 percent in mid- May, 30-year mortgage rates have been headed lower, reflecting in part a slowdown in economic activity in June. The economy hit what Federal Reserve Chairman Alan Greenspan on Tuesday termed a soft patch in June. Greenspan, however, in delivering the Fed's mid-year economic forecast to Congress, sought to allay fears that the slowdown could threaten the sustainability of the recovery. He predicted that growth would soon rebound even as the Fed proceeds with what Greenspan indicated should be a gradual pace of rate increases. Frank Nothaft, chief economist at Freddie Mac, said that the Fed's outlook for the second half of this year was more upbeat than expected, and he said this stronger growth will translate into further increases in mortgage rates and other interest rates set by financial markets along with the rise in short-term rates controlled by the Fed. However, the rise in mortgage rates will be measured, not extreme, and that will help keep the housing industry stable and affordable in the coming months, he said.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842613885","date":"2004-07-30","texts":"John Kerry, seizing the chance to define his candidacy before a national television audience with his presidential nomination acceptance speech, took the fight straight to the two areas where President Bush has enjoyed his greatest political strengths national security and social values. Rather than shying away from ground that has sometimes been shaky for Democrats, Mr. Kerry planted his own flag in a forceful and at times combative speech. Let there be no mistake I will never hesitate to use force when it is required, the Massachusetts senator told 4,000 cheering delegates on the final night of the Democratic convention in Boston. Any attack will be met with a swift and certain response, he continued, attempting to meet widespread and persistent voter questions about whether a Democrat, even a war veteran, is tough enough to lead the country in fighting terrorism. At one point, Mr. Kerry appeared to belittle Mr. Bush's record as commander in chief, especially his justification for the war in Iraq. Now I know there are those who criticize me for seeing complexities -- and I do -- because some issues just aren't all that simple, he said. Saying there are weapons of mass destruction in Iraq doesn't make it so. It was one of several oblique shots Mr. Kerry took at the president and his advisers, even as he also called directly on President Bush to run a positive campaign. Confronting another of his party's vulnerabilities -- a perception that Democrats are out of the cultural mainstream -- Mr. Kerry's 45- minute speech tackled President Bush on social issues. It's time for those who talk about family values to start valuing families, he said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982440","date":"2004-07-31","texts":"The White House forecast yesterday that the U.S. budget deficit for this year will be a highest-ever 445 billion, lower than the administration previously predicted but nearly 20 percent larger than last year's record shortfall. President Bush's budget director, while calling the figure unwelcome, said the new forecast for fiscal 2004 -- in line with recent congressional forecasts -- provides evidence that the economy is growing and tax receipts are recovering. The message echoed a new refrain in Bush's campaign speeches, voiced repeatedly yesterday in Missouri We're turning the corner, and we're not turning back. But Democrats -- and the campaign of presidential nominee John F. Kerry -- countered that the new estimate looks good only in comparison with a previous estimate of 521 billion that was unrealistically high. They noted that the deficit is still on pace to be 70 billion higher than last year's 375 billion. Further clouding the economic picture, the Commerce Department announced that economic growth slowed sharply in the second quarter, to an annual rate of 3 percent, from a revised rate of 4.5 percent in the first quarter. Dragged down by the lowest consumer spending in three years, the quarterly growth rate was the lowest since the first quarter of 2003. In addition, the Labor Department announced yesterday that from the start of 2001 to the end of 2003, 11.4 million workers were displaced from jobs -- 5.3 million of them from jobs they had held for three or more years. Though two-thirds of the 5.3 million found new jobs, 57 percent of those who did find work earned less than they had previously.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983082","date":"2004-08-02","texts":"John Kerry may have surrounded himself with Clinton veterans, the technocrats who form the Democratic Party's permanent establishment. But the tone of his convention speech -- nationalistic not just on matters of defense but also on trade and economics -- marked a departure from the Clinton orthodoxy. Kerry attacked the outsourcing of jobs, which he implicitly blamed for a decline in manufacturing and in middle-class living standards. What does it mean, the candidate asked, when Dave McCune, a steel worker I met in Canton, Ohio, saw his job sent overseas and the equipment in his factory literally unbolted, crated up and shipped thousands of miles away, along with that job Since Kerry asks this question, perhaps he will be good enough to provide voters with the answer next time he raises the subject. As Kerry and his advisers know, trade explains only part of the decline in manufacturing. Between 1970 and 2002, the sector's share of U.S. gross domestic product fell from 24 percent to 14 percent, a drop of 10 percentage points. But the trade deficit in manufactured goods grew by only about 4 percent of GDP over this period. Even though it's true that the deficit has recently grown sharply, deeper historical forces explain manufacturing's attrition. What forces An honest candidate might highlight two. First, Americans are growing richer, and richer people tend to spend less of their money on manufactured goods and more on services. As a result, the composition of production tends to shift. Second, manufacturing productivity has risen fast -- considerably faster, in fact, than the average rate for the economy. That productivity gain explains why manufacturing jobs tend to pay well. But it also allows firms to meet consumers' limited demand with fewer workers, so that manufacturing employment has fallen even faster than manufacturing's share of GDP. So here's what Kerry ought to say. My fellow Americans, I promised in my convention speech to revitalize manufacturing. But this sector's long-term decline is the flip side of our economic progress. Our manufacturing workers are marvelously productive, which is why they are paid well and also why they aren't more numerous.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614885","date":"2004-08-05","texts":"Dabblers in the dismal science are sounding the alarm Foreigners are losing their enthusiasm for American securities, with potentially disastrous implications for funding the U.S. current-account deficit. But a closer look at the evidence presents a very different picture. The U.S. is indeed running record trade and current-account deficits. This is associated with a record flow of capital to the U.S. from abroad, much of it from Asia. True, the most recent data from the U.S. showed that foreigners reduced their net purchases of long-term securities to 56.4 billion in May, down 26 from April's figure -- the lowest monthly total in seven months. But net purchases in May were weak only in comparison to their strength in the previous six months. Foreigners heavily increased their long-term commitment to the U.S. in late 2003 and early 2004, while lightening up in May. --- What those hitting the panic button fail to mention is that the excess of net long-term foreign financing over the current-account deficit had reached an all-time record 302 billion in the 12 months through April the widest point on the graph nearby. Because longer- term debt went up by more than the current account deficit, the effect was to lengthen the maturity of the U.S. external financing, adding to its stability. The strength of the dollar in recent weeks in the face of concerns, probably temporary, about a U.S. slowdown should help undercut the handwringing over the lower level of purchases in May. The Big Questions are whether U.S. expansion is dependent on Asia's savings or at risk due to the trade imbalance. The answer to both is no. The expansion is driven primarily by domestic developments the increasing flexibility of the economy and improvements since 2001 in the value of the dollar, interest rates and tax rates. America is in the early stages of a relatively long expansion, in which inflation and innovation will be more important variables than the trade deficit or foreign-capital flows.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982188","date":"2004-08-05","texts":"Virginia Gov. Mark R. Warner D said he believes business leaders who supported his efforts to raise taxes and balance the state's budget will also support John F. Kerry for president because they are concerned about the economy and the size of the federal budget deficit. In a conference call with reporters in southern states, Warner said the historical pattern of business leaders backing Republican candidates will be broken this year, nationally and in Virginia. You've got more business support this year for the Kerry ticket than even Bill Clinton did in 1992, he said. There's a real unease among many of the business leaders in the state. On Monday, the Kerry campaign released a list of 200 business executives nationwide who have signaled their support for the Democratic nominee. The list contained three names from Virginia Vinton G. Cerf, senior vice president of technology strategy for MCI Roger W. Sant, co-founder and chairman emeritus of AES Corp. and Warren M. Thompson, chairman and president of Thompson Hospitality in Herndon. The Democratic National Committee has begun airing a television ad in Virginia called Strength that uses clips from Kerry's acceptance speech at the party's nominating convention last week.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615979","date":"2004-08-06","texts":"WASHINGTON -- Despite signs the economic expansion is slowing, the Federal Reserve is unlikely to pull back from its campaign of regularly raising interest rates in the months ahead. Fed officials say their main concern is that today's extremely low level of interest rates carries a high risk of fueling inflation years down the road, and that outweighs concerns about damping the expansion by gradually raising rates to a so-called neutral level of between 3 and 5. That perspective suggests the Fed is almost certain to raise its target for the federal-funds rate, charged on overnight loans between banks, to 1.5 from 1.25 on Tuesday. It also means that, barring a significant reversal in the economy, it likely will raise rates in September and at one or both of its meetings in November and December. The decision may not seem straightforward. After all, economic growth slowed sharply to a 3 annual rate in the second quarter from 4.5 in the first quarter. Terrorism fears and tight global capacity also have pushed oil prices above 44 a barrel, a record, which could crimp consumer spending and confidence. Higher petroleum prices already are eroding stock values. Indeed, some Fed officials have trimmed their projections for economic growth in the second half of the year. At the same time, the underlying rate of inflation, which by the Fed's preferred measure jumped from 1 last September to 1.6 in April, eased back to 1.5 in June, remaining within the Fed's informal 1 to 2 comfort zone.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616167","date":"2004-08-11","texts":"AFTER DIGESTING THE Federal Reserve's interest-rate increase and parsing its mostly positive comments on the economy, investors exhaled and pushed stocks to their biggest gains in two months. As widely expected, the Fed raised the target federal-funds interest rate, which banks charge each other for overnight loans, one-quarter point to 1.5. Rattled by softness in recent economic growth, however, traders zeroed in on central-bank comments about the economy. Their worry That recent weakness in job growth and consumer spending would make the Fed question if the economy's recovery was losing steam and ratchet down the pace and scope of promised rate increases at future meetings. In its statement the Fed acknowledged recent economic softness, but blamed high energy prices and said the economy appears poised to resume a stronger pace of expansion going forward. This gave investors little indication that the Fed would deviate from its plan to raise rates at a measured pace in coming months. Skeptics cautioned that by noting recent weakness, the Fed may have left itself room to hold off on more rate cuts if the economy sputtered. But most investors focused on the positive and read this as a vote of confidence for the economy and more rate increases.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616358","date":"2004-08-12","texts":"WHEN AUTO makers wanted to keep cars moving off dealers' lots, they offered zero-percent financing. Now some home builders, worried that rising interest rates may clip the pace of new sales, have gotten into the act by making cheaper financing available to home buyers. While the builders aren't offering no-interest loans, in some areas they are undercutting the rates offered by more traditional lenders. To entice buyers, big national builders such as KB Homes and smaller developers such as Estridge Companies in Carmel, Ind., are providing incentives ranging from below-market loans to offers to lock in low rates for up to six months. In formerly hot markets like Denver and Austin, Texas, builders are sweetening financing deals, paying as much as 4,000 on a 200,000 mortgage to cover a buyer's closing costs. Rising rates are expected to play an increasingly important role in the housing market during coming months. Earlier this week, the Federal Reserve raised short-term rates for the second time in two months and further increases are expected this year. While mortgage rates don't move directly in tandem with moves by the Fed, they are expected to rise as the Fed continues to rachet up rates. The financial enticements from home builders are a relatively new but growing practice that the Fed highlighted last month in its beige book economic report. In response to rising rates, builders are altering their financing products accordingly in an attempt to make them more attractive, the Fed noted.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615782","date":"2004-08-13","texts":"Dow Jones Newswires TOKYO -- In a surprise knock to Japan's economic recovery, growth decelerated during the April-to-June period amid a sharp slowdown in corporate capital spending. Gross domestic product grew 0.4 in real, or price-adjusted, terms from the previous quarter, or 1.7 on an annualized basis, marking the fifth straight quarter of economic expansion. That was much worse than the average forecast of economists surveyed by and Nikkei News of a 1 rise from the previous quarter and 4.2 annualized expansion, and also was below the 3 rise marked by the U.S. in the same period. Japan's second-quarter growth compares with revised 7.4 annualized expansion during the October-to-December period and a 6.6 rise during the January-to-March period. However, economists said the disappointing figures didn't suggest the economy has entered a longer-term slowdown.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985048","date":"2004-08-16","texts":"BETWEEN 1998 and 2000, the United States pulled off a rare and fleeting miracle For the first time since 1969, it ran federal budget surpluses. This turnaround owed something to the tax increases passed in 1990 and 1993 and something to the spending discipline enforced by the Newt Gingrich Congress. But it also owed something to a mysterious revolution that occurred inside American businesses. The average American worker, whose output had been growing steadily at around 1.5 percent a year since the 1980s, suddenly clocked productivity gains of 2.7 percent per year between 1996 and 2000. That acceleration drove the economy's growth rate up to 4 percent, pushing tax receipts to an all-time high and creating budget surpluses that nobody had predicted. If the Bush administration knew how to create the conditions for another growth spurt, critics might have to rethink their opposition to tax cuts. According to the Berkeley-Brookings projections we cited yesterday, the deficit is likely to register at around 3.5 percent of gross domestic product in 2014. But if the economy grows by just under 4 percent a year, rather than just under 3 percent as assumed in the projection, the deficit in 2014 would come to a far less alarming 0.5 percent of GDP. What could President Bush do to boost growth His officials argue that tax cuts will contribute, but this seems unlikely. Lower tax rates on wages do boost the labor supply lower tax rates on investment may boost savings more labor and more capital mean more economic output. But Mr. Bush's tax cuts also have an offsetting consequence. Because they have not been accompanied by spending cuts, government borrowing has gone up, nudging everybody's cost of borrowing higher than it would be otherwise. A range of econo- metric studies suggest that these opposing impacts -- more labor and capital on the one hand, higher interest rates on the other -- roughly cancel one another out. Therefore, to boost growth, the Bush administration will have to look elsewhere. One option is trade policy. Fully liberalized global trade would create a boost to GDP of 2 percent, according to Harvard University's Jeffrey Frankel, who served on President Bill Clinton's Council of Economic Advisers. But this would be a one-time boost to the size of the economy, not a shift in the growth rate, so it would close only a small part of the deficit forecast for 2014, leaving untouched the monster deficits thereafter. Besides, completely free trade is a remote hope. Even success in the World Trade Organization's ongoing Doha Round of trade talks would fall short of that target. Another option is to tackle the absurd tort system, which claims a far higher share of GDP than in any other advanced country. Reform, if it ever could pass Congress, would boost growth by reducing litigation costs, freeing money that might fund innovation and research, and -- by reducing companies' propensity to withhold products from the market -- eliminate the needs to order unnecessary safety tests and waste time on defensive strategies that are more about reducing legal exposure than about safety. But how much extra growth would this yield Robert E. Litan of the Brookings Institution puts the answer at just 0.1 percent of GDP per year.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614506","date":"2004-08-17","texts":"Dow Jones Newswires Foreign investors increased purchases of U.S. securities in June for the first time in five months, evidence foreign demand is ample to sufficiently finance the U.S. current-account deficit. Foreigners bought 71.8 billion in U.S. stocks and bonds in June, up from 65.2 billion in May, according to the Treasury Department. Analysts estimate 45 billion to 50 billion in foreign investment is needed each month to finance the U.S. current-account gap, the broadest gauge of the nation's global trade. It stood at a record 144.9 billion in the first quarter. So far this year, foreign net purchases of U.S. securities are averaging around 75 billion a month, up from about 50 billion a month last year, analysts say. Worries about the ability of the U.S. to finance its twin deficits -- the current-account deficit and budget deficit -- remain overblown, said Tony Crescenzi, chief bond-market strategist at Miller Tabak. The June foreign-investment data exceeded financial markets' expectations that net purchases would be between 50 billion and 60 billion. The dollar had a positive reaction simply because the number was better than most people expected, said Shahab Jalinoos, senior foreign-exchange strategist at ABN-AMRO.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982556","date":"2004-08-17","texts":"A drop in oil prices and upbeat outlooks from Wal-Mart and Lowe's helped send stocks sharply higher Monday on Wall Street, with the swing exaggerated by thin late summer trading. Volume was light on Wall Street, even with the retail sector's rare good news, as many investors were tentative, hoping for better economic news in the week ahead. The Dow Jones industrial average gained 129.20, or 1.3 percent, to 9954.55 the Standard & Poor's 500-stock index advanced 14.54, or 1.4 percent, to 1079.34 the Nasdaq composite index was up 25.62, or 1.5 percent, at 1782.84. Venezuela's continuity of government eased oil concerns, and a smooth start to the Olympic Games in Athens helped reduce fears of terrorism. Wall Street will be looking closely at Tuesday's consumer price index, hoping to see signs that the rise in oil prices this summer have not unduly affected the price of goods and services. A better- than-expected reading could result in an extension of Monday's rally, while a poor reading will likely result in a sell-off, analysts said.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983075","date":"2004-08-17","texts":"IF YOU LOOK AT the Berkeley and Brookings Institution projections that we have cited the past two days, two factors overwhelmingly explain the looming budget crisis. The first is the rising cost of servicing the national debt In 2004, this comes to 1.4 percent of gross domestic product by 2040, it will have shot up to 11.9 percent. The second is the growth in health programs for the old and poor. In 2004, the combined cost of Medicare and the federal portion of Medicaid comes to 3.8 percent of GDP by 2040, it will come to 10.1 percent. To put that in perspective, the projected increase in health spending is nearly three times bigger than the projected increase in Social Security costs. And this forecast assumes that medical spending per beneficiary rises more gently than it has in the past. Extrapolate existing health inflation, and Medicare dwarfs all other budget challenges. The good news is that huge savings are possible in this area, though it would take huge political will to realize them. The United States currently spends 15 percent of GDP on staying well, fully six percentage points more than the average in rich economies. Some of that disparity is unsurprising, because America is richer than the average rich country The more prosperous a society, the greater the proportion of its income it's likely to spend on health. But Uwe E. Reinhardt of Princeton University has calculated that U.S. prosperity explains only half of the six-percentage-point disparity. The other half reflects the waste that follows from a system in which doctors decide when care is necessary while also profiting when care is given. Even if this waste were confined to private health care, fixing it would help the federal budget. Most private health spending is tax-exempt, so squeezing those dollars into other segments of the economy would increase the tax take. But the truth is that inefficiency is rampant within Medicare as well. Elliott S. Fisher of Dartmouth Medical School has demonstrated that some parts of the country spend twice as much as others per Medicare patient, even after adjusting for regional differences in patients' health status and the cost of medical care. Moreover, Dr. Fisher has shown that low-spending areas produced health outcomes at least as good as those in high-spending ones. If all regions could emulate the most efficient fifth of the country, the cost of Medicare would fall by 30 percent. Enforcing efficiency will not be easy. Expensive regions are expensive because they have lots of hospitals and doctors the medical folks are good at marketing their services. If the feds capped the number of heart surgeries or MRIs in each region, two things would happen Doctors would market themselves even more aggressively to non-Medicare clients, and retirees would stage a revolution against rationing. Suppose, in the spirit of this series, that this political constraint could somehow be overcome. What would that do to the future budget deficit A 30 percent cut in Medicare spending in 2040 would save just over 2 percent of GDP a similar cut in private health spending would boost the tax take, bringing the budget impact up to around 3 percent of GDP. With the 2040 deficit projected at 20 percent of GDP, this won't fix the problem.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615541","date":"2004-08-19","texts":"PROPONENTS of a higher minimum wage, frustrated by federal inaction, are turning their attention to the state level, and their efforts to tap voters' angst over the quality of new jobs could affect the presidential race. In November, voters in two key battlegrounds, Nevada and Florida, will be asked to raise the minimum wage in their states. Those on both sides of the initiatives believe the measures could increase voter turnout among Democratic-leaning African-Americans, Hispanics and low- income workers -- and possibly boost Democratic nominee Sen. John Kerry's showing against President Bush. The initiative drives have no formal connection to Mr. Kerry or the Democrats, and they come after 12 other states and Washington, D.C., already have established minimum wages higher than the federal rate. That figure, now 5.15 an hour, was last raised by Congress in 1997. Democrats and their allies hope the measures can help mobilize core backers upset about the economy in the same way Republicans pick up support from initiatives important to their supporters. Polls suggest Democrats hold the high ground on economics this year, and pushing for a higher minimum wage provides an opportunity to spotlight their policies. Similarly, allies of the president have been pressing state initiatives to bar gay marriage in several electoral battlegrounds. This year, polls show, weak job growth, the low pay of many newly created jobs and a widening gap between rich and poor are weighing on voters' minds. While many economists believe a higher minimum wage deters employment of low-skilled workers, the issue has wide political appeal, and even many business-friendly Republicans are loath to openly oppose an increase.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830985160","date":"2004-08-19","texts":"Timothy Jones happily bid his freshman year farewell and reveled in the fact that he no longer would be a member of the youngest high school class. But when Timothy, 15, becomes a sophomore next week , he'll relive one of the hardest parts of freshman year being the new kid in school. Last week , Timothy registered at Northwestern High in Hyattsville after transferring out of a high school in the District. I'm just really looking forward to doing better than how I was doing in D.C. schools, the Hyattsville resident said. I really want to start off good. Timothy won't be the only new kid on the block when classes resume, nor will any of the other new students spilling into the county's nearly 200 schools. Many of the new faces appearing in Prince George's schools will belong to adults about 55 new principals, 45 new vice principals and 850 new teachers. There will also be a new crop of central office administrators, the result of schools chief Andre J. Hornsby's reshuffling of his management structure.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984400","date":"2004-08-22","texts":"The American Institute of Certified Public Accountants opens a two-day conference on government accounting. AFL-CIO President John J. Sweeney and Sen. Tom Harkin D-Iowa lead protest at the Department of Labor as new overtime regulations go into force. Phi Delta Kappa International releases its 36th annual Gallup Poll on attitudes toward public schools. Center for Immigration Studies releases study on the impact of illegal immigration on the federal budget. The U.S. Census Bureau releases its annual reports on median income changes, the national poverty rate and the number of uninsured.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617097","date":"2004-08-24","texts":"A new analysis shows that cash-strapped state and local governments have increasingly come to depend on property taxes to fill revenue shortfalls as other sources of income soured. Though not an unexpected trend during economic downturns, the reliance on property taxes has lasted well beyond the end of the recession of 2001. Economists say it is has been of greater depth, and likely will have more lasting consequences, than it did during prior downturns. In good part, that's because the soaring housing market has lifted the median price of single-family homes by 15, making property taxes attractive to state and municipal governments facing spending increases. Meanwhile, states have grown more reluctant to lift income or sales taxes in recent years for fear of political retribution, economists say. In some cases, they are even prevented from doing so by laws passed during the 1990s boom. The local property tax is one tax the local authorities can use to offset declines in state money, says William Fischel, a professor of economics at Dartmouth College. To some extent, if the state is sending municipalities or even school districts less money because they're in fiscally difficult times, the one tax the local authorities have some discretion over raising is the property tax. Though municipalities can offset rising property values by changing their millage rates, or the rates at which taxes are levied on properties, many strapped municipalities chose not to do so in recent years. Ultimately, what determines whether property taxes go up is the overall budget for the taxing district, says Matt Gardner, state- tax-policy director with the Institute on Taxation and Economic Policy in Washington, D.C.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982948","date":"2004-08-24","texts":"One of the tongue-in-cheek rules that we column-writers have is, Often wrong, never in doubt. Take a stand, don't duck and weave too much. But someone as opinionated as I am should not only have no doubt, but shouldn't be wrong too often. No one's perfect, though. As witness the column I wrote three weeks ago as I headed for vacation, warning you not to buy Google at its initial public offering price. Oh, well. I'm back from the beach and it's clear that my advice turned out to be wrong. If you disregarded my opinion and bought Google at its 85 IPO price, you're sitting pretty, given that the stock has never traded below 95 and closed Monday at 109.40. Heck, if I'd known that was going to happen, I'd have hocked myself to the eyeballs, bought the IPO, taken a quick 20-a-share profit and used it to buy a beach house that I'd have named Never In Doubt. Of course, at the time I wrote that column, Google's projected price range was 108 to 135 a share, the offering was set at 24.6 million shares and the company said it would use a Dutch auction to price the IPO. Such an auction lets potential buyers say what they're willing to pay and sets the price at the point where there are enough buyers to buy all the shares being offered. That's designed to make sure that sellers aren't settling for a way-below- market price and IPO buyers aren't getting a windfall. But everything changed while I was recreating. Google cut its price to 85, trimmed 5 million shares from the offering and -- most important -- seems to have set the price artificially low to ensure a quick run-up. Instead of a true Dutch auction, which would probably have produced an IPO price of 95 to 100, Google sold at 85 and gave successful bidders only about 74 percent of the shares they sought. This created pent-up demand -- clearly what started the price running. Sorry to have been wrong -- but that's what happens when I depart from my customary skepticism and trust people I don't know. I thought the guys running Google were serious about not wanting to manipulate their stock price. Oops. As they say in pro sports, my bad.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830981864","date":"2004-08-25","texts":"At a time when much of our public discussion is riddled with disagreement, there is an emerging bipartisan consensus in one vitally important area that the challenges facing U.S. health care require major, transformative change. Some steps are already underway. Recently the Department of Health and Human Services announced a 10-year plan to build a new health information infrastructure. And while there is no consensus yet on all the changes needed, we both agree that in a new system, innovations stimulated by information technology will improve care, lower costs, improve quality and empower consumers. Today our care is often afflicted by systemic error and dramatic inefficiencies. According to a recent Rand Corp. study, even patients with the best available coverage receive recommended care, on average, only 55 percent of the time. Costs continue to escalate far in excess of inflation. Health care providers are paid for episodes of care when a patient is sick or injured, rather than for ensuring that patients are healthy. In other words, patients pay to be covered by a plan or seen by a doctor, not necessarily to receive effective, high-quality treatment. Care is too often oriented toward acute, episodic illnesses of the past -- not the chronic diseases that plague us now. Competition occurs among plans, networks and payers. It often does not sort out the best preventive, diagnostic and treatment strategies. Moreover, our current health care sector suffers from profound technological inconsistencies. We lead the world in medical breakthroughs using some of the most advanced technologies ever developed. But at the same time, doctors and nurses struggle under mounds of paperwork, providers lose time trying to manage data and the latest research takes years to reach medical practices. By using advances in information technology, we can put the right information in the hands of doctors and patients at the right time. We can empower patients, health care providers and health care purchasers to make better choices. Businesses in other sectors have embraced the information revolution to cut costs and improve productivity. They use information technologies not as an end but as a means to improve and innovate. It's time we realize the full potential of the information revolution to improve the quality of the health care system as well. The success of U.S. health care depends on patients' taking charge of their care and becoming active participants in it. Information and access to it will be paramount. Consumers and patients do not have enough information to make good choices. They need this information, including access to their own health records, and the tools to make better choices, manage their care more effectively and communicate more efficiently with their health care providers. At the same time, we must ensure the privacy of the systems, or they will undermine the trust they are designed to create.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615256","date":"2004-08-30","texts":"Dow Jones Newswires NEW YORK -- Gold prices on the Comex division of the New York Mercantile Exchange embarked on a declining path Friday as initial buying inquiries dried up and light week's-end profit-taking took center stage. The most-active December contract settled 4.20 lower, at 405.40 an ounce. The nearby-month benchmark contract was at 403.30, down 4.10. Gold prices got off to a firm start at the 410 mark, as traders initially proved reluctant to part with the metal ahead of the release of U.S. gross-domestic-product data at 830 a.m. Eastern time. While GDP, or the value of all goods and services produced in a nation, increased at a slower-than-forecast 2.8 rate in the second quarter, global currency investors interpreted the growth reported in consumer and business spending as positive for the U.S. currency and so shoved it higher as the session wore on. This, in turn, tarnished gold's appeal as an alternative to the dollar and spurred light speculator and bank sales.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982571","date":"2004-08-31","texts":"An unsettling report on consumer incomes set off a spate of profit-taking on Wall Street Monday as investors worried that a tepid economy would erode companies' third-quarter earnings. Another drop in oil prices failed to shake the gloom from the market. While investors were cheered by the Commerce Department's report of a strong rise in consumer spending for July, nearly flat growth in personal incomes and a handful of profit warnings for the third quarter made investors nervous. The news prompted them to cash in their gains following two weeks of advances. There's not a lot of resistance here, and you're seeing a little bit of profit taking, said Todd Leone, managing director of equity trading at SG Cowen Securities. Trading lower is the path of least resistance. Trading volume was again extremely light as many on Wall Street refused to make large moves until the Republican National Convention concluded without incident. Many investors also awaited the government's August employment report due Friday, hoping for signs that the economy was emerging from a sluggish summer. The Dow Jones industrial average fell 72.49, or 0.7 percent, to 10,122.52. The Standard & Poor's 500-stock index declined 8.62, or 0.8 percent, to 1,099.15, and the Nasdaq composite index dropped 25.60, or 1.4 percent, to 1,836.49.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614076","date":"2004-09-01","texts":"What's Brewing in the Real Estate Market Israel Development Aquaria Ltd., which plans to develop a 375 million retail and entertainment project in Eilat, Israel, near the border of Jordan in an area referred to as the Red Sea Riviera, has hired Sonnenblick- Goldman Co. to raise 305 million in venture and construction financing for the project. The 300-acre development, dubbed Aquaria Entertainment City, includes a water-themed amusement park, a 10,000-seat arena, a 2,500- seat amphitheater, shops, restaurants and an 18-hole golf course. Using planners and designers that helped create Walt Disney Co.'s Epcot park in Orlando, Fla., Aquaria also will offer amusement rides mixed into areas that mimic the look of other cities, including Hollywood, New Orleans, San Francisco, Rio de Janeiro, St. Tropez, Venice, St. Petersburg and Bangkok. The Israeli government is providing a 45 million grant and is leasing the land to Israel-based Aquaria, whose mostly U.S.- based principals are putting up about 25 million. Sonnenblick-Goldman, a New York real-estate investment banking firm, is raising 100 million in equity and 205 million in debt.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613697","date":"2004-09-02","texts":"MOST STOCKS shrugged off bad news on the economy and oil and turned in small gains. The broad Standard & Poor's 500-stock Index edged up 0.15, or 1.67 points, to 1105.91, although the 30-stock Dow Jones Industrial Average inched down 5.46 points, or 0.05, to 10168.46. The Dow is off 2.7 on the year, but the S&P 500 has fallen only 0.5. Trading volume again was above the lows recorded Friday and Monday, as worries about a disruption of the convention appeared to fade. The convention and the protests are going more smoothly than previously anticipated, said David Hegarty, head of stock trading at Commerzbank Securities, a New York brokerage arm of Germany's Commerzbank. Mr. Hegarty said he worked at the firm's backup location in the New York suburb of Rye on Monday and Tuesday, but returned to the city yesterday because things were going better than expected.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984252","date":"2004-09-02","texts":"U.S. manufacturing grew more slowly in August, a research group reported yesterday, adding to other signs that the economic expansion continued to lose steam in recent weeks. The Institute for Supply Management's index of manufacturing activity fell to 59 last month, its weakest reading of the year, from 62 in July. The figures are based on a survey of purchasing managers, with a reading above 50 indicating growth and a number below that level reflecting a decline. The report followed other recent reports that have showed stalling job creation, weak income growth, slowing home sales, falling exports and slipping consumer confidence. Wal-Mart Stores Inc. and Target Corp. are among the companies that have lowered their sales forecasts for August. Clearly, the economy is still working its way through a soft spot, said Ken Kim of Stone & McCarthy Research Associates in an analysis for clients. One bright spot in the economy is construction spending, which rose 0.4 percent in July from the month before to a record-high 997.2 billion annual rate, the Commerce Department reported yesterday. But part of the gain reflected activity that was delayed by wet weather in June, when construction spending was flat, analysts said. And some of the advance was the result of higher prices for building materials.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830983333","date":"2004-09-05","texts":"Politicians who complain about corporate bosses gaining at the expense of American workers are often accused of engaging in class warfare, which clashes with America's proud self-image as a classless society. But soaring executive compensation amid stagnant pay for average workers, the continuing hangover from a wave of corporate scandals and other realities keep this us-and-them issue very much alive. Indeed, Sen. John Edwards's Two Americas stump speech is but a polite and politic way of introducing social class and economic power into public discussion. But the bipolar view of class and economic interests that shapes this traditional Two Americas view reflects an outdated understanding of the American workplace. For decades, when academics, politicians and others spoke of workers, they generally meant people who used their hands and backs to produce things. The growth of hotel, restaurant, health care, Wal-Mart and other service sector jobs has not changed this Real physical work is at the core of what it meant to be a worker. CEOs and other executives, meanwhile, remain atop the economic ladder. But I've conducted interviews over the past year with members of a significant and growing segment of American employees who are in the middle of this us-and-them perception. These are middle managers in large corporations, such as loan officers leading a team of lenders, office managers responsible for administrative infrastructure, engineers in charge of teams of software developers, managers of local bank branches, human resources supervisors and many more who form a major, if underrecognized, population About 7 million employees are now classified as managers, while 11 million employees are production workers. These people are not paper pushers who simply clog up a useless bureaucracy. They are people with real skills who care about and enjoy their work and who can make useful things happen. Their skills are concrete, take time to learn and are to some extent portable to other companies. In short, these millions of middle managers are a new kind of craft worker, much like skilled electricians, carpenters and plumbers. They are certainly no longer the Organization Man or Woman of the 1950s and beyond, who, while conformist and restricted in what they could do, at least tended to have job security. Many of today's middle managers have more opportunity to be creative entrepreneurs within their companies, but, like other workers, they now also tend to have, at best, modest job security. Waves of corporate restructuring have left them vulnerable to layoffs and outsourcing. Also, like other workers, many of these middle managers feel their bosses are making poor decisions beyond their control and even their understanding. But unlike traditional workers, who use unions or ties to political parties to make their case and press for relief, these middle managers tend to be apolitical and have little sense of alternatives to their insecure world and how politics might reduce their insecurity.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983459","date":"2004-09-08","texts":"This year's federal budget deficit will reach a record 422 billion, and the government is now expected to accumulate 2.3 trillion in new debt over the next 10 years, the Congressional Budget Office reported yesterday. The expected deficit for the current fiscal year, which ends Sept. 30, is 56 billion less than the CBO predicted in March, as a recovering economy added to tax receipts. But it is 46 billion more than last year's record shortfall, with even more red ink possible, the nonpartisan agency reported The expected total 10-year deficit would climb from 2.3 trillion to 3.6 trillion if President Bush is able to extend the tax cuts he enacted. They are currently set to expire in 2011. This is a fiscal situation in which we cannot rely on economic growth to cause deficits to disappear, warned CBO Director Douglas Holtz-Eakin, a former economist for the Bush White House. The budgetary outlook will be dictated by policy choices. About half of the projected 10-year deficit is based on an assumption that conflicts in Iraq and Afghanistan will continue. The CBO policy requires that deficit projections be based on current conditions. The budget office expects that the total federal debt held by the public -- the amount borrowed through the sale of Treasury bonds to finance overspending -- will balloon 58 percent over the next decade, from 4.3 trillion this year to nearly 6.8 trillion in 2014.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830982204","date":"2004-09-09","texts":"PUBLISHED CORRECTIONS The name of the Neiman Marcus department store chain was misspelled in a Sept. 9 Business article. Published 92804 Federal Reserve Chairman Alan Greenspan said yesterday that U.S. economic growth picked up in recent weeks but is still restrained by high oil prices. Greenspan, appearing before the House Budget Committee, said the spring surge in energy prices weakened the economy more than analysts had expected. He suggested that uncertainty about oil prices continues to cloud the economic outlook. If it weren't for the oil price spike, I would be very optimistic about where the economy is going, Greenspan said in remarks that contrasted with a more upbeat assessment in July, when he spoke of a quickening economic expansion. Greenspan also repeated his call for Congress to restrain the growth of the federal budget deficit. He said failure to do so could cause inflation, interest rates and government debt payments to rise to economically damaging levels in coming decades.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830982041","date":"2004-09-13","texts":"John Edwards toured this flood-ravaged mill town in his home state Sunday, meeting with local leaders and business owners and workers hit by last week's flooding from Hurricane Frances. The visit was recently added to Edwards's campaign schedule, and was the sixth campaign trip Edwards has made here since Sen. John F. Kerry Mass. chose him in July as the Democratic vice presidential nominee. Kerry and Edwards hope to put North Carolina's 15 electoral votes in the Democratic column in November even though the state has voted for the Republican candidate in every presidential election since 1976, when Jimmy Carter beat Gerald Ford. The senator toured the town's main commercial district, within sight of the Blue Ridge Paper Products mill, which employs many residents. Damaged by flooding on the Pigeon River, the mill is closed, and officials said it may not open for some time. Edwards shook hands with workers of the Federal Emergency Management Agency and volunteers helping to dig the town out of flooding damage that left hundreds of roads closed, many businesses shut down and crops ruined. With rolled-up shirt-sleeves, Edwards walked through the muddied main street with Mayor Pat Smathers and Jerry Walker, mayor of nearby Clyde. The area, in the mountainous western part of the state, received nearly 18 inches of rain last week.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983342","date":"2004-09-13","texts":"Last week, a Senate Appropriations subcommittee approved the raise as part of a 90.6 billion spending bill for the Transportation and Treasury departments and several small agencies. The pay raise was approved by the House Appropriations Committee in July. The decision by the Senate subcommittee should make it relatively easy for the House and Senate to include the raise in legislation that can be sent to the president. But House and Senate aides expect that it might be weeks before Congress wraps up spending bills for fiscal 2005, raising the prospect that House-Senate agreement on the pay raise might not be reached until after Election Day. President Bush proposed a 1.5 percent pay raise for the civil service and a 3.5 percent raise for the military in his fiscal 2005 budget. But several members of the Washington area delegation organized support for a pay parity approach to provide the government's civilian employees with a raise equal to that of the military. Rep. Steny H. Hoyer D-Md., who often plays a key role in the annual pay-setting process, has repeatedly noted that Congress has provided equal pay adjustments to civil service and military employees in 17 of the past 20 years. During this year's debate, Hoyer and other Washington area lawmakers stressed that civil service employees have taken on expanded responsibilities for homeland security and the war against terrorism.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613554","date":"2004-09-17","texts":"Dow Jones Newswires Stocks rose, with hurricanes helping Dow Jones Industrial Average member Home Depot, while a different kind of storm continued to lash Coca-Cola. The Dow Jones Industrial Average gained 13.13 points, or 0.13, to 10244.49, the Nasdaq Composite Index retook the 1900 mark by rising 7.56, or 0.4, to 1904.08, and the Standard & Poor's 500-stock index advanced 3.13, or 0.28, to 1123.50. The gains were muted because the market is looking for a little bit of leadership and a little bit of direction, and so far we haven't found it, said Tim Anderson, senior block trader at Citigroup. As a result, it was hard for the blue chips to get back much today, especially after the Philadelphia Federal Reserve business-outlook survey came in a bit weaker than expected. Home Depot rose 31 cents, or close to 1, to 38.70. The rise may have been modest but it was good enough to put shares at a 52-week high, with the home-improvement retailer reaching the milestone through a series of gains in the past month on anticipated demand as hurricanes tore through the Southeast.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614013","date":"2004-09-17","texts":"Today's Market Forecast Cash Machines After so many laps around the track, the U.S. consumer's legs have got to be feeling mighty heavy by now. Thank goodness companies are in such spry shape. Thanks to the economic recovery that took hold last year, together with low interest rates and stringent cost controls, companies have more than repaired the heavy damage that hit their balance sheets at the start of the decade. Profit margins have shown a healthy climb. As a percentage of gross domestic product, profits have rarely been so high. Corporate wallets have fattened markedly as a result, with yesterday's second-quarter flow of funds report from the Federal Reserve suggesting companies have the best cash position in 40 years.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983772","date":"2004-09-19","texts":"California Gov. Arnold Schwarzenegger R vetoed bills Saturday that would have raised the minimum wage to 7.75 an hour, made Wal- Mart-like megastores more difficult to build and limited schools' ability to give students random drug tests. The governor said the minimum wage and megastore legislation would have hurt the state's economy and said drug testing policies should be left up to school officials. The minimum wage bill would have raised California's minimum wage from 6.75 to 7.25 Jan. 1 and to 7.75 on Jan. 1, 2006. The federal minimum is 5.15 an hour. Bill supporters said the minimum wage has not kept up with inflation, but Schwarzenegger said the legislation would have discouraged economic growth. Now is not the time to create barriers to our economic recovery or reverse the momentum we have generated, he said.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616561","date":"2004-09-20","texts":"There is little doubt that the Federal Reserve is about to pump up the federal-funds rate by 25 basis points to 1.75 as part of Alan Greenspan's kabuki dance to control inflation. It is also a textbook response to oil prices that are now about 35 more expensive than they were at the beginning of the year. But the truly deft and sneaky aspect of the increase is that higher oil prices themselves are probably a result of Mr. Greenspan's really loose monetary policy. This explanation of the current situation is in fact a mirror image of the one identified by Jeffrey A. Frankel, economist at Harvard's Kennedy School of Government, in the 1980s. Expectations and Commodity Price Dynamics The Overshooting Model, available online. Back then, real interest rates were high and prices for commodities, including oil, were in a swoon. Mr. Frankel's argument was simple and elegant. Changes in the money supply resulted in changes in real interest rates and the first impact of these changes was seen in prices for commodities. Thus, as real rates went up, commodity prices went down. Consider, then, Mr. Frankel's model applied to what has been happening more recently. As Mr. Greenspan engineered low real interest rates in 2001-04, the prices of commodities, particularly oil and other minerals, started to climb in advance of a general price increase. Why The prices of some things, like manufactured goods, are sticky. They don't change very fast because they may be fixed by explicit contracts, there may be imperfect information, or businesspeople may want to postpone the costs attached to changing their prices. Commodity prices, on the other hand, are way more flexible. Since commodity prices are determined by trading on fast-moving auction markets, they respond more swiftly to interest-rate expectations and monetary fluctuations than do consumer prices. But, in the short run, these faster-adjusting markets overshoot their long-run equilibrium prices. Since some prices are sticky -- or lag behind -- the prices that are free to move, like commodity prices, must move in an exaggerated fashion in order to compensate for the laggards. Thus, commodity prices overshoot their new equilibrium in order to generate an expectation of future depreciation that is sufficient to offset lower interest rates. This skyrocket effect will vanish in the long run.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613844","date":"2004-09-21","texts":"Dow Jones Newswires NEW YORK -- Selling in the tobacco group combined with profit warnings and high oil prices to nudge small-capitalization stocks into the minus column with the overall market. Investors shunned tobacco stocks ahead of the government's opening arguments in its 280 billion civil racketeering lawsuit against the cigarette industry this week. Vector Group tumbled 89 cents, or 5.6, to 14.93, and Universal Corp. lost 60 cents, or 1.4, to 43.97, both on the New York Stock Exchange. Large-cap Colgate-Palmolive's profit warning sent shares of consumer-products makers tumbling. Fragrance and decor company Blyth slipped 34 cents, or 1.1, to 31.06, while scented-candle maker Yankee Candle Co. slipped 12 cents, or 0.4, to 27.88, both on the New York Stock Exchange. On top of these developments, oil prices closed above 46 a barrel in New York, reigniting concerns about the impact high fuel costs may have on consumer spending. When crude-oil prices rise above 45 a barrel, you are just taking money out of people's pockets, said Michael O'Hare, head of block trading at Lehman Brothers.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614540","date":"2004-09-21","texts":"While economists have said the U.S. recession ended in late 2001, a fiscal recession continues in America's cities, according to the latest annual survey by the National League of Cities. The survey of finance directors from 288 cities found that 63 said their cities were less able to meet financial needs during their fiscal 2004 than in the previous year. Looking ahead, 61 said their cities will be less able to meet financial needs in 2005 than in 2004. Fiscal years start in January, July, or October depending on the city. The survey is expected to be released today. The financial officers blamed rising costs for employee health benefits, wages, public safety, increased infrastructure needs and employee pensions. The cities' revenues aren't keeping pace with their increased expenses. Cities' 2004 budgets predicted general-fund revenue increasing 2.6 from 2003, with general-fund expenditures expected to rise 3.6. As elected officials, we can only stretch our resources so far, tighten our belts so much, says James C. Hunt, vice president of the Washington, D.C., league, which represents U.S. cities. Mr. Hunt also is a council member in Clarksburg, W.Va. We have huge responsibilities we must address and not enough resources to support them. Cities also cited the weak economy and insufficient state aid, reflecting the financial havoc wreaked upon states, and in turn cities, during the economic downturn. There was a huge income-tax revenue burst for cities and states in the late 1990s and it disappeared with the bursting of the stock-market bubble and business capital-investment bubble, says James W. Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University, of New Brunswick, N.J. As a result, most states have been in a fiscal crisis, so they have cut back or not been able to increase state aid to cities.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616240","date":"2004-09-22","texts":"WASHINGTON -- The Federal Reserve raised its key short-term interest rate by a quarter of a percentage point to 1.75, saying the U.S. economy appears to have regained some traction after moderating earlier this year. The Fed said nothing to dissuade financial markets from anticipating another quarter-point rate increase before year end. The Fed's campaign to lift interest rates is intended not to slow the economy, but to raise rates from emergency lows in order to avoid creating an inflation problem in the future. The target on the federal-funds rate, at which banks lend to each other overnight, was chopped to a 45-year-low of 1 in mid-2003 from 6.5 at the start of 200. With much advance warning, the Fed began lifting rates in June. The economy now appears to have pulled out of a soft patch -- as Federal Reserve Chairman Alan Greenspan has put it -- that was largely the result of higher oil prices. After substantial hesitation, employers are hiring, adding more than one million jobs since the low point in August 2003, though payrolls remain one million shy of the March 2001 peak. Following disappointing second-quarter growth of 2.8, the U.S. economy now is expanding at better than 3.5, perhaps as strong as 4, private economists estimate. But recent declines in long-term bond yields suggest the bond market may not be as optimistic. The yield on the 10-year Treasury note fell to 4.05 yesterday, well below June's 4.87 yields fall as bond prices rise. Stocks rallied. The Dow Jones Industrial Average ended at 10244.93, up 40.04, most of that after the Fed spoke.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615377","date":"2004-09-27","texts":"In two significant moves to reduce global-warming emissions, California regulators approved the first-ever rule in the U.S. limiting such emissions from cars and trucks, and Russian officials took what appeared to be the first formal steps toward ratifying the Kyoto Protocol, the international treaty that seeks to curb global- warming emissions from industrialized countries. In California, state environmental officials approved a rule ordering auto makers in the 2009 model year to start selling cars and trucks with significantly reduced emissions of carbon dioxide and other gases widely believed to contribute to global warming. Because the vast majority of an automobile's global-warming emissions come from burning fuel in the engine, the California rule effectively would force the auto industry to markedly improve the fuel economy of vehicles sold in the state. The rule would force a reduction of about 30 in global-warming emissions from vehicles by 2016, when the measure takes full effect, officials said. The rule -- if it sticks -- would have wide ramifications. Not only is California the nation's biggest auto market, but also New York and six other Northeastern states, as well as Canada, are expected to consider adopting the California rule, moves that would triple the number of automobiles required to meet the tougher standard, said the California Air Resources Board, the state clean-air regulatory agency whose board voted unanimously Friday to move forward with the rule. The rule is a long way from taking effect. The auto industry, even as it is running advertisements trumpeting its new crop of fuel- efficient hybrid gasoline-and-electric vehicles, said it would fight hard to overturn the California measure. The Alliance of Automobile Manufacturers, the industry's trade group in Washington, said it would urge the California legislature and California Gov. Arnold Schwarzenegger to block the rule, arguing the rule would require so much new technology on vehicles that it would raise the price of the average new vehicle sold in California by about 3,000 -- about triple the amount that California regulators estimate. The industry also said it is considering suing California to block the rule. The legal argument The rule effectively amounts to a mandate for improved fuel economy, a power that, under U.S. law, is reserved for the federal government.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981653","date":"2004-10-04","texts":"-- Democratic presidential nominee John F. Kerry delivered a populist message to this long-suffering industrial region, visiting a picket line and telling blue-collar workers here Sunday that President Bush has been dishonest about the economy's health. On a swing through the Mahoning Valley near Youngstown in eastern Ohio, the senator from Massachusetts told a crowd full of union workers that I've got your back, and he portrayed Bush as disengaged from economic suffering. This administration, every time it's had an opportunity to make a choice for you . . . they've made a choice that helps the powerful, they've made a choice to help the people who are the most helped already, he said. The town-hall-style forum in a high school gymnasium, in which Kerry discussed a lack of health insurance, low wages and the outsourcing of jobs overseas, was part of an effort by his campaign to shift the national debate to economic issues in advance of Friday's debate. In Ohio, the Democrat sought to tie together his foreign and domestic criticism of Bush by charging that Bush had been untruthful about both. A day after a television ad by the Kerry campaign accused Bush of lying -- a word Kerry disavowed in Thursday's debate -- Kerry repeatedly questioned Bush's credibility, saying Americans really need to know that the president is being straight with them. Kerry's emphasis on pocketbook issues was a calculation that the campaign could use the momentum gained from his strong debate performance to change the subject from terrorism, where Bush has broader support. In an appearance on Fox News Sunday, Kerry strategist Tad Devine said that the race has closed and that the economy and health care are the issues the American people want debated.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616517","date":"2004-10-05","texts":"The jobs debate heats up this week, with the White House expecting that revised payroll data to be released Friday will put a shine on President Bush's record of helping the economy create new jobs. Friday's data will be the last released before the Nov. 2 election. While markets will focus on the Bureau of Labor Statistics' jobs report for September, politicians might pay more attention to revised data for the period from March 2003 through March 2004. A memo from the president's Council of Economic Advisers estimates that the payroll-employment figure for that period could be revised upward by 288,000 jobs, and conceivably by as much as 384,000. In August, nonfarm payroll employment stood 913,000 jobs, or 0.8, below the level when President Bush took office. Even a lesser revision, combined with additional jobs reported for July through September, would reduce Mr. Bush's first-term jobs deficit and weaken challenger Sen. John Kerry's attacks on his economic policies. The two meet for a town-hall style debate Friday evening in St. Louis, and are scheduled to debate domestic policy the following Wednesday. The White House estimate, prepared by career CEA technical staff, hasn't any effect on what the independent BLS actually will report Friday. This is a very preliminary estimate, said CEA spokesman Phillip Swagel, adding it was generated by an economic model with a typical statistical error range of plus or minus 140,000 jobs. The only number that matters is the number that the BLS announces on Friday. The BLS will incorporate its revisions in the official data in February.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984311","date":"2004-10-05","texts":"Wall Street extended its fourth-quarter rally into a second day Monday, supported by falling oil prices and a bullish assessment of the economy from a Federal Reserve official. Investors were cheered by a dip in oil prices, which backed off the 50-per-barrel mark of Friday's close of trading. A barrel of light crude closed at 49.91, down 21 cents, on the New York Mercantile Exchange. Stocks received a boost before the session opened when Philadelphia Federal Reserve President Anthony M. Santomero said in a speech that he expected the economy to grow by 3.5 percent to 4 percent through 2005. His comments and the buying that customarily opens a new quarter gave stocks their gains, although analysts said recent economic data and the forecast for third-quarter earnings might not support the bullishness. The Dow Jones industrial average rose 23.89, or 0.2 percent, to 10,216.54. The Standard & Poor's 500-stock index gained 3.67, or 0.3 percent, to 1135.17. The Nasdaq composite index advanced 10.20, or 0.5 percent, to 1952.40. Dow component American International Group, one of the world's largest insurance firms, slipped 23 cents, to 68.49, after it announced the Securities and Exchange Commission may sue the company for alleged violations of federal securities laws, based on allegedly misleading statements AIG made in recent news releases.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985399","date":"2004-10-10","texts":"Complaining about the actions of senior management, even when it seems you have a solid right to vent, can be a dicey proposition. QI was working on a team project where various peers and senior personnel were supposed to contribute pieces of the final product. A senior-level manager assigned a segment of the work by the project manager sent a rude e-mail to me a mid-level employee and several of my colleagues, nastily stating that the work she was responsible for was not 'real work' and that she was too busy to do it. After missing a deadline by 11 days and refusing to delegate the work, she sent a very shabby product and denigrated the type of work that we subordinates do. I'm over feeling annoyed and offended but am now wondering if anyone, perhaps the project manager, should confront her about her lack of respect for her teammates and the jobs we do. I expect better from my bosses, but is it wise to voice my thoughts What's the protocol here AKaren Usher, chief executive of TPO Inc., a Tysons Corner human resources outsourcing firm, said the corporate phenomenon of people in high positions belittling little people is moderately prevalent and that sometimes management doesn't do enough to intervene. Most managers are under-trained. In this case, she said the first thing is to seriously consider saying something to the person that sent you that note. If you go over their head, it can make the situation worse.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614690","date":"2004-10-13","texts":"Yahoo Inc. said third-quarter profit more than tripled and revenue more than doubled, helped by continued growth in search-related advertising and the effect of acquisitions, and raised its financial forecast for the fourth quarter. The Sunnyvale, Calif., Internet company said net income rose to 253 million, or 17 cents a share, from 65 million, or five cents, a year earlier. Revenue rose to 907 million from 357 million, in part because of acquisitions. More than half of Yahoo's net income came from the sale of a portion of its stake in rival Google Inc., following Google's August initial public offering. Yahoo said the sale of Google shares and related tax benefits boosted the bottom line by 129 million. Without the gain, Yahoo's per-share earnings would have been in line with the nine cents expected by analysts polled by Thomson First Call. The results exceeded Yahoo's own forecast. Excluding commissions paid to marketing partners, Yahoo reported revenue of 655 million. The company had projected revenue on that basis of 610 million to 650 million. Yahoo's results demonstrate continued growth in Internet-related commerce, even as more established technology companies struggled with a summer slowdown. They likely augur similarly strong results when Google reports for the first time as a public company next week.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616932","date":"2004-10-14","texts":"Paris -- NOT LONG ago, European officials, corporate executives, economists, fund managers and investment bankers had a dream European companies would be weaned off their penchant for debt financing and rely more on equity for growth. Insurance companies would buy more shares and fewer bonds. Governments would get out of the business of owning whole industries. In short, Continental Europe would begin to look a lot like the U.S. and United Kingdom. The process was rather clumsily called equitization. Then came the bear market. IPOs became an endangered species. Many investors abandoned Europe's stock markets. The de-stocking -- de- equitization, in market-speak -- of Europe set in. Strategists at Citigroup Smith Barney in London figure that after stripping out market moves, the value of Europe's stock markets excluding the U.K. has shrunk by about 0.5 in the past year. In other words, the delisting of stock exceeded the listing of stock, after 20 years when the net new supply of stock increased at an average rate of 8.1 a year. You've never seen anything like this in Europe, says Robert Buckland, the firm's head of pan-European equity strategy. The creation of equity is hitting a brick wall, big time.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614784","date":"2004-10-20","texts":"Dow Jones Newswires NEW YORK -- Stocks of Aetna, Cigna and UnumProvident were especially weak as the probe of insurers appeared to be taking a bigger turn toward health-care providers. Even strength by International Business Machines and Texas Instruments couldn't lift the market. The Dow Jones Industrial Average dropped 58.70 points, or 0.59, to 9897.62 and the Nasdaq Composite Index lost 13.62, or 0.7, to 1922.90. The Standard & Poor's 500-stock index fell 10.79, or 0.97, to 1103.23, continuing its seesawing between positive and negative territory. The index is now back in the red for the year. The insurance news rattled the market, traders said, helping to set the trend for the session. The hammer can drop, and this time it came from chatter about what Spitzer is doing regarding the investigations of insurance companies, said William Choi, trader at Pali Capital Management.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982662","date":"2004-10-20","texts":"Most government retirees will get a 2.7 percent increase in their monthly checks next year, their largest cost-of-living adjustment since 2001. The COLA will go to retirees covered by the Civil Service Retirement System and those who receive military and Foreign Service annuities. People who retired under the newer Federal Employees Retirement System and who are 62 or older will receive a 2 percent increase, under the rules for that program. The COLA for this year should help most federal retirees cope with rising costs, although lower-income retirees could see much of their increase eaten up by higher health care costs. Premiums next year are scheduled to rise 7.9 percent in the Federal Employees Health Benefits Program and Medicare premiums for doctor visits will jump 17.5 percent, the largest increase for that program in 15 years.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613916","date":"2004-10-22","texts":"WASHINGTON -- The Conference Board's composite index of leading indicators slipped in September for the fourth straight month, signaling that the economic soft patch will persist. Separately, the U.S. Labor Department reported that the number of workers filing first-time applications for unemployment benefits dropped by an unexpectedly steep 25,000 last week, a decline that may have been skewed by the holiday-shortened week. The Conference Board, a private research group in New York, reported that its composite index of leading indicators fell by 0.1 to a reading of 115.6 in September, after August's 0.3 decline. The slightness of the declines in the past four months seems to argue against invoking the economists' rule of thumb that three consecutive declines in the index signal a recession. While the leading index is not yet signaling a downturn, the growth rate of the leading index has slowed, said Ken Goldstein, an economist with the Conference Board. Economic growth should continue, but more slowly than expected, he added. The index is designed to predict the economy's path during the next three to six months. Oil prices have had a negative impact on the economy, but not enough to produce a broad spike in inflation. Recent hurricanes may also have held down economic activity, the Conference Board said.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984772","date":"2004-10-22","texts":"In one of his most popular songs, Swedish hip-hop artist Timbuktu sings of two strangers warily eyeing each other on a Stockholm subway, one a white Swede, the other an immigrant, each with his own thoughts and prejudices. I wonder why he's eyeing me like this, the white Swede asks himself. Maybe he's planning to follow me and rob me at knife tip. I bet he's a drug user that beats his kids, forces his wife to wear a veil. Timbuktu knows something about racial prejudice -- as a black man born in Lund, Sweden, whose first language is Swedish, but who for most of his life has had to deal with the stares, the taunts, the curiosity and the inevitable question But where are you really from From first grade through sixth, he recalled, he fought frequently during recess with a group of three boys who taunted him with racial insults. Even though he's a celebrity in Malmo, which he calls home, he says he is still followed by security guards when he enters a department store. And while his DJ sessions can pack the house, he finds he is denied entry to some clubs. I'm Swedish, definitely, and more and more so now, said Timbuktu, whose real name is Jason Diakite. He is the son of a black American man from Harlem and a white American woman from Scranton, Pa. But Sweden still has a very clear picture of what a Swede is. That no longer exists -- the blond, blue-eyed physical traits. That's changing. But it still exists in the minds of some people.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983351","date":"2004-10-24","texts":"For a quarter-century, a Boston inventor has been obsessed with a single idea an innovation that would give millions of American workers the chance to borrow their own money from their 401k savings plans using a new kind of credit card. In 1980 the inventor, an animated fellow named Francis Vitagliano, shared his concept with an MIT professor, Franco Modigliani. The Italian-born economist had been writing for 20 years about his theory of how and when people spend and save money during their lifetime, the so-called Life-Cycle Hypothesis. Modigliani's work would win him the 1985 Nobel Prize in Economics, but the call from Vitagliano would, he thought, give him a way to test his theory in real life. The men became champions for this new financial instrument, spending untold sums for a patent on the card idea, trying to sell it to banks and credit card companies, and withstanding a barrage of criticism from members of Congress and the financial community. Franco Modigliani died last year at age 85. But tomorrow in Washington, Francis Vitagliano, now 55, is scheduled to watch as the 401k card is unveiled at a financial conference. Appearing on a panel will be an official of ING, the global financial services company that has licensed Patent No. 5206803 and is preparing to introduce the new card to employers and their k-plan participants soon, after receiving final regulatory approval from the state of Connecticut. In this time of worry about the American retirement system, the card will once again cause a flap -- but possibly not as much as it has in the past. Whatever the immediate outcome, this is not the last stop for the controversial card as it does or does not become a staple of American getting and spending. And the tale of how it came to exist is one worth telling.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830982239","date":"2004-10-26","texts":"The sign on the outside of a tobacco warehouse here proclaims a big thanks to Republican Senate candidate Richard Burr for helping tobacco farmers get a 9.6 billion buyout as part of major legislation passed by Congress this month. Inside the cavernous building one late October evening, a pumped- up crowd of more than 1,000 Republicans ate tubs of barbecue, listened to the Malpass Family country music band, and heard the likes of former senators Jesse Helms and Lauch Faircloth heap praise on Burr, a five-term House member who is locked in a dead- even race with Democrat Erskine B. Bowles for an open seat. North Carolina, with its new high-tech industries, professional sports complexes and national banking centers, is undergoing major economic change. But in this final countdown to the election, Burr has linked arms with legends from the state's conservative past and turned to the tried and true themes of tobacco, religion and military strength to rally his GOP base. It is anyone's guess whether this back-to-basics approach will succeed against Bowles, a businessman and former chief of staff to President Bill Clinton who lost his 2002 Senate race against Elizabeth Dole. An early 10-point lead by Bowles has evaporated, according to the latest polls. Recent electoral history is not on Bowles's side No Democratic senatorial candidate here has been victorious in a presidential election year since the late Sam Ervin in 1968. Although Republicans are favored by many political oddsmakers to retain control of the Senate, there are eight or nine races regarded as too close to call -- enough for Democrats to win a majority if they can minimize losses in the South and pick up a few GOP-held seats, mainly in the West and Midwest. The Senate currently has 51 Republicans, 48 Democrats and one Democratic-leaning independent. Seats from five of the eight tossup races are held by Democrats, three by Republicans.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983188","date":"2004-11-03","texts":"Presidential campaigns have a way of focusing on what is wrong and who is to blame. Now would be a good time to give some thought to an area where, in fact, considerable progress is being made America's cities. For decades, talk about cities has been dominated by the perception of urban decay and by skepticism about urban policy. But the current reality paints a far more interesting -- and hopeful -- picture of metropolitan opportunity. In the past decade, the population of the nation's 50 largest cities has grown by nearly 10 percent. This was accompanied by a rise in city incomes that was almost double the national average and by an increase in housing units, homeownership and mortgage lending. In the same period, concentrated poverty declined 24 percent and urban crime also decreased. Cities are crucial to the U.S. economy. In 2002 metro economies were responsible for 85.6 percent of gross domestic product, almost 9.1 trillion in goods and services. If we look closely at inner cities, usually dismissed as lacking economic vitality, we understand that they, too, possess significant assets. Inner cities are home to 21 million people with purchasing power estimated at 331 billion. The business community is beginning to realize the potential of these communities, and investment has returned to many urban markets, bringing goods, services and job opportunities. What accounts for this progress How can it be sustained, even accelerated, as we seek healthy cities worthy of the richest country on Earth Several national trends -- such as immigration, population growth and the shift to a services-based economy -- are contributing to the urban renaissance. But another important factor is smart public policy. Over the past 20 years, bipartisan effort has put in place a number of federal programs that are working to stimulate private investment and energize people to take charge of their own destiny. They include the Home Investment Partnership Program, the Community Development Block Grant program, the new-markets tax credit and the earned-income tax credit. Their combined effect has been to help lift millions above the poverty line and into affordable homes. But two of the most important, one called HOPE VI and another known as Section 8 housing choice vouchers, were put in danger by reforms proposed in this year's budget. These are programs that have given cities important ways to transform aging public housing ghettos into dynamic mixed-income communities.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617008","date":"2004-11-04","texts":"REPUBLICANS may have won significant victories across the country in Tuesday's elections, but California voters registered a strong dissent with Bush-administration policy by approving vastly expanded state funding for medical research involving embryonic stem cells. The passage of California's Proposition 71, supported by nearly 60 of the state's voters, appears likely to herald a new era in U.S. stem-cell research. Restrictions on federal funding of the work have led to worries that the U.S. may be lagging behind in the nascent field of regenerative medicine, so called because of hopes that stem cells might be useful in treating conditions such as paralyzing spinal injuries, diabetes or Parkinson's disease. Without question, Prop. 71 represents a financial windfall to embryonic stem-cell research. The measure, now enshrined in the California Constitution, sets aside 350 million a year for the work during the next decade or so, up to a total of 3 billion. That sum dwarfs the 25 million the federal National Institutes of Health allocated to embryonic stem-cell grants last year and is three times as much as what defeated Democratic presidential nominee John Kerry vowed to provide in federal funding. Yet implementing the measure will raise a variety of new challenges, not least the question of whether the state can afford to devote so much money to basic research that might not yield medical or financial returns for a decade or more. During the past several years, California has consistently run the largest budget deficits in the nation, a fiscal gap it has temporarily plugged only by selling billions of dollars' of new bonds. Prop. 71, which will be funded by bond sales, could cost the state as much as 6 billion during the next 30 years. It is unclear exactly how the new California Institute of Regenerative Medicine mandated by Prop. 71 will allocate the new research funds, and whether the state stands to benefit financially if the research leads to commercial medical therapies. While Prop. 71's approval may draw bright medical researchers and fresh biotechnology investment to California, it also may spur other states to pass similar measures in order to level the playing field.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614425","date":"2004-11-12","texts":"Jones Apparel Group Chief Executive Peter Boneparth wants to give his middle-brow company a taste of luxury. Yesterday, Jones reached a definitive agreement to acquire the upscale retailer Barneys New York Inc. for a total of 400 million in cash and other consideration. To some, it seemed an odd pairing. While Barneys is known as an elite purveyor of high fashion, Jones is a giant in the slow-growing world of moderate and better women's apparel, home to such labels as Jones New York, Nine West and Anne Klein. While Jones has annual sales of more than 4 billion, it has no experience in luxury retailing. The acquisition is not a clear fit, wrote Prudential Equity Group analyst Lizabeth Dunn in a note to clients, writing that luxury retailing is outside Jones's core competency. Jones shares fell 3.0 yesterday to 34.92 in 4 p.m. New York Stock Exchange trading. Indeed, Mr. Boneparth, a former banker, is known for his impatience with haughty designer pretensions -- something that Barneys traffics in with flair. Jones is currently embroiled in a bitter legal dispute with Polo Ralph Lauren over the Lauren women's clothing line, which Jones used to manufacture.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613731","date":"2004-11-15","texts":"With oil prices easing and the uncertainties of the election past, U.S. consumers show early signs of becoming more confident about the economic outlook. The University of Michigan's consumer-sentiment index -- based on surveys conducted before and after the Nov. 2 election -- rose to a reading of 95.5 from 91.7 in October and 94.2 in September. In addition to the drop of oil prices below 50 a barrel and the resolution of a bitterly fought presidential campaign, the government reported recently that hiring in October was stronger than expected, all factors that should underpin confidence. Consumers will remain spending-minded, said Richard Curtin, the Michigan economist who oversees the confidence survey. He said the recent decline in oil prices was probably the key factor behind the improvement. Households were spending-minded in October, though their pattern of spending showed signs of changing from the month before. The U.S. Commerce Department said retail sales in October rose 0.2 from September on a seasonally adjusted basis, after a 1.6 jump the month before. The back-to-back gains put household consumption on solid footing going into the holiday season. One retailer that enjoyed steady gains in spending was Men's Wearhouse Inc., a Houston seller of men's suits with an average price of about 280. The retailer reported a hearty 8.9 increase in domestic same-store sales last month from a year earlier. Our business is kind of to the masses, to the middle-market kind of guy. I think he's doing fine, said Neill Davis, chief financial officer.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614145","date":"2004-11-15","texts":"INVESTORS ARE GOBBLING up retailing stocks in a manner that is in keeping with a season during which appetites often run unchecked. By Jan. 1, they may be staring into the mirror, wondering what led them to overdo it. There is no question that the retail-sales outlook is better today than it was a month ago, when oil prices and the presidential election were significant worries. But most of the good news has been sopped up by the recent gains in retail stocks, meaning that any further holiday-season surge could be difficult to sustain. First, the good news, of which there is plenty. The past several weeks have given retailers and their shareholders plenty of cause for cheer. Oil prices, which reached a high of 55.17 a barrel in New York on Oct. 22, closed at 47.32 Friday. The move lower suggests that in the months to come American households will be putting a little less cash into their gas tanks and furnaces than some feared, and more into stores' coffers. Worries that the outcome of the presidential election would be hung up in courts for weeks, weighing on consumer confidence, proved unfounded. The stock market has been celebrating President Bush's re- election, and that may spur some people -- particularly the affluent, who account for an outsize portion of overall consumer spending -- to purchase a few more gifts this holiday season. The October employment report showed far more hiring during the month than economists expected, and also included upward revisions for previous months. That means not only that there are more people with paychecks to spend but also that American workers in general may be a little less nervous about their jobs and thus a little more apt to make purchases. Indeed, sales look like they were more robust in October than expected. That puts spending on solid footing going into the holidays.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613959","date":"2004-11-17","texts":"Dow Jones Newswires NEW YORK - Online-brokerage houses saw some hopeful signs in October and the first part of November, with trading activity picking up as the political uncertainty that hung over investors dissipated once the presidential election was decided. ETrade Financial Corp. said Monday that trading activity picked up last month, providing the latest evidence of a potential recovery in the online-brokerage industry. The online financial-services firm said it processed an average of 123,112 total revenue-producing trades a day for its investor clients in October, up 25.8 from September but down 14.1 from October 2003. Margin-debt levels fell 1 sequentially. ETrade President R. Jarrett Lilien said the political uncertainty that kept some investors on the sidelines eased as October wore on and the U.S. presidential election approached.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617101","date":"2004-11-17","texts":"Dow Jones Newswires NEW YORK -- Stocks marked their poorest session this month, with Wal-Mart Stores, Home Depot, General Motors and J.P. Morgan Chase dragging down the Dow Jones Industrial Average. The Dow industrials fell 62.59 points, or 0.59, to 10487.65 the Nasdaq Composite Index dropped 15.47, or 0.74, to 2078.62 and the Standard & Poor's 500-stock index fell 8.38, or 0.71, to 1175.43. Economic news was blamed, as the producer price index for finished goods rose 1.7 for October, the biggest increase since January 1990. Traders on the floor probably said, 'Worst PPI in 14 years -- sell,'  said Rob Morgan, investment strategist at Janney Montgomery Scott. That's because with the number we might be letting a bit of inflation out of the box. I also think Wal-Mart's results played a role in the day's decline.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617276","date":"2004-11-17","texts":"The value of office buildings made the biggest jump in two years during the third quarter while apartment values continued to post strong increases, all as leasing activity kept strengthening in both markets, according to a new survey. The average value of office space increased 1.2 to 134.13 a square foot, from 132.52 in the second quarter, according to the survey of the top 50 U.S. markets prepared for The Wall Street Journal by Reis Inc., a New York-based real-estate research firm. That helped confirm that a 0.1 increase in the second quarter -- the first positive movement in more than a year -- wasn't just a blip. Average apartment values surged 2.2 in the third quarter to 71,132 per unit, from 69,601 in the second quarter. It was the second- largest increase in value in the past two years, behind the 2.5 jump in the second quarter. But the disparity between actual sales and the underlying value of offices and apartments continued to increase, with office properties selling at a 25.3 premium over their values and apartments going for 22 more. With a report out yesterday that showed the highest wholesale inflation increase in nearly 15 years, that could spell trouble down the line, says Lloyd Lynford, chief executive of Reis. Capitalization rates -- the estimated rate of return at the time of a property's purchase -- continued to plunge as investors were willing to take lesser returns for the perceived stability of real-estate assets. In the office market, capitalization rates went down to 7.9 in the third quarter, from 8.1 in the second. In apartments, they dropped to 6.8, from 7.1 in the second quarter.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982606","date":"2004-11-19","texts":"The index of leading economic indicators fell in October for the fifth straight month, suggesting that the economy may be slowing, a private research group said. The Conference Board said its main indicator of future economic growth fell 0.3 percent in October, following declines of the same size in September and August. The index is calculated by combining factors considered to be good indicators of the economy's direction, such as manufacturing, interest rates, consumer expectations, stock prices and money supply. The Labor Department said that initial jobless claims fell by 3,000 last week, to 334,000. Weekly claims have averaged 344,109 so far this year, compared with 402,000 for all of 2003, a sign businesses are holding on to workers as demand improves, the department said. A bankruptcy judge left intact temporary 21 percent pay cuts on some US Airways workers that he imposed last month to help the airline conserve cash and avoid liquidation. Lawyers for the International Association of Machinists and Association of Flight Attendants had asked U.S. Bankruptcy Judge Stephen S. Mitchell to reconsider his ruling, saying the airline had requested steeper pay cuts than were necessary to ensure the airline's survival while in bankruptcy. Continental Airlines said it will seek to cut 500 million a year in wages and benefits. The reductions, which would take effect Feb. 28, are in addition to 1.1 billion in cost savings the company has already identified, Continental said. Kevin Nordick, accused by prosecutors of bilking 58 million from 15,000 investors in 60 countries, pleaded guilty to federal fraud charges related to the scheme. Investigators called the Tri-West Investment Club one of the nation's largest Internet investment scams. Nordick faces up to 20 years in prison, and sentencing has been scheduled for Feb. 4. SBC Communications and Yahoo are expanding their alliance to market delivery of news, entertainment and other services on computers, cell phones, televisions and other devices. Details of the multiyear agreement were not disclosed.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616601","date":"2004-11-23","texts":"President Bush has let everyone know he intends to pursue an ambitious second-term agenda. But if he wants to know what could spoil his plans even before his second Inaugural, he might consider the market reaction to his Administration's weak dollar complacency. Stocks and bonds both tanked on Friday, as the dollar fell again and oil and gold jumped, the latter to its highest level 449 an ounce yesterday since 1987. Investors may recall that was the last time we had a dollar crisis, as well as a little stock-market episode known as Black Monday. The markets rallied yesterday, as the dollar firmed and oil dropped. But we hope the point has been driven home that investors don't bet on countries that debase their currencies. All the more so when the nation's leading policy makers seem blase, not to say clueless, about the matter. Treasury Secretary John Snow has been roaming the world saying that he favors a strong dollar policy even as he lobbies for a weaker dollar against Asian currencies. Investors who observe what Mr. Snow does tend to discount what he says. Mr. Snow is also fond of repeating the nonsense that exchange rates should be set by market forces. However, a currency isn't just another commodity, like wheat or copper it is a store of value. And unlike other commodities, its supply is determined by a central bank, in the U.S. by the Federal Reserve, which has a monopoly on dollar creation. The global currency markets are dominated by a cartel of central banks, and currency values are a function of their relative monetary policies. Isn't a Treasury Secretary supposed to know that The larger worry is that the Bush Treasury, and perhaps Mr. Bush himself, seem to have fallen for the notion that a country can devalue its way to prosperity. This is the patent medicine of the manufacturers' lobby, as well as the kind of economist who has done so much for Argentina, Mexico and other nations over the years. Britain tried this in the 1970s, and had to call in Margaret Thatcher to save the country from sinking to Third World status. The Carter Administration also tried talking down the dollar and ended up inspiring a global run on U.S. assets.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613765","date":"2004-11-24","texts":"GOODBYE, WASHINGTON. Hello, Wall Street. I am not a political columnist, and I have no desire to argue over the merits of privatizing Social Security. Still, for those of us who are investment junkies, it's time to start paying attention, because it looks as if this thing could actually happen. Which brings me to today's question What would privatization mean for our finances Here are three insights. -- Betting on bonds. When pundits discuss privatizing Social Security, there's much talk of Americans investing their payroll taxes in stocks. But if folks are logical, they will end up owning more bonds. After all, when we contribute to Social Security today, what we are buying is a future stream of inflation-indexed income, not unlike we could get by purchasing inflation-indexed Treasury bonds. Indeed, because we know we will get this income stream, presumably we are a little more aggressive with our individual retirement accounts, our 401k plans and our other retirement savings.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613855","date":"2004-11-24","texts":"REAL-ESTATE INVESTORS may want to consider clustering. 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. 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. 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. 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.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617184","date":"2004-11-26","texts":"RIDGE MAY LINGER at Homeland Security while Bush seeks his successor. Some department officials say White House homeland security adviser Fran Townsend, an oft-mentioned successor, lacks management experience. Another candidate, Undersecretary Asa Hutchinson, has strained relations with colleagues, including Deputy Secretary James Loy. In a bipartisan gesture, Bush aides sound out Democratic Rep. Jim Turner, departing after Republican-led redistricting in Texas, as a potential successor to Hutchinson. Health and Human Services Secretary Thompson is expected to leave, but aides say no announcement is imminent. Insiders expect Trade Representative Zoellick to get a new post, with rumored options ranging from the World Bank to Mideast envoy. The latter would be unwelcome to Israelis recalling Zoellick's ties to ex-Secretary of State Baker, whom they consider partial to Arabs. One potential USTR successor Grant Aldonas, a Commerce Department trade official. WHITE HOUSE CLAIMS election boost for its trade policy.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984962","date":"2004-11-28","texts":"Since 1976, Finn Caspersen has been chairman of the Hodson Trust, overseeing an annual distribution of grants to four Maryland schools Johns Hopkins University in Baltimore, St. John's College in Annapolis, Hood College in Frederick and Washington College in Chestertown, on the Eastern Shore. This year, each of the four schools will receive more than 1.6 million, according to an announcement last week. Caspersen and his staff answered questions from staff writer Darragh Johnson about the Hodson Trust, which has as its motto Assisting in the advancement of education for decades. A The Hodson Trust was settled in 1920 by the family of Beneficial Corporation founder Colonel Clarence Hodson to support excellence in education. . . . Colonel Hodson spent his youth in Crisfield, Maryland, where at the age of 25 he was elected president of the Bank of Crisfield and was the youngest bank president in the United States at the time. Throughout his 40-year business career, Hodson was director for more than 40 banks, trust and mortgage companies, insurance companies and public utilities. He applied his experience and knowledge to encourage state legislatures to enact laws to make small loans available to working-class Americans at affordable interest rates. His success forced unscrupulous loan sharks out of business. Why did the trust select these four colleges as its recipients, instead of spreading the money, over the years, among other schools The trustees have discretion in determining how the gifts will be used. This year, St. John's is using the money to build a new dormitory. Hood's gift will go for scholarships. Washington College is in the midst of a campaign to raise 37 million, so their money will be for challenge grants, and Johns Hopkins is using the money for merit scholarships, summer internships and research on cancer at the medical school.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984997","date":"2004-12-01","texts":"The Montgomery County Council approved changes yesterday in the county's affordable housing program designed to create more moderately priced homes in a region where a hot real estate market has shut out many renters and buyers. The changes, the first major overhaul of the program in 30 years, could affect development particularly in downtown areas of Bethesda, Silver Spring, Wheaton and Rockville. To make it easier for developers to get financing for high-rises with below-market units, the council voted to allow more units on available land by relaxing height restrictions and green space requirements. The council also voted to increase the amount of time that below- market housing is required to remain in the program, so that the county can retain as many affordable units as possible as developable land dwindles. Rental units will have to remain in the program for 99 years, up from 20 years, and for-sale units will have to remain 30 years, up from 10 years. Council President Steven A. Silverman D-At Large said downtown high-rises with moderately priced units might be one or two stories higher under the new rules. I think people will accept a couple more floors on a building if that means more affordable housing in Montgomery County, Silverman said. The people who work in Montgomery County ought to have a fair shot at living in Montgomery County.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613591","date":"2004-12-03","texts":"Dow Jones Newswires NEW YORK -- Rates of long-term fixed-rate home mortgages rose this week, according to the primary market survey by Freddie Mac, the housing-finance agency. Freddie Mac attributed the rise in mortgage rates to improved sentiment in financial markets that growth in the final quarter of 2004 will be strong. Of course, with the signs of strong growth come fears of inflation, and that tends to push up long-term mortgage rates, said Frank Nothaft, Freddie Mac chief economist, in a statement. The 30-year fixed-rate mortgage rate rose to 5.81 from 5.72 in the week. A year ago, the 30-year fixed-rate mortgage stood at 5.89. The 15-year fixed-rate mortgage rate rose to 5.23 from 5.15. A year ago, this rate stood at 5.22.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985177","date":"2004-12-03","texts":"Disappointing retail sales figures and an unexpected jump in unemployment claims prompted investors to take profits Thursday, leaving stocks mixed despite another big drop in oil prices. One day after crude oil futures posted their biggest decline since September 2001, oil prices again fell sharply. However, stock investors were disappointed with November sales reports from the nation's retailers. A number of top retailers issued lower-than-expected sales reports as the holiday shopping season got underway. With two-thirds of the U.S. economy powered by consumer spending, many investors hoped strong holiday spending would boost the economy through the end of the year. The Dow Jones industrial average fell 5.10, or 0.05 percent, to 10,585.12. The Standard & Poor's 500-stock index dropped 1.04, or 0.1 percent, to 1190.33, while the Nasdaq composite index gained 5.34, or 0.3 percent, to 2143.57. Investors also were nervous after the Labor Department reported a sharp rise in first-time unemployment claims, which climbed 25,000 last week, to 349,000.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613789","date":"2004-12-05","texts":"Q What exactly is the budget deficit, and what harm does it do Bill Shearer Hanahan, S.C. Charleston Post and Courier A The budget deficit was 412 billion, or 3.6 of the nation's gross domestic product, for the fiscal year that ended Sept. 30. That's the grand tally of all the money the U.S. government takes in versus all the money it spends, including Social Security payroll taxes and benefits. If you exclude Social Security, as some people like to do, the rest of the government ran 568 billion in the red.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614766","date":"2004-12-06","texts":"A quirky mix of assets and markets world-wide has benefited from the simultaneous plunge of crude oil and the U.S. dollar, and strategists are pushing advice that hinges on the continuation of those trends. No surprise, other commodities besides oil have rallied on the dollar's woes, as have overseas investments, especially companies that produce or sell natural resources. The Dow Jones Japan Financial Index and Dow Jones World Basic Materials Index each gained more than 9 last week. Since November, the Baltic Dry Index, a gauge of shipping costs closely linked to raw-material prices, has jumped nearly 25 to 6134. Gold futures are up 6.6 over the same period to 457.80 on the Comex division of the New York Mercantile Exchange. But stock sectors usually associated with more-aggressive investment strategies, such as technology, have also benefited The Dow Jones World Technology Index gained almost 8 last week. And the Nasdaq Composite Index rose 2.2, up 8.8 since November, to 2147.96. The upshot, many analysts say, is that investors are betting not just on a continuation of world economic recovery and U.S. dollar weakness, but they are also doing so in especially hard-charging fashion. This is the theme right now, big time, says James W. Paulsen, chief investment strategist, Wells Capital Management. People want to be in whatever the most aggressive thing is and get away from the least aggressive. Mr. Paulsen says he believes there is good reason to expect a global recovery, although a weak U.S. jobs report Friday showed that there may yet be a few potholes along the way. The Labor Department said nonfarm payrolls grew by only 112,000 jobs in November, well below the 200,000 jobs economists had expected before the data release.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616058","date":"2004-12-06","texts":"Dec. 6, 2004 PERIOD SCHEDULED PREVIOUS CONSENSUS INDICATOR COVERED RELEASE ACTUAL FORECAST Productivity 3Q 2004 Tue 1.9 2.0 Unit Labor Costs 3Q 2004 Tue 1.6 1.6","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614257","date":"2004-12-08","texts":"Dow Jones Newswires It all seems so simple. The dollar weakens, U.S. goods and services become more competitive in world markets, imports slow as consumers balk at higher prices and the current-account deficit shrinks to a more manageable -- and, for policy makers, a less scary -- level. This domino theory, though, plays down one very important practical point The pain a weaker dollar inflicts elsewhere and the subsequent discomfort that makes politicians squirm. So as the dollar slide has accelerated in recent weeks, the regional battle lines have begun to be drawn. That has been evident in the rising chorus of complaints from U.S. trade partners about the falling dollar. In the year ahead, economists believe relations could chill even further, with some suggesting the dollar's adjustment could spark real trade tensions.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614905","date":"2004-12-10","texts":"Dow Jones Newswires NEW YORK -- The options market's fear gauge fell back from early rises in a volatile session punctuated by poor jobs data, higher energy prices and mixed news from a trio of chip makers. Investors showed concerns over another jump in the price of oil and a weekly government report that first-time jobless claims rose last week, as opposed to the decline expected by economists. Disappointing sales forecasts from chip makers Xilinx Inc. and Altera Corp. also sent shivers through the market. A solid earnings report from National Semiconductor Corp., a big chip maker, helped lift the mood. The Chicago Board Options Exchange volatility index spent more than half of the day up. Then it reversed course in the early afternoon to close down 0.31 point at 12.88. The index, also known as the options market's risk forecast, measures short-term anticipated volatility in the Standard & Poor's 500-stock index. Investors bid up the December puts of Xilinx and of Altera after their weak sales outlooks for the current quarter, which were released after Wednesday's close. Xilinx's out-of-the-money December 27.5 puts rose five cents to 15 cents on the CBOE. About 14,000 of those contracts changed hands, nearly seven times more than the open interest of 2,077. The stock was down 1.01 to 29.72 at 4 p.m. in Nasdaq Stock Market trading.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985371","date":"2004-12-11","texts":"Investors' concerns over the economy and potential inflation outweighed a sharp drop in oil prices, sending stocks slightly lower Friday. Wall Street was rattled somewhat by the Labor Department's latest producer price index report, which said the PPI rose 0.5 percent in November, an indicator of possible inflation. The report overshadowed a drop in crude oil futures after the Organization of Petroleum Exporting Countries agreed to cut oil production. The Standard & Poor's 500-stock index was down 1.24, or 0.1 percent, at 1188.00, and the Nasdaq composite index fell 0.94, or 0.04 percent, to 2128.07. For the week, the Dow fell 0.46 percent, the S&P 500 dropped 0.27 percent and the Nasdaq was down 0.93 percent.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614893","date":"2004-12-15","texts":"Tokyo -- FOREIGN INVESTORS helped Japan crawl out of a long economic slump by pouring money into its stock markets and mopping up troubled assets. Now Tokyo is hoping foreigners will help fend off a national debt crisis long in the making. For the first time, the Japanese government is holding a roadshow to pitch its debt to investors from the U.S. and Europe. As its budget deficit continues to blossom, Tokyo is scrambling to line up new types of investors who can play a part in absorbing the record amount of government bonds that will hit the market during the next several years. The task will be even more urgent if the nation's two-year-old economic recovery, now faltering, finds its feet again. That would spur the current big buyers of Japanese government bonds, such as domestic banks and the postal savings system to slash their purchases in favor of higher-yielding investments such as stocks. An end to the country's monetary easing policy would mean the Bank of Japan, too, would reduce its purchases of JGBs, as the government bonds are called. The problem is that foreign investors have little appetite for what's on offer. Because of Japan's super-easy monetary policy, yields on JGBs are the lowest among debt issued by the Group of Seven wealthy nations, as are the grades Tokyo's bonds get from credit-rating agencies. We are very negative on JGBs right now, and we have been for some time, says Charles Dolan, senior portfolio manager for global bonds at Mellon Asset Management. From Los Angeles, he manages 3.5 billion for pension funds and central banks around the world.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616827","date":"2004-12-16","texts":"President Bush said a lower U.S. budget deficit and higher interest rates are the answer to Europe's worries about a weak dollar, but that the markets get the final say. Mr. Bush's remarks appeared aimed at U.S. trading partners' concerns over the economic damage of a weak dollar, which makes their goods less competitive in the U.S. But he offered nothing new to support the dollar. We believe that the markets should make the decision about the relationship between the dollar and the euro, Mr. Bush said after Italian Prime Minister Silvio Berlusconi raised the issue in an Oval Office meeting. Indeed, as the two met, the dollar weakened on news that foreigners cut back their purchases of U.S. stocks and bonds. The U.S. has been relying on such purchases to finance its budget deficits and consumer spending. Mr. Bush did add that he would try to bring about the conditions such that a strong dollar will emerge by doing everything we can in the upcoming legislative session to send a signal to the markets that we'll deal with our deficits, which hopefully will cause people to want to buy dollars. The dollar showed little reaction after Mr. Bush's comments. Please see related articles on pages C1 and C5. In an unusual remark, Mr. Bush added that the Federal Reserve had, under Alan Greenspan, raised the interest rates yet again, a signal to the world markets that the chairman is also aware of the relative currency valuations between the euro and the dollar. The Fed raised its overnight interest-rate target to 2.25 from 2 Tuesday, its fifth consecutive quarter-point increase this year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615417","date":"2004-12-24","texts":"Dow Jones Newswires NEW YORK -- Volume started to fade in the final trading session before Christmas, but investors' high hopes showed no signs of flagging. Many continued placing bullish bets, encouraged by economic data showing a rise in durable-goods orders and consumer-spending growth. At the International Securities Exchange, investors were buying about 2.27 new calls for every new put -- after a brief pause when that number dipped below two for the first time this month. The Chicago Board Options Exchange volatility index, or VIX, eased 0.22 to 11.23. This 30-day forecast of stock-market volatility has fallen in 13 of the last 17 sessions, for a 15.4 decline this month. This slow and steady ebb toward new nine-year lows is another sign that traders looking ahead for possible stock-market threats believe all is calm. But futures on the VIX indicate traders believe the market might become more volatile soon -- at least when companies begin reporting earnings in January. Recent futures prices show traders believe the VIX might rise to about 13.4 at mid-January, 14.5 at mid-February and 15.9 at mid-May.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985475","date":"2004-12-24","texts":"Wall Street's major indicators rose again Thursday despite the falling dollar and signs of weaker consumer spending. Although the weaker dollar raises the possibility of higher inflation, investors saw the U.S. currency's decline as an opportunity to help close the trade deficit, since U.S. goods will be less expensive abroad. The Dow Jones industrial average rose 11.23, or 0.1 percent, to 10,827.12, its highest close since June 13. 2001. Broader stock indicators were modestly higher. The Standard & Poor's 500-stock index was up 0.56, or 0.05 percent, at 1210.13, the best close for the index since Aug. 3, 2001. The Nasdaq composite index gained 3.59, or 0.17 percent, to 2160.62. For the week, the Dow rose 1.66 percent, the S&P 500 gained 1.33 percent, and the Nasdaq climbed 1.19 percent. It was the second week of gains for the major indicators, which have risen in five of the past seven weeks. A number of technology firms announced their earnings late Wednesday. Memory chip manufacturer Micron Technology's first- quarter profit rose substantially, to 23 cents per share compared with a penny a share in the comparable quarter last year. The company beat Wall Street estimates by a penny per share, but its revenue was lower than expected. Micron lost 8 cents, to 11.80.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830983970","date":"2005-01-01","texts":"President Bush's political allies are raising millions of dollars for an election-style campaign to promote private Social Security accounts, as Democrats and Republicans prepare for what they predict will be the most expensive and extensive public policy debate since the 1993 fight over the Clinton administration's failed health care plan. With Bush planning to unveil the details of his Social Security plan this month, several GOP groups close to the White House are asking the same donors who helped reelect Bush to fund an extensive campaign to convince Americans -- and skeptical lawmakers -- that Social Security is in crisis and that private accounts are the only cure. Progress for America, an independent conservative group that backed Bush in the campaign, has set aside about 9 million to support the president's Social Security plan as well as other White House domestic priorities in the new year, said spokesman Brian McCabe. The group is asking its donors for much more, he said. Stephen Moore, head of the conservative Club for Growth, has raised 1.5 million and hopes to hit a 15 million target when his fundraising drive ends. But their contributions are likely to be dwarfed by those from corporate trade associations, spearheaded by the National Association of Manufacturers. Other likely contributors include the financial services and securities industries and other Fortune 500 companies, GOP officials say. White House officials, led by Karl Rove and Charles P. Blahous III, the president's policy point man on Social Security, are helping to shape the public relations campaign, said the officials, who talked about private discussions with the White House on the condition of anonymity.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830981795","date":"2005-01-02","texts":"The U.S. job market should improve steadily this year, while consumer inflation eases and oil prices decline -- all good news, that is, if nothing goes wrong with the sunny economic forecasts released in recent weeks by many private and government economists. The economy should continue to expand at a pace that is not too hot . . . not too cold . . . just right, Macroeconomic Advisers LLC, the St. Louis-based forecasting firm, wrote in a recent report to clients, lifting a line from the Goldilocks tale. Lest we be too complacent about the future, we need only remember that the story ended with Goldilocks running screaming from the three bears' house, the firm said, citing several risks to its projections. Even forecasts produced by the most advanced econometric models are essentially well-educated guesses about what is most likely to happen, based on past experience. And as such, they are subject to errors and surprises. A year ago, many forecasters, including those at the Fed, overestimated how fast the economy would grow in 2004, in large part because they could not foresee the terrorist events, hurricanes and political turmoil that would send benchmark oil prices shooting to above 55 a barrel in October from around 35 in January. White House economists were among several who were over-optimistic about job growth, underestimating businesses' lingering caution and ability to squeeze more efficiencies out of their existing workforces.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614853","date":"2005-01-04","texts":"Dow Jones Newswires NEW YORK -- Rumors of a new, lower-priced Macintosh computer drove options traders to Apple Computer on the first day of trading this year. Last week, two independent Web sites reported that Apple will introduce a Mac priced below 600 at the MacWorld Conference & Expo to be held in San Francisco next week. One site, Think Secret, predicted that Apple will launch a Mac priced at 499, sans monitor, on Jan. 11. Industry observers say the product would be aimed at personal- computer users who want a second computer to use with their iPod, the hand-held digital-music player made by Apple. Merrill Lynch analyst Steve Milunovich wrote in a note yesterday that Apple could sell a Mac without a monitor for less than 500 without hurting margins.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613990","date":"2005-01-05","texts":"Dow Jones Newswires NEW YORK -- Investment-grade bond issuance sprang to life yesterday with a slew of deals, and the largest offering came from the finance unit of Berkshire Hathaway, the investment holding company controlled by billionaire Warren Buffett. The 3.75 billion deal, offered as private placement in the Rule 144a market, was increased from an original 3 billion size and was split between three-year floating-rate notes, as well as five- and 10- year fixed-rate notes. Although the bond deal saw strong demand, some investors expressed caution because of a recent request received by the company's reinsurance unit, General Re, from the Securities and Exchange Commission about the unit's role in nontraditional or loss mitigation insurance products. The SEC and New York State Attorney General Eliot Spitzer are coordinating inquiries into the possible misuse of insurance products to smooth company earnings and have sent inquiries to several insurers. Investors cited some concern that developments regarding the inquiry could cause credit spreads to widen.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613822","date":"2005-01-06","texts":"ROLAND, Okla. -- The bill collector called when Clay Stanley, gaunt and suffering from AIDS, lay bedridden in his apartment, back from the hospital after a bout with a viral infection. It wasn't about a car or credit card. The call concerned a matter Mr. Stanley, who is 39 years old, says he had long forgotten student loans he took out two decades before. The private collector, acting on behalf of the U.S. Department of Education, said Mr. Stanley must pay 69 a month or the government would take a larger sum than that each month from his Social Security disability checks, Mr. Stanley recalls. I didn't know what to do, so I said 'OK,'  he says. Years after a political outcry over high levels of student-loan defaults, the Education Department has become one of the toughest debt collectors around. Over the past decade, it has won a steadily expanding arsenal to wield against former students who don't repay. A 1998 change in federal law, for instance, made it extremely difficult for people to escape student loans through personal bankruptcy. The Education Department also can now seize parts of borrowers' paychecks, tax refunds and Social Security payments without a court order, a power that only the Internal Revenue Service, among federal agencies, regularly wields. Access to a government database of the newly employed has enabled the department to make much more effective use of private collection companies. And it can go after even decades-old student loans, because there's no statute of limitations on them, unlike most consumer debt. As a result, the Education Department collected 5.7 billion in defaulted student loans in the fiscal year ended Sept. 30, more than twice as much as in 1998. For current loans that go into default, the department now projects it will ultimately retrieve every dollar of principal, plus almost 20 in fees and overdue interest, a prediction few private lenders would be bold enough to make.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613819","date":"2005-01-07","texts":"Long after acute needs for food, water, shelter and medicine are met, survivors of the Asian tsunami may suffer an invisible but disabling illness -- post-traumatic stress disorder, or PTSD -- that could complicate physical and economic recovery in the stricken regions. Millions now are suffering acute shock and depression after witnessing the sea swallow their relatives and homes. For some -- estimates range widely from 10 to 50 of survivors -- traumatic stress and major depression could last months or years, preventing the return to work, school or family duties. Watching a mate or child drown while being helpless to save them can haunt a person for the rest of their life, says Ronald Kessler, professor of Health Care Policy at Harvard Medical School and director of the World Health Organization's World Mental Health surveys. Mental disorders of the sort that are likely to occur as a result of the tsunami can lead to averages of 20 days or more of lost productivity per year among working people, says Dr. Kessler, extrapolating from U.S. studies. Others won't be able to return to work for longer periods, he adds, with still graver impact on a developing-country economy. The WHO is offering quick courses in disaster mental-health training to Sri Lankan medical students, he adds.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613907","date":"2005-01-07","texts":"Dow Jones Newswires NEW YORK -- Home mortgage rates fell during the past week, as economic news reflected stable growth and low inflation, said Freddie Mac, the housing-finance agency. The average for 30-year fixed mortgage rates for the week ended yesterday fell to 5.77 from 5.81 a week earlier, Freddie Mac said in its weekly primary mortgage-market survey. A year ago, the 30-year mortgage averaged 5.87. The rate for five-year Treasury-indexed hybrid adjustable-rate mortgages, a new addition to the primary mortgage-market survey, averaged 5.03. The rate for one-year Treasury-indexed ARMs fell to 4.10 from last week's average of 4.19. A year ago, the one-year ARM averaged 3.76.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615473","date":"2005-01-11","texts":"Annualized interest rates on certain investments as reported by the Federal Reserve Board on a weekly-average basis WEEK ENDED Jan. 07, Dec. 31, 2005 2004","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615283","date":"2005-01-18","texts":"Dow Jones Newswires The shift away from defined-benefit plans is putting more responsibility on workers to pad their own nest eggs, but so far, at least one-fifth of new retirees appears to be faltering under the burden. This finding, from a report released last week by the nonpartisan Employee Benefit Research Institute, comes at a time when President Bush is pushing to allow workers to divert a portion of their Social Security payroll taxes into private accounts, making investors even more accountable for their retirement savings. Employers, in recent years, have stepped up their efforts to get workers into 401k plans amid the changing retirement-plan landscape and the uncertainty of Social Security. Still, nearly a third of eligible workers aren't participating in their company's 401k plan, and of those who do, many aren't putting away enough to make it through their retirement years, according to Hewitt Associates, a global outsourcing and consulting firm in Lincolnshire, Ill. These savings patterns, if they don't change, will wreak havoc on nest eggs. Already, among 15 of new retirees -- many of whom had defined-benefit plans for at least part of their career -- total wealth fell by at least 50 from 1992 to 2002. An even greater number, about a fifth, of this group are in danger of running out of money during retirement. Still, the majority of those born in 1931 to 1941, individuals who are now 64 to 74 years old, saw their total wealth grow by 50 or more during this 10-year period.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615114","date":"2005-01-19","texts":"YOU MAY NOT LIKE the idea of Social Security private accounts. But you will almost certainly want to fund one. I am not arguing that the partial privatization of Social Security is a good idea I have my concerns, and I am not arguing that private accounts will fix Social Security's financial problems they won't. But suppose Social Security is overhauled, and suppose, as many pundits expect, that we end up with a mix of traditional Social Security benefits and private accounts, as called for in reform model 2 suggested by President Bush's 2001 Social Security commission. At that point, you will face a critical decision Should you direct part of your payroll taxes into a private account, or should you continue to put everything into the traditional Social Security system As best I can figure, it's no contest You should go for the private account. Model behavior. When I sat down to analyze reform model 2, I thought I was in for some heavy-duty math, comparing potential rates of return. But in fact, the break-even rate of return is built into the model -- and it's so low it makes private accounts look awfully attractive. With model 2, you would have the option of putting four percentage points of your payroll taxes, up to 1,000 a year, into a private account. The rest of your payroll taxes would continue to flow into the old system and eventually earn you the right to a monthly check. That check, however, would be smaller than the check you would receive if you continued fully funding the traditional system.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615146","date":"2005-01-19","texts":"Annualized interest rates on certain investments as reported by the Federal Reserve Board on a weekly-average basis WEEK ENDED Jan. 14, Jan. 07, 2005 2005","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614547","date":"2005-01-20","texts":"Paris -- FRUSTRATED THAT THE dollar's three-year decline has failed to make a dent in the record U.S. trade deficit, U.S. and European policy makers are turning up the heat on Asian countries, particularly China, to share more of the burden in righting the world's massive economic imbalances. They should be careful what they wish for, however. If China does agree to unhitch the yuan from the dollar -- or at least give it some wiggle room -- it might not have much impact, leaving the U.S. with its huge trade deficit and Europe with a too-strong currency, uncompetitive industries and poor economic growth, just as it exists now. On the other hand, a move to really disconnect the yuan and other Asian currencies' ties to the dollar could send U.S. interest rates higher and the American economy lower. Last week, European Central Bank chief economist Otmar Issing opened the West's verbal assault on the East, arguing that the euro's rise and dollar's fall had gone far enough and that it was Asia's turn to carry the can. In terms of foreign-exchange developments, we see at the European level the adjustment is completed and has even gone too far, Mr. Issing said in a speech. The key to this problem . . . lies in Asia and above all in China's hands, but China is not addressing this because of its internal problems. Two days later, departing U.S. Commerce Secretary Donald Evans, New York Federal Reserve Bank President Timothy Geithner, ECB President Jean-Claude Trichet and Paul Jenkins, senior deputy governor at the Bank of Canada, joined the pick-on-Asia chorus. Mr. Trichet noted the clear consensus amongst the international community . . . on the fact that there is a need for emerging Asia to go progressively in the direction of perhaps progressive and orderly appreciation of the sub- currencies. Translation Asian nations with currencies pegged to the dollar should stop keeping them artificially low.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985300","date":"2005-01-20","texts":"PUBLISHED CORRECTIONS A Jan. 20 Business in Brief item incorrectly said that an acquisition will give Constella Group of Durham, N.C., 260 employees in the Washington area. The company will have 450 employees in the area. Published 12205 Home construction rebounded in December, capping the best year since 1978, a government report showed. Housing starts rose 11 percent, to an annual rate of 2 million units, after sinking to a 1.8 million pace in November, the Commerce Department said. Building permits, an indicator of future construction, slipped 0.3 percent, to 2 million at an annual rate. Housing starts for all of 2004 totaled 2 million, up 5.7 percent from 2003 on 30-year-mortgate rates of less than 6 percent and the biggest increase in payrolls since 1999, economists said. Online auction giant eBay reported a 44 percent increase in fourth-quarter profit that was pushed by holiday sales and increased international listings. For the period ended Dec. 31, the San Jose, Calif., company earned 205.4 million, compared with 142.5 million during the same period last year. But the company's numbers -- released after the markets closed -- missed Wall Street forecasts and were accompanied by a 2005 forecast of slower growth in mature markets, particularly the United States and Germany. EBay shares dropped 11.7 percent in after-hours trading on the Nasdaq Stock Market. For 2004, eBay earned 778.2 million on sales of 3.27 billion, compared with 441.8 million in 2003 on sales of 2.17 billion. Enron's top bosses will be tried on criminal charges in Houston, a federal judge ruled. Enron founder Kenneth L. Lay, former chief executive Jeffrey K. Skilling and former top accountant Richard A. Causey had requested a change of venue, arguing that they couldn't get a fair trial in Houston because of the widespread media coverage of Enron's collapse. Legal music downloads in the United States and Europe increased to 200 million in 2004 from 20 million in 2003, as iPod digital players gained in popularity and thousands of illegal download Web sites were shut down, the International Federation of the Phonographic Industry said. The digital music market was worth 330 million last year, according to researcher Jupiter, or about 1 percent of the 32 billion global music industry.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985326","date":"2005-01-20","texts":"Private investment is pouring into developing countries at the fastest rate since just before the Asian financial crisis of the late 1990s, according to a report released yesterday by the leading international association of financial institutions. The trend has some of the features of a bubble that could lead to market turmoil in the future, the group's director acknowledged. The Institute of International Finance Inc., which represents more than 300 banks, investment firms and other major financial companies, said the flow of private money to 29 emerging market nations reached 279 billion last year. That is more than double the 2002 level, and close to the 287 billion posted in 1997, the year that Thailand's currency collapsed, sparking a flight of capital from Asia. The record was in 1996, when 322 billion flowed into emerging markets. The flow of capital has been especially strong in recent months to China and Russia, but was also up last year in Latin America, Eastern Europe, Asia and the Pacific, and Africa and the Middle East. The pace will continue this year, according to the group's forecast. Net flows of private capital -- the amount of new private investment and loans less outflows and repayments -- will be 276 billion in 2005, the institute predicted.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983750","date":"2005-01-23","texts":"For Republicans, Social Security reform could be the kind of donnybrook that health care reform was for Democrats in 1994. The magnitude of the political risk is staggering. On Capitol Hill, many Republicans wonder if they are being led off a cliff. What does President Bush think he's doing Well, he says, there's a Social Security crisis. The crisis is now, Bush said in December. But he must know this isn't true. Economically speaking, stabilizing Social Security's long-term finances is a task of only middling difficulty and importance. It requires no fundamental change in the program and need not be tackled right away. As for private Social Security accounts, they are -- again, economically speaking -- a solution in search of a problem. No, what Bush and the Republicans are focused on is not the economy, stupid. It is conservative social engineering on the grandest possible scale. When people talk about Social Security reform, they usually mean reforms, plural. They're usually linking two changes that are conceptually and mechanically distinct. Reform No. 1 would reduce the growth of benefits -- or raise payroll taxes -- to bring the program into long-term fiscal balance. Reform No. 2 would structurally revamp the program by creating private accounts A portion of your Social Security payroll tax would go into an investment account with your name on it instead of going to the U.S. Treasury to finance the benefits of current retirees, as now happens. Congress can adopt one idea, both ideas or neither. Either, by itself, is politically difficult doing both -- simultaneously cutting and restructuring the program -- is audacious. Yet that is what Bush seems likely to propose. Why take the chance On close examination, the economic payoffs are unimpressive. The moral and political dividends are potentially another matter.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613523","date":"2005-01-24","texts":"Some people continue to believe, or at least still assert, that tax rates don't influence taxpayer behavior all that much. We therefore direct their attention to the Treasury Department's latest historical data on revenues from taxes on capital gains. The numbers look like a 25-year demonstration of the Laffer Curve in action. As the nearby chart shows, taxes paid on capital gains have been highly responsive to the maximum capital gains tax rate. See accompanying table -- WSJ Jan. 24, 2005 Especially notable is how, over the years, capital gains realizations and the taxes paid on those gains have tended to increase in the years following a cut in the capital gains tax rate. The reductions highlighted in the chart include the famous William Steiger tax rate cut that passed Congress in late 1978 over Jimmy Carter's objections, the Reagan tax cut passed in 1981, and the cut that was part of the Clinton-Gingrich balanced budget deal of 1997. All of those reductions caused taxpayers to cash in more of their gains and thus yielded revenue windfalls for the federal Treasury in succeeding years. On the other hand, the capital gains tax increase of 1986 -- which moved the rate back up to 28 from 20 -- proved to be a revenue disaster. Taxes paid on long-term capital gains those typically held longer than one year fell off a cliff to 33.7 billion in 1987 from 52.9 billion a year earlier. And they stayed at close to that mediocre lower level for nearly another decade. In other words, higher rates didn't do anyone any good, not even the politicians who thought they'd be getting more tax revenue to spend. We aren't asserting that tax-rate changes have been the only factors influencing revenue changes. The performance of the broader economy and the stock market have also mattered a great deal. Capital gains revenues boomed in the late 1990s after the 1997 rate cut, but they fell abruptly with the bursting of the dot-com and tech bubbles in 2001.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616507","date":"2005-01-25","texts":"A HARSH DOWNDRAFT grips the U.S. airline industry, with five carriers stuck in bankruptcy court and others amassing extensive red ink. Whipsawed by sky-high fuel prices, lower fares and a glut of seats, nine of the 10 biggest carriers by traffic are expected to report fourth-quarter losses. Five did so last week. Distressed airlines typically pin their survival hopes on huge savings from worker concessions. But slashing rank-and-file paychecks creates a management conundrum. Union members want senior executives to share their financial pain. Indeed, the prior heads of Delta Air Lines and AMR Corp. got forced out partly due to union ire over executive sacrifices perceived as inadequate. Yet further curbs on the compensation of the airlines' top brass could push even more of them out of the executive suite. It's a real tough dilemma, says Kim Cameron, a University of Michigan management professor. While profitability and stock prices usually rise when leaders share their subordinates' pay pain, pressure to pinch executive pay harder could weaken carriers' chances for recovery by increasing the tempo of management turnover. If you pay below market, you get what you pay for, says a former vice president of a troubled major carrier who joined a start-up airline earlier this month. You will be left with the 'B' team. As it now stands, virtually no upper-management wallet at sick airlines remains untouched, but the extent of slimmed compensation varies by carrier. Delta's chief executive officer, Gerald Grinstein, skipped his 500,000 annual salary for six months last year. And since he became head of the Atlanta airline in January 2004 after having been a Delta board member, Mr. Grinstein has taken no other remuneration.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617151","date":"2005-01-25","texts":"WHEN STOCKS FROM otherwise healthy companies pay out more than their bond brethren, at least in terms of certain ratios, investors can benefit from that rare lapse in logic. At issue are companies whose stock dividends carry higher yields than the same companies' bonds. An investor who buys those stocks and shorts the bonds stands to make a quick profit. Such a strategy played in 2004 would have returned 10 versus a 9 return by the S&P 500, according to Goldman Sachs. It's an inefficiency, because the market values different securities of the same issuer in a way that doesn't make sense from an economic perspective, says David Kostin, a Goldman portfolio strategist. An asset with higher growth potential theoretically should offer less current yield than a similar asset with lower growth potential. And that's usually how it works. The growth of a stock dividend is expressed as a percentage yield gleaned by dividing the annual dividend payment by the stock's current market price. Companies that can afford to pay dividends on their stocks tend to see their stock prices rise over time, and the rising share price lowers the dividend yield unless the dividend payment rises dramatically. But 15 companies identified by Mr. Kostin and a colleague, Robert Koyfman, in a report earlier this month have average dividend yields of 3.8, while their bond yields, adjusted for inflation, average 2.4.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985509","date":"2005-01-25","texts":"At John D. Ashcroft's farewell ceremony yesterday at the Justice Department, acting Solicitor General Paul D. Clement rose to thank the outgoing attorney general for the steady stream of work he's provided to government lawyers. He listed just a few cases Ashcroft v. Free Speech Coalition, Eldred v. Ashcroft, Ashcroft v. ACLU, Ashcroft v. ACLU another one, Georgia v. Ashcroft, Leocal v. Ashcroft, Ashcroft v. Raich. And coming soon to a court near you Ashcroft v. Oregon. I literally wonder what we in the solicitor general's office will do without the attorney general around, Clement deadpanned. It is a common lament. Love him or hate him, everybody in official Washington will miss John Ashcroft. Fellow conservatives will miss a reliable ally. Liberals will miss the best demon they've had since Newt Gingrich. And reporters will miss the torrent of copy he inspired. Remember his installation of a blue curtain in the Justice Department's Great Hall to cover the exposed right breast of the Spirit of Justice statue Her modesty was still intact during yesterday's ceremony. His warning that those who questioned the Bush administration's strategy were aiding and abetting terrorists His sensational announcement that the FBI had disrupted an unfolding terrorist plot to attack the United States by exploding a radioactive dirty bomb Other officials quickly made it clear he dramatically overstated the threat. His departing boast that the objective of securing the safety of Americans from crime and terror has been achieved A month later, Health and Human Services Secretary Tommy G. Thompson marveled that it is so easy to attack the nation's food supply.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614211","date":"2005-01-27","texts":"Paris -- FOR MONTHS, the foreign-exchange market has been squarely focused on the huge U.S. trade and budget deficits, the weakening dollar, even the possibility of a dollar crisis. Now some money managers and others are beginning to examine the highflying euro's soft underbelly. What they see isn't very appealing. Take Bridgewater Associates, a Westport, Conn., institutional bond and currency manager and one of the world's biggest institutional hedge-fund managers with just under 100 billion under management. The firm, whose managers have been longtime dollar bears, now has a short- euro position that's as big as its short position in the dollar. Among major developed countries, the 12-nation euro zone has the weakest economy, the lowest interest rates, the strongest currency and among the highest probabilities for significant capital outflow, says Bob Prince, Bridgewater's co-chief investment officer. Shorting both the dollar and euro, Bridgewater is long the Swiss franc, pound sterling and Swedish krona. And in particular, we like the yen against the euro, says Mr. Prince. While Bridgewater forecasts the euro to be little changed against the dollar in 12 months, the firm sees the euro roughly 15 lower at about 114 yen. In a little-noticed decline, the euro has already fallen to 134.71 yen from above 141 yen in late December. Meanwhile, at a two-day shindig last week that Morgan Stanley hosts annually for its clients, there was a remarkably strong sense that the dollar could surprise on the upside against several European currencies and that the euro could decline against the yen and other Asian currencies, says Stephen Jen, the firm's global head of currency research. He suspects that this outlook largely reflects investors' reaction to the dollar's new-year's rally that has seen the euro retreat 4.5 against the U.S. currency since Dec. 30 to 1.3074.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614753","date":"2005-01-28","texts":"Dow Jones Newswires 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. 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. 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. 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.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616183","date":"2005-01-28","texts":"Pioneer Natural Resources Co. agreed to sell a portion of its future oil and natural-gas production to subsidiaries of Wachovia Corp. for 593 million, cashing in at today's high commodity prices. The Irving, Texas, energy company said it would sell about 20.5 million barrels of oil equivalent -- about half oil and half gas -- that it has discovered and slated for production over the next five to seven years. This is about 2 of the company's total reserves. Instead of selling the future production at market prices, the company sold an overriding royalty interest to Wachovia for a present value of 28.97 a barrel. Pioneer will book the sale as deferred revenue. Chairman and Chief Executive Scott D. Sheffield said the stock market placed a lower value on these future reserves than it was able to obtain through the deal. Pioneer was able to capture the arbitrage opportunity presented by the equity market's failure to appropriately value companies with longer-lived reserves, he says. Analysts, however, noted the move was tantamount to a bank loan, which uses future production as collateral. Pioneer's stock price rose on the news, up 6.2, or 2.24, to 38.52 in 4 p.m. New York Stock Exchange composite trading. The announcement also overshadowed another announcement yesterday that the company is facing rising costs for finding and producing oil and gas through its drilling program. The so-called drill-bit finding and developing costs rose to more than 22 a barrel of oil equivalent. Facing these higher costs to drill oil and gas, the company said it will increase its spending on buying back its shares. The board approved spending 300 million in 2005 on share repurchases, up from 92 million last year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614590","date":"2005-02-01","texts":"Annualized interest rates on certain investments as reported by the Federal Reserve Board on a weekly-average basis WEEK ENDED Jan. 28, Jan. 21, 2005 2005","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616921","date":"2005-02-06","texts":"THIS WEEK Budget Time The Bush administration tomorrow releases its proposed budget for fiscal year 2006, which begins Oct. 1 this year. In his State of the Union speech, the president said the budget holds the growth of discretionary spending below inflation, makes tax relief permanent, and stays on track to cut the deficit in half by 2009. Senate Mulls Class-Suit Reform The Senate is set to take up a bill that would push class-action lawsuits out of state jurisdiction and into the federal courts. Business groups have lobbied hard for the legislation, complaining that frivolous lawsuits are costing them millions, but consumer groups say it would cut off consumers' access to timely and fair trials. Google Spills the Beans Investors expect more news about Google's strategies this week, when the search-engine company hosts its first information day for financial analysts since its initial public offering of stock in August. Earnings Season Winds Down Most big companies have now reported quarterly earnings and the results in general have been better than expected. Tech giant Cisco Systems reports on Tuesday, and then come Cigna, MetLife and Nissan on Wednesday, followed by Aetna and Dell on Thursday.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614886","date":"2005-02-08","texts":"Electronic Data Systems Corp. posted a fourth-quarter profit on cost cutting, but the computer-services pioneer based in Plano, Texas conceded its efforts haven't increased sales and said it planned a new round of cost cutting for this year. The second-largest computer outsourcer in the world after International Business Machines Corp. reported net income of 53 million, or 10 cents a share, compared with a net loss of 337 million, or 70 cents a share, in the year-earlier period. The return to profit stems from nearly 1 billion in cost cuts after a series of restructurings. We've improved our margins and gotten rid of some of the bad contracts that were dragging us down, said Michael H. Jordan, EDS chairman and chief executive officer. We've made significant progress in our problem accounts that had lower net in prior periods, he said. Excluding a 97 million restructuring charge and other one-time items, the company would have reported earnings of 130 million, or 25 cents a share. Revenue fell 4.7 to 5.25 billion in the quarter from 5.51 billion. New contract signings, a significant indicator of future growth, were below plan, falling to 3.8 billion from a depressed 4 billion.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615657","date":"2005-02-11","texts":"As home prices soar, we survey more than 1,000 neighborhoods, finding big gains from Miami to Wayzata, Minn. June Fletcher on unexpected hot spots -- and whether the boom can last. ROBERT ALBERTSON put his five-bedroom lakeside house in tiny Wayzata, Minn., up for sale last year at 1.4 million -- and, almost immediately, pulled it off the market. Calls from eager buyers convinced Mr. Albertson, who helped invent Mr. Coffee, that it was worth waiting to see if prices would rise. They did A few months' delay added another 100,000 to the value of the Tudor-style home, according to two recent appraisals, and he plans to put it back on the market at 1.5 million. Says Mr. Albertson, who bought the house in 1963 for 38,000 Prices here have just gone crazy. What home-price bubble So far, predictions of the U.S. housing market's demise have been greatly exaggerated. Despite some dark clouds -- war, a looming deficit, the weak dollar -- this market has continued to rise, with existing-home prices up 8.3 through the end of 2004, according to the National Association of Realtors, compared with 7.5 the year before. As low interest rates fueled sales, dozens of cities saw double-digit gains In Glendale, Calif., where prices had already doubled in the past four years, the median home price rose 29.8 last year, to 440,000. In the old whaling town Marion, Mass., prices rose 13.5, to an average of 550,000. No one can say for sure if this can continue. But at least some homeowners can brag that their neighborhood did even better than most. In a town-by-town survey conducted for Weekend Journal by housing specialists Fiserv CSW, we analyzed home-price changes in more than 1,200 ZIP codes for the year ending September 2004. To get a sense of the longer-term phenomenon, we also looked back at the change in these areas compared with five years ago.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983948","date":"2005-02-11","texts":"The U.S. trade deficit narrowed in December but was still the second-highest monthly figure ever. And that lifted the deficit for 2004 to 617.7 billion -- an all-time high that shattered the previous record, set in 2003, by 24 percent. The trade report, issued yesterday by the Commerce Department, capped a year in which the voracious demand by Americans for imported goods drove the deficit to proportions all but unheard of for a major industrial country -- 5.3 percent of gross domestic product, up from 4.5 percent the year before. The widening gap has deepened worries that the United States is growing dangerously dependent on the capital lent by foreigners to cover the cost of the products they sell to Americans. The December deficit decline to 56.4 billion from a revised record of 59.3 billion in November offered some hope that the trade gap's relentless surge might abate in coming months. Federal Reserve Board Chairman Alan Greenspan said last week that the deficit may soon start leveling off and possibly even shrink. Greenspan cited the dollar's fall against other currencies, which makes U.S.-made goods more competitive with products made abroad. But yesterday's report offered insight into why a turnaround may be a long way off, because as the Commerce summary noted, imports increased nearly twice as much as exports last year. That is the opposite of what must happen for the deficit to narrow. Since the 1.764 trillion that the United States imported in 2004 is so much greater than the 1.146 trillion that it shipped abroad, exports must grow much faster than imports to close the gap. The U.S. trade deficit narrowed sharply, but let's not get carried away, said Joel Naroff of Naroff Economic Advisors, in a report to clients. The level is still the second highest we have ever recorded . . . the deficit is still way too wide.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982123","date":"2005-02-14","texts":"The Bush budget policy continues to be awful. But the recent proposal for personal accounts in Social Security is at least half- excellent. If the administration can show the flexibility to recant one key error, it may deserve to win the coming battle in Congress. First, what's excellent Unlike many versions of pension privatization, the Bush personal accounts are not a giveaway to Wall Street. The government would administer the personal accounts and control the short list of investment options, so salesmen would get no opportunity to push junk funds with enormous hidden fees onto unwary workers. The Bush plan is not a giveaway to account holders, either. Pension privatization in Britain, and the leading reform proposal from the Social Security commission in President Bush's first term, involved taxpayer subsidies to those who opted for personal accounts A policy that was supposed to fix the future budget hole actually wound up enlarging it. The new Bush proposal, by contrast, is intended to be roughly budget-neutral although more on this later. The new proposal also takes a decent shot at protecting investors from their own folly. Unless workers explicitly demanded otherwise, their savings would go into a life cycle account that shifts money from stocks to bonds as they get older. That way they're protected from a possible stock market crash on the eve of their retirement. Admittedly, some high-rolling 64-year-olds will still punt on equities and get burned. But millions of poor workers who accepted the default life-cycle option would retire richer. The leading reform proposal in Bush's first term said that individuals could set aside 4 percent of their pay up to the payroll tax cap, currently 90,000 in personal accounts, but that the maximum anyone could set aside per year was 1,000. In his new proposal, however, the president added a promise to phase out that 1,000 cap. This may sound like an innocent change. But it turns a plausible plan into a crazy one. The phaseout kills the progressivity in personal accounts. Under the old proposal, a worker earning up to 25,000 could divert 4 percent into his account, whereas a worker on 90,000-plus could divert just over 1 percent the opportunity to earn superior investment returns was to be concentrated among workers who most needed it. But if Bush phases out the 1,000 cap, that progressivity will ultimately be eliminated.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984645","date":"2005-02-15","texts":"U.S. college students received more than 122 billion in financial aid from public and private sources for undergraduate and graduate study in 2003-04, an increase of 11 percent from the previous year after adjusting for inflation, according to the College Board. Two-thirds of all Harvard University undergraduates receive some form of financial assistance, including outside awards, the school reports. Nearly 25 percent of grant money given by states to undergraduates is awarded on merit and not financial need, according to Donald E. Heller, an assistant professor and researcher at the Center for the Study of Higher Education at Pennsylvania State University. That's up from 10 percent in 1990. Eight states Alabama, Florida, Georgia, Louisiana, Mississippi, New Mexico, North Carolina and South Carolina have favored merit- based financial aid over need-based aid in recent years, Heller said. Financial aid from federal grants, per student, increased 5 percent across the country in 2003-04 from the previous year. But the growth rate in loans, which unlike grants must be repaid, was about three times as fast, according to the College Board.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613636","date":"2005-02-18","texts":"CAMBRIDGE, Mass. -- Harvard University's secretive seven-member governing board issued an unusual statement yesterday It stands behind the school's president, Lawrence H. Summers. The board's one-page letter to the Harvard community sets the stage for a possible showdown between Mr. Summers and his prominent faculty critics, who are moving toward a referendum on his leadership. The immediate source of friction between Mr. Summers and the faculty was a talk he gave at a recent conference on work-force diversification -- statements that he finally made public yesterday -- but the roots of the clash run deeper. Hired more than three years ago to retool Harvard for the 21st century, the former Treasury secretary has found the hierarchical management style common in corporations and cabinet agencies to be a tough fit for a storied university accustomed to decision making that is decentralized and collegial. The confrontation comes as more and more universities, pressed financially on several fronts, have turned to leaders with experience outside academia to reinvigorate their institutions -- and have in turn often met resistance from faculty. The campus firestorm over Mr. Summers erupted last month when he made comments at a National Bureau of Economic Research conference here suggesting that innate gender differences could help explain why fewer women gain high-level academic careers in science and math. Prominent Harvard faculty and presidents of other elite universities spoke out publicly against his views.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614481","date":"2005-02-23","texts":"Money is flowing into 529 college-savings plans, fueling expectations that Congress could act this year to make their tax advantages permanent. At the end of 2004, assets in 529 plans reached an estimated 52.3 billion, according to the nonprofit College Savings Foundation. That marks a nearly 50 increase from 2003. Stock-market gains played a role, but much of the growth came from increasing numbers of parents establishing accounts for their kids. Right now, the tax-free status 529 plans enjoy is set to expire Dec. 31, 2010. After that, the dollars parents withdraw for college would be taxed in some fashion. Lawmakers have talked about permanency several times in recent years, but nothing of substance has come of that. College-funding experts see the growth in assets and the Bush administration's effort to make some recent tax cuts permanent as a sign that 529 plans are here to stay. We're starting the discussions with the key decision makers in Washington to stress the importance of removing the sunset provision, says Chuck Toth, a board member for the College Savings Foundation.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984809","date":"2005-02-27","texts":"With the Bush administration, one never knows what is intentional and what isn't, but the president's proposal to introduce private investment accounts into Social Security has certainly served to divert attention from whether the whole federal government is headed for a fiscal train wreck. That's probably a good idea, from the administration's point of view, because both it and many private employers are asking people to pin their retirement and other hopes for the future on financial assets. And they are asking this at a time when the government is promising benefits and services it can't come close to affording without taxing the fillings out of our teeth or going to banana republic-style inflation -- or both. It is a reality that David M. Walker, the comptroller general of the United States, has been trying to point out to everyone who will listen and to those who won't. Walker is head of the Government Accountability Office, a congressional agency that studies government programs and policies and reports on how well or badly they are working. The costs of the three big social programs of our society -- Social Security, Medicare and Medicaid -- are rising so fast that by 2040 they and interest payments on federal borrowings will consume all the government's revenue, even assuming that the Bush tax cuts are allowed to expire and that discretionary government spending spending that is not already promised by law grows only at the rate of inflation.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614877","date":"2005-03-01","texts":"The United States in recent months has been preoccupied with the Middle East and with the near-term crisis posed by North Korea's announcement that it has nuclear weapons. But there are other long- term developments taking place that will change the political landscape of Asia in ways that will ultimately weaken U.S. influence there. Policy makers in Washington seem scarcely to have noticed, much less arrived at a long-term strategy for dealing with these developments. Since 1945, East Asia has never had the internal cohesion or organization of Europe, with the latter's strong multilateral institutions like the European Union and NATO. But this is beginning to change. The Association of Southeast Asian Nations Asean joined with the three major Northeast Asian powers, China, Japan and South Korea, to form a group called Asean Plus Three in 1998. In addition, the Chiang Mai Initiative links the central banks of 13 East Asian countries and provides swap facilities in case of speculative attacks of the sort that occurred during the financial crisis of 1997-98. At the Asean summit meeting in Vientiane, Laos, last December, the organization decided to hold an East Asian Summit some time next year in Kuala Lumpur that would bring together the leaders of the Asean Plus Three group, but not those of the U.S., Australia, New Zealand, or India. There is a great deal of irony in this development. In 1990, former Malaysian Prime Minister Mahathir bin Mohammed proposed the creation of an East Asian Economic Caucus, a multilateral grouping of East Asian powers that would deliberately exclude countries like the U.S. and Australia -- a caucus without the Caucasians. The U.S. and Australia were vehemently opposed to this. At American behest, the Japanese quietly sought to kill the idea, while the Australians worked hard to promote a more inclusive Asia-Pacific Economic Cooperation APEC forum as an alternative. What Asean Plus Three and the proposed East Asian Summit represent is a resurrection of the old Mahathir proposal, but this time with mighty China rather than tiny Malaysia driving the process forward. Japan, which earlier had acted as America's cat's paw in stopping the Mahathir plan, is now on board. The roots of these developments lie in the Asian economic crisis, and in a series of highly effective Chinese diplomatic initiatives over the past several years. There has always been a huge gulf in perceptions about the causes and consequences of the Asian crisis between the U.S. and countries in East Asia. Americans tended to see the problem as one of crony capitalism, poor corporate governance, and flawed exchange rate management on the part of Thailand, Indonesia, Korea and other countries. The East Asians, by contrast, interpreted the behavior of the U.S. and U.S.-influenced international financial institutions like the IMF as narrowly self-interested, seeking to open up Asian financial markets to U.S. investment banks. To this day, South Koreans refer to the crisis of late 1997 as the IMF crisis. In the aftermath of the crisis, Washington continued to bat down proposals from the region for new institutions to mitigate future financial shocks, like the Japanese proposal for an Asian IMF. Since the Clinton administration had little to offer the region in terms of new ideas or institutions, countries there took matters into their own hands and established the Chiang Mai Initiative and Asean Plus Three. Things have gotten no better under the Bush administration, which has made the war on terrorism the lens through which it saw regional cooperation.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982998","date":"2005-03-01","texts":"Stocks skidded Monday as investors, concerned about rising prices and the threat of inflation, took profits after last week's three- day rally. Volatility in pharmaceutical stocks and an analyst downgrade of General Motors also pressured the market. Fresh worries about inflation arose after the Commerce Department's latest reading on consumer income and spending. Personal income fell less than expected in January, but spending was flat and core consumer prices rose 0.3 percent -- the fastest rate in more than three years. When you have the Standard & Poor's 500-stock index up three days in a row like we had last week, you'll definitely see some money coming off the table, said Neil Massa, equity trader at John Hancock Funds. It's a broad sell-off here, not just one sector, and the money's not being put to use anywhere. So I think folks are just waiting for later in the week. The Dow Jones industrial average fell 75.37, or 0.7 percent, to 10,766.23. The S&P 500 declined 7.77, or 0.6 percent, to 1203.60, and the Nasdaq composite index dropped 13.68, or 0.7 percent, to 2051.72. Despite persistent inflation fears and rising oil prices, stocks were mostly higher for the month, with only the Nasdaq -- home to technology and smaller biotech companies -- lagging slightly. Strong earnings and decent economic data helped the Dow industrials and other large-cap stocks to post gains after a disappointing January. For the month, the Dow was up 2.63 percent and the S&P 500 gained 1.89 percent, while the Nasdaq lost 0.52 percent.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614544","date":"2005-03-04","texts":"Dow Jones Newswires For global investors, some of the most popular trades are getting a bit harder to carry. The carry trade -- broadly defined as borrowing money in currencies with lower interest rates and reinvesting where rates are more favorable -- had been hugely popular last year. In the second half of 2004, a falling dollar and comparatively low U.S. interest rates made the dollar an ideal currency to borrow, or fund, the trade. Many investors were also fond of the yen and the Swiss franc, since interest rates in Switzerland and Japan were so low. At the same time, they were investing the money and getting high returns on bonds in countries like the United Kingdom, Australia and in emerging markets. More recently, a long list of factors have been unraveling the attractiveness of such trades. Among them have been the durability of the early-2005 dollar rally, rising U.S. interest rates, a more shaky outlook for the Australian dollar, traction in the Japanese economic recovery and the potential revaluation of the yuan by China.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616340","date":"2005-03-04","texts":"Inside the World of Corporate Finance & Wall Street Plus ca Change The odd man out at the Chicago Board of Trade this week is someone quite familiar. In the futures exchange's board elections Wednesday, longtime member George P. Hanley lost a three-man race to fill two director seats. In the weeks leading up to the balloting, Mr. Hanley had become embroiled in controversy over unspecified trading incentives that his firm, Infinium Capital Management, receives from a CBOT competitor, the all- electronic Eurex US market. Speaking after losing the board race, Mr. Hanley said he believed most voters recognized exchange incentives and trading in multiple venues as standard practices in the futures industry. Still, his chances were hurt by many members' generalized fear of the rapid evolution of futures markets, especially electronic trading platforms that rival CBOT's trading floor, he added.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616572","date":"2005-03-09","texts":"Dow Jones Newswires SAO PAULO, Brazil -- You have to be an optimist to sell stock to the general public in Brazil. A half century of rampant inflation, ending in 1994, meant that middle class Brazilians put their meager savings into U.S. dollars, often placed literally under the mattress, or invested in real estate or telephone lines. Starting in the 1970s, banks offered at least some protection through daily interest accretions, but that did nothing to create a culture of investment in stocks. The tide is beginning to turn -- individual investors now account for about a quarter of the trading volume on the Sao Paulo Stock Exchange, up from less than 10 a decade ago -- thanks in large part to the efforts of stock exchange officials and the local unit of Spain's Banco Santander Central Hispano. Brazilians know they will need investment alternatives, ideally with a high degree of liquidity, says Joao Carlos Pimenta, executive- director of the Santander-Banespa brokerage, which is widely recognized as the leading promoter among local banks of individual investment. Stocks fit the bill.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615430","date":"2005-03-11","texts":"Dow Jones Newswires NEW YORK -- Mortgage rates rose in the past week after Friday's employment report reinforced the perception that the economy is on solid ground, said Freddie Mac in its weekly survey. The average for 30-year fixed mortgage rates for the week ended yesterday, rose to 5.85 from 5.79 a week earlier and 5.41 a year ago. The average for 15-year fixed-rate mortgages this week was 5.38, up from 5.33 a week ago and the year-ago 4.69. The rate for five-year Treasury-indexed hybrid adjustable-rate mortgages, was 5.22, up from the previous week's average of 5.17. There is no historical information for last year since Freddie Mac began tracking this mortgage rate at the start of 2005.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984003","date":"2005-03-16","texts":"While President Bush has been on the road trying to woo public support for his plan to privatize Social Security, two of the nation's economic gurus have been warning that the country is flirting with financial disaster. It's time for the president to stop focusing on a risky and unpopular scheme for addressing the problems of 2040 and to pay more attention to crises that could unfold during the next few years. The difficulties with Bush's plan for private investment accounts have become clear First, it wouldn't address the solvency of the Social Security system, which Bush rightly warns is a serious problem, and it might actually make that problem worse and, second, it's unpopular with the folks who just reelected Bush. A Washington Post-ABC News poll released Monday showed that only 35 percent of Americans say they approve of Bush's handling of the issue. What's truly unfortunate about Bush's privatization road show is that it has distracted him and the nation from the financial threats that loom just over the horizon. Those dangers were highlighted in frightening analyses made this month by investor Warren Buffett and Federal Reserve Chairman Alan Greenspan. Though the two differ about precisely what may lie ahead, they agree that unless the United States puts its financial house in order, it faces real trouble. Buffett's comments came in his annual letter to shareholders of Berkshire Hathaway Inc., released March 5. Every year, Buffett's letter offers blunt economic analysis, and it has become a kind of cult object for his devotees. But this year's version was enough to give you indigestion after devouring the sage's favorite meal of a T- bone steak and double hash browns at Gorat's in Omaha. Indeed, it was downright scary in its comments about the dangers posed by America's trade deficit. Buffett has argued since 2003 that this huge trade deficit will eventually bring a sharp decline in the dollar, and he has tried to protect his company's shareholders against that dollar crash by speculating in foreign currencies. But this year, with the trade deficit having ballooned to a record 618 billion in 2004, Buffett's tone is almost apocalyptic.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983138","date":"2005-03-20","texts":"During the Nov. 17 public meeting about a publicly subsidized baseball stadium, one Charles County resident told the county commissioners that she had dropped off packages a week earlier filled with her research findings on such a facility. Shortly after the meeting, she spoke with commissioners President Wayne Cooper D only to find out that not only had he not been given the information, he didn't remember hearing her speak of it during the meeting. Were the commissioners listening I would be willing to bet the packages were never opened. I asked Commissioner Al Smith R-Waldorf after the meeting why he thought this facility would be successful here when these things haven't been in other areas. He told me he didn't want to hear about failures elsewhere because he believed in its success here. 1. County Administrator Gene Lauer's projected average income of the jobs that would be created by this stadium was approximately 33,000 per year. He quickly rattled off the job positions this included -- the baseball players' salaries was one. How many of the players will actually be Charles County residents and will contribute to our local economy Was this position intentionally included to boost the positive effects of such a facility 2. While Lauer and his staff responded in a general, combined format to questions raised by opponents about traffic, noise and other issues, no mention was ever made about the information supplied to them that contained the independent economists' negative findings on the economic impact of a publicly subsidized sports facility. Why wasn't that addressed I guess Commissioner Robert J. Fuller D-St. Charles addressed that issue at the March 8 work session when he said the county government wasn't in the business of business, it is in the business of providing entertainment for its residents. In a meeting I had with Cooper in January, he told me that he wanted, as president of the board of commissioners, to bring his business expertise to the table. I can only assume he decided this expertise was not required in making this decision.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985594","date":"2005-03-24","texts":"-- A U.N.-appointed panel investigating influence peddling in the oil-for-food program in Iraq is examining three contacts between Secretary General Kofi Annan and executives of a Swiss company that made payments to Annan's son while it conducted millions of dollars' worth of business with the world body, a senior U.N. official said. The U.N. chief of staff, Mark Malloch Brown, made the disclosure less than a week before former Federal Reserve chairman Paul A. Volcker is due to issue a report on whether Kojo Annan improperly used his family connections to obtain a U.N. contract for his former employer, Cotecna Inspection SA, in December 1998. Malloch Brown described Annan's meetings as innocent encounters that played no role in securing contracts for the Geneva-based firm and said the secretary general told investigators about them. He said that Annan is confident he will be exonerated of any wrongdoing but that Volcker will determine whether the actions of his son were appropriate or not. The 64 billion U.N. oil-for-food program was created in December 1996 to provide Iraq with an exemption from sanctions, which had been imposed after its 1990 invasion of Kuwait, to sell oil to buy food, medicine and other humanitarian goods. The former Iraqi government collected more than 2 billion in bribes and kickbacks from companies trading with Iraq under the program. Annan appointed Volcker in April to investigate allegations of misconduct by U.N. personnel. Last month, Volcker accused Benon Sevan, the former director of the oil-for-food program, of asking the Iraqi government to steer valuable oil contracts to an Egyptian businessman. Sevan insists he has done nothing wrong.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830981989","date":"2005-03-27","texts":"Rising energy prices pushed U.S. consumer inflation up in February to its fastest rate in four months, the Labor Department reported, reinforcing concerns that inflation may be poised to take off in a way that would roil the U.S. economy. The figures followed the Federal Reserve's clear warning Tuesday that it stands ready to raise interest rates more aggressively in coming months if necessary to keep inflation under control. The danger, economists said, arises if Fed officials have to raise interest rates so high to choke off inflation that they also brake economic growth, driving stock prices down and unemployment up. That worry is heightened by the fact that prices are rising faster than wages for most workers, which means their earnings have fallen over the past year after adjusting for inflation, sapping consumer buying power. The consumer price index, the Labor Department's widely followed measure of inflation, rose 0.4 percent last month, up from a 0.1 percent increase in January, primarily because of a 2 percent gain in energy prices.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614413","date":"2005-03-31","texts":"Dow Jones Newswires The dollar was little changed versus the euro and the yen as a late- session climb carried the U.S. currency back to day-earlier levels. After declining in Asia, the dollar traded in narrow ranges versus the euro for most of the European and North American sessions. However, a late-session rise in oil prices hurt the yen and some emerging-market currencies and helped lift the dollar back to the levels of late Tuesday, said Brian Garvey, currency strategist at State Street Global Markets. The dollar's late rally also meant the U.S. currency held on to the gains it had made over the previous nine sessions versus the yen. Since Monday, the euro has recovered somewhat from last week's dollar advance, but weak Japanese data have kept the yen under pressure. In late New York trading, the euro was at 1.2936 from 1.2924 late Tuesday. The dollar was at 107.53 yen from 107.52, and at 1.1980 Swiss francs from 1.2022 francs. The pound rose to 1.8803 from 1.8746, while the euro was at 138.86 yen from 138.93 yen.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984701","date":"2005-04-03","texts":"There has been plenty of wailing in recent months over the soaring property tax bills that homeowners have been receiving, thanks to their similarly soaring home values. Families complain of being taxed out of their homes through no fault of their own. But less attention is being paid to a group of homeowners who could be in even greater peril those who stretched themselves thin to buy an expensive house that they could afford only by borrowing on a low-interest, adjustable-rate mortgage. Interest rates now appear to be starting back up, and many of these borrowers will soon face higher mortgage payments, often accompanied by those higher taxes. It's hard to tell exactly how many such homeowners there are, but if the popularity of adjustable-rate mortgages is any indication, there are a lot. According to an analysis by Barry Glassman of Cassaday & Co., a McLean-based financial advisory firm, adjustable-rate mortgages ARMs last year took a startlingly large share of the mortgage market, accounting for roughly a third of new originations for much of the year and topping out at 36 percent in October.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617220","date":"2005-04-04","texts":"INTERNATIONAL INVESTORS have tended to view Saudi Arabia's stock market a bit like the desert itself It might be hot, but it also is dangerous. But as an undercurrent of relative political calm runs through the nation and through the region, more foreign investors are taking a fresh look at investing in the Middle East's biggest stock market. It helps, of course, that Saudi Arabia's Tadawul All-Share Index posted a gain of 76 in 2003, rose 85 last year and is up 28 this year to a record 10853. That has boosted the total market value of Saudi stocks to about 360 billion, far ahead of Qatar, the next-largest market in the Gulf Council Countries, which has a market value of 72 billion. The Saudi stock boom is being fueled by the high price of oil. The U.S. benchmark futures contract for oil is up about 32 this year and is hovering at around 57 a barrel. For the nation that holds the world's largest oil reserves, that has provided a huge amount of wealth that has been fed into the local market. The stock market's surge has coincided with an increased appetite among international investors, especially hedge funds, for alternative, high-return investments. Institutional money that had been invested in Central and Eastern Europe when they were hot emerging markets has been redirected to the Middle East, and particularly to Saudi Arabia, analysts say. Individual foreign investors currently can invest in Saudi Arabia only through mutual funds, not directly. Lorcan O'Shea, a director in Merrill Lynch's equity capital markets division in London, expects more gains to come. We don't see anything that's going to derail this momentum for quite a while.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617285","date":"2005-04-04","texts":"WASHINGTON -- Weak payroll growth and declining unemployment suggest that the U.S. job market is growing at a slow but steady pace. Employers added a disappointing 110,000 jobs in March, the fewest since July and a big decline from 243,000 in February, the Labor Department reported. Meanwhile, the seasonally adjusted unemployment rate fell to 5.2 in March from 5.4 in February. Economists believe that last month's lackluster performance in payroll growth is an indication of businesses turning more cautious in the face of profit pressures and another spike in energy prices. Separately, the Commerce Department reported that construction spending increased 0.4 in February to a seasonally adjusted annual rate of 1.05 trillion. In addition, the Institute for Supply Management, which polls purchasing agents at more than 400 industrial companies, said its index of manufacturing activity was relatively unchanged at 55.2 in March. The new-orders index ticked higher to 57.1 from 55.8, while the employment gauge slipped to 53.3 from 57.4. Index readings above 50 indicate the sector is expanding. The March number represents the 22nd consecutive month of manufacturing growth.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613880","date":"2005-04-05","texts":"Annualized interest rates on certain investments as reported by the Federal Reserve Board on a weekly-average basis WEEK ENDED Apr. 01, Mar. 25, 2005 2005","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983526","date":"2005-04-06","texts":"Racial segregation and discrimination in housing remain persistent problems in the United States, according to the National Fair Housing Alliance, an advocacy group. The alliance said yesterday that minority homeowners continue to be steered to minority-dominated neighborhoods where real estate does not appreciate as quickly as in majority white neighborhoods. Housing discrimination complaints to state, federal and nonprofit agencies rose 8.6 percent in the past year, climbing to 27,319 in 2004 from 25,148 in 2003, according to the group. Some commentators say integration has failed, said Shanna L. Smith, president and chief executive of the Washington-based alliance. I say integration has yet to happen. Housing discrimination is also the focus of a spate of recent legislative initiatives concerning real estate lending practices that some say have hurt minority homeowners. Critics charge that while lenders once denied loans to minorities, they now reap large profits by pushing these borrowers into costly loans with high interest rates, prepayment penalties and big balloon payments, leaving people heavily burdened with debt. Bankers say that higher interest rates compensate for the risk of lending to people who have bad credit. New mortgage lending figures released this week are expected to clarify whether there are discrepancies between the loan rates being offered to white and to minority home buyers. The federally required information is being released institution by institution, making comprehensive comparisons difficult until September, when federal regulators will release an annual aggregate report. The data will not, however, include credit score information, which many observers view as key in interpreting the statistics.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614203","date":"2005-04-07","texts":"BLUE-CHIP STOCKS extended their baby rally into a third day, and after the closing bell, nervous investors were rewarded with some upbeat profit reports. During regular hours, hopes for quarterly earnings gains helped push the Dow Jones Industrial Average up 27.56 points, or 0.26, to 10486.02, still down 2.8 since the year began. After falling for most of the month of March and nearing their lows for the year, stocks this week got a bounce. Still, the three-day rally has amounted to just 81.72 points on the Dow industrials, reflecting worries about high oil prices, rising interest rates and recent corporate turmoil. We are holding these levels but we don't seem to be moving up a great deal, said Tim Heekin, director of trading at San Francisco brokerage house Thomas Weisel Partners. I pick up the paper every day and there seems to be a large stock in almost every sector that is running into trouble, he said. After regular trading hours, investors reacted strongly to profit news from Alcoa and Bed Bath & Beyond. In afterhours trading, the aluminum maker rose 2.7, while the retailer advanced 6.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613545","date":"2005-04-08","texts":"THE FINANCIAL markets could use a few good inflation watchers these days as soaring oil prices and a strong economy stoke concerns about rising consumer prices. Among economists regularly surveyed by The Wall Street Journal, two have stood out for their ability to forecast inflation Gail Fosler, chief economist at the Conference Board, and Maria Fiorini Ramirez, of MFR Inc. Unfortunately, for those in need of guidance, the two economists now see things very differently. Ms. Fosler expects inflation to pick up by year's end while Ms. Ramirez sees inflation easing off a bit. Collectively, the 56 economists in the Journal surveys have been expecting headline inflation to move down from the 3 rate posted early in the year, as prices for energy and other commodities ease. The consensus of the economists who participated in the latest monthly survey is that the consumer-price index will rise 2.5 on an annual basis by year's end. But that consensus is creeping up. The group was looking for a CPI increase of 2.3 two months ago. Getting a fix on inflation and oil is becoming increasingly important. Higher consumer inflation could push up interest rates and erode the purchasing power of households, which could eventually derail economic growth. Right now the economy is sending off mixed signals on the outlook. While commodity prices have soared, manufacturers have had difficulty passing higher costs on to consumers. Forecasts reflect the confusion. Among economists who have participated in the survey for at least three years, only nine accurately predicted the inflation rate would slow in 2003, when it dipped below 2, and then accelerate again in 2004, when it shot up over 3.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982429","date":"2005-04-10","texts":"It appears no fewer than four times on the top 10 list of best- selling funds for early 2005 Capital Income Builder, Capital World Growth & Income, Income Fund of America and the Franklin Income Fund. By comparison, growth shows up only three times and global just once. Those four income funds together took in 20 cents of every dollar that went into all stock and bond funds in January and February, by my calculation using figures from the consulting firm Financial Research Corp. in Boston. The investing public and their advisers, it appears, have embraced income funds as the great anti-speculation, a remedy for the excesses of the last great bull market. As an extra kicker, U.S. rules now give most dividends the same lower income tax rates accorded long-term capital gains. The idea seems sound enough. The question is, could success spoil this pretty picture Is everybody on guard against the danger of increased risk that tends to infiltrate any category of investments enjoying a hot streak We have great respect for dividend-paying ability as an indicator of quality, says Tom McManus, chief investment strategist in New York at Banc of America Securities LLC. But today's investor seems to be chasing high current income without regard for growth or safety. When you look at the recent performance of some of these funds, their popularity is no mystery. According to Bloomberg data, the 32.3 billion Franklin Income Fund averaged an 11.3 percent annual return over five years through the end of March, a period in which the Standard & Poor's 500-stock index posted a loss of 3.2 percent a year.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614002","date":"2005-04-12","texts":"BLUE CHIPS extended their slump into a second day, as investors bit their nails ahead of today's release of the minutes of the latest Federal Reserve interest-rate meeting. Investors are nervous because the Fed changed the wording of its post-meeting statement last month, suggesting growing concerns about inflation. People fear the minutes will indicate building pressure among Fed policy makers to raise interest rates more sharply. Many people simply are avoiding stocks, and volume -- 1.22 billion shares on the New York Stock Exchange and 1.33 billion on the Nasdaq Stock Market -- was the year's lightest at both markets. The Dow Jones Industrial Average fell 12.78 points, or 0.12, to 10448.56, down 3.1 so far this year. More stocks fell than rose on the Big Board. But gains in drug and financial stocks helped the broad Standard & Poor's 500-stock index inch up 0.01 point -- less than 0.001 -- to 1181.21, off 2.5 this year. What I think has really been hurting the market is the Fed. They are talking about raising interest rates more, to control inflation, said Todd Leone, head of listed trading at New York brokerage firm SG Cowen. Now we will see what the Fed was thinking, if they are really seeing inflation. Investors also await quarterly profit announcements, with General Electric and Citigroup reporting Friday.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985385","date":"2005-04-13","texts":"The U.S. trade deficit rose to an all-time high of 61 billion in February, the Commerce Department reported yesterday, dealing a fresh blow to hopes that the gap will start to shrink soon in response to the decline in the dollar. Exports stayed relatively flat, totaling 100.5 billion in February, just 0.1 percent, or 100 million, above the previous month's level. At the same time, the nation's pattern of importing more and more goods continued unchecked, as foreign products purchased by Americans rose 1.6 percent, or 2.6 billion, to 161.5 billion, led by oil, autos and consumer goods. The politically sensitive U.S. deficit with China narrowed in February to 13.9 billion from January's 15.3 billion level. But critics of China pointed out that the combined figure for those two months was 47 percent above the same period last year and said the report will fuel growing sentiment in Congress for a tougher policy on Beijing's trade practices. The overall gap was a record -- by itself nothing new, because the monthly trade deficit has smashed through previous highs eight times since the start of last year. But yesterday's report deepened concern that the flow of goods across U.S. borders does not seem to be responding to the dollar's fall, even though that decline has continued for three years. A cheaper dollar is supposed to spur sales of U.S. exports by making American goods more attractive to foreign purchasers, and reduce Americans' appetite for foreign products by making them more expensive. Together with some private economists, Federal Reserve Chairman Alan Greenspan predicted late last year that the move in the currency would start to exert an effect on trade flows and shrink the gap in months to come. So far, however, signs of such a development have been scant.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842615134","date":"2005-04-15","texts":"Evidence of declining consumer demand keeps mounting, even amid upbeat economic developments. Major U.S. manufacturers, despite high energy and raw-material costs, are continuing to see firm growth in orders, aided by the weaker dollar and the continuing move to replace equipment bought during the investment boom of the 1990s. The strength is visible more among capital-goods producers and less among consumer-oriented manufacturers. Furniture makers and others in the latter category are seeing the impact of slowing job growth, a decline in consumer confidence and low household savings rates. Indeed, noticeably absent from the rosy projections are auto makers and their suppliers, who have cut expected profit and production plans. At the same time, U.S. business inventories rose in February, expanding 0.5 to a seasonally adjusted 1.288 trillion, while sales fell 0.4, the steepest decline since April 2003, the Commerce Department said yesterday. Combined with the reports earlier this week of a record February trade deficit and disappointing March retail sales, the data added another indication that America's 2005 economic growth may be weaker than the gradual slowing many economists have anticipated from last year's 4.4 pace.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615420","date":"2005-04-15","texts":"Every April 15 we ask What is the government doing with my tax dollars We know how much Congress spends, but to what end The Department of Education received 67 billion in 2004, but do children read better The government spends 30 billion on agriculture annually. Most of these subsidies go to the wealthiest farmers, including Ted Turner, making it our largest corporate welfare program. Was this the intent Since 1993, the Government Performance and Results Act has required agencies to submit an annual performance report of goals and progress -- not unlike what shareholders expect from publicly traded companies -- an accounting of the agency's activities and financial condition. In spite of this law, some agencies still lag in transparently reporting on their goals and activities. According to the FY 2004 Annual Scorecard of agency performance reports produced by the Mercatus Center at George Mason University, only 11 of the budget is covered by good reporting The biggest agencies are still trying to articulate their goals and show public benefits, i.e. they don't know what results our dollars are delivering. We are all shareholders in the largest fiscal entity in the U.S. the federal government. This year's proposed budget equals 2.57 trillion, a figure likely to increase when the final budget passes Congress. The majority, 55, goes to entitlement programs Social Security, Medicaid, and Medicare. Discretionary activity consumes 37, split evenly between defense and non-defense activities. The remaining 8 pays for interest on debt. Spending on entitlement programs will keep rising as baby boomers retire. And discretionary spending is also likely to creep ever higher. Without a change in budgetary behavior, spending as a share of GDP will rise to 40 by 2040. According to Comptroller General David Walker, balancing the budget in that year will require cutting spending by 60 or raising taxes to two-and-a- half times today's level. Before imagining the horror of that tax bill, or the political fallout of slashing swaths of federal programs, such measures may be unnecessary if the government starts allocating money according to program effectiveness, not political calculation. It's common sense but not general practice in Congress that the government should only spend money on activities that show results. This concept, also known as performance budgeting, has made inroads notably in President Bush's Management Agenda.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615884","date":"2005-04-18","texts":"Signs of sluggish growth at some top companies, hints of a flagging consumer, fresh fears of oil-price damage to the global economy -- all these are contributing to a retreat from risk in financial markets. The Dow Jones Industrial Average last week recorded its steepest declines since 2003. It dropped 3.6 for the week to close Friday at 10087.51, 7.8 below its 3 12-year high reached on March 4. The Nasdaq is off 11 from a peak hit in December. And Treasury bonds, despite inflation worries, have rallied as nervous investors seek out safety from tumbling stocks. In recent months, investors had grown surprisingly complacent about taking on risk, and indicators reflected a remarkable calm concerning potential market mayhem. But that has changed. High oil prices, a widening U.S. trade deficit and the Federal Reserve's new concern over inflation have all chipped away at the calm mood in the financial markets. Over the weekend, finance ministers of the Group of Seven major industrial economies, meeting in Washington, expressed concern about oil prices and noted that the global economy's expansion is less balanced than before. They also warned of the potential for a sharper-than-expected rise in long-term interest rates and currency volatility. Cracks in the bull market and in investor complacency first appeared in mid-March when General Motors Corp. issued a stark earnings warning. Its shares plunged and its huge debt traded sharply lower. Ford Motor Co. earlier this month joined GM in expressing doubts about future performance. At the same time, corporate turmoil, such as the investigations into insurance giant American International Group, has resuscitated concerns about corporate behavior. Then on Thursday night International Business Machines Corp. reported its first-quarter numbers early. And they were far worse than anticipated.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983656","date":"2005-04-19","texts":"An April 12 editorial calling for comprehensive immigration reform reinforced the misperception that waiver authority granted under Section 102 of the Real ID Act would pertain only to environmental laws that affect the building of a fence along the California border. That section would give the secretary of homeland security blanket authority to ignore all federal, state and local laws -- at his discretion and without judicial review -- that he determines would interfere with the construction of barriers and roads along our borders. No federal agency or official has ever been provided with such a blanket exemption from judicial review and the rule of law. The Post is correct in saying that the only way to achieve comprehensive immigration reform is to address the problems with our immigration system head-on. Unfortunately, the Real ID Act is a poorly conceived proposal that ignores basic American values of fairness and decency and undermines the rule of law. Congress needs to start over. By reporting only the choice between raising the visa quota for foreign tech workers and outsourcing the work to India Business, April 8, S. Mitra Kalita added to the confusion over H-1B visas. Her story ignored the concerns of U.S. workers. In both choices, an American worker with a college education is deprived of the opportunity to work or enter the field, and U.S. capital heads overseas. Importing workers in large numbers fuels a race to the bottom for U.S. workers and employers. The H-1B program has no displacement protections for U.S. workers.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615020","date":"2005-04-20","texts":"Yahoo Inc. said first-quarter net income more than doubled on robust growth in online advertising, international operations and its fee- based businesses. Yahoo also raised revenue projections for 2005. The Sunnyvale, Calif., Internet company said net income rose to 205 million, or 14 cents a share, from 101 million, or seven cents a share, a year earlier. Excluding sales of investments and other factors, profit would have been 190 million, or 13 cents a share. That exceeded the earnings of 11 cents a share expected by analysts polled by Thomson First Call. Revenue rose 55 to 1.17 billion. Excluding commissions paid to marketing partners, Yahoo had revenue of 821 million, well above its projection of 765 million to 805 million. Yahoo raised its 2005 revenue projection on that basis to 3.57 billion to 3.72 billion, from 3.37 billion to 3.57 billion. Chairman and Chief Executive Terry Semel told analysts the company achieved balanced growth with contributions across the board from our multiple lines of business and geographic regions. He said in an interview that individuals on average spent more time using Yahoo, which helped boost the company's ad revenue.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984381","date":"2005-04-20","texts":"Investors cheered by long-awaited good news on inflation pushed stocks higher Tuesday, hoping that a lower-than-expected increase in basic wholesale prices meant the economy will stay on a sound footing. Solid first-quarter earnings also fueled buying. Wall Street had feared that the Labor Department's producer price index, which measures wholesale prices, would show inflation taking hold in the economy. But while the PPI rose 0.7 percent for March because of higher energy and food prices, the closely watched core PPI, without those volatile costs, grew just 0.1 percent, less than the 0.2 percent economists expected. We're finally seeing some numbers that point to less inflation in the pipeline, said Lincoln Anderson, chief investment officer at LPL Financial Services in Boston. Coupled with a pretty strong earnings outlook for the quarter, this hopefully puts a floor on the market and gets things turned around again. The Dow Jones industrial average rose 56.16, or 0.6 percent, to 10,127.41, coming off of four straight down sessions and a loss of 436 points. The Standard & Poor's 500-stock index climbed 6.80, or 0.6 percent, to 1152.78, and the Nasdaq composite index gained 19.44, or 1 percent, to 1932.36. Worries about U.S. oil-refining capacity pushed crude futures sharply higher, keeping stock gains somewhat in check. In earnings news, an 11 percent hike in sales helped Johnson & Johnson to a strong first-quarter profit. The health care company beat Wall Street's profit expectations by 5 cents per share. Johnson & Johnson edged a penny higher, to 69.05.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984559","date":"2005-04-20","texts":"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. 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. 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. 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. 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.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615959","date":"2005-04-21","texts":"THE RECESSION in the U.S. has been over for more than three years. The economy has been growing at better than a 4 annual clip for the past two. Profits, at least until recently, have been up. Growth in worker productivity has remained strong. Unemployment has fallen to 5.2, the lowest since September 2001. Yet wages for the typical worker aren't even keeping up with inflation. Wages are growing unusually slowly for this point in the economic cycle, especially given persistently strong growth in productivity, the goods and services produced for each hour of work. The U.S. Labor Department says that hourly wages for private-sector workers who aren't bosses rose 2.6 to nearly 16 an hour between March 2004 and March 2005, which is short of the 3.1 increase in consumer prices over that period. Weekly paychecks are up a bit more, but only because workers are putting in more hours. The department's broader Employment Cost Index, which covers more workers, says wages and salaries rose just 2.4 last year, well shy of last year's 3.3 increase in prices. Employers don't give raises because they feel generous. They give raises because they can afford to -- that is where productivity comes in -- and because they have to do so to attract or keep workers. Profits and productivity, up 4 last year, suggest employers have the money, but don't feel pressure to give raises. To those who argue that wages aren't rising because today's businessmen are greedy . . . or Wal-Mart is cunning, Bradford DeLong, an economist -- and prolific blogger -- at the University of California at Berkeley replies that's nonsense. Something else is going on. The link between wages and productivity depends on the fact that businessmen are greedy and cunning, he says. You don't raise wages out of altruism instead you expand your work force out of greed, and the expanding work force pushes wages up.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613827","date":"2005-04-22","texts":"Inside the World of Corporate Finance & Wall Street House of Goldman You didn't even need to be a close observer of this week's meganews -- the New York Stock Exchange's decision to buy electronic-trading outfit Archipelago Holdings Inc. -- to notice Goldman Sachs Group's fingerprints. They were everywhere. But before someone gets a book proposal pitching the story of Goldman's unprecedented dominance, let's turn the calendar back four score or so. Then, another little banking firm you may have heard of, J.P. Morgan, looked like the boss of the Big Board -- and everything else financial, too. In fact, before the Federal Reserve Act of 1913, the House of Morgan was the country's de facto central bank, John Brooks, the now deceased New Yorker magazine writer, reminded us in his book, Once in Golconda, a True Drama of Wall Street 1920-1938. Consider the stock-market crash, for example. A few minutes after noon on Black Thursday in 1929, when a kind of Homeric catalogue of the banking chieftains of the time gathered to engineer a consortium to bail out the market, they did so at J.P. Morgan's 23 Wall St. building, Mr. Brooks wrote. About 90 minutes later, Morgan's principal broker, Richard Whitney, entered the New York Stock Exchange and strode to the U.S. Steel post, where he bid for 10,000 shares at 205 -- the last price the stock had sold at but well above where it was being offered when Mr. Whitney arrived. Richard Whitney Halts Stock Panic, headlines declared the next day. Mr. Whitney became the personification of Wall Street, a bona fide national hero. He would go on to run the exchange, although his own investing improprieties would later see him declare bankruptcy and serve time in Sing Sing.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984367","date":"2005-04-22","texts":"Federal Reserve Chairman Alan Greenspan said yesterday, for the first time explicitly, that he expects tax increases to be part of any eventual agreement to reduce the federal budget deficit. Greenspan, appearing before the Senate Budget Committee, also acknowledged that his support for tax cuts in early 2001 unintentionally led to policies that helped swing the federal budget from surplus to deficits. In pointed comments, Greenspan addressed recent Democratic critics who have sought to blame him for the return to deficits. Greenspan reminded lawmakers that government economists at the time predicted budget surpluses as far as the eye can see. Yet Greenspan had warned then in congressional testimony that the forecasts might be wrong, and he recommended some trigger mechanism that would limit the tax cuts if certain budget targets were not met. Greenspan said he thinks it's frankly unfair for critics to blame him now for the fact that Congress chose to read half his testimony and discard the rest. Sen. Paul S. Sarbanes D-Md. said he believed it was fair to consider how your message would be taken and that lawmakers saw Greenspan's 2001 remarks as providing a green light for tax cuts, which were enacted without triggers.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616436","date":"2005-04-25","texts":"Dow Jones Newswires The backlog of initiaI public offerings waiting to be priced is smaller than a year ago, an indicator of a worsening environment for bringing companies public. About 114 companies are waiting to go public, based on filings with the Securities and Exchange Commission, down from 160 at the same time last year, according to data tracker Dealogic. The deals are estimated to be worth 20.9 billion, down from a waiting list worth 29.1 billion a year ago. Last week, just seven companies filed IPO paperwork with the SEC. Much of the slowdown has to do with the broader stock market, which has been in the red almost the entire time this year. Some is because companies need more time to comply with the Sarbanes-Oxley Act, which requires detailed summaries of internal controls and auditor opinions on those controls. And some is due to the rotten performance that some recent IPOs have put in, such as metal-products distributor Earle M. Jorgensen Co., which hasn't revisited its offering price of 10 a share since the moment it began trading.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615780","date":"2005-04-26","texts":"Today's Market Forecast Home Bound The scariest phrase in investing It's different this time. Scarier still is when people start acting on that conceit. This appears to be happening in hot housing markets, where many buyers are justifying heavy debt loads with the belief that the rising price will bail them out if they can't keep up with payments. Their attitude is Get me into that house before the price goes up any more, says Lehman Brothers economist Ethan Harris. Get me into that rapidly appreciating asset and if I have to, I'll sell it and make a lot of money off of it.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614165","date":"2005-04-27","texts":"STOCKS SLIPPED on a disappointing consumer-confidence report and mixed news from component companies of the Dow Jones Industrial Average. The Dow fell 91.34 points, or 0.9, to 10151.13, as DuPont was hurt by disappointing earnings and Hewlett-Packard's stock was pushed down by industrywide worries about the demand for printers. And American International Group was pummeled by mounting legal concerns, including heightened interest by New York state regulators regarding the insurer's booking of premiums on workers' compensation coverage. Those developments overshadowed a 1.1 rise in International Business Machines shares, to 75.43, after the computer maker announced a 5 billion share buyback and a dividend increase. Other stock indictors also weakened. The Nasdaq Composite Index lost 1.2, or 23.34 points, to 1927.44. The Standard & Poor's 500-stock index ended at 1151.74, off 0.9, or 10.36 points. The Conference Board's consumer-confidence index fell to 97.7 this month, worse than the consensus expectation of 98.0 in a survey of economists by Dow Jones Newswires and the worst in five months.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616500","date":"2005-04-27","texts":"Associated Press CHICAGO -- Chicago Mercantile Exchange Holdings Inc. reported that first-quarter profit surged 54 as electronic trading helped lift volume at the futures market. The company had net income of 70.9 million, or 2.04 a share, up from 46.1 million, or 1.35 a share, a year earlier. Revenue jumped 32 to 223.9 million as clearing and transaction fees increased 31 to 160.8 million. The results exceeded the expectations of analysts surveyed by Thomson Financial, who were looking for profit of 1.93 a share on revenue of 211.6 million. Shares of the company were up 11.39, or 6.4, to 189.40 in 4 p.m. New York Stock Exchange composite trading. Average daily CME volume climbed 39 to 3.9 million contracts, and trading on its Globex electronic platform rose 95 to 2.6 million contracts a day. Electronic volume represented 66 of its volume.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985297","date":"2005-05-01","texts":"Maryland motorists who suffer from sticker shock every time they fill their tanks routinely look for the cheapest fuel they can find. But they don't find much difference in prices from one station to the next -- or at least not as much difference as they found a few years ago. The reason lies in a fascinating tale of Annapolis favoritism. The story begins with the 2000 spike in oil prices, which caused gas prices to soar. Consumers responded by avoiding traditional service stations and buying lower-priced gas from chains such as Sheetz and Wawa. The two convenience chains were expanding into Maryland at the time, and several grocery stores and shoppers clubs also were opening gas stations to attract customers. The sight of motorists queuing up at these retailers worried the owners of traditional service stations, who appealed to state lawmakers for help. Annapolis has a history of restricting price competition to protect politically connected businessmen, so their call did not go unheeded. The result was legislation to prohibit retailers from selling gas below state-established minimum prices derived from weekly wholesale prices. The legislation also empowered the state comptroller to investigate reports of illegally cheap gas and gave the comptroller the authority to suspend or revoke the license of any retailer caught offering low prices. The legislation's supporters said the new law was necessary to prevent predatory pricing in which one retailer undercuts competitors to drive them out of business and then raises its prices. But I've not heard of a single instance in which Sheetz or Wawa had engaged in predatory pricing, which economists generally considered to be unworkable. Sheetz and Wawa fought the legislation, but in vain. It passed both houses of the legislature by overwhelming margins and was signed into law by Gov. Parris N. Glendening on May 18, 2001. The following September, Comptroller William Donald Schaefer sent letters to the editors of several Maryland newspapers proclaiming the legislation to be good for the consumer and assuring motorists that the new law would not cause gas price increases. When the law went into effect that October, Sheetz and Wawa promptly raised their prices. What would Maryland gasoline prices be like if the minimum-price law were lifted A loophole in the law gives an indication. A gas station can lower its price below the minimum in good faith to meet competition. If Sheetz or Wawa tried to lower its prices to draw customers away from a nearby service station, that would not be legal competition, and the owner of a competing station could call the comptroller's office. But what if a Sheetz store were near a Wawa outlet and they wanted to compete against one another instead of calling the comptroller In St. Mary's County, this is happening. As of April 18, one Wawa was selling regular unleaded for 1.99 the nearby Sheetz was selling it for 2. In response, the Texaco and Shell stations down the road were selling gas for 2 a gallon. In contrast, the statewide average gas price that day was 2.22 for regular unleaded.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614422","date":"2005-05-03","texts":"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. 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. 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. 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. 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.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617114","date":"2005-05-04","texts":"Dow Jones Newswires Option traders looking for action found it in the nursing-home sector. Traders priced in expectations of greater stock-price volatility into options on Kindred Healthcare Inc. and Manor Care Inc., two nursing-home operators. A proposed Medicare rule that could lower per- day reimbursement rates for nursing care -- a source of both companies' revenues -- is expected any day. The volatility implied by the nursing-home companies' short-term option prices jumped, suggesting that traders expect the stocks may soon make a move. Concerns about reduced Medicare reimbursement rates prompted Jefferies & Co. to lower its investment rating on Kindred and the stock-price target on Manor Care about three weeks ago. Kindred stock rose 69 cents to 34.53 in double its average daily trading volume in 4 p.m. New York Stock Exchange composite trading. Investors sold May 35 calls -- receiving an upfront payment in return for agreeing to sell the stock at 35. These calls traded 2,014 contracts, compared with 871 previously outstanding, and rose 60 cents to 1 at the American Stock Exchange.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985204","date":"2005-05-06","texts":"Productivity rose more than expected in the first quarter as U.S. companies reduced the number of hours their employees worked. The 2.6 percent annual rate of increase in productivity, which measures how much workers produce for every hour of work, followed a 2.1 percent increase in the previous quarter, the Labor Department said. Labor costs rose at a 2.2 percent annual rate after a 1.3 percent fourth-quarter gain. SBC Communications was denied permission by U.S. regulators to exempt new high-speed Internet and video services from rules that apply to voice and other Web products sold by phone companies. The Federal Communications Commission voted 4-0 to reject the petition from SBC, the second-largest U.S. phone company, according to the FCC's Web site. The FCC said it denied the request because the rules may not even apply and the petition wasn't specific enough. SBC, which plans to deliver the new video and faster-speed Internet services over a 4 billion fiber-optic network, could get a favorable government ruling later. FCC Chairman Kevin J. Martin has said he wants to remove old restrictions from the newer services. The Congressional Budget Office lowered its 2005 federal deficit forecast by 12.5 percent, following the lead of Wall Street forecasters. Taxes paid before the April 15 deadline exceeded expectations by 54 billion, and the CBO now estimates that the deficit for the current fiscal year will be about 350 billion. Private-sector analysts estimate that the deficit will be about 370 billion. Reviving the 30-year Treasury bond would be unlikely to raise long-term bond yields because of low inflation, Federal Reserve Chairman Alan Greenspan said. It is clearly a phenomenon which not only exists in the U.S. but pretty much around the world that is low, real long-term interest rates, Greenspan said. What we are observing is an underlying set of pressures which is a major factor causing disinflationary forces worldwide in the past decade. The Treasury will decide in August whether to reintroduce the 30-year bond. General Motors spun off the part of its pension fund that invests in venture capital and buyout funds. GM retains 49 percent of the new firm, Performance Capital Management, which manages about 7 billion. General Motors Asset Management of New York is the world's biggest corporate pension fund.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615483","date":"2005-05-10","texts":"Annualized interest rates on certain investments as reported by the Federal Reserve Board on a weekly-average basis WEEK ENDED May 6, Apr. 29, 2005 2005","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614921","date":"2005-05-11","texts":"Intricate and risky trading strategies in credit markets are suddenly causing pain, amid concerns about diminishing corporate credit quality. Among the credit-derivative products facing pressure collateralized-debt obligations, or CDOs, and credit-default swaps. CDOs typically are repackaged corporate debt with varying yields and levels of corporate risk. Investors can opt for CDO slices ranging from investment-grade corporate debt to unrated, extremely risky debt. Credit-default swaps are essentially products that provide insurance against a potential corporate debt failure. In both markets, turmoil has erupted, raising the pressure on investors such as hedge funds and Wall Street dealers to cut losses or reprice their positions. Speculation of hedge-fund troubles dogged the credit markets throughout yesterday's trading session. The Dow Jones CDX index of investment-grade credit-default swaps yesterday widened to 72 basis points, or 0.72 percentage point, from 63.25 basis points Monday, according to GFI Group. The European iTraxx indexes also came under selling pressure in the afternoon. The high- yield crossover index took the biggest hit, widening 25 basis points against a key benchmark to 380 to 385. Widening spreads reflect a flight to safety and away from riskier investments, such as corporate debt. It all started real fast, said Raymond Kennedy, high-yield portfolio manager at Pimco, a Newport Beach, Calif., asset-management firm. Investment-grade index products are just getting slaughtered. Junk bonds were suffering even steeper losses.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615982","date":"2005-05-11","texts":"Dow Jones Newswires The dollar was modestly weaker against most major currencies as some investors sold the U.S. currency ahead of the release of today's keenly awaited March trade-deficit data. Falling Treasury yields and U.S. equities added to the pressure on the currency, which still seems to be searching for a clear direction. The session's main winner was the euro, which strengthened against the dollar, yen and sterling, as traders took profits after driving the common currency lower in recent days. In late New York trading, the euro was at 1.2872, up from 1.2843 late Monday. The dollar weakened to 105.59 yen from 105.65 yen and to 1.2015 Swiss francs from 1.2055 francs. The pound fell to 1.8822 from 1.8832 on weak overnight data, while the euro moved to 135.88 yen from 135.66 yen. There were no major U.S. economic reports. The trade-deficit numbers could shake up the market in early New York trading today. The consensus of a Dow Jones Newswires and CNBC survey is that the deficit widened slightly to 61.5 billion in March, from February's record 61 billion.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984086","date":"2005-05-13","texts":"U.S. retailers rang up strong sales last month, suggesting that the economy has regained momentum even as many lower-income consumers remain hard hit by high energy prices. Retail sales jumped 1.4 percent in April, more than triple their mild 0.4 percent gain in March, the Commerce Department reported yesterday. Auto dealers, department stores, home furnishers, building materials and garden centers, grocers, and gasoline stations were among the retailers that reported sales growth. Following the news last Friday that job growth rose sharply in April, the retail report provided more evidence that the economy rebounded last month after noticeably losing steam in March. Signs of a 'soft spot' are disappearing, said Kevin Cummins, an economist with UBS Securities LLC, referring to the weak retail sales and decline in hiring, factory production and consumer confidence in March. At the same time, however, Wal-Mart Stores Inc. and others that cater to lower-income households continue to blame high energy costs, particularly gasoline prices, for their sluggish sales growth in recent months.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842615185","date":"2005-05-16","texts":"Federal Reserve Chairman Alan Greenspan defended the Sarbanes-Oxley Act that Congress passed after a series of corporate accounting scandals, saying he is surprised that a law enacted so rapidly has functioned as well as it has. Delivering a commencement address at the University of Pennsylvania's Wharton School yesterday, Mr. Greenspan said the 2002 law importantly reinforced the principle that . . . corporate managers should be working on behalf of shareholders to allocate business resources to their optimum use. Among other things, the law requires chief executives and chief financial officers to certify the accuracy of their companies' financial statements and accounting practices. Some executives, business groups and Bush administration officials have criticized the statute and the way the Justice Department and Securities and Exchange Commission are administering it, arguing that it is onerously expensive and discourages businesses from taking risks. The U.S. Chamber of Commerce has said that provisions governing the adequacy of internal controls have been implemented in such a manner as to damage the long-term competitiveness of U.S. companies and the U.S. capital markets and to create burdens on these companies and their management well beyond what Congress intended and what is needed to remedy acknowledged abuses.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984031","date":"2005-05-17","texts":"Federal banking regulators yesterday warned banks and other lenders to be more selective about who can get home equity loans and lines of credit because rising interest rates may make it harder for people to repay their loans. Government officials said that while mortgage defaults remain rare, many institutions are loading up on high-risk loans. They urged lenders to review interest-only loans, which allow borrowers to delay principal payments for years, and no-doc loans, which don't require documenting borrowers' assets and income. They also suggested that lenders that refuse to do so may find themselves facing heightened federal oversight. For consumers, it could become tougher to get some kinds of home equity loans, such as those that amount to 100 percent of a home's value. It may curtail the appetite of some lenders for taking risks and if it does, it would reduce the credit supply to some consumer groups, said Douglas G. Duncan, chief economist for the Mortgage Bankers Association. I think this is a policy that's long overdue, said John H. Vogel Jr., a professor of real estate at Tuck School of Business at Dartmouth University. We've built an entire housing finance structure based on the belief that housing will always keep going up, and people are using home equity loans with the assumption they can always repay them when they sell their houses at an increased value.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615209","date":"2005-05-18","texts":"AS ANTI-CHINA sentiment rises in Washington, the Bush administration is caught in a complex balancing act bashing Beijing enough to appease critics in Congress and stir action -- without provoking a trans-Pacific backlash. The U.S. is exerting pressure on economic issues and criticizing China's human-rights policy and belligerence toward Taiwan, just as it is begging Chinese leaders for more help in curbing nuclear weapons in North Korea and hoping China won't cozy up to anti-American governments in places such as Venezuela. If we push too hard, this could cool China's ardor for helping us on a number of issues, says David M. Lampton, director of China studies at the Nixon Center in Washington. Mr. Lampton says China also could potentially retaliate, for example, by shifting investments from U.S. dollar-denominated assets. Complicating the White House calculus is soaring hostility on Capitol Hill, which some administration officials call off the charts. Congress has largely deferred to President Bush's foreign- policy priorities, especially since Sept. 11, 2001, but China policy is one area where legislators are demanding a change of course, particularly on trade. Nobody has felt that more than Treasury Secretary John Snow, who recently went to the Senate to testify about his department's budget and found himself in a hearing rife with anti-China anger. China wants us to be a sponge for all their trinkets and trousers and shirts and shoes and all the things they produce, including high-tech, and yet, they don't want to open their market to us, Democratic North Dakota Sen. Byron Dorgan lectured the cabinet member, adding We sit around without the will, the nerve or the backbone to say this is nonsense we're not going to put up with this anymore.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985407","date":"2005-05-22","texts":"Any doubts that there is a housing bubble in many of the major markets were dispelled last week by fresh data on home prices and mortgages and warnings from bank regulators. The National Association of Realtors found that median prices for previously occupied homes rose at double-digit rates over the past year in 66 of the 136 metropolitan areas in its survey. That's the highest number since the Realtors began compiling such tables 25 years ago. For Washington, the figure was 22.7 percent. David Lereah, the NAR's chief economist and a bubble-doubter, noted that nationally, the figure was a less worrisome 9.7 percent. Like many in the industry, he blamed a shortage of supply for the price spikes. But others see more than a bit of speculation in a number of housing markets where half the properties are being bought for investment purposes or second homes. On the Gulf Coast, buyers are lining up with letters of credit from local banks to put down payments on condominiums in projects where construction has yet to begin. In other markets, there are reports of new homes being bought two or three times before someone actually moves in. In order to afford the higher prices, home buyers are opting for more of the loans that carry greater risk if values fall or interest rates rise. The Mortgage Bankers Association reported that adjustable-rate and interest-only loans accounted for nearly two- thirds of the mortgage originations in the second half of 2004. Both offer lower monthly payments than traditional 15- and 30-year fixed- rate mortgages favored by previous generations. Mortgage strategists at UBS called the shift to the new products symptomatic of . . . the end of the housing cycle.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830981641","date":"2005-05-29","texts":"Like many parts of the government, the Internal Revenue Service is all about balance How to balance programs that provide taxpayer services against those that crack down on tax cheats how to hold down costs but still bring in revenue. On Friday, the IRS announced that it would close 68 offices, including four in Maryland and two in Virginia, where taxpayers can walk in for face-to-face help with their tax returns and questions. The plan will put 434 employees at risk of losing their jobs, including 43 in Maryland and Virginia. We're being asked to create efficiencies and be responsible with taxpayers' dollars, said Mark W. Everson, IRS commissioner. The office closings, he said, will have the least impact on good service. Colleen M. Kelley, president of the National Treasury Employees Union, offered a different view The result of this unwise plan will be not only a sharp reduction in customer service but also a decline in taxpayer compliance with the tax laws. As in many years, budget pressures are helping shape IRS decisions. The agency faces a 1 percent cut in funds for taxpayer services in fiscal 2006 and also needs to find the money to cover a pay raise for its 93,000 employees, higher rents and inflation. That means the IRS has to scramble to cut costs by 130 million to 150 million.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983007","date":"2005-05-29","texts":"The Franklin Templeton Hard Currency Fund ICPHX, the oldest U.S. mutual fund that bets against the dollar, had a successful run during the past three years as the dollar lost value. So far, 2005 has been a different story. The 16-year-old fund is down 3.4 percent this year as the U.S. currency has rebounded against currencies, including the euro and the Canadian dollar, the fund's two biggest holdings. Michael Hasenstab, the 207 million fund's co-manager in San Mateo, Calif., says deep-rooted economic problems such as the bloated U.S. trade deficit will push the dollar lower again over time. There's a bit of a disconnect between fundamental developments and short-term movements in the dollar, said Hasenstab, 31, who has worked at Franklin since 1995. Hasenstab and co-manager Alex Calvo, 41, have more than a rising dollar to contend with. Their fund also faces competition from a batch of new rivals. ProFund Advisors LLC, Rydex Investments, Merk Investments LLC and Potomac Funds are lining up to offer six new U.S. currency funds, four of which are designed to go up when the dollar goes down. Demand for such funds faltered in the late 1990s when both U.S. stocks and the dollar were rallying. Franklin Resources Inc., the parent company, tried to merge the Hard Currency Fund with another fund in 2001, after assets fell to 33.6 million in October 2000. Fidelity Investments, the world's biggest mutual fund manager, closed three U.S. currency funds in 1997, citing insufficient demand.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614084","date":"2005-05-31","texts":"Dow Jones Newswires TORONTO -- The U.S. dollar's steady climb against other major currencies may stall or even reverse this week, as its recent rally pauses amid a heavy schedule of political and economic news. With financial markets in New York and London closed for holidays yesterday, the dollar gained against the euro after French voters strongly rejected the European Union constitution in Sunday's referendum. The dollar also firmed against the Swiss franc but was little changed against the yen. The foreign-exchange market will follow a similar referendum on the EU constitution in the Netherlands tomorrow as well as the usual litany of economic data from the U.S. and elsewhere. Late Monday, the euro was at 1.2474, down from 1.2574 late Friday. The dollar traded at 107.98 yen, from 107.95 yen, and 1.2388 francs, from 1.2313 francs. The pound fetched 1.8235, little changed from 1.8221.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614355","date":"2005-05-31","texts":"SOMETHING STRANGE HAS been going on in the bond market, and, so far at least, it has been great news for stocks. As the Federal Reserve has continued to raise short-term interest rates, longer-term government-bond yields haven't followed suit. They have fallen back to levels that some experts didn't expect to see again in their lifetimes. After declining for two months, the yield of the 10-year Treasury note was at a paltry 4.08 Friday, well below the 4.6 level at which it stood when the Fed started raising short-term rates a year ago. Prime lending rates, pegged to the Fed rates, are up. But fixed mortgage rates and some corporate borrowing rates, which are pegged to bond yields, are at or below year-ago levels. For a few stock investors, this conundrum, as Fed Chairman Alan Greenspan has called it, is bad news, because it could presage a weak economy. But the prevailing view in the stock market is one of celebration. Many stock investors believe falling bond yields are predicting some good news indeed low inflation, moderate economic growth and an end soon to the Fed's rate increases. That kind of Goldilocks economy, not too hot or too cold, would be fine for stocks.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616543","date":"2005-05-31","texts":"Opponents of education vouchers like to say they prefer public school choice known as charters. But even that claim often turns out to be an illusion under pressure from teachers unions. Consider what's happening in Connecticut, where Republican Governor M. Jodi Rell is resisting charter expansion despite their notable success in the state. Charter schools -- which are free from many of the union work-rule constraints imposed on regular public schools -- have been allowed in Connecticut since 1997, and there are now 14 of them. A study by Western Michigan University found that the state's charter students are gaining more on the state assessment tests than students in surrounding traditional public schools. If charter middle schools were treated as a single school district, it would lead the state among districts with more than 25 black and Hispanic enrollment. Another WMU study conducted three years ago found similar results, and the authors note that, of the six states they're monitoring, the results from Connecticut are the most positive and promising for charter schools that we have seen. Alas, Connecticut is also one of only two states -- the other is New Jersey -- that artificially cap charter enrollment at 300 students per school, and thus its schools have an average waiting list of 200 students. Reformers want to expand the number of charter schools, as well as remove the enrollment limit make charters eligible for the state's school construction program and raise charter spending by a modest 10 million to bring them in line with what the state spends on other public schools. Connecticut currently spends on average about 9,100 per student in regular public schools, though that figure can run to 13,000 in urban districts such as New Haven and Hartford. Teacher salaries are among the highest in the country. By contrast, under current law the state allots charters just 7,250 per student, even though most charters operate in urban districts and, unlike regular public schools, must also cover their own facility costs.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613808","date":"2005-06-02","texts":"For months, pessimistic bond markets and optimistic central bankers have been in a tug of war over where the world economy is headed. A renewed plunge in long-term interest rates world-wide suggests the pessimists are winning. Government bond yields in the U.S., the euro zone and Asia have all fallen sharply in recent weeks, fed by a diet of disappointing economic data, lackluster business investment and -- in a new development yesterday -- hopes that the Federal Reserve will soon take a break from raising interest rates. The decline in long-term interest rates mystifies central bankers -- even Fed Chairman Alan Greenspan. They see creeping inflation risks and a still-robust outlook for the global economy outside of Europe. And they're increasingly concerned that low long-term rates are also fueling an unsustainable surge in housing prices. Prices of 10-year Treasury bonds jumped yesterday and yields, which move in the opposite direction, tumbled to 3.89, from 4 Tuesday. That's the lowest since March last year, before the first of the Fed's eight quarter-percentage-point interest-rate increases. The drop came after Richard Fisher, new president of the Federal Reserve Bank of Dallas, said that the Fed is in the eighth inning of raising rates, suggesting he believed an increase by the Fed later this month might be its last. Investors expect the Fed to boost its target for the federal-funds rate, charged on overnight loans between banks, to 3.25 from 3 at its meeting on June 29 to June 30. Mr. Fisher's comments are at odds with those of other Fed officials who have emphasized that interest rates are still too low to ensure low inflation. But his remarks reinforced a view of many bond traders and a few economists that economic growth in the U.S. is slowing and inflation is ebbing, both of which will lead the Fed to take a pause from raising rates.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984272","date":"2005-06-05","texts":"Jonathan Coe's new novel, The Closed Circle, is an immensely satisfying sequel to The Rotter's Club 2001. That book -- frequently funny, occasionally harrowing -- followed a group of anxious teenagers in Birmingham, England, through the 1970s. The world around them was torn by labor strikes, race riots and acts of terrorism, but those calamities could only occasionally break through their real worries forgetting a bathing suit, passing a physics exam or getting a pretty girl into bed. The Closed Circle picks up more than 20 years later, on the eve of the new millennium, when these friends and the world are all grown up. They dress better, listen to more sophisticated music and feel more concerned about wrinkles than acne, but they're still anxious, still worried about making the grade, still trying to figure out with whom they should sleep. Most of them have no better idea of who they are than they did in high school, but now they're afflicted with an aching sense of nostalgia, too. There were some feelings that never faded, one of them realizes, no matter how many years intervened, no matter how many friendships and marriages and relationships came and went in between. This is, in many ways, a book about the function of nostalgia, about what's remembered and misremembered, which makes it a particularly easy sequel to enter. The characters constantly remind each other and us of events from their past, and at the back is a brief summary of The Rotter's Club for those who have not read it, or who perhaps -- having read it -- have inexplicably forgotten it. Coe is a witty writer with a talent for social satire that singes characters without burning away their humanity. He's particularly interested in the way people manage their personal lives in relation to the political climate, and so the plot of The Closed Circle constantly runs beyond its fictional edges into the pages of contemporary history. Too many novelists avoid this kind of topicality, as though they're creating sitcoms and desperate to avoid dating themselves in syndication. But Coe writes his characters right up to the moment, providing critical commentary -- on globalization and the war in Iraq, for instance -- that sounds almost as current as this week's op-ed pages. The novel opens with Claire Newman's return home after six years in Italy and a failed relationship that makes her feel as if she's made no progress in her life at all. The time away has also given her a fresh perspective on Birmingham, and it's not reassuring My first impression, she writes to her dead sister in a long-running journal, is that there are vast numbers of people who don't work in this city any more, in the sense of making things or selling things. All that seems to be considered rather old-fashioned. Instead, people meet, and they talk. And when they're not meeting or talking in person, they're usually talking on their phones, and what they're usually talking about is an arrangement to meet. What's more alarming to her, though, is the mental climate Underneath is something else altogether -- a terrible, seething frustration.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985060","date":"2005-06-05","texts":"Just when a little spark has returned to money market mutual funds, things are about to get complicated. For almost a year now, yields on these packages of short-lived securities such as Treasury bills and commercial paper have staged a nice, steady recovery toward respectability as the Federal Reserve has raised short-term interest rates. The average yield on money funds, which scraped bottom at about 0.5 percent in April 2004, has climbed back to a 312-year high of 2.44 percent as of May 31 at last report by researchers iMoneynet in Westborough, Mass. It figures to go higher still, especially if on June 30 the Fed posts another quarter-point increase, to 3.25 percent, in the overnight bank rate. Here's the rub With each basis point, or hundredth of a percentage point, that money rates increase, they move closer to medium- and long-term rates that have been rising less sharply or not at all. If Fed policymakers, who have raised short-term rates 25 basis points at each of their last nine scheduled meetings, were to keep doing that, the target rate would reach 4 percent by Nov. 1.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615696","date":"2005-06-07","texts":"Annualized interest rates on certain investments as reported by the Federal Reserve Board on a weekly-average basis WEEK ENDED Jun 03, May 27, 2005 2005","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613672","date":"2005-06-08","texts":"Dow Jones Newswires Emboldened by the recent turnaround in auto bonds after General Motors Corp.'s smooth transition to speculative-grade ranking, bondholders responded warmly to rival Ford Motor Credit's first foray into the corporate-bond market since Standard & Poor's lowered its credit ratings to junk in May. The finance arm of Ford Motor Co. sold an unsecured offering of 1.5 billion, increased from 1 billion. Its three-year notes have a coupon of 6.625 at a price of 99.259, for a yield of 6.902. That amounted to a yield margin of 3.30 percentage points over comparable Treasurys, in line with expectations. UBS and Lehman Brothers were the lead managers on the bond offering. In light of recent events, investors are increasing their risk appetite, said Brian Ropp, an auto analyst at T. Rowe Price in Baltimore. This, and the attractive spread concession on Ford Motor Credit's new issue should see this deal do well, Mr. Ropp added. Spreads are the difference in yield between bonds and comparable U.S. Treasurys paid to investors for owning riskier corporate debt. The 1.5 billion deal garnered around 4 billion in orders from investors, according to one market participant. The deal was put together partly in response to inquiries by investors about an offering from Ford, people familiar with the situation said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614237","date":"2005-06-08","texts":"BEIJING -- Chinese central bank chief Zhou Xiaochuan warned that mounting political pressure on Beijing to revalue its currency, and overblown expectations about how such a move may help correct imbalances in the world economy, are making it more difficult for China to take action. His U.S. counterpart, Federal Reserve Chairman Alan Greenspan, said he is confident Beijing would make a move reasonably soon, since it was in China's own best interests. The two bank officials were speaking to a gathering of world bankers yesterday in Beijing. China has come under increasing pressure from its trade partners to revalue the yuan. U.S. and European manufacturers complain that an overly cheap yuan gives Chinese companies an unfair advantage by making their exports more competitive. The White House is trying to stave off growing protectionist pressure in Congress by pushing China for a substantial appreciation of the yuan, which is pegged at 8.28 to the dollar. The U.S. Treasury has said China risks trade sanctions unless it eases the peg within six months. Mr. Zhou, an English-speaking technocrat, is widely believed to advocate a more flexible currency and greater use of other market mechanisms, such as interest rates, to iron out the boom-bust cycles that plague the Chinese economy. Some Chinese officials fear that if Beijing abandons the peg, it would be pulling up an anchor that has held the economy steady for more than a decade. Yesterday, Mr. Zhou touched on some of those concerns, telling bankers that China is concerned about how any yuan appreciation could affect domestic jobs and growth. While China remains committed to currency overhauls, he said, China's banks need more time to prepare.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983012","date":"2005-06-08","texts":"Wall Street gave up a substantial early gain and staggered to a mixed finish Tuesday after a Federal Reserve official warned that interest rates might continue to climb. The Dow Jones industrials had surged more than 111 points before Federal Reserve Bank of Atlanta President Jack Guynn said in a speech that the Fed's Open Market Committee was not yet ready to stop its policy of modest rate hikes. Guynn's comments set off profit-taking that left the Dow with a minimal gain and the Standard & Poor's 500-stock index and Nasdaq composite index with slight losses. It was an earlier, bullish assessment of the economy from Fed Chairman Alan Greenspan, given in a speech broadcast at a meeting of central bankers in Beijing late Monday, that triggered the initial advance. Greenspan said the economy would remain strong and intimated that the Fed could soon stop raising interest rates, at least for the short term. With seemingly conflicting comments from the Fed committee members, investors remained confused as to whether the economy was headed for a harsh slowdown and whether the Fed would continue raising interest rates through the summer. The Dow rose 16.04, or 0.2 percent, to 10,483.07. The Nasdaq fell 8.60, or 0.4 percent, to 2067.16, and the S&P 500 slipped 0.25, or 0.02 percent, to 1197.26.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616913","date":"2005-06-09","texts":"Dow Jones Newswires Small stocks gave back Tuesday's gains and then some, as a broad market rally failed late for the second consecutive day. Trucking stocks were among the session's worst performers after Bear Stearns cut its ratings on several companies, citing inconsistent demand, decelerating pricing and increased cost pressures. Among small stocks, the broker cut its rating on Heartland Express, Werner Enterprises, Covenant Transport and Knight Transportation NYSE to underperform from peer perform. Heartland fell 98 cents, or 5, to 18.52 Werner dropped 85 cents, or 4.5, to 18.15 Covenant slid 89 cents, or 6.8, to 12.30 and Knight gave up 2.22, or 8.9, to 22.66. Thanks to positive commentary from large-cap Texas Instruments, semiconductor-related stocks gained ground as a group. Among small stocks, Kulicke & Soffa Industries added 18 cents, or 2.7, to 6.95, Lattice Semiconductor added 13 cents, or 3.1, to 4.29, and Kopin gained nine cents, or 2.4, to 3.85.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613875","date":"2005-06-10","texts":"Federal Reserve Chairman Alan Greenspan said the economy has left its soft spot behind and that companies' pricing power is more evident, suggesting more interest-rate increases are to come. Mr. Greenspan also focused on new risks to the economic outlook, specifically high housing prices. In a report released yesterday, the Fed said the value of all U.S. housing climbed 15 in the first quarter from a year earlier, and mortgage debt rose 13, both easily outstripping the 6 gain in after-tax income over the same period. The soft readings on the economy observed in the early spring did not presage a more-serious slowdown, Mr. Greenspan told Congress's Joint Economic Committee. Though there have been periods of weakness during the expansion, they are backing and filling. . . . Instead of the economy going very smoothly forward it goes in little cycles. And hence, it's often misread as though we're about to tilt into a recession. He said inflation was contained, but cited risks slowing productivity growth, which makes it more costly for firms to boost sales, and evidence of increased pricing power. The Fed has raised its target for the federal-funds rate, charged on overnight loans between banks, to 3 in eight quarter-point steps from 1 last June. Mr. Greenspan didn't address future rate moves, but quoted from the Fed's May 3 statement that interest rates would likely continue to rise at a measured pace. That has come to mean a quarter point per meeting. His commentary suggested that the Fed, contrary to recent speculation, probably will raise rates at least a few more times.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613748","date":"2005-06-13","texts":"CAPITAL EXCHANGE HOUSING PRICES CAPITAL EXCHANGE ALLOWS readers to weigh in on The Wall Street Journal's weekly Capital column, in which David Wessel looks at the economy and the forces shaping living standards world-wide. Here are some of the reader comments and Mr. Wessel's responses to the recent Capital column about Federal Reserve officials showing more signs of worry on rapidly rising housing prices. RICK BROOKS WRITES I have heard of a long-term relationship between house prices and annual income or wage growth. Do you know of any studies that make the case for this relationship DAVID WESSEL RESPONDS","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614453","date":"2005-06-16","texts":"THE MORTGAGE industry is starting to make the move from short to long. Lenders are rolling out a new crop of 30-year fixed-rate mortgages that let homeowners make low, interest-only payments for as long as 10 or 15 years. It is the latest effort to snare borrowers seeking lower monthly payments. Also getting a new push mortgages that stretch for as long as 40 years. The newest crop of products is largely aimed at borrowers who are looking for lower payments but are also concerned about interest-rate risk. In recent months, mortgage experts have been surprised by the continued strong interest in adjustable-rate mortgages at a time when borrowers can still lock in a fixed-rate loan at rates well below 6. With rising short-term interest rates reducing the relative attractiveness of adjustable loans, lenders are seeing greater interest in loans that protect borrowers from rising interest rates -- and are introducing products for that market. Last month, Wells Fargo & Co. rolled out a 30-year fixed-rate mortgage that is interest-only for the first 10 or 15 years. The interest rate remains the same throughout the life of the loan, but the monthly payment is recalculated after the interest-only period ends so that the mortgage balance is paid off over the remaining 15 or 20 years. U.S. Bank Home Mortgage, a unit of U.S. Bancorp, plans to introduce a 20-year fixed-rate mortgage with an interest-only feature for the first 10 years. Bank of America Corp., IndyMac Bancorp Inc. and LendingTree.com, a unit of IACInterActive Corp., all have fixed- rate interest-only mortgages in the works. Forty-year mortgages -- which keep monthly payments down but cost more over the long term -- also are attracting more notice in the wake of Fannie Mae's recent decision to expand its purchases of these loans. First offered in the 1980s, 40-year loans account for less than 1 of mortgage originations, according to the Mortgage Bankers Association. More banks may be willing to offer them now that they know they can be sold to Fannie Mae, which has been purchasing 40-year mortgages since September 2003 under a pilot program with 22 credit unions. Fannie will purchase both fixed- and adjustable-rate 40-year mortgages.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614651","date":"2005-06-16","texts":"Dow Jones Newswires Investors are showing a renewed interest in, if not a preference for, preferred stock. A company's preferred stock generally pays a fixed dividend that yields more than a company's common stock. It is less subject to sudden price swings, and it is called preferred because of its place in line ahead of holders of common stock in case of a bankruptcy proceeding and liquidation. In addition, a preferred dividend is paid out before a common dividend. And it is much less likely for a preferred dividend to be cut. Preferred shares enjoyed a surge in popularity after a new tax law was enacted during President Bush's first term, which cut the tax rates on dividends to an average of 15 from as high as 38.6. They are enjoying another renaissance now as investors turn to them to get better yields in a lower interest-rate environment and also to seek shelter from the volatile equity market.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982747","date":"2005-06-16","texts":"Consumer prices fell in May, the first decline in 10 months, as energy costs eased from highs hit in early April, the government reported yesterday. The figures suggest that after a year of Federal Reserve interest rate increases, the U.S. economy is in pretty good shape, growing at a decent clip with low inflation, unemployment and interest rates. But the Fed is far from declaring victory, or finishing its work of raising its benchmark short-term rate -- contrary to the hopes and predictions of many traders and analysts in the financial markets. Federal Reserve Chairman Alan Greenspan indicated to Congress's Joint Economic Committee last week that the central bank remains concerned about the potential for future inflation. Interest rates remain too low. Labor costs are rising. Businesses are finding it easier to raise prices. And Fed officials are intensely studying whether the red-hot housing market might contribute to higher overall consumer prices. To keep the lid on inflation, he suggested, the Fed probably will keep steadily raising short-term interest rates in the months to come.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615344","date":"2005-06-21","texts":"In recent months, one overriding debate has raged within the world- wide financial community. How can long-term U.S. interest rates be so low And how can so many economists have been so wrong on their interest rate forecasts No less a figure than Alan Greenspan, chairman of the Federal Reserve Board, famously described this question as a conundrum in congressional testimony earlier this year. It is stunning for the head of our central bank to describe himself as mystified by the behavior of overall rates. But he has plenty of company. This observer cannot recall a bigger disconnect between conventional wisdom and market reality on such a central issue. Indeed, today, yields on 10-year and 30-year U.S. Treasury securities have fallen to the astonishingly low levels of 4.1 and 4.4 respectively. Both are lower than the average annual yield for these securities over the last 25 years. These low rates persist even in the face of powerful factors which, in historical terms, should drive them up, including monetary policy itself, a strong U.S. economic growth outlook and the increasingly large size of our current account deficit. This contradiction is, in essence, the conundrum. Three alternative schools of thought have emerged to explain it. One is that the bond market has overshot. A second is that the growth outlook is actually weaker than the consensus forecast, and the bond market is discounting such slower growth before it manifests itself. But the right answer involves excess global liquidity which, for the moment, has nowhere else to go but into dollar-denominated fixed- income assets like U.S. Treasury securities. --- Before we proceed, let's review the conundrum itself in detail. Chairman Greenspan's precise comment referred to the unprecedented behavior of longer-term interest rates in light of recent monetary policy. He noted that the Federal Reserve Board has raised the Federal Funds Rate eight times since June, 2004. Mr. Greenspan emphasized that past increases in the shortest-term rates have always pushed up long- term rates. But not this time.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614489","date":"2005-06-24","texts":"Today's Market Forecast Out of Order Investors carp that the world has entered an era of low returns. Companies are acting as if they share this view. Even though it is five years since the tech bubble began deflating and three years after the brunt of uproar over corporate misbehavior bore down upon them, executives are still playing a conservative game. Despite brimming coffers and a generous financing environment, both spending on new equipment and hiring have lagged behind expectations. Today's Commerce Department report on durable-goods orders in May should give some indication of the pace of business spending. The aspect of the report economists will focus on will be nondefense capital-goods orders excluding aircraft, which provides a good reading on what companies are spending on things like computers and backhoes.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616086","date":"2005-06-24","texts":"Wait, I thought you told the SEC. Charter Communications Inc., the cable operator controlled by Microsoft co-founder Paul Allen, is hitting bumps with an unusual issue of new stock tied to its sale last November of 862.5 million in convertible notes. Charter isn't shouldering its burden alone. The investors who bought those notes are right there with it. Selling the convertibles was a tall order to start with. The St. Louis company has more than 19 billion in debt, and bearish short sellers account for more than a third of Charter's publicly available stock. Ordinarily, hedge funds -- major buyers of convertibles -- would take a pass. These investors typically borrow a company's stock and short it as a hedge against owning the convertibles -- if the stock rises the convertibles become more valuable should the stock fall, the short position pays off. But the huge short position in Charter stock makes it prohibitively expensive to borrow more of the stock to sell it short. So Citigroup Global Markets Ltd., the underwriter of the convertibles, came up with a twist. The bank lined up investors for the notes and got Charter to promise to issue 150 million shares of new stock that would be lent to Citigroup. Citigroup would turn around and lend the stock to the note buyers, enabling them to replace the expensive stock they borrowed to short Charter and thus comfortably lock in their hedge against the 5.875 notes, which mature in November 2009 and can be converted into Charter shares should the stock hit 2.42. Charter shares traded at 1.23, up one cent, in 4 p.m. Nasdaq Stock Market composite trading yesterday. Citigroup had a road map for doing this. Power giant Calpine Corp., another heavily indebted, heavily shorted company, last year sold 736 million in convertible notes tied to an issue of 89 million new shares. Calpine lent the shares to Deutsche Bank Securities, a banker on the deal, which lent them to hedge funds that bought the convertibles. The new stock issue wasn't dilutive because, under the terms of the deal, the shares will be returned to the company in 10 years when the convertibles reach maturity.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982576","date":"2005-06-26","texts":"Is there any truth to the image of telecommuters as pajama-clad, unshaven workers who get easily distracted by child care, personal telephone calls or housework Probably not, according to AT&T Corp., which tracked its employees' telework patterns for the past 10 years. In fact, the company's surveys show that its teleworkers are more productive than those who work in an office. Most large companies today have at least a few people who telecommute from home, if not on a daily basis, then with some sort of regularity. With longer commutes, child-care issues, a global economy and, of course, much better technology, it only makes sense to allow workers to work from home at times. About 90 percent of AT&T's management employees work from home at least some of the time, while 30 percent of them work completely from home. Other workers have the ability to spend days at home on an as-needed basis. But with our new world of widespread telecommuters come growing pains. Telecommuting mistakes can cost companies money, productivity and employee morale, according to AT&T. Its own casual study of worst practices that's such a nice change from all the best- practices research out there found that companies don't trust employees to be productive, said Cathy Martine, senior vice president of Internet telephony at AT&T. Companies also face problems in that teleworkers miss face-to-face contact. But those companies that don't permit teleworking fall flat during weather or other disasters, when employees could have worked from home, even if they could not travel to the office.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613761","date":"2005-06-28","texts":"Although global growth is chugging along, the world's economies are exposed to an unusual number of risks, according to a report prepared for the world's central banks. The troubling signs range from record housing prices and soaring indebtedness to an ever-widening U.S. current-account deficit and remarkably low bond yields. Any shift back to more ordinary levels could potentially be rapid and disruptive, according to a report yesterday by the Bank for International Settlements, an international organization that fosters cooperation among the world's central banks. On the whole, world-wide growth is fairly strong and inflation is tame, but many central banks are nevertheless worried. The last time the world economy faced such a confluence of imbalances was in the late 1960s. Then, the situation contributed to soaring inflation in the 1970s and the debt crises of the 1980s that affected many emerging-market economies. Most economists don't think this will happen again because the world economy is more deregulated and globalized -- which, along with inflation-focused central banks, should take the heat off excessive price increases. One of the textbook prescriptions for many of the looming problems is higher interest rates. But that can cause unemployment and unhealthfully low inflation, the report said. The challenge is to address the sources of potential unsustainability without, in the process, inducing a marked slowdown in world growth, Nout Wellink, president of the BIS, said yesterday. It is a tricky moment for central banks, which have debated for years over how to deal with potential bubbles. There is no consensus The U.S. Federal Reserve prefers a hands-off approach when it comes to bubbles and simply cleans up the mess afterward the European Central Bank tries to keep bubbles from emerging to begin with.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614055","date":"2005-07-01","texts":"Fannie Mae has had to restate earnings covering the past several years, but the company's economist got his numbers right for this survey. Mr. Berson accurately predicted that the nation's gross domestic product -- the most widely used barometer of economic growth -- would be above the consensus expectation of 3.5 growth in the first quarter of 2005. His forecast was 3.9 the government reported Wednesday that the actual figure was 3.8. Mr. Berson also nailed his forecast for the change in the consumer-price index, which advanced 2.8 for the 12 months through May. Strong growth and inklings of inflation would normally lead to much higher yields on long-term Treasurys. But it didn't in the first half, and that is what really set Mr. Berson apart from other forecasters. The panel got walloped -- yet again -- by the bond market. The consensus among economists was that 10-year Treasury yields would rise from 4.2 in December to 4.8 by the end of June. But yields declined instead to 3.9. Mr. Berson said they would rise to only 4.45, making him less wrong than just about everyone else. Mr. Berson, who has worked at Fannie Mae for 17 years, is a baseball fanatic whose favorite number-cruncher is Bill James, a cult hero among baseball fans for his statistical abstracts of the nation's pastime. Mr. Berson said he will keep his first-half home run in perspective. I'm constantly humbled by bad forecasts in both baseball and economics, he said. Right behind Mr. Berson was Lawrence Kudlow, the popular CNBC-TV commentator and head of the economic-consulting firm Kudlow & Co. He correctly predicted strong growth and a firmer dollar. Rounding out the top five were Mickey Levy of Bank of America Corp., Robert DiClemente of Citigroup Inc. and David Littmann, who retired from Comerica Inc. -- and our survey -- earlier this year. The least-accurate forecasts came from James Smith, a University of North Carolina business-school professor who predicted that falling oil prices would push the consumer-price index into negative territory Bob Shrouds and Robert Fry, DuPont Co. economists who forecast a sharp economic slowdown and Ellen Hughes-Cromwick, Ford Motor Co.'s chief economist, who predicted weaker growth and rising bond yields. Ironically, another person near the bottom -- David Rosenberg at Merrill Lynch & Co. -- had the best forecast for Treasurys. He said bond yields would drop to 3.8. But Mr. Rosenberg, one of the more bearish economists on Wall Street, missed the boat by predicting weak growth and much tamer inflation.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616966","date":"2005-07-01","texts":"THE MERGERS TRAIN just keeps rolling along. The past three months of mergers and acquisitions produced the most active period since the end of 2000, with corporations and investors putting down 665.9 billion for deals around the world, 53 more than the year-earlier period. From utilities and cable television to banks and real estate, companies showed they wouldn't shy away from doing deals even amid a lackluster stock market. If earnings improve and cash continues to pile up on corporate balance sheets, the next six months stand to produce a similar stream of deals, say the bankers and lawyers who put the transactions together. Still, there probably will be few blockbusters, such as the one announced yesterday Bank of America's roughly 35 billion purchase of MBNA Corp. Instead, expect a procession of announcements driven by these M&A stalwarts cost- cutting and modest geographic expansion. Boards are still cautious, says Boon Sim, head of mergers and acquisitions for the Americas, at Credit Suisse First Boston. I don't think there are any 'concept' deals out there. The market is still pretty disciplined, and that trend will continue for the rest of the year. Still, activity in the second quarter picked up by nearly every measure. In the U.S. alone, the amount spent on deals surged 73, compared with the second quarter of 2004, and rose 20 from this year's first quarter. Private-equity firms continued their march into the fray, accounting for 17 of global M&A activity, a sharp increase from 11 last year, according to data from Thomson Financial. Through the first-half of this year, the dollar volume of global deals involving retailers surged 137 according to data firm Dealogic, while oil and gas deals also leapt 137, and technology rose 60.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617246","date":"2005-07-01","texts":"Dow Jones Newswires Americans' personal incomes grew at a much slower pace in May but still eclipsed the month's flat spending rate. Personal income rose at a seasonally adjusted annual rate of 0.2, after rising 0.6 in April, the Commerce Department said. Personal consumption didn't budge in May after climbing 0.6 in April, putting the savings rate for Americans at 0.6 in May, the first time in five months that it increased from the previous month's pace. Economists blamed rising energy prices for weak consumer spending. Previous data showed retail sales dropped 0.5 in May, partly because of slumping auto demand. But some analysts believe spending bounced back in June. May was kind of a pause in an otherwise healthy trend, Robert McGee, chief economist at U.S. Trust in New York, said of the unchanged reading on consumer spending.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984952","date":"2005-07-01","texts":"Bank of America's plans to buy MBNA Corp., creating a credit card giant, give new fuel to the debate over whether consumers are better served by bigger companies. While supporters argued yesterday that the deal would give customers access to a wider array of services, some consumer advocates warned that the merger could reduce competition and drive up interest rates and fees, as well as pose new privacy concerns. A merger between Bank of America, the nation's fifth-largest credit card company, and MBNA, the third-largest, would create the largest credit card issuer in the country, as measured by balances outstanding. The company would account for one of every five dollars charged on plastic. This is horrible for consumers, said Robert Manning, a Rochester Institute of Technology professor and author of Credit Card Nation, a critical look at the credit card industry. There will be fewer options and fewer big players. Consumers, who now are often charged 39 in late fees if their payment arrives past the due date, can expect 50 late fees coming up on the horizon, within a year or so, Manning said. They also can expect to see the rash of promotional low-interest rate offers shrink, he added. MBNA was the most generous in balance transfer offers. If that's off the table, this will be the beginning of the end for people with a lot of debt who played the rotating credit card debt game.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983421","date":"2005-07-03","texts":"Mutual funds squeezed out small gains in the second quarter of 2005 after a lackluster start to the year, as inflation remained tame and investors seemed to shrug off concerns about surging energy prices. U.S. diversified stock funds, which are the most common type of mutual funds, posted a return of 2.32 percent for the second quarter as of June 30, compared with a negative return last quarter. But analysts say investors should still be cautious. Whether positive returns continue depends on volatile oil prices and on how much the Federal Reserve raises its benchmark short-term interest rate this year, analysts said. On Thursday, the Fed bumped up the short-term interest rate by a quarter percentage point for the ninth time this year, bringing it to 3.25 percent. It's the magnitude of changes people are concerned about, said Tom Roseen, a senior research analyst at Lipper, the mutual fund research company that released the latest preliminary numbers. If the Fed decides to tighten more aggressively, both in time frame and in magnitude, that could put a strain on the market as a whole. People got nervous in the first quarter of 2005, as consumer prices rose more quickly than in previous months. Investors worried that the Fed would raise its short-term interest rate more aggressively to curb the risk of inflation. The result U.S. diversified stock funds saw negative returns of 2.52 percent.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613618","date":"2005-07-06","texts":"Annualized interest rates on certain investments as reported by the Federal Reserve Board on a weekly-average basis WEEK ENDED Jul. 01, Jun. 24, 2005 2005","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985503","date":"2005-07-07","texts":"For the first time in six years, the Howard County Council will consider an increase in the county's taxi fares, largely because of gasoline prices, which have doubled during that time. As the normal cost of living increases and the price of gas keeps going up, we figured it was time, said Frank Awuah, operations manager of Columbia Cab, the county's largest taxi company, which sought the increase. The resolution includes an increase in mileage rates and a first- time gasoline surcharge of 90 cents per trip. Sheila Tolliver, council administrator, said that under the proposed rates, a 10- mile in-county trip would cost 21.94, up from 14.95. A three-mile trip, more typical for most local passengers, would cost 7.32, an increase of 2.37. Some passengers and council members said the measure, coming atop the Maryland Transit Administration's proposal to eliminate several bus routes in the area, would further limit public transportation options for residents on fixed incomes. A public hearing on the measure is scheduled for 730 p.m. July 18 in the Banneker Room of the George Howard Building, 3430 Courthouse Dr., Ellicott City. A council vote is scheduled for July 28. The resolution would keep the fare for the first three-eighths mile at 1.90 and increase it for each additional one-eighth mile from 15 cents to 22 cents. The surcharge for trips outside the county would increase from 2 to 2.50, and the fee for credit card charges of more than 20 would rise from 1 to 2.50. The new fees would apply to all four county taxi companies, although Columbia Cab and Columbia Flyer are the largest by far.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614324","date":"2005-07-08","texts":"FINANCIAL MARKETS rebounded after shuddering in the wake of the London bombings. The Dow industrials closed up 31.61 points at 10302.29. London's FTSE 100, down nearly 4 at one point, finished at 5158.30, 1.4 lower. Treasurys and gold jumped, but later gave back most or all gains. Oil settled down 55 cents at 60.73 after first plunging on fears of an economic slowdown. --- The ECB and Bank of England left interest rates on hold. The ECB tried to quell fears that the London attacks would further dent Europe's economic recovery. --- The London attacks are likely to have only a temporary impact on airlines and travel companies, industry analysts said.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984055","date":"2005-07-08","texts":"After Sept. 11, 2001, the world learned that counterterrorism specialists had seen that kind of attack coming, they just did not know when and where it would take place. In a similar sense, they saw yesterday's London bombings coming, too they have been warning of such a strike on European soil for much of this year. It took only a few hours for British Foreign Secretary Jack Straw to conclude that the assault bore the hallmarks of an al Qaeda- related attack. And while investigators were still sifting through the evidence, the available facts -- the British venue, the soft targets with economic importance, the timing during the Group of Eight summit in Scotland and the relatively simple operational techniques -- conformed almost precisely to the methods of what specialists describe as an evolving al Qaeda movement. Now more a brand than a tight-knit group, al Qaeda has responded to four years of intense pressure from the United States and its allies by dispersing its surviving operatives, distributing its ideology and techniques for mass-casualty attacks to a wide audience on the Internet, and encouraging new adherents to act spontaneously in its name. Since the 2003 invasion of Iraq, terrorism experts in and out of government have warned that the movement has appeared to gain ground, particularly in Europe, where a large, mobile, technology- savvy and well-educated Muslim population includes some angry and alienated young people attracted to the call of holy war against the West. The simultaneous bombings of four rush-hour commuter trains in Madrid on March 11, 2004, the shooting death of Dutch filmmaker Theo Van Gogh last November and recent preemptive arrests made by European police suggest a less top-down, more grass-roots-driven al Qaeda. The movement's ability to carry off sophisticated, border- crossing attacks such as those Osama bin Laden and his lieutenants mounted against New York and the Pentagon almost four years ago appears diminished, some experts say.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614509","date":"2005-07-12","texts":"The Labor Department said Friday that the U.S. jobless rate fell to 5 in June, the lowest since 2001. Federal tax revenues continue to rebound, at a nearly 15 annual rate so far this year, and economic growth continues to average nearly 4 despite 60 oil and rising interest rates. Maybe it's time to give the tax cuts of 2003 the policy credit they deserve. More broadly, it's time to draw a few lessons from the fiscal policy debates of the Bush years. For we now know who was right, and who wasn't, going back to the proposals that were offered to restore growth after the dot-com bubble burst and through the 2001 recession and the aftermath of 911. The big economic fight of the first Bush term was over fiscal policy, especially the size and design of tax cuts. The neo-Keynesians and believers in Rubinomics proposed temporary tax cuts through tax rebates to boost consumer spending. Jon Corzine, the point man on taxes for Senate Democrats, was insistent on the rebate idea. Unfortunately, President Bush agreed, in part to get 12 Democratic votes in the Senate and in part because some of his advisers also fell for the Keynesian illusion that temporary tax cuts would spur growth. So he agreed to phase in his own marginal-rate income tax cuts over several years, while passing out 500 rebate checks immediately to American families in order to increase demand for goods and services. While this tax cut may have been a political success, it was an economic flop, as growth retreated again in 2002 after a one-time bounce. The tax cut debate resumed in January 2003, however, as Mr. Bush decided to pursue a more supply-side course. This time he aimed his tax cuts directly at the collapse in business investment, proposing to eliminate the double tax on dividends and to accelerate his income tax cuts at the top marginal rates. House Ways and Means Chairman Bill Thomas compromised on a 15 dividend rate but added a capital gains cut to 15 from 20.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982765","date":"2005-07-14","texts":"The federal budget deficit will slip to 333 billion this fiscal year, from 412 billion in 2004, as a surge of unanticipated tax receipts pushes the red ink significantly below levels projected just five months ago, White House officials said yesterday. The midyear budget forecast also shows that President Bush is on track to reach his goal of halving the deficit a year before his deadline of 2009. By 2008, the White House forecasts that the deficit will fall to 162 billion, or 1.1 percent of the gross domestic product GDP. A slight rise projected for 2010 reflects the initial cost of Bush's proposal to add private investment accounts to Social Security. It's a sign that our economy is strong, and it's a sign that our tax relief plan, our pro-growth policies, are working, Bush said after a Cabinet meeting at the White House. In dollar terms, the 2005 deficit of 333 billion would still be the third highest on record. That figure relies on the expenditure of about 173 billion in surplus Social Security taxes that must be repaid when baby boomers enter their retirement years. Sen. Jim DeMint R-S.C. called the deficit numbers misleading because Congress is raiding Social Security to mask the true size of the deficit, which he says should be more than 400 billion. But the change from February's projections is dramatic. Then, the White House foresaw a record deficit of 427 billion, equal to 3.5 percent of the GDP, for the fiscal year ending Sept. 30. Under that forecast, the deficit would have risen for the fourth straight year, from the 128 billion surplus Bush inherited in 2001. Now, the deficit is expected to finally begin receding, and it would come in at 2.7 percent of the GDP, smaller in those terms than the deficits of 15 of the past 25 years.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616735","date":"2005-07-19","texts":"Annualized interest rates on certain investments as reported by the Federal Reserve Board on a weekly-average basis WEEK ENDED Jul. 15, Jul. 08, 2005 2005","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615006","date":"2005-07-20","texts":"STRONG EARNINGS reports from International Business Machines and Merrill Lynch propelled the Standard & Poor's 500-stock index to a fresh four-year high. The Dow Jones Industrial Average rose 71.57 points, or 0.68, to 10646.56, a four-month high. It still is down 1.3 for 2005. The S&P 500 rose 0.67, or 8.22 points, to 1229.35, now up 1.4 this year. The Nasdaq Composite Index, home to most technology stocks though not NYSE-listed IBM, jumped 1.32, or 28.31 points, to 2173.18. The Nasdaq is at its highest level since the start of January and near its own four-year high, down only 0.1 since the end of 2004. The market continues to be led by two sectors, energy and technology, said Tim Heekin, trading director at San Francisco brokerage firm Thomas Weisel Partners. After regular hours, investors received mixed earnings news. Amgen reported better-than-expected results and rose 8 in after-hours trading. But Intel and Motorola fell 1 and 4 respectively after hours, as their profits barely exceeded analyst forecasts. Tech investors now are harder to impress, which could make gains harder.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614551","date":"2005-07-21","texts":"Dow Jones Newswires Asian shares closed mostly higher yesterday, with Japanese stocks boosted by steel and auto companies. European markets closed mixed. Overall, the Dow Jones World Stock Index rose 0.3, or 0.6, to 216.88. Excluding the U.S., the index rose 0.03, or 0.1, to 172.10. In TOKYO, the Nikkei Stock Average rose 0.2, or 24.51 points, to 11789.35. Steel shares extended gains after the Chinese government said gross domestic product grew 9.5, suggesting strong steel consumption would continue. Nippon Steel rose 1.8 to 276 yen, and JFE Holdings gained 2.3 to 2,895 yen. In LONDON, the FTSE 100 Index rose 0.3, or 13.70 points, to 5215.20. Royal Dutch Shell, one of the biggest stocks in the Dow Jones Stoxx 600 Index, traded for the first time as a single company, ending nearly 100 years of trading as Royal Dutch Petroleum, in Amsterdam, and Shell Trading & Transport, in London. It now has two classes of shares. The A shares are subject to Dutch withholding tax, while the B shares are exempt. Both trade in London. The B shares closed down 1.7 A shares shed 3.2. ---","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614234","date":"2005-07-26","texts":"Ceremonial gift-giving is an integral part of doing business in China. The value lies not so much in the gift whose packaging is often more elaborate, but in the possibility of cementing a mutually beneficial relationship. And so it was with last week's headline-grabbing announcement that China would revalue the yuan against the U.S. dollar. The modest gesture may make more possible a comprehensive economic dialogue between China and the U.S. in the interest of both nations. The announcement on July 21 by the People's Bank of China that it would revalue the yuan, abandoning the 11-year-old peg of 8.28 yuan per U.S. dollar, caught financial markets by surprise. The jolt led market participants to gauge effects of current and perhaps future revaluations on currency values and interest rates. And, some U.S. political leaders claimed a victory in the campaign to blame Chinese market manipulation for external imbalances facing the U.S. --- But there is a bigger story here. In the first sentence of the People's Bank's July 21 announcement, the bank states With a view to establish and improve the socialist market economic system in China, enable the market to fully play its role in resource allocation as well as put in place and further strengthen the managed floating exchange rate regime based on market supply and demand. . . . Emphasis added The inherent conflicts in the phrase socialist market economic system, and market supply and demand with capital controls and a managed float highlight both the central economic challenges facing China and the need for a comprehensive U.S. economic policy toward China.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616982","date":"2005-07-31","texts":"Uncle Sam is about to start a national campaign to urge more Americans to use direct deposit for their benefit checks. Here's how to jump on board. The campaign, called Go Direct, is an effort by the Treasury Department and the Federal Reserve to make it easier and safer for recipients of Social Security and Supplemental Security Income to get their monthly payments -- and in doing so, save the government millions of dollars in postage, printing and related costs. Currently, the Treasury Department mails about 160 million benefit checks a year, which translates into 100 million in printing and mailing expenses. In about 2 12 years, the first of 77 million baby boomers will become eligible for Social Security benefits, which could cause the number of mailings and related costs to soar. In March, federal officials completed a six-month pilot campaign, also called Go Direct, in three states and Puerto Rico to determine how best to motivate people to switch to electronic transfers of money to their bank accounts. The key enlisting the help of local organizations and businesses -- including more than 13,000 volunteers at banks, senior centers and health and consumer groups -- to spread the word.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614841","date":"2005-08-02","texts":"TRAVERSE CITY, Mich. -- DaimlerChrysler AG's Chrysler Group plans a major revamp of its manufacturing process that it hopes will shave billions of dollars off the cost of developing and producing cars over many years. The move reflects how U.S. auto makers have begun to rethink basic assumptions about manufacturing cars and trucks as they seek a way out of the intense price war, and surge in overseas competition, that has sapped their North American profits since 2001. Chrysler's new manufacturing process, which will be rolled out this fall at a plant in Belvidere, Ill., that is among the company's biggest money-losers, is intended to allow the flexibility to build three or more completely different models of cars in a single plant. Typically, U.S. auto makers produce one or two types of vehicles per plant. The idea behind the retooling is to improve the odds of a plant operating at close to maximum capacity -- a big key to profitability in a capital-intensive industry like autos. Chrysler has been making money this year, thanks to the success of a line of three similar models -- the Chrysler 300, the Dodge Magnum and Dodge Charger, all of which are built at one Canadian plant. But amid heavy competition, it still faces pricing pressures similar to those being felt by rivals General Motors Corp. and Ford Motor Co. Both GM and Ford have been slashing prices to move cars and trucks off their lots, a strategy that has boosted sales but hammered profit margins. Yesterday, the two introduced new strategies for emphasizing low sticker prices. The long-term challenge for Detroit's car makers remains ending the cycles of overproduction and binge-discounting that have characterized the U.S. market since 2001, and better matching production to shifting consumer demand. In recent years, Detroit has invested too heavily in vehicles that consumers didn't end up wanting in huge numbers.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985241","date":"2005-08-02","texts":"Wall Street finished an uninspired session mixed on Monday as a new high in oil prices was partly offset by a better-than-expected reading of the nation's industrial activity and strong sales at Wal- Mart Stores. The stock market remained resilient in the face of record intraday and closing prices for oil. A barrel of light crude reached an intraday high of 62.30 before closing at 61.57, up 1, on the New York Mercantile Exchange. The death of Saudi King Fahd was cited as creating uncertainty in the oil market. The surge in oil prices was mitigated by upbeat July sales at Wal- Mart and a bullish reading of the Institute for Supply Management's manufacturing index -- showing that both the consumer and industrial sectors have adapted well to high energy costs. However, the strong growth in the economy raised concerns about the Federal Reserve and its policy of gradually raising the nation's benchmark rate. The Dow Jones industrial average fell 17.76, or 0.2 percent, to 10,623.15. The Standard & Poor's 500-stock index rose 1.17, or 0.1 percent, to 1235.35, and the Nasdaq composite index gained 10.55, or 0.5 percent, to 2195.38. Wal-Mart rose 18 cents, to 49.53, as the retailer reported a 4.4 percent increase in sales from stores open at least a year, another strong sign of consumer spending.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984171","date":"2005-08-07","texts":"No one bothers to plant trees or flowers in this blight on the harsh Red Desert. Trailer homes line the sad, barren streets -- ready to be hitched up and hauled away at any time. The gravel roads are a symbol of impermanence in a boomtown so temporary many of the men who live here left their families back home. This is about the worst, ugliest city I've ever seen in my life, declared Shawn Klein, a gas field worker who had just pulled into town from the Black Hills in South Dakota. The fields surrounding Wamsutter are sprinkled with thousands of natural gas wells, and new workers arrive every day, eager for big paydays. But pessimism hangs over Wamsutter like the blanket of smoke in the town's only bar. As far as state officials are concerned, Wamsutter is a bust just waiting to happen. In the West, boom-to-bust tales dot the landscape. Industries come and go, and sometimes so do the communities that helped drive commerce. State and local officials know that what goes up -- gas prices are near record highs -- eventually must come down.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982630","date":"2005-08-10","texts":"Financially troubled low-cost carrier Independence Air painted a gloomy picture of its future yesterday, saying it may be forced to file for bankruptcy protection. The airline's Dulles-based parent, Flyi Inc., said in its quarterly filing with the Securities and Exchange Commission that it won't be able to pay its bills unless it soon raises significant funds. Such matters raise substantial doubt about the Company's ability to continue as a going concern, the filing said. It added that if the situation continues, it will have to file for bankruptcy protection. Some Wall Street analysts have been predicting since last fall that Flyi may be forced to file for bankruptcy protection. The airline has raised the possibility, too, but never with the sense of urgency it demonstrated yesterday. In a mid-afternoon conference call with Wall Street analysts before the quarterly report was filed, Flyi chief executive Kerry B. Skeen didn't mention bankruptcy. But he raised serious concerns about the company's future and outlined steps to address its liquidity crisis. Skeen said his 14-month-old airline plans, for example, to reduce the number of flights it offers by 17 percent this fall, eliminate service to San Jose, Calif., borrow more money, sell off some assets, delay the purchase of future aircraft and ask creditors to forgive or restructure more debt.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983842","date":"2005-08-11","texts":"Hedge funds used to reek of exclusivity. They were run by the most cunning traders on Wall Street, who employed exotic trading techniques designed to make money regardless of whether markets rose, fell or stayed flat. Their clients included only the super- rich. Hedge funds are now a 1 trillion industry. Millions of middle- class people invest in them through pension funds or mutual funds. The Virginia Retirement System, for example, recently increased its investments in hedge funds to 1.6 billion, or close to 4 percent of its assets. The Baltimore City Fire & Police Employees' Retirement System put 80 million into hedge funds last year, while the City of Baltimore Employees' Retirement System invested about 55 million, or 5 percent of its assets. Some experts say pension funds and university endowments are plowing money into the high-fee funds at the worst possible time. Investment returns have dropped, inexperienced managers are piling in and some sophisticated investors appear to be pulling money out. Hedge funds make -- and risk -- big money by making big bets, mostly with borrowed money. They bet on movements in multiple markets, whether it be in stocks, bonds, currencies, commodities, options, derivatives or any combination of the above. Estimates suggest that hedge fund trading can account for as much as half the daily volume on the New York Stock Exchange, though as with so much else in the lightly regulated hedge fund world, reliable figures are difficult to find.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616505","date":"2005-08-17","texts":"Dow Jones Newswires Sexy it isn't, but cash is catching the eye of those on Wall Street and Main Street alike. Considered a sucker's bet in the late 1990s -- when stocks, especially technology shares, boasted solid double-digit returns -- cash also didn't fare much better in the first half of this decade. Rapid-fire interest-rate cuts by the Federal Reserve in 2001-03 made the cost of money cheap, and returns on parking funds in money-market accounts minuscule. That is changing, but the pace of Fed interest-rate increases has been so gradual that it is only now beginning to register with investors who are casting around for better returns given the lackluster performance of riskier stocks this year. It isn't only stocks that stand to lose as these interest-bearing instruments ascend to new heights. Longer-dated Treasury bonds are also looking increasingly unattractive in a world where the virtually risk-free cash investment promises nearly the same return as a 10-year note.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614181","date":"2005-08-18","texts":"WASHINGTON -- Wholesale prices in July jumped by the largest amount in nine months, boosted by a surge in the cost of cars and energy. But economists expressed little concern that the higher prices producers are paying signal broad inflation. The producer-price index for finished goods rose 1 last month, the Labor Department said. The index was flat in June. Much of the overall monthly increase reflected a 4.4 rise in energy prices, led by a 10.9 jump in gasoline prices and a 3.7 rise in the cost of natural gas. The reported rise in wholesale prices contributed to a sharp oil- price drop on commodities markets yesterday, amid concerns that the two-year surge in prices could finally be cutting into demand for petroleum products like gasoline. Crude-oil futures for September delivery settled at 63.25, down 2.83, on the New York Mercantile Exchange.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830985154","date":"2005-08-18","texts":"Stocks rose yesterday after Hewlett-Packard reported earnings that beat analysts' estimates and oil prices had their biggest drop since April. Hewlett-Packard, the final Dow Jones industrial average member to announce results for the past quarter, was joined by semiconductor- production equipment maker Applied Materials, which also posted results that exceeded Wall Street expectations. Earnings across the board are still going to drive stock prices higher this year and be pretty good, said Jon Brorson, who helps manage 72 billion as head of growth investing at Neuberger Berman in Chicago. The Dow rose 37.26, or 0.4 percent, to 10,550.71. The Nasdaq composite index gained 8.09, or 0.4 percent, to 2145.15. The S&P 500 inched up 0.90, or 0.1 percent, to 1220.24, limited by a slide in energy stocks. A government report on producer prices that showed inflation may be accelerating also weighed on the benchmarks. Crude oil for September delivery tumbled 2.83 a barrel in New York, the steepest decline since April 27, as a government report showed that inventories were sufficient for refineries to make gasoline for the final weeks of the summer.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982358","date":"2005-08-21","texts":"If you were an English major in the '60s or '70s, chances are you took a course in the Jewish novel and read books by Saul Bellow, Bernard Malamud and Philip Roth. These days, Bellow's not politically correct enough for many professors, Malamud's largely forgotten, Philip Roth is just a novelist, not a Jewish one, and few of those teaching the dozens of younger novelists who happen to be Jewish would identify them that way. Besides, as far as classroom focus goes, most of those coming of age in literature these days are women, whether Jewish or Gentile. Students used to read about young Jewish guys on the way up, but Augie March and Alexander Portnoy have been replaced by the heroines of Candace Bushnell, both in books and, thanks to student interest in film and TV, in such forms as the Sex and the City series, which gives a whole new meaning to the phrase on the make. This curricular shift is as it should be, given the current concern with the role of women, even if it minimizes the more parlous place of the Jew in the Western canon there's no play called The Desperate Housewife of Venice. If the chapter in U.S. literary history called The Jewish Novel has closed, Steven G. Kellman brings us back to its strange beginnings in his lucid, highly readable biography of a writer whose life is as peculiar as anything in his fiction. Bellow, Malamud and company needed an ancestor to add gravitas to their mid-century Renaissance, and they found him in Henry Roth, who wrote Call It Sleep in 1934 and then lapsed into six decades of nearly total silence, spending most of those years as a waterfowl farmer in Maine and erupting in his eighties in a volcanic flood of prose that yielded thousands of pages just before his death. Born Herschel Roth in 1906 in Galicia, a region of Austro- Hungary, the future novelist crossed the Atlantic as a babe in his mother's arms, traveling in steerage as part of the massive Jewish immigration that eventually made New York the capital of the Diaspora. The family moved around New York, spending just four years on the Lower East Side, which would become the cosmos of Call It Sleep. His mother never really learned English, and his father was a failure at making a living and at fatherhood. Late in life, after Roth married Muriel Parker and had a family of his own, the father described him as a schmo who had married a shiksa and didn't amount to anything. An indifferent student, Roth profited from City College of New York's populist admissions policy. But his real literary education came from bohemian friends who introduced him to writers like James Joyce and T.S. Eliot. The ennui and alienation of Eliot's personae appealed to Roth, and Kellman points out that, in composing Call It Sleep, the novelist took from Joyce the goal of transforming the quotidian into art, the idea for the self-portrait of the artist as a young man and the stream-of-consciousness technique. Call It Sleep tells the story of six years in the life of an immigrant boy named David Schearl just prior to World War I. David is protected by a loving mother, but his increasingly paranoid father can't hold down a job and makes life hell for them all. The squalor Roth depicted offended some critics, though others praised the gritty details as true to life. But in 1934, when unemployment exceeded 20 percent, relatively few readers were interested in throwing their disposable cash at an unknown writer, especially one with so troubling a story to tell, and within two years Call It Sleep was out of print.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615999","date":"2005-08-25","texts":"Dow Jones Newswires Stocks fell as the price of oil rose to a record, but home builders such as Toll Brothers bucked the declines on a positive report on the housing market. The Dow Jones Industrial Average lost 84.71, or 0.8, to 10434.87 the Nasdaq Composite Index slid 8.34, or 0.4, to 2128.91 and the Standard & Poor's 500-stock index declined 8, or 0.7, to 1209.59. Selling accelerated late in the session as crude-oil futures ascended to yet another record. It's finally gotten to the point where it's beginning to influence consumer behavior, said Bruce Bittles, chief investment strategist at R.W. Baird. On top of high oil prices, a report showing a drop in durable-goods orders weighed on economically sensitive stocks such as Dow-industrial component Caterpillar, which lost 1.48, or 2.7, to 53.21.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616106","date":"2005-08-25","texts":"Negotiations to sell Electronic Data Systems Corp.'s A.T. Kearney management-consulting unit collapsed after the sole bidder withdrew. Monitor Group, a Cambridge, Mass., consulting firm, said two months of analysis and talks couldn't produce a deal acceptable to Monitor, EDS and Kearney partners. We didn't see that there would be enough free cash flow, especially in the early years, a Monitor spokesman said. The breakdown in talks increases the likelihood that EDS may have to write down assets associated with A.T. Kearney, said Cynthia L. Houlton, an analyst at RBC Capital Markets, a unit of Royal Bank of Canada. EDS reported assets associated with Kearney of 276 million as of June 30. I don't think people are lining up to take the place of the Monitor Group, she said. Ms. Houlton doesn't own shares in EDS, and rates the stock sector perform. RBC Capital Markets doesn't provide investment-banking services with EDS. News of the deal collapse was reported on Crain's Chicago Business Web site.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616705","date":"2005-08-25","texts":"Dow Jones Newswires Options at Millennium Pharmaceuticals were active amid a leap in expectations for overall market volatility. Millennium's September 12.50 calls traded 9,005 contracts, compared with 7,769 outstanding, and rose 10 cents to 20 cents at the Chicago Board of Options Exchange. Its September 10 puts also were active, trading 1,466 contracts and gaining 20 cents to 60 cents. The heavy trading came amid a surge in implied volatility -- a gauge of traders' expectations of stock-price swings. Millennium stock shed 30 cents, or 2.9, to 9.88 a share on the Nasdaq Stock Market. Some observers interpreted the options activity as a bullish sign for stock in the Cambridge, Mass., drug company. Shorts are scared, said Walter Lamerton, head of options at SG Cowen & Co. They're afraid something's getting ready to come out and they're going to get hurt. A possible driver, some observers said, is a coming Food and Drug Administration hearing about a cancer drug developed by Millennium rival Celgene. Investors have worried that if Celgene's Revlimid drug wins FDA approval, it could erode the market share of Velcade, one of Millennium's key drugs.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983893","date":"2005-08-29","texts":"The Census Bureau tomorrow will release the latest statistics on poverty in the United States, the income level of an average household and the number of Americans still lacking health insurance. A growing chorus of experts and politicians is raising questions about the data that frame Americans' understanding of their nation's well-being. From poverty levels to health insurance, inflation to personal savings, widely accepted statistics are overstating some problems and understating others, miscounting people, and sending policymakers down blind alleys. We're getting at best an impressionistic sense of what's going on in the economy, said Rep. Rahm Emanuel D-Ill., who recently introduced legislation to establish an independent commission aimed at overhauling government economic statistics. Major policy decisions are being made based on data that is inadequate to the task. This seemingly technical problem has real-world consequences, allocating federal assistance to some who don't need it while cutting off others who do, raising the costs of programs like Social Security, or pushing policies for problems that may not exist. For example, since poverty levels are not adjusted for regional costs of living, the working poor in expensive urban centers like Washington are routinely excluded from federal programs because their income lifts them above the official poverty line. The rural poor in low-cost states like Arkansas often can afford considerably higher standards of living than their urban compatriots. Yet they may be eligible for food stamps, housing aid, free school lunches and other programs that exclude the urbanites.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615912","date":"2005-09-01","texts":"The economic damage from Hurricane Katrina will take months to sort out, but it's not too soon to sort the good from the bad among possible government responses. The first rule of policy in a disaster should be to do no more harm. In the category of good is the Bush Administration's decision yesterday to release some oil from the Strategic Petroleum Reserve to help Gulf Coast refiners keep operating. With oil supplies reduced, the refiners need to borrow the SPR crude or they might have to shut down. The companies will return the borrowed oil to the Reserve when private supplies are back to normal. The Administration is also right to resist the temptation to go further and flood the market with Reserve crude, even if that would look good politically. The President is willing to do what it takes to relieve an oil company, but not enough to relieve the crushing burden of oil speculation and price-fixing on American consumers and small businesses, declared Congressman Ed Markey, thus taking the prize as the first Member of Congress to exploit this natural disaster for partisan gain. His staff should tell the Massachusetts Democrat that releasing more crude won't affect prices at the pump by one penny if the oil can't be refined into gasoline. Far more likely to reduce gas prices is yesterday's timely decision by the Environmental Protection Agency to suspend temporarily some pollution standards on gas and diesel fuel to ease shortages. One cause of generally higher gas prices that isn't well understood by the public is the proliferation of boutique fuels to meet anti-pollution rules passed by Congressmen like Mr. Markey. These require special refining capacity, and with the shutdown of at least eight refineries it makes sense to ease these rules given the more urgent need to rebuild fuel supplies. Even better, the EPA waived the rules for all 50 states, not just those directly hit by the hurricane. This recognizes that Katrina will end up affecting gas prices nationwide because of shortages and delivery delays, so 50-state relief ought to reduce the number of local price spikes. We wish the EPA had extended the waivers beyond September 15, but at least that's the day the EPA's requirements for summer-fuel blends expire and the industry may have winter fuel stocks ready to go.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984813","date":"2005-09-01","texts":"The U.S. Census Bureau reported this week that Howard was the fifth-wealthiest county in the country, based on a median household income of 82,065 in 2004. That puts Howard just below Montgomery County, which had a median household income of 82,971 last year, according to the bureau's annual American Community Survey. The highest-ranked in the nation was Fairfax County, with a median household income of 88,133. In the 2003 American Community Survey, Howard ranked second in the country for household income, at 88,555. In 2002, Howard was ranked fifth wealthiest, behind Montgomery and Fairfax. The survey is available at www.census.gov. The effort to protect more farmland in the county is prompting a fairly high anxiety level, Marsha S. McLaughlin, director of the Howard Department of Planning and Zoning, said this week. McLaughlin told a newly appointed committee of west county landowners, developers, land-use lawyers and homebuilders that she hopes the group can strike a balance between protecting landowners' property rights and preserving more farmland. The panel was assembled after western residents complained vigorously last month about the department's proposal to reduce residential density on land zoned rural conservation. County officials worry they're losing too much prime farmland to development, so they want to make it less attractive to build there.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985384","date":"2005-09-03","texts":"If you're thinking about selling a house this fall, keep in mind this real-life real estate parable. It's all about being too greedy at the very moment that your local market may be past its price- growth peak and slowly cooling off. The story was related to me in late August by one of the country's top analysts of housing price movements and mortgage trends, Amy Crews Cutts, deputy chief economist at Freddie Mac in McLean. Cutts lives in a suburban Washington neighborhood of relatively modest houses of roughly similar ages and lot sizes. Absent major additions or renovations, home values tend to move together within a narrow price band, most recently about 400,000. One homeowner, however, decided to move the goal posts. He put his house on the market for 50,000 more than anyone had ever paid in the neighborhood -- 450,000. Three months later, he hadn't gotten a nibble, much less a full- price offer. But he still insisted that somehow, somewhere there was a buyer at 450,000.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983999","date":"2005-09-05","texts":"The Labor Day weekend is upon us. We hear authoritative pronouncements from AAA Mid-Atlantic confidently predicting the number of persons in the metropolitan area who will be traveling over 50 miles outside the area during the holiday weekend. We hear similar predictions for Memorial Day and Thanksgiving. How do they know that What methodology do they use Answer Man has often thought that it would be useful to possess a time machine. He would use it to go into the past to rectify certain bad decisions -- an unfortunate quip at a social event, a poor choice of haircut, the more ill-advised portions of his senior prom -- and, occasionally, to peer into the future. He also would lend it to AAA so it could leap forward, count some cars, then come back and tell us exactly what's in store for us, traffic-wise. Sadly, such technology does not exist. And so AAA has to rely on a different method for its predictions of holiday traffic volume. Here's what it does It asks people if they're going to travel. Actually, the Travel Industry Association of America asks that question. To arrive at this year's Labor Day forecasts, TIA pollsters called at random 1,300 U.S. adults between July 15 and 25 and surveyed them about their travel intentions, said AAA spokesman Justin McNaull. The results of that survey were then massaged, with the massage oil being a proprietary forecast model developed by TIA's economist. Its ingredients are the results of the surveys the association is doing continually, along with such indicators as unemployment rates, consumer spending and gross domestic product. The final figure was then broken down for various geographic locations.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614356","date":"2005-09-06","texts":"HURRICANE KATRINA IS forcing professional investors to rethink their strategies for the fall. The week after Labor Day is when the pros come back from vacation and adjust their portfolios for the rest of the year. Until the beginning of last week, they thought they had a pretty strong grasp on what mattered for stocks -- the Federal Reserve, oil prices and the ability of corporate earnings to keep racing ahead. Now, those calculations are back in doubt. Some investors believe Katrina will hold the stock market back, as rising oil prices and shipping disruptions hurt corporate profits and economic growth. Others think Katrina actually could help stocks in the longer term, since the rebuilding effort eventually should spur consumption and investment in new equipment. They also see the Fed, at least temporarily, supporting the economy by suspending its campaign of interest-rate increases. Who is right will have an enormous impact on the stock market's direction. This is changing a lot of the thought patterns that I had 30 days ago, says William Dwyer, president of MTB Investment Advisors in Baltimore, which manages more than 11.5 billion in stocks, bonds and money-market investments. He believes that, after the initial economic hit, the rebuilding actually could extend the life of both the economic recovery and the bull market. Mr. Dwyer sees the rebuilding adding 50 billion to the economy in the next six months, close to 0.5 of the economy's total value.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982231","date":"2005-09-06","texts":"Wall Street economists and money managers spent the long holiday weekend keeping close watch on the effects of Hurricane Katrina, with many saying that, despite the devastation, the long-term impact on U.S. and global economic growth should be muted. But several analysts also warned that global stock, bond, currency and commodities markets may react sharply in the coming days and weeks to any signs of prolonged energy supply disruption, depressed consumer spending or rapidly rising unemployment. The economic and market implications of Katrina, and her ugly aftermath, remain highly problematic, Robert J. Barbera, chief economist at ITG-Hoenig, wrote in a report to clients over the weekend. Most obviously, a slower trajectory for global growth now seems unavoidable. . . . U.S. consumer spending will take a hit in the months ahead. Several Wall Street firms reduced their predictions for U.S. economic growth in the second half of the year, citing the impact of gas prices on consumer spending and the disruption of commodity shipments through the critical ports at the mouth of the Mississippi. Credit Suisse First Boston, for instance, reduced its estimated gross domestic product growth for the third quarter from 3.7 percent to 3 percent. William C. Dudley, chief U.S. economist at Goldman Sachs & Co., wrote in a research note that the reduction in economic output should be limited to the next few months. But he said such an outcome was not guaranteed. The worst-case scenario is if the drop in consumer spending leads to significant enough job losses to push the unemployment rate materially higher. That could be sufficient to generate the type of dynamics that culminate in recession.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842615750","date":"2005-09-07","texts":"Annualized interest rates on certain investments as reported by the Federal Reserve Board on a weekly-average basis WEEK ENDED Sep. 06, Aug. 26, 2005 2005","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613971","date":"2005-09-08","texts":"Ten days after Katrina, the private economy is holding up nicely. Oil platforms and pipelines are being repaired, traffic is returning on the Mississippi, gasoline prices are stabilizing, and the stock market has rallied two days in a row. The biggest threat now to a rapid and complete recovery is the storm-after-the-storm in Washington, where the politicians are making Governor Blanco look composed. Our panicky, or shall we say opportunistic, solons are already using Katrina to bust through whatever spending limits they had previously set for themselves. Following last week's 10.5 billion, Congress is set to appropriate 52 billion more this week, and not just for the Gulf Coast. Senate Minority Leader Harry Reid has already tossed out 150 billion as a spending goal, and Republicans are saying they won't be outbid. No one wants to be stingy, but it's time to worry when the same people who passed a 286 billion highway bill without enough money for Louisiana levees now want to throw money at everything in sight. If you think we're being cynical, consider that it took all of two days back from recess for Democratic leaders yesterday to propose killing this year's budget resolution. That document is hardly a fiscal straitjacket. But it is the only mechanism Congress has for putting any restraint on Medicaid and other entitlements growing by 7 to 8 a year, or triple the inflation rate. It's a terrible sign for fiscal sanity that GOP leaders gave in yesterday and agreed to suspend budget reconciliation for at least two weeks. The real agenda here is to use Katrina to kill the Bush tax cuts and restore Congressional spending-at-will. The rules of reconciliation allow tax cuts to pass the Senate with 50 votes, rather than with the 60 needed to break a filibuster. So Republicans had hoped to use those rules to extend the Bush tax cuts on dividends and capital gains for another two years, through 2010. Without reconciliation, tax cuts are dead. The irony is that Congress is doing all of this just as the U.S. economy spurred by tax cuts is throwing off record increases in revenues. Federal coffers are rising this year to the tune of 262 billion more than in fiscal 2004, and most state budgets are also brimming. If America is going to have any hope of financing both a war on terror and hurricane relief, it needs to keep this expansion growing. Telling investors that their tax rates on dividends will soon rise back to 35 from 15, and on capital gains to 20 from 15, would both shock the stock market and hurt growth.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614433","date":"2005-09-08","texts":"BANGALORE, India -- The president of Infosys Technologies Ltd. said surging demand from Europe is powering growth at the outsourcing company. A lot of large European corporations have been testing the waters with their toes, and they now are ready to dive in, said Nandan Nilekani, who also is chief executive of Infosys, India's second- largest outsourcing company by revenue. Last week, Infosys signed a five-year, 140 million deal to maintain and support software applications for Dutch bank ABN Amro Holding NV. The contract could be just the beginning of a wave of orders from European Union members, Mr. Nilekani said. Mr. Nilekani said that while Indian information-technology-service outsourcing companies receive more than 80 of their revenue from U.S. clients, more European companies realize that they have to outsource to be competitive. Although Infosys's revenue from Europe has grown more than 50 a year in the past five years, it still accounts for only 23 of overall sales. Europe is likely to account for more than 30 of total revenue at big Indian outsourcing companies in the next few years, industry analysts say.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985174","date":"2005-09-10","texts":"Wall Street advanced solidly Friday to finish the week higher as oil prices cooled and investors embraced signs that the economy could move forward despite Hurricane Katrina's devastation of the Gulf Coast. The major indexes gained for the week. Falling energy prices lent to a brighter economic picture in Katrina's wake, with crude oil sliding despite worries about record- high energy costs this winter and continued refinery shutdowns and gasoline futures slipping below 2 a gallon. Investors also anticipated a burst of activity once reconstruction begins in the Gulf region. The market seems to be concentrating on the future rebuilding of the devastated area, and I think that's what's keeping the market from declining, said Peter Cardillo, chief strategist at S.W. Bach & Co. Revised forecasts from chipmakers Texas Instruments and Intel late Thursday bolstered the market with indications that consumer spending remains healthy. Texas Instruments raised its quarterly estimates -- fueling hopes for greater electronics demand and calming fears of a spending slowdown -- while rival Intel refined its previous view. Broader stock indicators also gained ground. The Standard & Poor's 500-stock index rose 9.81, or 0.8 percent, to 1241.48, and the Nasdaq composite index advanced 9.48, or 0.44 percent, to 2175.51.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616644","date":"2005-09-14","texts":"STOCKS SLOSHED AROUND in the red as investors focused more on post- Katrina worries than positive economic data collected prior to the devastating hurricane and its aftermath. Stock indexes started the day up about 3 since the hurricane slammed the Gulf Coast at the end of last month. But rising damage estimates are stoking fears that the economy and corporate profits will be dinged by higher gas prices and lower consumer spending resulting from Katrina. The Dow Jones Industrial Average fell 85.50 points, or 0.8, to 10597.44. The tech-stock-heavy Nasdaq Composite Index slipped 0.5, or 11.08 points, to 2171.75. The Standard & Poor's 500-stock index dropped 0.8, or 9.36 points, to 1231.20. Bond prices rose as investors were cheered by lower-than-expected inflation in August, pushing down yields. The market has been pretty strong since the storm, so it makes sense that we'd give some gains back, said Andy Brooks, head of stock trading for T. Rowe Price Group Inc. All this economic data is open to revision post-Katrina. Indeed, investors shrugged off heartening readings on the economy gathered prior to the hurricane. Despite record oil imports, the U.S. trade deficit unexpectedly narrowed in July, the Commerce Department said. Meantime, the Labor Department released data showing that the prices of wholesale goods in the U.S. rose at a slower rate last month.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984694","date":"2005-09-14","texts":"For three nights Protestant rioters trashed David Hamilton's neighborhood in east Belfast, tossing firebombs and rocks, hijacking and burning cars and ripping down streetlights in the city's worst violence in years. Looking at the shattered battlefield of his street on Tuesday, Hamilton, 37, also a Protestant, said he would have been out there too if he were a little younger and didn't have four children. The Protestant people are persecuted and want to stick up for themselves, but nobody seems to be listening, he said. The only way to be heard is the way the Catholics do it -- with violence. According to a variety of Protestants interviewed here, the riots over the past few days were an expression of rage and frustration among members of the Protestant working class, who feel they are being left behind economically and politically in the aftermath of the three-decade sectarian war known as the Troubles. When the Irish Republican Army this summer declared an end to its armed struggle, British Prime Minister Tony Blair hailed the historic step. His government immediately began withdrawing troops and dismantling military posts in the province. But furious Protestants said they were being betrayed. Their rage was compounded by the release of a convicted IRA bomber, Sean Kelly, the night before the IRA declaration in July. Protestants saw it as a reward from Blair for disarmament.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985330","date":"2005-09-15","texts":"Since you asked for our feedback about your article on SAT tests What the SAT Tests Are Really Scoring, Fairfax Extra, Sept. 8, I will give you my two cents as a parent of a Madison High School senior. First of all, unlike you, I am a fan of the SAT. I think it's critical to efficiency in college admissions, given that some school districts practice rampant grade inflation and others including Fairfax County do not. Without the objectivity of having SAT grades, colleges would be missing a critical piece of information in their admissions processes. As I am sure you know, studies have indeed found the SAT to be a good and useful predictor of how well kids do in college. On the other hand, I agree with you that the average SAT grade of a school's students doesn't tell one much about whether that school is a good place to learn. After all, even with the changes, it's still pretty much an aptitude test. Thus, it's going to correlate more with IQ than with the quality of teachers. Moreover, if one's goal is to get into the most selective college possible, I think there's probably a decent argument to be made that one may be better off in one of the less elite high schools, taking as many tough courses as possible and perhaps standing out more from the pack. Your Sept. 8 column was a good piece, but it was incomplete because it did not include several relevant factors affecting SAT scores. While poverty does correlate with SAT achievement, a more powerful correlation appears to be culture. Asians in general and the immigrants from some Latin countries have a deep cultural reverence for education that transcends economic status. On the other hand, domestic underclass culture, particularly that of many African Americans, denigrates promising black students as acting white, as if scholarship was a racial characteristic.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982688","date":"2005-09-22","texts":"On Aug. 3, 1967, President Lyndon B. Johnson sent a message to Congress in which he said that the United States could not continue to fight a war in Vietnam and at the same time continue his Great Society programs without, among other things, raising taxes. George Bush ought to read that message. It was titled The Hard and Inescapable Facts. For Bush, facts are neither hard nor inescapable. He believes in magical math -- a firm understanding that somehow, in some way, something will happen to make everything come out right in the end. This is the economics practiced by the dreamy who think that today's credit card purchase will never come due. This, in a nutshell, is the financial blueprint for the United States of America. For Johnson, the realization that bills come due came too late. Early on he said, We can continue the Great Society while we fight in Vietnam, but he sensed -- canny pol that he was -- that the American people would pay for the former but not, if they had to choose, the latter. When Johnson finally had to ask for a tax increase, he was on his way out as president. Less than a year after delivering his message about hard facts, he had to face the hardest one himself He announced he would not seek reelection. Bush, having won a second term, cannot seek reelection and so he may never become politically accountable for his mismanagement of the nation's finances. As Johnson initially attempted, Bush is telling the American people they can have both guns and butter -- two for the price of one. In Bush's case, guns is the war in Iraq and Afghanistan and the butter is domestic programs such as enriched Medicare along with the war on terrorism, which Bush himself has characterized as virtually endless. In his case, though, he has not only refused to raise taxes, he has actually lowered them. LBJ could only marvel. Ever since the war in Iraq went from resplendent victory Mission Accomplished to the ugly quagmire it has become almost 2,000 American dead, commentators have been making comparisons to Vietnam. I myself have done that -- and I think certain commonalities exist and are troublesome. Usually, these comparisons focus on military or political matters, but Robert D. Hormats, a former assistant secretary of state and now a vice chairman of Goldman Sachs International, has found what may be a more apt comparison. Initially, both wars were financed on the cheap because interest rates were low.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616712","date":"2005-09-26","texts":"WASHINGTON -- Culminating more than a year of effort by the U.S., Britain and scores of antipoverty activists, the governors of the World Bank and International Monetary Fund endorsed a plan to forgive as much as 55 billion in loans to as many as 40 impoverished nations. The endorsements, during a series of weekend meetings here, make the debt-relief offer all but final. The executive boards of both institutions could meet as early as this week to seal the deal. To make growth achievable and future aid more likely to bolster success, we simply must confront unsustainable debt burdens in the poorest countries, Treasury Secretary John Snow told representatives of the other 183 IMF and World Bank member nations Saturday. Entering the weekend, the debt-relief plan appeared in danger of stalling, though President Bush and his counterparts from the other Group of Eight major industrialized powers had signed off on it during a summit in Scotland in July. The big breakthrough came Friday night, when Mr. Snow and his G-8 counterparts signed a letter pledging to replenish the World Bank's resources to make up for revenue lost when the bank forgives billions of dollars in loans outstanding. The pledge helped assuage the fears of the Netherlands and other small countries that big nations would demand that the World Bank -- the largest lender for developing nations -- forgive billions of dollars in loans, possibly leaving it short of cash for its development mission.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983968","date":"2005-09-26","texts":"Louisiana's congressional delegation has requested 40 billion for Army Corps of Engineers projects in the wake of Hurricane Katrina, about 10 times the annual Corps budget for the entire nation, or 16 times the amount the Corps has said it would need to protect New Orleans from a Category 5 hurricane. Louisiana Sens. David Vitter R and Mary Landrieu D tucked the request into their 250 billion Hurricane Katrina Disaster Relief and Economic Recovery Act, the state's opening salvo in the scramble for federal dollars. The bill, unveiled last week, would create a powerful Pelican Commission controlled by Louisiana residents that would decide which Corps projects to fund, and ordered the commission to consider several controversial navigation projects that have nothing to do with flood protection. The Corps section of the Louisiana bill, which was supported by the entire state delegation, was based on recommendations from a working group dominated by lobbyists for ports, shipping firms, energy companies and other corporate interests. The bill would exempt any Corps projects approved by the commission from provisions of the National Environmental Policy Act and the Clean Water Act. It would also waive the usual Corps cost- sharing requirements, ensuring that federal taxpayers would pay every dime. With the public eager to help Katrina's victims, President Bush and Congress have already approved 62.3 billion in spending for the Gulf Coast. But some budget hawks are grumbling about the impact on the deficit the Louisiana delegation's 250 billion bill would cost more than the Louisiana Purchase under the Jefferson administration on an inflation-adjusted basis. Some critics of federal water projects said the 40 billion Corps request could make the delegation look especially greedy and undermine support for the state's reconstruction plans.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982629","date":"2005-10-02","texts":"IN JANUARY 2004, President Bush announced an ambitious plan to gain a new foothold on the moon and to prepare for new journeys to worlds beyond our own. It seemed, we noted then, an odd moment to embark on a dispensable project of great expense -- given a yawning budget deficit, pressing health care and educational needs, and a long-term struggle against terrorism. Now, as the country faces another great expense in the aftermath of Hurricane Katrina, NASA has unveiled its proposal for making Mr. Bush's vision a reality. Both the moment for embarking on this endeavor and the justifications for it seem odder than ever. The agency's new administrator, Michael D. Griffin, says that the 104 billion project, which would put American astronauts on the lunar surface by 2018, can be done without adding to the agency's budget beyond keeping pace with inflation and without taking away from the agency's valuable programs outside the area of human space flight. We hope he's right, but given NASA's history of cost overruns and inevitable cost pressures, both assertions seem optimistic. If they don't prove true, after all, Mr. Griffin won't be around to answer for them -- and yet another NASA chief will have to deal with yet another program that's gone way over budget. More fundamentally, we believe that the needs of NASA -- and the country -- can, at this point, be better served by continuing and expanding robotic exploration. In a visit to The Post the other day, Mr. Griffin emphasized the inherent limits of robots NASA, he said, had concluded that a human could achieve in a single day what it would take a robot 90 days to do. But sending a human into space costs far more than dispatching a robot. The inherent risks of human spaceflight can be minimized but not eliminated. And humans, at least in the near future, will not be able to remain on the moon, Mars or elsewhere nearly as long as robots the rovers Spirit and Opportunity are still cruising the Martian surface after landing in January 2004. All in all, 90 days to one seems like a pretty good trade-off. Indeed, Mr. Griffin was refreshingly candid in acknowledging that favoring humans over robots wouldn't make sense if science were the only consideration. He argued, instead, that extending the range of human habitat out from Earth into the solar system -- and, indeed, beyond -- is critical for human survival. In the long run, a single-planet species will not survive, Mr. Griffin said, adding, There will be another mass-extinction event. If we humans want to survive for hundreds of thousands or millions of years, we must ultimately populate other planets.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984070","date":"2005-10-06","texts":"Mexican immigrants living in the United States have less expensive ways to send money to relatives in Mexico, using private and government money-transfer programs aimed at encouraging immigrants to join the U.S. banking system. Bank of America Corp. last week announced the launch of SafeSend, a free money-transfer service between the bank's branches in the United States and several Mexican financial institutions. The Federal Reserve and the Central Bank of Mexico are promoting a joint program called Directo a Mexico, under which participating U.S. banks charge low fees to send money to Mexico by using the central banks as intermediaries. People sending money to Mexico pay as much as 15 per transaction -- known as a remittance -- to companies such as First Data Corp.'s Western Union Financial Services Inc. and MoneyGram International Inc. Those companies handle most of the estimated 20 billion a year sent between the United States and Mexico. Banks account for only about 5 percent of that amount. The end goal is to get a banking relationship started, said Diane Wagner, a Bank of America spokeswoman.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984730","date":"2005-10-13","texts":"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. 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. 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. 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. 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.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842613583","date":"2005-10-14","texts":"Dow Jones Newswires Today's Market Forecast Inflation, Real and Imagined It shouldn't shock anyone that a dollar doesn't go as far as it used to. Still, today's inflation report could be an eye-opener. Economists surveyed by and CNBC estimate, on average, that the Labor Department's September consumer-price index will show that prices picked up by 0.9 from their August level. That would be the biggest monthly gain since 1990. The economists' estimate would put the CPI 4.4 higher than it was a year earlier. That would be the biggest year-on-year gain since 1991.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616585","date":"2005-10-15","texts":"Dow Jones Newswires NEW YORK -- The dollar fell Friday after a softer-than-expected September core-inflation reading and generally weak U.S. data. In volatile morning trading, the dollar tumbled as the data were released, briefly bounced back and then fell to fresh session lows by midday. In the end, the dollar was far off the two-year high it tapped Thursday against the yen, while the euro gained more than a cent from its session low and briefly topped 1.21. In late New York trading, the euro was at 1.2087, up from 1.2033 late Thursday. The dollar sank to 114.01 yen from 114.32 yen and to 1.2834 Swiss francs from 1.2877 francs. The pound was fetching 1.7699, up from 1.7563. Although overall consumer prices rose 1.2 in September, the core number -- excluding food and energy -- rose just 0.1. A 0.2 rise in retail sales in September also put pressure on the dollar a 0.4 increase had been expected. The 1.3 drop in industrial production in September and the University of Michigan's mid-October consumer- sentiment index were both worse than expected.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984393","date":"2005-10-16","texts":"It's a point David M. Walker, comptroller general and head of the Government Accountability Office, makes repeatedly when he testifies before congressional committees that oversee the federal workforce We strive to lead by example. Since his arrival in November 1998, Walker has worked tirelessly to brand the GAO a model agency -- what he calls a world-class professional services organization -- that has a strategic plan, standards for judging job performance and salary scales that reward the best employees but also reflect the realities of the labor market. Walker has used his position to help shape Bush administration policies on personnel management. He introduced the buzz phrase human capital to the federal government, as he did to the consulting world before coming to the GAO. Awkward as the term might be, Walker uses it to promote the idea that employees should be viewed as assets, valuable resources, not liabilities. He regularly invokes his efforts to reorganize and reinvigorate the GAO when advising Congress on government-wide personnel policy and the progress of two large departments -- Homeland Security and Defense -- that are crafting plans to move their employees into performance-based systems. Changes in how employees are paid and promoted are often the most sensitive issues that an agency head can tackle and, if bungled, can lower staff morale and productivity. A new study sponsored by IBM's Center for the Business of Government portrays Walker's changes as on the right track and suggests that Homeland Security, Defense and other agencies should pay more attention to the lessons learned at the GAO.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983929","date":"2005-10-20","texts":"Stocks soared Wednesday, with the Dow Jones industrials gaining more than 128 points as a sharp drop in oil prices and a reassuring assessment of the economy helped investors overcome their disappointment over Intel's earnings and troubling sales forecasts. Intel's profits and a warning of slow fourth-quarter sales rattled investors who had hoped for more bullish forecasts from corporate America. But the market drew solace late in the day from the Federal Reserve, which in its regular beige book breakdown of the economy said many parts of the country are still seeing decent growth despite high energy prices. Stocks also got a boost from falling crude oil futures after the Energy Department reported larger-than-expected inventories of oil, gasoline and heating oil. The Dow rose 128.87, or 1.3 percent, to 10,414.13. The Standard & Poor's 500-stock index climbed 17.62, or 1.5 percent, to 1195.76. The tech-focused Nasdaq composite index gained 35.24, or 1.7 percent, to 2091.24. The Commerce Department said new housing construction rose to an annualized rate of 2.108 million units, far greater than the 1.975 million economists expected.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982553","date":"2005-10-23","texts":"Pity the poor McMansion owner. If the President's Advisory Panel on Federal Tax Reform gets its way, those folks with the three-car garages, grand entryways, mega-kitchens and spacious bedrooms will lose the tax break they get for any portion of their mortgage over 312,000. In a place like Potomac, where the median sales price for a house is more than twice that amount, that could tear a hole in some fancy pocketbooks, depending on how much their owners have borrowed for their dream houses. Oh, and that little summer cottage at the beach in Rehoboth or the lakefront place at Deep Creek or Lake Anna That might cost a bit extra too. The panel wants to eliminate the mortgage deduction for vacation homes. Planning on a home equity loan to consolidate credit card debt or cover your kid's college tuition Think it through again. The president's advisory panel is expected to propose taking away the federal tax deduction for payments on that loan, too. These are still just proposals cooked up by a bipartisan panel, and who can count how many similar proposals have gone nowhere But it is a panel established by President Bush and charged with making the tax code simpler, fairer and more conducive to economic growth. For it to even consider going after the home mortgage deduction is a gutsy move -- even if the president recoils at the very idea. The home mortgage interest deduction is known as the third rail of tax politics for good reason. It's loved by the people and criticized mostly by academics. It is credited with creating a nation of homeowners, spawning social stability and entire industries designed to cater to everything from financing to construction to furnishing knickknacks and beyond. Tens of millions of Americans have come to rely on the generous tax benefit -- and with home prices soaring, they aren't all McMansion owners either. In the District last year, the average house cost 415,178, according to the city's figures.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614054","date":"2005-10-25","texts":"Annualized interest rates on certain investments as reported by the Federal Reserve Board on a weekly-average basis WEEK ENDED Oct. 21, Oct. 14, 2005 2005","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985070","date":"2005-10-25","texts":"President Bush yesterday named his top economic adviser, Ben S. Bernanke, to succeed Federal Reserve Chairman Alan Greenspan, who steps down Jan. 31 after helping guide the U.S. economy for more than 18 years. Bernanke, 51, who served as a Fed board member and once chaired Princeton University's economics department, is the right man to build on the record Alan Greenspan has established, Bush said to reporters in the Oval Office yesterday. Bernanke assured listeners that Greenspan's coming retirement will not trigger any significant shift in the Fed policies -- primarily the adjustment of interest rates -- that have helped deliver solid economic growth, low inflation and low unemployment for much of the past two decades. My first priority will be to maintain continuity with the policies and policy strategies established during the Greenspan years, Bernanke told reporters, as the Fed chairman stood a few feet away. If confirmed by the Senate, I will do everything in my power, in collaboration with my Fed colleagues, to help ensure the continued prosperity and stability of the American economy. Stock prices rose yesterday as Wall Street welcomed the selection of a highly regarded economist who has focused his academic career on studying Fed policy, whose thinking is well known to financial markets and who would arrive with recent experience working with Greenspan at the Fed, analysts said.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842617271","date":"2005-10-26","texts":"Wal-Mart Stores Inc. plans to add between 555 and 600 stores globally next year, adding 60 million square feet and becoming more aggressive in the number of supercenters it opens, Chief Financial Officer Tom Schoewe said in an interview. The world's largest retailer by sales plans to open 270 to 280 supercenters, which sell groceries and general merchandise, in the U.S. About 160 of these will be expansions or relocations of former discount stores. This year Wal-Mart had estimated it would add between 240 and 255 supercenters, but will end up with 266 new ones. We are ahead of plan and the practical reality is that they are getting more difficult to open, but we're putting a larger number of projects in the hopper, Mr. Schoewe said shortly before Wal-Mart began its two-day analyst conference yesterday at its Bentonville, Ark., headquarters. Wal-Mart has seen sales growth in the U.S. slow down this year because of tougher competition, an uneven economic recovery and higher fuel prices. Nonetheless, the retailer's store-opening plans indicate it is bullish on its growth prospects. Indeed, Wal-Mart Chief Executive Lee Scott said yesterday, We could be three or four times bigger in the U.S. Mr. Scott expects local zoning and land-use laws to grow stricter in coming years. The company is reckoning that stores built and opened sooner rather than later will face fewer delays. Already the company has seen projects in certain areas take longer to gain approval than elsewhere.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613670","date":"2005-10-31","texts":"FOR THE STOCK MARKET, a big Washington scandal usually is little more than a tempest in a Teapot Dome. From President Harding's Teapot Dome scandal -- named for a Wyoming rock formation atop a misused government oil reserve -- through the Clinton impeachment, stocks have proved remarkably impervious to news that has roiled the political world. It happened again last week. Thursday's stock tumble was influenced by reports that White House aide I. Lewis Libby was about to be indicted. But stocks quickly rebounded Friday even before the indictment was announced. Down 115 points on Thursday, the Dow Jones Industrial Average soared 172.82 points on Friday to 10402.77, up 187.55 points, or 1.8, on the week. Some of Friday's advance, certainly, reflected investor relief that the waiting was over and that Karl Rove, president Bush's political guru, wasn't indicted. But the investigation of White House leaks continues and Mr. Rove remains in legal jeopardy. When the indictment was announced during the day, the market fell, but just for a few minutes, before resuming its rise. Traders said Friday's gains appeared to have less to do with politics than with economics. They reflected pleasure that the government's report on third-quarter economic performance, also out Friday, included low inflation figures and good growth numbers. And that is the way it usually goes with political scandals. Corporate profits, inflation and interest rates are what drive stock prices. Unless political news affects those things, by making a tax increase or an economic slowdown more likely, its impact on markets tends to be short-lived.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614720","date":"2005-10-31","texts":"Halloween arrived early in Colorado this year as supporters of a pro-tax ballot initiative rolled out scare tactics to dramatize the allegedly dire consequences of a no vote at the polls this Tuesday. We hope Colorado voters look to see what's hiding behind the fright costumes. Advocates of what amounts to a 4 billion tax hike have deluged the airwaves with threats that senior citizens will go without their lunches, schools and state parks will close, college tuitions will soar, and programs to prevent poisoning, air pollution, ski lift accidents and teenage suicide will shut down. One TV ad shows the popular mayor of Denver jumping out of a plane as a metaphor for the carnage that awaits Colorado should the tax hike fail. Miraculously, he survived. At stake here is the fight over the future of the famous Colorado Taxpayer Bill of Rights law, or Tabor, as it is now commonly called. Tabor was approved by voters in 1992 to end the tax and spending cycle of the 1970s and 1980s. It restricts increases in the state budget to the rate of population growth plus inflation. Any tax revenue collections above that cap are returned to taxpayers. Some 3.3 billion, well over 1,000 per taxpayer, was returned to Coloradans in just the first five years. But when the high-tech bubble popped in 2000 and 2001, Colorado was hit hard and general fund revenues fell by 15 in two years. Now Republican Governor Bill Owens has joined hands with unions and the business community to call for a five-year time out on Tabor so state agencies can replenish their budgets. Taxpayer groups worry that once the state is freed from Tabor's fiscal discipline, it will never be restored. This battle of Tabor has gained national attention because the law has become a template for at least two dozen other states seeking to restrain their own stampeding taxes. Colorado is a worthy role model The tax cap is one of the main reasons that economists cite for the state moving to 10 percentage points above the national average in personal-income growth in the period after Tabor, from five points below it in the years before Tabor.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614780","date":"2005-11-02","texts":"Real-estate stocks took a battering on a flood of earnings reports, including several from big companies that disappointed investors. The company that fared the worst didn't release earnings at all but warned they wouldn't be good. Mills Corp., a big shopping-mall owner, said third-quarter results will be substantially below expectations because of an accounting issue. Investors had expected strong third-quarter results to be a boost for real-estate investment trust stocks, which have fallen on worries about rising interest rates and sliding consumer confidence. What they got was the Mills announcement Monday after the bell and disappointing reports yesterday from the likes of Equity Office Properties Trust, the biggest office-building landlord in the country. REIT shares overall were down just more than 2 yesterday, making the industry the second-worst performer among Dow Jones U.S. industry groups after electric utilities, off slightly more. Broadly, REIT third-quarter earnings have been good as office, apartment and retail real-estate markets improve. Yesterday's downturn was a reversal from last week, when REITs rallied on good earnings reports and outlooks from mall REIT Simon Property Group and others. Philip Martin, senior vice president of equity research for Stifel, Nicolaus & Co., described what happened to REITs yesterday as a knee- jerk reaction to earnings that came in a little lower than predicted at a time of increasing interest rates and rising inflation.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982160","date":"2005-11-04","texts":"As sustained combat in Iraq makes it harder than ever to fill the ranks of the all-volunteer force, newly released Pentagon demographic data show that the military is leaning heavily for recruits on economically depressed, rural areas where youths' need for jobs may outweigh the risks of going to war. More than 44 percent of U.S. military recruits come from rural areas, Pentagon figures show. In contrast, 14 percent come from major cities. Youths living in the most sparsely populated Zip codes are 22 percent more likely to join the Army, with an opposite trend in cities. Regionally, most enlistees come from the South 40 percent and West 24 percent. Many of today's recruits are financially strapped, with nearly half coming from lower-middle-class to poor households, according to new Pentagon data based on Zip codes and census estimates of mean household income. Nearly two-thirds of Army recruits in 2004 came from counties in which median household income is below the U.S. median. Such patterns are pronounced in such counties as Martinsville, Va., that supply the greatest number of enlistees in proportion to their youth populations. All of the Army's top 20 counties for recruiting had lower-than-national median incomes, 12 had higher poverty rates, and 16 were non-metropolitan, according to the National Priorities Project, a nonpartisan research group that analyzed 2004 recruiting data by Zip code. A lot of the high recruitment rates are in areas where there is not as much economic opportunity for young people, said Anita Dancs, research director for the NPP, based in Northampton, Mass.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982004","date":"2005-11-09","texts":"One puzzle these days is why Americans are so confident at the shopping mall and so glum in opinion polls. By many measures, the country's prosperity is broad-based. Families are buying and renovating homes at a ferocious pace. Sales of existing homes in 2005 are expected to reach a record 7.1 million units. Since mid- 2003 the number of payroll jobs has increased by 4.2 million. The unemployment rate of 5 percent is low by historical standards. But in polls, Americans are downbeat. The University of Michigan's index of consumer confidence was 74.2 in October, a big drop from 96.5 in July. The three-month decline is the second-largest on record the first occurred around the 1990 recession. This and other surveys could signal an economic slowdown or recession. There are obvious grounds for anxiety. In October new car and truck sales plunged 14 percent. Although gasoline prices are falling, they're still higher than a year ago. Homeowners will also face bigger winter heating bills, reflecting higher energy costs. Economist Marc Levinson of J.P. Morgan expects average households to pay 900 to 1,000 more in the Northeast and 700 to 800 more in the Midwest than last year. The real estate boom could recede or even implode. Because many homeowners are borrowing against rising housing prices and spending the extra cash, that could hurt ordinary shopping. Should a recession actually occur, of course, the gap between today's strong economy and sour public opinion would disappear. But until then, I have another theory to explain what's been a persisting disconnect between our mood and our behavior the hangover from the 1990s boom. We subconsciously compare everything now with what happened then and the comparison favors the past and disparages the present. Almost nothing looks as good as it did then. We were marching toward a carefree future. The Internet was everything -- and American companies dominated the Internet the business cycle was dead or dying interest rates and inflation were low stock prices would rise forever budget deficits were disappearing and unemployment was low. The powerful U.S. economy could subdue almost any threat say, the 1997-98 Asian financial crisis. Not coincidentally, the Michigan confidence numbers reached unprecedented levels in the late 1990s the historic peak occurred in January 2000 at 112. It wasn't simply that the economy did well. What was distinctive is that it did so well that it suggested we could take its future for granted. We called it the New Economy, which implied that the rules of the game had changed. There were explanations for all this bliss new technologies adoption of just- in-time inventory practices the revival of entrepreneurship. These arguments were satisfying they were also superficial. Alfred E. Neuman had become our chief economic guru What, me worry The central fantasy was that we could dispense with uncertainty and anxiety. Now they've reasserted themselves with a vengeance. We fret about China, a housing bubble remembering the stock and tech bubbles, huge trade and budget deficits, oil -- as well as terrorism, Iraq and possible pandemics. The return of worry partly accounts for the weakness of consumer-sentiment polls. People are less confident about the future. But what then explains the strength of actual consumer spending The answer is that Americans' personal spending decisions depend less on their general view of the economy and more on their personal circumstances -- and these haven't shifted so dramatically.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983644","date":"2005-11-12","texts":"Wall Street was growing worried in November 2002 that the Federal Reserve might not be able to keep the economy from tumbling into another downturn. Economic growth was sluggish, just a year after a recession and terrorist attacks. And inflation was falling unusually low, even though the Fed's benchmark short-term interest rate was at its lowest level in more than four decades. The Fed couldn't lower the rate much more, and soon might have no power to spur a more vibrant expansion, many analysts speculated. Wrong, said Ben S. Bernanke, a former Princeton economics professor who had joined the Fed board just four months earlier. Bernanke, in a speech, reassured the markets that the Fed still had several weapons to stimulate the economy and had most definitely not run out of ammunition. Bernanke also suggested that the Fed had beaten inflation, its arch-enemy since the 1970s, and had shifted its focus to a new danger -- deflation, the crippling decline in overall prices that plagued the United States during the 1930s and Japan in the 1990s. To listeners in financial markets, Bernanke's words marked a turning point for the Fed and heralded the arrival at the central bank of a new voice and strategist to help guide the economy through a dicey time.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617259","date":"2005-11-13","texts":"The stock market is starting to perk up, and for a good reason Stocks are more reasonably priced than at any time in several years, especially shares of some of the economy's leading companies. And this comes at a time when alternatives such as real estate, commodities and riskier types of bonds appear increasingly expensive. The best bargains in the stock market, according to some analysts and investors High-quality, household names such as J.P. Morgan Chase, McDonald's, General Electric, Wal-Mart Stores, Procter & Gamble, J.C. Penney, Dow Chemical and Lockheed Martin. These companies, all with commanding market shares, have traditionally fetched higher stock prices in relation to their earnings than many smaller rivals. Not any more. All these stocks are relative bargains, say the bulls, who suggest it may be time for investors to boost their allocation to the bluest of the blue-chip stocks -- some of them titans of industry, others with familiar names that may be found in your pantry, refrigerator, closet, checkbook or medicine cabinet. Of course, these inexpensive stocks could get even cheaper if the economy hits a wall next year. The highest-quality stocks will do the best in the months ahead, since they are the least expensive and should grow earnings at a better clip as the economy slows and the dollar weakens, says Jack Ablin, chief investment officer at Harris Private Bank in Chicago. He has been buying shares of GE and Procter & Gamble for his firm's account. He also recommends an exchange-traded iShares fund that tracks 100 large companies and trades under the symbol OEF. One piece of evidence cited by Mr. Ablin the Standard & Poor's 500- stock index, which tracks the largest 500 stocks, trades at a price just above 15 times next year's expected earnings. The S&P 100, which contains the largest companies, trades a tad lower. While those figures are about in line with historical averages, they're down sharply from priceearnings ratios of more than 30 in the late 1990s. And they look quite reasonable if interest rates and inflation don't rise too much from current levels.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613936","date":"2005-11-14","texts":"MOST EVERYONE on Wall Street predicted the dollar's three-year bear market would get even worse this year. And, despite its impressive rally in recent months, most are again calling for dollar declines in 2006. With the U.S. currency climbing to a fresh two-year high against the euro Friday and hovering around a 26-month best against the yen, there are nascent signs the bearish consensus may be splintering. A few analysts are even arguing that the dollar could strengthen further next year. That could have implications for stock investors. Too strong a currency can hurt exporters by making their goods less globally competitive, weighing on earnings. Some fund managers say a stronger dollar could increase stock prices by helping squelch inflationary pressures. That would keep interests rates from rising too quickly and abruptly slowing the economy. We're looking for a continuation of the dollar rally, says Gary Thayer, chief economist for A.G. Edwards and one of the rare dollar bulls at the end of last year. And we think we're close to a point where others may also start to begin thinking more favorably about the dollar. That day may be closer than he suspects. A Dow Jones Newswires survey of 18 banks last week showed a median forecast for a dollar decline of about 9 against the euro and the yen by the end of next year. These dollar forecasts are rosier than ones made three weeks ago, reflecting a broad, if modest, shift in thinking that the dollar can at least hold its gains longer than expected.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615668","date":"2005-11-18","texts":"REPUBLICANS TRIM agenda and seek small successes by year end. After already having dropped Social Security, Senate leaders defer action on making President Bush's tax cuts permanent. House leaders push ahead on immigration-law overhaul Senate Leader Frist pushes action on that and on asbestos liability into the 2006 election year. Congressional leaders will claim victory if they can send a deficit- reduction bill, appropriations measures and avian-flu money to the White House after a brief post-Thanksgiving December session. I don't think there's going to be much else accomplished, says Arizona Sen. McCain. Democratic leaders begin unveiling priorities with 128 billion innovation agenda increasing funds for basic research, science education and broadband access. House Minority Leader Pelosi vows pay-as-you-go budgeting but doesn't specify financing. DEMOCRATS FACE pressure to fight Alito but won't promise filibuster.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614286","date":"2005-11-20","texts":"This is typically the sweet spot of the year for stocks. The question is whether the 2005 version will feature real sugar or just Sweet'N Low. With surprising frequency, the period from November through early January is the strongest for stocks, often providing the majority of the annual gain. So far, the pattern is repeating this year. From January through October, the Dow Jones Industrial Average fell 3. Since then, it is up 3, leaving the Dow barely changed this year, off 0.2. On Friday, the Dow rose 0.4, producing a gain of 0.8 for the week. The Dow finished at an eight-month high. The Standard & Poor's 500-stock index and the Nasdaq Composite Index, up similar amounts on the day, hit 412-year highs. Why year's end is so good for stocks has long been a subject of debate. Some trace it to days when farmers withdrew money to finance a harvest in late summer, then deposited profits afterward. Others point out that many companies, not just retailers, do the bulk of their business and make their largest profits at year's end, as clients buy for the new year. Markets tend to rise ahead of expected January investment of retirement money in stocks. And crude-oil prices have a way of falling at year's end, after the summer driving season, easing inflation fears. That is happening now -- with crude oil down to a five-month low of 56.14 a barrel last week -- and also happened last year. Whatever the reason, a lot of money managers are counting on a 2005 year-end rally to save their portfolios from decline and leave them in the black, looking like heroes to clients. Little wonder that Wall Street calls the late-year stock surge a Santa Claus rally.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616870","date":"2005-11-25","texts":"INVESTORS' PRE-THANKSGIVING cheer propelled the Dow Jones Industrial Average to its fifth straight day of gains Wednesday, leading some traders to worry about a postholiday hangover. The Dow temporarily soared as high as 10950 before finishing at 10916.09, up 44.66 points, or 0.41, and just about 24 points short of a 412-year high. The Nasdaq Composite Index and the S&P 500, meanwhile, both reached 412-year highs. But the rally has left some investors fretting about a reversal. In one ominous sign noted by technically minded traders, the Relative Strength Index has risen to a level not seen in a year. That index measures the relationship of up to down days in the S&P 500, and when it starts climbing it's often read as a sign that the stock market is overheated. You can't go up every single day, said Todd Leone, head of listed trading at brokerage firm SG Cowen. At some point the market's got to rest. Stock and bond markets were closed yesterday for the Thanksgiving holiday, and both markets close early today. Stocks' advances Wednesday came amid sliding oil prices and investors' hopes that the Federal Reserve might stop raising interest rates soon.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981920","date":"2005-11-26","texts":"ADEAR ALTA That's the shortest real estate question -- and one of the best -- I have ever received. I wish the answer could be so brief. An as is real estate sale means the seller will not pay for any property repairs but must disclose all known defects. Many sellers of older homes sell as is because they don't want to be inconvenienced with repairs or renovations, realize the buyers may want to tear down the house or remodel to their own preferences, andor can't afford to make repairs. Personally, I learned about as is home sales after I bought a foreclosure house from a bank. The realty agent marketing the residence emphasized that the sale was as is and that the bank wouldn't pay for any repairs. But the price was such a bargain that I was blindsided and failed to notice all the items that needed repair or replacement. Fortunately, I had plans to renovate the property, so it really didn't matter, and I eventually resold that property at a substantial profit. Sellers of as is houses should realize that it is a red-flag warning to buyers, who usually expect a sales price discount from full-market value to compensate for the needed repairs. Buyers of as is houses can often obtain bargain purchase prices, but they should always make their purchase offer contingent on approval of a professional inspection report.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983317","date":"2005-11-27","texts":"Life is full of little ironies. So also is the Maryland budget. Three years ago, Maryland, like 43 other states, had a deficit driven by the bursting of the dot-com bubble. Gov. Robert L. Ehrlich Jr. R, then a gubernatorial candidate, accused the outgoing administration of Parris N. Glendening of engaging in a scorched- earth spending spree. Republicans called the Democratic governor Parris Spendening. But what became of all that scorched earth spending Did Ehrlich reduce Spendening spending levels Hardly. If you accept the doubtful premise that Glendening's spending was scorched earth, then Ehrlich's spending has reached incendiary levels. When he left office, Glendening's final general-fund budget proposal was 10.4 billion. Ehrlich's baseline general-fund budget this year is expected to be 3.2 billion higher than that, an increase of almost one-third in just three years. During this period, Ehrlich has ignored state spending affordability guidelines. For years, Republicans in Maryland campaigned on the need to rein in state spending. Since Ronald Reagan was president, it has been a GOP shibboleth that government at all levels is riddled with waste, fraud and abuse. But after three years in control of the governorship, Ehrlich's budgets implicitly acknowledge that state spending is not easily cut and that governments tend to spend what they take in. The initial Republican apologia for Ehrlich's spending will be to blame the Democratic legislature. This is a constitutional impossibility. Maryland's governors enjoy more expansive budget powers than any of the nation's 49 other state chief executives. With limited exception, no state spending can occur without first being proposed by the governor. The biggest exception has been mandated funding, such as the Thornton aid-to-education formula -- and Ehrlich declined to sign or veto that when it was presented to him for reaffirmation.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613540","date":"2005-12-01","texts":"Paris -- AFTER A GOOD RUN on European stocks, it may be time for investors to go Stateside. Since the Federal Reserve began raising interest rates in mid-2004 -- and especially this year -- European stock markets have outperformed the U.S. by a wide margin. But with the Fed nearing the end of its policy of monetary restraint and the European Central Bank about to start raising rates, probably as early as today, it could be Wall Street's chance to shine. Contending the ECB is as determined as the Fed to push interest rates to levels it thinks are right to damp inflation, Mike Lenhoff, chief strategist at Brewin Dolphin Securities, says this resolve could inhibit euro-zone equity-market performance just as Fed policy has hampered Wall Street. European stocks, he adds, could be in for a period of underperformance, while the U.S. stock market makes up for some lost time. For the year to date, the Dow Jones Stoxx index of 600 leading European companies is up 19.3. That compares with a measly 0.2 advance in the Dow Jones Industrial Average and a 3.1 increase in the broader Standard & Poor's 500-stock index. Behind the performance disparity is a Fed that in the past 17 months has steadily raised rates to 4 from 1. Meanwhile, the ECB has left its key refinancing rate unchanged at 2 for 29 months and hasn't increased it in more than five years. In fact, since global stock markets bottomed on March 12, 2003, European equities -- on a total- return basis, which includes dividends reinvested -- have outperformed Wall Street by 56, according to Morgan Stanley Capital International.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614114","date":"2005-12-06","texts":"Dow Jones Newswires NEW YORK -- U.S. Treasurys attracted further selling yesterday, as investors reacted to the recent string of solid economic reports. In late trading, the 10-year note was yielding 4.57, near its high for the session of 4.58. A week ago the 10-year tested 4.39, and since then data casting the economy in sound shape has pushed yields higher. The economy is cruising along at a good clip, and people think rates should move a little higher, said John Roberts, managing director at Barclays Capital in New York. In the latest round of data, the Institute for Supply Management's nonmanufacturing index, which is comprised mostly of services, moved to a reading of 58.5 last month, from 60.0 in October. Readings above 50 indicate expansion, and the result for November was roughly in line with the pullback to 59.0 expected by economists.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613465","date":"2005-12-08","texts":"The Wall Street Journal Online A LATE POP by General Motors kept the Dow Jones Industrial Average from sinking into negative territory for 2005. Drifting lower all day, the blue-chip average briefly dipped into the red for the year. But a last-minute surge by GM, one of 30 Dow industrial stocks, helped the average trim its losses just before the close. The auto maker's stock gained 2.9 thanks to a report that it is considering giving a board seat to Kirk Kerkorian's Tracinda Corp., which has been buying GM shares and advocating a corporate makeover to invigorate the stock. Analysts said the overall decline by stocks was a carry-over from a selloff that began in late trading Tuesday, when investors unloaded stocks after a big rally. The Dow finished yesterday down 45.95 points at 10810.91, leaving it up just 0.26 for the year. The Standard & Poor's 500-stock index fell 6.33 points to 1257.37, leaving it up 3.75 for the year, and the Nasdaq Composite Index declined 8.75 points to 2252.01, up 3.52 year-to-date. Treasury-bond prices declined ahead of a 10-year Treasury-note auction today, pushing yields higher. The dollar, which has benefited from rising interest rates in the U.S. and stagnant rates elsewhere, advanced against the euro and yen.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615222","date":"2005-12-10","texts":"THE PILLARS OF WALL STREET used to look down on Lehman Brothers and Bear Stearns as mere bond houses. Guess who's looking up now. Since 1998, shares of both have blown away their competitors. Yet the two, which report earnings next week, have followed very different strategies. Lehman has done even better. But Bear may be the better stock pick. Seven years ago, the two were valued at roughly 5 billion each. Today, Lehman sports a 35 billion market cap, almost three times Bear's. That reflects Lehman's savvy decision to expand aggressively as the bursting of the tech bubble was followed by the inflation of the current credit bubble. Both had about 9,000 employees in 1998. Today Lehman has 22,500 compared with Bear's 11,500. Over that period, Lehman's earnings nearly quadrupled, while Bear's results grew about two and a half times. Lehman expanded abroad and derives 40 of earnings outside the U.S. Bear gets a tenth of its profit abroad. Yet both are reliant on fixed income and would be hurt by a marked slowdown in credit markets. Though Lehman draws more than half its revenue from fixed income compared with about 45 at Bear, investors seem convinced Lehman's growth prospects make it a better bet. Lehman trades at 12.5 times 2006 earnings as forecast by Morgan Stanley -- a 20 premium to Bear. It also fetches 2.3 times book value -- a 40 premium to Bear's book value multiple.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616344","date":"2005-12-18","texts":"THIS WEEK Web Titans Near Deal An advertising deal between Google and Time Warner's AOL could be announced as soon as this week, shutting out Microsoft, which has been wooing AOL since January. The deal could allow AOL to sell advertising among the search results provided by Google on its Web properties, while also promoting AOL's Web properties among the sponsored links in Google's search results. Housing Data Tuesday we'll find out how many new homes were started in November, and Friday we'll see how many new homes were sold in that month. October saw a spike in sales but a drop in construction. Earnings Watch Circuit City reports quarterly earnings tomorrow, followed by Morgan Stanley and Nike on Tuesday and General Mills on Thursday. Store Sale Supermarket chain Albertson's is set to be sold to an investment group of Cerberus Capital, Kimco Realty and grocery chain Supervalu for about 9.6 billion, say people familiar with the matter. A deal could lead to heavy layoffs and store closings.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615500","date":"2005-12-21","texts":"REGULAR REBALANCING is good. But even less would be better. Around this time each year, many folks nudge their mutual-fund portfolio back into shape by lightening up on winning funds and adding to lackluster performers. And that's a smart thing to do. It turns out, however, that rebalancing can be even more profitable if it's done less often. Here's why you should scale back your real- estate investment trusts and your small-stock holdings -- but leave your growth stocks and your Japan fund to run. -- Reining in risk. Building and maintaining a fund portfolio can be reduced to three simple steps. First, pick the market segments you want to invest in and decide how much you will stash in each. You might settle on a mix of, say, 30 large U.S. stocks, 10 small U.S. companies, 5 REITs, 10 developed foreign-stock markets, 5 emerging-market shares, 5 gold stocks, 25 high-quality U.S. bonds, 5 high-yield junk bonds and 5 foreign bonds.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615658","date":"2005-12-22","texts":"Dow Jones Newswires A slow week for new stock offerings was typified by subdued debuts yesterday from insurance-services company CRM Holdings Ltd. and semiconductor designer Pixelplus Co. CRM Holdings, a Bermuda-based company that provides fee-based management services for self-insured groups, closed at 13 on the Nasdaq Stock Market, flat with its IPO price. CRM, which specializes on groups that self-insure for workers' compensation risk, sold 2.85 million shares at the low end of the expected price range of 13-to- 16 set by underwriters Sandler O'Neill and KeyBanc Capital Markets. CRM reported total revenue of 31.6 million in the first nine months of 2005, up 31 from the same period in 2004. Its net income was 5.3 million, up 36. The workers' compensation insurance industry is fraught with risk and competition from major insurers. In CRM's case, its operations are concentrated solely in New York and California, while larger competitors offer multistate coverage. An IPO from workers' compensation insurer Amerisafe Inc. in November had a similar tepid reception, closing flat with its offer price, but the stock is currently trading up 10 from its offer price.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984398","date":"2005-12-22","texts":"SMALL TREASURES -- 11 a.m.-6 p.m. Thursday-Saturday and noon- 6 p.m. Sunday, through Jan. 8. Andrei Kushnir and Michele Taylor's annual small works show, with pieces by members of the Washington Society of Landscape Painters and other artists. 8289 Main St., Ellicott City. Free. Call for holiday hours. 410-465-4467. ALL THE HORSES -- 11 a.m.-530 p.m. today, tomorrow, Tuesday- Dec. 30 and by appointment, through Dec. 30. Closed Saturday, Sunday and Monday. Equine paintings by Rana Geralis. American City Building, 10227 Wincopin Cir., Columbia. Free. 410-740-8249. SKATING -- 2-5 p.m. Sunday. A community roller-skating event sponsored by Howard County Hadassah and the Jewish Federation of Howard County. Proceeds will go to Hadassah Hospital in Israel. Supreme Sports Club roller rink, 7080 Deepage Dr., Columbia. 20 per family skate rental is additional. 410-418-9262 or www.hocohadassah.org. MAME -- 6 p.m. Tuesday-Saturday, 5 p.m. Sunday, and 1030 a.m. Wednesday and Sunday, through Feb. 19. No shows Saturday, Sunday or Jan 1. Auntie Mame becomes the guardian of her 10-year- old nephew, then sees her life turned upside down with the 1929 crash of the stock market. Toby's Dinner Theatre, 5900 Symphony Woods Rd., Columbia. 41-46 for adults 27.50-46 for children 12 and younger. Call 800-888-6297 or www.tobysdinnertheatre.com. JINGLE BELL ROCK -- 730 p.m. tomorrow, 2 p.m. Saturday, 2 and 7 p.m. Tuesday, Wednesday, next Thursday and Dec. 30. The Young Artists Theatre presents a modern musical based on Charles Dickens's A Christmas Carol. Routes 29 and 216, Cherry Tree Center, West Laurel. 8 7 for groups of 10 or more. Reservations required. 301-604-2844.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616338","date":"2005-12-24","texts":"Dow Jones Newswires Small stocks began the holidays on a cheerful note, rising for their fourth consecutive session and outpacing their larger brethren Friday. Staar Surgical soared 2.74, or 47, to 8.51. The Food and Drug Administration approved the Monrovia, Calif., ophthalmic-product maker's adult myopia treatment, the Visian Implantable Collamer Lens. Forward Industries fell 4.67, or 32, to 10.05. The Pompano Beach, Fla., designer and marketer of carrying cases cut its fiscal first- quarter revenue guidance to a range of 8.3 million to 8.7 million, lower than its previous forecast of more than 8.9 million. Progenics Pharmaceuticals gained 2.51, or 11, to 25.60. The Tarrytown, N.Y., biopharmaceutical concern entered into an agreement with a division of large-cap Wyeth to jointly develop methylnaltrexone, a treatment for opioid pain medication side effects.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983225","date":"2005-12-29","texts":"Agricultural researchers at the University of Missouri at Columbia's Center for Agroforestry are experimenting with more than 50 varieties of chestnuts. The goal to bring back the American chestnut. A century ago -- before an Asian blight devastated most of the country's millions of chestnut trees -- chestnuts were a staple of American diets, particularly for recent immigrants. The trees' rot- resistant timber was used to build barns and beams, its bark provided tannin for leather. While the chestnut remains an oddity for most Americans, commercial production is increasing, and so is demand. The American Chestnut Foundation has worked very closely with the Agriculture Department to come up with a disease-resistant strain of the American chestnut, President Bush said when he planted a 16-foot chestnut tree on the White House grounds to mark the 133rd annual celebration of Arbor Day on April 29. One day the American chestnut . . . will be coming back. And this is our little part to help it come back. For now, domestic production is a fraction of the global market, said Michael Gold, associate director of the Missouri center. He estimates that U.S. chestnut growers produced 1.5 million pounds last year, compared with 200 million pounds worldwide.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615873","date":"2005-12-30","texts":"STOCKS CAN'T SHAKE the post-Christmas blues. In listless holiday-season trading, investors appeared to give up hopes for a year-end rally. The Dow Jones Industrial Average finished yesterday virtually unchanged for 2005, down 11.44 points, or 0.11, at 10784.82. With one trading day left in the year, the industrials were just an eyelash above last year's close of 10783.01, in danger of sinking into the red after two years of gains. Trading volume was among the year's lightest. Other major indexes also fell, putting them slightly ahead for the year. The day's news was downbeat. The bond market again inverted, meaning that yields of two-year Treasury notes moved higher than those of 10-year notes. Normally, investors demand higher yields for longer-term investments. Some investors worry that the inversion could signal recession to come, while others say it just means a mild decline in the growth rate. The yield of the two-year note finished at 4.381, and that of the 10-year note was 4.368.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984432","date":"2005-12-31","texts":"QDEAR BOB I have a FICO score of 750 and wonder why I am still paying private mortgage insurance. -- Jennifer R. When you bought your house or condo, you probably paid little or no cash down. Because of your high credit score, your lender approved a high loan-to-value ratio mortgage. The lender insisted on PMI to eliminate its foreclosure loss risk. Until you have at least 20 percent equity, your lender still views you as a high risk, which requires PMI to protect the lender. Also, until your home loan has at least 24 months of on-time monthly payments, most mortgage lenders will refuse to cancel PMI. Some especially nasty lenders will not cancel PMI until the loan balance declines below 80 percent of its original balance, ignoring your home improvements and market value appreciation. That usually takes 10 to 15 years, depending on your interest rate. If you have one of these really bad lenders, refinance with a different lender.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613534","date":"2006-01-03","texts":"Today's Market Forecast Mortal Coil The good news about last year's flat stock market Stocks got cheaper. The bad news They could get cheaper still. In 2005, the Dow Jones Industrial Average had one of the most uninspiring annual performances of its 109-year history, finishing the year down 0.6 -- which is to say almost perfectly flat. The broader market did a bit better, but with the Standard & Poor's 500-stock index gaining 3, it, too, drew yawns rather than applause. But even as the market treaded water, corporate profits grew quickly. Company analysts polled by Reuters Estimates predict that earnings for companies in the S&P 500 increased 13.6 in 2005. Because the S&P 500 went up less than its earnings, it's priceearnings ratio slipped. On Friday, the S&P 500 closed at 16.4 times 2005 earnings. It finished 2004 at 18 times that year's earnings. In fact, it's the lowest S&P 500 PE ratio in 10 years.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616365","date":"2006-01-03","texts":"Sung Won Sohn can thank a pair of 250 denim jeans for his top place in The Wall Street Journal's annual U.S. economic-forecasting rankings. Earlier in the year Mr. Sohn, economist and chief executive of Hanmi Financial Corp. in Los Angeles, was visiting a California jeans producer whose executives told him they couldn't keep up with demand for high-priced clothing. He figured there must be money out there if people are willing to pay that much for bluejeans. The insight -- along with reports from other clients that costs were rising -- led Mr. Sohn, 61 years old, to increase his 2005 projection for inflation and to stick with his call for healthy economic growth in the U.S. The resulting prediction of growth of about 3.8 for the first three quarters and above-trend inflation of about 3.6 left him ahead of the pack when the results were tabulated. U.S. gross domestic product expanded, on average, at a 3.7 annual rate during the first nine months, and, as of November, the consumer-price index was up 3.5 from a year earlier. Most other economists had forecast lower inflation and a little less growth in 2005. Preliminary estimates of fourth-quarter growth are slated for later in January. Also among the most accurate were J. Dewey Daane, a retired professor at Vanderbilt University in Nashville, Tennessee Mickey Levy, chief economist at Bank of America in New York Gail Fosler, chief economist with the Conference Board in New York and Maria Fiorini Ramirez of MFR Inc., an economic-consulting firm in New York. All five had above-average inflation forecasts, and three of the five had above-average growth forecasts. Many forecasters rely on econometric models to come up with forecasts for economic growth, inflation, interest rates and exchange rates. Mr. Sohn finds a little intuition comes in handy, too. I talk to people on the ground, he says.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982314","date":"2006-01-03","texts":"Joe Ellis first realized that hard times were coming to his native Blue Ridge community a decade ago when a local pajama factory packed up after 50 years and moved overseas, taking 1,100 jobs. In 2001, the Natalie Knitting factory, which had been around as long as anyone could remember, pulled up stakes, taking its 350 jobs. Not far behind was the Buster Brown plant and 300 jobs. It was a constant downward spiral for the entire community, said Ellis, who grew up outside this mountain town of 6,300, about 330 miles southwest of Washington. The towns of Smyth County -- Marion, Chilhowie and Saltville - - were being dealt away, in local parlance. In the new global economy, the textile and manufacturing plants that had helped Smyth County thrive 30 years ago were headed where labor was cheaper. Now he and a group of local officials and economic leaders are determined to give Smyth County an economic transfusion. Along with keeping his company and its 40 workers humming, Ellis has invested in increasing the region's tourist trade while county leaders have concentrated on keeping the county's remaining businesses and luring more. They've done so with tax incentives and efforts to improve education for the labor force. So far the tactics have worked so well that state leaders call Smyth County a model.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983494","date":"2006-01-12","texts":"Stocks advanced Wednesday after New York Federal Reserve President Timothy F. Geithner said in a speech that core inflation is quite moderate. Since fighting inflation is the U.S. Federal Reserve's top concern, investors interpreted Geithner's remarks as another sign that the Fed might soon end its series of short-term interest rate increases. Geithner said that overall inflation pressures have risen but that inflation excluding food and energy, however, has been quite moderate, in part due to very modest growth in unit labor costs. The Dow Jones industrial average rose 31.86, or 0.29 percent, to 11,043.44. It was the average's best close since June 2001. Broader stock indicators were higher. The Standard & Poor's 500- stock index rose 4.49, or 0.35 percent, to 1294.18, its highest finish since May 2001. The Nasdaq composite index rose 11.04, or 0.48 percent, to 2331.36, its highest close since February 2001.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830985400","date":"2006-01-13","texts":"No, there aren't Intel Inside stickers on Apple's new Intel- powered iMac desktops and MacBook Pro laptops, introduced this week at the Macworld Conference & Expo here. The distinctive Intel chime that ends almost every PC manufacturer's ad does not emanate from the speakers of these new machines, either. Even from up close, it can be difficult to tell Apple's new Intel- based iMac and MacBook Pro from their PowerPC predecessors -- the iMac, in particular. With it powered off, the only easy way to distinguish it from the iMac G5 is a DVI digital-video port that takes the place of an analog VGA connector on the old model. But with the MacBook Pro go ahead and keep calling it a PowerBook we probably will, too, Apple is trying out several new ideas in laptop design and taking one big gamble. It has the same built-in iSight webcam, remote control and Front Row media-viewing software as the iMac and trades in the old PowerBook's PC Card slot for a newfangled Express Card slot -- but it doesn't include a modem. You can buy a 49 external modem, or at some point, you may be able to pop a modem into that Express Card slot. I haven't used a modem much in the past few years, but when I've needed to, it's always been on my laptop -- shocking as it is in a country that calls itself part of the First World, there are some places in the United States without Wi-Fi broadband. Apple is taking a risk here, and for minimal gain -- it's not like there isn't room on the laptop's flanks for a modem port. Next to where you might expect to find such a thing, Apple has stashed one other new trick, a MagSafe power connector. Instead of requiring you to insert a plug into a socket, this flat, recessed surface uses a magnet to hold the power cable firmly in place while still allowing it to break away cleanly if the power cord gets jerked unexpectedly -- say, when I trip over it for the fifth time in a day.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614185","date":"2006-01-16","texts":"HONG KONG -- China's foreign-exchange reserves ballooned to 818.9 billion at the end of last year, putting the country on the road to hitting the 1 trillion mark and claiming the world's largest reserves this year. The expanding coffers will likely add to pressure from the U.S. for Beijing to speed up appreciation of its currency. For China, the reserves are in some ways an embarrassment of riches. They draw unwelcome attention to Beijing's policy of maintaining exchange-rate stability by buying up most of the dollars that flood into the country in the form of foreign direct investment, export earnings and speculative capital. Critics in the U.S. and Europe complain that this practice gives Chinese exporters an unfair advantage on world markets by making the Chinese yuan artificially cheap. Partly in response to U.S. pressure, Beijing allowed a 2.1 appreciation of the yuan against the dollar last July and pledged to make its exchange rate more market-driven. However, since that time, the yuan has edged up only by a further 0.52. It last traded on Friday at 8.0698 to the dollar. Coupled with other evidence of breakneck economic growth in China, the buildup of reserves is definitely helping Western countries to add pressure on China for currency appreciation, said Grace Ng, a senior economist at J.P. Morgan. To China's critics, the figures provide evidence that the economy can withstand a stronger currency. If, as expected, the country's reserves leap by a similar margin this year, taking the total over the 1 trillion threshold, economists say Beijing will find it harder to resist pressure for faster currency appreciation from the U.S. and other major trading partners and still avoid a protectionist backlash.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613934","date":"2006-01-18","texts":"Annualized interest rates on certain investments as reported by the Federal Reserve Board on a weekly-average basis WEEK ENDED Jan. 13, Jan. 06, 2006 2006","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985221","date":"2006-01-21","texts":"Stocks suffered their biggest one-day drop in two years Friday as rising oil prices and surprisingly weak financial reports from blue- chip companies General Electric Co. and Citigroup Inc. spread gloom across Wall Street. The selling began at the opening bell and mounted through the day, driving the Dow Jones industrial average down 213.32 points, or 2 percent, to 10,667.39. The blue-chip index, which last week broke 11,000 for the first time in more than four years, is now slightly below where it began the year. The selling spread across the broader market as well. The Standard & Poor's 500-stock index fell 23.55 points, or 1.8 percent, to close at 1261.49. Technology stocks plummeted as a Justice Department request for Web-searching information from Google Inc. pushed the company's stock down more than 8 percent, its biggest one- day drop ever. The Nasdaq fell 54.11, or 2.4 percent, to close at 2247.70. Traders and money managers said the day's losses stemmed from a litany of grim news that mounted through the day. First, oil prices spiked on fears that international sanctions against Iran over its nuclear ambitions could shut down an important source of oil. A futures contract for a barrel of crude closed at 68.35 in New York on Friday, up 1.52, or 2.3 percent. A moderating oil price was among the main drivers of last year's fourth-quarter stock market rally. We are making another run at 70 a barrel, and we are doing it without a hurricane having knocked out 70 percent of U.S. production, said Jack Caffrey, equity strategist at J.P. Morgan Private Bank, referring to last year's hurricane season. You couple that with the stark reminder of all the geopolitical jitters out there, and you wind up with investors wanting to get a little more defensive.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842615690","date":"2006-01-23","texts":"Dow Jones Newswires DANA CORP.'S DISMAL third-quarter results have led some analysts to worry that the auto-parts supplier could face dwindling cash and a weakened balance sheet this year, even amid a boom in one of its key markets. The Toledo, Ohio, company faces a critical year in which it must fix its operations and renegotiate bank agreements. As with many auto suppliers, Dana is struggling with higher raw-material costs and exposure to the decline in U.S. market share by Detroit's big auto makers, General Motors Corp. and Ford Motor Co. Ford accounted for 25 of Dana's revenue in 2004 and GM 11. Dana Chief Financial Officer Robert Richter said it expects cash flow from operations and the sale of three business lines will provide adequate liquidity. Dana, which makes axles, frames and other parts for cars and commercial trucks, reported a third-quarter net loss of 1.27 billion, or 8.50 a share, on revenue of 2.41 billion. While charges were responsible for most of that loss, the company lost 63 million on operations despite a 13 increase in revenue compared with the year- earlier period. Dana's stock was down 19 last week.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830985624","date":"2006-01-29","texts":"Looking at the enormous -- and incessant -- tide of books and articles written about Hitler and the Third Reich, we may note an interesting discrepancy. The majority of non-German historians and authors have devoted and are still devoting their main interests to Hitler's war and crimes, to the second six years of the Reich, 1939- 45. The majority of German historians and authors have devoted their main interests to topics and themes about the first six years, 1933- 39. This is understandable. In 1939 Hitler chose war, with the results of total defeat for Germany and Germans. But what led up to that What happened to the German people before that fatal turning point The Third Reich in Power is Richard J. Evans's attempt to answer many of those questions through historical synthesis. The second part of this British historian's planned three-volume history of Nazi Germany, it is crammed with information data, statistics, official and private records and reminiscences, sustained by the author's knowledge of German and his acquaintance with all kinds of German sources, many of them relatively recent ones. This heavy volume amounts to something like a massive handbook of a very big subject. It consists of seven large parts, made up of four chapters each, moving from the history of the Nazi police state to that of propaganda, religion, artistic and intellectual life, economy and finance, class structure, Jews and finally The Road to War -- that is, Hitler's foreign policy. Yet there are things wrong with both the content and the writing of this massive book. Its long chapters about economics, finance and nationalization of German industry, detailing their difficulties, miss the essence of Hitler's thinking. Why should I nationalize the industry he once said. I shall nationalize the people -- which is what he did alas, quite successfully. Compared to that, Evans's citing of the occasional private grumblings of industrialists such as Gustav Krupp are largely devoid of meaning. His judgments are sometimes contradictory. On page 370, he writes that the economy was clearly in no shape to sustain a prolonged conflict in 1938-1939. Clearly And did Hitler plan for a prolonged conflict But on page 409, he states that the economy had recovered from the Depression faster than its counterparts in other countries. Germany's foreign debt had been stabilized, interest rates had fallen to half their 1932 level, the stock exchange had recovered from the Depression, the gross national product had risen by 81 per cent over the same period. . . . Inflation and unemployment had been conquered. Another contradiction Everything that happened in the Third Reich took place in this pervasive atmosphere of fear and terror, which never slackened and indeed became far more intense towards the end. Yet on many other pages, Evans mentions umpteen examples of the regime relenting its pressures for tactical purposes for example, before and during the 1936 Berlin Olympics. This heavy book is chock-full with statistics. Yet there is no mention of such very telling numbers as the increase in German marriages from about 511,000 in 1932 to 611,000 in 1936 the jump from 921,000 births in 1932 to 1,280,000 in 1936, meaning that for every two children born in Germany in 1932, three were born just four years later the fact that in 1938 and 1939, most marriages in all of Europe were registered in Germany, exceeding the numbers among even the prolific people of Eastern Europe or the statistic that suicides committed by young people under 20 dropped by 80 percent  during the first six years of the Hitler regime -- all symptoms of a great and ominous rise of German national confidence.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830985137","date":"2006-01-30","texts":"In his Jan. 9 column about The Awakening statue on Hains Point, Answer Man wrote that J. Seward Johnson still owns the life-size aluminum giant he created for a sculpture conference in 1980. The National Park Service seems happy to have it, although any statue going on federal land today would need to be commemorative in nature. Robert Lloyd Nelson of Rockville wrote to say that he'd always found the statue whimsical. Then he read a story about Isoroku Yamamoto, the admiral who planned the Japanese attack on Pearl Harbor. Yamamoto is said to have counseled against the attack but was overruled, Robert wrote. He was then put in charge of the attack, and as a dutiful subject of the Emperor, successfully carried out his assignment. But as the war got under way, he reportedly remarked, 'I fear we have awakened a giant.'  Now Robert sees The Awakening in a new light. It doesn't take much imagination to see the enraged face of Uncle Sam on that giant's head emerging from its buried slumber, he wrote. The Park Service should consider itself blessed to have inherited this significant work when the original sculpture conference closed. The giant did indeed awaken, and whowhatwhere would we be today if it hadn't On Jan. 16 Answer Man wrote about the Peoples Building, which is visible from New York Avenue. It houses D.C. government offices now but started life as the warehouse and headquarters of the homegrown Peoples Drug chain. Doris Taylor remembers the building well. Fifty years ago she was secretary to the warehouse manager, Wilbur Disney.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614851","date":"2006-01-31","texts":"Dow Jones Newswires NEW YORK -- Small stocks didn't stray very far from the flat line and ended mixed as investors were cautious ahead of the Federal Reserve's interest-rate meeting today. Still, energy stocks rallied after large-cap Exxon Mobil reported a surge in fourth-quarter profit. Atwood Oceanics, which posted a 72 rise in first-quarter net income, rose 2.55, or 2.6, to 100.68 on the New York Stock Exchange. Contango Oil & Gas jumped 38 cents, or 2.9, to 13.45 on the American Stock Exchange, and Global Industries added 41 cents, or 3, to 13.91. Several medical-equipment stocks declined after large-cap Kinetic Concept's fourth-quarter revenue missed Wall Street's expectations. Datascope lost 55 cents, or 1.6, to 34.86, and ArthroCare declined 50 cents, or 1.1, to 44.50. The Russell 2000 index of small-capitalization stocks fell 1.35, or 0.18, to 730.87. The S&P SmallCap 600 Index rose 0.65, or 0.17, to 378.21. The Nasdaq Composite Index of large and small-cap stocks gained 2.55, or 0.11, to 2206.78.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615308","date":"2006-01-31","texts":"The paradox of Alan Greenspan's achievement as he leaves office today after 18 years as Chairman of the Federal Reserve is that nearly everyone is praising his performance but no one seems to know exactly how he did it. He bequeaths to successor Ben Bernanke a record but not a method -- which means we all have to see if the new guy has the same juggling skills. As no less an authority than Milton Friedman notes nearby, this monetary eclecticism hasn't detracted from Mr. Greenspan's historical accomplishment. With a blip or two along the way, he has continued the progress toward price stability begun at the Fed under Paul Volcker. He also steered the economy through or around more than one major crisis, including the stock market crash of 1987 and the savings and loan debacle of a couple of years later. We'd give Mr. Greenspan less credit than the conventional wisdom does for his handling of the foreign-exchange crises of the 1990s. His willingness to join Robert Rubin in bailing out Mexico's foreign-debt holders in 1994 accentuated the moral hazard that led to the Asian and Russian crises later that decade. The Bush Administration's change of policy in refusing to bail out such global deadbeats as Argentina has done more to limit currency crises than those episodes did. On the other hand, Mr. Greenspan deserves more praise than he typically receives for his stewardship over financial markets. He has tried to demystify the widespread use of credit derivatives, which have helped financial institutions diversify their risk. One happy result is fewer bank failures than in previous recessions or periods of rising interest rates. This Greenspan contribution will be especially missed, since no one else has the same stature to counter the misguided fears tossed around by Warren Buffett and other media favorites. Another misguided critique of the Greenspan era is the recent preoccupation with global imbalances. This is an updated version of the 1980s' alarums over the U.S. twin deficits, in the trade account and federal budget. The fear now as then is that the trade deficit in particular is unsustainable, and that it will lead to a crash in the dollar and thus in the global economy. The conventional wisdom's proffered cure, now as then, is a major U.S. tax increase.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984858","date":"2006-02-01","texts":"No man's reputation is safe at his retirement, and so it is with Alan Greenspan's. History's verdict will await subsequent events that reveal the long-term consequences of his 18 years as chairman of the Federal Reserve. But until then it's silly to discount as the Economist recently did his apparent accomplishments. Doubters should consult standard economic statistics covering his tenure since 1987 The U.S. economy gross domestic product has expanded 72 percent, and its growth rate has outstripped that of virtually every other advanced country. The number of payroll jobs increased by 32.1 million 31 percent from August 1987 Greenspan's first month to December 2005. Interest rates dropped from 8.39 percent on 10-year Treasury bonds and 9.31 percent on 30-year mortgages 1987 averages to 4.5 percent and 6.1 percent, respectively. The Dow Jones industrial average quadrupled, from 2,680 on Greenspan's first day Aug. 11 to 10,900 as of Jan. 30.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614304","date":"2006-02-03","texts":"President Bush on Monday will tell the nation what he wants done with the budget next fiscal year. But the significance of his proposals and Congress's response is dwarfed by one daunting fact Some 84 cents of every dollar the government spends is essentially committed before he and the legislators even have at it. That is the amount that goes to three all-but-untouchable elements interest on the federal debt defense and homeland security and, above all, entitlements programs such as Medicare, Medicaid and Social Security. It leaves just one-sixth of spending for nearly everything else the government does domestically, from secretaries' salaries to research -- what is known in budget jargon as discretionary spending. Entitlements are the real elephant in the room. Formulas for spending on these social programs are set by law. Anyone eligible can collect. And the programs are growing far faster than either inflation or the economy, some 8 a year. Medicare, at 391 billion this year, is close to equaling the entire domestic discretionary slice of the budget. Add in Social Security and the federal share of the state-run Medicaid program for the poor, and the big-three entitlements total 1.1 trillion for this year -- 3 billion a day. This spending is the big issue in the federal budget, not post-Katrina rebuilding, headline-grabbing pork like Alaska's ridiculed bridge to nowhere, or even the costly war in Iraq.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614978","date":"2006-02-03","texts":"ASIAPACIFIC South Korea to Seek Free-Trade Pact With U.S. WASHINGTON -- The Bush administration will begin negotiations with South Korea -- the U.S.'s seventh-largest export market -- in a bid to lift trade barriers between them, trade officials from both nations announced. This is the most commercially significant free-trade negotiation we have embarked on in 15 years, U.S. Trade Representative Rob Portman said. Removing trade and investment barriers between our two nations through a free-trade agreement will increase market access for our farmers, ranchers, workers and businesses to the dynamic and growing Korean economy. With annual gross domestic product approaching 1 trillion, South Korea is the world's 10th-largest economy.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615804","date":"2006-02-04","texts":"WASHINGTON -- Job creation accelerated in January, pushing the unemployment rate to its lowest mark in more than four years and offering fresh evidence that the economy got off to a strong start this year. The economy created 193,000 nonfarm jobs last month, 53,000 more than in December, the Labor Department said Friday. While the gain fell short of many analysts' expectations, any disappointment was offset by revisions to December and November figures showing 81,000 more jobs were added than originally estimated. Over the past three months, nonfarm payroll employment expanded at a rate of 229,000 a month. The jobs report had even better news for workers. The demand for workers sent the unemployment rate to 4.7 from 4.9 in December, its lowest level since July 2001, and the average hourly wage rose to 16.41 from 16.34. Compared with January 2005, hourly pay rose 3.3, a near three-year high that puts the rate of yearly wage growth roughly in line with the 3.4 annual inflation rate. Together with a recent spate of positive indicators, particularly in the manufacturing sector, the employment report points to a newly vigorous economy after the fourth quarter's lull. The main reason Consumers propel 70 of the economy with their purchases, and wage growth generally leads to higher spending. The Federal Reserve will pore over the jobs report to gauge how much pressure higher wages will put on prices, which could lead to inflation. Most analysts interpreted Friday's jobs report as an indication that Fed policy makers will raise interest rates again next month, although there is much debate over whether it should.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613657","date":"2006-02-05","texts":"Financial security has rarely looked so unappealing. Bonds and bond mutual funds are supposed to offer a comforting dose of certainty. You typically have an excellent idea of how much interest you will collect each year and what price you will receive when you go to sell. But today, that virtue looks like a vice. Even the longest-dated Treasury bonds pay less than 5. To make matters worse, many folks fear rising interest rates will pummel bond prices. What to do In this week's and next week's column, I will offer some pointers on how to navigate 2006's treacherous bond market and how to build a portfolio that should serve you well in the years ahead. Today's contention The current worries are overblown -- and they certainly shouldn't dissuade you from having at least a portion of your portfolio in bonds. Bonds may be unappealing, but stocks aren't much better. They trade at lofty priceearnings multiples and they pay skimpy dividend yields.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984201","date":"2006-02-05","texts":"You need to get your credit reports from the three credit bureaus -- Equifax, TransUnion and Experian. Why all three You need all three reports because each may contain different information. Each credit bureau keeps a file on you with information supplied by your creditors. Some creditors don't report consumer credit information to all three bureaus, so it's possible that what's on one report may not be on another. The good news is that under the Fair and Accurate Credit Transactions Act of 2003, you are entitled to a free credit report from each credit bureau. Under the law, you can obtain a free copy of your credit report once every 12 months upon request. There are several ways to get your free credit reports By phone. Call 877-322-8228. You will go through a verification process over the phone. Your reports will be mailed to you. By mail. You can request your credit report by mail by filling out a request form which you can find online and mailing it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, Ga. 30348-5281. When ordering your credit reports, also request your credit scores which are not free. You need all three scores because, just as with your credit report, each bureau generates a different score. You can go to the Web site of each bureau to pay for your score.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984731","date":"2006-02-07","texts":"I ask you to join me in creating a commission to examine the full impact of baby boom retirements on Social Security, Medicare and Medicaid. -- President Bush Tucked into the State of the Union speech last week was this tepid acknowledgment of the dramatic changes in the country's social fabric that will occur with the aging of the population. First President Bush joked about it -- the leading edge of the baby boom is turning 60 and who are his mom and dad's favorite boomers Himself and Bill Clinton But after this bit of bipartisan humor, the president slipped into the trap of seeing the demographic revolution of longevity as pure disaster. We must also confront the larger challenge of mandatory spending, or entitlements, said Bush. In other words, greedy geezers are going to bankrupt the government. Left out are the opportunities prompted by an older, healthier generation for creating wealth and enhancing families and communities. Yet some of the most promising solutions to the economic burden of government programs are likely to come from public and private initiatives that expand opportunities for older Americans to keep working and stay active in their communities.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614066","date":"2006-02-13","texts":"Hong Kong -- AMERICAN COMPANIES operating in China enjoyed another year of strong profits in 2005, possibly even setting a record. But you would hardly guess it from company statements or the negative vibes on trade with China coming out of Congress these days. Corporate America often seems to go out of its way to hide its successes in China. That may not be the smartest strategy as U.S. politicians girding for a possible trade war highlight the corporate losers of trade with China, while ignoring the many winners. According to the Bureau of Economic Analysis, U.S.-affiliated companies in China -- companies in which U.S. firms have at least a 10 stake -- earned 3 billion in 2004. That's up from zero in 1990. Joseph Quinlan, chief market strategist for Bank of America, says that figure is a good reflection of how U.S. companies are making out in the world's fourth-largest economy. He estimates earnings reached a record 3.2 billion in 2005. True, corporate profits from China accounted for just a sliver of the 209 billion earned by U.S. affiliates world-wide in 2004. Japan yielded 11.3 billion Mexico, 7.6 billion. But China is becoming an increasingly attractive market for U.S. companies, even in some of the most competitive industries. Take the auto sector. As its losses piled up in the U.S., General Motors Corp. reported income from China of 218 million for the first nine months of 2005. This nugget was buried in GM's filings to the Securities and Exchange Commission.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613604","date":"2006-02-15","texts":"The Dow Jones Industrial Average retook the 11000 mark in its best session of the year, aided by Alcoa, Coca-Cola and 3M as oil fell and retail sales rose. Alcoa, which played a big role in leading the industrial average lower on Monday, was its best percentage performer, rising 1.13, or 3.7, to 31.37. The Dow gained 136.07 points, or 1.3, to 11028.39, its first close above 11000 since Jan. 11, with gains by 28 of its 30 members. The Nasdaq Composite Index added 22.36, or 1, to 2262.17, a day after finishing at its lowest point of the year. The Standard & Poor's 500 Index rose 12.67, or 1, to 1275.53. The fact that oil prices broke to a new low this year was a major factor today, along with the big retail sales figures we received that failed to hurt the bond market, said Bruce Bittles, chief investment strategist at RW Baird. This triggers anticipation the Fed won't have to be as aggressive an inflation-fighter if oil behaves. Coca-Cola advanced 60 cents, or 1.5, to 41.34. The beverage giant said director Warren Buffett won't run for re-election, but his company, Berkshire Hathaway, will retain its stake.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983303","date":"2006-02-16","texts":"In his first appearance before Congress as Federal Reserve chairman, Ben S. Bernanke picked up where Alan Greenspan left off, criticizing a House bill that would strengthen oversight of Fannie Mae and Freddie Mac for not going far enough to rein in the companies' investment portfolios. Bernanke said the House bill would not give a new regulator for the two companies sufficiently strong guidance on how to regulate the portfolios, which he and others think have grown so large that they threaten the stability of the financial system. I understand the good intentions underlying the House bill, but I feel it does not solve the problems and therefore if we were to go with that bill, we would be missing the last opportunity we will have in many years to really address these problems, Bernanke said. Congress is considering legislation to tighten oversight of the two companies after multibillion-dollar accounting scandals. The bill Bernanke took issue with yesterday passed the House last fall. Critics of Fannie Mae and Freddie Mac, including Greenspan, prefer a Senate bill that would force the companies to sell much of their investment holdings.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983335","date":"2006-02-20","texts":"If you think the stocks on the Nasdaq Stock Market have been doing well, take a look at the stock of the Nasdaq Stock Market. In a little more than a year, shares of Nasdaq have soared from about 9 to Friday's close of 39.81, making more than 500 million in profit for the few investors who even knew they could own stock in the market. Nasdaq Stock Market shares began trading on the Nasdaq Stock Market where else a year ago this month when the market began its spinoff from NASD, the Washington-based nonprofit group that created Nasdaq. Soon the New York Stock Exchange will follow Nasdaq, transforming itself from an organization owned by its member traders and firms into a publicly owned, profit-making business. The move is awaiting approval by the Securities and Exchange Commission, which could come as soon as this week. Based on what's happened to the stocks of Nasdaq and two other markets that have gone public, Washington area investors might make some money by buying stock in the NYSE.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614940","date":"2006-02-22","texts":"NEW YORK -- The release of a Federal Reserve document that suggested to some bond investors that rate increases are nearing their end failed to have much impact on U.S. Treasury prices yesterday and left the market in the same modestly negative spot it was in ahead of the release. According to the minutes from the Jan. 31 Federal Open Market Committee meeting, Fed officials, while worried about upside risks to inflation, said that the stance of policy seemed close to where it needed to be given the current outlook. But they added, in a familiar refrain, that some further policy firming might be needed to keep inflation pressures contained and the risks to price stability and sustainable. The FOMC minutes for most in the market confirmed what they already knew the Fed has a modest amount of rate increases left in it, and how that tightening plays out will be the product of what the economic data do. As such, the lack of surprise stripped from the market any catalyst to trade dramatically. In turn, that left the market very close to the same negative tone that dominated the day. While the minutes were hawkish, they did not trigger the sell-off that some were expecting, said Ian Lyngen, strategist with RBS Greenwich, in Greenwich, Conn. The trend to lower prices has emerged and we expect it will extend into the close. By day's end, the 10-year Treasury note stood at 99 1532, down 732 or 2.19 per 1,000 invested, to push up the yield to 4.567.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981804","date":"2006-02-23","texts":"Consumer prices rose in January at the fastest pace in four months, especially pinching the wallets of drivers and other energy users. The latest picture of the nation's pricing climate, released by the Labor Department yesterday, reinforced expectations that Federal Reserve Chairman Ben S. Bernanke and his colleagues will increase interest rates in the months ahead to blunt inflation. The government's most closely watched inflation barometer, the consumer price index, advanced by 0.7 percent, compared with a 0.1 percent dip in December. The seesaw pattern mostly reflects gyrating energy prices. Consumers continue to be battered by rising costs, said Joel Naroff, president of Naroff Economic Advisers. It's tough out there for most households. A separate report showed that workers' average weekly earnings, adjusted for inflation, dropped by 0.4 percent in January compared with a year ago. For most workers last year, paychecks didn't keep pace with inflation.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830984517","date":"2006-02-23","texts":"On Tuesday afternoon Mike Leavitt, the secretary of health and human services, made another of his frequent trips to New Orleans on a mission that speaks volumes about his approach to what is arguably the most important domestic policy job in the federal government. In an interview hours before his departure, the former Utah governor told me that his purpose was to exchange ideas with local officials about how to make the hurricane-stricken city a model of a new design for delivering health care in this country. The urgency of the task -- not just for New Orleans but for the nation -- was underlined by a report that the journal Health Affairs issued as he left Washington. Its key finding Health care, which now consumes 16 percent of the U.S. gross domestic product each year, will eat up 20 percent by 2015 -- a level that Leavitt said is unsustainable without serious damage to our economy. Steps such as the health savings accounts that President Bush has recommended, and others being discussed in Congress, can nibble at the problem, Leavitt says, but far more fundamental changes must be made if costs are to be brought under control without sacrificing quality care. Leavitt is attacking the problem at two levels. At the top, he has assigned his department the task of developing, by the end of this year, national standards for four breakthrough projects applying 21st-century information technology to medical offices and hospitals. One would standardize systems for registering patients and listing their prescriptions and other basic medical data so they would not have to be entered on separate clipboards with each visit. A second would set standards for equipment allowing remote monitoring of chronic illnesses, such as the blood sugar tests required by diabetes patients.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615744","date":"2006-02-28","texts":"Annualized interest rates on certain investments as reported by the Federal Reserve Board on a weekly-average basis WEEK ENDED Feb. 24, Feb. 17, 2006 2006","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614225","date":"2006-03-02","texts":"PUERTO RICO'S largest mortgage lender didn't answer all the questions about its books in a 195-page earnings restatement this week. It did say enough to convince some that the island's banking industry is in trouble. Some of the disclosures by Doral Financial Corp., which faces a criminal investigation by the U.S. attorney's office in New York, feed into a view held on Wall Street that several of Puerto Rico's banks are operated more like private clubs than public companies. The Securities and Exchange Commission also is investigating Doral. In its restatement Monday, Doral said 2004 net income was 214.8 million, 56 lower than originally reported. The main culprit in the restatement improper valuations on certain mortgage-related transactions. This is bad for everyone, Avi Barak, an analyst at Sandler O'Neill in New York, says about the effect on several other Puerto Rican banks. Mr. Barak doesn't cover Doral, but he has sell ratings on First BanCorp and R&G Financial Corp., two Puerto Rican lenders under investigation by the SEC for the way they accounted for mortgage deals with Doral. Specifically, Doral didn't put accurate values on some of the mortgage assets it sold to other banks. Those assets, called interest- only strips, or IOs, are likely to end up back on Doral's balance sheet after the other banks' auditors reclassify them as loans instead of sales, as required by generally accepted accounting principles.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616441","date":"2006-03-02","texts":"Strong income gains and unseasonably warm weather prompted consumers to spend more money than usual in January. Along with data showing manufacturing activity expanded in February, that suggests the economy is on track for robust first-quarter growth. Personal income of Americans increased 0.7 in January, the biggest jump since September, according to the Bureau of Economic Analysis. The gain amounted to roughly 75.2 billion. At the same time, consumer spending increased 0.9, about 76.7 billion, the largest climb in six months. The January spending jump follows a soft fourth quarter, which led economists and retailers to worry about an economic slowdown. But the latest data confirm other recent reports that show consumer spending picked up again in January, and that the broad-based gains should ripple throughout the economy. Consumer spending is strengthening sharply in the first quarter said Dean Maki, chief U.S. economist at Barclays Capital. He estimates that consumer spending in the first quarter will grow at an annualized rate of 4.5 or more, compared with 1.2 in the fourth quarter. Spending is recovering after the post-hurricane lull and sluggish auto sales late last year, he said. The large gain in personal income was the result mainly of rising wages and salaries, which partly reflects rising employment. The economy added 193,000 new nonfarm jobs in January. But Uncle Sam also contributed to the January income increase as the Medicare prescription-drug plan, an increase in cost-of-living adjustments for recipients of Social Security and some other federal programs boosted transfer payments. Meantime, pay raises for federal civilian and military personnel boosted government wage and salary disbursements. Excluding these special factors, personal income increased 0.4 in January, BEA says.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616078","date":"2006-03-03","texts":"Google Inc. provided few significant new details about its business during highly anticipated presentations for securities analysts yesterday. But analysts said they were reassured by the company's optimism about growth prospects, and investors pushed up Google's share price throughout the day. The meeting at Google's Mountain View, Calif., headquarters followed a turbulent month for the company's stock. Google's recent announcements of fourth-quarter profit fell short of analysts' consensus estimates, spooking investors. On Tuesday, Google's chief financial officer warned growth was slowing. In that climate, many analysts and investors have said the meeting was an important event for determining investor sentiment. At 4 p.m. in Nasdaq Stock Market composite trading, Google was up 11.65, or 3.2, to 376.45. That was off 13.93 from the Monday price and down 21 from a 52-week high of 475.11, as the stock still hasn't recovered from its roller-coaster ride. Google continued to rise in after-hours trading, up 6.25 to 382.70. Google executives pointed to what they described as bright prospects for the company's core search business and initiatives such as search services that provide results linked to specific geographic locations. We believe our business is exhibiting very strong fundamentals and very strong growth potential, said Chief Financial Officer George Reyes. Mr. Reyes devoted much of his presentation to questions he said analysts had raised. He said Google's capital expenditures, primarily for computer and network equipment and facilities, in 2006 would represent a substantial increase over and above last year's 838 million.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614904","date":"2006-03-06","texts":"Providence Equity Partners Inc. and Goldman Sachs Group Inc.'s investment arm are expected to purchase Education Management Corp. for 3.4 billion, people familiar with the matter said, as increased access to federal funding improves the prospects of for-profit trade schools and universities. Education Management runs 72 primary campuses across the U.S. and Canada, training its 72,000 enrolled students in fields such as fashion, psychology and Web-site design. It also runs a small but growing operation providing online instruction. For-profit education has become a growth business in the U.S., as tuition costs at traditional nonprofit colleges and universities soar. New students also are choosing to take their courses online, a more convenient and more profitable method. Providence and Goldman Sachs are expected to pay about 43 for each share of Education Management, a 16 premium to the Pittsburgh company's stock price in Nasdaq Stock Market composite trading Friday. The company's board has approved the transaction, and it is expected to be announced this morning. Shareholders must approve the final offer. The for-profit space was given a boost in recent days, when Congress lifted the requirement that colleges must deliver half their courses at a physical campus to qualify for financial student aid. That means the for-profit providers, of which Education Management is ranked No. 3 by revenue, can attract a new set of potential students to their programs.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982460","date":"2006-03-07","texts":"Two years ago, after Robert Polet became chairman of Gucci Group, he told designers of the corporation's smaller brands that they had to be on the road to profitability by 2007 -- or else. Polet didn't say precisely what would happen to Stella McCartney, Balenciaga, Alexander McQueen and Yves Saint Laurent if they didn't stop hemorrhaging money. But his meaning was clear. Under the leadership of Domenico de Sole and Tom Ford, Gucci Group had acquired a host of brands, most notably Yves Saint Laurent. Those acquisitions were a strain on the parent company, which maintained financial stability thanks to the steady sales of Gucci handbags and shoes. But after Ford left two years ago, the signature brand was having its own troubles -- hiring, firing and promoting designers in a series of moves to find his replacement. The smaller brands needed to prove their viability. If the merchandise on the runway is any indication, the threat of unemployment seems to be working -- at least for the most part. Designer Tomas Maier transformed Bottega Veneta into a profitable brand known for exquisite handbags crafted from woven leather, matte crocodile and snakeskin. Maier's ready-to-wear, which he showed last month in Milan, is streamlined, artful and speaks of personal indulgence and wealth with dignified subtlety and grace. Last week in Paris, the company opened a new Bottega Veneta boutique on the swanky Avenue Montaigne and editors, admirers and Polet turned out to toast the brand. Designer Nicolas Ghesquiere showed a stellar fall collection for Balenciaga last week -- one that followed a breathtaking presentation for spring. With the help of its popular handbags, as well as a small specialty collection of trousers and one of reworked vintage designs, Balenciaga appears positioned to meet Polet's deadline. The brand has benefited from significant attention in Paris. There is an exhibition showing now that examines the relationship between Cristobal Balenciaga and an American client, the socialite Mona Bismarck. And in July, another one will open celebrating the house's history. The other members of Gucci Group have been more troublesome. Since taking over at Yves Saint Laurent, designer Stefano Pilati has created a series of iconic accessories, including a platform loafer that is more expensive clodhopper than elegant footwear. But he struggles to strike a balance between femininity and feminism -- a dichotomy for which the brand is so famous and revered. Pilati has alternately overwhelmed his mannequins with ruffles, oppressed them with religious references and offered fussy collections that would require a valet, a driver and a manservant before they could be deemed manageable.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982654","date":"2006-03-08","texts":"The last several years have been marked by low unemployment, strong economic growth, robust productivity gains and record corporate profits. Normally, you'd expect most Americans to be doing pretty well. As it happens, however, inflation-adjusted income for all but a tiny fraction of the wealthiest households hasn't increased at all. So what gives Why is there such a disconnect between economic growth and household income What happened to all the money Anyone who offers a simple answer to those questions -- that it's all the fault of the Bush tax cuts, or it can be solved by sending everyone to college -- is blowing smoke. There is also a plethora of data sets that can be used to show that, in reality, we're all still better off than we were 10, 20 or 30 years ago, or, if you wish, that the American Dream is dead and the economy is now run by and for the super-rich. What is almost certain, however, is that fundamental changes in the structure of the labor, product and capital markets are accelerating a long-term trend toward income inequality. And this is happening not only here in the United States, but other places as well.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613991","date":"2006-03-10","texts":"The Nasdaq Composite Index fell for a sixth straight session, hurt by Google and semiconductor stocks such as Broadcom, while General Motors couldn't stop the Dow Jones Industrial Average's slide. The Dow industrials fell 33.46, or 0.3, to 10972.28. The Nasdaq Composite declined 17.74, or 0.78, to 2249.72. This is the first time it has been down in six straight sessions since January 2005. The S&P 500 shed 6.24, or 0.49, to 1272.23. A rise in oil prices set off selling, and there remains a lot of anticipation about much higher short-term interest rates, said Chris Wolfe, head of research and market strategy at Dover Management. Also, none of the data we've seen suggest that Friday's labor markets report will deliver a substantial upside surprise. In fact, there may end up being disappointment. Google Nasdaq continued showing weakness, dropping 10.88, or 3.1, to 343. The Internet-search engine agreed to pay as much as 90 million to settle a lawsuit filed against it and other Internet companies, alleging that the companies overcharged for online advertisements. The drop followed Wednesday's 2.9 decline after Google accidentally revealed internal financial targets for 2006 on its Web site. In addition to Internet stocks, sellers set their sights on semiconductor shares. Broadcom fell 1.15, or 2.5, to 45.57, and Intersil declined 1.19, or 4.2, to 27.41, both on the Nasdaq. National Semiconductor lost 85 cents, or 3, to 27.18 even though it posted third-quarter results that beat analysts' expectations.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983010","date":"2006-03-12","texts":"For managers of the RS Partners Fund, the second-best performing U.S. small-company value mutual fund since 2001, only two things are certain this year jail and school. Andrew Pilara, 64, who oversees the 2.3 billion fund RSPFX, is bullish on Corrections Corp. of America, the country's largest operator of jails and prisons, and Corinthian Colleges Inc., which runs 97 schools across the United States. While most companies will post smaller earnings gains in 2006 as consumer spending weakens, companies such as Corrections Corp. and Corinthian Colleges will keep growing, said Pilara, who co-manages the fund with Joe Wolf, 34, and David Kelley, 35. Demand for their services isn't dependent on the economy, Pilara said. Our caution led us to businesses that aren't economically sensitive, he said in an interview from his office at RS Investments in San Francisco. Pilara expects rising commodities prices to hamper U.S. growth, while economists are forecasting that the first quarter will show the biggest gains in two years. The RS Partners Fund climbed 14 percent in the past year. Much of the gain came from energy-related companies such as Compton Petroleum Corp. and Paramount Resources Ltd., which increased as oil and natural gas prices rose to records.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830982127","date":"2006-03-15","texts":"Running big budget deficits threatens the health of the U.S. economy and could cut the nation's standard of living, Federal Reserve Chairman Ben S. Bernanke said. The budget deficit totaled 319 billion last year, less than in 2004 but still the third-largest deficit ever recorded. This year, the White House forecasts a budget deficit of 423 billion -- a record in dollar terms. As baby boomers start retiring and collecting Social Security and Medicare benefits, the budget will come under severe pressure, Bernanke said in a written response to questions from Sen. Robert Menendez D-N.J. after the Fed chief's remarks at a congressional hearing on the economy in February. U.S. retail sales fell last month after the biggest gain in more than four years, as auto purchases declined and the return of cold weather discouraged shoppers. The 1.3 percent decline was the first decrease in six months and followed a revised 2.9 percent rise in January that was larger than initially estimated, the Commerce Department said. Excluding automobiles, sales fell 0.4 percent last month after rising 2.6 percent in January.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616513","date":"2006-03-17","texts":"Many Americans have a tough time saving. Particularly when they're saving for something that won't happen 10, 20 or 30 years from now -- their retirement. Only about one in eight low- and moderate-income Americans -- those in the bottom 20 of income levels -- have a retirement account, according to Federal Reserve numbers quoted by The Wall Street Journal. This means millions of Americans face a troubling future. That's why H&R Block launched our Express IRA savings product. This program allows low- and moderate-income Americans to take a critical step -- often their first -- toward saving for their future. Thanks to the Express IRA, over half a million Americans have taken this step -- placing part of their tax refund into an Individual Retirement Account. For the first time, they were saving for a better future. You can imagine our shock, then, when New York Attorney General Eliot Spitzer went after our company for offering this innovative savings plan. He announced this week that he's suing H&R Block for 250 million. I believe I speak for every one of H&R Block's more than 7,000 franchisees and company employees in the state of New York in saying that this suit is an unfair attack on a good product that plays a key role in our mission to help lower- and middle-income Americans start saving for retirement. I use the words unfair attack deliberately, for that is exactly what I believe we are facing.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615486","date":"2006-03-22","texts":"IT SEEMS TO DEFY common sense Real-estate stocks continue to rally -- even as interest rates rise. Eighteen months ago, many investors began to sell off their real- estate holdings amid warnings that the property market might have peaked. But real-estate investment trusts -- tax-advantaged investment companies whose shares trade on major exchanges -- have continued to outperform the market. This year alone, the Dow Jones Equity REIT Index is up almost 13, compared with a gain of almost 4 for the Standard & Poor's 500-stock index. It's the fastest run out of the starting gate for REIT stocks in six years, according to SNL Financial, a research firm in Charlottesville, Va. The run-up in REIT prices has certainly been surprising, even to boosters of the industry like us, says T. Ritson Ferguson, chief investment officer for ING Clarion Real Estate Securities, a Radnor, Pa., investment-management firm. The rally has partly been driven by mutual funds and other big investors, some of whom bailed on the sector 15 to 18 months ago and are now buying the stocks again, egged on by recent improvements in the outlook for almost every sector, particularly hotels and offices. REITs have been helped by fund managers and other investors who missed the big run-up and now fear that not owning them is hurting performance records. Some money managers, having been wrong once before, are reluctant to tell small investors to bail out of the sector. Others factor in an individual's total exposure to real estate -- including homes and investment properties -- to determine whether that person should also be owning real-estate stocks.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982448","date":"2006-03-22","texts":"After its Bonzo Goes to BitburgDead Kennedys glory days, hard- core punk fell into disrepair in the 1990s, flummoxed by the twin specters of Clinton in the White House and Britney Spears atop the pop charts. But with globalization and the Iraq war proving irresistible targets to everyone from Pink to country singers, American punk appears ready to lace up its Doc Martens and lumber back into the fray. Anti-Flag, one of its best and most visible acts, wasn't in service the first time around, but the band's making up for lost time with its major label debut, For Blood and Empire, a civics lesson wrapped in a pipe bomb. Empire evokes Rancid fronted by Noam Chomsky, if Chomsky were fond of full-volume lectures on the Downing Street Memo, which he probably is. From its front cover, which depicts the White House lawn festooned with graves, to its sample of Rep. Jim McDermott discussing depleted uranium was Dido not available, it's incendiary enough to make American Idiot seem like a Republican Party recruitment tool. To Anti-Flag, the message is the point after all, how often do you see an album sleeve with footnotes and the music is of passing interest. Suffice it to say that like most respectable hard-core outfits, the band has its roots in both British and Northern Cal punk Empire is a patchwork of poppy hard core, less accessible hard core, and the occasional strummed ditty 1 Trillion Dollar about U.S. weapons sales, with just enough kinda-catchy punk The Press Corpse to justify a major label advance. Cranky and remorseless, as medicinal as it is entertaining, Empire wasn't built for subtlety. It's both literate there are songs about eugenics, and the WTO's farming policies and ponderous there are songs about eugenics, and the WTO's farming policies, an exercise in Polemics 101 that at times feels too much like, well, an exercise.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615998","date":"2006-03-24","texts":"As stocks pulled back, YRC Worldwide and CBOT Holdings took major tumbles, while Jabil Circuit and Level 3 Communications adopted the opposite tack. The Dow Jones Industrial Average dropped 47.14 points, or 0.42, to 11270.29, after coming within roughly 20 points of a six-year high on Wednesday. The Nasdaq Composite Index fell 3.2, or 0.14, to 2300.15, and the Standard & Poor's 500-stock index shed 3.37, or 0.26, to 1301.67. Today investors were worried about inflation and rates going higher, said Larry Peruzzi, senior equity trader at Boston Company Asset Management. We saw an existing home-sale number that was the highest in two years. And there was a spike in the price of oil after the unexpected drop in inventories. YRC Worldwide plunged 6.73, or 15, to 38.56 on the Nasdaq Stock Market. The trucking and delivery company, formerly known as Yellow Roadway, reduced its first-quarter earnings estimates, citing cost overruns and lower volumes from inventory adjustments at large retailers. The news contributed to a decline by 19 of the Dow Jones Transportation Average's 20 components. UPS was the lone gainer, adding one cent to 78.86. CBOT Holdings, parent of the Chicago Board of Trade, lost 14.27, or 11, to 117.40. Investors were said to be taking profits following the stock's run-up over the last week. Coming into yesterday's session, shares had risen nearly 14 since March 16.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981926","date":"2006-03-24","texts":"Google's stock will be added to the Standard & Poor's 500-stock index, a long-anticipated rite of passage that lifted the online search engine leader's recently sagging shares. Standard & Poor's announced the forthcoming change after the stock market closed. Google will replace Burlington Resources on March 31. Burlington Resources is being acquired by ConocoPhillips. Google's shares gained 1.67 to close at 341.89 on the Nasdaq Stock Market, then soared 31.61, or 9 percent, in extended trading as of 8 p.m. Gratis Internet, a District-based company, is being sued by New York Attorney General Eliot L. Spitzer for allegedly selling the personal information of millions of consumers. Gratis gives video games, CDs, iPods and other products to consumers who sign up for promotions through its Web sites. Spitzer's suit alleges that the firm sold lists of millions of customers to independent e-mail marketers.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613829","date":"2006-03-25","texts":"This is the time of year when colleges and universities decide on the Class of 2010. It's also when students and parents are in full- throated gripe about the admissions lottery, the opaque system by which high school seniors are accepted or rejected. We don't pretend to understand all of the mysteries of this ultimately arbitrary process. But for all of its imperfections -- witness the former Taliban spokesman who won a coveted slot at Yale, or the recent SAT scoring screwup -- on the whole the college- admissions process does a good job of matching students and schools in what continues to be the best system of higher education in the world. And it even lets us say something good for a change about Harvard -- and Yale too. Cynics will note that the way to get into elite universities is to be a minority, the child of an alum, have a 4.0 GPA and perfect SAT scores, or be a star quarterback or piccolo player. It certainly doesn't hurt to come from a geographically diverse place such as Wyoming. And, oh, did we mention that it would help if junior spent last summer scaling Mount Everest or writing a novel Diversity is a much-maligned word these days -- and for good reason when it is used as justification for racial preferences -- but it is also one of the strengths of U.S. colleges. Unlike virtually everywhere else in the world, applicants to U.S. universities aren't usually selected by a set of fixed academic criteria. Most foreign universities couldn't care less about students' extracurricular activities or whether their parents wore the old school tie. In Japan, entrance exams are everything. All the University of Tokyo cares about is how a kid scores on a test he has spent four years cramming for. European universities show somewhat more flexibility, but if you haven't followed an approved course of study in high school -- to which students are tracked at the age of 10 or 12 -- you can pretty much forget about college.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982697","date":"2006-03-25","texts":"-- Wall Street closed out the week with modest gains Friday, though trading was erratic as encouraging signs of a cooling housing market conflicted with signals of economic strength and left no real clue as to the Federal Reserve's next move on interest rates. The Commerce Department reported that new-home sales fell 10.5 percent in February, the biggest one-month drop in nine years. With slowing housing demand, Wall Street thought that would make it easier for the Fed to stop raising rates soon. A surge in big-ticket factory orders raised questions, however, about whether demand would hold steady, possibly increasing pricing pressure and the chance for higher inflation. The Fed meets Monday and Tuesday, and it is expected to raise the nation's benchmark rate by a quarter of a percentage point, to 4.75 percent. While questions remain as to how many more rate increases the Fed will implement, analysts believe stocks still have room to move higher, thanks to a decent economy and the chance for another quarter of strong corporate earnings. The Dow Jones industrial average rose 9.68, or 0.1 percent, to 11,279.97. The Standard & Poor's 500-stock index rose 1.28, or 0.1 percent, to 1302.95. The Nasdaq composite index rose 12.67, or 0.6 percent, to 2312.82.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830984968","date":"2006-03-25","texts":"Over the past 20 years, they've redone a lot -- windows, floors and added a master suite -- in their Greenfield, Wis., house. Each project has brought their once-tired house in line with its prettier neighbors. Larry Nowakowski figures that he and his wife, Nina, will get back every dollar of what they've spent, some of it from home equity loans, thanks to rapidly rising house prices. They've hit the payback ceiling. If they change the layout of the house to create the open, flowing family room they want, they probably won't get that outlay back on resale. House appreciation has peaked, Larry Nowakowski said. It won't happen any more. Now we're cashing in our investment. The couple expects to soon put their house on the market for about 250,000. They want to buy a condo to get the floor plan they want and get rid of the burdensome yard work they don't.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984907","date":"2006-03-26","texts":"If your mutual fund portfolio hasn't been performing as well as you think it should and you're not sure why, it may be time for a bit of spring cleaning. A cluttered investment lineup is inefficient at best and costly at worst. By identifying overlapping holdings and gaps in your asset- allocation plan, you may be able to cut your expenses and boost your total return. If your mutual fund garage needs a clean sweep, here is a checklist of 10 things to consider What's your goal, and are you on track to reach it Everybody's got dreams, but we don't always articulate them when we're investing, which financial planners say is a big mistake. Identify your goals -- saving for retirement, a college education or your dream home -- figure out how long it will take and how much you'll need to achieve them and set up individual accounts for each. Keep your eyes on the prize by regularly checking your progress. If you're not on target, you may have to invest more or take on more risk. Too often people invest first and think about why later, or not at all, said Percy E. Bolton, a financial planner in Pasadena, Calif. Sometimes it's like you have to be a psychologist . . . you have to discover people's goals, Bolton said. If an account has no goal, you don't know what you're working toward. So when you go to invest, anything will do, and you're left just hoping it will do okay. Is your portfolio diversified You may hold a lot of funds, but that doesn't mean all your eggs aren't in one basket. Planners say people often pile into the types of funds that have worked well for them in the past or whatever they think will bring the highest return and wind up short in other areas, such as fixed income, which can provide important protection in down markets. A better strategy is to own a bit of everything.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614238","date":"2006-04-02","texts":"Consumers burdened with debt have probably heard the pitch more than once By combining some or all of your debt into one big loan, you can lower your monthly payments and be on Easy Street within months. Such appeals are rampant these days as rising interest rates squeeze borrowers' wallets. Unfortunately, the outcome is often less cheery than the advertisements imply. While consolidation can indeed lower your monthly payments, it's frequently a faster road to bankruptcy than to financial salvation, many debt specialists say. The problem Consolidation loans feed on the temptations that land many consumers in debt in the first place. You feel as if you can afford another shopping spree once monthly payments are lower. Consumers with severe debt problems and poor credit also tend to get socked with extra fees and higher interest rates when they consolidate, making the loan even harder to pay off. Unfortunately, it's much easier to get a consolidation loan with decent terms when you don't really need it, says Gerri Detweiler, a consumer debt specialist in Sarasota, Fla. Also, cutting your monthly payments by stretching out the term of your loan means you will pay far more interest in total.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615012","date":"2006-04-06","texts":"WALL STREET'S upbeat mood extended into a third day, as optimism about interest rates and the economy pushed the Standard & Poor's 500- stock index to its highest finish in almost five years. Another Federal Reserve official made upbeat comments and investors got a favorable report on the nation's enormous service sector, which helped push the Dow Jones Industrial Average up 0.32, or 35.70 points, to 11239.55. It is ahead 4.9 this year and within 100 points of a six-year high. The broad S&P 500 rose 0.43, or 5.63 points, to 1311.56, its highest finish since May 2001. It is up 5.1 for 2006, but still not near its March 2000 record of 1527.46. Investors shrugged off another jump in crude-oil futures, up 84 cents to 67.07 a barrel. Gold, which tends to rise in times of investor uncertainty, rose 1.90 to 587.90 an ounce. A stream of Fed officials have been suggesting that the Fed soon could end its interest-rate increases, which began in June 2004. Higher rates weigh on stocks by raising costs for companies and consumers alike. Late Tuesday, Thomas Hoenig, president of the Kansas City Federal Reserve Bank, said the Fed is very close to where we need to be on rates.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614284","date":"2006-04-07","texts":"Stocks ended mixed, with Merck, Home Depot and American Express weighing on the Dow Jones Industrial Average, while fellow components 3M and Boeing offset some of the slide. The DJIA fell 23.05 to 11216.50. The Nasdaq Composite Index advanced 1.42 to a five-year high of 2361.17. The Standard & Poor's 500-stock index shed 2.52 to 1309.04. The market suffered today from the specter of higher interest rates, said Barry Hyman, equity-market strategist at Ehrenkrantz King Nussbaum. It's worried about Friday's March employment report being quite strong, which will continue to pressure the Federal Reserve to possibly raise rates further. Merck lost 1.15, or 3.2, to 34.84, the Dow industrial average's biggest decliner by far. A jury found that the drug company had failed to warn consumers of painkiller Vioxx's safety problems and held it liable for the heart attack of one of two plaintiffs, awarding him 4.5 million in compensatory damages. Home Depot dropped 51 cents, or 1.2, to 42.14. Housing-related stocks sagged as bond yields resumed their rise.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830981710","date":"2006-04-08","texts":"Smoothing the way for President Hu Jintao's upcoming visit to the United States, a 200-strong team of Chinese officials and entrepreneurs has embarked on a tour of U.S. cities to sign deals that they say will bring companies there up to 15 billion in new business. Their first purchases, computer software and hardware worth 4.44 billion, were signed Thursday in Los Angeles, according to the Commerce Ministry. The deals to be signed also include grain, telecommunications equipment and Boeing aircraft, a senior Foreign Ministry official said. A Foreign Ministry spokesman, Liu Jianchao, described the total to be contracted only as a large amount. But Zhou Xianmei, a spokesman for the Chinese consulate in Los Angeles, said the scheduled purchases amount to 15 billion. The contracts are being signed in part to demonstrate to U.S. businessmen and their representatives in Congress that trade with China can be profitable for the United States even though it resulted in a record 202 billion deficit in 2005. The imbalance, mainly due to flourishing Chinese exports of low-price goods, has generated resentment in Congress and led some Senate and House figures to urge that trade restrictions be imposed. The senior official said Hu plans to meet with members of Congress in addition to President Bush and administration officials, seeking to calm growing anxiety among legislators over the trade deficit, China's swift economic growth and its increasing influence in Asia. The bunching of the business deals being signed in coming days, the official acknowledged, was designed to sweeten the atmosphere for those talks in Washington on April 20.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982097","date":"2006-04-08","texts":"Home-equity loans and lines of credit are still a popular way for homeowners with a mortgage to borrow. The interest is much lower than on other forms of consumer borrowing and, generally, interest you pay on loans up to 100,000 is tax-deductible. In the past few years, with housing prices soaring nationwide and short-term interest rates at or near record lows, many homeowners have used the equity in their houses to finance home improvements or college tuition or to pay off high-interest debt. But times are changing. Interest rates on short-term home-equity lines of credit have spiked even as the housing market is slowing, which means that homeowners will have less of a cushion to fall back on should they be unable to repay borrowed money. A home-equity line of credit charging 4 percent two years ago is now over 7.5 percent and is expected to hit 8 percent by the summer, said Greg McBride, a senior analyst at Bankrate.com, which tracks loans. That's because a line of credit, the most popular way to borrow against home equity, is a variable-rate loan and rates have gone up as the Federal Reserve has increased its benchmark rate. Still, home-equity loans and lines of credit are often the most attractive option for homeowners looking to borrow, and traditional cash-out refinancing of first mortgages has fallen out of fashion since rates began to rise.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984260","date":"2006-04-08","texts":"Six-year-old Scotty Lefkowitz and his big sister, Gwen, 11, had all the makings for a perfect lemonade stand. Until their neighbors came along. The siblings had set up a plate of homemade chocolate chip cookies, fresh strawberries and a cold pitcher of lemonade on a table underneath the cherry blossoms in front of their home in the tony Kenwood neighborhood of Bethesda. Their laminated signs flapped in the warm spring breeze 1 for lemonade. But a few houses down Dorset Avenue, the neighbors were selling for just 25 cents a cup, undercutting them by a whopping 75 percent. So Scotty and Gwen quickly rethought their business strategy -- they would advertise their bigger cups and offer free refills. Such are the economics of the lemonade stand. Every year when the cherry blossoms peak, the normally peaceful subdivision is thronged with visitors who come to see the snowy blooms on the 1,200 Japanese Yoshino trees that line these streets. And every year, the children of Kenwood milk it for all it's worth. It teaches them commerce, and it teaches them a lot about being resourceful, said Scotty and Gwen's mother, Lori. They get into it because it's their little enterprise.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613653","date":"2006-04-10","texts":"STOCK INVESTORS are tearing out their hair for fear that surging Treasury-bond yields will torpedo the stock market. But not Jim Paulsen. The chief investment strategist for Wells Capital Management, which oversees 175 billion, figures higher yields are just great for stocks. I've just got a sense of optimism about this thing, Mr. Paulsen says. If you are a real stock bull, you've got to root for a higher bond yield. That wasn't exactly how the market reacted Friday. Treasury-bond yields affect other interest rates across the economy, including those of fixed-rate mortgages and many corporate loans and bonds. Higher rates put a pinch on consumers and companies alike, and that squeezes profits. When the yield of the benchmark 10-year Treasury note jumped Friday to 4.965, a level it hadn't seen since June 2002, stocks suffered The Dow Jones Industrial Average fell 96.46 points, or 0.9, to 11120.04. The fear is that higher yields mark the end of the easy-money era that has been the stock market's prime driver since 2002. Consumers will find it more expensive to buy a home or to take out a home-equity loan and buy a new car. Businesses will find new investment more costly. Investors will have to think twice before tossing more borrowed money into the stock market -- they might even take some out. Bonds and money-market funds, with their higher new rates, will draw money away from stocks.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615791","date":"2006-04-10","texts":"Friday's bullish report of 211,000 new jobs in March and a drop in the unemployment rate to 4.7 -- matching its lowest level in five years -- brings further evidence that the great American jobs machine rolls on. Since May of 2003, U.S. businesses have created 5.2 million new jobs. The highly publicized layoffs of 50,000 workers by Ford and General Motors over the next two years is the number of net new jobs the U.S. economy is producing every week in other industries. In such high-growth regions as the Southeast and Mountain West, the problem is a shortage of willing and trained workers. Thank goodness for immigrant workers who are filling vital niches in the labor force. Critics continue to complain that President Bush's tax policies have only benefited the super-wealthy, but that would come as news to the five million Americans who were jobless before the 2003 tax cuts, and thus had no income, but now have a weekly paycheck. Employers are on enough of a hiring spree that some Wall Street economists of the Keynesian persuasion are fretting over wage-push inflationary pressures. Inflationary pressures do exist due to a Federal Reserve policy of excess dollar liquidity, as evidenced by the 600 price of gold futures. But this is a problem for monetary policy. More people working increases the supply of goods and services, which forces prices down, not up. Since at least February of 2004, wages have been rising at a slightly faster pace than core inflation, and the median wage has climbed to more than 600 a week for the first time ever. These pay hikes are a result of another hallmark of this expansion rapid productivity growth, particularly in manufacturing. So workers are benefiting from a labor market trifecta robust expansion in jobs, steady gains in productivity and gains in real take-home pay. This employment boom once again stands in contrast to the jobs depression in France. Thanks to much more flexible work rules, ease of hiring and firing, lower government benefits for not working, and lower taxes on employers 29.6 of employer costs in the U.S. versus 47.4 in France, more than half of America's 15-to-24-year-olds have jobs, versus only about one-in-four in France.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615987","date":"2006-04-10","texts":"The Pentagon said the costs for 36 big weapons systems -- including marquee warplane, submarine and ground-vehicle programs -- have jumped by at least 30 and some by more than 50, but officials attributed the growth in cost to new reporting rules, not mismanagement. A report released Friday was the first review of major weapons programs since Congress tightened terms for calculating cost increases. The new law requires the Pentagon to compare current unit prices with original cost estimates, in addition to more recent revised projections. The Pentagon found that 25 programs had grown by at least 50 over original costs, while 11 programs were between 30 and 50 more expensive. It's not fair to say that this reflects on how we are doing in the past few years, given the broad time span under consideration, said Cheryl Irwin, a Pentagon spokeswoman. For example, the prices of Lockheed Martin Corp.'s F-22 stealth fighter and Boeing Co.'s C-17 cargo jet rose more than 50, but their original baseline costs were set years ago. The majority of affected programs date from the 1980s and 1990s, Pentagon officials said. Legislators say the new law brings transparency to congressional oversight of the Pentagon. Defense contractors complain it fails to take into account inflation or technological and program changes that inevitably occur in long-term weapons development. Even younger programs, such as Boeing's 165-billion Future Combat Systems modernization project for the Army and Northrop Grumman Corp.'s Global Hawk unmanned spy plane, surpassed the law's 50 cost-growth threshold because of program restructurings and delays.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983025","date":"2006-04-11","texts":"U.S. stocks failed to sustain an initial rally, leaving the Standard & Poor's 500-stock index little changed, as rising oil prices damped enthusiasm about first-quarter earnings reports. The S&P 500 rose 1.12, or 0.1 percent, to 1296.62 after gaining as much as 0.4 percent. The Dow Jones industrial average added 21.29, or 0.2 percent, to 11,141.33. The Nasdaq composite index lost 5.75, or 0.2 percent, to 2333.27. Retailers including Wal-Mart Stores and Home Depot led the market's retreat, thwarting an attempt to recover from the biggest loss in more than five weeks. Crude-oil futures closed at the highest price since September on reports that the United States is planning for military strikes against Iran. Investors are concerned about how higher commodity prices will affect the outlook for inflation and interest rates. Producers of gold and copper advanced with prices for the commodities. Gold prices rose, and copper and zinc climbed to all- time highs while nickel jumped to a level not seen since 1989. Alcoa, the first Dow member to publish quarterly results, rose along with energy producers. After exchanges closed, the world's biggest aluminum maker said profit more than doubled, and its shares surged.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613608","date":"2006-04-12","texts":"Rome -- IN AN ELECTION that came down to a handful of votes, Italy's center-left coalition leader Romano Prodi appeared to eke out a narrow victory -- but by such a razor-thin margin that it is unlikely his longtime adversary, Prime Minister Silvio Berlusconi, will be consigned to the sidelines. Mr. Berlusconi, speaking on national television yesterday evening, refused to concede defeat and suggested that it might be necessary to form a coalition government with his political foes. He also spoke of numerous irregularities in the voting, without being more specific. About half a million ballots were declared invalid, and if they are re-examined, as members of Mr. Berlusconi's coalition have demanded, it is possible the outcome of the vote could flip. A recount could prompt a period of political uncertainty and lead to a contested final outcome -- a situation analogous to the protracted stalemate between George W. Bush and Al Gore following the U.S. presidential election in 2000. In addition, the vote leaves room for the 69-year-old Mr. Berlusconi, who has made a career of defying the odds, to wield tremendous influence on the political stage. Even if Mr. Prodi's lead is confirmed, his thin margin will make it difficult to push through any of the economic restructuring measures many economists believe the country badly needs. Before this election we were hoping that we'd be able to assess the strategy of the new government, whoever they were, for dealing with Italy's public finance problems, said Brian Coulton, a Fitch ratings analyst. Now there's the risk that it will be impossible to have any kind of strategy.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616491","date":"2006-04-12","texts":"STOCKS LOST momentum and ended the day lower on light trading volume, as a dearth of economic news left investors to fret over high oil prices, persistently high Treasury yields and the robust price of gold and other commodities. Stocks kicked off the day higher to extend Monday's gains, with an initial boost from strong earnings of aluminum-maker Alcoa and mobile- phone firm Nokia. But share prices soon turned south as investors worried about inflation, particularly in commodities. Signs of inflation could lead the Federal Reserve to keep raising interest rates, which can cool enthusiasm for stocks as investors seek higher yields from bonds. Renewed concern about a possible slowdown in consumer spending and corporate earnings growth as a result of higher rates pushed down the Dow Jones Industrial Average 51.70 points, or 0.46, to 11089.63 points, or up 3.5 this year. Crude-oil futures settled up 24 cents at 68.98 a barrel, after climbing to a seven-month high of 69.45 Monday night. Oil is up 13 this year. Investors continued to worry about political tensions related to Iran's nuclear program as well as a production outage and unrest in oil-producing Nigeria. Low trading volume, commodity inflation and geopolitical issues -- a lot of little things today, said Larry Peruzzi, a stock trader at Boston Company Asset Management in Boston. There wasn't a knockout blow, but the damage was done through a lot of jabs to the midsection.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984732","date":"2006-04-15","texts":"QWe signed a contract to purchase our first home last week, and settlement is scheduled for mid-May. Before the contract was signed, we shopped around for the best mortgage. After the real estate contract was signed, we immediately contacted the lender we had selected and made a formal application. The lender asked us if we want to lock in the interest rate. This is our first house, and we have absolutely no understanding of the way the mortgage market works, so we did not understand his question. However, he explained that if we lock in by signing a document called a loan lock-in, the rate the lender quoted would be guaranteed as long as settlement takes place by the time specified in the sales contract. We know that interest rates are on the rise. Will this lock-in document protect us AA lock-in agreement will be your best protection, but all terms and conditions must be spelled out clearly and the document must be in writing. In the past few years, mortgage interest rates have been at their all-time low. So potential borrowers were satisfied with their under- 6 percent rates. But now that rates are on the rise, potential home buyers want absolute certainty that the loan they have arranged will in fact be available on the day of closing. I believe that we have seen the last of the under-6 percent loan rates, at least for the foreseeable future. Thus, the concept of locking in your mortgage interest rate becomes important. You are concerned that your lender will honor its commitment to you. This is understandable. Even if you can afford a higher-rate loan, you may now have a double problem I strongly suspect that because property values have dramatically escalated in the past few years, you probably agreed to pay a high price for your house and a higher mortgage rate will mean an even larger monthly payment.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617225","date":"2006-04-17","texts":"This is a critical moment for U.S. manufacturing. Of course it is fraught with risk and controversy -- but also rich with possibility. Unfortunately, the latter usually goes unnoticed by our policymakers. Many of them believe that U.S. companies can no longer compete on their own. They want to isolate America by erecting trade and investment barriers. They seem not to have a clue that we live in a global economy. This parochialism hurts American companies, and hence it hurts America it also hurts the rest of the world, denying the benefits our industry can bestow. The new protectionism, then, is a lose-lose- lose proposition. It is unsustainable U.S. companies cannot collectively operate as a single-engine plane trying to pull the rest of the world along with us. We need multiple engines for growth, and the rest of the world provides them. Here, Caterpillar's experience may be instructive, and perhaps lead to some larger lessons for U.S. business leaders in the global economy. We're in the midst of one of the most successful periods in our 81-year history, coming off our second year of record sales and profits. Our workforce has grown more than 20, and our stock price has more than tripled in five years. To be sure, we've run up against the same labor costs and global competition as the auto makers and other troubled manufacturers. But we're doing fine. Why There's no single answer. We've addressed rising health-care costs proactively we invested substantially to improve productivity and get flexible with our sourcing we eliminated our centralized, functional structure and established independent businesses with specific profit- and-loss responsibilities. Throughout, we kept our focus on designing high-quality, innovative products. But most importantly, we're thriving today not because we survived globalism but because we embraced it. Caterpillar is one of America's major manufacturers last year alone we exported more than 9 billion in products. But we've also become a major British manufacturer, a major Brazilian manufacturer and a major Chinese manufacturer -- just to name three of the 40 countries where we have a presence. By expanding globally, we have maintained our ability to grow. We refused to concede markets to competitors and thus kept them from gaining undue strength to block our entry. When it made sense to invest for local access, we did so.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617155","date":"2006-04-19","texts":"CASH MAY NO LONGER be king. Sticking with a money-market fund has been a smart strategy over the past year, as interest rates have climbed and as short-term yields have rivaled those on longer-term bonds. But with 10-year Treasury notes recently breaking above 5 for the first time in almost four years, this could be a good time for cash investors to take a little more risk. Here's the case for tiptoeing into short- and intermediate-term bonds, while also snapping up inflation-indexed Treasurys. -- Stepping out. When interest rates climb, your first instinct should be to lengthen the average maturity of your bond portfolio, so you take advantage of the higher yields. And interest rates, of course, have risen. At yesterday's market close, 10-year Treasury notes were paying a tad less than 5, up from 4.4 at the end of 2005 and 3.1 in June 2003. Problem is, short-term interest rates have also climbed, pushing up the average yield on taxable money-market funds to 4.2.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985349","date":"2006-04-19","texts":"It's come to this The chief project to restate Democratic economics for our time was unveiled a couple of weeks ago, and it's named after the father of American conservatism, Alexander Hamilton. Necessarily, the authors of the Hamilton Project preface their declaration with an attempt, not altogether successful, to reclaim Hamilton from the right. The nation's first secretary of the Treasury, they note, stood for sound fiscal policy, believed that broad-based opportunity for advancement would drive American economic growth, and recognized that 'prudent aids and encouragements on the part of government' are necessary to enhance and guide market forces. Which is true, as far as it goes. Hamilton believed in balanced budgets and in the government's taking an active role to build the infrastructure and fiscal climate that business and the nation need to succeed -- ideas as alien to the current administration as support for collective farms. But Hamilton also feared the common people, dismissed their capacity for self-government and supported rule by elites instead. That might be enough to deter most Democrats from naming their firstborn economic revitalization scheme after him, but the authors of the Hamilton Project are made of sterner stuff. They include Peter Orszag, an estimable Brookings Institution economist investment banker Roger Altman, formerly of the Clinton Treasury department and, chiefly, former Treasury secretary and current Citigroup executive committee Chairman Robert Rubin, whose iconic status within the Democratic mainstream has waxed as the median incomes of Americans under the Bush presidency have waned. Rubin has also become a seal of good housekeeping for Democratic candidates seeking money from Wall Street. When Bob Rubin talks, Democratic pols don't just listen they scramble for front-row seats and make a show of taking notes. Much of what Rubin and his co-authors have to say in their statement is on the money. Since the mid-'70s, they note, prosperity has neither trickled down nor rippled outward. They acknowledge that recapturing broadly shared prosperity in an age of globalization is a daunting conundrum. Still, they have some recommendations Balance the budget a principle they elevate to a fetish. Have the government invest more in education, health care, energy independence, scientific research, and infrastructure, since market forces will not generate adequate investments in such social essentials. Provide compensatory wage insurance for the many workers forced to take lower-paying jobs as middle-income jobs grow scarcer.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830981899","date":"2006-04-22","texts":"Wall Street gave up early gains and closed mostly lower Friday after oil prices topped 75 a barrel for the first time, rising 1.48 on the New York Mercantile Exchange. The continued gains in oil, gold and bond yields are keeping inflation worries at the forefront, said Ken Tower, chief market strategist for Schwab's CyberTrader. Evidence of economic growth in next week's reports will renew the debate over when the Federal Reserve might stop nudging up the overnight rate. The Fed is going to have a hard time stopping their increases if the economy seems to be gaining strength, Tower said. I think the Fed will have a very hard time talking down the inflation hawks if the data comes in stronger than expected. The Dow Jones industrial average rose 4.56, or 0.04 percent, to 11,347.45, building on Thursday's performance that was its best close since reaching 11,351.30 on Jan. 20, 2000. The Standard & Poor's 500-stock index fell 0.18, or 0.01 percent, to 1311.28. The Nasdaq composite index fell 19.69, or 0.83 percent, to 2342.86. The major indexes ended the week with gains, mostly from the big advance Tuesday after minutes of the Fed's late March meeting showed the central bank was looking for signs that it could stop its interest rate increases. Inflation data released in subsequent sessions and oil's ascent stifled the market's enthusiasm, but the Dow still rose 1.88 percent for the week, while the S&P 500 rose 1.72 percent, and the Nasdaq gained 0.72 percent.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982735","date":"2006-04-23","texts":"Jeffrey M. Dunn's strategy just resulted in a 41 percent profit in 10 weeks Pick some relatively cheap stocks on the rise, then buy all the shares you can, even relying on brokerage loans, also known as buying on margin. Dunn is an eighth-grade civics teacher at Mercer Middle School in South Riding, and part of Virginia's civics curriculum introduces students to economics supply and demand, inflation, the impact of monetary policy. Dry stuff, to be sure, so Dunn, like hundreds of teachers across the state, helps get these points across through the Stock Market Game, held once in the fall and once in the spring. Students start out with 100,000 in pretend money and almost the entire universe of stocks to choose from. They can buy another 100,000 worth on margin and even sell stocks short -- that is, bet on their falling in price. The team of students with the most money after 10 weeks wins not only bragging rights and a trophy but also savings bonds and a trip to Richmond for an awards luncheon. The Washington Post and PNC Bank co-sponsor the game in the Washington area.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616935","date":"2006-04-25","texts":"IT'S FOX NEWS CHANNEL'S 10th anniversary this October. But the cable network doesn't want a diamond bauble to commemorate the occasion. It wants cold, hard cash -- and plenty of it. Fox News executives well remember their early days, when the channel got little respect and was in the shadow of Time Warner Inc.'s CNN. While it blew by its rival almost 4 12 years ago in the ratings, it still trails them in one key area -- distribution fees paid by cable and satellite operators. On that score, the News Corp.-owned channel is now looking to overtake CNN and just about every other cable channel, aiming to triple the fees it charges them to carry the channel. It wants an increase to 1 dollar per month per subscriber, from the 25 cent to 35 cent subscriber fee the network currently earns. CNN gets an average of about 50 cents per subscriber MSNBC takes in between 30 and 35 cents. We're in the elite group, says Tim Carry, vice president of affiliate sales for Fox News. We have a significant advantage over 90 of the industry, yet over the last 10 years we've been paid as if we're at the bottom. Only a handful of cable networks are able to command such a high fee, most notably Walt Disney Co.'s ESPN, which takes in over 2.50 per subscriber. Like ESPN, these channels pay huge sports-rights expenses and get compensated for them. Other channels that command high distribution fees include Time Warner's TNT, which carries Nascar and the National Basketball Association and gets 90 cents, and the Disney Channel, which doesn't sell advertising and gets about 1.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616059","date":"2006-04-26","texts":"THE BOMBING of another popular Egyptian beach resort on Monday could further set back Cairo's attempts to liberalize its political, economic and legal systems, and adds a potential complication to U.S. efforts to spread democracy through the region. The attacks at the Dahab resort on the Sinai Peninsula -- which officials yesterday afternoon said killed at least 24 people -- promise to buffet Egypt's economy at a time when President Hosni Mubarak has been pursuing aggressive economic changes as a way to reduce unemployment and strengthen his party's flagging popularity. Mr. Mubarak's hope has been that greater prosperity would blunt the appeal of Islamic fundamentalists and give him room to expand the democratic process without threatening the government's secular foundation. Instead, what has emerged is a violent and sustained campaign by radical Islamists to destabilize Mr. Mubarak's government -- and a flourishing of support among many ordinary Egyptians who back the Islamists' goal of a religious state, if not their methods. Already, that mix prompted Mr. Mubarak to recently suspend a round of local elections and delay easing Egypt's draconian security laws. Now, in the wake of the Dahab attacks, there is concern that these and other overhauls could be pushed back further and possibly suspended altogether. It's happened once again -- we take a few steps forward and then many leaps back, says Ibrahim Hassan, an Egyptian lawyer who has been active in pressing the government for greater judicial reforms. How Mr. Mubarak, 77 years old, proceeds has enormous implications for the U.S. and its goal of pacifying the Middle East through democracy. Cairo has long supported the U.S. on a range of big regional issues and is one of only two Arab countries -- Jordan is the other -- that has made peace with Israel. Egypt also is the recipient of some 2 billion of U.S. aid a year, second only to Israel in U.S. foreign-aid disbursements.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981838","date":"2006-04-30","texts":"No, really, I mean it. If you're the gambling type, you can now bet on those skyrocketing pump prices that once again have consumers over a barrel. An online gambling site has posted odds on the short- term future of the price per gallon. Will gas prices hit 4 by June 15th The odds are 3 to 1 they will. You wager 100 and win 300, says Freddy Harris, the general manager and top oddsmaker at YouWager.com, a First Fidelity sportsbook based in Costa Rica. If you want a longer shot, you can bet gas prices will get to 5. If you're right, we will pay you 8 to 1. If not, we will cheerfully take your 100. With interest rates and gasoline prices steadily rising and consumer confidence falling, some folks may be hoping to hedge the high cost of gasoline by wagering on it. Since the gas-price odds appeared on YouWager.com's board two weeks ago, about 60 people have put money on the 5-a-gallon bet, says Harris, and about 150 have bet that gas will break 4 a gallon. It's a fun thing. This is something you could debate at the barbershop. Put your money where your mouth is . . . if you have a strong opinion, says Harris. But while the days of cheap gas seem to be over, at least you can still place a cheap bet. The minimum is 25, and the maximum is 100. But gas wagering goes off the board May 10, so bettors risk 34 days of market manipulation and things happening that can affect gas prices. And they'll have to wait until June 15 to find out whether they're winners.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982661","date":"2006-05-01","texts":"Some local activists predicted that thousands of Washington area immigrants would participate in a national economic boycott today, but immigrant groups who have spoken out against the boycott said they fear that the immigration reform movement is being commandeered to promote political causes beyond immigration. The public tug of war, which continued in the Washington area yesterday on Spanish-language radio, could result in more limited participation in the region than is expected in Dallas and Los Angeles, where the organizers of last month's massive protests have been more unified in support of today's boycott, which asks immigrants to refrain from buying goods and to stay home from work and school. Police in Los Angeles said they expect a rally that could draw as many as a half-million people. Some major national firms that rely heavily on immigrant labor said they would close for the day. Perdue Farms said about half of its chicken processing plants would close, and Tyson Foods Inc. said nine of its 15 beef and pork plants will not operate. Local business owners said they did not know what to expect. Some said they would close, and several construction firms said they would allow their employees to take the day off. Ricardo Juarez, coordinator of Mexicans Without Borders in Northern Virginia, and a local leader of the boycott, predicted that real economic impact would be felt in the Washington area.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615119","date":"2006-05-03","texts":"Wal-Mart Stores Inc. has taken plenty of heat over its wages and health benefits, but many employees say they have an even bigger gripe with the world's largest retailer their hours. When Mona Curtis signed on 3 12 years ago to work at a Wal-Mart store in Hillsboro, Ohio, the 71-year-old retiree says she made it clear that weekends were out because of her duties as a foster parent and churchgoer. But when Ms. Curtis refused to work a pair of weekend shifts in June, she says a manager cut her hours in half, to just two days a week. At a Wal-Mart supercenter in Apopka, Fla., Cora Brown, 66, says she had to fight to keep her schedule as a cashier after her husband fell ill last spring. Meanwhile, the eight-year Wal-Mart veteran says she has seen a number of co-workers quit amid tighter work-shift rules. Those who haven't quit have found themselves working more oddball shifts, she says. They'll call them in at 7 a.m. on Monday, 10 a.m. on Tuesday and three in the afternoon on Wednesday, Ms. Brown says. Over the past year, Wal-Mart has quietly focused on tackling a tricky problem how to improve spotty customer service while keeping a lid on its payroll, which covers 1.3 million employees in the U.S. alone. The key, management says, is to better match work shifts with the ebb and flow of customer traffic.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615347","date":"2006-05-03","texts":"'I know you believe you understand what you think I said, but I am not sure you realize that what you heard is not what I meant. That quote did not originate with Alan Greenspan, but it is widely attributed to him, perhaps because it so neatly eloquently is not quite the right word sums up his knack for obfuscation, especially before Congress. By now, new Federal Reserve Chairman Ben Bernanke probably wishes he'd had that sentence printed on a business card when CNBC anchor Maria Bartiromo asked him at a dinner over the weekend whether he thought markets had properly understood him last week. The Chairman's testimony last Thursday prompted a mild stock rally on the hopes that the Fed believes it can soon afford to halt its string of interest-rate hikes. Investors always like to believe the end of rate hikes is nigh, because rising rates create greater financial risks. But stocks went in reverse on mid-afternoon Monday when Ms. Bartiromo reported that Mr. Bernanke had told her over the weekend that his testimony had been misinterpreted. To be fair to the new Fed chief, there may be no other job in the world where a handful of words uttered at a dinner party can count for so much. However, the real issue is less Mr. Bernanke's dinner-party discretion, or Ms. Bartiromo's, than the Fed's policy intentions. And one reason for market disquiet is uncertainty about how seriously the Fed is taking the risk of incipient inflation. Any new Fed chief has first and foremost to establish his credibility in maintaining the soundness of the currency, and the last few days suggest Mr. Bernanke has some work to do in that department. In the wake of his dovish remarks last week, the dollar continued its fall to a new recent low -- even against the Canadian dollar. Gold and commodity prices kept rising, and oil staged another charge above 70 a barrel. Even the TIPS spread on inflation-linked bonds widened. In other words, inflationary expectations staged a rally of their own.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982321","date":"2006-05-04","texts":"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. 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. Their message Improve residents' access to banks, financial advice and homeownership, and broader prosperity will ensue. 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. 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.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983949","date":"2006-05-04","texts":"The Bush administration plan for an influenza pandemic released yesterday hinges on sharing authority with global agencies such as the World Health Organization, and, at the opposite end of the spectrum, with governors, mayors and school superintendents. The 227-page road map acknowledges that the federal government cannot -- and should not try -- to fully manage the response to an event that is likely to start overseas, eventually take hold in even the smallest U.S. communities, and last for months. The impact of a severe pandemic may be more comparable to that of war or a widespread economic crisis than a hurricane, earthquake, or act of terrorism, the authors of the plan wrote. The center of gravity of the pandemic response will be in communities and the support the federal government can guarantee to any state, tribe or community will be limited. At the same time, the road map -- developed to support an equally voluminous pandemic strategy unveiled in November -- lays out an ambitious agenda of more than 300 tasks for federal agencies, along with a timetable for completing them. They include such tasks as helping improve a flu laboratory in Singapore and encouraging new cell-based vaccine-making technology in this country devising plans to route all international flights to just a few U.S. airports during a pandemic and helping local jurisdictions come up with plans for canceling school and triaging patients at hospital emergency rooms.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982752","date":"2006-05-11","texts":"Federal Reserve officials raised a key interest rate again yesterday and signaled that they do not know whether they will need to move it still higher in coming months to prevent rapid economic growth from pushing inflation higher. The policymakers suggested in a statement that they were keeping their options open, a message that disappointed many investors and analysts who had hoped for a clear sign that the Fed would pause in June and leave its benchmark interest rate unchanged after nearly two years of steady increases. Stock prices fell sharply after the central bank's top policymaking group, the Federal Open Market Committee, announced its unanimous decision and issued a statement. But then stocks rallied, dropped and then rose again as investors reacted with confusion to the first FOMC statement in two years that did not hint at the central bank's likely next move. Some further policy firming may yet be needed to address inflation risks, the committee said, raising the possibility of at least one more rate increase. At the same time, the FOMC suggested that it does not know how many, if any, more increases are in store and that it may pause at its next meeting in June if economic growth slows and inflation pressures ebb. The committee emphasizes that the extent and timing of any such firming will depend importantly on the evolution of the economic outlook in response to new data.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983498","date":"2006-05-11","texts":"Wall Street ended an uneasy session mostly lower and bond prices tumbled Wednesday after the Federal Reserve suggested it might not be through raising interest rates if more increases are needed to fight inflation caused by soaring energy and commodities prices. The Dow Jones industrial average rose 2.88, or 0.02 percent, to 11,642.65. The Dow is less than 80 points from its highest-ever close. The Standard & Poor's 500-stock index lost 2.29, or 0.2 percent, to 1322.85, and the Nasdaq composite index sank 17.51, or 0.7 percent, to 2320.74. The Fed's decision to boost a key short-term lending rate to 5 percent was widely anticipated. But investors were rattled by the central bank's accompanying statement, which said more policy firming -- or rate increases -- could be necessary to contain inflation. Bonds sold off their earlier gains after the Fed's statement. And the chance for more interest rate increases weighed on the dollar, which fell against the Japanese yen. Meanwhile, gold futures climbed past a 25-year high of 700 an ounce. Crude oil futures rebounded Wednesday as worries about overseas supply cutoffs countered a weekly government report showing increased oil and gasoline reserves and greater refinery output.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617252","date":"2006-05-15","texts":"THE PARTY TO celebrate a record for the Dow Jones Industrial Average has been postponed. There are plenty of reasons, one of which is that not everyone got an invitation. As the Dow industrials surged 5 in less than a month, returning almost to the record close of 11722.98 that dated from Jan. 14, 2000, two other major indexes were running out of steam and rising more slowly -- 3 for the Standard & Poor's 500-stock index and 1.5 for the Nasdaq Composite Index. Both hit records in March 2000 and neither is near a return to those levels. The divergence troubles some investors. What you'd typically want to see is a broad-based rally with all boats rising, says Peter Wall, chief investment officer for Chase Private Client Services, a brokerage and money-management arm of J.P. Morgan Chase. The fact that some indexes are looking weaker than others is a sign that we are in the mature or the end phase of a bull market.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616703","date":"2006-05-17","texts":"U.S. producers absorbed some of the pain of higher energy prices in April, and the housing market showed further signs of cooling, helping to quell fears inflation will spread to the broader economy. Wholesale prices of finished energy goods such as gasoline rose 4 in April, pushing up average prices on all finished goods -- everything from turkeys to tractors -- a greater-than-expected 0.9, the Labor Department reported. But the closely watched core index of producer prices, which excludes energy and food, rose only 0.1, well below expectations. Given all the energy-price hikes coming through, that's still very subdued, said Nigel Gault, U.S. economist at consultancy Global Insight. Economists and investors watch wholesale prices closely as a signal of what may happen with the consumer-price index, a broader measure of inflation on which the government will report today. The two don't correlate closely from month to month, but producer prices do give some indication of what is coming in consumer prices. In recent weeks, various indicators have pointed toward gathering inflation pressures, raising concerns that the Federal Reserve will have to extend its 23-month string of interest-rate increases. Also, the economy appears to have been running a lot hotter in the first quarter than initially believed. The Bureau of Economic Analysis reported last month that real gross domestic product -- the value of the nation's output, adjusted for inflation -- grew at an annual rate of 4.8 in the January-March period. But some now expect the government to revise its estimate of first-quarter GDP growth a full percentage point higher.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616785","date":"2006-05-17","texts":"BULLS AND BEARS make the markets, but Barry Ritholtz witnessed something else in the past couple of weeks. Have you ever watched a flock of birds and all of a sudden they all break left asks the strategist with Ritholtz Capital Partners. Sure, the stomach-churning downturn in the last several sessions -- in U.S. stocks and then the bubblicious commodities markets -- was fast. But it wasn't surprising. The things that should have mattered didn't for the longest time, and now suddenly they do. To figure out where the birds will come to roost, look homeward. Housing has been the key sector driving consumer spending, employment and therefore the markets. It was trending south long before last week's selloff, but investors have yet to fully appreciate its implications. The Federal Reserve's rate-raising campaign has clearly started to have an impact, as long-term rates are moving up. And oil's relentless rise has finally started to bite. Crude's creep seemed merely worrisome when it hit 40 a barrel, troubling at 50 and ominous at 60, but by the time oil hit 70, investors seemed to forget about it. But the airlines and distributors that have been tacking fuel surcharges onto their wares didn't forget, and now inflation is on the horizon. The rapid recent swoons are only the latest evidence of how dominated the markets are by aggressive speculators, especially the trend-following hedge funds that play the futures markets. These funds have been whipsawing the global markets, researcher Bridgewater Associates pointed out in a note this week.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615792","date":"2006-05-20","texts":"Special to The Wall Street Journal 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. 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. 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. 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.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616984","date":"2006-05-23","texts":"WASHINGTON -- Rising gasoline prices in the wake of Hurricane Katrina generally were the result of the forces of supply and demand, a Federal Trade Commission study found. But the agency identified scattered instances of price gouging, a finding likely to inflame congressional debate over pending federal legislation. The FTC study, ordered by Congress last year, is expected to be a major focus of a Senate hearing today. Overall, the FTC report offered support for the petroleum industry, which has been dogged by price-gouging accusations after Katrina idled 27 of U.S. crude-oil production and 13 of the nation's refining capacity. The average price of gas in six representative cities spiked 50 cents after the storm hit land on Aug. 29, declined 35 cents over two weeks and then jumped by additional 25 cents after Hurricane Rita hit in late September, the FTC report said. In light of the amount of crude-oil production and refining capacity knocked out by Katrina and Rita, the sizes of the post- hurricane price increases were approximately what would be predicted by the standard supply-and-demand paradigm, the report said. The report found that several refiners saw their profit margins rise after the hurricanes in ways that weren't attributable to increased costs, and 15 separate instances of gouging by refiners, dealers and stations were cited. The FTC said these increases mirrored local trends in all but one case when geography and other factors were considered.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615644","date":"2006-05-25","texts":"The latest readings on U.S. housing and business investment confounded economists' expectations, but the underlying trends still show the economy acting pretty much as Federal Reserve officials had hoped Perhaps slowing, but not sinking. In two separate reports, the Commerce Department said new-home sales rose and businesses' orders for capital goods dropped in April. At first glance, that's at odds with the Fed's main scenario for what the economy will do this year Consumer spending should slow as a weakening housing market makes people feel poorer, but increased business investment -- in the form of capital-goods purchases and hiring -- should help keep the deceleration from becoming a disaster. Economists, however, warned against reading too much into the volatile monthly data, saying that longer-term trends still point toward slowing home sales and growing capital spending. We all agree that the housing market is cooling off, and some other sector of the economy must take the burden of keeping growth healthy, said Ethan Harris, chief U.S. economist at Lehman Brothers in New York. Capital spending is a prime candidate. New-home sales rose to a seasonally adjusted annual rate of 1.19 million in April, up 4.9 from the previous month, thanks in part to a surge in Southern states. The number contrasted sharply with expectations of an April drop in home sales, but downward revisions to the previous months' numbers lessened the surprise. After revisions, the rate of new-home sales dropped 7.6 over the first three months of 2006, compared with a previous estimate of 4.2. April's rate of sales was still 12.4 below the most recent peak in July 2005. The overall picture is one of a cooling housing market, said Joshua Shapiro, chief U.S. economist at MFR Inc. a New York consultancy. It's hard to argue against that. Declining demand, for example, was among the reasons cited by luxury-home builder Toll Brothers Inc. when it announced earlier this week that it was lowering its full-year earnings forecast.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616380","date":"2006-06-01","texts":"WASHINGTON -- Federal Reserve officials discussed leaving interest rates unchanged in May or raising them half a percentage point before settling on a quarter-point boost, evidence of their growing uncertainty over what rate action to take, the minutes from their deliberations show. The minutes from the May 10 meeting of the policy-making Federal Open Market Committee, released yesterday after the usual three-week lag, also show officials increasingly concerned about inflation and inflation expectations. They also disclosed that Chairman Ben Bernanke had appointed a subcommittee on communications to be led by governor Donald Kohn and including Federal Reserve Bank of Minneapolis President Gary Stern, and San Francisco Fed President Janet Yellen. Officials discussed actions ranging from leaving rates unchanged at this meeting to increasing the federal-funds rate 50 basis points, but all agreed a 25-basis-point move was appropriate today to keep inflation from rising and promote sustainable economic expansion, the minutes said. There are 100 basis points in a percentage point. The committee's vote to push the Fed's short-term interest-rate target up a quarter point -- to 5 -- was the 16th consecutive meeting with such an increase and was widely anticipated in markets. Nonetheless, it was the first time since the Fed began to raise rates in June 2004 that, according to minutes, anything other than a quarter-point increase was discussed, other than soon after Hurricane Katrina last summer, when one member preferred no rate increase. Future meetings also are likely to feature divergent opinions and, perhaps, dissenting votes on the rate action. That would reflect the different weights officials put on their concerns about rising inflation and slowing economic growth.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983191","date":"2006-06-01","texts":"Sometimes in Washington, good things are more likely to happen by accident than by congressional or executive design. Treasury secretary nominee Henry M. Paulson Jr. is no doubt aware of this fact, but it's one worth keeping in mind in the continuing debate over tax reform, which is sure to command a good deal of the new secretary's attention. I'm thinking of one program in particular the alternative minimum tax, or AMT. The AMT is viewed by many as a bad thing. Yet, consider this There is wide agreement among economists on the benefits of a federal flat tax on income that would apply a uniform rate to every taxpayer and eliminate most current deductions and tax credits. A flat tax would get rid of a large number of economic distortions resulting from the many tax subsidies that often benefit narrow interest groups. This is tax pork, and Congress is as addicted to it as to the ordinary spending kind. In places around the world, including Eastern Europe, governments creating new tax systems have been turning to a flat tax to avoid this sort of thing. What does this have to do with the AMT Just this As Post business reporter Albert B. Crenshaw has noted, the AMT approaches a modern-day flat tax. It imposes a uniform rate of 26 percent up to 175,000 in income, and above that 28 percent. Tax revolutions are few and far between. Taxes are so important to the economy that major changes in tax law are best achieved incrementally, giving notice well in advance and avoiding potentially large disruptions from big surprises. That's part of the genius of the AMT. If it is left alone, it will move us gradually but steadily toward a flat tax on income as inflation brings more people within its ambit. Some leading Republican conservatives have long advocated a flat tax. Yet few of them are speaking out vigorously for retention of the AMT. In fact, many are joining the clamor in Congress for its repeal or limitation. It would seem that they were either hypocritical in advocating a flat tax or have somehow failed to recognize that the AMT is in essence a new, evolving form of flat tax.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614017","date":"2006-06-06","texts":"TOKYO -- Japanese stocks pulled back yesterday, as uncertainty over the downfall of corporate financier Yoshiaki Murakami and declines in U.S. stocks from Friday prompted profit-taking in pricey blue-chip shares such as Toyota Motor, Canon and Mitsubishi UFJ Financial. But many of the stocks in Mr. Murakami's fund rose, after falling sharply on Friday on fears the fund might sell off its shares. The Nikkei Stock Average dropped 121 points, or 0.8, to 15668.31 following a 285.57-point rally on Friday. Most investors said the effect likely would be limited on the overall Tokyo stock market from the Murakami scandal. But some also said they want to see foreign investors' reactions to the news. Mr. Murakami, who leads the so-called Murakami Fund, admitted yesterday that he had violated the country's insider-trading laws, and would step away from his own fund and investments. Yesterday, the home for many of the Murakami stocks of start-up companies, the TSE Mothers market, saw its index rise 3.4 to 1393.86, but it is still down about 50 from its year high of 2799.06 in January. Among the stocks in which the Murakami fund holds a major stake, Matsuzakaya, Sumitomo Warehouse, GMO Internet and New Japan Radio all rose.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615435","date":"2006-06-06","texts":"YOUR CASH is no longer trash. Thanks to a string of 16 consecutive Federal Reserve interest-rate increases since June 2004, investors have been earning substantially more on their money. In recent weeks, yields on some money-market mutual funds and short-term Treasury bills have crossed 5 -- their highest levels since 2001. That follows earlier moves by some banks to boost yields on certificates of deposit past 5. After a number of years in which historically low interest rates caused investors to overlook cash -- if not shun it outright -- Wall Street is once again treating it as a serious option, as are individual investors, who are pouring money into it. And higher yields aren't the only lure. Stocks have swooned in recent weeks, with the Dow Jones Industrial Average dropping 199 points yesterday, and investors have grown skittish about inflation and higher interest rates and their effect on stock and bond returns. Yesterday the government issued a new batch of six-month Treasury bills paying 5. Money-market mutual funds managed by Morgan Stanley and the asset-management division of Credit Suisse, a unit of Credit Suisse Group, began paying 5 late last month. These funds are primarily geared to pension funds and institutions, although some high-net-worth investors may get access to them through their advisers or private bank. If the Federal Reserve raises short-term interest rates from the current 5 when it meets later this month -- as Chairman Ben Bernanke has signaled he may well do -- then many of the retail money-market funds open to small investors are likely to cross the 5 threshold within weeks. That is because the rates on money-market funds, which invest in short-term debt, are determined by market rates. If the Fed declines to raise rates, then yields on money-market funds are likely to stall out just under 5, says Peter Crane, publisher of Money Fund Intelligence.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984703","date":"2006-06-07","texts":"It's hard not to feel some sympathy for departing Treasury Secretary John Snow. He worked tirelessly for President Bush, trudging all over the country to plug the administration's policies. In 2005 Snow spoke at the Detroit Economic Club, the Omaha Chamber of Commerce and the Sony Technology Center in Mount Pleasant, Pa. For all his trouble, Snow earned only perfunctory public gratitude from the president and was subjected to repeated rumors that the White House was unhappy with his performance. Worse, he seemed to have had little effect on policy or the economy. The same fate may befall Snow's anointed successor, Henry Hank Paulson, head of the highly profitable investment banking firm Goldman Sachs. Of course, it's not supposed to be this way. Paulson comes advertised as a Wall Street take-charge guy who will improve public economic confidence and reassert control over policy. But how is that to happen Unless he blunders badly, Paulson's role as chief economic spokesman doesn't matter much. Most Americans don't know the name of the Treasury secretary and don't care. What they care about is 3-a-gallon gasoline and 6.5 percent mortgage rates. It's possible that Paulson will have more influence on policy than Snow had. As economist Roger Kubarych of HVB America points out, there's no shortage of challenges trying to avert big bankruptcies GM in the auto industry preventing disorderly shifts in global currency rates curbing federal spending on retirement benefits fixing the Pension Benefit Guaranty Corp., which insures defined-benefit pensions. The trouble is that Bush's positions on most issues are already set. Even if they weren't, many powerful interests -- Congress, the United Auto Workers, China, AARP -- may limit what Paulson can actually accomplish. To excel as Treasury secretary, Paulson needs something no one wants an economic crisis that enables him to act as hero, much as then-Treasury Secretary Robert Rubin also once head of Goldman Sachs and then-Federal Reserve Chairman Alan Greenspan did during the 1997-98 Asian financial crisis. Any new upset would spotlight Paulson assuming the Senate confirms him along with the new Fed chairman, Ben Bernanke. What are the odds of a crisis Not great -- but not negligible, either. After three years of strong performance 5.3 million new jobs, 4.6 percent unemployment, the U.S. economy could be at a tipping point. Two problems loom one traditional, one not.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615953","date":"2006-06-12","texts":"TOKYO -- Japan's economy grew considerably faster in the January- March quarter than previously announced, as companies increased their investment during that quarter more than had been thought. Gross domestic product -- or GDP, the widest measure of economic activity -- expanded 0.8 in January-March from the October-December quarter in real, or price-adjusted, terms, the government announced Monday. That was equivalent to 3.1 growth on an annualized basis. The earlier estimate was for 0.5 quarter-on-quarter growth, or 1.9 annualized. The strong GDP figure indicated strength in Japan's real economy, the world's second-largest after the U.S., and contrasted with falls in Japan's stock market, which has plunged to six-month lows in recent days. The Tokyo Stock Exchange opened lower on Monday, as investors sold stocks following the decline in the U.S. market Friday. The main reason for the higher GDP figure was a revised estimate for capital expenditure that was more than twice the earlier number. The estimate jumped 3.1 over the previous quarter, or 12.9 in annualized terms, as companies boosted their capital spending even more than previously thought in anticipation of strong demand. The preliminary estimate had been a 1.4 quarter-on-quarter rise, or a 5.8 annualized rate. Interpreting the combination of rocky financial markets and a strong economy is key to the Bank of Japan's timing of the expected end to its zero interest-rate policy. Since 2001 the central bank has guided to zero the rate that banks charge each other for overnight loans.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615021","date":"2006-06-13","texts":"Lehman Brothers Holdings Inc. reported its second-best quarter ever, but investors focused on a weakening financial-markets environment that could crimp brokerage firm earnings going forward and sent the company's shares tumbling to their worst trading day in more than four years. Citing strong results in investment banking and stock trading, Lehman reported net income of 1 billion, or 1.69 a share, for the second quarter ended May 31, up 47 from 683 million, or 1.13 a share, a year earlier, but down slightly from its record first quarter, when it earned 1.1 billion. Analysts polled by Thomson Financial had projected a profit of 1.61 a share. Net revenue, or revenue minus interest expense, was 4.41 billion, up 35 from 3.28 billion a year earlier and down 1.1 from 4.46 billion in the first quarter. In recent weeks, there has been concern that falling stock markets and rising interest rates may make it tougher for firms like Lehman to continue posting record results. Lehman's earnings, while strong, may give investors a road map for some of the trouble spots to come. In a report to investors, Prudential Equity Group LLC analyst Michael Mayo said some of the firm's results were mixed. Revenue from equity trading fell 7 quarter to quarter, in part, he said, because of the rocky stock market. The firm's investment-banking results, while up 28 from a year earlier, fell 11 from the previous quarter. The main reason Debt underwriting fees fell 30 from the first quarter in part because of rising interest rates.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830985202","date":"2006-06-17","texts":"Federal Reserve Board member Donald L. Kohn said yesterday that central bank officials will look for new ways to convince Americans that inflation will not take off. Consumers' and investors' expectations of future inflation have risen slightly in recent months by several measures, raising concerns at the Fed that such perceptions might become self- fulfilling if they embolden businesses to raise prices, encourage shoppers to pay them and prompt workers to demand higher wages. Consumers' expectations of future inflation eased a bit in early June from the end of May but remained slightly higher than in April, according to a University of Michigan survey released yesterday. Inflation expectations have come a little bit unhinged, Kohn said at an economic conference in Chatham, Mass., according to Bloomberg News. It's not a big deal, but it has presented us with some issues. Kohn alluded to Fed Chairman Ben S. Bernanke's promise to Congress that he would seek the support of his central bank colleagues to adopt a numerical long-term inflation goal, or target, as a way to keep inflation low and stable. For example, the Fed could publicly commit itself to keeping inflation close to 2 percent over two years, or 1 to 2 percent over some period. Currently, the Fed seeks price stability, or low inflation, but doesn't define it with a number.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614543","date":"2006-06-19","texts":"Today's Market Forecast Line in the Sand Financial officers have little to fear but the Fed itself. Investors around the world spent the past few weeks fretting about whether the Federal Reserve will try to nip rising inflation in the bud by raising interest rates in late June. With an increase in the federal-funds rate next week to 5.25 now looking like a certainty, the focus in the days ahead shifts to whether the Fed will signal yet another increase in its benchmark interest rate in August. A slew of economist reports out over the weekend say it is a distinct possibility that the federal-funds rate later this summer will hit 5.5, the line in the sand for many chief financial officers.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984125","date":"2006-06-21","texts":"Wall Street pared an earlier advance to end mixed Tuesday as investors' persistent concerns about interest rates and the economy countered relief over an upbeat home-building report. At the close of trading, the Dow Jones industrial average gained 32.73, or 0.3 percent, to 10,974.84, after rising almost 88 points earlier. The Standard & Poor's 500-stock index fell 0.02, to 1240.12, and the Nasdaq composite index lost 3.36, or 0.2 percent, to 2107.06. A stronger-than-expected jump in new-home construction fed optimism that the overall economy remains sturdy in the face of higher lending rates and gasoline prices. However, disappointing forecasts for June business sent home builders' shares down. Upbeat sales from Caterpillar and steady oil prices also gave stocks support. But while the market recovered somewhat from Monday's decline, erratic trading like Tuesday's is anticipated while investors await the Federal Reserve's latest statement on inflation and economic growth after its meeting next week. Bonds slipped, with the yield on the 10-year Treasury note edging up to 5.15 percent, from 5.14 percent late Monday. But the two-year yield was 5.20 percent, signaling less confidence in long-term debt with expectations of an economic slowdown.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985159","date":"2006-06-22","texts":"A former U.S. Treasury secretary is advising some of the world's biggest holders of U.S. Treasury bonds that they ought to find much better ways to invest their money. Lawrence H. Summers, who headed the Treasury in the last 18 months of the Clinton administration, has argued in recent speeches that developing countries in Asia, Eastern Europe, Latin America and Africa should put much of their excess funds into stocks. Too often, he contends, the central banks of those countries invest their hoards of foreign securities -- now totaling several trillion dollars -- in safe but low-yielding U.S. Treasurys. The return will be zero on those Treasurys after inflation and currency changes are factored in, Summers said in a lecture last week at the Center for Global Development, a Washington think tank. Meanwhile, he said, the developing countries are passing up much more lucrative investments -- this, in societies where hundreds of millions of people are still desperately poor. In another speech, this one in Bombay a few weeks ago, he said, It is striking to estimate the cost to developing countries of their Treasury- heavy portfolios. Given Summers's previous job as the official with chief responsibility for financing the U.S. government, there is an obvious paradox in his suggesting that any central bank disinvest in U.S. securities. In a telephone interview yesterday, he said he saw no incongruity in his position, because he is not urging wholesale dumping. He said central banks around the world must keep large volumes of their money in super-safe assets such as Treasury bills. And any diversification into riskier investments such as stocks is not likely to be rapid, in ways that would affect the Treasury's ability to borrow at affordable interest rates, he said. Summers, who announced in February that he will step down as president of Harvard University, is known for his impolitic remarks -- a famous example being his suggestion that intrinsic aptitude could explain why fewer women than men have excelled in science and math. So his argument against Treasurys might seem to be just another case of his penchant for flippancy.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615358","date":"2006-06-26","texts":"MORTGAGE BROKERS, prepare your resumes. And while you are at it, highlight any experience you've had in health care. 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. 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. 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. 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.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982805","date":"2006-06-30","texts":"A relief rally carried Wall Street sharply higher Thursday after the Federal Reserve appeared to soften its stance on future interest rate hikes, saying it would consider both the economy's health and inflation as it formulates its policy. The Dow Jones industrial average had its biggest one-day point gain in more than three years. The Dow surged 217.24, or 2 percent, to 11,190.80, its biggest single-day jump since March 21, 2003. The Standard & Poor's 500- stock index climbed 26.87, or 2.2 percent, to 1272.87, its largest gain since March 17, 2003 the Nasdaq composite index jumped 62.54, or 3 percent, to 2174.38, its biggest jump since July 27, 2002. While investors had been expecting the quarter-point increase in short-term lending rates, they were reassured by the central bank's accompanying statement, in which it noted economic growth had moderated but that some inflation risks remain. The Fed has tended to focus on inflation in past statements, but this time said it would look at the economy's growth rate along with the impact of inflation in deciding whether to raise rates in the future. Bonds rose further on the Fed's statement, with the yield on the 10-year Treasury note tapering to 5.20 percent from 5.25 percent late Wednesday. The 2-year yield dropped to 5.20 percent, a signal of heightened confidence in holding long-term debt. The Fed's announcement enabled Wall Street to look past a steep jump in oil prices after a report showed shrinking U.S. gasoline reserves with the start of the busy summer driving season.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984158","date":"2006-07-01","texts":"A June 30 article about a pending package of stem cell bills said that all three bills must pass for the package to pass. In fact, each bill can pass or fail on its own. Also, the Fetal Farming Act was not introduced by Sen. Sam Brownback R-Kan., but by Sen. Rick Santorum R-Pa. for Brownback and himself. A headline in the June 30 Metro section about a D.C. Council committee on a measure to ban government bodies from holding private meetings characterized council members who were initially no-shows for the meeting as opponents of the measure. The no-shows, Jim Graham D-Ward 1, Phil Mendelson D-At Large and Carol Schwartz R- At Large, have said they are crafting amendments to the measure. A June 30 Style article on the White House state dinner gave an incorrect title for Secretary of Defense Donald H. Rumsfeld. A June 30 Business section article about the conviction of HealthSouth founder Richard M. Scrushy incorrectly called him a former physical therapist. Scrushy trained as a respiratory therapist. A photo caption accompanying Steve Pearlstein's June 30 Business section column misidentified a Clark Construction executive. He is A. James Clark, chairman of Clark Enterprises Inc., parent company of Clark Construction group.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614586","date":"2006-07-02","texts":"Sex sells. But that hasn't been enough to lift Playboy Enterprises from its slump. Shares of the company, which publishes Playboy magazine and operates the soft-core Playboy TV channel and hard-core Spice channel, have been lackluster over the past decade. In fact, the stock, near 10, is below its price when Hugh Hefner, the company's founder and controlling shareholder, took the company public in 1971. Now, some people are seeing reason for improvement. Playboy PLA Class B shares has been hurt recently by the losses at its magazine and rising competitive pressures in the domestic TV business. The company warned in May that its 2006 profits would be way below Wall Street's expectations. That news sent the stock skidding. Earnings are likely to drop to 25 cents a share, from 56 cents a share in 2005.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614874","date":"2006-07-07","texts":"Tobacco bonds issued by states, counties and cities held steady as the tobacco industry chalked up another win with the long-awaited verdict in the Engle class-action lawsuit in Florida. Tobacco bonds are trading at their tightest levels in a long time, with investors having flocked to these bonds as the legal tide appeared to be turning in favor of the tobacco industry. The Engle case, the latest ruling to favor the industry, was a class-action personal-injury lawsuit brought against the five largest cigarette manufacturers in the U.S. The lawsuit generated the largest punitive-damage award in history -- 145 billion -- before being overturned by an appellate court in 2003, a decision supported yesterday by the Florida Supreme Court. The verdict keeps money in the industry's pocket that will help pay for about 25 billion in tobacco bonds, so called because they are backed by the flow of future payments from tobacco companies under terms of a 1998 legal settlement with 46 states. Prices of the tobacco bonds were steady in the wake of yesterday's decision. Investors noted that little scope existed for further gains given the very narrow yield differential between the triple-B or triple-B-minus tobacco bonds and other municipal securities.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617186","date":"2006-07-08","texts":"THERE'S A SURPRISING new Chinese knockoff that's gaining popularity in the U.S. -- denim. Factories in China are ramping up production of denim meant to compete with the expensive Japanese fabric that has become the hallmark of premium jeans. That's good news for consumers, because they'll now be able get the look and feel of fancy jeans -- what the industry calls a soft hand -- for less than 100, or half what today's highest-end jeans can sell for. But the bar is high, and some makers aren't yet convinced of the quality of Chinese denim. What has given Japanese denim its cachet is a combination of sophisticated washes and high-quality yarns that absorb color more evenly and look antiqued. Expensive labels from Kasil to 7 For All Mankind often tout the fact that they use Japanese denim. Now, however, Chinese factories are starting to churn out denim with a similar appearance and texture -- for about half the price. Japanese denim generally runs 5 to 12 a yard, depending on the finish, while Chinese denim is 2.50 to 3.50. For some companies, Chinese denim provides a way to move up the denim hierarchy. Next week, Eddie Bauer, which mostly produced 50 jeans made with basic U.S. denim, will also start selling premium trouser jeans, trench coats and skirts made of Chinese denim and priced between 68 and 98. On the high end, makers like Joie and Odyn are planning to use the less-expensive Chinese fabric for jeans with more costly hand-distressing or embellishment that will retail for about the same price as plainer styles in Japanese denim.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983193","date":"2006-07-08","texts":"Virginia Gov. Timothy M. Kaine D has recommended changes to legislation passed by the General Assembly that environmentalists had feared would cripple a popular land conservation program. The bill was part of a compromise between the House of Delegates and the Senate, which concluded months of feuding and passed a state budget last month. As passed by the General Assembly, the measure repealed Virginia's estate tax and paid for the tax break by imposing a cap of 50 million in 2007 and 75 million in 2008 on tax credits given to landowners who agreed to preserve open space. Senators had argued that the popular tax credit program needed the caps because it was costing the state many millions more than predicted. House leaders and conservationists countered that the program's popularity was proof that it was helping Virginia to save acreage from development. The amendments would impose a 100 million cap and allow the cap to rise over time with inflation. Kaine also would remove a provision to give preferential treatment to landowners in the Chesapeake Bay watershed. Christopher G. Miller, president of the Piedmont Environmental Council, called the governor's amendments a substantial improvement.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983592","date":"2006-07-09","texts":"With the multimillion-dollar renovation of Gen. George C. Marshall's Leesburg home nearly complete, a new director has taken the helm to oversee its transition from an oft-cited historic preservation effort to a successful museum and educational center. Kirsten H. Dueck, a 35-year-old former vice president of Sotheby's Inc., became executive director of the George C. Marshall International Center, the nonprofit group that owns and operates the estate, in mid-June. She said her goal is to turn Dodona Manor, which has had more than 5,000 visitors since reopening in November, into a true public space where more people can learn about the World War II general and diplomat who authored the successful economic recovery plan for postwar Europe. Marshall had this incredible role in determining the place that America would take in the world, and so . . . we are honoring him and his legacy, Dueck said. In her first weeks on the job, Dueck has begun carrying out her plans for the estate. Last week, she started curating the museum's next exhibit -- set to open in the fall -- which will chronicle the relationship between Marshall and British Prime Minister Winston Churchill through letters and photographs. And she is preparing for the arrival later this month of more than a dozen teachers from around the world who will participate in an intensive week-long course about the Marshall Plan. Dueck said that in the next few years, she intends to oversee the restoration of the gardens and some of the rooms that are not on the public tour as well as the construction of an education center next door to accommodate more group tours and class visits. The board of directors is in the midst of a 5 million fundraising campaign and hopes to break ground on the education center by 2007.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984197","date":"2006-07-09","texts":"After a quarter such as the past one, when equity markets worldwide climbed to multiyear highs, dropped like a stone and then bounced, what's a small investor to do Retail investors have a history of overreacting to market swings in harmful ways. They poured into technology stocks right before the bubble burst in 2000, and many of them were so shell-shocked by the ensuing decline that they piled out of equities altogether and missed most of the bull market of the past three years. What happens is a perverse form of market timing, rushing in at high prices and panicking out at low prices, said Richard Hoey, chief economist for Dreyfus Corp. It's a mistake for you to assume you know what is going to happen in the market in the future, Hoey said. Follow the long-term plan. Most financial advisers suggest that investors follow an asset-allocation strategy with fixed percentages of their money in bonds, cash and various types of stocks, such as large U.S. companies, small companies and international companies. Over the past three years, small-company stocks and stocks in the developing world have shot up much faster than those of large American companies, so many investors may find their portfolios out of balance. Now might be a good time to capture some of the gains and reinvest the profits in areas that haven't grown as quickly. If you were biting your nails during the last downturn, it might be a sign you need to diversify. If you've got a lot of money in emerging markets or small-cap stocks, quit it or at least don't put any more in, said Russ Kinnel, director of mutual fund research at Morningstar Inc.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982401","date":"2006-07-12","texts":"Hugh Stubbins Jr., 94, an architect whose Citigroup Center in Manhattan, with its sharply angled roof, is a major icon on the New York skyline, died July 5 at Mount Auburn Hospital in Cambridge, Mass. He had pneumonia. Mr. Stubbins also designed such noted buildings as Boston's Federal Reserve Bank the Ronald Reagan Presidential Library in Simi Valley, Calif. and Congress Hall, now known as House of World Cultures, in Berlin. The 59-story Citigroup formerly Citicorp Center, dedicated in 1977, broke with the glass box form of modern skyscrapers with its roof, piercing the sky at a 45-degree angle. It appears to sit on four huge columns -- not at the corners, but in the middle of each side of the building. Tucked in one corner is a church, also designed by Mr. Stubbins, that replaces one that was torn down to build the complex. By any standard the architect, Hugh Stubbins & Associates of Cambridge, Mass., has created one of New York's significant buildings, the New York Times wrote.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614880","date":"2006-07-18","texts":"BANKS USED TO give you a free toaster when you opened a savings account. Now they want to give you Royal Caribbean cruises and Tumi luggage for taking out a loan, paying your bills online and writing checks. Building on programs that reward customers for using debit and credit cards, banks are rolling out deals that allow customers to accumulate points for just about every transaction they complete and for every account they open. The goal getting customers to use more of their everyday bank's services, instead of spreading their business around to rivals. Three of the biggest U.S. banks -- Citigroup Inc.'s Citibank unit, National City Corp. and Banco Popular, a unit of Popular Inc. -- have recently launched or sweetened customer-loyalty programs in which freebies, varying from Starbucks gift cards to airline tickets, can be earned more quickly than through rewards tied to credit and debit cards alone. Nearly 10 million people have enrolled in these programs so far, and the growing interest is spurring credit-card company MasterCard Inc. to introduce technology and consulting services in the next several months that will keep track of accumulated points for banks. This isn't the first time banks have dangled high-end freebies to their customers, but in the past, such gifts were usually reserved for new depositors. At National City, which has 1,200 bank branches from Missouri to Pennsylvania, customers who enroll in the Points from National City program have 22 different ways to rack up points. Taking out a mortgage generates 50,000 points, and the reward for adding direct deposit to an existing checking account or using a debit card for the first time is 5,000 points. Customers accumulate 25 points every time they write a check, plus additional points for using their credit or debit cards, just as they would in a traditional rewards program.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981832","date":"2006-07-19","texts":"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. 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. 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. 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. 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.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984679","date":"2006-07-19","texts":"Today's burning question Will the name Billy Ray Cyrus cause people to sneer and smirk for eternity Yes, his 1992 Achy Breaky Heart was country music's equivalent actually, predecessor to Macarena, but why blame the mulleted one for recording a song so ridiculously catchy it was overplayed into a punch line The people just couldn't get enough. Until they did. And then they got way too much. Though he's gone on to find some success as an actor -- he plays the father to his real-life daughter Miley Cyrus on the Disney show Hannah Montana -- in the world of music, Cyrus's one-hit blunder status is cemented in awful-pop lore. But it's past time to stop judging him on that song alone, and there's no better place to start reevaluating his career than Wanna Be Your Joe, a fine and occasionally compelling collection of 14 new songs. It's a nearly clunker-free effort that boasts a wide range of material, from the winningly earnest title track, with its hints of young John Cougar's Jack and Diane, to the gas-price protest song A Pain in the Gas, which brings the CD to a somber close. Along the way, Cyrus tackles a fallen hero in The Man Tribute to Dale Earnhardt, failed love in What About Us and the flaws of his chosen genre in Country Music Has the Blues. On the last, which boasts guest appearances from George Jones and Loretta Lynn, Cyrus offers an olive branch to those who have disparaged his country cred, singing, If it makes you feel better  blame me if you want to  But I think country music has the blues. Cyrus can turn on the twang with the best of them, but on this album he hits softer, smoother notes as well, sounding less country roadhouse than comfy living room. Though they're on the sappy side, such songs as I Wouldn't Be Me and Hey, Daddy have a simple, endearing grace to them. The latter is a weeper made weepier when you learn that Cyrus played the song for his dying father earlier this year, just weeks before he passed away.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613517","date":"2006-07-20","texts":"American Airlines' AMR Corp. parent and Southwest Airlines reported sharply increased profits for the second quarter, signaling a continuing rebound in the U.S. airline industry even as fuel prices remain high. The results underscore how aggressive airlines have been at slashing costs and running more-efficient operations. AMR spent nearly 30 more on jet fuel than it did in the year-earlier quarter -- 1.71 billion compared with 1.35 billion -- but cost containment in other areas such as maintenance and wages still enabled it to report a profit five times that of a year earlier. Fuel prices remain the wild card and threatens to damp progress if prices rise further. Fuel now represents more than 31 of AMR's expenses, compared with just 12 four years ago, and the airline has continued to revise its price estimates upward. In January, AMR estimated an average full-year fuel price of 1.95 a gallon, which it increased to 2.07 in April and 2.18 yesterday. U.S. airlines are digging their way out of a long-running financial slump that resulted in more than 40 billion in net losses since 2001. This year, the industry's losses should narrow to no more than 2 billion, before turning a profit next year, according to the Air Transport Association, an industry group. Continental Airlines, US Airways Group Inc., AirTran Airways parent AirTran Holdings Inc. and Alaska Air Group Inc.'s Alaska Airlines are all expected to report profits for the second quarter and full year, according to analyst estimates provided by Thomson Financial. JetBlue Airways and UAL Corp.'s United are pegged for second-quarter profits, too, though they are expected to post losses for the full year. Meanwhile, Delta Air Lines and Northwest Airlines -- both mired in bankruptcy-court proceedings -- are expected to stay in the red for the second quarter and year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613994","date":"2006-07-20","texts":"As the Dow Jones Industrial Average powered to its second-biggest gain of the year, it was energized by J.P. Morgan Chase, International Business Machines and Wal-Mart Stores. But Yahoo proved that a rising tide doesn't lift all boats, by marking its biggest decline ever. The Dow leapt 212.19 points, or 1.96, to 11011.42. The advance was this year's second best, behind a 217-point rise on June 29. The Nasdaq Composite Index rose 37.49, or 1.83, to 2080.71. The Standard & Poor's 500-stock index advanced 22.95, or 1.86, to 1259.81, returning to positive territory for the year. The market was galvanized as Federal Reserve Chairman Ben Bernanke told lawmakers a moderation in U.S. growth now seems to be under way, which should help to limit inflation pressures over time. Investors had a strong incentive to buy because of their perception after the comments that the Fed is almost done hiking interest rates, said Phil Orlando, senior portfolio manager at Federated Investors. But I think they put on rose-colored glasses. There are other issues out there, including corporate earnings that appear to be slowing more rapidly than previously thought, as well as the tinderbox in the Middle East. J.P. Morgan rose 2.34, or 5.8, to 43.05, the Dow industrial average's best percentage gainer. The nation's third-largest bank based on market value said its net income more than tripled in the second quarter amid strong growth throughout its businesses.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982029","date":"2006-07-20","texts":"Federal Reserve Chairman Ben S. Bernanke said yesterday that the central bank remains worried about rising inflation, but he did not signal any immediate plan to raise interest rates again to combat it, sending stock prices soaring in relief. Bernanke, testifying on Capitol Hill, did say the possibility of worsening inflation is the biggest threat to the U.S. economy, suggesting the Fed would combat that danger if necessary by raising interest rates in coming months. But the Fed chairman also left open the possibility that the Fed may pause, at least briefly, after two years of steady interest- rate increases, taking no action at its next policymaking meeting, on Aug. 8. We will be evaluating all options when we come to meet in August, Bernanke told the Senate Banking Committee as he presented the Fed's economic forecasts for the next 18 months. Markets rallied around the world. The Dow Jones industrial average jumped 212 points, or nearly 2 percent. Some analysts described the financial markets' reaction as a relief rally because Bernanke did not signal firm plans for another rate hike in August. Many traders had braced for a tougher warning after the Labor Department released a worrisome inflation report yesterday morning, before the chairman testified.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613630","date":"2006-07-21","texts":"WASHINGTON -- Federal Reserve policy makers raised interest rates last month in part because markets expected them to do so, and they figured failure to act might hurt their credibility as inflation fighters, minutes of the meeting suggest. The minutes were released on the second of two days of congressional testimony on monetary policy by Fed Chairman Ben Bernanke. Mr. Bernanke repeated his main themes of the previous day Inflation is at a troubling level but should decline as the economy slows and energy prices stabilize. Yesterday, markets lowered to 47, from 62 Wednesday, the odds the Fed would raise short-term interest rates, now at 5.25, to 5.5 at its next meeting Aug. 8. Policy makers boosted their target for short-term rates in June because of a deterioration in the inflation outlook, the minutes say. But they also acted to preserve the decline in inflation expectations of preceding weeks, which appeared to be conditioned on expectations of higher rates. Fed officials typically attribute rate actions to economic and inflation developments, not to market expectations. The disclosure in the minutes, released after the customary three-week delay, suggests that based on their economic forecast alone, the decision to raise rates would have been a closer call.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985498","date":"2006-07-23","texts":"Here's a sure sign that interest rates are topping out People are getting excited about money-market mutual funds. After five years of going nowhere on balance, the amount of money in these plodding short-term savings and cash-management vehicles has lately begun to increase. As money-fund yields have steadily climbed toward 5 percent from less than 1 percent a little more than two years ago, you can hear the drumbeat picking up in the financial press. Money market heats up, declared one headline. Money fund rates shine again, said another. Money fund articles are too numerous to list this month, Peter Crane of Crane Data LLC reports in the July issue of his newsletter Money Fund Intelligence. As a confirmed fan of money funds since they arrived on the scene three decades ago, I see plenty to like in these developments. So- called cash investments can be an excellent stabilizer in a money- management plan, and money funds can be a great way to hold a cash position.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615360","date":"2006-07-24","texts":"Amid a climate of optimism, bond investors expect economic data this week to do little to determine the Federal Reserve's next step for monetary policy. That should make for a week of calm trading, in contrast to last week, which proved an important period for bond-market participants. Fed Chairman Ben Bernanke spent Wednesday and Thursday testifying before Congress about the central bank's outlook for the economy and monetary policy. He told legislators he expects growth to moderate, and while he is concerned by the recent flare-up in price pressures, he expects the reduced momentum to keep inflation in line. The chairman also stuck to a familiar refrain regarding monetary policy where interest rates go next is a function of how the economy performs, he said. Bond traders responded to Mr. Bernanke's comments by pushing prices higher. The federal-funds futures market cut back odds to a less-than- even chance that policy makers will drive what is now a 5.25 overnight target rate to 5.5 at the Aug. 8 Federal Open Market Committee meeting. A survey of major bank economists by Dow Jones Newswires found a majority of the forecasters reckon the Fed will raise the rate then, after which the funds rate will hold steady through the remainder of the year. Late Friday, the 10-year Treasury note's yield stood at 5.047 the two-year yield was at 5.084. The gap between yields on the two- and the 10-year note, the benchmark yield curve, was a negative 0.03 percentage point. Reduced fear of future rate increases is a positive for Treasury prices, particularly for the short end, which is the most sensitive to changes in official rates.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614135","date":"2006-07-25","texts":"CHICAGO -- United Airlines parent UAL Corp., in a surprise for Wall Street, said it expects to post second-quarter net income of 119 million, its first profit since 2000, reflecting improving industry conditions and cost-control efforts. Shares of the nation's second-largest airline by traffic, behind AMR Corp., rose on the news, rising 1.25, or 4.6, to 28.20 in 4 p.m. composite trading on the Nasdaq Stock Market. UAL said it announced preliminary results yesterday to guide investors ahead of the issuance to employees of 726 million of convertible notes, a requirement of its plan of reorganization. The expected profit is more than twice the estimate of analysts surveyed by Thomson Financial. The company said its revenue rose 16 to 5.1 billion from a year earlier. Revenue from each mainline jet seat flown a mile increased 12. UAL said it generated 500 million in cash since March 31, boosting its unrestricted cash balance to 4.2 billion, despite higher fuel expenses. On the expense site, United said it intends to lop 300 million from its costs this year and hopes to achieve a portion of its 2007 cost- reduction target of 400 million in 2006. Part of the savings will come from cutting at least 1,000 salaried and management jobs this year. UAL said its unit cost, or the cost to fly a mainline seat a mile, increased 9. Excluding fuel and special items in both quarters, unit cost declined by 1.6. The company said it expects its unit cost, excluding fuel and one-time items, to decline in the third and fourth quarters as well. The preliminary results represent a considerable improvement, Standard & Poor's Corp. airline analyst Philip Baggaley said in a research note. He said United's unit costs remain materially higher than those at AMR's American Airlines. United expects to announce final second-quarter results Monday.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981841","date":"2006-07-25","texts":"Ask the next adults you see about inflation and interest rates. Get them to explain the workings of the Federal Open Market Committee and monetary policy. Aside from thinking you are asking strange questions, many may struggle to give you a response. Yet, it is not adults but children who are being encouraged to learn such facts by a U.S. institution not used to dealing with 11- year-olds -- the Federal Reserve. The country's central bank launched the Federal Reserve Kids Page www.federalreserve.gov kids to educate America's middle-schoolers about money and the economy -- and in less than four months it has been visited more than 70,000 times. Guided through a colorful site by a cartoon eagle wearing a top hat -- who appears sitting in the Fed's boardroom, outside the Capitol and with a pile of cash -- children can find out how many Federal Reserve districts there are, what the board of governors does and where it all began. The Web site was set up to promote economic education and financial literacy. This new Web page provides younger students with a basic approach to the complexities of the Federal Reserve that is both enjoyable and interesting, Mark W. Olson said at the time the site was launched, when he was on the board of governors. The Kids Page's basic explanations could help more than just children get a grip of what is going on in the country's central bank. It even comes with a beginner's guide to inflation -- and how it might affect the amount of fun the teenagers can afford on the weekend.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613553","date":"2006-07-29","texts":"After years of caution, companies are raising prices on a range of consumer products, from cereal and beer to washing machines and toilet paper. This past week, cereal-maker Kellogg Co. and brewer Anheuser-Busch Cos. both said prices on their products are heading up. Airlines, after a period of cutting back, are flying with full planes -- and charging more for seats. Cigarettes and tissues are getting more expensive, and soon cruises may too. Broadly, consumer prices are rising more quickly than at any time in the recent past, after years in which many consumer-good companies complained they had no ability to raise prices to cover costs or increase profit margins. On Friday, the government reported that its index of core personal consumption prices -- the gauge the Federal Reserve watches most closely -- rose at an annualized rate of 2.9 in the second quarter. That was the highest since 1994. Much of that rise has been driven by a surge in rents, but goods prices also now appear to be turning up. Meanwhile, real growth in gross domestic product -- a broad measure of economic activity, adjusted for inflation -- slowed sharply to a 2.5 seasonally adjusted annual rate. In the first quarter, it was a strong 5.6. Stocks rallied Friday in part on the hope that the GDP slowdown might persuade the Federal Reserve to pause at its Aug. 8 meeting in its campaign to raise short-term interest rates, which have gone to 5.25 from 1 in June 2004. The Dow Jones industrials surged 119.27 points, or 1.1, while the Nasdaq was up 1.9.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617415","date":"2006-08-06","texts":"We keep hearing We will have to work longer before retiring in order to shore up our nest eggs. But how long is longer New research indicates the numbers might not be as bad as you think. The benefits of working longer are obvious. If we postpone the day we walk away from the office, we will give ourselves a better chance of adequately funding a retirement that easily could last two or three decades. What's more, all the evidence argues for working longer. Going forward, people who retire in their early 60s will find that Social Security benefits will replace less of pre-retirement salaries because the age at which you will be eligible for full benefits is gradually rising to 67. Medicare premiums and taxes on Social Security are slated to climb. And the median 401k balance in households between the ages of 55 and 64 is only 60,000. But is longer ...forever A new study from the Center for Retirement Research at Boston College offers some answers.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617044","date":"2006-08-09","texts":"Investor interest in international funds has tempered slightly, but that hasn't altered the picture for international ETFs. Over the past year, these funds have become huge. Exchange-traded funds, index-tracking mutual funds which trade on an exchange like a stock, have been raking in cash -- and internationally oriented ETFs have grown even faster than their domestic counterparts. According to the Investment Company Institute, total ETF assets rose 38 to 335.1 billion in the past 12 months. In the same time, global ETFs nearly doubled to 82.8 billion. The funds reached their peak of 88.9 billion in April, before emerging markets slumped. Both mutual funds and ETFs are popular with investors seeking to put money abroad because differences of language, currency and reporting all make picking individual stocks tricky. Many financial advisers say investors should have some portion, often as much as 20, of their savings invested in foreign companies. Because foreign stocks tend to rise and fall at different times than U.S. stocks, overseas exposure can even out stock-market swings. Of course, the fact that international funds have posted strong returns over the past several years hasn't hurt their popularity either. Investors gravitate to markets that perform well, says J.D. Steinhilber, founder of AgileInvesting.com, an investment-advisory service. International markets became cheap relative to U.S. markets several years ago, he adds, although recent gains have closed the gap.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983997","date":"2006-08-09","texts":"A prominent journalist wrote in 1947 The basic power determinant of any country is its steel production, and what makes this a great nation above all is the fact that it can roll over 90 million tons of steel ingots a year, more than Great Britain, prewar Germany, Japan, France, and the Soviet Union combined. Well, that was then. In 2005 the United States ranked third in raw steel production. Its output 95 million metric tons was behind Japan's 113 million tons and less than a third of China's 349 million. So We are experiencing another competitiveness panic. These occur every 15 or 20 years. There's an outpouring of worried reports and articles. After Sputnik in 1957 -- the first artificial Earth satellite -- we were supposedly doomed to be overtaken by the Soviet Union. In the late 1970s and 1980s, it was Germany and then Japan. Lately, China and India have been the threats. Through it all, the United States has remained the dominant global economy, representing about one-fifth of the world's total output. If it means keeping the lead in every industry where we once led, we're doomed. As other countries develop, they create larger and better industries to meet their needs. Steel is an example. The United States doesn't need 350 million tons of steel. Textiles, consumer electronics and automobiles are other industries where we've lost ground to countries that have greater local needs, lower costs or better management. In many cases, U.S. multinational companies have relocated plants abroad to cut costs. Similarly, if competitiveness requires the United States to maintain its present share of the world economy, we are also probably doomed. We have recently maintained our share only because Europe and Japan have grown more slowly than the United States. But if China and India continue to grow rapidly, the U.S. share will shrink. The U.S. economy is now about 13 trillion China's is about 2.2 trillion, says economist Nicholas Lardy of the Institute for International Economics. China's growth is 9 to 10 percent annually the United States' is 3 to 4 percent. At those rates, China might pass the United States in 20 or 30 years, says Lardy. However, per capita incomes in China would still be much lower. The point Global economic growth -- something the United States encourages -- erodes America's dominance. Technology, talent and wealth spread everywhere. One possible competitiveness definition is the ability of countries to stay ahead in developing new industries. Economists once saw land, labor and capital as the basic inputs of any economy. But they've now added knowledge, as David Warsh -- former economics columnist for the Boston Globe -- shows in his engaging book Knowledge and the Wealth of Nations. It doesn't just matter how much countries invest or how many people they employ. What also matters is how smartly. Can they create gadgets and services that people want or that solve important problems","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613559","date":"2006-08-10","texts":"Continued concerns about the strength of the U.S. economy got the better of stocks yesterday, as sharp increases in Cisco Systems and Charles River Laboratories International were more than offset by Hospira's plunge and home builder Toll Brothers delivering an affirmation that conditions are cooling. The Dow Jones Industrial Average lost 97.41, or 0.87, to 11076.18. The Nasdaq Composite Index eased 0.57, or 0.03, to 2060.28, with its loss mitigated by Cisco's influence on the tech group. The Standard & Poor's 500 Index shed 5.53, or 0.43, to 1265.95. This was the fourth loss in a row for the three averages. We started off in pretty good shape but couldn't hang on as concerns about the economy hobbled us, said Alan Skrainka, chief market strategist with Edward Jones. It's clear that 17 rate hikes are taking a bite out of industry sectors. Still, Cisco Systems Nasdaq jumped 2.49, or 14, to 19.78, boosting its market value by more than 15 billion in its biggest percentage advance in more than four years. The maker of routers, switches and other apparatus that connect computers to the Internet late Tuesday reported strong fourth-quarter results, buoyed by solid orders. It projected revenue would increase 15 to 20 for fiscal 2007. The robust report lifted Cisco's rivals, as well. Juniper Networks Nasdaq rose 49 cents, or 3.8, to 13.41, Alcatel's American depositary receipts gained 22 cents, or 2, to 11.12, and Lucent Technologies, set to merge with Alcatel, advanced six cents, or 2.9, to 2.11.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615314","date":"2006-08-10","texts":"Luxury-home builder Toll Brothers Inc. said orders in its fiscal third quarter fell 47, with no signs of a rebound in sight. The Horsham, Pa., company said orders in the quarter ended July 31 totaled 1,443 units, compared with 2,746 units a year earlier. The decline was bigger than the 33 to 40 decrease Wall Street had expected and worse than its 32 order decline in the previous quarter. Chief Executive Robert Toll blamed an inventory glut and waning home-buyer confidence. It is the first downturn in the 40 years since we entered the business that was not precipitated by high interest rates, a weak economy, job losses or other macroeconomic factors, he said. Toll Brothers shares were down 1.70, or 6.4, to 24.88 in 4 p.m. composite trading on the New York Stock Exchange. Shares of other home builders also fell as the news appeared to spook investors across the sector. Toll Brothers said cancellations increased in a number of markets, like Orlando, Fla. Northern California Palm Springs, Calif. Las Vegas and Phoenix. The home builder said it has opted not to slash home prices in order to move sales.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613798","date":"2006-08-11","texts":"DON'T BE DAUNTED by the portentous title of the Court TV film On Native Soil The Documentary of the 911 Commission Aug. 21, 10 p.m. to midnight. With some exceptions, particularly its heavy-handed portrayals of some of the bereaved Susan Rescorla, widow of Rick Rescorla, the heroic Morgan Stanley vice president for security, would certainly have cause for complaint, the documentary succeeds in making sense out of an impossibly complicated network of themes. The main one -- the work of the 911 Commission -- has, it should be said, been cleaned up significantly. There are no pictures here of the political grandstanding that marred that event, nothing of the semihysterical accusations of former Sen. Bob Kerrey, among others. Though we do get a telling moment in which former Watergate prosecutor Richard Ben-Veniste, in full prosecutorial mode once more, refuses -- as though he were grilling an opponent before a jury -- to allow then National Security Adviser Condoleezza Rice to finish her answer. The bullying effort didn't prevent the witness from shutting Mr. Ben- Veniste up long enough to finish her answer -- one of her better public moments. It is wonderful, too, to hear former Transportation Secretary Norman Mineta declaiming against failures to strengthen airport security Norman Mineta, militant foe of any special scrutiny of, say, passengers whose appearance and background fit the known profile of potential hijackers -- i.e., young Middle Eastern males. Especially those with odd omissions in their credentials. There's little doubt that Secretary Mineta's high-minded refusal to allow such passengers to be inconvenienced by extra questioning raised fears of giving offense among airport security staffers -- and gave rise to inhibitions that played their part in certain peculiar, and deadly, oversights. One such traveler who arrived at an airport without a photo ID was, as one of the film's commentators acidly points out, nevertheless allowed to proceed. The day was 911, that passenger one of the hijackers. Two other hijackers set off metal detectors and were allowed to proceed, without further search. Interwoven with the story of the hearings are the memories of survivors and of the bereaved, some of them never before heard, all of them haunting.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614105","date":"2006-08-11","texts":"The Federal Reserve cited moderating growth when it paused in its rate-increase campaign this week, and concerns about the economic outlook seem to be growing among economists. This month's WSJ.com economic-forecasting survey showed projections for gross domestic product and employment growth were cut, while forecasts for consumer prices and oil prices were lifted. Economists continued to nudge higher their estimates of the probability of a recession over the next 12 months on average, they put the likelihood at 26, up from 20 in June and 15 in February. Economists, on average, forecast GDP growth at a 2.8 annual rate for the third quarter, the first time their forecast for that quarter has been under 3 since the economic-forecasting survey first asked about the period in November 2005. While their forecast is slightly above the 2.5 real GDP growth recorded in the second quarter, it is well below the 5.6 growth in the first quarter and average annual growth rate of 3.2 from 2003 to 2005. The economists forecast growth slowing to a 2.6 rate in the fourth quarter, and staying at that rate for the first half of 2007. GDP is the broadest measure of economic output. The economy has definitely slowed below trend, said Ethan Harris at Lehman Brothers. Second-quarter GDP is soft, employment numbers are coming in soft and the housing market is finally softening. Oil prices remained at the forefront of concerns, as 43 of economists -- 20 of the 46 who answered the question -- indicated higher costs presented the biggest risk to their GDP outlook. At the same time, the average year-end forecast for crude-oil prices was lifted to 69.50 a barrel. That is up by more than 4 since the last survey, conducted in June, but below the recent level of oil prices, which have traded in the mid-70s this week. The economists expect prices to drop to 65.25 by next June.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983211","date":"2006-08-13","texts":"The subtitle of Bubble Man symbolizes the many flaws in Peter Hartcher's jeremiad against Alan Greenspan and the dot-com hysteria that the former Federal Reserve chairman allegedly abetted. The Missing 7 Trillion Dollars refers to the losses that stockholders incurred in the three years after the late-1990s stock market bubble collapsed. Throughout the book, Hartcher argues that Greenspan is to blame for those losses -- until the epilogue, in which Hartcher acknowledges that in the three years after those three years, a market upswing recovered nine dollars out of every ten lost. As Gilda Radner's Emily Litella famously put it, Never mind. Bubble Man's thesis is simple and direct From 1996 on, Greenspan knew that equity markets were overheated and should have taken concerted action to cool them. In fact, he gave one speech in December of that year questioning the irrational exuberance of investors but never followed up to pop the bubble. Indeed, by 1999, Greenspan had become an out-and-out cheerleader of the so-called New Economy, in which labor productivity was rising so quickly that inflationary pressures were of minimal concern. As the steward of America's financial markets, he should have known better, Hartcher argues, but in the face of jawboning from both Congress and the White House, Greenspan buckled under and took the easy way out. Hartcher's evidence for most of these assertions is a pretty thin gruel. In the transcript of a September 1996 meeting of the Federal Open Market Committee, Greenspan says that he thought stocks were experiencing a bubble market. Hartcher -- the former Washington bureau chief of the Australian Financial Review, now political editor of the Sydney Morning Herald -- takes this as ironclad evidence that Greenspan knew that something was rotten in the state of Wall Street but chose to do nothing. The problem is that Bubble Man assumes that, at the moment Greenspan uttered that sentence, his opinion was both fixed and true. Neither assertion holds up. Hartcher fails to demonstrate that Greenspan ever repeated his comment at any later Fed meeting. The record suggests that Greenspan was worried about asset-price inflation -- that is, skyrocketing stock and housing prices. Furthermore, he was not entirely sure he should be worried about it. As the 1990s progressed, he continually sought out diverse views on this point. The fact that his infamous caution against irrational exuberance was framed as a question symbolizes the extent of his uncertainty. As it turns out, Greenspan was right to be unsure. For all the talk about stock market bubbles, the returns on tech stocks in the decade since 1996 have proven way higher than the historical average. Price-to-earnings ratios are now higher than the historical average, albeit significantly lower than they were at the peak of the dot-com era. When one takes a step back, Hartcher's case falls apart completely. To assert that Greenspan's Fed was the primary regulatory authority responsible for the dot-com bubble requires the reader to swallow an awful lot. For one thing, you need to accept that other government agencies -- say, the Securities and Exchange Commission or the Treasury Department -- should be completely exonerated for their roles in the mishap for another, you need to accept that the Fed would somehow be able to deflate stock prices without harming the real economy.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616145","date":"2006-08-14","texts":"U.S. INVESTORS STAYED on an even keel after last week's foiled terrorist attack. But they still face an imminent threat to their portfolios a slowing economy at home and increased interest rates abroad. In such an environment, the dollar often suffers. When that happens, strategists and money managers tend to counsel clients to favor shares of large companies. The idea is that because these companies tend to be multinationals that earn large chunks of revenue from operations outside the U.S., they are better positioned to weather weakness at home. Also, increased overseas interest rates support foreign currencies, making earnings abroad worth more when the income is repatriated into weaker dollars. Trouble is, the recent track record for that advice isn't what it used to be. In the last 14 years, there's really been no advantage to moving to large-cap stocks during times of dollar weakness, said Mike Thompson, research director at Thomson Financial, referring to companies with the biggest stock-market values. The research firm compared the performance of the Standard & Poor's 500-stock index, made up mostly of big multinationals, with various European currencies. Sure enough, those big stocks performed better from 1976 to 1992, a time when the dollar was generally weak. That seemed logical The stocks moved in the opposite direction of the dollar.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614052","date":"2006-08-16","texts":"A TEST OF HEDGE-FUND resilience is playing out in Japan. A fund run by U.S.-based Whitney & Co., one of the biggest in the Japanese market, has lost nearly a quarter of its value so far this year, people familiar with the fund say. These people say Whitney New Japan Fund, which had assets of 1.3 billion at the end of 2005, has reported to investors declines of about 23 through July. Another fund, Whitney Japan Select Fund, with assets of about 200 million at the end of 2005, has dropped about 29 in the period, the people say. Whitney declined to comment. Whitney's predicament reflects the pain many hedge funds are experiencing amid global market volatility. The pain has been acute in Asian markets, where hedge funds in the region last year raised billions in fresh capital from investors. Whitney's struggles mirror those of dozens of Tokyo-based hedge funds.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617429","date":"2006-08-17","texts":"CORPORATIONS are borrowing money at the fastest clip in several years amid a wave of leveraged buyouts and acquisitions, rising capital expenditures and pressure from shareholders for larger dividends and share buybacks. The debt is expected to keep rising in the next year -- especially if the Federal Reserve holds off on more interest-rate increases -- as companies raise cash to repurchase more shares and to make higher quarterly and special-dividend payouts. For now, economists say the balance sheets of most companies are strong enough to handle the added borrowing. In fact, the moves could help the stock market deal with an expected slowdown in profit gains later this year as the economy contracts. That is because both higher dividends, and buybacks that raise earnings per share by reducing the number of outstanding shares, could help offset any decline in profit growth. Nonfinancial companies saw their debt rise 6.3 in the 12 months that ended in the first quarter to 5.5 trillion. That is the fastest yearly growth for debt in five years. In 2005, debt increased at an average 12-month pace of 5.1, while in 2004 debt growth was 2.7, according to John Lonski, an economist at Moody's Investors Service. Debt is expected to have increased about 7 in the second quarter. The rosy debt scenario is predicated on an economy that doesn't weaken significantly, and on interest rates not climbing much higher, both of which would make the increased debts more of a burden. It all comes at a time when individuals and the U.S. government are dealing with their own heavy borrowing, making it more important for U.S. companies to successfully handle their added debt.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982150","date":"2006-08-17","texts":"Wall Street emerged from the summer doldrums Wednesday as a second straight day of tame inflation data sent stocks sharply higher and pushed the Dow Jones industrial average to its highest level in three months. Falling crude futures, which slid below 72 per barrel, also fueled the gains. The Dow rose 96.86, or 0.9 percent, to 11,327.12, its best close since May 16. The Dow has gone up nearly 229 points in two days. The Standard & Poor's 500-stock index added 9.85, or 0.8 percent, to 1295.43, its highest level since May 11, and the Nasdaq composite index gained 34.53, or 1.6 percent, to 2149.54 for its best close since July 6. The consumer price index, which measures price increases at the retail level, rose 0.4 percent in July, slightly higher than June's 0.2 percent increase. But with food and fuel prices removed, core CPI rose just 0.2 percent, less than the 0.3 percent economists expected. Combined with Tuesday's producer price index, which showed a decline in core wholesale prices, the data point to a drop in inflation pressures. That would allow the Fed to stop raising rates, which would otherwise threaten economic growth and cramp corporate profits. The housing market showed more signs of slowing, which could also motivate the Fed to maintain its position on rates. Housing starts fell to an annualized rate of 1.795 million in July, down from 1.85 million in June. The number of building permits issued likewise fell.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842614064","date":"2006-08-19","texts":"The dollar was little changed late in New York Friday after a day of choppy trading triggered by a weaker-than-expected consumer sentiment survey early in the session. The University of Michigan's mid-August report, which showed a steep drop in its consumer-expectations index together with a sharp rise in inflationary expectations, sent the dollar tumbling. Yet the dollar managed to recoup much of its losses against major currencies as traders used the report as an excuse to trade through an otherwise data-light August Friday. Choppy movements with little lasting effect may be par for the dollar's course next week, analysts said, with no U.S. data scheduled for release until Wednesday and the August vacation season in full swing. Late in New York, the euro was at 1.2830, little changed from 1.2829 late Thursday. The dollar was at 115.78 yen, down from 115.94 yen, while the euro was at 148.57 yen, off from 148.75 yen. The dollar was trading at 1.2327 Swiss francs, compared with 1.2326 francs, while sterling was fetching 1.8817, down from 1.8847.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616199","date":"2006-08-19","texts":"Ahead of its initial public offering two years ago, Google Inc. tackled queries on wiretapping, an interview published during its quiet period, how it carried out its unprecedented share auction and other prickly issues raised by regulators ahead of its blockbuster IPO. The press-shy company also agreed to disclose America Online as a big part of its distribution network and defended its practice of awarding stock options before going public, according to documents reviewed by MarketWatch, an online financial-news site owned by Dow Jones & Co. Inc., publisher of The Wall Street Journal. Overall, the documents obtained through the Freedom of Information Act revealed that the most closely watched IPO of its generation drew a careful review from Securities and Exchange Commission lawyers down to the wire before Google made its debut on Aug. 19, 2004, at 85 a share, raising 1.66 billion. Google absolutely came under more scrutiny than a lot of IPOs, said Frederick D. Lipman, a partner at securities-law firm Blank Rome LLP and an expert on IPOs. It was a high-profile company, and the SEC was aware of that. Since the IPO, the stock price has quadrupled, and Google continues to draw praise from Wall Street to Main Street. In 4 p.m. Nasdaq Stock Market composite trading Friday, Google fell 2.44, or 0.6, to 383.36 a share. The stock traded at a 52-week high of 475.11 in January and at a 52-week low of 273.35 last August.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615439","date":"2006-08-21","texts":"BEIJING -- After its second interest-rate increase in four months, China's central bank may be running out of room to use rates as a tool to choke off excess investment, economists say. That is because the higher Chinese deposit rates climb, the more attractive it becomes for speculators to take large positions in the yuan in hopes that China's currency will strengthen against the dollar. Such risks have increased now that the U.S. Federal Reserve has taken a pause after two years of increasing rates, making it less attractive to hold dollars. The upshot China's leaders might be forced to rely even more heavily on administrative methods -- such as curbs on the supply of new land for construction -- to slow investment and head off overheating, the economists say. With this rate hike and the pause in U.S. monetary policy tightening . . . there is now less room for further upward moves in Chinese interest rates, Standard & Poor's said after the latest increase was announced late Friday. The move by the People's Bank of China, which became effective Saturday, raised benchmark one-year bank-lending rates by 0.27 percentage point to 6.12. The U.S. Fed's target for short-term interest rates is 5.25. The Chinese central bank also increased rates paid on one-year deposits by the same magnitude, to 2.52.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614618","date":"2006-08-23","texts":"SmartMoney LAST WEEK'S gentle summer rally was helped along by a cease-fire in Lebanon, a modest drop in oil prices, and especially a growing consensus that the Federal Reserve may have indeed stopped raising interest rates, as opposed to pausing in its pursuit of higher rates. Still, this is no time for complacency. Interest-rate cycles usually last years, and don't change overnight. Even so, it's becoming apparent that we're in the midst of a historic shift from a long period of rising short-term interest rates to one of flat to declining rates, which will likely have an impact on the fixed-income portion of your portfolio. Lately, it's been pretty easy to be a fixed-income investor. All you had to do was put cash in a money-market fund and collect ever-rising yields, while putting your bond allocation into one- to three-year certificates of deposit. With the yield curve nearly flat, and even inverted at times, you could capture maximum returns of close to 5 with minimal risk. True, this approach wasn't earning double-digit returns, but you sure didn't lose any sleep. It also turns out this was a good strategy this year, one of those relatively rare periods when cash outperformed longer-term bonds. So far in 2006, cash equivalents earned 2.9, while 10-year Treasurys lost 1.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614718","date":"2006-08-23","texts":"HERNDON, Va. -- For years, real-estate brokers and home builders promised that the soaring property market eventually would glide to a soft landing. These optimists predicted that home prices, which had more than doubled in parts of the country between 2000 and 2005, would continue to rise, but at a more normal pace of 5 or 6 a year. It isn't working out that way. The rapid deterioration of the market over the past 12 months has caught many homeowners and builders off guard. Some are being forced to cut prices far below what their homes could have fetched a year ago. It's too early to say how hard the landing will be, but at a minimum it will be bumpy for many people who need to sell homes. And the economy as a whole, buoyed in recent years by the housing frenzy, could suffer. The pain that homeowners and home builders are now feeling follows a raging national house party. As Americans soured on the stock market after the tech bubble burst in 2000, they poured money into real estate, spurred on by the lowest interest rates in four decades and looser lending standards. Surging demand created home shortages in California, Florida and the Northeast. Over the five years ending Dec. 31, average U.S. home prices jumped by 58, according to a federal housing index. But mortgage rates began rising and surging inventories of homes for sale finally caught up with demand. Though economists had been predicting a slowdown in housing for years, many homeowners and builders were surprised by how fast the market changed. It's just like somebody flipped a switch, says Lynn Gardner, a real-estate auctioneer who works in Northern Virginia. It would be difficult to characterize the position of home builders as other than in a hard landing, says Robert Toll, chief executive of luxury home builder Toll Brothers Inc., which reported yesterday that net income fell 19 in the third quarter ended July 31. See related article on page A2.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984421","date":"2006-08-26","texts":"Government policymakers should work to make sure the benefits of economic globalization are widely enjoyed to maintain political support for free trade, Federal Reserve Chairman Ben S. Bernanke said today. Political and technological changes are likely to keep spurring global economic integration -- the growing exchange of goods, capital, workers and ideas around the world, he said in a speech here. That trend creates the potential to elevate living standards and lower poverty, but also the likelihood of resistance by groups or nations that feel threatened by change, Bernanke told an international gathering of central bankers, analysts and academics. The challenge for policymakers is to ensure that the benefits of global economic integration are sufficiently widely shared, Bernanke said. The effort is well worth making, as the potential benefits of increased global economic integration are large indeed. He did not propose specific policies to counter efforts to restrict trade, but suggested as one general example the need to retrain people who have lost jobs because of globalization.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613949","date":"2006-08-28","texts":"Arnold Schwarzenegger is following the wrong script. After taking over as governor in 2003, he was expected to vanquish business-as- usual politicians in Sacramento -- and pull California from the brink of fiscal ruin. Instead, he has decided to put his own political future ahead of the economic survival of his beloved Golden State. How else to interpret his recent move to join ranks with his opponents in Sacramento to put a pork-heavy 37 billion bond infrastructure proposal on the November ballot Mr. Schwarzenegger's move officially marks the end of his grand plans to reform Sacramento, earning him kudos from many California Democrats. Sen. Don Perata, the most influential Democrat in the state legislature, and Senate Assembly Speaker Fabian Nunez have praised Mr. Schwarzenegger's leadership and pledged to campaign with him this fall to promote the initiative. Making joint appearances with prominent Democrats while he is campaigning for re-election will help cement Mr. Schwarzenegger's image as a political moderate, something he has been trying hard to cultivate in this bluest of blue states since last year. That's when the state's public unions accused him of right-wing partisanship, and defeated the bold reform initiatives he put on the ballot to curtail their influence on state government and politics. The real issue, however, is what this bond measure will do to California. Few doubt the need for California to invest in its crumbling infrastructure. But this is an infrastructure bond in name only. The four big-ticket items in the bond -- which is two times bigger than the biggest bond in the state's history -- are 2.6 billion for housing, 10.4 billion for K-12 schools and universities, 3.1 billion for levee repairs and 19.2 billion for transportation. The housing bond is simply welfare masquerading as a capital project. A bulk of its money won't fund general infrastructure -- an acceptable use of general-obligation bonds like these -- but such things as cheap multifamily dwellings for low-income families, and down-payment assistance for first-time home buyers. The education bond is equally misguided, given that 40 of the state's 94 billion general-fund revenues are already constitutionally earmarked for education. Moreover, California voters approved a total of 25 billion for school-construction bonds in 2002 and 2004 to reduce overcrowding. If there is still not enough money for new schools, it is not because of lack of state spending, but abject waste by individual districts. If anything, this handout will encourage more waste by undercutting districts' need to explore the kind of public- private partnership responsible for Inderkum High School in Sacramento being completed a month early and 2.5 million under budget. In this case, a private developer built the school and district authorities used their public dollars to lease the facility from him.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616080","date":"2006-08-28","texts":"JACKSON HOLE, Wyo. -- Globalization, the conventional wisdom goes, has downsides It hurts the wages of the lesser skilled. It leads to large and possibly dangerous trade imbalances. It can threaten economic stability through financial-market volatility. But academics, investment bankers and government officials at the Federal Reserve's annual symposium here heard a much more upbeat vision of a globally integrated world. For example, it is usually said that outsourcing work from a high-wage country, such as the U.S., to lower-wage ones -- also dubbed offshoring -- makes workers in the richer country's affected industries worse off, but the country as a whole better off, because consumers enjoy lower prices on the products made overseas. But Gene Grossman and Esteban Rossi-Hansberg of Princeton University argued that offshoring can lead to higher wages for unskilled U.S. workers. Things may be better than they would have been had there been no offshoring, Mr. Grossman said. When a company offshores some work, its remaining workers become more productive. It can thus expand, hire more workers -- perhaps even some of those whose work was offshored -- to do jobs that can't be offshored, and it can pay at least some of them more. The proof is that wages of unskilled, blue-collar workers didn't do worse than they actually did between 1997 and 2004, given two strong, offsetting economic forces the surge in productivity, or output per hour of work, which should have lifted their wages, and the decline in prices of imports, which should have pushed down their wages by lowering the prices of the competing goods these workers made. Anthony Venables of the London School of Economics argued that when an industry in a rich country starts trading with a poor country, the wages in the rich country may actually pull further away from those in the poor country, instead of converging down to the lower level as standard economic theory predicts. The reason The industry in the rich country may rely on many local inputs that its competitors in a new foreign market don't have -- access to specialized workers, for example, or daily face-to-face contact with competitors and customers.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615220","date":"2006-08-30","texts":"U.S. Treasury prices rebounded late yesterday into positive territory after the release of the minutes from the Federal Reserve's last meeting proved less severe than expected. Market participants had been braced for tougher talk on inflation in the minutes, especially after one member of the policy-setting Federal Open Market Committee opposed the decision to pause at the Aug. 8 meeting. Instead, market participants interpreted the Fed minutes as reiterating what they already knew -- namely that the central bank would continue to watch inflation but was comfortable leaving rates unchanged to better gauge the impact of its policy on the economy. This encouraged investors to move in and buy Treasurys after they had spent much of session earlier selling government securities. The market had prepared itself that the statement would be much more negative with regard to inflation and possible future rate hikes, said Gary Pollack, managing director of Deutsche Bank Private Wealth Management in New York.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616010","date":"2006-08-31","texts":"Stocks edged up, as Micros Systems soared and semiconductor shares such as Lam Research were strong as a group. But Costco Wholesale dropped on an earnings miss, and ADC Telecommunications slid on a sales shortfall. The Dow Jones Industrial Average rose 12.97 points to 11382.91, reaching a three-month high. The Nasdaq Composite Index advanced 13.43 to 2185.73, a two-month high after a run of five straight gains. The Standard & Poor's 500-stock index shed 0.01 to 1304.27, dropping from the three-month high set Tuesday. We had a consoling gross domestic product report that was revised upward, which was expected, said Alan Gayle, senior investment strategist at Trusco Capital Management. That and further declines in bond yields helped the market hang on to its gains. Micros Systems Nasdaq leapt 7.95, or 21, to 46.41. The maker of hospitality-industry software offered strong fiscal 2007 guidance on strength in both hotel and international markets, and it posted better-than-expected fourth-quarter results, allaying concerns that a slowdown in the U.S. restaurant business might hurt its operations. Investors remained interested in technology and made semiconductor stocks a focus. Lam Research Nasdaq rose 2.95, or 7.3, to 43.12 National Semiconductor gained 1.10, or 4.6, to 24.80 and FormFactor Nasdaq advanced 3.12, or 6.7, to 49.45.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614089","date":"2006-09-01","texts":"Today's Market Forecast Data Deluge If it is possible for one to curse under his breath and hold it at the same time, that is what investors are doing today. They are cursing because a slew of big economic reports will keep them chained to their desks on the Friday before the Labor Day holiday. They are anxious because today's news will likely set the tone for trading for at least the next month. On the docket The Labor Department's August employment report, the University of Michigan's final read on consumer sentiment in August, the Institute for Supply Management's report on August manufacturing activity, the Commerce Department's July construction-spending report and August sales reports from auto companies.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984667","date":"2006-09-06","texts":"For reasons that aren't exactly clear, the supposedly smart people with all the money -- pension funds, university endowments and wealthy investors -- have decided it no longer makes sense for them to look for undervalued public companies, or promising new companies looking to go public. Instead, they prefer to put their money into private equity funds, which charge outrageous fees to look for undervalued public companies, or promising new companies looking to go public, and buy them up at a price 20 percent higher than the current stock-market price. Of course, buying whole companies can get expensive, especially when you're talking about an energy giant such as Morgan Kinder or HCA, the country's largest hospital chain, just to give two recent examples. So to finance the deals, private equity managers have their newly acquired company issue lots of junk bonds, at high interest rates. These bonds are then bought by hedge funds, which also charge outrageous fees and also raise most of their money from pension funds, university endowments and wealthy individuals. In a few instances, private equity funds have also begun to raise capital by issuing common stock, which also tends to be snatched up by the very same hedge funds, pension funds, university endowments and wealthy individuals. And to top things off, the new owners invariably offer fat new pay packages to the managers of the company they've just acquired - - in most cases, the same managers who were running the company when it was public. The idea is to give them even greater incentive to maximize the value of the company, so it can be taken public again. Now, if this sounds to you like a giant, circular Ponzi scheme, it's only because it is. As far as I can figure out, the winners will be the fund managers and their highly paid enablers, the investment bankers. And let's not forget the corporate managers, who have the chance to become fabulously wealthy if they are successful in stealing the company from public shareholders to whom they presumably owed a fiduciary duty, and later selling it back to public shareholders at a higher price.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982071","date":"2006-09-07","texts":"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 401k-type program for more than 3.6 million government employees and retirees, officials announced yesterday. 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. 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. 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. 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.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985019","date":"2006-09-14","texts":"This suburb, contiguous with Chicago's western edge, is 88 percent white. A large majority of the customers of the Wal-Mart that sits here, less than a block outside Chicago, are from the city, and more than 90 percent of the store's customers are African American. One of whom, a woman pushing a shopping cart with a stoical 3- year-old along for the ride, has a chip on her shoulder about the size of this 141,000-square-foot Wal-Mart. She applied for a job when the store opened in January and was turned down because, she said, the person doing the hiring had an attitude. So why is the woman shopping here anyway She looks at the questioner as though he is dimwitted and directs his attention to the low prices of the DVDs on the rack next to her. Sensibly, she compartmentalizes her moods and her money. Besides, she should not brood. She had lots of company in not being hired More than 25,000 people applied for the 325 openings. Which vexes liberals such as John Kerry. He and his helpmeet last shopped at Wal-Mart when In 2004 he tested what has become one of the Democrats' 2006 themes Wal-Mart is, he said, disgraceful and symbolic of what's wrong with America. By now Democrats have succeeded, to their embarrassment if they are susceptible to that, in making the basic numbers familiar The median household income of Wal-Mart shoppers is under 40,000. Wal-Mart, the most prodigious job-creator in the history of the private sector in this galaxy, has almost as many employees 1.3 million as the U.S. military has uniformed personnel. A McKinsey company study concluded that Wal-Mart accounted for 13 percent of the nation's productivity gains in the second half of the 1990s, which probably made Wal-Mart about as important as the Federal Reserve in holding down inflation. By lowering consumer prices, Wal- Mart costs about 50 retail jobs among competitors for every 100 jobs Wal-Mart creates. Wal-Mart and its effects save shoppers more than 200 billion a year, dwarfing such government programs as food stamps 28.6 billion and the earned-income tax credit 34.6 billion.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613568","date":"2006-09-21","texts":"Stocks rose sharply, with Oracle's market value jumping nearly 10 billion, Circuit City Stores' shares edging down after a strong start, Morgan Stanley moving up on a double-digit rise in earnings, CarMax reaching a record and Darden Restaurants advancing, aided by its Olive Garden eateries. The Dow Jones Industrial Average rose 72.28 points, or 0.63, to 11613.19 -- within 109.79 points, or 1, of its all-time closing high of 11722.98, as 25 of its 30 component stocks rose. The Nasdaq Composite Index gained 30.52, or 1.37, to 2252.89, up eight of the past nine sessions. The Standard & Poor's 500-stock index edged up 6.87, or 0.52, to 1325.18, after touching a five-and-a-half-year high. The momentum placed the indexes at fresh four-month highs. The market got off to a good start on strong earnings and lower oil prices, said Alan Gayle, senior investment strategist at Trusco Capital Management. And the Federal Reserve's decision to leave interest rates unchanged certainly wasn't bad news. Oracle Nasdaq jumped 1.80, or 11, to 17.93, a five-year high, adding 9.4 billion to its market capitalization. The gain helped return the Nasdaq 100 Index of nonfinancial stocks to positive territory for 2006, after being down for four months. Oracle's fiscal first-quarter earnings rose 29, besting Wall Street estimates. Revenue climbed 30. Software stocks rose on the news. Citrix Systems moved up 2.21, or 6.5, to 36.28 Tibco Software gained 61 cents, or 7, to 9.31 and Red Hat advanced 1.07, or 4.5, to 25.07, all on the Nasdaq.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984617","date":"2006-09-28","texts":"Concerned that Congress is moving toward providing a 2.2 percent pay raise for the military next year, a leading veterans' group said that with troops fighting in Iraq and Afghanistan, this is not the time to skimp on a raise. The House approved a fiscal 2007 defense appropriations bill late Tuesday that would raise military pay by 2.2 percent, effective in January. Senate negotiators have signed off on the raise, but the full Senate has not voted on the spending bill. More than just the military raise may be at stake because the military raise usually spills over into the civil service. Congress in most recent years has adopted a pay parity policy that calls for equal raises for the two workforces. The Military Officers Association of America, known as MOAA, yesterday urged Congress to approve a 2.7 percent across-the-board raise for the armed forces. As a nation, we ought to do better for our military than we are about to do, said Norb Ryan Jr., president of MOAA and a retired vice admiral. MOAA and other military groups made some progress toward a 2.7 percent military raise earlier this year when the House approved it as part of a fiscal 2007 authorization bill for defense programs. The Senate version, however, stuck with the White House's recommendation for a 2.2 percent raise.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614027","date":"2006-09-29","texts":"THE DOW JONES Industrial Average bypassed its high within minutes of the market open, then again near the close, but trimmed its gains to finish shy of the record. The indicator, which tracks 30 blue-chip companies, posted an intraday high of 11728.46, up 5.48 points from its January 2000 peak. But on the day, the Dow industrials finished up 29.21 points, or 0.29, at 11718.45, up 9.3 on the year. Among the Dow average's strongest components were Caterpillar and General Motors. GM rose after Kirk Kerkorian's Tracinda, which owns 9.9 of GM's shares outstanding, said it was considering purchasing as many as 12 million more shares of the auto maker. Tracinda also said it supports an alliance between GM and Renault-Nissan. However, the three names with the biggest influence weightings in the price-weighted Dow industrial average -- International Business Machines, Altria Group and Boeing -- all finished the day off less than 0.5. Even modest gains at one or two of those companies would have sent the Dow industrial average over its record, which now stands just 4.53 points away, at 11722.98. The Dow is teasing everybody right now, said Kenneth Tower, chief market strategist at the online-brokerage firm CyberTrader.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615542","date":"2006-10-02","texts":"Following the selloff that hit global markets in May, international stock mutual funds -- especially those focused on emerging markets -- bounced back in the third quarter, even if investors weren't rewarded as handsomely as in previous periods. With the exception of Japanese-stock funds, international mutual funds were in the black in the period, faring well against their U.S. counterparts. International large-cap value funds, for example, rose 3.2 in the quarter through Sept. 26 versus a 5.3 rise for the corresponding U.S. category, according to preliminary data from fund researcher Lipper Inc. Diversified emerging-market funds were standouts, up 4.4 on average. The big surprise is how emerging markets, especially Asian and Latin America, came back strongly this quarter. It stands in the face of the expected U.S. economic slowdown, said Arijit Dutta, analyst at investment researcher Morningstar Inc. Mutual funds invested in Asia outside Japan gained 5.3 in the quarter through Sept. 26, according to preliminary data from Lipper. Other notables European region funds, up 4.2 China region funds, adding 3.8 Latin American funds, up 3.5. Japan funds parted from the group, shedding 4.5. Emerging markets bounced back from a sharp correction in May after the U.S. campaign of interest-rate increases was put on hold, Mr. Dutta said.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616549","date":"2006-10-02","texts":"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. 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. 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. 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. 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.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616957","date":"2006-10-02","texts":"WENTWORTH, N.C. -- Many Democratic politicians, shrugging off lessons of recent political history, see this as the year when the widening gap between the rich and the rest of America will help win them votes. As a group of his constituents munched on pot roast and buttered green beans in a school cafeteria here, Rep. Brad Miller -- a two-term Democrat seeking re-election in a district spanning rural, suburban and urban communities -- launched into what he believes is a winning pitch. People who are doing well are doing very well, he said into a handheld microphone, his tie loosened as he walked among the tables. The rich are doing just fine. But wages aren't budging for the majority of Americans. The congressman's words resonate here. Although some voters are prosperous suburbanites, others in this district along the Virginia border have lost textile-mill jobs. They've been forced into lower- paying positions with fewer benefits and scant prospect for raises. Pamela Tucker, a mental-health worker from nearby Reidsville, says she can barely keep up. Things are worse. The taxes, the price of health care, gas, she says. People don't have the means. Other Democrats -- including Michigan Sen. Debbie Stabenow in a tough re-election fight and Claire McCaskill in her challenge to Missouri incumbent Republican Sen. Jim Talent -- are sounding similar themes The U.S. economy is growing, but the poor and especially the middle class aren't benefiting. The rich are. And President George W. Bush and a Republican Congress are to blame, they argue.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614265","date":"2006-10-07","texts":"Gary C. Comer 1927-2006, Lands' End Founder GARY C. COMER parlayed a love of sailing into Lands' End, one of the world's largest mail-order clothing businesses. With its misplaced apostrophe that his then-fledgling company couldn't afford to fix, Lands' End made Mr. Comer a billionaire. Then he used his fortune to combat global warming, help children who shared his impoverished roots on Chicago's South Side and oppose President Bush over the war in Iraq. He died Wednesday at age 78. The son of a railroad conductor, Mr. Comer skipped college and worked as an advertising copy writer for Young & Rubicam -- now part of London-based WPP Group PLC -- for 10 years before starting a mail- order business in 1962, in an office above a smoky all-night Chicago saloon. Drawing on his expertise in sailboat racing-he had won a bronze medal at the Pan American Games in 1959 -- Mr. Comer first sold sailing equipment through magazine ads. When he and five partners later incorporated as Lands' End Yacht Stores, he picked a name that had a romantic ring to it and conjured visions of a point to depart from on a perilous voyage, Mr. Comer wrote in a 1988 essay for the company's 25th-anniversary yearbook. About a decade after mailing its first catalog in 1965, Lands' End broadened its focus to classic clothing.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981757","date":"2006-10-09","texts":"Correction The Oct. 9 Federal Diary column gave an incorrect Internet address for Understanding Government. The group's Web site is httpwww.understandinggov.org. Published 10142006 As federal employees understand all too well, it's sometimes hard to sort out myth and fact in Washington. Last week, the White House budget office posted a paper on one of the Bush administration's Web sites www.results.gov that, from its perspective, tried to set the record straight on the president's management agenda for the government. That agenda has been controversial since it began five years ago -- in part because it promotes contracting out federal work and more rigorous approaches to measuring the performance of employees and programs. It's safe to predict that a number of the facts in this new paper will be disputed by federal unions and in some quarters of Congress. Federal employees also will bring their workplace experiences to bear when assessing the Office of Management and Budget's paper, which pulls together the administration's explanations on contentious sections of the agenda. Among the paper's points","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985368","date":"2006-10-10","texts":"He put a beautiful Lady Liberty and a majestic flaming torch on the silver and gold coins, and he named them Liberty Dollars. On his Web site, www.libertydollar.org, he said It is fun to use REAL money. Liberty Dollars are a proven and profitable currency that protects and grows the purchasing power of your money True story, phony money. So says the U.S. Mint, which would like to remind Liberty Dollar users that since the United States already has its own currency, the only thing Liberty Dollars buy in these parts is a jail term. Liberty Dollars were coined by von NotHaus and an Evansville, Ind.-based group called Norfed, which stands for sort of the National Organization for the Repeal of the Federal Reserve Act and the Internal Revenue Code. In the late 1990s, the group began hawking its money as a hedge against inflation, and as a way to compete with the Fed. Von NotHaus makes the pitch online, using a raft of statistics and graphs that he says show the greenback is well nigh worthless. Norfed Executive Director Michael Johnson says the group isn't aiming to overthrow the American monetary system. We're not locking horns with the Fed. I mean, that's crazy, he said. Norfed simply wants to offer a solution to the Federal Reserve Note, a.k.a. U.S. dollars. Norfed struck the first gold- and silver-backed coins -- which, to avoid charges of making its own money it calls rounds -- in 1998 at its private mint in Idaho. Today the group claims to have more than 20 million in Liberty coins and notes in circulation, and about 2,500 merchants who accept Liberty Dollars for goods and services from doughnuts to tattoos.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615866","date":"2006-10-17","texts":"U.S. Treasury prices rose moderately as investors shrugged off comments by Federal Reserve officials that did little to change the prevailing view of a central bank on hold for the rest of the year. Data on New York state manufacturing, which showed stronger-than- expected activity, also left little mark on Treasurys. I think everybody now understands where the Fed stands, said Rick Klingman, managing director of U.S. rates trading for ABN Amro in New York, referring to the Fed's focus on inflation risk. While we may get Fed speakers this week, I don't think that will shake the market up, he said. Federal Reserve Bank of St. Louis President William Poole said the inflation rate is too high, but my best guess is that inflation is likely to be tapering down. He added that the inflation news has been slightly more positive of late. Lower energy prices are likely aiding this improvement, he said. San Francisco Fed President Janet Yellen said it makes sense to keep rates on hold for a time as the 17 increases work their way through the economy.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614790","date":"2006-10-18","texts":"The Chicago Mercantile Exchange Holdings Inc. and the Chicago Board of Trade agreed to join forces to form the world's largest financial market, one that will dwarf exchanges in the U.S. and Europe -- even the New York Stock Exchange. The Chicago Merc announced plans to buy the smaller CBOT Holdings Inc. for about 8 billion. As the biggest deal yet in a global consolidation of the financial-exchange industry, the plan sets aside more than a century of crosstown rivalry. The agreement reflects the rapid growth in the investment industry's hottest sector derivatives, or contracts whose value is derived from the movements in other financial instruments such as stocks and bonds. The linkup will make trading in many such derivatives a simpler matter, while also raising concerns that the increased power of the combined exchanges could lead to higher fees for traders. Having grown far beyond their roots in putting together buyers and sellers of eggs, butter and corn, the Chicago exchanges, together, will trade some nine million futures contracts a day. Futures contracts give investors the right to buy or sell something later at a set price. Thus, they are used to hedge risk, allowing investors to enjoy smoother growth of their assets without the bumps that come with simpler investments on, say, a portfolio of stocks. Chicago used to be known as the hog butcher of the world. The city now will be known as the world's risk manager, said John F. Sandner, a Chicago Merc board member.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982439","date":"2006-10-19","texts":"The Dow Jones industrial average briefly swept past 12,000 for the first time Wednesday, extending its march into record territory but falling short of the benchmark close. The index surpassed the milestone shortly after trading began, rising as high as 12,049.51, before pulling back as the market's initial wave of enthusiasm dissipated and investors cashed in some gains. The Dow closed Wednesday at 11,992.68, up 42.66, or 0.36 percent. The previous closing high of 11,980.60 was set Monday. The Standard & Poor's 500-stock index rose 1.91, or 0.14 percent, to 1365.96. The Nasdaq composite index fell 7.80, or 0.33 percent, to 2337.15. It took the Dow 712 years to make the trip from 11,000, having been pummeled during that time by the dot-com bust, recession and the Sept. 11, 2001, terrorist attacks. In the spring of 1999, during the Internet boom, it took the Dow 24 days to sprint to 11,000 from 10,000. The Dow's quick move past 12,000 Wednesday came after a Labor Department report indicated that consumer price pressures are leveling off and as third-quarter earnings reports from major companies bolstered investors' confidence.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985617","date":"2006-10-19","texts":"The editors of National Journal, a respected and independent Washington publication, had the smart idea of inviting 11 distinguished economists to fill out a score card on the economic performance of the Republican Congress. The grades are published in the latest issue of the weekly magazine. The economists were asked to score Congress in seven categories, using letter grades. The composite score of four categories was a C, meaning average by historical standards. Two got a B-minus and one a D. Not exactly a huge vote of confidence. Who were these 11 judges National Journal describes them as prominent 'nonaligned' economists -- people who, by virtue of their work and long careers outside of politics, have earned reputations for delivering unvarnished analysis of economic policy. Their individual credentials are impressive. Ethan Harris, Maury Harris, Allen Sinai, and David Wyss are well known on Wall Street, the editors write. Nariman Behravesh of Global Insight is one of the most respected economic forecasters. Lyle Gramley is a former governor on the Federal Reserve Board, and Michael Mussa is former research director at the International Monetary Fund. Edward Leamer is director of the Business Forecast Project at UCLA's Anderson School of Management, and James F. Smith is a professor at the Kenan- Flagler Business School at the University of North Carolina. David Lereah is a longtime chief economist at the National Association of Realtors. Victor Zarnowitz has long worked at the Conference Board, the business group that issues closely watched numbers on consumer confidence and leading economic indicators, and he serves on the committee of economists that decides when recessions begin and end. Short-term fiscal policy grades averaged out at B-minus. Gramley and Sinai gave it an A and A-minus, largely because the tax cuts had stimulated investment and productivity. Five others put it down around C, because so little revenue growth was channeled into reducing budget deficits.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613513","date":"2006-10-21","texts":"GOOGLE IS buying YouTube. Chicago Mercantile Exchange Holdings is snaring Chicago Board of Trade parent CBOT Holdings. Eli Lilly is gobbling up Icos. The list goes on and on in what is shaping up to be quite a year for mergers, with deals involving U.S. targets up about 9 this year from last year, according to the Mergers & Acquisitions Report. But here's something to keep in mind, especially if you're an investor in an acquiring company Over time, based on postdeal stock prices, sellers often have proven to be smarter than buyers. That isn't to say there aren't smart buyers, including PepsiCo, which has effectively used acquisitions to diversify and grow. Or J.M. Smucker, the jelly company, which several years ago bought the Jif brand of peanut butter from Procter & Gamble. Talk about synergy But the reality is that the seller always has better information, says Harbir Singh, professor of management at the Wharton School of the University of Pennsylvania. Seems obvious enough, but try telling that to investors in companies such as America Online after it swallowed Time Warner in a deal valued at more than 100 billion. Or Mattel, after its misguided 3.8 billion purchase of Learning Co. Or Quaker Oats, after its botched 1.7 billion acquisition of Snapple. The difference between a good deal and a bad one often boils down to little more than hubris, or just plain ego, which can cause a buyer to overpay. It's not that sellers are smarter than buyers, says Richard Roll, a finance professor at UCLA's Anderson School of Management and author of The Hubris Hypothesis of Corporate Takeovers. It's just that buyers are overconfident in their ability to value what they're going to buy.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983587","date":"2006-10-25","texts":"Behind the closed doors of the Federal Reserve's marble temple on Constitution Avenue, a fervent debate is underway this week. The subject might seem, at first glance, to reflect minor differences of opinion. Should the Fed explicitly tell the public what level of inflation it wants to achieve And if so, should that goal be in the 1 to 2 percent range, or comfort zone, expressed by many central bankers in recent years, or should the upper limit be raised to as high as 3 percent Close as those numbers may sound, the implications for every American family are substantial. If the Fed enforces a low- inflation goal vs. one that is slightly higher, consider what a pair of pants or a loaf of bread would cost a decade from now, assuming they track the overall inflation rate. If inflation runs a modest 1.5 percent a year, typical of the level in the late 1990s, a 70 pair of pants would cost 81.24 in 10 years and a 2.79 loaf of bread would cost 3.24. But if inflation, running at more than 2 percent recently, is allowed to creep up to 3 percent a year, those pants would cost 94.07 in a decade, and the bread would cost 3.75. How much people's paychecks will buy in the future, how far their retirement money will go, how many people might need to be thrown out of work to achieve a stated inflation goal -- all these outcomes could be influenced by a debate among the nation's central bankers at their meetings yesterday and today, to which the public has no access.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984613","date":"2006-10-26","texts":"I have to wonder whether our school system understands the mixed messages it keeps sending out. I find it ironic that we parents are told that our children need their sleep, then they have to get up at 6 to catch the bus or that our children are overweight and need to be outside playing and getting exercise, but they are given homework and projects every night. We are told that knowing whom our children are hanging out with is important, but because of some idiotic home project, we have to send them to a house we know nothing about. We are told that having a home-cooked meal at the table as a family is important, but we are forced to run to Staples to buy more poster board and spend all night working with the children on a project that is way over their heads. We are told their backpacks are too heavy, and then the teachers load them down with books. A little help from the school system would be nice, such as moving back the start of school, agreeing that home projects are a complete waste of time, that a child getting play time really is important. Don't they understand I am trying to raise a person, not Standards of Learning scores You have laced several issues together in a compelling way. I would love to hear what other parents, as well as students and educators, think of this. Do you have any idea whether there is state law or Fairfax County public schools policy regarding how long students are allowed to be on the bus during their commutes to and from school","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830981782","date":"2006-10-27","texts":"Buoyed by high petroleum prices and an increase in production, oil industry colossus Exxon Mobil Corp. yesterday reported that its third-quarter earnings rose to 10.49 billion, putting the company on track to break the record it already holds for annual corporate profits. The results marked a 6 percent increase from the third quarter of last year, thanks largely to the average 65.14 a barrel it received for the roughly 2.5 million barrels of crude oil and natural gas liquids it produces every day. That average was about the same as in the second quarter of this year but still up 7.12 from the third quarter of 2005, when prices spiked after Hurricane Katrina. It was a tremendous quarter, said Jacques Rousseau, oil analyst at Friedman Billings Ramsey & Co. The quarterly profit was the second-highest in U.S. corporate history -- after Exxon Mobil's fourth quarter last year. Excluding one-time gains that boosted the fourth-quarter results, the quarter just ended was even more profitable. Analysts said, however, that the latest quarter could also mark a peak in the oil giants' profits if crude oil prices begin to ease. Many speculators and members of the Organization of the Petroleum Exporting Countries fear that the three-month slide in oil prices will continue. For now, though, oil prices remain high, closing yesterday at 60.36 a barrel.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985465","date":"2006-10-28","texts":"To hear Republicans talk, Rep. Charles B. Rangel, the gravel- voiced New York Democrat who stands to take over the tax-writing House Ways and Means Committee, is giddy about the chance to undo popular tax cuts enacted during President Bush's first term in office. But Rangel said yesterday that he had no intention of rolling back the cuts, most of which are scheduled to expire in 2010, if Democrats claim the House on Nov. 7. I think it would be ridiculous for us in 2007 to be talking about 2010 tax cuts, Rangel said in an interview. I don't want to go retroactive in terms of any of the tax cuts. I think retroactive tax increases are bad tax policy. As the prognosis for Republicans to maintain control has grown increasingly gloomy, Rangel has become a favorite rhetorical punching bag for President Bush and Republican leaders. At fundraisers, in news releases and on the campaign trail, Republicans have been warning voters that a Democratic House would raise taxes and wreak havoc on the nation's economic recovery. They raise the specter of Rangel's bejeweled hands on the controls of federal tax policy like some terrifying Halloween goblin. Last week, House Majority Leader John A. Boehner R-Ohio attacked Rangel by name two days in a row in news releases with such headlines as Dem Tax Hikes Would Threaten Strong Economy. The American people don't trust Charlie Rangel and his tax-happy Democrat friends because they know Democrats will work overtime to raise their taxes, Boehner said.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616522","date":"2006-10-30","texts":"NEW YORK -- Bryan Whalen and Ike Spirou have never met. But through the world of modern mortgage finance, their fates are inextricably linked. Mr. Whalen, who manages a multibillion-dollar mortgage-bond portfolio at Los Angeles-based Metropolitan West Asset Management, stands to gain if Mr. Spirou, a financially stretched homeowner in New York City, reneges on his mortgage loan. That's because Mr. Spirou's 360,000 loan was packaged with thousands of others into a bond, and Mr. Whalen has entered a newfangled derivative contract -- similar to an insurance policy -- that will pay off if enough loans in the bond go bad. The sophistication is remarkable right now, says Mr. Whalen. You can profit in any scenario. Mr. Whalen represents a new breed of investor people who are using financial instruments to bet against the homeowners they consider most likely to suffer in a housing downturn. Many such investors, including Mr. Whalen, don't expect the current slide in house prices to lead to widespread economic malaise. Rather, they're betting on trouble for folks like Mr. Spirou -- so-called subprime borrowers who have become homeowners thanks to the increasing availability of easy credit. Whatever happens with Mr. Whalen's wager, there's a lot more at stake than his fund's performance or the roof over Mr. Spirou's head. Subprime lending has put as many as two million families into homes over the past decade, helping push the U.S. homeownership rate up to 69 from 65 -- a major shift toward an ownership society that politicians of all stripes have touted as one of the nation's economic successes. As the bets play out, they will show how much of that success is permanent, and how much a temporary phenomenon fueled by overly aggressive lending.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982982","date":"2006-11-02","texts":"Democratic congressional candidate Shawn O'Donnell of Fredericksburg is borrowing a page from the party's national playbook in his quest to unseat Rep. Jo Ann Davis Link the Republican incumbent to President Bush as much as possible. I believe she's been a rubber stamp of George Bush, O'Donnell, 51, said. Literally every failure this administration has had, she's got a degree of guilt that should be associated with those politics. Davis, 56, was first elected in 2000 to represent Virginia's 1st Congressional District and has raised five times as much money as O'Donnell. She dismissed the Democrat's criticism. I just run on my own record, Davis said. I don't look at what my opponent's doing, and I don't say anything about what my opponent's doing. The candidates offer stark differences to voters in a district that includes parts of Prince William, Spotsylvania, Stafford and Fauquier counties.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985211","date":"2006-11-02","texts":"Several small retail businesses have opened in Prince William County in recent months, highlighting the continued residential growth of the county and demand for residential services and retail. In Woodbridge, a towel-embroidering business, My Towels Talk, opened shop at 4320 Ridgewood Center Dr. The store stitches on inspirational messages. There will be a ribbon-cutting for the store hosted by the Prince William Regional Chamber of Commerce at 11 a.m. Nov. 21. SunTrust Mortgage Inc., a subsidiary of SunTrust Bank, opened an office in Woodbridge at 14560 Potomac Mill Rd. The mortgage company will host a ribbon-cutting at 10 a.m. Nov. 17. In Haymarket, a UPS Store opened at 5501 Merchant's View Square, with a grand opening earlier in the week. The store provides packing, shipping, document services and moving supplies. Small retail businesses have fed much of the boom in jobs in the region over the past few years, according to economists.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842616233","date":"2006-11-10","texts":"Despite Terry Moe's enthusiastic endorsement Management 101 for Our Public Schools, editorial page, Oct. 31, there is nothing revolutionary about an idea that has been around since the 19th century. England tried it, Canada tried it and several U.S. school districts have tried it -- linking teacher pay to test scores has never worked. The Management 101 philosophy advanced by Mr. Moe is grounded in assumptions about pay that are misleading and incorrect. Southwest Airlines has never used individual incentives, and it is the cost and productivity leader in its industry. After surveying companies that experimented with different ways to tie pay to individual performance, consulting firm William M. Mercer concluded that most individual merit or performance-based pay plans share two attributes They absorb vast amounts of time and resources, and they make everybody unhappy. The strongest incentives for teachers and all working people are competitive salaries and good working conditions. Connecticut adopted this view some years ago when its schools were in serious trouble. Today Connecticut consistently ranks above the national average in math and reading, a turnaround made possible by higher salaries for qualified faculty, increased licensing standards and mentoring for all new teachers. While Mr. Moe and others are riding on the hope that an end-of-the- year cash bonus will translate into student success, teachers and those who know better will continue working to transform teacher quality at its core. Reg Weaver","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617064","date":"2006-11-10","texts":"It is disappointing to read that someone as highly regarded as U.S. Treasury Secretary Henry Paulson has chosen to lend his good name to the opportunistic campaign to repeal essential investor protections adopted in the wake of recent massive accounting frauds Paulson Pulls for U.S. Markets, Money & Investing, Oct. 23. Make no mistake about it, these efforts are designed to do far more than tweak the rules. If that were all the Financial Services Forum, the U.S. Chamber of Commerce and their allies had in mind, they would simply congratulate the Securities and Exchange Commission and the Public Company Accounting Oversight Board for having the job well in hand and move on to other issues. Backers of these efforts repeatedly cite the declining number of major foreign initial public offerings on U.S. markets as evidence that investor protections must be scaled back. As they surely understand, however, the decline in foreign listings on U.S. exchanges long predates the passage of Sarbanes-Oxley. A variety of factors contributed to the trend, not least U.S. economic policy over the past quarter century that actively encouraged globalization, technological advances that made globalization possible and investment-banking fees that are nearly twice as high for U.S. IPOs as they are on major European exchanges. In fact, foreign listings on U.S. exchanges bottomed out earlier this decade following the bursting of the tech- stock bubble, 911 and the massive accounting scandals that led to the passage of SOX. Since the implementation of SOX, the number of foreign companies listing in the U.S., the amount of money they have raised here and the U.S. share of the global IPO market have all grown. If Secretary Paulson is looking to boost U.S. competitiveness, there are several pressing problems that are well within the purview of the Treasury secretary. Chief among them are the government's lack of fiscal discipline and burgeoning budget and trade deficits, factors the World Economic Forum identifies as central to a decline in U.S. economic competitiveness. Efforts to tackle these problems are far more deserving of Secretary Paulson's support than the poorly cloaked special interest attack on investor protections he has unaccountably chosen to back. Barbara Roper Director of Investor Protection","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613839","date":"2006-11-11","texts":"A hike in the national minimum wage seems all but certain to become one of the first fruits of the Democrats' victories this week. Nancy Pelosi, the presumptive Speaker of the House, has pledged to raise the minimum by over 2, to 7.25 from 5.15. And President Bush has already signaled he'd go along. At the state level, six states not only approved minimum wage hikes in referendums this week but indexed the minimum to inflation going forward. We hope Mr. Bush fights off any attempt at federal indexation and insists on a provision to protect small business. Raising the minimum wage has been a hardy perennial of the left for decades now. What is striking is the degree to which is has come to be seen as an economic free lunch. Even some reputedly unbiased economists have started to tout the view that raising the minimum wage has no discernible effect on job creation. But if this were true, they'd be calling for a 10, 20 or even 50- an-hour minimum wage. They're not, and neither is Nancy Pelosi. That's because the law of demand is one of the most dependable precepts of economics. It says that when the price of something goes up, demand for it goes down. An employee's wages are the price the employer pays for his services, so raising their wages means forcing employers to pay more for workers. The price goes up and there is downward pressure on demand for workers. Other things being equal, jobs are lost. For a long time, this was so obvious that no serious person doubted it. But a couple of studies in the 1990s purported to find no evidence of job loss associated with minimum-wage hikes, and it's been off to the races ever since. Classical economics teaches that for a given job, there is a market-clearing price -- the price at which both someone is willing to do it and someone else is willing to pay them to do it. If you raise the legal minimum above that price, you may get more people willing to perform the job, but you'll probably also get less people employers willing to pay the new, higher price to get the job done. To picture how this works, think about the grocery bagger in the supermarket, a classic low-wage service job. Supermarkets hire grocery baggers for the minimum wage, or close to it, because it's a perk that makes their customers' experience a bit nicer and helps move the lines along, possibly requiring fewer cashiers, who cost more to hire than grocery baggers.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985148","date":"2006-11-14","texts":"The Washington region has become a gateway for immigrants drawn by the local economic boom of the past five years, yet they are landing here at starkly different places on the economic spectrum, according to data to be released by the Census Bureau today. There are more than 1 million immigrants in the area -- one out of every five people -- and they include highly skilled workers from India and China, who have come for jobs at the top of the wage scale. Immigrants from El Salvador and Mexico have come with less education and language skills and are taking lower-paying jobs, according to the Census data on economic, social and household characteristic of ethnic groups. Washington has a much more diverse set of immigrants compared to other cities in the country because the region offers many more types of jobs, said William H. Frey, a demographer at the Brookings Institution. In New York and Los Angeles, family reunification has been a primary magnet for new immigrants. Though the Washington area has attracted immigrants with family connections, jobs associated with government contracting, the high-tech sector and rapid residential expansion have also drawn people, Frey said. The Census numbers include both immigrants and native-born members of various ethnic groups. The Indian population, which has increased by 50 percent in the past five years, has the highest median income of any group, at 87,369. That includes whites, other Asians and Hispanics, according to the Census data. About eight in 10 Indians in the region are foreign born eight in 10 speak a language other than English, but eight in 10 also speak English very well.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983359","date":"2006-11-19","texts":"Computer, Internet and telecommunications stocks are suddenly enjoying a resurgence, and some of the biggest beneficiaries of the rally have been value-oriented mutual funds, which until very recently would never have gone near a technology stock. As the U.S. stock market has embarked on a strong advance since mid-year, the long-depressed Nasdaq Composite Index has played a starring role. The index, 11 of whose 12 largest components are tech stocks such as Microsoft Corp., Intel Corp. and Dell Inc., climbed 21 percent from July 21 through the middle of last week, including dividends. That eclipsed a 13 percent total return for the Standard & Poor's 500-stock index and a 14 percent gain for the Dow Jones industrial average. Talk about a role reversal. While the Dow has been hitting record highs and the S&P 500 has climbed to a six-year peak this week, the Nasdaq index remains more than 50 percent below the lofty heights it reached in 2000. But if a particular group of stocks is down, that doesn't mean it's out. In keeping with their long tradition of bargain-hunting among neglected sectors of the market, several prominent managers of value funds began buying tech stocks a year or two ago. That put them in good position to reap the rewards of the Nasdaq revival.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615629","date":"2006-11-20","texts":"Rising costs, an aging population, and a Democratic Congress mean the coming years are sure to see pressure for a larger government role in health care. So it's encouraging that America's private health insurers are thinking about ways to preserve a competitive market for health services. We only wish the proposals they released this month under the banner of their lobby group -- America's Health Insurance Plans -- did more to promote a genuine free market in health care. AHIP's one really good idea is the creation of something called a Universal Health Account, which would end the tax bias that lets employers deduct health care expenditures but doesn't let individuals do the same. The employer-based private health care system has contributed significantly to cost inflation, because individuals generally aren't sensitive to the price of their treatment decisions. It also contributes to the perceived problem of the uninsured, because a very large number of the 40-some million Americans classed as such every year are merely between jobs. Congress took an important step toward equalizing tax treatment and encouraging portable, individually owned polices by creating Health Savings Accounts in the 2003 Medicare bill. HSAs combine a tax-free, high-deductible insurance policy with a tax-free savings account to pay smaller expenses. But while their take-up rate has been impressive, HSAs still represent only a small portion of the market. A Democratic Congress also isn't likely to be friendly to further HSA expansion on the grounds that high-deductible plans are only for the healthy and wealthy. Studies of HSA purchasers provide little support for the health and wealthy charge. But AHIP's Universal Accounts proposal transcends that debate by suggesting that any type of insurance plan -- even first-dollar coverage, if an individual so chooses -- ought to qualify for HSA-type tax treatment. This is a genuinely innovative proposal. It wouldn't merely go a long way toward making insurance more affordable for those who don't get it from their employers. It would provide incentives to move beyond the employer-based insurance system. Instead, companies would be free to fund portable insurance policies for their employees much like they fund portable 401k retirement accounts. Such a Universal Health Account system would provide more security than the current one, which often keeps sick people tied to jobs for fear of losing coverage. We hope the idea gets a fair hearing.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981845","date":"2006-11-25","texts":"Stocks fell Friday in light trading, ending a shortened week as the December holiday shopping season began and attention turned to retailers and a steep decline in the dollar against other major currencies. The day after Thanksgiving appeared to be a busy one for retailers as shoppers seeking bargains flocked to stores. Without tallies from cash register receipts, however, investors were forced to examine little more than anecdotal evidence as they tried to determine how sales for the holiday season would fare. With the stock markets closed Thursday for Thanksgiving and many investors taking a holiday Friday, Wall Street saw a quiet session that closed at 1 p.m. The Dow Jones industrial average fell 46.78, to 12,280.17, the Standard & Poor's 500-stock index fell 5.14, to 1,400.95 and the Nasdaq composite fell 5.72, to 2,460.26. Richard Sparks, an analyst at Schaeffer's Investment Research, noted stocks pulled off their lows of the session as investors pared concerns about the strength of retail sales and the dollar, though he noted some pessimism remained. I think those concerns are keeping some traders on the sidelines.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613629","date":"2006-11-26","texts":"Losing a job for the first time can be an anxiety-laden milestone for twentysomethings. But it can also be an opportunity to rethink your course, and possibly make changes, before you've proceeded very far on a career path. A job loss in March was a bittersweet experience for 27-year-old Erin Suhy, who had been working as a development assistant for a nonprofit organization. I lost income and the potential to work in a field that I respect, she says, but the job wasn't challenging and it made me miserable. Since then, the New York resident has worked on and off doing administrative work and is currently collecting unemployment insurance while considering post-graduate certificate programs in Web design. She's also thinking about moving. This time has given me the opportunity to think about what I really want out of life, she says. However, the worst part of being unemployed is feeling insecure, she says, and constantly wondering am I making the right decisions Twentysomethings often agonize over every career move. They feel like their choice has to be momentous, says Larry Root, a professor of social work at the University of Michigan. And when a job doesn't work out, he says, it can be hard psychologically, leading to low self-esteem, mental stress and feelings of inadequacy.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617110","date":"2006-11-28","texts":"INVESTORS HAVE SHARPLY reduced the premium they pay for shares of foreign companies listed in the U.S. since a regulatory crackdown on corporate malfeasance in 2002, according to new academic research. The findings figure prominently in a report to be released Thursday by the Committee on Capital Markets Regulation, a private-sector group studying the negative impact of regulation on the competitiveness of U.S. financial markets with the support of Treasury Secretary Henry Paulson. Shares of foreign companies listed both in the company's home market and on a U.S. stock market traditionally trade at a higher valuation as a percentage of book value than domestic peers that aren't cross- listed. Investors may pay more for a company listed in the U.S. because they put more trust in a company that has met stringent U.S.- listing standards or because there is a deeper market for U.S.-listed shares. That premium for listing on both a U.S. and home-stock market has dropped sharply since 2002, according to Luigi Zingales, a finance professor at the University of Chicago's business school and a member of the capital-markets committee. Mr. Zingales measured the advantages of listing in the U.S. by tracking the difference between market value the price at which company's stock trades and book value the accounting value of its assets. If a cross-listed company traded at 150 of book value and a similar company from the same country listed only on their home market traded at 120 of book value, the valuation premium would be 30 percentage points.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615106","date":"2006-12-02","texts":"WITH LESS than a month left to the year, the question for investors is whether they should be singing Deck the Halls or worrying that the economy is about to get decked. Stocks fell for the second week in a row and Treasury yields dropped to their lowest level in more than 10 months, after reports from the malls suggested that holiday shopping over the Thanksgiving weekend wasn't as strong as investors had hoped and a closely watched manufacturing gauge unexpectedly fell. Clearly, the focus here is on underlying economic weakness, said hedge-fund manager Seth Tobias, general partner at the Circle T family of funds. The Dow Jones Industrial Average ended Friday down 27.80 points, or 0.2, to 12194.13, after falling as much as 120 points during the day. The Institute for Supply Management said its manufacturing index slipped to 49.5 in November -- its lowest level in more than three years -- from 51.2 in October. Anything below 50 represents contracting manufacturing activity. The Dow fell 86.04 points, or 0.7, for the week but is still up 14 for the year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983549","date":"2006-12-03","texts":"For many, taking a sick day requires little thought. But by most estimates, nearly half of all private-sector workers in the United States do not have a single day of paid sick leave. And more do not have a paid day off that can be used to care for a sick child. Low-wage workers are hit the hardest, with three of every four lacking any paid sick leave. They also usually have no health-care coverage or work a full-time or more than full-time schedule of piecemeal, part-time jobs, making paid sick leave even more unlikely. When workers without sick leave get a virus or an injury, they have to decide if they can take an unpaid day off and still make the rent. If not, they often return to their jobs as security guards, cooks, waitresses and cashiers -- decreasing their productivity and possibly getting others sick. Paid sick days can reduce turnover, cut down on health-care costs although most companies that don't provide paid sick leave also don't provide health-care coverage, and increase productivity and morale. There was movement on the paid-sick-day front last month. More than 60 percent of voters in San Francisco approved a ballot measure that would require all businesses with fewer than 10 workers to give employees up to 40 hours of paid sick leave a year for larger employers, up to 72 hours. At every company, an employee will accrue one hour of paid sick leave for every 30 hours worked, so both part- time and full-time workers would be covered. It probably won't end with San Francisco. There is a push to get similar measures in front of decision makers in other cities and states in the coming year, including in the District.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984619","date":"2006-12-06","texts":"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. 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. The situation has left many investors confused and queasy stock prices rose yesterday after falling Friday, as did the dollar. 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. 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.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617444","date":"2006-12-08","texts":"STOCKS SLIPPED for a second straight day as investors continued to fret -- and disagree -- over where the U.S. economy is headed. Many held off on placing big bets ahead of the release of jobs data due out today. The result was another lackluster finish for key stock- market measures, punctuated by moves reflecting news that affected a few big-name companies. The Dow Jones Industrial Average rose more than 50 points in the first half hour of trading, briefly crossing its Nov. 17 record close. But by the end of the day, the blue-chip average was down 30.84 points, or 0.3, at 12278.41 points, up 15 on the year and 64.15 points away from the record set last month. Shares in Home Depot, a Dow component, tumbled 2.5 after it disclosed late Wednesday that it had backdated executives' stock options, making the home-improvement giant one of the largest firms to have admitted engaging in the controversial practice. Throughout the day, the Dow fluctuated in the opposite direction of crude oil, which opened lower but finished up to snap a three-day losing streak. The stock market often moves inversely to oil prices because higher energy costs can sap consumers' purchasing power, threatening corporate profits.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984144","date":"2006-12-11","texts":"My highest priority as Treasury secretary is the long-term strength and competitiveness of the U.S. economy. Managing our economic relationship with China to ensure both nations benefit is vital to our nation's future prosperity. A market-based economy in China, with sustainable economic growth and full participation in rules-based international trade, is in our best interest -- and in the interest of the Chinese people. Since 1980 China's share of the world economy has more than quadrupled. The United States and China now account for almost half of global economic growth. And bilateral trade between our two nations grew by a factor of five over the past decade. Beyond the numbers, the U.S.-China economic relationship epitomizes both the opportunities and challenges of globalization. This week a delegation made up of U.S. Cabinet secretaries, agency directors and the Federal Reserve chairman, Ben Bernanke, will participate in the first meeting of our new Strategic Economic Dialogue with China. Presidents Bush and Hu Jintao launched the dialogue in September to focus on China's successful integration into the global economy and ensure that China continues on its market-based reform path. My colleagues and I will meet with Chinese leaders in Beijing for discussions in three areas maintaining sustainable growth without large trade imbalances continuing to open markets to trade, competition and investment and improving energy security and the environment.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614032","date":"2006-12-12","texts":"TOKYO -- The decline in Japan's population could undermine the country's economic recovery unless workers perform more productively, and the new economy minister is taking aim at inefficient industries and workers. Hiroko Ota, who took office in September, faces an economy that is back on track after more than a decade in a slump. Japan's big structural problems have mostly been fixed The banks have cleaned up their bad loans, and prices have stopped falling. Japan's economy grew at an average of more than 2 a year from 2003 through 2005, and it is expected to grow another 2 or so a year in 2006 and 2007. But long-term challenges remain. Japan's huge national debt amounts to 175 of gross domestic product, compared with 64 in the U.S. Cutting the debt gets harder with a falling population because Japan has fewer tax-paying workers. If production per worker increases more slowly than the number of workers falls, overall economic production will fall. Japan has escaped from its downturn, the 52-year-old Ms. Ota said in an interview. We need to improve productivity more than the population declines. Japan, like mature economies in Europe, is engaged in a major rethinking of its economy -- including how to pare down welfare states along with the job and market protections introduced during the years after World War II. These changes now are seen as barriers to growth.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982308","date":"2006-12-13","texts":"Wall Street pulled back Tuesday, finishing slightly lower as investors grappled with an economic assessment by the Federal Reserve that warned yet again of inflation risks and reported a substantial slowing in the housing sector. The Dow Jones industrial average was down 12.90, or 0.10 percent, at 12,315.58. Earlier in the day, it was down more than 76 points. Broader stock indicators also fell but closed above their lows as well. The Standard & Poor's 500-stock index slipped 1.48, or 0.10 percent, to 1411.56, and the Nasdaq composite index fell 11.26, or 0.46 percent, to 2431.60. The assessment, which accompanied the Fed's widely expected decision to keep the nation's benchmark interest rate unchanged at 5.25 percent, left open the possibility that the central bank might raise rates if inflation accelerates. That disappointed some investors who were hoping for signs that the Fed was moving toward cutting rates. Investors fear an increase could cause problems if it comes as the economy, particularly the interest-rate-dependent housing sector, is still slowing. The Fed's statement described the housing market's slowdown as substantial, a change from past statements. The Commerce Department reported that the trade deficit fell to 58.9 billion in October, a much bigger drop than economists were anticipating. The 8.4 percent decline from September, the biggest percentage drop in five years, was a result of moderating oil prices.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984717","date":"2006-12-14","texts":"Securities regulators unanimously embraced a plan that they said would slash costs and restore common sense to an audit rule attacked as too expensive by business groups and lawmakers. The Securities and Exchange Commission voted 5 to 0 yesterday to instruct corporate managers to focus their reviews on the areas that pose the greatest risk of fraud on financial statements. Congress required executives and auditors to scrutinize corporate financial controls in the 2002 Sarbanes-Oxley Act, which was passed after huge frauds at Enron and WorldCom. The rule, which cost businesses millions of dollars more than regulators anticipated, has been a lightning rod almost ever since, becoming what SEC Chairman Christopher Cox called the single biggest challenge in the accountability law. SEC staff members said that under the new proposal, they would urge corporate managers to use their best judgment in evaluating controls, rather than requiring them to scrutinize specific things such as the integrity of executives and the accuracy of petty cash accounts. But, rejecting an approach advocated by some business interests, regulators refused to create special exemptions for small companies. Instead, they said their plan encourages managers to develop tailor-made reviews based on the size and complexity of their businesses. Corporate managers have criticized outside auditors for performing unnecessary and expensive work to protect themselves from liability and make more money. Accounting firms argue that the high costs were the result of long-deferred maintenance and have since declined. The Public Company Accounting Oversight Board, which oversees the accounting industry, will make companion proposals for accountants on Tuesday.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613624","date":"2006-12-16","texts":"THE DOUBTERS are stepping aside, at least until next year, and the bulls are beginning to wonder how high they can push the stock market before year's end. After almost a month of soft performance, when some investors worried that the market had already peaked for the year, stocks resumed their rampage this past week, on the back of reassuring economic and profit data. With the November consumer-price inflation numbers coming in virtually flat Friday -- a welcome surprise -- the Dow Jones Industrial Average pushed to a second consecutive record finish, its 20th record since October began. For the week, the Dow was up 138.03 points, or 1.1, at 12445.52, including a gain of 28.76 points Friday. The Dow has risen 16.1 in 2006, with almost all that gain coming in a sharp climb since July 14. The mood of the market was a tad euphoric, making some skeptics warn again that stocks have gotten ahead of themselves and are overdue for a pullback. Equities are overbought, said Bijal Shah, senior stock strategist for Societe Generale's Corporate & Investment Banking division, in a report entitled, 2007 A Correction or a Bear Market","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984403","date":"2006-12-17","texts":"The U.S. economy is ending the year with a flurry of good news, including signs that inflation has receded, consumers are spending money briskly and growth is likely to continue well into 2007. Here comes Santa Claus Mark Vitner, a senior economist at Wachovia, wrote to clients after a new batch of favorable statistics was released yesterday. All we wanted this holiday season was a little more growth and a little less inflation. Boy oh boy, has Santa delivered. Nearly gone is the inflation scare of the spring and summer, as are investors' doubts about whether a new Federal Reserve chairman would be tough enough to beat back price increases. And almost gone are analysts' worries that the slumping housing market would curb consumer spending and trigger a recession. On the contrary, Wall Street loosened the corks in the champagne bottles all week as each unexpectedly rosy economic figure rolled in. Inflation, for the moment, is at 0 percent The consumer price index was unchanged in November, as falling fuel prices and discounts on such items as clothing, electronics, airfares and hotel rooms offset increased prices for many other goods and services, the Labor Department said yesterday.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614545","date":"2006-12-20","texts":"The Dow Jones Industrial Average took what was shaping up as a down day and turned it into a triumph, climbing to its highest closing level on record. The advance came as Circuit City Stores was pounded after issuing earnings, Oracle faltered on its results, but Morgan Stanley rose after posting a record profit. The Dow industrials rose 30.05 points, or 0.24, to 12471.32, its third record close in four sessions. The industrials had been off nearly 44 points and then mounted a midafternoon comeback. The Nasdaq Composite Index, affected by software maker Oracle and semiconductor softness, dropped 6.02, or 0.25, to 2429.55. The Standard & Poor's 500 index gained 3.07, or 0.22, to 1425.55. The market still has an upward bias, said David Klaskin, chief investment officer at Oak Ridge Investments. A lot of investment managers are still sitting on a relatively high level of cash and are using signs of weakness as an opportunity to buy.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985009","date":"2006-12-22","texts":"THIS SERIES has described ways to address inequality Increase tax progressivity invest more in education reform health care. But there's pressure to reach beyond that to tackle inequality where it apparently originates, meaning the workplace. This pressure can be dangerous. Companies are not instruments of social policy their first duty is to make money by serving customers, and they can provide for their workers only so long as they do that. Nevertheless, two sorts of corporate reform are warranted. It should be easier for labor unions to organize. And it should be harder for top executives to pay themselves outlandish sums. Union membership has fallen from 20 percent of the workforce in 1980 to 13 percent in 2005, and part of this decline is inevitable. It reflects attrition in the manufacturing industries that are most easily organized. It reflects the rise of sophisticated human resource departments that provide workers with training, savings plans and grievance procedures -- usurping some of unions' traditional functions. And it reflects the deregulation of domestic industries such as trucking and airlines, plus tougher foreign competition. These forces spur businesses to innovate, but they also constrain their ability to make wage concessions to unions. In competitive markets, companies will pay workers what it takes to prevent them from being lured away by rivals -- and not more. Yet the decline of organized labor also reflects a legal climate that is neither inevitable nor desirable. The way labor law is enforced now, employers can block attempts to establish unions by intimidating workers a supervisor can summon an employee to daily meetings to discuss the dangers of unions or ban discussion of a union during work hours. If these tactics are not enough, employers can fire union organizers although this is supposed to be illegal, the penalties are too feeble to serve as a deterrent. Meanwhile, a series of decisions from the National Labor Relations Board has narrowed the definition of workers who are eligible for union membership. Two months ago, for example, the three board members appointed by President Bush outvoted the two appointed by President Bill Clinton in ruling that relatively junior workers can be defined as supervisors, thus restricting their right to join a union. A fairer legal climate might reduce inequality slightly. According to David Card of the University of California at Berkeley, de-unionization explains about 15 percent of the increase in wage inequality among men over the past quarter-century. But the larger gain from reforming labor law would be political. Freedom of association is a core democratic right, and polls suggest that between 30 and 50 percent of nonunion workers would choose union representation if they had a chance to vote for it. The suppression of freedom of association is wrong in itself, and it fosters the suspicion that the rules of the economy are rigged against workers. Setting aside the debate over how much union membership can improve wages or benefits, the option of union membership is crucial to the legitimacy of capitalism. The same goes for rules on executive compensation. Since 1970, the pay of chief executives has jumped from less than 30 times the average wage to almost 300 times that level. This helps explain why the richest 1 percent of Americans pocketed 21.6 percent of all the gains in national income between 1996 and 2001, according to Ian Dew- Becker of the National Bureau of Economic Research and Robert J. Gordon of Northwestern University. As with the decline of labor unions, some of the rise in executive compensation reflects market forces and is inevitable. Yet similar market forces are at work in other advanced nations, where executive pay has grown more modestly. In 2003, the ratio of U.S. chief executives' pay to that of manufacturing workers was more than double the norm in 13 other rich countries.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984100","date":"2006-12-27","texts":"Almost all Americans see themselves as middle class. To declare yourself middle class is to say you've succeeded without openly bragging that you're superior -- a no-no in a democratic culture. You're like everyone else, only a little more or less so. Not surprisingly, a recent poll done for the Economic Policy Institute, a liberal think tank, finds that only 2 percent of Americans put themselves in the upper class and a mere 8 percent consider themselves lower class. The large majority classify themselves as upper-middle class 17 percent or middle class 45 percent. The rest 27 percent see themselves as working class, a stepping stone to the middle class. Because the middle class isn't really the middle -- it's a huge blob -- describing how it feels and thinks is usually an act of simplification, exaggeration or invention. Yet that's routine because politicians and commentators want to show that they grasp the hopes and fears of everyday Americans. The middle class today is said to be angry and anxious. It's worried about jobs, health insurance and retirement income. The EPI poll explores these discontents. Up to a point, it confirms conventional wisdom. One question asked respondents to agree with one of the following statements Most people today face increasing uncertainty about employment, with stagnant incomes, paying more for health care, taxes, and retirement, while those at the top have booming incomes and lower taxes.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616578","date":"2006-12-28","texts":"The abiding cliche about Gerald Ford -- who died Tuesday at age 93 -- is that he was a decent man who steadied the country but held the White House too briefly to leave a major imprint. We've always thought that view of his Presidency is too diminishing, not least because he led the nation at a dangerous time and resisted political furies that could have done the U.S. far more harm. America's Suicide Attempt is how the historian Paul Johnson describes the 1970s. And it is important to recall the bad temper of the times that Ford inherited in becoming the 38th President. He succeeded Richard Nixon, who had resigned over the Watergate coverup and amid an unpopular war in Vietnam. He faced large liberal majorities in Congress that were emboldened by their ouster of Nixon and set to revive the Great Society. And he had to clean up the financial problems caused by a burst of inflation and wage and price controls. Ford navigated all of these traumas better than he gets credit for. --- It is true that Ford was something of an accidental President, the only one in U.S. history never elected as either President or Vice President. Before Nixon picked him to replace the disgraced Spiro Agnew as his Vice President, Ford had been contemplating retirement from his Grand Rapids, Michigan, House seat. But like another unlikely President from the Midwest, Harry Truman, he had reserves of honesty and fortitude that served him well. He made a particular contribution in pardoning Nixon, though he knew Nixon's enemies would accuse him of a quid pro quo. The decision cost him dearly in the polls and may have cost him the election in 1976, but it also spared the country from years of division over a criminal trial that special prosecutor Leon Jaworski seemed determined to pursue.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983601","date":"2006-12-28","texts":"The economic policies of Gerald R. Ford are usually remembered as a joke. Soon after he took over as president, in August 1974, he tried to tame runaway price increases by urging Americans to wear round red lapel pins emblazoned with the initials WIN, for whip inflation now. But Ford didn't give up the fight against what was then called stagflation a debilitating mix of rapid inflation, high unemployment and slow economic growth. In fact, before his 30-month administration ended, he discarded his original plans and cobbled together an unconventional set of programs that succeeded, at least for a while, in slowing the country's financial slide. Among his economic policies, what President Ford is most remembered for is the inflation campaign, which was kind of silly, said Alice M. Rivlin, a former vice chairman of the Federal Reserve Board and a director of The Washington Post Co. But in the end, I think, he did quite well. The U.S. economy was in sad shape when Ford replaced the disgraced Richard M. Nixon to become the nation's 38th president. Then it got worse. The economy fell into the steepest recession since World War II, coupled with an upward price spiral that was faster than at any time in modern memory. Unemployment approached 9 percent, inflation ran at a 12 percent annual rate, and the gross domestic product was flat or declining. Energy prices, in particular, soared due to an oil shortage.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616628","date":"2007-01-03","texts":"It may be time to put away the bubbly. The New Year's forecasts are so unrelentingly sanguine that you have to wonder whether a tanker of strong, black coffee is in order. The U.S. economy will keep growing. The housing market will recover. The Federal Reserve will cut interest rates. And financial markets will soar. The world, it seems, has become intoxicated by the steady flow of what my fellow financial writers call liquidity. Money flows freely, like the vodka from Dennis Kozlowski's infamous ice-hewn David, filling every dark and desolate crevice of the financial world. There is a steady stream of resources to the most perilous of emerging markets, the most hopeless of troubled companies and the most overextended of home buyers. That's great fun while it lasts. But does anyone seriously think it will last forever","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613725","date":"2007-01-05","texts":"Payroll Number Is Going to End Guessing Game Investors have taken a glum view of the nation's labor markets this week. Now they'll find out if it's justified. Economists surveyed by on Tuesday estimated the Labor Department will report today that the economy added 115,000 jobs in December, about in line with job growth in the past few months. Then economists spent the rest of the week ratcheting down their expectations.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830985542","date":"2007-01-07","texts":"These two themes struck me as I read The Washington Post's Being a Black Man series. I was impressed with how the young black men profiled in the series acknowledged their plight and assumed responsibility for it. Their unsentimental realism contrasts sharply with the persistent victim arguments of the experts and specialists interviewed for the series, and those of many academics and social scientists, white and black alike, who think they understand black men and the solutions to their problems. The Post's survey found that 60 percent of black men attribute their plight to their own personal failures and attitudes rather than to racism. They do not underplay the persistence of racism in the United States, but they refuse to explain away their troubles by blaming the system. It is heartening to see that young black men, even more than whites, think that to blame things on other people is not only a false take on reality but a sure way to guarantee failure. The men interviewed repeatedly made the point that viewing the world as a victim can be self-fulfilling. Most telling is Rahsaan Ferguson's account of his father's mantra, You are a black boy. That's two things you will always have against you. This, Rahsaan fortunately came to realize, was terribly disabling advice It kind of brings you down, he said. Indeed. Rahsaan's father, nonetheless, can be forgiven for so badly misadvising his son, because his views are consistent with those of most members of the academic and professional community who interpret or work with blacks. Among such professionals, the overwhelming dogma is that blacks are victims and that racism -- personal and institutional -- is the main explanation for their troubles. It is striking that an overwhelming majority of the professional analysts interviewed for the series emphasized victimhood in their explanations. Even successful black men are victims of this crisis, argued Courtland Lee, a University of Maryland professor and former editor of the Journal of African American Men, in one of The Post's articles. They know they walk around with a target on their backs.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616318","date":"2007-01-08","texts":"Last year, the U.S. dollar did what economists had long predicted it would have to do It fell in value against other currencies. And many believe that if Americans know what is good for them, they should be hoping for more of the same this year. A weaker dollar creates plenty of hardships. Not only do European vacations get more expensive for Americans, so do Chinese-made television sets and other imported goods. For foreigners, a weaker dollar means their investments in the U.S. lose value. But in the eyes of economists, the more the dollar weakens, the more it helps alleviate one of the great worries of our time The gaping U.S. current-account deficit. The current account, which includes trade flows and other international payments, measures exactly how much Americans' spending is outpacing their income -- and how much they are borrowing from abroad to fill the gap. The U.S. is estimated to have rung up a deficit of about 900 billion in its current account last year. That is equivalent to nearly 7 of the U.S. economy -- a level that, if sustained, would cause the nation's foreign debts to pile up to dangerous levels. A weaker dollar would help narrow the deficit by making U.S. exports more attractive to foreign buyers while making it costlier for Americans to buy products from abroad. The fate of the dollar and the current account, which has worried economists for years, was a hot topic at this past weekend's annual meeting of the American Economic Association. A panel of prominent economists -- including Nobel Prize winner Robert Mundell of Columbia University, Harvard's Martin Feldstein and Kenneth Rogoff, Michael Mussa of the Peterson Institute for International Economics and Ronald McKinnon of Stanford -- held forth on the subject to a packed ballroom in Chicago.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616188","date":"2007-01-12","texts":"A management shake-up at Volkswagen AG is putting more power in the hands of its engineering-minded new chief executive officer, Martin Winterkorn, and raising concerns among investors about how aggressively Europe's largest auto maker will continue to cut costs. Europe's largest auto maker by vehicles sold said yesterday that the head of its core VW brand, Wolfgang Bernhard, would leave the company by mutual consent effective Jan. 31, less than two years after taking office and roughly two months after then-CEO Bernd Pischetsrieder abruptly resigned. Mr. Pischetsrieder had clashed with Volkswagen Chairman Ferdinand Piech over the company's strategy and governance. Mr. Winterkorn, who officially became CEO of Volkswagen Jan. 1, couldn't be reached to comment and has said little publicly about his plans for leading the company. While Mr. Winterkorn has garnered praise for increasing Audi's sales in recent years, investors question whether he will bring the same energy to cost cutting as Mr. Bernhard, who had taken a prominent role in the effort. Volkswagen said in a statement yesterday that its new management structure opens the way for greater synergies within the company. An aide at the company's communications department said its representatives were traveling back to Germany from the North American International Auto Show in Detroit and weren't available to comment. Mr. Winterkorn will now lead the VW brand and oversee research and development for the company. Volkswagen also reorganized its brands, putting luxury nameplates Audi, Bentley, Bugatti and Lamborghini together in one division, and mass-market brands VW, Seat and Skoda in another.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616862","date":"2007-01-13","texts":"A strong advance from Exxon Mobil helped lift the Dow Jones Industrial Average to its second record in as many days, while Google surpassed 500 and helped place the Nasdaq Composite Index at a six- year peak. But Advanced Micro Devices was a big decliner after saying it won't produce as much profit as expected, and Cablevision Systems slid as a buyout offer was seen as too light, losing 1.21, or 4.1, to 28.39. The Dow's 41.10-point, or 0.33, rise Friday to 12556.08 meant that it rose 1.3 on the week. This was its best week, points and percentage-wise, since mid-November. The Nasdaq Composite gained 17.97, or 0.72, to 2502.82, and gained 2.8 for the week. The Standard & Poor's 500-stock index added 6.91, or 0.49, to 1430.73, and 1.5 for the week. The economic numbers we've seen over the past few days are showing we're not rolling over into a recession, and right now the market is somewhat relieved, said Jay Suskind, director of trading at Ryan Beck & Co.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983338","date":"2007-01-16","texts":"The government's ability to understand and predict hurricanes, drought and climate changes of all kinds is in danger because of deep cuts facing many Earth satellite programs and major delays in launching some of its most important new instruments, a panel of experts has concluded. The two-year study by the National Academy of Sciences, released yesterday, determined that NASA's earth science budget has declined 30 percent since 2000. It stands to fall further as funding shifts to plans for a manned mission to the moon and Mars. The National Oceanic and Atmospheric Administration, meanwhile, has experienced enormous cost overruns and schedule delays with its premier weather and climate mission. As a result, the panel said, the United States will not have the scientific information it needs in the years ahead to analyze severe storms and changes in Earth's climate unless programs are restored and funding made available. NASA's budget has taken a major hit at the same time that NOAA's program has fallen off the rails, said panel co-chairman Berrien Moore III of the University of New Hampshire. This combination is very, very disturbing, and it's coming at the very time that we need the information most. NOAA officials announced last week that 2006 was the warmest year on record in the United States -- part of a highly unusual warming trend over several decades that many scientists attribute to greenhouse gases. Some climate experts think that the atmospheric warming could bring more extreme weather -- longer droughts, reduced snowfall and more intense hurricanes such as the ones experienced along the Gulf Coast in 2005.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615636","date":"2007-01-18","texts":"Fingernail-gnawing scientists nudged the hands of the Doomsday Clock ahead this week, citing their growing anxiety over global nuclear tensions. Not to be outdone, Federal Reserve Chairman Ben Bernanke warned that a U.S. economic disaster awaits unless the ticking time bomb of entitlement spending is defused. In testimony seemingly designed to grab the new Democratic Congress by the lapels, the top monetary policy maker sounded an unmistakable alarm on fiscal policy, telling the Senate Budget Committee that the recent improvement in the federal budget gap was merely the calm before the storm. The storm is what a large number of economists expect will be a spine-snapping bounce in federal spending on Social Security and Medicare as the Baby Boom generation enters retirement. Mr. Bernanke told the panel that entitlement spending could shoot to 15 of gross national product by 2030, compared to about 8 of GDP now, and that the problem isn't something that the economy can grow its way out of. Forestalling reform could lead to a ballooning debt, higher interest rates, and a painful retrenchment in the form of sharp spending cuts, tax increases, or both. The longer we wait, the more severe, the more draconian, the more difficult the objectives are going to be, Mr. Bernanke said, offering that change was past due. I think the right time to start was about 10 years ago. Lawmakers lapped it up. Budget Committee Chairman Kent Conrad, the North Dakota Democrat, said he hoped that people are listening about the need for us to address these long-term imbalances, to take these challenges on, and the sooner we do so, the better. The highest- ranking Republican on the panel was equally receptive. Mr. Bernanke's warning was right on, and a clarion call that I hope folks will listen to, said Sen. Judd Gregg. But if legislators seem of one mind on the notion that bulging entitlement payments will some day come along and chop the economy off at the knees, there's very little agreement as to what should be done about it. President Bush tried to overhaul Social Security by instituting private investment accounts, but critics smelled a handout to Wall Street, and the Democrats swatted it down. Treasury Secretary Henry Paulson is exploring options for entitlement reform, however, and Mr. Bush has made it known that he intends to make another run at altering Social Security. Some economists, who may have tuned in to the proceedings for hints about the future course of interest rates, said that as dire as the Fed chairman's warning sounded, the calm before the storm may have bought Congress and the White House a little bit of breathing room to batten down the hatches. There was little about rates Mr. Bernanke, who will offer his semiannual economic testimony next month, called data on December industrial production good and discoursed for a little on the merits of various manners of measuring consumer inflation, but that was pretty much the extent of the macro chatter Brian Bethune of Global Insight wrote that a continuing resolution should keep the clamps on spending, and has a high likelihood of being extended to the entire fiscal year. But what use politicians might make of that lease is unclear. A battle is brewing over Iraq war funding, and that may blot out all other debate over the pursestrings. ---","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615380","date":"2007-01-23","texts":"The Dow Jones Industrial Average suffered its worst point drop so far in the new year, with component Boeing leading the way down after its stock was downgraded. The blue-chip average tumbled for a fourth straight day, off 88.37 points, or 0.7, to 12477.16, up 0.1 on the year. Boeing plunged 3.4 after Wachovia Securities bumped its rating to market perform from outperform, saying aircraft orders are due to ebb. Dow components Honeywell and Caterpillar also were among big decliners, off 2.3 and 2, respectively. An early jump in oil prices spooked stock investors, but those gains evaporated by day's end. Stephen Wood, a strategist at asset-management firm Russell Investment Group, said some investors may already be looking ahead to next week's meeting of Federal Reserve policy makers, increasingly nervous that signs of economic strength will trigger the central bank's inflation-fighting instincts. That could mean raising its interest-rate targets at some point this year, rather than cutting them as many stock investors had hoped. Higher interest rates make bonds more attractive while raising borrowing costs for businesses and consumers, and thus tend to hurt stocks.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617322","date":"2007-01-24","texts":"Despite their sponsors' best motives, moves to restart the collapsed Doha round of world trade talks at the World Economic Forum in the Davos Swiss resort this week may prove quixotic. In both the U.S. and the EU, which are critical to any advance, trade negotiators face resistance from powerful farm lobbies. Started in 2001, the Doha round is meant to help poor countries gain access to the developed world's markets by cutting subsidies and tariffs in rich markets -- especially in agriculture. In return, wealthy nations would win access to key markets for services such as banking and insurance. Talks collapsed in July after the EU and U.S. turned down requests by emerging economies such as Brazil and India to trim generous farm handouts. Trade representatives from 30 leading economies, including the European Union, the U.S., China, India and Brazil, will hold one-on- one talks before meeting as a group Saturday and hope to tell the World Trade Organization they are prepared to resume serious formal negotiations. But with little real change since the breakdown, the U.S. and EU remain unwilling to cut farm subsidies enough to satisfy the emerging economies, and the ministers are said to be trying to save face, to show they're working hard for a deal. --- Read John W. Miller's report httponline.wsj.comarticleSB116958872432485383.html","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617219","date":"2007-01-25","texts":"Washington -- Democrats in congress are bringing the credit-card industry in for fresh scrutiny, renewing a push to protect consumers from lurking fees, interest-rate spikes and other hazards of the fine print. Today, Senate Banking Committee Chairman Chris Dodd is to hold a hearing on disclosure, marketing and billing strategies of credit-card firms, the first in a series of hearings on how the industry affects consumers. Meanwhile, a Homeland Security and Governmental Affairs subcommittee headed by Sen. Carl Levin, a Michigan Democrat, has launched a probe into misleading credit-card practices. In a study requested by Mr. Levin, the Government Accountability Office recently noted a jump in the number of consumers facing interest rates over 25, big increases in average fees charged for late payments or exceeding a limit and inconsistencies in how credit- card companies disclose fees to consumers. The flurry of activity marks a shift for the credit-card industry, which generally enjoyed favorable treatment on Capitol Hill under Republican rule. As recently as two years ago, Congress was more focused on the effect delinquent borrowers had on lenders, and it passed a landmark law making it harder for borrowers to erase debts by filing for bankruptcy. Banks cheered, and consumer advocates fumed. With Democrats now in control of the agenda, the microscope is being focused on how terms offered by banks and credit-card networks burden many consumers. At the least, congressional scrutiny likely will encourage some issuers to move away from practices Mr. Dodd says trap consumers in a hole of debt from which they may never recover.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983495","date":"2007-01-30","texts":"Fairfax County has emerged as a jobs powerhouse that far outpaces Montgomery County and now rivals the District as the region's economic core, according to a new federal report that details a profound shift in the Washington area over the past 15 years. The region's lessening reliance on federal employment and the growth of the Northern Virginia economy are well-established trends, but Bureau of Labor Statistics economists who produced the report said they were stunned at how strong the movement has been. Fairfax County has separated itself from the rest of the crowd, said Diane Nilson, a bureau economist. If you're looking across the board, you'd think that these others are doing fine, and they are. But what jumped out at us is how much Fairfax has separated itself from them. The report is based on information that is more detailed and accurate than the agency's routine survey-based updates and that has never been used for in-depth analysis of the region. In 1990, the report states, about 16 percent of the region's workers held federal jobs, the same percentage as worked in professional and business services, the agency's category for most private-sector professional jobs, including lawyers, engineers and computer programmers.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830982499","date":"2007-01-31","texts":"As President Bush was out in Peoria touting the virtues of foreign trade and asking for fresh authority to promote it, newly ascendant Democrats on Capitol Hill signaled just how tough it's going to be for the president to get what he wants. In a hearing, Democrats repeated earlier warnings that they are unlikely to approve pending trade pacts with Peru, Colombia and Panama unless the administration agrees to provisions tightening labor and environmental protections in those countries. They pledged to demand similar labor rules before extending the president's authority to negotiate new trade deals. We have had trade policies in this administration that assume that trade is an end in itself, that market forces will work themselves out, that there isn't really an active role for government, said Rep. Sander M. Levin D-Mich., who chairs a House subcommittee on trade. We've had a tremendous loss of U.S. manufacturing jobs. The new chairman of the House Ways and Means Committee, Charles B. Rangel D-N.Y., presided over a wide-ranging discussion that touched on how to prevent companies from shifting production to exploitative factories in poor countries, how to confront China over allegedly unfair trade practices and how to help Americans who lose jobs. The hearing took place as President Bush visited the Illinois headquarters of Caterpillar, the construction-equipment giant and a highly successful exporter. There, the president asked Congress to extend his so-called trade promotion authority -- his legal right to negotiate trade pacts that he can submit to lawmakers for a simple up-or-down vote. It expires at the end of June, and without it, trade deals stand little chance of getting through Congress as individual legislators pick them apart to protect jobs in their districts.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613714","date":"2007-02-01","texts":"If the U.S. economy keeps growing like it is, Rodney Dangerfield is going to have to rise from the dead and file a patent claim. The expansion that gets no respect keeps cruising along -- past 70 oil, above rising interest rates, and now apparently around even the housing and auto slumps. Yesterday's report that fourth quarter GDP rose a healthy 3.5 was merely the most recent repudiation of the media and Beltway bears who have predicted a recession in each of the past four years. The latest scare came last fall, as the decline in housing accelerated and many of Wall Street's Keynesian forecasters predicted the consumer would slump along with it. We hope someone offered smelling salts to the economists at Goldman Sachs yesterday. To the contrary, the consumer remains confident, clocking in with a strong 4.4 spending growth rate in the quarter. Clearly the strong job market and rising wage levels are offsetting any fear among consumers that their home values have flattened or fallen. Without housing and autos, real GDP rose 5.8. At the same time, U.S. exports are booming, as growth elsewhere accelerates. Exports rose 10 in the quarter and a very robust 9.2 for the year, adding 1.64 percentage points to GDP growth. By the way, exports to China alone rose by more than 30 in the first 11 months of last year, even without a major change in China's policy to peg the yuan closely to the U.S. dollar. Members of Congress pounded Treasury Secretary Hank Paulson yesterday for not doing enough to get China to revalue the yuan, but maybe China's growing economy is more important for American exporters than devaluing the greenback. Just a thought. The most bullish economists yesterday also hailed the GDP report's inflation signals, which were muted. But we're not convinced the current inflation cycle has played itself out -- not with gold back near 650 an ounce, commodities in general rising again and the dollar weak. For its part, the Federal Reserve held its target fed funds rate at 5.25 yesterday, but played inflation down the middle. Inflation pressures seem likely to moderate over time, its statement said, but some inflation risks remain. In other words, they have no idea.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616533","date":"2007-02-02","texts":"NEW YORK -- Yesterday's lone new stock offering, for medical-device company Xtent Inc., rose 3. The Menlo Park, Calif., company closed at 16.48, above its initial public offering price of 16, in 4 p.m. Nasdaq Stock Market composite trading. Xtent sold 4.7 million shares at the low end of its expected 16-to-18-price range, which was set by underwriters Piper Jaffray Cos., Cowen & Co., Lazard Capital Markets and RBC Capital Markets. Xtent was the fifth company to go public this week as the IPO market slips into gear after the holiday break. Biopharmaceutical company Molecular Insight Pharmaceuticals Inc. is expected to make its public debut today on Nasdaq. A development-stage medical-device company, Xtent is working toward the commercialization of its drug-eluting stent systems for the treatment of coronary artery disease. As of Sept. 30, it had an accumulated deficit of 46.9 million.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982035","date":"2007-02-03","texts":"The nation's labor market softened slightly last month, with the unemployment rate edging up to 4.6 percent as job growth slowed, the Labor Department said yesterday. The report fits with widespread government and private forecasts that the economy will slow to a cooler but still-solid pace of growth this year after expanding rapidly last year. That is expected to cause the drum-tight job market to ease and inflation pressures to ebb. The Labor Department's report paints a perfect picture of the U.S. economy and labor markets making a 'soft-landing,'  said Stuart Hoffman, chief economist at PNC Financial Services Group. The jobless rate ticked up in January from 4.5 percent in December but remains low by historical standards. Much of the increase occurred because hundreds of thousands of workers poured into the labor force last month, likely drawn by booming job growth at the end of last year. Employers increased their payrolls by 206,000 workers in December and by 196,000 in November, the department said, revising upward earlier estimates. That was more than the monthly number of new jobs, 100,000 to 150,000, that many economists think necessary to keep pace with growth in the labor force.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615189","date":"2007-02-06","texts":"With Democrats now in control of Congress, many proposals President Bush made yesterday affecting individuals' wallets -- including killing the estate tax and overhauling the tax treatment of health- insurance benefits -- appear to be heading for the cutting-room floor. But a few others, such as giving the Internal Revenue Service more money to pursue tax dodgers and protecting millions of people for another year from being ensnared in the alternative minimum tax, could attract bipartisan support. Here is how the president's proposed 2.9 trillion budget may affect your pocketbook. TAXES The president is asking for nearly 2 trillion in net tax cuts over the next decade, mainly by extending provisions scheduled to expire in coming years. For example, the top 15 rate on long-term capital gains and most corporate dividends is set to expire at the end of 2010. So are today's federal income-tax rates, which range as high as 35. Without legislation, those rates would head higher starting in 2011. Don't expect Congress to act soon on the president's proposals to make those tax rates permanent. Lawmakers effectively have punted that issue into the elections of 2008, and beyond, amid continuing concern about reining in the federal budget deficit.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617099","date":"2007-02-09","texts":"PepsiCo Inc.'s 61 profit rise in the fourth quarter shows how the snack-and-beverage giant is increasingly relying on robust growth outside the U.S. and a widening product lineup as rising commodity costs and soft sales of some drink brands hurt results in the U.S. Like some other companies, the Purchase, N.Y., company is grappling with rising costs of corn, oranges, fuel, and other costs at the same time that U.S. consumer demand for some products has slowed. PepsiCo declined to reveal how much its commodity costs have risen, Cash corn prices surged 57 from December 2005 through December 2006 amid growing demand for ethanol and other pressures. The price of orange-juice futures climbed more than 60 in 2006 on the New York Board of Trade, as hurricane damage in Florida constrained supplies. Sales of sports drink Gatorade and Tropicana Pure Premium orange juice declined in the fourth quarter, accompanied by continued drops in soda sales. Stronger-than-expected results from the company's Frito-Lay North America unit, PepsiCo's largest source of profit, showed how the company is offsetting rising costs by raising prices, improving productivity and churning out new snacks. The company's strongest results came from its fast-growing international division, with operating profit rising 26. Snack volume rose 9, with particularly strong sales in Mexico and Russia, while beverage volume rose 7, led by sales in the Middle East, Argentina, China and Brazil.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982583","date":"2007-02-12","texts":"Believe your banker. Listen to the junior associate at your law firm. And read your newspaper with a skeptical eye. These seem to be some lessons of the 2006 Local Economy Challenge. Meet the person who most accurately predicted how the Washington region would fare last year Kathleen Walsh Carr, the president of Cardinal Bank Washington. And the least accurate We'll get to that in a minute. Carr correctly guessed that the value of goods and services produced in the Washington area would rise by 4 percent. She reckoned that the region would add 70,000 jobs the number was 67,600. She figured that local stocks would rise 10 percent they rose 9.3 percent. Those were among the nine economic indicators that she predicted, on average, better than any other participant. I am just stunned that I won, said Carr. I wasn't throwing darts at a board, but almost. Actually, she was being modest. Carr has spent 33 years as a banker, all in her native Washington. She said she based her predictions mostly on conversations with friends and clients, from whom she detected a general feeling of confidence. It wasn't scientific so much as it was information gleaned from other people, she said. It didn't hurt that, as a member of the board of directors of the Federal Reserve Bank of Richmond, she routinely reviews its extensive economic research.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984992","date":"2007-02-12","texts":"The Pentagon and the State Department have been squabbling quite publicly over State's request to have the already-stretched military fill about 40 percent of the 300 new State jobs in Iraq created by the administration's latest rebuilding plan. Seems the military isn't the only one balking at working there. The U.S. Embassy in Baghdad is finding it increasingly difficult to get local Iraqis to work there because of what one senior official at the embassy called the precarious security situation in the country. Last year, 35 local employees resigned, nearly all due to security issues, the official said. The State Department is authorized to hire 136 local people for jobs in the embassy, but right now only 47 are filled by Iraqis. Thirteen more are filled by Jordanians brought over in a program specifically set up to fill the chronic gap. Even with the Jordanians, the ever-growing shortage of local Iraqis seriously impacts on our ability to carry out the normal, day-to-day operations of the embassy, the official said. They can't find Iraqis to fill the solid-paying jobs even in a country where the unemployment rate is estimated to be 25 to 40 percent. Two years ago, the department sent out pleas for volunteers to go to Iraq, but the responses were mostly from folks who could fill only low-level jobs. There are now a number of important mid-level jobs the embassy needs to fill with people from the region.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614808","date":"2007-02-14","texts":"WASHINGTON -- Even as the U.S. trade gap widened in December for the first time in four months, economists said trade is likely to contribute to growth in coming months, as exports continue on an uptrend and oil prices, which surged in December, fall back. Economists have long predicted that as economic demand among top U.S. trading partners caught up with rapid U.S. economic growth, the U.S. trade deficit would shrink. The wider gap in December does not overturn the view that the deficit has peaked, said Nigel Gault, an economist at consulting firm Global Insight. The U.S. deficit in trade of goods and services in December grew 5.3 from the previous month to 61.18 billion, the Commerce Department reported yesterday. That marked the first monthly widening of the deficit since August. The shortfall for all of 2006 grew 6.5 to a high of 763.59 billion. It was the trade deficit's fifth yearly record in a row. The deficit with China, by far the largest U.S. trading partner, also hit a record for the year at 232.55 billion, sparking calls for action from the Democratic-controlled Congress.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615533","date":"2007-02-14","texts":"It's the best of times. It's the scariest of times. Last year, U.S. exports, industrial production, real hourly compensation, corporate profits, federal tax revenues, retail sales, GDP, productivity, the number of people with jobs, the number of students in college, airline passenger traffic and the Dow Jones Industrial Average all hit record levels. For the third consecutive year, global growth was strong, continuing to lift and hold millions of people out of poverty. From 30,000 feet, heck from 1,000 feet, it sure looks like the best of times. In relative terms, the first five years of the current recovery have been much better than the first five years of the 1990s recovery. But all this has not softened the pessimism of many pundits and politicians who are either unimpressed or expect the whole thing to come crashing down any minute. That is, unless the government firmly grabs the reins of the global economy and steers it clear of disaster. Many believe that the debate is over on global warming, nationalized health care, tax hikes, rich-versus-poor, the trade deficit and obscene oil company profits. Forgotten in this rush to pass judgment on capitalism is the fact that the last two times government seriously tried to control the U.S. economy -- in the 1930s and in the 1970s -- they made a terrible mess of it. In the 1930s, the Smoot-Hawley Tariff Act caused a collapse in global trade, while the Fed allowed the money supply to shrink by one- third. Government regulation in the 1920s prevented banks from branching, which caused more than 10,000 to fail in the 1930s, deepening and prolonging the Great Depression. Herbert Hoover's tax hikes were icing on the cake, capping off a perfect storm of D.C. policy mistakes. It took another 35 years, and a nice run of prosperity, but Washington finally gathered the courage to try this again. Between 1965 and 1981, Great Society welfare and health-care programs, wage and price controls, inflationary Fed policy, 70 marginal tax rates, 50 capital-gains tax rates, and highly regulated energy, airline, banking and trucking industries created severe problems. The Misery Index calculated by adding inflation and unemployment rose to 21.9 in 1980 today it is 7.2.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616536","date":"2007-02-15","texts":"WASHINGTON -- Leading House Democrats, after pulling the Bush administration behind the idea of incorporating labor rights into trade deals, are upping the ante further in the trade debate by pushing the White House to take a tougher line toward China. A hearing scheduled today by the House Ways and Means Committee is expected to lay the groundwork for action on legislation that would bring China under U.S. laws that use tariffs to punish countries that unfairly subsidize their exports. The move goes beyond the strategy stressed by the Bush administration in dealing with such subsidies. The administration has been trying to work through the World Trade Organization in Geneva, lodging a WTO complaint last week alleging Beijing's support for Chinese companies is harmful to U.S. makers of everything from computer products to steel. The emerging legislation would open a second front to pressure Beijing and underscores the determination of congressional Democrats -- who won a legislative majority in November's election partly on an antiglobalization agenda -- to bring a more-activist tone to U.S. trade policy. What the administration needs to accept is, there is now a new majority, and there is now a need for new policies, said Michigan Democrat Sander Levin, chairman of the House Ways and Means trade subcommittee. The session will focus on subsidy complaints, as well as China's alleged failure to enforce intellectual-property rights.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982421","date":"2007-02-16","texts":"Correction A headline on a Feb. 16 Business article referred to Rep. Barney Frank D-Mass. as a senator. Published 2172007 Federal Reserve Chairman Ben S. Bernanke yesterday rejected a Democratic lawmaker's suggestion that he consider cutting interest rates to bolster the economy. Bernanke, testifying for a second day on Capitol Hill, this time before the House Financial Services Committee, repeated that the Fed is likely to hold rates steady for a while if slower economic growth nudges inflation lower this year and next as expected. But the Fed also thinks inflation is too high and might go higher, Bernanke said. If he and his colleagues adjust borrowing costs in coming months, they are more likely to raise rates than lower them. In order for this expansion to continue in a sustainable way, inflation needs to be well controlled, Bernanke said in response to remarks by committee Chairman Barney Frank D-Mass.. If inflation becomes higher for some reason, then the Federal Reserve would have to respond to that by raising interest rates.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614845","date":"2007-02-17","texts":"The latest government figures show that Americans are socking away less for our futures than during any other sustained period since the Great Depression. That sounds alarming. However, a close look at how the government calculates personal saving suggests the number may be incomplete. Affluent Americans, especially, ought to be figuring their own savings differently -- counting important things that we'll add up below. Once you do your own math, you'll have a clearer snapshot of where your wealth really lies, and a strong foundation to use as you build your financial plan. First, a bit about the government figure. This month, the Commerce Department's Bureau of Economic Analysis put the nation's personal saving at negative 116.6 billion for December 2006. To get that number, the bureau starts with after-tax disposable income then subtracts personal consumption of all sorts.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984020","date":"2007-02-21","texts":"Global finance is mysterious, exciting and sometimes reckless. A specter now haunts it -- the specter of excess liquidity. Will this prove a passing anxiety or, as in 1997 and 1998 with the Asian financial crisis, will it threaten the stability of the entire global economy Good question. Liquidity is a common, but confusing, economic metaphor. Financial markets say, stock and bond markets are said to be liquid when it's easy to buy and sell. Transactions flow smoothly. By contrast, either buyers or sellers are scarce in an illiquid market. Prices move sharply, up or down. Markets can also have too much liquidity Investors may take increasingly large risks to put their abundant funds to use. Bubbles can form. Losses may follow. Just recently, HSBC -- a major bank holding company -- announced more than 10 billion in losses on so-called subprime home mortgages. Representing about 20 percent of new mortgages in 2006, subprime loans go to weaker borrowers with shakier credit histories. When borrowers are less creditworthy, their loans carry higher interest rates. Hence, the appeal to lenders. Now, losses are emerging. What's unclear is whether the subprime losses are an isolated event or a harbinger of wider investment blunders. In the past quarter-century, points out economist Richard Berner of Morgan Stanley, the financial system -- the way that savings are channeled into investments -- has changed in three fundamental ways.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982149","date":"2007-02-23","texts":"Financial regulators yesterday rejected calls for more direct oversight of hedge funds and said that the current system for preventing market collapse and widespread investor losses is working well in their first policy statement on the issue in eight years. Hedge funds are loosely regulated pools of private investment designed for wealthy individuals and institutions. Nearly 9,000 of the rapidly growing funds control more than 1 trillion in assets. On a given day, the funds may account for a third of the trading volume in major U.S. stock exchanges, according to industry estimates. The funds' outsized returns are drawing interest from pension funds and less-well-heeled investors -- and concern from investor advocates and analysts who fear that excessive borrowing and risky trading bets by the funds could induce instability in the market. The unanimous policy directive by the President's Working Group on Financial Markets comes weeks after pressure from allies in Europe and elsewhere to pay heightened attention to the hedge fund sector. Led by Germany, the Group of Seven nations pressed for more vigilance in policing the funds earlier this month. On Tuesday, Canadian authorities proposed forcing hedge fund managers in that country to register with regulators. The approach in the United States has been far less direct. The Securities and Exchange Commission tried to impose a similar registration requirement in 2004, only to see it struck down by a federal appeals court as overreaching. The SEC is considering a separate proposal to raise the minimum net worth that would allow an individual to invest in a hedge fund to 2.5 million from 1 million.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616914","date":"2007-02-24","texts":"Private-equity houses are circling supermarkets. A group including Kohlberg Kravis Roberts has expressed an interest in J Sainsbury, the United Kingdom's third-largest supermarket chain by sales. In the U.S., Albertson's last year was taken private for more than 9 billion, and Roundy's, a 2 billion Midwestern chain, this past week said it was seeking a buyer. Supermarket shareholders may be wary of selling out too cheaply. Past experience suggests that's not such a big risk. It's easy to see why the buyout shops are interested. Supermarkets have stable cash flows and lots of property. Private-equity funds can make a mint by stocking them with debt. KKR had a blowout success doing this with Safeway, which it acquired in 1986. In just four years, the buyout pioneer made seven times its original investment. Shareholders don't want to leave such rich pickings on the table. But before holding out, they should consider the experience of Kroger, a chain that is once again subject to buyout speculation. In 1988, KKR offered 64 a share, or a 60 premium, for the Cincinnati company. Rather than take the money, management engineered a massive 40 per- share dividend, which it funded with debt. In its wake, the stock fell to about 18 a share. At that point, it looked like shareholders would have been better off selling out. But management then got down to restructuring the business. It sold several prize assets and cut costs. As a result, Kroger's shares increased by an average of 20 a year over the following decade, beating the Standard & Poor's 500-stock index by a cool five percentage points each year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981777","date":"2007-02-25","texts":"I knew I was perhaps too concentrated in Washington Post stock about 17 percent and maybe a little light when it came to bonds 4 percent, but I figured I was pretty well off when it came to the rest of my stock investments. After all, I had investments in four stock mutual funds. That was before I looked closer. Two stock mutual funds accounted for most of my holdings, and it turned out they had a lot in common. Two of their top five holdings were identical Citigroup and Bank of America made up more than 4 percent of the holdings of one mutual fund and more than 8 percent of the holdings of another. And it turns out I'm not alone. Most of us are not as diversified as we should be when it comes to retirement investments. At its simplest, diversification means investing in different types of assets. When it comes to retirement savings, the choices are basically stocks, bonds, and cash and cash equivalents, such as savings accounts, certificates of deposit and money-market funds. Put all your money in a single stock, and you may be exposed to more risk than you realize -- as employees at Enron and WorldCom learned, to their sorrow. At the other extreme, invest completely in safer but lower-yielding investments, and you may be earning less than with a more diversified portfolio. But you also need to spread your risks within each asset category. That's why so many investors choose mutual funds, which allow them to own a small portion of a large number of investments. But buying more than one mutual fund may not add much to the diversity of your investments if the funds are investing in the same companies. And sometimes they are, as I found.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615329","date":"2007-02-26","texts":"The companies were the 1,000 largest in the Dow Jones U.S. Total Market Index at year-end 2006 that had stock-market trading histories of at least 12 months. Size was measured by the total value of a company's publicly traded common stock. The Dow Jones U.S. Total Market Index is designed to cover about 95 of U.S. stock-market capitalization. To be included in the index, companies must meet certain standards. Those not included weren't considered for the Scoreboard even though their stock performance may have made them one of 2006's best- or worst-performing companies. Companies that were removed from the index after filing for bankruptcy-law protection during the year were excluded. Companies that didn't meet the index's liquidity standards because of very low trading volume of their shares also aren't part of the Scoreboard, including such well-known names as Berkshire Hathaway Inc. Some big companies were dropped from the index after being acquired last year, including hospital operator HCA Inc., which was acquired by an investor group and taken private, and Golden West Financial Corp., a savings and loan acquired by Wachovia Corp. Dow Jones also excludes securities such as convertible notes, warrants, rights, mutual funds, unit investment trusts, closed-end funds and shares in limited partnerships.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617127","date":"2007-03-01","texts":"TOKYO -- One reason Tuesday's plunge in global stocks happened so fast involved money that helped fuel their recent rise super-low-cost funds from Japan. From 2001 until July 2006, Japan's central bank kept its benchmark short-term interest rate at zero, and even after a rate increase last week, the rate is only 0.5. That compares with 5.25 in the U.S. and 3.5 in the euro zone. The difference has enabled investors to profit by borrowing money in yen to buy higher-yielding assets denominated in other currencies. This technique is known as the carry trade -- because it takes advantage of the gap in returns, or carry, from different assets. Once the preserve of sophisticated financial traders like hedge funds, its use now has spread to include mutual funds and others in countries where yen loans are available. To execute a carry trade, investors have to sell the yen they borrow so they can buy assets in other currencies. With so many investors selling yen, the growth of the carry trade helped push down the yen in recent months to its lowest level in years against major currencies. That makes the carry trade more attractive because a falling yen makes profits earned in other currencies worth more in comparison. When concerns about the U.S. economy and overheated stock markets around the world helped trigger market drops Tuesday, investors say the unwinding of yen loans accelerated the declines. Market participants say it is likely that when some investors grew nervous, they began to sell their holdings in everything from Indian stocks to the Australian dollar and used the proceeds to buy yen to pay back their loans.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984091","date":"2007-03-07","texts":"Microsoft launched an unusually caustic public broadside yesterday against Google, accusing its archrival of running roughshod over copyrights as it creates an online service for searching books. Speaking at the annual meeting of the American Association of Publishers in New York, Thomas C. Rubin, Microsoft's associate general counsel, devoted much of his remarks to an attack on Google's practice of copying entire books into its database, often without the permission of copyright holders. It systematically violates copyright and deprives authors and publishers of an important avenue for monetizing their works, Rubin said, according to prepared remarks. In doing so, it undermines critical incentives to create. Microsoft's salvo came as the software giant faces mounting pressure from Google, which is increasingly extending its reach beyond the Web search that made it the darling of the technology industry. Last month, Google began selling an online productivity suite, including e-mail, calendar and Web services, that competes with Microsoft's Office software. Google also continues to extend its substantial lead over Microsoft in Web searching, an area where Microsoft has struggled and that remains the main way users navigate the Internet.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616503","date":"2007-03-08","texts":"After Tuesday's big rally, the stock market turned back into the Little Engine that Couldn't. The Dow Jones Industrial Average, whose 157-point surge Tuesday was its strongest in point or percentage terms since July, gave back 15.14 points, or 0.12, to finish at 12192.45. It is down 2.2 this year. Trading again was heavy. Since its closing record of 12786.64 set on Feb. 20, the blue-chip average has fallen in nine of the past 11 sessions, a decline of 4.6. Yesterday, the Dow was up for most of the day, following bullish comments on the economy from Treasury Secretary Henry Paulson and from the head of the Chicago Federal Reserve bank. But a Fed report in the afternoon indicated that economic strength is only modest, and the report helped persuade investors to cash in some of Tuesday's winnings. Making things worse, home builder D.R. Horton late in the day offered an unusually bleak outlook for the housing market. After last week's volatility, even though we had a great day Tuesday, we haven't healed completely, said Andy Brooks, head of stock trading at Baltimore asset-management firm T. Rowe Price. People are still very cautious and anxious, so we can be pushed around here pretty easily. There's not a lot of confidence out there.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984690","date":"2007-03-09","texts":"An item in the National Briefing of the March 9 Business section gave an incorrect figure for the net worth of U.S. households in the fourth quarter of 2006. It is 55.6 trillion. Published 3102007 The net worth of U.S. households -- the difference between total assets and total liabilities -- climbed to a record high of 55.6 billion in the final quarter of last year, boosted mostly by gains in stocks, the Federal Reserve said. For all of 2006, households' net worth rose by 7.4 percent, slower than the 7.9 percent increase in 2005. Household debt grew by 8.6 percent in 2006, down from an 11.7 percent increase in 2005. Subprime lender New Century Financial stopped accepting loan applications as it struggles to obtain financing despite market speculation that the company could file for bankruptcy protection. The lender faces investor lawsuits and an investigation by federal prosecutors into trading in its stock. David Einhorn, the founder of hedge fund Greenlight Capital, resigned from its board. Einhorn's hedge fund holds a 6.3 percent stake in New Century, according to a filing with the Securities and Exchange Commission. CVS boosted its offer for Caremark RX for a third time, a day after Express Scripts raised its bid. CVS increased the dividend it would pay Caremark shareholders by 1.50, bringing the total offer to 62.19 a share in cash and stock. It's the best and final offer, CVS said in a statement.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617277","date":"2007-03-10","texts":"A Wall Street Journal News Roundup European stock markets ended the week firmer, buoyed by retailers, as the prospect of merger activity rippled through the sector. Indexes reversed early losses after U.S. jobs data eased worries over an economic slowdown. In Asia, Japan's stock market rose on stronger-than-expected machinery orders, but the Hong Kong market was dragged down by selling in China Mobile ahead of a reweighting in the benchmark Hang Seng Index. In LONDON, the FTSE 100 Index rose 17.50 points, or 0.3, to 6245.20. Alliance Boots leapt 14 on a takeover bid, later revealed to be from its deputy chairman and private-equity group Kohlberg Kravis Roberts. The deal is valued at GBP 9.7 billion 18.72 billion. In PARIS, the CAC 40 rose 13.58 points, or 0.3, to 5537.84. European Aeronautic Defence & Space fell 4.6 after reporting a fourth-quarter loss.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981772","date":"2007-03-10","texts":"U.S. unemployment dropped slightly last month and hourly wages rose, evidence of a still-healthy labor market that eased many investors' concerns about a possible economic slowdown. New data from the Bureau of Labor Statistics showed the unemployment rate fell to 4.5 percent, from 4.6 percent the month before, as businesses and government created 97,000 new jobs. Hiring in the health and hospitality industries and a spike in government employment made up for a drop in construction jobs and a continued decline in manufacturing employment. Average hourly wages paid to non-supervisory and production workers rose 6 cents, to 17.16, a 4 percent increase from a year earlier. Though the pace of job creation was slow compared with recent months, the overall report was stronger than expected on Wall Street, giving a small boost to markets that had begun to take a dimmer view of the U.S. economy. Recent reports on economic growth and orders for capital equipment, among other things, pointed to a possible slowdown and contributed to recent volatility in the stock market. Bolstering the outlook further The monthly U.S. trade deficit fell nearly 3.8 percent in January, to 59.12 billion. Buoyed by overseas sales of airplanes and computers, exports increased 1.4 billion, to 126.7 billion imports fell by about 1 billion, to 185.8 billion.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830981881","date":"2007-03-11","texts":"Did the plunge in the stock market two weeks ago leave you wondering what to do Did the subsequent days of roller-coaster markets make you even more confused Many money managers claim to have the winning strategy. Of course, they disagree. Here are five who are staking big bucks on their predictions. David W. Tice, president of David W. Tice & Associates, manages the Prudent Bear mutual fund, started in 1995, and the Prudent Global Income Fund, launched in 2000. They have a combined 1 billion under management. The Bear fund aims to profit from a market downturn by betting that U.S. stocks will fall, a strategy known as shorting. The Global fund is structured to benefit from a weakening U.S. dollar and rising gold prices. The recent downturn is proof that easy money has helped prolong a period of financial prosperity, says Tice, who thinks a stubborn bear market is likely settling in. Tice admits he has seen red in recent years the Bear fund posted losses in 2003 and 2004 but has recorded modest returns since. He says he underestimated the willingness of mortgage lenders to do business with higher-risk borrowers. But as lenders begin to pay the price for those risky loans, Tice says he is bulking up on short positions on financial institutions, as well as other companies that depend on access to credit. We think this could be a 10- to 15-year decline, he said. David Poiesz, head of the growth-equity investment team at OppenheimerFunds, manages the 1.3 billion Oppenheimer Growth Fund and co-manages the 2.8 billion Oppenheimer Equity Fund. Some investors, he says, have too much money invested abroad after chasing higher returns in emerging markets. He views the recent market turmoil as a healthy reminder of the risks overseas, and says U.S. investors might find safer options at home.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982028","date":"2007-03-11","texts":"Bond A debt instrument, essentially an IOU, issued by governments or companies that is repaid with interest over a specific time period. Yield Total return on the bond investment, including interest rate and price, expressed as an annual percentage rate. Treasurys Issued by the Treasury Department to raise money for the federal government. They vary in duration, from three- and six- month bills through two-, three- and five-year notes, to 10- and 30- year bonds. TIPS Treasury Inflation-Protected Securities adjust the value of the principal amount to keep pace with price changes. Munis Issued by states, counties and local authorities to raise money for roads, schools, sewers, hospitals, stadiums, airports and other municipal projects.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614024","date":"2007-03-13","texts":"For years, an obscure class of Wall Street investment vehicles has acted like a locomotive in the housing-finance business, driving growth by soaking up risky mortgage bonds and parceling them out to investors around the world. Now, as mortgage problems mount and a wave of mortgage-bond downgrades looms, these investments, known as collateralized debt obligations, are starting to look like a different vehicle -- rockets overloaded with combustible fuel. Some big investment banks have been wavering when launching new CDO deals because of problems in the subprime mortgage market, which caters to the least credit-worthy borrowers. The problems also have investors demanding much higher returns on the CDOs they buy, which makes them harder to sell and drives down their prices. CDOs are an integral part of Wall Street's mortgage dicing-and- slicing machine. After mortgages are written, investment banks pool them together and use the cash flows they produce to pay off mortgage- backed bonds, which the investment banks underwrite. The mortgage bonds, in turn, are often packaged again into CDOs and sold off in slices. Investors can choose to buy the risky pieces of the bonds or purchase slices with less risk.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616002","date":"2007-03-15","texts":"As Congress prepares to tackle the annual federal budget process, we are a week away from a vote that could put our economy on a dangerous new path. Yesterday, the majority party unveiled its budget proposal to impose higher taxes on families and businesses in order to pay for more wasteful Washington spending. Despite campaign promises not to raise taxes, the new majority party's budget fails to keep existing tax policies in place, which amounts to a 900 billion tax hike over five years, the largest tax increase ever. The Democrats may try to use smoke and mirrors to mask this increase, but it is there, and the real victims will be average Americans. Under a Democratic budget that does not extend existing tax policies, the lowest-income families who pay taxes will see their taxes increase by 33. The 1,000 per child tax credit would be cut in half, and the standard deduction for married couples would be cut by 1,700. Forty-five million working families with two children would pay 3,000 more in taxes per year, equivalent to a 5 pay cut. Three thousand dollars may not sound like a lot in Washington, but in New Hampshire and Iowa it pays for a year's worth of groceries, health- care expenses, home-heating oil or electricity. In addition to taking more from hard-working families, that tax hike would serve to slow the economy, suppressing investment and job creation. It would dampen the positive impact that the capital gains tax rate has had on the investments of families and seniors. That tax hike would become a noose around the neck of the economy. Following the bursting of the Internet stock- market bubble, corporate scandals and the Sept. 11 terrorist attacks, the U.S. economy was struggling to stay afloat. A Republican Congress joined forces with the president to enact fair, pro-growth tax policies in 2001 and 2003. These tax cuts have had a remarkable effect. The economy has not only remained afloat, it has also thrived, offering increased prosperity and opportunity to millions of American families and businesses.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983224","date":"2007-03-18","texts":"Okay, you're probably thinking that sounds outrageous, so let me take it down a bit. How about a 10-year auto loan If you're financing the purchase of a car with the equity in your home, that is exactly what you could be doing -- paying for a car over 10 or even 30 years. The use of home-equity loans, lines of credit and cash-out refinancing to purchase automobiles grew in the last decade as interest rates dropped and property values soared. It also has become popular as lenders hype the fact that interest on a home loan is tax-deductible, unlike interest on a vehicle loan. In 2006, about 24 percent of homeowners used a home equity line of credit to purchase a car or truck, according to Synergistics Research, a financial services market research company based in Chamblee, Ga. About 8 percent of homeowners took out a second mortgage specifically to buy a vehicle, says William H. McCracken, chief executive of Synergistics. But is buying a car or paying off your remaining auto loan balance with the borrowed equity from your home a good financial move I issue a note of caution on this, says Don Taylor, a columnist for Bankrate.com and an associate professor of finance at the American College in Bryn Mawr, Pa. If you don't have the discipline to do more than the minimum payments on these loans, then this is not a good idea.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613902","date":"2007-03-21","texts":"Don't Bet on Fed To Give Shelter In Market Storm Volatility on Wall Street had been tame for so long that the recent splashes seemed like tidal waves, rippling throughout stock markets. Unnerved investors have turned to hopes for a Federal Reserve rate cut as shelter. No question, stocks' recent ups and downs have been dizzying. After hitting a record closing high of 12786.64 on Feb. 20, by March 5 -- its most recent closing low -- the Dow Jones Industrial Average had lost 736 points, nearly 6.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614786","date":"2007-03-22","texts":"Baseball players are said to peak in their late 20s. Chess players in their mid-30s. Theoretical economists in their mid-40s. But in ordinary life, there's an obvious tension between sheer smarts, often seen in the supple minds of the young -- and experience, which comes only with age. Which one is more valuable in making personal-finance decisions A quartet of economists think they have found an answer. In looking at which consumers get stuck paying those pesky credit-card fees, the economists noticed a puzzling pattern Younger and older consumers were more likely than others to get hit with easily avoided fees. So the economists expanded their inquiry to loans and other products, and sifted through records of tens of thousands of consumers. They found that middle-aged adults tend to borrow at lower interest rates and pay fewer fees than younger and older adults. The age at which consumers are least likely to make financial mistakes a few months past their 53rd birthday, despite all the pressures that accompany middle age.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614778","date":"2007-03-23","texts":"Crude-oil prices jumped, some investors had second thoughts about the risk of inflation, and others took profits from Wednesday's rally, leaving stocks little changed at the end of the day. The Dow Jones Industrial Average inched up 13.62 points, or 0.1, to close at 12461.14. It is now off just two points from where it started the year. Exxon Mobil, a Dow component, led the way, rallying 1.5 due to the rise in crude prices. The blue-chip average has now risen four straight days, including a 159.42-point jump on Wednesday prompted by Federal Reserve comments on interest rates. Oil futures for May delivery rose 3.5, or 2.08, to 61.69 a barrel, now up 1 on the year at the New York Mercantile Exchange. It was the third straight rally in the oil market, which has been beset by jitters over falling U.S. fuel inventories and the prospect for rising demand as the weather warms and drivers hit the road. Except for oil producers, however, most companies are hurt by higher fuel prices, which raise production costs and sap consumers' purchasing power. That helped to push some stocks lower yesterday.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617149","date":"2007-03-23","texts":"Ever since news emerged that ABN Amro Holding NV was not only in play but in exclusive takeover talks with Barclays PLC of the U.K., it has seemed to be only a matter of time before other big banks began circling. The real question was whom. Now comes news that a faction within U.S. giant Citigroup Inc. is pushing Chairman and Chief Executive Charles Prince to bid for the big Dutch bank. The fact that any move would have to be unsolicited, and might be considered hostile, complicates matters. Hostile takeover bids in the banking industry are difficult to win, and hostile deals of all stripes are particularly tough in the Netherlands, where companies enjoy many defenses that aren't allowed elsewhere, as Carrick Mollenkamp, Jason Singer and Dennis K. Berman report. Indeed, the Dutch central bank has already said it would frown on such a situation. However, ABN Amro and Citigroup have complementary businesses in the U.S. and Latin America, and a deal would give Citigroup a stronger foothold in continental Europe. There also is the possibility that Citigroup could push for part of ABN's assets, such as Chicago-based LaSalle Bank or Banco ABN Amro Real SA of Brazil, each of which contribute about 17 to ABN's overall revenue. Nonetheless, the Dutch community might not like a Citigroup bid, fearing it would reduce the bank's Dutch headcount aggressively, according to corporate government consultant Jaap Koelewijn. But he also considers the proposed Barclays takeover no more than a diversion, arguing that active investors won't accept it because other competitors could achieve greater synergies and hence be able to pay a higher premium. Read Carrick Mollenkamp, Jason Singer and Dennis K. Berman's report httponline.wsj.comarticle0SB117462029775746489,00.html","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614865","date":"2007-03-24","texts":"What did they say What did they mean Investors routinely dissect the Federal Reserve policy committee's statements to infer far-reaching economic implications from a phrase here or a deleted word there. The Fed's comments Wednesday afternoon have proven especially tricky to decipher. The stock market rallied just after the Fed's latest statement was released, as many investors interpreted the deletion of a previous mention of firming rates, along with the absence of any mention of subprime-mortgage lending, as a sign that policy makers are now leaning toward cutting in their target interest rate in the months ahead. After the previous Fed meeting in January, investors had taken the Fed's mention of possible firming as a sign of possible rate increases to tame inflation. The Dow Jones Industrial Average has gainly modestly each day as economists debate what the Fed meant.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613981","date":"2007-03-28","texts":"WASHINGTON -- A House tax panel intends to consider a bill to expand various taxpayer rights, including a measure aimed at curbing predatory tax refund anticipation loans. The House Ways and Means Committee is to consider today the Taxpayer Protection Act of 2007. A description of the draft bill offers eight taxpayer-rights provisions, all of which have either no or negligible revenue effects, according to the Joint Committee on Taxation. The item aimed at refund anticipation loans would prohibit the Treasury secretary from providing a debt indicator to tax preparers involved in preparing such loans with high fees or interest rates. Refund anticipation loans are short-term loans keyed to a person's pending tax refund. Consumers groups say many refund anticipation loans carry excessive interest rates. A debt indicator helps in the granting of refund anticipation loans because it tells whether a taxpayer has any offsetting debts to the federal government that could first be claims against a tax refund, according to the Joint Committee on Taxation. The debt indicator therefore reduces a lender's risk because it shows whether the government will seek to intercept part of the tax refund. The bill would prohibit the Treasury secretary from providing a debt indicator to any person involved in making refund anticipation loans with predatory charges and fees.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615343","date":"2007-03-28","texts":"Don't lose your shirt when you give it away. Many people who have donated used clothing, books, furniture and other household items to charity each year failed to get proper documentation for their gifts -- and thus could lose all or part of their deduction if challenged by the Internal Revenue Service, according to a recent government report. Taxpayers and tax professionals need to be better educated about the rules for claiming charitable gifts, says the report by the Treasury Inspector General for Tax Administration, a U.S. Treasury Department unit. At the same time, the report urges the IRS to do a better job of enforcement. One problem many donors face is understanding the property-donation rules, which can be complex. Even those who have mastered all the old rules may be unaware of new twists that became law last summer -- and thus affect returns for 2006 that taxpayers are filing now. Based on a sampling of returns for the 2005 tax year, the Treasury report estimates that 101,236 taxpayers may have claimed unsubstantiated noncash gifts totaling about 1.8 billion. The report focused on noncash gifts other than vehicles and works of art.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981812","date":"2007-03-29","texts":"Federal Reserve Chairman Ben S. Bernanke yesterday blamed loose lending for the recent turmoil in the mortgage market and told Congress that it's worth looking at the idea of creating a law against certain lending practices. Bernanke, testifying at a hearing of Congress's Joint Economic Committee, said Fed policymakers are likely to hold interest rates steady for a while and are more concerned about high inflation than slow economic growth. Stock prices fell as his comments dispelled many investors' hopes that the central bank was preparing to cut interest rates to bolster a weakening expansion. The Fed chairman used the hearing to make his first public remarks on why more Americans are falling behind on their mortgage payments and losing their homes to foreclosure, particularly subprime borrowers with poor credit histories, low incomes, no down payments or other factors that put them at higher risk of default. The hearing comes as Congress is trying to assess the causes and figure out what to do in response. Bernanke's testimony was also his first since a Senate Banking Committee hearing last week, at which panel chairman Christopher J. Dodd D-Conn. blamed the subprime mortgage mess on a failure of the Fed and other bank regulators to enforce federal lending laws. The Fed chairman, without explicitly referring to Dodd's criticisms, countered yesterday that lenders had insufficiently gauged many subprime borrowers' ability to repay mortgages, particularly when their payments increase because of rising interest rates.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617086","date":"2007-03-30","texts":"A string of downbeat economic reports, including evidence that companies are paring back investment spending and signs that housing is taking another hit, have prompted economists to reduce their forecasts for economic growth in the first half of 2007. Since late last year, forecasters have warned that economic growth in 2007 would be weaker than in 2006, due to a slump in housing construction and reduced production by American auto makers. Last year, gross domestic product, the broadest measure of economic activity, grew at an inflation-adjusted 3.3. However, as the housing and auto slumps have deepened while business spending has started to wane, economists are taking another whack at their GDP forecasts. Earlier this month, the consensus estimate of economists surveyed by The Wall Street Journal called for GDP to grow about 2.3 in the first quarter, down from an estimate of 2.5 a month earlier. The forecast for the second quarter was unchanged at 2.4. One-tenth of a percentage point in GDP amounts to about 13.5 billion. The housing recession is likely to be a little deeper and much more prolonged than any of us have been thinking, and capital spending will be considerably weaker, said Nariman Behravesh, chief U.S. economist at consulting firm Global Insight, which lowered its forecast of first-quarter GDP growth to 1.6 from 2.2. Macroeconomic Advisers, an economic consulting firm based in St. Louis, lowered its forecast to 1.4 from 1.7. Economists at Morgan Stanley reduced their tracking of first-quarter GDP growth to 1.4 from 1.6 growth the firm's estimate was as high as 2.2 in mid- March.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614991","date":"2007-04-02","texts":"Foreign stock markets went for a wild ride in the first quarter, spooked by fears of a slowing U.S. economy and the ripple effects that a downturn could have globally. But most foreign markets steadied by the end of the quarter, leaving investors with some hope that the four-year overseas rally remains intact. The pullback began the last week of February amid signs that loans to the least creditworthy U.S. borrowers, known as subprime loans, were deteriorating. Investors worried that delinquencies in this corner of the property market could spread to the broader housing sector, damping U.S. consumer appetites for foreign goods and commodities. Global markets suffered their biggest one-day selloff Feb. 27, with blue-chip indexes falling between 3 and 7, after a nearly 9 drop in Shanghai's main stock index further unsettled nerves. It was a pretty turbulent period, said Shigeki Makino, a senior portfolio manager at Putnam Investments in Boston. Concerns about risk came back to the fore, and people reined in their riskier bets pretty quickly. The Dow Jones Stoxx Index, which measures the performance of major European companies, advanced 2.5 in the quarter, Tokyo's Nikkei Stock Average of 225 companies was ahead 0.4, while Morgan Stanley's emerging-markets index edged up 1. All did better than the Dow Jones Industrial Average's 0.9 decline. But these return figures belied the price swings to start the year, and the sudden flight from riskier markets in late February. Latin America best exemplified the roller-coaster nature of the quarter. These stocks lost 5 during the first week of the year, bounced back 12 until Feb. 22, slid 12.5 during the next 10 days, then bounced back another 12 in the three weeks that followed.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614277","date":"2007-04-04","texts":"The triple-digit gain for the Dow Jones Industrial Average, putting it back into positive territory for the year, was propelled by Home Depot and General Motors. Meanwhile, Continental Airlines was among carriers that took flight on lower oil prices, and Tiffany counted itself among retailers that recorded stellar sessions. But a hedging strategy caused a setback for Bunge, and Molson Coors Brewing dropped after a downgrade. The Dow rose 128 points, or 1.03, to 12510.30, registering its fourth up session in a row and rising to a five-week high as 29 of 30 components rose. Procter & Gamble was the decliner, with a drop of 12 cents to 62.90. The Nasdaq Composite Index gained 28.07, or 1.16, to 2450.33, also up four sessions in a row, its longest streak in two months. The Standard & Poor's 500-stock Index advanced 13.22, or 0.93, to 1437.77, a five-week high. There is a lot of concern that consumer spending is going to drop off significantly, especially in the summer months, said David Klaskin, chief investment officer at Oak Ridge Investments. Today's drop in oil prices and the uptick in pending home sales eased fears at least for the near term.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614039","date":"2007-04-05","texts":"Amid softening home prices, rising foreclosures and turmoil in the mortgage industry, billionaire financier Carl Icahn is making a contrarian bet on a troubled pocket of the U.S. housing market high- end Florida condominiums. How Mr. Icahn fares with his wager could help answer whether this state's housing downturn is a cloud that will soon blow over or a storm that will linger for years. The board of WCI Communities Inc., a home builder that has erected hundreds of high-rise condos along the Florida coast, could decide today whether to accept Mr. Icahn's tender offer of 22 a share for the builder that many consider a good barometer for the state's priciest real estate. That offer, which totals about 920 million, is slightly higher than WCI's 21.45 price yesterday in 4 p.m. New York Stock Exchange composite trading. Mr. Icahn's pursuit of WCI has puzzled many on Wall Street who believe the Bonita Springs, Fla., company is highly exposed to the swelling glut of condos dotting Florida beaches and golf courses. In the fourth quarter, WCI, which has a market value of about 909 million, had more defaults on condos and cancellations of typical single-family homes, which it also builds, than it received orders for new homes. Mr. Icahn appears to be counting on Florida real estate to make a comeback. My investment philosophy, generally, with exceptions, is to buy something when no one wants it, he said yesterday. We made a fairly large investment and took control of several energy companies seven or eight years ago when they were way down. Housing is somewhat analogous. Mr. Icahn, who has put up a slate of nominees for the WCI board, declines to comment on what, if any, plans he has for the company. In a Jan. 16 Securities and Exchange Commission filing, Mr. Icahn said he beneficially held 14.5, or 6.1 million shares, in WCI and that he intended to contact the company to discuss how to unlock the inherent value of its shares. His tender offer is conditioned on the WCI board pulling its recently enacted poison-pill provision intended to ward off hostile takeovers. WCI declined to comment, citing a quiet period after the tender offer.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984261","date":"2007-04-07","texts":"Gas prices may be up and housing prices may be down, but the U.S. economy is still putting people to work and even adding a little padding to their paychecks. New data from the Labor Department show the jobless rate ticked down slightly in March, to 4.4 percent. Businesses and government created 180,000 new jobs -- far more than many economists had expected -- as good weather helped to fuel a rebound in construction hiring. Retailers, restaurants, schools and hospitals also added jobs at a brisk pace, according to the report, luring people back into the job market and more than offsetting job losses in factories, telecommunications and leasing. Meanwhile, average hourly wages for non-supervisory workers jumped to 17.22, up from 16.55 one year ago, a solid 4 percent increase. There's now very strong growth in the labor force, as strong as it's been since the turn of the decade, said Mark Zandi, chief economist at Moody's Economy.com. Wages are rising and people are starting to recognize that this is the best time to be looking for a job since 2000. The drop in unemployment was the second consecutive monthly decline, pushing the jobless rate down to a level touched briefly last fall but not seen previously since 2001. Combined with rising wages, economists said the new employment numbers offer evidence that the job market remains surprisingly sturdy despite a slump in the housing market and continued weakness in the manufacturing sector, which shed another 16,000 jobs last month.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842614455","date":"2007-04-11","texts":"Drug maker Merck is hoping it can reenter a lucrative market for arthritis painkillers, but comments from regulators today suggest it faces long odds, just as a number of analysts suspected. Merck's Arcoxia, like the company's shelved Vioxx, is a Cox-2 inhibitor, designed to reduce the gastrointestinal damage that other painkillers may cause. However, The Food and Drug Administration said in a memo posted on its Web site that new drugs in that class should fill an unmet medical need for patients who have no other relatively safer means to manage their arthritis pain. The agency also noted that it remains uncertain as to whether most Cox-2 drugs deliver their purported gastrointestinal benefits -- it said only Pfizer's Celebrex, which remains on the market, has been shown to reduce bleeding. Vioxx was yanked off the market in 2004 after it was linked to increased cardiovascular risks, and Merck soon found itself facing thousands of lawsuits from consumers. The drug maker has vowed to fight each claim, and it has had a mixed record in state and federal trials so far. Under great political pressure, the FDA put black box warnings on Cox-2 inhibitors in 2005. Since then, Merck has been looking for a way to recover at least some of the 2.5 billion in annual sales Vioxx produced in 2003, its last full year on the market. An outside panel of medical experts will vote Thursday on whether they think Arcoxia, which is already being sold by Merck overseas but fetched relatively small sales of just 265 million last year, should be given the green light by the FDA. The agency isn't bound to follow the experts' advice, though it frequently does. Many Wall Street analysts believe that Arcoxia's chances for approval are slim. Jason Napodano of Zack's Equity Research sees a near-term U.S. launch of Arcoxia as highly unlikely. He thinks that regulators, who took a lot of heat over their approval of Vioxx and other Cox-2 inhibitors after word of the heart risks emerged, will be ill-inclined to stick their necks out on the drugs this time. We believe the FDA would be highly criticized for approving Arcoxia given the past cardiovascular risks seen with the class and the new hypertension and edema risks shown in a trial of the drug, Mr. Napodano noted. Many analysts aren't even bothering to build Arcoxia into their projections for Merck. Merck remains upbeat about its outlook and even recently bumped up its profit estimates for this year. Though it's eager to replace its lost Vioxx sales, the drug giant isn't putting all of its eggs in one basket. It boasts a strong roster of newer drugs which should help to offset the large piles of cash that the company is shoveling into Vioxx litigation, as well as the loss of patent protection on the blockbuster cholesterol fighter Zocor. Among those medications is Gardasil, a vaccine for the cervical-cancer causing human papillomavirus. Merck ditched a much-criticized campaign to make Gardasil vaccinations mandatory for young girls, but Mr. Napodano thinks that it will be a blockbuster for Merck anyway. Wall Street also has high hopes for just-approved diabetes drug Janumet. Jami Rubin of Morgan Stanley, who lifted her price target on Merck from 53 to 55 today, projects it will fetch 2.8 billion in sales by 2011. Merck, which reports earnings next week, saw it shares rise slightly today, to around 46 a share, just shy of its 52-week high of 46.55. ---","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615284","date":"2007-04-11","texts":"D.R. Horton Inc., the nation's largest home builder by number of units, said its second-quarter orders fell 37, an indication that the crucial spring home-selling season is proving to be weaker than many builders had hoped. The company said it had orders for 9,983 homes in the quarter ended March 31, compared with 15,771 homes a year earlier. The dollar value of those orders was 2.6 billion, down from 4.4 billion a year earlier. Market conditions for new-home sales continue to be challenging in most of our markets as inventory levels of both new and existing homes remain high, Chairman Donald Horton said. Our cancellation rate is essentially unchanged from the prior quarter, but it remains above our historical range as we continue to see an increase in the use of sales incentives in many of our markets. Orders in all geographic regions declined in the fiscal second quarter. California posted the sharpest drop, declining 59 to 1,107 homes. Orders in the Southeast fell 30, in the South Central region orders dropped 34 and in the Southwest slid 39. The West was down 28. The Northeast had the smallest decline, down 21. Horton, based in Fort Worth, Texas, is the latest builder to report that the usually strong spring-selling season has gotten off to a slow start. Its deteriorating orders come amid a tightening of mortgage- lending standards and a softening of home prices in many markets.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616653","date":"2007-04-11","texts":"Minutes of the Federal Open Market Committee March 20-21, 2007 A meeting of the Federal Open Market Committee was held in the offices of the Board of Governors of the Federal Reserve System in Washington, D.C., on Tuesday, March 20, 2007 at 230 p.m., and continued on Wednesday, March 21, 2007 at 900 a.m. The Manager of the System Open Market Account reported on recent developments in foreign exchange markets. There were no open market operations in foreign currencies for the System's account in the period since the previous meeting. The Manager also reported on developments in domestic financial markets and on System open market transactions in government securities and federal agency obligations during the period since the previous meeting. By unanimous vote, the Committee ratified these transactions. The information reviewed at the March meeting indicated that the economy appeared to be expanding at a modest pace in the first quarter. Declines in residential construction activity continued to weigh on overall activity, and business investment had softened considerably over the preceding several months, especially in equipment used in the construction and motor vehicle industries. However, consumer spending had increased appreciably in the early part of the year, and labor demand continued to expand, albeit at a somewhat slower pace than last year. Meanwhile, the twelve-month increase in core consumer prices remained elevated relative to its pace one year earlier.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616919","date":"2007-04-11","texts":"MADRID -- With more than 100 billion of deals proposed in the past two years, Europe's giant utilities have one of the world's biggest cases of merger mania. Just yesterday two European companies culminated a messy battle and agreed to a 58.27 billion bid for Spain's Endesa SA. Behind all the deals is a big collision between Europe's new push for a unified marketplace and the national pride of Europe's politicians. Starting July 1, the European Union's power sector will be officially flung open to competition, allowing utility companies from any of the bloc's 27 member nations to sell electricity in any other. By unshackling the energy sector, European regulators hoped to boost competition and lay the foundation for stronger growth on the continent. They wanted to inject the continent's electricity marketplace with new players that would spur cheaper energy prices. But that vision has bumped up against a messy reality Politicians in European capitals are reluctant to loosen their grip on the state- run national champions that dominate strategic sectors. Rather than invest in new capacity, transmission lines and other upgrades, the dominant players have instead been bulking up for a wave of mergers. Big utilities are scrambling to buy up assets from Bulgaria to Scotland in a mad dash to get bigger when the deregulatory rules come into full effect. Last year, Paris rushed a merger between French utility Suez SA and Gaz de France SA, though the pact has hit legal and political hurdles and the outcome is unclear. Earlier this year, two midsize power companies in the Netherlands, Essent NV and Nuon NV, said they would tie the knot. Spain's Iberdrola SA will complete its 24 billion friendly takeover of Scottish Power PLC in the United Kingdom this month, making it the world's biggest marketer of renewable energy sources such as wind power.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617273","date":"2007-04-12","texts":"WASHINGTON -- Federal Reserve officials agreed at last month's policy meeting that more interest-rate increases might be needed to combat inflation, but given increased uncertainties about the economy, they opted not to cite higher rates as their only alternative. In light of the increased uncertainty about the outlook for both growth and inflation, the Federal Open Market Committee also agreed that the statement should no longer cite only the possibility of further firming, according to a summary of the March 20-21 meeting, released yesterday with the usual three-week lag. Downside economic-growth risks had increased in the weeks since the January FOMC meeting, according to the minutes, and the latest information cast some doubt on whether core inflation was on the expected downward path. The Fed has held the federal-funds interest rate steady at 5.25 since June. At last month's meeting, it dropped a longstanding reference to the possibility of higher interest rates, saying instead that future policy adjustments will depend on the evolution of the outlook for both inflation and economic growth. Investors' initial reaction that the wording meant the Fed might cut rates was quickly reversed a week after the Fed meeting when Fed Chairman Ben Bernanke said, I do want to emphasize that we have not shifted away from an inflation bias.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981956","date":"2007-04-12","texts":"IRS agents are devoting more time to corporate audits that fail to find additional tax dollars, an analysis of federal records released yesterday shows. As a result, an increasing share of underreported taxes identified by the government comes from individuals, according to the analysis by the Transactional Records Access Clearinghouse, a nonpartisan research group at Syracuse University. TRAC said the results raise concerns that the IRS isn't using its limited resources to collect taxes in the fairest and most efficient manner. The analysis comes as Congress and the president grapple with how to close the 350 billion tax gap -- the government's estimate of unreported or uncollected federal taxes -- in the face of rising expenses, particularly from the war in Iraq. You would not expect what we found if the system were running well, said Susan B. Long, a TRAC researcher who is a professor of statistics at Syracuse's business school. IRS spokesman Terry Lemons said TRAC's numbers are accurate but that the drop in productivity is the temporary result of a policy change in 2003, when Mark W. Everson became IRS commissioner. The new policy, intended to improve tax collection, shifted auditing time from larger companies to smaller firms and required agents to finish corporate audits more quickly, in part by asking fewer questions.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614317","date":"2007-04-18","texts":"Telecom bankers have a lot to answer for. In the past year, the industry's two big U.S. initial public offerings of stock have been disastrous. The shares of Vonage Holdings and Clearwire have plummeted 80 and 25, respectively, since their debuts. Now, bankers are shopping the largest telecom IPO since 2004. Luckily for them -- and prospective investors -- the 1 billion float of discount cellphone operator MetroPCS looks like a winner. Metro is a pygmy competing against giants, but that isn't necessarily bad. Competition among the big cellphone operators is relatively restrained. It tends to revolve around which flashy new handset is offered along with a standard multiyear contract. In contrast, Metro sells cheap, unlimited cellphone service to customers on a monthly basis for a flat fee. This has worked out well. Metro's revenues have increased about 60 in each of the past five years. But growth rates aren't everything, as Vonage and Clearwire have demonstrated. Profitability is the key. And it remains only a vague promise for those two companies. Metro, by contrast, has turned a profit for the past four years -- and its earnings have paid for a majority of its growth. Moreover, the price it's seeking looks reasonable. At 20, the midpoint of the indicated range, the stock will be valued at less than 16 times estimated 2007 EBITDA earnings before taxes, depreciation and other factors. This is slightly more than Leap Wireless, a similar business. But Metro is likely to grow faster because its licenses cover a greater proportion of the population.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615528","date":"2007-04-28","texts":"A WSJ News Roundup Shares of China Citic Bank climbed in their debut in Hong Kong and Shanghai Friday, but markets across Asia were otherwise generally muted ahead of several holiday closings this week. In Europe, Britain's top share index fell to its lowest close in two weeks as commodity shares and concerns over strength of the U.S. economic growth weighed on the market. Other European markets also ended lower. In the world's biggest initial public offering so far this year, China Citic Bank, a major mainland bank, climbed 14 above its IPO price in Hong Kong and soared 96 in Shanghai, a market essentially only open to domestic investors. The bank's president, Chen Xiaoxian, said the gains in Shanghai exceeded his expectations, but he doesn't think it is a sign the domestic stock market is overheating. Analysts said they expect the stock to give up some gains in coming sessions as Chinese investors compare it with other listed banks, some of which have equally bright earnings outlooks but lower valuations.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984820","date":"2007-04-29","texts":"Two Finns are sitting at a bar, a bottle between them. They polish it off in silence and order another, at which point Finn A raises his glass and says, Cheers By the time I landed in Helsinki last April for Finland's annual May Day celebration, this was the joke I'd been told -- by a Finn -- to sum up the northern nation's less-is-more approach to conversation. I'd been living in Iceland, Scandinavia's other oddball nation, for about a year. And I'd heard that during May Day, known as Vappu in Finland, the nation abandoned its famous shyness and let loose. My Vappu began on the ground-floor bar of Hotel Torni, a historic downtown hotel and my base camp for the weekend. Built in 1931, the Torni, now part of the Finnish hotel chain Sokos, is renowned both for being the headquarters of Soviet bodies that remained posted in Finland after World War II and for having the best view of the city, from the women's bathroom in the hotel's rooftop bar. Though it was Saturday and May Day wasn't until Monday, celebrations were already underway at the Torni's 1930s-era American Bar. On the bar stool next to mine, Helsinki resident Mikko Vaajamo sampled from a personal drink buffet of aged whiskey, champagne, espresso and a strawberry margarita. There are two days when you don't want to have visitors arriving in Finland for the first time, Vaajamo said. One is Vappu. The other, he offered, is Midsummer's Eve, when things apparently get equally out of hand and could also give visitors the mistaken impression that Finns are always an outgoing, jovial crowd. Vappu, he said, is kind of a nationwide coverup story.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982994","date":"2007-05-01","texts":"Edward Federman, a former executive for Tyco International, agreed to pay 2.65 million to settle Securities and Exchange Commission charges that he helped overstate the company's operating income from fiscal 1998 through fiscal 2003's first quarter, ended Dec. 30, 2002. The SEC said that Federman, who was chief financial officer in Tyco's electronics division for two years, and two other executives were involved in a sham transaction and improperly used accounts to improve financial results. Stephen P. Luscko of Sarasota, Fla., was sentenced to five years in prison for manipulating stocks in four publicly traded companies through an e-mail scheme that netted 6.8 million. Two others in the case, Gregory Alphonse Neu and Brian George Brunette, had been sentenced earlier. The three men formed the four companies and touted them through sham press releases and e-mails, then dumped the stock they owned, leaving others' investments essentially worthless, the Justice Department said. Luscko, Neu and three of the companies also face civil charges filed by the Securities and Exchange Commission. Atmel plans to restate 12 years of earnings to include 125 million in costs for incorrectly dated stock options after an investigation by its board, which concluded that 93 of 112 awards handed out from 1997 to 2006 were backdated.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983666","date":"2007-05-03","texts":"On Monday, with few of his colleagues present and the Senate press galleries largely unoccupied, Sen. Lamar Alexander of Tennessee took the floor to make one of those statements that fill the Congressional Record but rarely go any further. Last week, he said, while the media covered Iraq and U.S. attorneys, the Senate spent three days debating and passing perhaps the most important piece of legislation of this two-year session. Almost no one noticed. Alexander has a point. The bill, boldly named the America Competes Act, authorized an additional 16 billion over four years as part of a 60 billion effort to double spending for physical sciences research, recruit 10,000 new math and science teachers and retrain 250,000 more, provide grants to researchers and invest more in high-risk, high-payoff research. As Alexander noted, these were recommendations of a National Academy of Sciences task force that he and others had asked to tell Congress the 10 things it most urgently needed to do to help America keep its brainpower advantage so we can keep our jobs from going to China and India. Back in December 2005, I wrote about the report that Alexander and Sens. Jeff Bingaman and Pete Domenici, both of New Mexico, had requested -- and about the bipartisan support that seemed to be available for this competitiveness agenda. I even suggested that it was a natural topic for President Bush's 2006 State of the Union address if he wanted to break through the growing partisan roadblocks on Capitol Hill.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983564","date":"2007-05-04","texts":"The Defense Department has made adequate progress in establishing a new pay-for-performance system but it is too soon to gauge employee support and perceptions, a review found. Congress approved creation of the National Security Personnel System for Defense civil service employees in 2004. NSPS regulations were published in late 2005, but the system has taken longer to start up than projected, in part because federal unions challenged some of the new rules in a suit that is pending before a federal appeals court. When completed, the system will cover nearly 700,000 Defense employees, making it one of the biggest changes in the civil service in decades. The regulations were written in partnership with the Office of Personnel Management, which conducted the review of the NSPS. The 165-page paper is the first of several audits, by analysts inside and outside the Bush administration, to determine if the overhaul in pay and personnel rules leads to improvements in Defense workforce management and departmental operations. According to the OPM review, the Pentagon provided data showing that National Security Personnel System has leaders committed to the program, a strategy for training employees and managers and procedures to tie employee pay raises to annual job performance ratings. Most of the 11,000 employees in the first wave of the new personnel system appear to have met expectations set by their managers, according to data released by the NSPS program office. That report showed 97 percent of the employees qualified for a performance-based raise or bonus that was awarded on top of the across-the-board pay raise given all federal employees.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984433","date":"2007-05-05","texts":"QI signed a one-year lease for an apartment when I came for college. My father was a co-signer on the lease because I don't have credit or a job. My father has suffered a severe stroke, which has left him with almost no memory, impaired speech and mobility, and no job. I also received a letter from his neurologist telling me that I have to travel back home and take care of him because I am the only available family member -- my brother is in the military and cannot leave to take care of him. I spoke with the people at the rental office, and they said the only way I could get away without paying any penalties for breaking the lease is if the apartment is rented. I'm okay with that, but the problem is that it could take months for them to rent it. Right now, with medical bills and unemployment, I can't afford to pay the rent, much less the rent plus penalty charges. I need to know if I can legally break the lease because of the family emergency. The only reason I got the apartment was because of my father's signature. Is there anything I can do so that I may go and take care of my father and not have to keep paying rent I'm sorry to hear about your father, but I have to tell you that the information from the apartment managers is accurate. A lease is a legally binding document. Personal reasons or even severe health emergencies are not legal grounds to unilaterally terminate the lease without penalty or being responsible until the unit is rented.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983323","date":"2007-05-09","texts":"It sometimes seems as if almost everything we buy comes from China DVD players, computers, shoes, toys, socks. This is, of course, a myth. In 2006, imports from China totaled 288 billion, about 16 percent of all U.S. imports and equal to only 2 percent of America's 13.2 trillion economic output gross domestic product. Does that mean we don't have a trade problem with China Not exactly. China is already the world's third-largest trading nation and seems destined to become the largest. On its present course, it threatens to wreck the entire post-World War II trading system. Constructed largely by the United States, that system has flourished because its benefits are widely shared. Since 1950, global trade has expanded by a factor of 25. By contrast, China's trade is mercantilist It's designed to benefit China even if it harms its trading partners. There's a huge gap in philosophy. By accident or design, China has embraced export-led economic growth. The centerpiece is a wildly undervalued exchange rate. Economist Morris Goldstein of the Peterson Institute thinks the yuan is 40 percent cheaper than it should be. The resulting competitive advantage props up exports, production and jobs. Since 2001, China's surplus on its current account -- the broadest measure of its trade flows -- has jumped from 17 billion to 239 billion. As a share of China's GDP, it has zoomed from 1.3 to 9.1 percent. These figures include Chinese firms and multinational companies doing business in China. Despite popular impressions, China's trade offensive hasn't yet seriously harmed most other economies. For example, America's current account deficit to which Chinese imports contribute was 857 billion last year, up from 389 billion in 2001. Still, that hasn't stymied job creation the U.S. unemployment rate is 4.5 percent. And world economic growth has accelerated. But what's been true in the past may not be true in the future. The huge U.S. trade deficits, fed by Americans' ravenous appetite for consumer goods and heavy borrowing against rising home values, stimulated economies elsewhere, including China's. Now that stimulus is fading as U.S. home prices weaken and consumers grow more cautious. For China to expand production, demand must come from its own consumers or other nations -- or some other country's production must be displaced. There's the rub.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982506","date":"2007-05-10","texts":"China's ambassador promised to toughen safety standards to prevent exports of contaminated food and drugs, Sen. Richard J. Durbin D-Ill. and Rep. Rosa DeLauro D-Conn. said after meeting with Zhou Wenzhong, China's ambassador to the United States, and Andrew von Eschenbach, commissioner of the Food and Drug Administration. The Chinese government and the FDA promised to work towards a mutual agreement to improve inspections and overall safety of food products and drugs traded between the U.S. and China, the lawmakers said in the statement. The Chinese government has detained shippers who distributed tainted wheat gluten and rice protein concentrate, later found to be improperly labeled, the statement said. A housing advocacy group filed a lawsuit against mortgage lender NovaStar Financial, accusing it of violating federal law by discriminating against African Americans, Native Americans and people with disabilities. The National Community Reinvestment Coalition alleged that NovaStar discriminated against Native Americans by banning loans for properties on reservations, against blacks and Hispanics by banning loans for rowhouses in Baltimore, and against people with disabilities by banning loans for houses used as foster-care facilities for the disabled.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984440","date":"2007-05-10","texts":"County Executive Jack B. Johnson D and Council Chairman Camille Exum D-Seat Pleasant left Tuesday for their annual pilgrimage to Wall Street to talk to investors at the big bond rating agencies about the county's economic health. The delegation had meetings with Moody's Investors Service, Fitch Ratings and Standard and Poor's, the three top firms that offer ratings for government agencies, said Denise Roberts, a county spokeswoman who was also making the trip. After a similar trip last year, Fitch Ratings upgraded the county's rating from AA to AA. After the previous year's presentations, Moody's moved the county up from Aa3 to Aa2. The designations are important because counties with higher ratings can borrow money at lower interest rates. Also, the ratings are made by investors after examining economic prospects, so improved rankings indicate confidence from the penny pushers about the county's health. Roberts said the county team is hoping the rating agencies would be similarly impressed this year and upgrade county bonds once again. Other county officials off to New York included Chief Administrative Officer Jacqueline F. Brown, Deputy Chief Administrative Officer for Finance Iris Boswell, Johnson's Chief of Staff Michael D. Herman, Director of the Office of Management and Budget Jonathan Seeman and Director of Finance J. Michael Dougherty.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616545","date":"2007-05-14","texts":"RECOMMENDED READING SINCE THE dawn of the digital era, parents have been wondering if videogames are good for their kids. Now the question is becoming ever more urgent as games evolve to look and sound scarily realistic. To get a handle on the issue, we turned to Craig Anderson, a distinguished professor of psychology at Iowa State University and co- author of Violent Video Game Effects on Children and Adolescents Theory, Research, and Public Policy. Here are some of Mr. Anderson's picks for resources about videogames and their effect on children -- and his comments on each. -- Emily Meehan","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614958","date":"2007-05-16","texts":"The Wall Street Journal Online The Morning Brief, a look at the day's biggest news, is emailed to subscribers by 7 a.m. every business day. Sign up for the e-mail here. Regulators, it seems, will always struggle to keep up with the ever- quickening pace of innovation in financial markets. Ben Bernanke's on- one-hand-and-on-the-other discourse yesterday about how to police derivatives markets lacked a clear prescription, but it did serve as a reminder that even the biggest macro policy making has something in common with individual investment decisions a balancing of risks and benefits. Addressing the Atlanta Federal Reserve's annual financial-markets conference, the Fed chairman noted that the increasing prominence of hedge funds -- a subject he tackled last year -- and credit derivatives are part of the remarkable wave of financial innovation that we have seen in recent years, and one that has prompted boisterous debates about the need for more regulation. But central banks and other regulators should resist the temptation to devise ad hoc rules for each new type of financial instrument or institution, he argued. Rather, we should strive to develop common, principles- based policy responses that can be applied consistently across the financial sector to meet clearly defined objectives. A big reason why The sophistication and depth of financial markets promote economic growth by moving capital to where it can earn the best returns while dispersing risk more broadly among a wider field of investors, increasing the resilience of the system and the economy to shocks, he said. Any tampering with the likes of single-name credit default swaps, credit default swap indexes, and derivatives based on exotic interest- rates and foreign-exchange options -- in short, all the kinds of complex instruments created to transform risk into profit -- must also preserve the benefits of financial innovation, he said. What public policy makers must do, he noted, is assure financial stability in the marketplace, protect investors and safeguard the integrity of the markets. To do these things correctly, regulators need to know how to measure risk in the infamously opaque derivatives and hedge-fund fields. At the same time, Mr. Bernanke suggests it isn't fair to scrutinize only one particular class or category of investing field. If transparency about risk-bearing is important, then consistency seems to imply that full transparency should be required of credit markets broadly, not just of credit derivatives, he says. And why stop with credit markets Do we know exactly who is bearing the risk in equity markets or foreign exchange markets, for example","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985389","date":"2007-05-16","texts":"Sen. Charles E. Grassley R-Iowa proposed legislation that would subject hedge funds to stricter oversight and routine inspections, reinstating rules struck down by a federal court last year. The measure would require hedge fund managers with at least 15 investors and more than 50 million in assets to register with the Securities and Exchange Commission. Sens. Carl M. Levin D-Mich. and Claire McCaskill D-Mo., right, introduced a bill that would outlaw some credit-card billing and interest-rate practices that critics say confuse consumers and can push them deeper into debt. The bill would prohibit charging interest on any portion of a credit card debt that a customer pays in a grace period. It also would limit penalty increases in interest rates, which are imposed when a payment is made after the due date, and ban universal default, in which credit card issuers raise interest rates for customers because they're late on payments to other creditors. The House voted 411 to 3 to delay a pilot Transportation Department plan to allow Mexican trucks full access to U.S. highways. The trucks would have to be declared safe first, the lawmakers said, and Mexico would have to give U.S. truckers the same access south of the border. The pilot program would restrict opening the border to 100 carriers based in Mexico allowed to use a maximum of 1,000 vehicles.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982909","date":"2007-05-17","texts":"The issue of trade policy -- as critical to the nation's future as Iraq and every bit as divisive -- is now squarely before the Democratic Congress. It will almost certainly provide a huge challenge to its leadership. The stage was set by a painfully negotiated deal between the White House and Democrats, announced last week, on the terms of trade in pending agreements with Peru and Panama. Those agreements with two small nations are just the overture for a much larger debate involving tariff-cutting deals with Colombia and South Korea. And then comes the monumental question of whether to give President Bush the same free hand that his predecessors have enjoyed in negotiating global and regional trade agreements, not amendable by Congress but subject only to an up-or-down vote. Before last week, there was no chance that a Democratic Congress would trust Bush to look out for the interests of American firms and workers in any such negotiations. Now there is a chance -- but only a chance -- that the United States will be able to take its usual leadership role in moving the world toward an open trading system. What created this opportunity was that after months of saying no, the lead negotiators for the White House, Treasury Secretary Henry Paulson and U.S. Trade Representative Susan Schwab finally said yes to the inclusion of labor and environmental guarantees in the body of the trade agreements. Such provisions -- requiring signatories to enforce internationally recognized standards banning child labor and prison labor and permitting union organizing, as well as requiring enforcement of their own environmental laws -- had been included in the final trade agreements negotiated by the Clinton administration and approved by Congress.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842613594","date":"2007-05-21","texts":"China's move to take a 3 billion stake in U.S. private-equity giant Blackstone Group marks an unusually aggressive start to the country's long-anticipated campaign to diversify how it invests its massive 1.2 trillion foreign-exchange reserves. The deal is expected to be completed alongside Blackstone's announced 4 billion initial public offering of a 10 stake in the firm. News of China's planned Blackstone stake comes as U.S.-China economic talks are about to begin in Washington, led by U.S. Treasury Secretary Henry Paulson and Chinese Vice Premier Wu Yi. The run-up to the talks has been dominated by U.S. complaints about China's currency, which many Washington politicians say is kept artificially low to give Chinese exports an unfair advantage. Chinese leaders have repeatedly said they want to reduce the country's trade imbalance with the rest of the world, which contributes to inflationary pressures at home as well as to trade frictions abroad. As Kate Linebaugh and Andrew Batson report, an investment in Blackstone would be one way for China to show it is willing to increase its flow of dollars to the U.S. to try to balance the flood of dollars into China. Meanwhile, a rare change to China's currency regime unveiled Friday ahead of this week's Washington talks has done little to appease the country's critics abroad, but new financial tightening measures, including an interest-rate increase, could help with another of Beijing's priorities calming the frenzy in its stock market. ---","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614410","date":"2007-05-25","texts":"Officials Press Japan on Rates International Monetary Fund officials said Japan's central bank should keep the pace of interest-rate increases gradual, and the Organization for Economic Cooperation and Development urged it not to raise rates until the end of 2008 to ensure an end to deflation. The OECD predicted Japan's real gross domestic product would rise 2.4 this year, higher than the 2 growth it had forecast. In 2008, the OECD said, the economy would expand by 2.1. Smoking Banned In 75 of Homes","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617210","date":"2007-05-25","texts":"Sales of new homes surged in April as prices plummeted, indicating that builders are making huge concessions to entice buyers. The Census Bureau said sales of newly constructed homes rose 16.2 last month to a seasonally adjusted annual rate of 981,000 homes, the largest monthly gain in 14 years and far exceeding economists' expectations. But the report also found that median prices tumbled 10.9 to 229,100 as builders offered deep discounts and other incentives. Aggressive sales techniques being employed by builders are now showing some success, David Seiders, chief economist at the National Association of Home Builders, said in a statement. That is an encouraging sign, say some economists, because it suggests that demand for housing can be revived if prices fall in line with buyers' expectations. Still, economists aren't ready to say the market is on the mend. It could mean that we have hit bottom, but it's too early to make that call, said Patrick Newport, an economist at Global Insight Inc. We need a couple more good months before we can say that things are turning around.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616527","date":"2007-05-30","texts":"Continuing the resurgence of technology retailers in a complex market, CDW Corp. late yesterday said it agreed to be acquired by Chicago buyout firm Madison Dearborn Partners LLC. Madison Dearborn, of Chicago, agreed to acquire CDW for about 7.3 billion, or 87.75 a share. The purchase price represents a 16 premium to CDW's closing stock price of 75.56 a share Friday. CDW shares were up 7.55, or 10, at 83.11 yesterday in 4 p.m. Nasdaq Stock Market composite trading. CDW said its board has approved the deal and said it will urge shareholders to approve the acquisition, which is expected to close near the end of the third quarter or early in the fourth quarter. Before approving the agreement, CDW said its board conducted an auction process in which a number of potential bidders participated. Under the agreement, CDW will solicit proposals from third parties during the next 30 days, with the assistance of its financial adviser, Morgan Stanley, a move common in private-equity deals. J.P. Morgan Chase & Co.'s J.P Morgan Securities Inc. and Lehman Brothers Holdings Inc. advised Madison Dearborn. CDW is one of the country's largest resellers of computers, software and related equipment, primarily for large corporations and the government. Founded in 1984, CDW reported net income of 266.1 million on sales of 6.79 billion last year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984212","date":"2007-05-31","texts":"Here's how some major bills fared recently in Congress and how local congressional members voted, as provided by Thomas Voting Reports. NV means Not Voting. The House passed a bill HR 1252 giving the Federal Trade Commission and state attorneys general added tools for prosecuting energy companies suspected of charging unconscionably excessive wholesale or retail prices. The bill defines what it terms price gouging, directs the FTC to establish pricing transparency in wholesale markets, makes it a crime to publish false information on wholesale prices and allocates fines and penalties collected under the bill to the Low Income Home Energy Assistance Program. The bill awaits Senate action. The House sent President Bush a bill S 214 to repeal a year-old USA Patriot Act provision used by the administration to appoint U.S. attorneys without Senate confirmation. The provision is central to the ongoing dispute over the Justice Department's firing and replacement of several U.S. attorneys. The bill would restore previous limits on the department's authority to make interim appointments and give Congress and federal judges a greater role in such appointments. The House passed a bill HR 1427 to create the Federal Housing Finance Agency to oversee Fannie Mae and Freddie Mac. The two federally backed corporations, which dominate the nation's secondary mortgage market, have been tarred in recent years by accounting scandals. The bill, which awaits Senate action, requires the companies to divert 3 billion of their profits over five years to affordable housing, including 500 million in the first year to replace hurricane-destroyed homes on the Gulf Coast. Members voted to table a Republican bid for a reprimand of Rep. John P. Murtha D-Pa. for his official conduct. Republicans allege Murtha vowed improper legislative action against a GOP member who had publicly challenged an earmark of funds for Murtha's congressional district. As a privileged resolution, the measure H Res 428 was not debatable.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613872","date":"2007-06-02","texts":"The bears went on the offensive in the Treasury market Friday after a data deluge further eroded fading hopes for a Fed rate cut this year. With a 5 yield on the benchmark 10-year note a hair's breadth away, some investors already are bracing for more of a bear run. Within 90 minutes, Treasury traders were hit by some of the most significant numbers on the U.S. economic calendar. First, there were data on nonfarm payrolls and personal income and spending, which includes the Fed's favored inflation gauge. Rounding things off were the Institute for Supply Management's manufacturing survey, the ReutersUniversity of Michigan consumer-sentiment survey and pending home sales. If this economic Super Friday had revealed across-the-board economic weakness, it could easily have blunted -- and may have reversed -- a Treasury-market bear run that saw prices slide through most of May. It wasn't so. What proved to be mixed economic data kept the selling pressure intact and lifted the yield on the 10-year note to 4.955. And with market momentum as strong as it is and traders talking of accelerating mortgage-related selling, the risk of falling deep in the red looks significant.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984254","date":"2007-06-07","texts":"Senate Democrats lashed out at the three leading U.S. auto executives yesterday for fighting legislation to force improvements in vehicle gas mileage, warning that lawmakers are losing patience with the industry. Sen. Thomas R. Carper of Delaware said Congress is tiring of the industry's argument that tougher fuel-economy rules would lead to plant closings and layoffs. Carper, whose state is losing a big Chrysler sport-utility vehicle plant, noted that the Big Three Detroit automakers have downsized significantly in the past two years. For the better part of 20 years, you've lost market share. There have been plant closings, and you've lost money, Carper told the auto executives. Just keep in mind For 20 years, we've been patient. The Democratic senators' criticism was directed at chief executives of the domestic auto industry's three top automakers -- G. Richard Wagoner Jr. of General Motors, Alan R. Mulally of Ford and Tom LaSorda of Chrysler -- during a Capitol Hill lunch organized by Sen. Debbie Stabenow of Michigan. Ronald A. Gettelfinger, president of the United Auto Workers union, also attended. Since winning a congressional majority in November, Democrats have been pushing automakers to accept higher fuel-economy standards. Political momentum toward a change in corporate average fuel economy standards has intensified.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615934","date":"2007-06-08","texts":"Bond prices continued to march lower, pushing 10-year Treasury yields above the psychologically important 5 mark to the highest level in nearly 11 months. Simmering inflation jitters also hammered stocks, which had been at records. The bond selloff helped to send the Dow Jones Industrial Average lower for a third straight day after Monday's high -- off 198.94 points yesterday, or 1.5, to 13266.73. The selling in both bonds and stocks accelerated in the afternoon after influential bond-fund manager Bill Gross of Pimco said he has turned bearish on bonds. The 10-year Treasury note's price plummeted 3132, or 9.6875 per 1,000 invested, pushing the yield up to 5.10. In comments posted on Pimco's Web site, Mr. Gross said 10-year yields could reach 6.5 within five years due to strong global economic growth and possible inflation -- the enemy of bond investors everywhere because it eats into the value of the interest payments they receive. Over the next three to five years, our secular outlook suggests that global inflation, and certainly U.S. inflation, will accelerate mildly. . . . That combination is not necessarily bond-friendly, Mr. Gross wrote. He called his statements a major shift after 25 years of bullishness on the bond market.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984459","date":"2007-06-08","texts":"House Democrats looking to spare millions of middle-class families from the expensive bite of the alternative minimum tax are considering adding a surcharge of 4 percent or more to the tax bills of the nation's wealthiest households. Under one version of the proposal, about 1 million families would be hit with a 4.3 percent surtax on income over 500,000, which would raise enough money to permit Congress to abolish the alternative minimum tax for millions of households earning less than 250,000 a year, according to Democratic aides and others familiar with the plan. Rep. Richard E. Neal D-Mass., chairman of the House subcommittee with primary responsibility for the AMT, said that option would also lower AMT bills for families making 250,000 to 500,000. And it would pay for reductions under the regular income tax for married couples, children and the working poor. All told, the proposal would lower taxes for as many as 90 million households, and Neal said it has broad support among House leaders and Democrats on the tax-writing House Ways and Means Committee. Everybody's on board, he said. Neal has yet to release details of the plan, however, and others inside and outside the committee say major pieces of it are still in flux. Some Democrats say Neal's plan stretches the definition of the middle class too far, providing AMT relief to too many wealthy households. They argue that the cutoff for families to be spared from the AMT should be lower, at 200,000, 150,000 or even 75,000.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616447","date":"2007-06-13","texts":"U.S. bond yields hit a five-year high, with the yield on the benchmark 10-year Treasury note rising to nearly 5.25, driving up the cost of everything from 150,000 home mortgages to 20 billion leveraged buyouts and threatening to slow the nation's economic growth. Investors continued to dump Treasurys yesterday -- as they have for more than a week -- amid worries about rising inflation abroad and concerns that foreigners might curb their purchases of U.S. bonds, which have been an important source of support for the market. By increasing borrowing costs for American consumers and corporations alike, the upsurge in yields could damp the economy, which barely grew in the first quarter, and intensify the slump in the nation's housing market. Rising interest rates raise the monthly payments of homeowners with adjustable-rate mortgages and make it more costly for them to refinance to a fixed rate. They could also put the brakes on the corporate buyout boom, which has been financed by cheap debt and has helped to drive the stock market higher in recent years. Yesterday, the 10-year note closed at 5.249, just above last year's peak rate and slightly below the recent high set in May 2002 of 5.259. The note's price, which moves in the opposite direction of the yield, was 94 832, down 2732, or 8.4375 for each 1,000 invested. The price of the 30-year bond was 91 132, down 1 2032, pushing its yield up to 5.356, the highest since June 2004.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614015","date":"2007-06-15","texts":"The Cost Of Inflation Growth, It Seems The good news today is that inflation isn't heating up much. The bad news is it hasn't cooled down much, either. Today's report on consumer inflation from the Labor Department should show prices picked up last month, but only temporarily. Economists estimate the consumer-price index rose 0.6 in May from April's level, largely due to a run-up in gasoline prices that have since subsided. Economists look for the core index, which excludes volatile food and energy costs, to rise 0.2.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617040","date":"2007-06-15","texts":"Small stocks rose for the second straight session yesterday as a wholesale-inflation report eased interest-rate jitters -- or at least put them off until today. The Russell 2000 index of small-cap stocks rose 4.58, or 0.55, to 837.12, eking out a gain of less than two points for the week so far, after a sharp fall on Tuesday. The S&P SmallCap 600 added 3.18, or 0.74, to 435.03. In particular, some small semiconductor stocks rose sharply. Among catalysts for the sector, Banc of America Securities raised its rating on large-cap Intersil's shares to buy, saying Wall Street had underestimated the company's growth potential. Intersil rose 1.94, or 6.3, to 32.75. Small-cap OmniVision Technologies added 54 cents, or 3.5, to 15.96. The producer-price index rose sharply in May, but core inflation, which excludes food and energy, was more subdued. If core consumer inflation exceeds the average economist expectation of a 0.2 increase, Sean Simko, head of fixed-income management at SEI Investment, expects the 10-year Treasury yield to test the five-year highs above 5.25 set on Tuesday. As the yield is used as a benchmark for corporate borrowing, this would likely buffet small stocks, which are particularly dependent on the debt markets.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614801","date":"2007-06-18","texts":"What If Spending Doesn't Slow Market pundits spend a lot of time worrying about what will happen to the U.S. economy if consumer spending suddenly slows. Maybe it's time to worry about what will happen if it doesn't. Economic growth has been sluggish for much of the past year, thanks largely to the housing downturn. Consumers have kept on spending, and they have helped to keep the economy on an even keel. Economic output grew at an annual rate of just 0.6 in the first quarter. Had it not been for a 4.4 rate of increase in consumer outlays, the economy likely would have contracted.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617254","date":"2007-06-18","texts":"Rocky Road isn't just an ice-cream flavor any more. It's also a good description of what options traders think lies in store for the stock market. As stocks return to record levels, the smooth sailing that characterized stock trading at the end of 2006 and early 2007 isn't likely to return, these traders are signaling by demanding considerably more for options on the Standard & Poor's 500-stock index than they did earlier this year. That worry has in turn appeared in readings of the Chicago Board Options Exchange volatility index, or VIX. The VIX is derived from options on the S&P 500 and reflects traders' willingness to pay for the protection that these offer. The VIX tends to fall as stocks rise, indicating that worry about stock-market turbulence is abating. But on Friday, with stocks racing back toward record levels, the VIX also rose. It gained 0.3, or 2.2, to 13.94. That's sharply above the low levels at which the index sat for much of late 2006 and early 2007, says Chris Johnson, chief investment strategist at Johnson Research Group.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613826","date":"2007-06-20","texts":"New York Attorney General Andrew Cuomo says at least three student- loan companies may unfairly charge a uniformly higher rate to students at colleges with populations that are less affluent or include more minorities. Instead, Mr. Cuomo says the companies should base the rates on a family's credit rating. He compared the practice to discriminatory redlining, when banks and other lending institutions offered less-favorable loan terms to residents of certain areas, such as inner-city neighborhoods. He identified Nelnet Inc., Lincoln, Neb. Student Loan Xpress Inc., a unit of CIT Group Inc. and Northstar Education Finance Inc., St. Paul, Minn., as firms that take the institution's information into account when making loans to students, such as the default rate of the school and the earnings history of graduates. Mr. Cuomo's allegations ramp up a new front in his nationwide student-loan-industry investigation, which has exposed widespread payments from lenders to financial-aid officials that he says have compromised the advice offered to students. Congress is cracking down on such practices. Taking institutional factors into account raises disclosure concerns, particularly since entering students aren't informed that by the way, which college you pick is a factor in what loan you get and what interest rate you pay, Mr. Cuomo said. Lenders say that information can be an important tool when assessing a student's future ability to pay back debt. When you are making student loans, the collateral is the underlying education, measured by such factors as earning potential of its graduates, says Jamie Wolfe, Northstar's chief financial officer.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614283","date":"2007-06-21","texts":"WASHINGTON -- With inflation soon likely to drop into the Federal Reserve's so-called comfort zone of 1 to 2, Fed officials are seeking to shift their emphasis away from today's benign inflation readings to the more uncertain path of future inflation. To that end, the central bank's policy makers, when they meet next Wednesday and Thursday, are likely to continue to highlight the risks that low unemployment could yet push inflation higher. At next week's meeting, Fed officials are expected to debate whether to continue describing inflation as elevated in their post-meeting policy statement, an issue complicated by their lack of consensus on whether inflation ought to be much lower than it already is. There is little chance the Fed will alter its target for short-term interest rates, which has stood at 5.25 since last summer. Officials appear on hold for at least the next several months. Inflation alarms sounded at the Fed when the annual pace of core inflation, which excludes food and energy prices, jumped to 2.4 in February from 2.1 in December, as measured by the Fed's preferred inflation gauge -- the price index for personal consumption expenditures. The jump prompted officials to describe inflation as elevated following their March and May meetings.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616797","date":"2007-06-21","texts":"Investing in real estate once meant owning rental property downtown or buying shares in a U.S.-based real-estate investment trust. Today, it increasingly means putting money in a REIT trading in Singapore or buying a pied-a-terre in a refurbished medieval village in northern Italy. These days, real-estate investing is a international proposition. Nearly a score of global real-estate mutual funds have launched in the U.S. in the past two years, more than doubling in number. They now manage some 16.8 billion collectively, with more than 5.8 billion in new money flowing in this year alone, according to investment researchers Morningstar Inc. Earlier this month, the American Stock Exchange listed its second international real-estate exchange-traded fund in the last six months, the WisdomTree International Real Estate fund. And last summer, private bank Northern Trust Corp. launched the first international real-estate index fund, Northern Global Real Estate Index, which now has more than 1 billion in assets. Not content with owning real estate through the stock market, some Americans are venturing abroad to buy properties, especially in lower- cost markets such as Brazil, Morocco and Portugal. They then turn them over to property-management firms to generate income. That's what Beth Damberger and her husband, Orlando Londres, are doing. Instead of investing in stocks and bonds, the Vallejo, Calif., couple, who own a pet-care business, in the past year have put their investment dollars into a villa in southern France, a beachfront apartment in Brazil and a studio in a Bulgarian ski resort. They hope to one day move to France with their two young children, but for now are renting the villa to vacationers to cover the mortgage payments. The apartments in Brazil and Bulgaria -- each of which cost about 60,000 -- are purely investments, says Ms. Damberger.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984442","date":"2007-06-28","texts":"Orders for U.S. durable goods fell more than forecast in May, the first government economic report to cast doubt on the strength of the rebound in business investment. Demand for goods meant to last several years fell 2.8 percent, the first drop in four months, after a revised 1.1 percent gain in April that was larger than previously estimated, the Commerce Department said Wednesday. Excluding transportation equipment, orders fell 1 percent. The decline, led by fewer orders for aircraft, metals and machinery, spurred some economists to cut forecasts for economic growth this quarter. Federal Reserve policymakers, who predict faster economic expansion later this year, are forecast to keep interest rates unchanged when their two-day meeting ends today. The optimism about business spending maybe was a bit overdone, said Kevin Logan, senior market economist at Dresdner Kleinwort in New York. The economic rebound will be pretty modest. Economists forecast durable goods would fall 1 percent after a 0.8 percent rise reported earlier for April, according to the median of forecasts in a Bloomberg survey.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614353","date":"2007-06-29","texts":"NEW YORK -- The dollar rebounded from a three-day rally in the yen after the Federal Reserve offered reassuring words on the U.S. economy, which calmed the frayed nerves of yen-funded carry-trade investors. The dollar had already started to reverse the three-day yen rally before the Federal Open Market Committee meeting ended, amid market expectations that the FOMC wouldn't make comments that could roil the markets. The FOMC didn't disappoint. It left rates on hold at 5.25 for the eighth straight time and continued to say it expects the U.S. economy to see moderate growth over the next few months. That further eased recent worries among carry-trade investors, who borrow yen at low interest rates to buy higher-yielding currencies such as the dollar, that U.S. subprime mortgage sector problems could spill into the broader U.S. or global economies. The fear was that the Fed may be a bit dovish on U.S. growth and inflation worries, said Matthew Strauss, senior currency strategist at RBC Capital Markets. If they were, that may have reignited recent fears amongst carry-trade investors.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616934","date":"2007-06-29","texts":"WASHINGTON -- With the nation's underlying inflation falling, the Federal Reserve yesterday softened its hawkish inflation stance a bit while squelching any suggestion it might cut interest rates soon. The central bank, in the statement issued at the end of its two-day meeting, sidestepped the question of whether the current inflation rate is low enough. It emphasized that the outlook for inflation -- and not the latest inflation reading -- is now driving its interest- rate decisions. On that score, the Fed reiterated that its predominant policy concern remains the risk that inflation will fail to moderate as expected. As widely expected, the Fed's policy-making Federal Open Market Committee left its short-term interest-rate target at 5.25, where it has been for almost exactly a year. In the accompanying statement, it said, that readings on core inflation, which excludes food and energy, have improved modestly in recent months, a more optimistic assessment than at its last meeting, on May 9, when it said core inflation remains somewhat elevated. But it added Sustained moderation in inflation pressures has yet to be convincingly demonstrated. Moreover, the high level of resource utilization has the potential to sustain those pressures.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616657","date":"2007-07-02","texts":"Monday, July 2 Taking the pulse of manufacturing activity, the ISM index is expected to show a pickup in orders and production for June. But the overall index is likely to remain unchanged at 55. A reading above 50 indicates expansion. --- President Bush and Russia's Putin continue a two-day meeting in Kennebunkport, Maine. ---","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614043","date":"2007-07-05","texts":"Can Techs Pick Up Slack In Stock Market Big tech stocks are shooting up like bottle rockets, leading to oohs and ahhs on Wall Street. Since early March, the Nasdaq 100 index, which tracks large technology stocks like Google and International Business Machines, is up 15, compared with an 11 gain by the S&P 500.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982726","date":"2007-07-11","texts":"The steep rise in oil prices in recent years has not triggered either high inflation or a recession, in large part because consumers and businesses expect price increases to remain tame, Federal Reserve Chairman Ben S. Bernanke said yesterday. That contrasts sharply with the experience of the 1970s, when spiking oil prices combined with expectations of high inflation to fuel double-digit price increases and slower economic growth, he said in a speech to economists at the National Bureau of Economic Research Summer Institute in Cambridge, Mass. The Fed chairman made no mention of the central bank's interest rate policy or its forecast for inflation or economic growth in coming months. He is scheduled to testify to Congress on those subjects next week. Light sweet crude oil closed yesterday at 72.81 per barrel, up 62 cents, on the New York Mercantile Exchange, the latest stop in a choppy climb since 1998, when it was trading for less than 15 a barrel. Yet consumer prices rose 2.7 percent in the 12 months ended in May, the Labor Department said. That is higher than the Fed would like but far less than the 13.5 percent inflation in 1980, after the 1979 Iranian revolution sent oil prices soaring.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616038","date":"2007-07-12","texts":"BEIJING -- China continued its recent record-breaking run of increasing official foreign-exchange reserves, adding another 130.59 billion to its stash in just three months. But the unusual multibillion-dollar transactions thought to have fueled the huge increases in those holdings this year show signs of tapering off. Separately, China's statistics bureau said the country's economy in 2006 grew at an even faster pace than previously estimated, with gross domestic product expanding 11.1, up from the initially calculated 10.7. The revision led some economists to predict that China could surpass Germany sooner than expected to become the world's third-largest national economy. The U.S. and Japan are the first- and second-largest national economies. China's latest additions to its foreign-reserve holdings -- the world's largest -- brought their total to 1.33 trillion at the end of June, up from 1.2 trillion at the end of March, according to data published yesterday by the country's central bank. The figures highlight the enormous sums of money flowing into China -- and the difficulty in tracing them.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985107","date":"2007-07-15","texts":"Five climate change bills have been introduced in the Senate. Here's a comparison of some of their provisions. Economy-wide Petroleum refiners and natural gas producers, non-carbon-dioxide greenhouse gas emitters, large coal-consuming facilities Establishes a price ceiling at 12 a ton for carbon credits in 2012 and raises that ceiling at an annual rate of 5 percentage points higher than inflation. At the start, a majority of allowances would be distributed free to past industrial users, about a quarter would be auctioned and the rest used to provide technology incentives or aid to low-income families. Increasing amounts would be auctioned Economy-wide Petroleum refiners and natural gas producers, fluorinated gas producers and entities that emit more than a certain amount of carbon dioxide","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842614673","date":"2007-07-20","texts":"Caught between increasingly assertive Islamic militants and louder calls for democratic reforms, the balancing act performed by Gen. Pervez Musharraf, Pakistan's president and a key U.S. ally, is becoming even trickier. On Friday, Pakistan's Supreme Court reinstated the nation's top judge, ruling that his suspension by Gen. Musharraf was illegal and quashed a separate case of alleged misconduct by the chief justice, Iftikhar Mohammed Chaudhry. Chief Justice Chaudhry's suspension last March -- the government said he used his position to help secure a police job for his son and took advantage of privileges such as using government aircraft -- sparked protests by lawyers and political opponents that has since blossomed into a powerful democratic movement. The government insisted the case had no political motive and that Gen. Musharraf had little choice under the constitution but to suspend Chief Justice Chaudhry. But opponents accused Gen. Musharraf of plotting to remove an independent-minded judge to forestall legal challenges to his plan to ask lawmakers for another term. The army general -- who took control of the country in a 1999 coup -- faces widespread demands within Pakistan to resign from the military if he wants to be re-elected as president again. So far, he has resisted taking off the uniform, as he would be constitutionally required to do by the end of this year and also allowing the return to Pakistan of his chief political opponents. But today's victory for the nascent democratic movement is just one of many challenges to Gen. Musharraf, a leader President Bush has called Washington's strongest ally in the fight against al Qaeda. Just last week Pakistani commandos stormed the Red Mosque -- a center of radical-and-fundamentalist teaching in Islamabad -- after a monthlong siege. About 100 people died. Pakistani officials said the action was taken after Gen. Musharraf recognized the threat of the growing Talibanization of Pakistan and senior U.S. and Pakistani officials have said it was part of a broader effort to push back the Taliban and al Qaeda. But it also led tribal leaders to call off the tentative truce in Pakistan's lawless border area and in recent days, militants there -- and in Islamabad -- have killed hundreds of Pakistani troops and citizens. The border area is a subject of intense interest for the U.S. as its intelligence community says that region has become a haven for al Qaeda's senior leadership -- including perhaps Osama bin Laden and his deputy, Ayman al-Zawahiri. Al Qaeda leaders, according to U.S. officials, are using the border region to train recruits from Europe and Africa while reaching out globally to affiliate groups, particularly in Iraq and North Africa. But many counterterrorism officials wonder if Gen. Musharraf, who is also Pakistan's military chief, has the ability, will or political base to mount a major operation inside the tribal areas against al Qaeda and the Taliban, the Islamist fundamentalists who ruled Afghanistan until late 2001. Gen. Musharraf's troubles present some difficult choices for the Bush administration in its fight against Islamic extremism in the region. After the military's raid of the mosque, the U.S. government continued to offer statements of support. It recently pledged 750 million in aid over five years to help spur development in the tribal regions, the latest dollop in billions of dollars in military and economic assistance the U.S. has offered Pakistan since the Sept. 11 attacks. ---","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616875","date":"2007-07-20","texts":"Bank of America Corp. said its second-quarter profit rose 5.2, but the Charlotte, N.C., banking giant is finding it harder to overcome an interest-rate squeeze and higher loan costs, relying instead on fees and big investment gains. Like other banks reporting results this week, Bank of America said it is putting aside more money for loans expected to go sour. The bank said its credit quality remains sound. But it is clear that more borrowers are struggling to make payments as the housing market continues to slump. The bank nearly doubled its provision for expected credit losses to 1.81 billion from 1.01 billion a year earlier, citing probable losses in growth areas such as home-equity and small-business lending. Nothing in our credit-quality numbers is a surprise, said Kenneth D. Lewis, the bank's chairman and chief executive, noting that the increased costs are coming off historic lows. He said Bank of America, the nation's second-largest bank by stock-market value after Citigroup Inc., is well positioned going into the second half of the year. Other banks reporting earnings yesterday also made provisions for worsening credit conditions. SunTrust Banks Inc., Atlanta, the eighth- largest U.S. bank, posted a 25 increase in net income thanks to an after-tax gain of 146 million on the sale of Coca-Cola Co. stock. Net income soared to 681 million, or 1.89 a share, from 544 million, or 1.49 per share, a year earlier. Excluding the gain from the Coke stock, quarterly net income would have fallen as the bank doubled its provision for loan losses to 105 million.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616055","date":"2007-07-23","texts":"In regard to Jagdish Bhagwati and Arvind Panagariya's Why the Trade Talks Collapsed, editorial page, July 7 There is far more involved than indicated in their article, which mostly focused on India. The reality, in our view, is that the agricultural economies of most developing countries have been grievously harmed by the free-for-all of globalization, which treats agricultural products as just another commodity and gives little heed for the social and cultural consequences of displaced farmers. Neither the World Bank nor the World Trade Organization seems to fully understand the dynamics and unique needs of the world's agricultural economies, which are not interchangeable and -- unlike non-agricultural products -- can be subject to instant devastation from floods, droughts and other climatic factors. The bottom line is that the developing world has a compelling need to protect its farmers, and the Western world has a strategic need to help them to not just survive but also prosper. It is simplistic to assume that free and open markets will solve all problems. As we have seen, they can equally well lead to severe economic disruption, instability and violence. Our organization, in cooperation with others, is developing a model for better regulation of agricultural trade that we believe is increasingly needed in order to assure future security of the world's food production -- for the benefit of the world's farmers and consumers alike. Although not directly related to Doha, the absence of such a model is surely a fundamental reason for Doha's collapse. Jacques Carles Executive Director","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614217","date":"2007-07-26","texts":"The 6 drop in German conglomerate Siemens AG's share price Wednesday, as well as the disclosure of more suspicious transactions found in a continuing bribery probe, underscored the challenges that new Chief Executive Peter Loscher faces as he tries to turn around and streamline the company as it launched a major round of restructuring involving deals valued at more than 22 billion. As Mike Esterl and David Crawford report, the terms of one deal and heavy losses in a telecommunications joint venture prompted doubts by investors. It says it will sell its VDO auto-parts unit to German rival Continental AG for 15.75 billion and acquire Dade Behring Inc., a U.S. clinical-diagnostics company, for about 7 billion. The deals are part of Siemens's effort to sharpen the focus of its businesses. But Siemens also disclosed a heavy loss in its telecommunications- equipment joint venture with Nokia Corp., as well as a sharp rise in the number of suspicious transactions it has uncovered as part of the companywide probe into alleged bribery. A weaker-than-expected quarterly earnings report and investor concerns that Siemens paid too high a price for Dade slammed the brakes on a months-long rally in the company's share price. Read our report by Mike Esterl in Frankfurt and David Crawford in Berlin httponline.wsj.comarticleSB118536749155177499.html Read Breakingviews' analysis httponline.wsj.comarticleSB118540259102878128.html","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615513","date":"2007-07-27","texts":"By bidding up stock prices all year, investors were effectively betting the housing slowdown wouldn't engulf the broader economy. Yesterday, that confidence appeared to be shaken. Stocks and corporate-bond markets tumbled amid selling that was more widespread than during the three previous days of triple-digit declines this month. Along with risky bonds and anything connected to the housing market, investors sold off stocks, emerging-markets bonds and even high-quality corporate debt. The record trading volume in stocks reflected rising anxiety. Meanwhile, roughly 1,300, or nearly 17, of the around 7,800 stocks that trade on U.S. exchanges hit their lowest price of the past 12 months. To many investors, that made yesterday's selloff more ominous than other big declines this year. Sid Bakst, a senior portfolio manager at investment firm Robeco Weiss, Peck & Greer, said the steady drip of bad news on subprime-mortgage loans and the failure of some leveraged buyouts to get long-term financing has made investors increasingly nervous. As each day has gone by, things have been leaking a bit more, Mr. Bakst said. But today there was full-blown carnage.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614190","date":"2007-07-28","texts":"San Francisco -- Perhaps no one on the globe has come to symbolize the rise of the investor class in America in recent decades more than Charles Schwab. When Mr. Schwab, or Chuck, as nearly everyone calls him, opened his first brokerage office in 1971, the stock market was pretty much the exclusive sandbox of the richest 5-10 of Americans. Today, thanks in no small part to his company's financial market innovations, investing has been thoroughly democratized, as he puts it, with more than half of working class adults now owners of stock. Creating wealth is what Mr. Schwab has come to regard as his life's pursuit. He's accomplished that not just for himself -- his stake in the company is estimated at 4 billion -- but also for the millions of small investors who first came to be owner-capitalists by opening a Schwab account. So who better to discuss the future of financial markets and investing than the man who revolutionized the brokerage business I visited Mr. Schwab recently at the firm's headquarters in the heart of downtown San Francisco. Mr. Schwab is astonishingly muscular and fit for a grandfather who turns 70 this weekend. Throughout our conversation -- which took place in his 30th-floor office overlooking the Bay -- he is cordial but intense. He speaks of the company as if it is one of his children, and he doesn't seem to be in any hurry to surrender the helm. I ask him what he means by his favorite term, democratic capitalism. He replies that the stock market today is an open tent for anybody to come into. Ever the salesman, he adds For as little as a thousand dollars, you can open an account at Schwab. I mean, it's not a big barrier to entry.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616115","date":"2007-07-30","texts":"What's the future of the IT department Some analysts have suggested the IT department is withering. Most of the work it now performs eventually will be automated, outsourced or handed off to other departments, these observers say. But others see the IT department growing in importance as it takes on an increasingly strategic role. From this perspective, IT is undergoing a transformation from a behind-the-scenes department to one that holds real clout within the company and plays a significant part in the development of products, processes and services that help the company grow. Francesca Donner, an editor for The Wall Street Journal Online in New York, discussed the changing role of the IT department in an email exchange with three chief information officers -- Meg McCarthy of Aetna Inc., Frank Modruson of Accenture Ltd. and Steve Squeri of American Express Co. Following are edited excerpts from their discussion. THE WALL STREET JOURNAL Analysts have written that IT departments are becoming more strategy- and business-oriented. Do you agree","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616301","date":"2007-08-09","texts":"WASHINGTON -- President Bush shrugged off concerns about stock- market turmoil, saying Wall Street is adjusting to a flood of liquidity and is beginning to readjust its assessment of risk. Mr. Bush, seeking to reassure jittery investors who have watched the market gyrate wildly, said the volatility is natural but the economy is strong and there is enough liquidity to absorb the ups and downs. If markets are given a chance, they will adjust in a way that is a necessary reaction to a flood of liquidity that came into the market over the last couple of years, the president said during a briefing with reporters at the Treasury Department. Investors have been spooked as they try to discern whether a shakeout in the market for risky mortgages will lead to credit tightening throughout the economy. The flood of credit to which Mr. Bush was referring fueled a boom on Wall Street, providing loans for homeowners, including some with poor finances, and sparking a wave of corporate takeovers financed with debt. There is concern that a tightening in lending standards could hurt the broader economy. Asked whether he was concerned that the shakeout could spread, Mr. Bush said it all depends on if you're a glass-half-full or a glass- half-empty kind of guy. He said the U.S. economy is strong and that Wall Street will look at the fundamentals of the economy, such as low unemployment and low inflation. He added that the correction in the housing market appeared to be heading for a soft landing.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982410","date":"2007-08-10","texts":"It's a good thing the back-to-school shopping season isn't graded. Teen retailers would be embarrassed to show their scores to Mom and Dad. The segment was among the worst-performing last month, depressing growth across the industry. Nearly all of the teen apparel retailers yesterday reported sales at stores open at least a year, known as same-store sales, declined during July when weighed against the same month last year. Abercrombie & Fitch, which also owns Hollister & Ruehl, was down 4 percent. American Eagle Outfitters dropped 6 percent. Aeropostale plummeted 12 percent. Very weak, said Michael P. Niemira, chief economist for the International Council of Shopping Centers, a trade group. The question then is, 'What's going on beneath the surface'  Niemira estimated that same-store sales at teen retailers fell 6 percent last month compared with the same period last year. Meanwhile, retailers overall posted a 2.6 percent gain in same-store sales, continuing the slow but steady growth that Niemira said has characterized much of the year.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617286","date":"2007-08-14","texts":"Higher energy prices, a lousy housing market and tighter credit continue to put the squeeze on consumers -- and Wal-Mart and Home Depot are feeling their pain. Wal-Mart Stores lowered its fiscal-year earnings forecast today, even as the world's biggest retailer reported that its second-quarter net income rose 49 to 3.11 billion, or 76 cents a share. The positive quarterly comparison was largely due to a charge in the year- earlier period, and CEO Lee Scott didn't try to hide his disappointment in his company's latest results. Our underlying operating performance this quarter is not what we expect of ourselves, and not what our shareholders expect of us, he said in a statement. The retail giant said sluggishness in the overall economy contributed to its weaker outlook, but some of the problems are of Wal-Mart's making. Price cuts that opened the key back-to-school season lowered gross margin at U.S. stores by half a percentage point, yet piles of spring apparel remain unsold. Still, executives noted that inventory grew at a slower rate than sales during the second quarter, reversing an issue that plagued the retailer during its first quarter. Meanwhile, the cooling housing market continued to hamper Home Depot's quarterly earnings. The home-improvement retailer saw its net income drop 15 to 1.59 billion, although these results came in ahead of Wall Street expectations. The company also hinted at the possibility that the proposed sale of its supply business might not go through under current terms. Shares of Wal-Mart fell 5.1, while Home Depot slid 4.9. In his conference call, Wal-Mart's Mr. Scott emphasized the financial difficulties crimping the retailer's core demographic of modest-income shoppers. It is no secret that many customers are running out of money towards the end of the month, he said. The paycheck cycle is, in fact, more pronounced now than it ever has been. Evidence of consumer unease could be seen in the 14 quarterly sales gain Wal-Mart supercenters notched for groceries, whose rock- bottom prices draw budget-stressed consumers. Pharmacy and electronic sales also improved during the quarter. But home-related items and clothing, with their wider profit margins, remained a downer for the retailer. Analysts saw evidence that Wal-Mart executives are taking steps to fix those factors in the company's control, but many remain cool on the retailer's near-term prospects. A.G. Edwards analysts called it an ebb tide in low-end consumer spending. Goldman Sachs faulted the tougher macro environment for making the company's turnaround even tougher to enact, and warned of retail-sector fallout from any further price cuts Wal-Mart's efforts to clear inventory could pressure other discounters this holiday season. And HSBC's note, echoing Mr. Scott, affirmed that the paycheck-to-paycheck cycle means that, for consumers, inflation takes a bite out of real spending growth. In that regard, there was a glimmer of good news in economic data released Tuesday. Despite another jump in energy prices, July data on U.S. wholesale prices were unlikely to stir inflation concerns. The producer price index for finished goods rose 0.6, but the core number that excludes more volatile food and energy prices was up just 0.1 -- slightly below Wall Street expectations. Even more unexpected was Tuesday's trade data the U.S. deficit narrowed in June due to surprising strength in exports. Growth in U.S. demand for imported goods also slowed slightly, knocking the trade gap down 1.7 to 58.14 billion. The trade deficit from May was also revised downward to 59.16 billion. Strength in the global economy at large, combined with continued weakness in the dollar, helped enhance demand for U.S. exports. Bear Stearns analysts wrote that the trade numbers will likely lead the Commerce Department to revise second-quarter economic growth around 4.3 from an originally reported 3.4. ---","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614019","date":"2007-08-15","texts":"Business Mood May Give Fed Leeway to Cut Market turmoil has lots of investors betting the Federal Reserve will come to the rescue in the months ahead with interest-rate cuts to boost the economy. The Fed says its bigger concern is still the prospect of inflation, which weighs against interest-rate cuts. That makes today's Labor Department report on consumer-price inflation in July especially important. Economists surveyed by Dow Jones estimate the consumer-price index was up a scant 0.1 in July and the core consumer-price index, which doesn't count volatile food and energy prices, was up 0.2.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615266","date":"2007-08-16","texts":"When you hear that Apple has released a new product, you think of a sleek Macintosh laptop, or perhaps a beautiful program for editing videos. But a spreadsheet Not a spreadsheet. After all, expertise with spreadsheets is the sort of computing skill about which the Mac guy in Apple's TV ads mocks the PC guy. And yet, last week, Apple brought out a new spreadsheet program called Numbers, thus completing one of its least-known products a productivity suite called iWork. The iWork '08 suite, which competes with the Macintosh version of Microsoft Office, also includes a word- processing program called Pages and a presentation program called Keynote. The two were upgraded last week. IWork costs 79, about half the price of the lowest-cost version of Microsoft Office, which sells for 149. In the past 10 years, Apple has out-designed Microsoft and its hardware partners in a number of key areas. But can Apple really take on Microsoft in the category of productivity software, where Office rules on both Windows and the Mac To find out, I've been testing the new iWork, which runs only on the Mac, against the Mac version of Office. My verdict iWork '08 is a nice product, capable of turning out sophisticated and attractive word-processing, presentation and spreadsheet documents. It can even read Microsoft Office documents, whether created on the Mac or on Windows computers, and can save documents in Microsoft Office formats so they can be opened in Office on the Mac or on Windows. But iWork simply isn't as powerful or versatile as Microsoft Office, especially when it comes to word processing and spreadsheets. And it suffers from a design that places far more emphasis on making documents look beautiful than on the nuts and bolts of the actual process of writing and number-crunching.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615143","date":"2007-08-17","texts":"The stock market went into correction mode yesterday, only to make a massive end-of-session comeback. Bear Stearns was among financial shares that led the way, Continental Airlines rose above the fray, but Alcoa couldn't quite regroup. The Dow Jones Industrial Average lost 15.69, or 0.1, to 12845.78 after being down as much as 343.53, and marked its sixth decline in a row. Since reaching its closing high of 14000.41 on July 19, the industrial average has only one of its 30 members showing a gain Procter & Gamble. The Standard & Poor's 500 Index rose 4.56, or 0.3, to 1411.26, still down, by 0.5, for the year. The Nasdaq Composite Index lost 7.76, or 0.3, to 2451.07, down each of the last six sessions. The New York Stock Exchange Composite Index declined 1.94 to 9087.10. All four indexes were down more than 10 from their most recent highs, the generally accepted definition of a stock market correction. Positives that emerged from the financial group were said to have greatly helped the market recoup. Bear Stearns rose 13.29, or 13, to 116.44. The investment bank is set to cut about 240 jobs at its mortgage-lending unit. Fannie Mae gained 3.70, or 6, to 65.15 and Freddie Mac rose 1.06, or 1.8, to 61.34.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983596","date":"2007-08-17","texts":"What we have on our hands here, folks, is a full-blown, global financial crisis comparable to the junk bond collapse of 1987, the S&L crisis of 1990 or the Asian financial crisis of the late '90s. On major stock exchanges, stock prices have fallen roughly 10 percent in a matter of weeks in volatile, high-volume trading. And in the past days, the sell-off has been extended to developing markets, where the declines have been even steeper. The yen has recorded its biggest jump against the dollar since 1998 as traders unwind a massive carry trade that for five years had allowed them to profit by borrowing at 2 percent in Japan and lending at higher rates in places like the United States or Australia. Meanwhile, the Australian dollar recorded the sharpest declines since it started trading freely in 1983, forcing the central bank Friday morning to intervene in markets to stabilize the currency. And so many investors are flocking to the safety of the U.S. Treasury that the yield on the three-month bill has fallen nearly three-quarters of a percentage point in just two days, the sharpest decline since the October 1987 stock market crash. In Canada, a group of banks have gotten together to provide short-term credit to business after the freeze-up in the market for commercial paper.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613835","date":"2007-08-20","texts":"So-called safe-harbor flows have meant strong currents for the U.S. Treasurys market throughout the credit-market shakeout. Now it looks like their absence could leave investors flailing. The Federal Reserve's efforts to keep cash moving in the financial system have stopped short of the sort of interest-rate cut the market craves, but they have weighed on Treasurys nevertheless. The question is how much government bonds will suffer from any turnaround in the credit and stock markets. Friday, the Fed cut the borrowing rate on its discount window to 5.75 and extended the term from overnight to 30 days, with the option to renew. The central bank left the key federal-funds rate untouched at 5.25. It was enough to prompt a significant drop in prices of long-dated Treasurys. The benchmark 10-year note fell 1932 point, lifting its yield to 4.673, as debt prices and yields move inversely. At the same time, the Dow Jones Industrial Average surged 1.8. The feeling in the market now is that it isn't so much a question of whether the Fed will cut the fed-funds rate, but when it will do so. According to Credit Suisse, it is a matter of strategy alone an early cut risks overstepping the mark and forcing an adjustment down the line, with all the attendant volatility and potential damage to the bank's credibility. If credit markets stabilize, the Fed can bide its time and take a more measured approach.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614273","date":"2007-08-20","texts":"Strains in financial markets had been evident for weeks, but Thursday, Aug. 16, was different. As the day dawned in London, 45.5 billion in short-term IOUs issued outside the U.S. by corporations and others were maturing and had to be rolled over. Traders usually have buyers for such paper by lunchtime in London, around 7 a.m. in New York. On this morning, demand had dried up, and it would take the whole day to sell less than half of it, said a person familiar with the market. At 730 a.m. in New York, the largest maker of mortgages in the U.S., Countrywide Financial Corp., said it was tapping 11.5 billion in bank credit lines, a sign that it was unable to raise money in financial markets as it had been. This was a development more serious than another hedge fund running into trouble. When you start talking about Countrywide, said one senior Wall Street executive, that's kind of America. At the end of the day, we're talking about Mom and Pop and the right to own a home. Just before noon New York time, near the end of the London trading day, the yen suddenly surged against the dollar, rising 2 in just minutes and crushing currency-market players who hadn't anticipated such a sharp move. On the London trading floor of Goldman Sachs Group Inc., phone lines lit up in unison, and some salesmen wielded two phones at the same time. They were shoving and grabbing each other to get in front of traders, and shouting orders to execute trades, according to eyewitnesses.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613456","date":"2007-08-21","texts":"The Wall Street Journal Online The Morning Brief, a look at the day's biggest news, is emailed to subscribers by 7 a.m. every business day. Sign up for the e-mail here. On Friday evening, with Congress out of town on its summer recess and Americans heading into a mid-August weekend, the Bush administration sent a message to the states The federal government will make it tougher for a national children's insurance program to cover the offspring of middle-income families. The State Children's Health Insurance Program was created in 1997 to help children whose families couldn't afford insurance but didn't qualify for Medicaid, and administration officials tell the New York Times that the changes are aimed at returning the program to its low- income focus and assuring it didn't become a replacement for private insurance. Administration point man Dennis Smith wrote to state officials saying there would be new restrictions on the District of Columbia and the 18 states -- including California and New York -- that extend or plan to extend coverage for children whose families make more than 250 of Federal poverty levels. For a family of three that 250 is 42,900, and for a family of four it's 51,625. Under the new limits, a child from a family making more would have to spend one year uninsured before qualifying, and any state that wants to extend coverage would have to assure Washington that at least 95 of children eligible for SCHIP or Medicaid are enrolled in one of the programs. But as the Associated Press reports, no state can currently make such assurances. Rachel Klein, deputy director of health policy for advocacy group Families USA, tells the AP that since many families above the 250 threshold can't afford private insurance, the effect of this policy is to have more uninsured kids. Ann Clemency Kohler, deputy commissioner of human services in New Jersey, tells the Times the changes will cause havoc with our program and could jeopardize coverage for thousands of children. States have already been imposing waiting periods and taking other steps to prevent parents from moving their children from private insurance to SCHIP, which currently serves some 6.6 million children, the Washington Post notes. The administration's new restrictions come as the program, which expires at the end of next month if Congress doesn't reauthorize it, is the subject of a larger political fight that pits the White House against Democrats and some Republicans in Congress and state capitals.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982809","date":"2007-08-21","texts":"Uninsured Washington area residents shopping for health coverage -- or convinced they have to go without -- have a new tool to help them assess the options available to them. A Web site first developed for California by the nonprofit Foundation for Health Coverage Education now includes information specific to all 50 states and the District. The same information is available via a toll-free hotline for people using a phone rather than a computer. While the information on the site isn't new -- several consumer groups have compiled essentially the same facts -- its interactive format lets users shortcut through complexities to personalized options much more quickly and easily. The foundation, funded largely by the insurance industry, argues that the oft-cited figure of 43 million uninsured Americans includes many people who don't know of the choices available to them. Once a user identifies his state of residence, both the Web site and phone line use five simple questions to gauge a person's eligibility for public and private health plans open to those not covered by employers. For example, if you report that you and your teenage son live in Washington, have no insurance and have a monthly income of 2,000, one plan you'll hear about will be the DC Healthy Families initiative, which provides health insurance to low-income children and their parents. The Web site also provides links to printable applications for many plans and phone numbers for insurers and government agencies. Consumer advocates for the uninsured said they welcome any additional tools that could help people find insurance.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616641","date":"2007-08-22","texts":"Bailout has been a busy word in the last two weeks. But lending so solvent institutions won't go under for lack of short-term liquidity is very different than bailing out insolvent institutions from their bad decisions. In any case, we've made peace with a financial system that lives a little closer to the edge on liquidity than it would if there weren't a Federal Reserve. Whether the alternative would be a more stable world, with as much growth, is uncertain. But there's no doubt that the system has been conditioned to expect a general subsidy to risktaking by way of the Fed's willingness to provide cheap money in an emergency. Everybody talks about moral hazard. A wisp of memory came to mind last week. Then-Fannie Mae chief Franklin Raines visited The Journal years ago and entertained himself by mocking editorial writers who assume that establishing that a policy is economically inefficient is enough to establish that it's unwise. He yukked it up quite a bit, in fact, noting that voters are perfectly entitled to assert values other than those of the market, namely that homeownership is a social blessing and should be encouraged with subsidies. And so we've done with tax subsidies, lending subsidies and a concerted set of policies by Bill Clinton's HUD to move low-income people out of rental units and into homes they own. His goal, which was achieved, was to lift the homeownership rate from 64.2 to 67.5 of households. But a home financed by a mortgage is not just an asset. It's also a liability. We owe thanks to Carolina Katz Reid, then a graduate student at University of Washington, for a 2004 study of what she dubbed the low income homeownership boom. She considered a simple question -- whether or not low-income households benefit from owning a home. Her discoveries are bracing Of low-income households from a nationally representative sample who became homeowners between 1977 and 1993, fully 36 returned to renting in two years, and 53 in five years. Suggesting their sojourn among the homeowning was not a happy one, few returned to homeownership in later years.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616740","date":"2007-08-22","texts":"The dollar slipped modestly against the yen, but volatility continued to decline and currency trading was range-bound after U.S. officials offered soothing words on recent turmoil in financial markets. Treasury Secretary Henry Paulson said that credit-market turbulence over the past few weeks is due to a repricing of risk but said it is no reflection of the underlying health of the U.S. and global economies. And Richmond Federal Reserve President Jeffrey Lacker said that despite the recent upheaval, the Fed should remain focused on fundamentals of growth and inflation when it assesses whether to change its main policy tool, the federal-funds rate. We subsequently stabilized in the stock markets and stabilized in the dollar as well, said Andrew Busch, global foreign-exchange strategist at BMO Capital Markets in Chicago. We're not getting any exaggerated moves that we've been getting in the last couple of weeks. Late in New York, the dollar was at 114.42 yen, down from 114.96 yen late Monday. The euro was at 1.3466, down from 1.3485, and at 154.12 yen, down from 155.01 yen. The pound was at 1.9825, down from 1.9882. The dollar was at 1.2067 Swiss francs, up from 1.2054 francs.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617257","date":"2007-08-22","texts":"Market turmoil in the U.S. sent shock waves as far as Asia, a sign of the close connection among distant financial markets. But many analysts say the region's economies might suffer far less damage, a feat that would show they have become less dependent on the American economy. Troubles in the U.S. market for subprime mortgages have triggered a widespread flight from risk and driven down financial markets around the world. In an effort to calm the markets, Japan's central bank is expected to leave its short-term interest-rate target at 0.5 this week, rather than raising it as previously expected. But barring any major broadening of the credit crunch, the effects on Asia's real economies -- things like production aimed at consumer spending and exports -- could be relatively modest, analysts say, even if the turmoil triggers a slowdown in the U.S. That's because, by many measures, Asian economies appear to be growing less reliant on the U.S. Indeed, less than a week after the U.S. market's most violent movements, China's central bank raised its key interest rate yesterday because strong growth is driving up inflation. Meanwhile, many Southeast Asian countries are benefiting from investment aimed at their domestic markets. For the first time since the 1997-98 Asian financial crisis, Indonesia's government is planning to finance projects to improve the country's transportation and energy infrastructure. Indonesian companies also are gearing up for expansion.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984988","date":"2007-08-22","texts":"As financial markets went haywire this month, Wall Street looked to one of its own, Treasury Secretary Henry M. Paulson Jr., for help. Paulson, who was chairman of the investment bank Goldman Sachs before joining the Bush administration, has acknowledged that the downturn in the markets could damage the U.S. economy. But the Treasury Department under Paulson has made no dramatic public moves to shore up frozen markets for home mortgages and other debt. Yesterday, Paulson and Federal Reserve Chairman Ben S. Bernanke met with Senate Banking Committee Chairman Christopher J. Dodd D-Conn. as the debate over the government's response to the breakdown of markets for mortgage and other debt moved to Capitol Hill. Dodd, in a news conference after the private meeting, called on Paulson and Bernanke to use all the tools at their disposal to ease the problems. Most of the policy changes Dodd suggested would do little to affect frozen credit markets in the near term, economists said, but rather might help prevent a similar event. The reality is that, for Paulson and the Treasury Department, there are relatively few tools that would allow this or any administration to manage the ups and downs of financial markets, according to economists and economic policymakers of both parties.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614161","date":"2007-08-27","texts":"In January, Dell Inc. sent factory supervisor Julie Figlar for her first bout of specialized management training. For five days at a Nashville hotel, she and 17 other front-line supervisors practiced how to give feedback to workers, resolve conflicts and other skills. It is more than many companies do for the managers who are at the front lines supervising workers. Traditionally, these supervisors learn how to manage on the job, mostly by trial and error, with little formal instruction in people skills. Big companies offer more training in information technology than in management skills, according to the American Society for Training and Development. As a result, many new managers struggle with asserting authority, communicating with workers and delegating responsibility. Now, some companies, including Dell and Home Depot Inc., are stepping up formal manager training. The moves come as many firms seek to better motivate and engage workers in an increasingly global and fast-paced environment. Pat Galagan, an executive at the training and development society, sees many companies gradually increasing training for front-line supervisors. She says those leadership skills are gaining importance as companies try to boost worker productivity. Front-line supervisors are the ones who are in the best position to get more discretionary effort out of people, Ms. Galagan says. That makes them much more critical than they've ever been. Home Depot noticed earlier this decade that its traditional informal coaching and mentoring for first-line supervisors had become less effective as the company expanded and higher-level managers grew busier, says Leslie Joyce, chief learning officer at the retailer. That works well when the numbers are small, she says. As we got bigger, that methodology didn't work as well. Home Depot now has about 30,000 department supervisors, the first rung of management in its stores.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983397","date":"2007-08-27","texts":"Early childhood development may seem like an odd topic for a Federal Reserve Bank president. But as a regional Reserve Bank in a federated central banking system like the Fed, we spend a good deal of time trying to understand the economies that make up our district, which includes Maryland, D.C., Virginia, West Virginia and the Carolinas. Data on the growth of income per person across the United States and across cities and metropolitan areas reveal that at least one important measure of skills is consistently correlated with future growth. That measure is education, and a typical finding is that the share of the population of a U.S. city or state that had a college degree in 1990 was positively associated with growth in family income between 1990 and 2000. In other words, the more educated the population, the greater the subsequent growth in economic well-being. Furthermore, population growth is correlated with education levels, suggesting that places with highly skilled populations create opportunities that attract newcomers. What is striking about the empirical evidence is that higher skill levels predict faster growth, all else equal. One possible interpretation of this fact is that skills, in addition to boosting current income, enhance an area's ability to further build its skill base Human capital begets more human capital, you might say. Economists have identified two distinct ways this might come about. One is the straightforward notion that certain general skills make people better at learning new skills. Another involves what economists call externalities or increasing returns, meaning that a skilled worker is more productive in a marketplace or work environment with other skilled workers. The idea that human capital promotes growth is, perhaps, not too surprising. After all, and as I mentioned, it's quite natural to think of differences in skills as explaining a substantial part of the differences in income between individuals -- why shouldn't this logic extend to communities, cities, states and so on At the level of individual workers, in fact, there is abundant evidence that the importance of skill to one's economic well-being has grown over the last several decades. This is seen in a growing gap between the average wages earned by high school graduates and those with college or advanced degrees. The growth in this pay differential, or skill premium, is a major factor behind the increase in income inequality that has received so much attention of late. The apparent reasons for this widening dispersion are germane here. Wages paid to workers at any particular skill level generally reflect the productivity of those workers -- how much economic value their work creates. If the wages of higher-skilled workers have grown more rapidly than the wages of the less-skilled, it must be that the work environment has changed in a way that has made the productivity of higher-skilled workers rise more rapidly.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616121","date":"2007-08-28","texts":"As the housing slump caused stocks to slide yesterday, Safeway slipped on a sell rating, Onyx Pharmaceuticals surged on a clinical trial triumph and Altria Group advanced on the prospect of a spinoff. The Dow Jones Industrial Average dropped 56.74, or 0.4, to 13322.13. The tech-heavy Nasdaq Composite Index lost 15.44, or 0.6, to 2561.25, having fallen back in just two of the past seven sessions. The Standard & Poor's 500-stock index lost 12.58, or 0.9, to 1466.79. The New York Stock Exchange Composite Index fell 78.11, or 0.8, to 9528.93. Investors wanted little to do with stocks after word that existing- home sales fell during July, a fifth-straight decline, while inventories of unsold property climbed and prices dropped. This showed us how fractured and uncertain the housing market still is, said John Twomey, managing director for institutional equities trading at Merriman Curhan Ford. Until there are signs of stabilization, what goes on in the housing market will remain an important factor in traders' and investors' decision making. Safeway lost 1.05, or 3.2, to 31.89. Merrill Lynch downgraded the supermarket chain's shares to sell from neutral, expecting them to underperform through the rest of 2007 and likely into 2008. Altria Group rose 89 cents, or 1.3, to 70.08. The tobacco company is expected to announce a spinoff of its Philip Morris International arm after a board meeting tomorrow.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614074","date":"2007-08-29","texts":"Investors fleeing jittery stock markets plowed money into the safety of government bonds yesterday, driving the prices of Treasurys higher and their yields lower. Stocks dropped late in the day and investors moved to the Treasury market on renewed worries about the disappearance of easy credit and subprime-mortgage woes. Many investors and traders are on vacation this week, and others are simply unwilling to trade anything but the safest fixed-income assets. It's actually quite quiet on the trading floor. You're not getting any screaming and yelling. At this point everyone's taking their hands off the wheel and watching the car skid, said T.J. Marta, a fixed- income strategist at RBC Capital Markets in New York. Treasury bills and short-term Treasurys saw the heftiest gains as the flight to plain-vanilla investments picked up speed. The three- month Treasury bill yield fell to 4.395 yesterday as its price rose.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615058","date":"2007-08-30","texts":"WASHINGTON -- When Ben Bernanke was nominated to head the Federal Reserve in 2005, he promised to maintain continuity with the policies and policy strategies established during the Greenspan years. But in handling his first financial crisis, Mr. Bernanke shows signs of a break with Alan Greenspan, the Fed's chairman from 1987 to 2006. That shift is important in understanding why Mr. Bernanke hasn't cut the Fed's main interest rate yet, and it could alter investors' expectations of how the Bernanke Fed will function. The Fed historically has had two major economic duties. Maintaining financial stability is one. Controlling inflation while preventing recession is the other. To Mr. Greenspan, market confidence and the economy's growth prospects were so intertwined as to make the Fed's two duties almost inseparable. He cut rates after the 1987 stock-market crash and the near-collapse of hedge fund Long-Term Capital Management in 1998 to prevent investor reluctance to take risks from undermining the nation's economic growth. By contrast, Mr. Bernanke distinguishes between the central bank's two functions. So, on Aug. 17, the Fed cut the interest rate and lengthened the term on loans to banks from its little-used discount window in hopes banks would use the window -- or at least the knowledge it was available -- to lend to solid borrowers having trouble getting credit amidst the market turmoil. The action was aimed at restoring the normal functioning of disrupted credit markets, not primarily at boosting growth.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616232","date":"2007-08-31","texts":"MANILA, Philippines -- The perpetual sick man of Asia is making an unexpected recovery. Once among Asia's most prosperous nations, the Philippines had languished economically for decades while neighboring countries, big and small, raced ahead. But for the past two years -- almost lost amid the international excitement about the growth of China, India and Vietnam -- the Philippines has been rebounding. This year, the nation's economy is expected to post its fastest growth rate since the early 1990s, despite the economic shadow cast by the global credit squeeze sparked by problems in the U.S. mortgage market. The Philippine economy grew at a 7.5 annual rate in the second quarter. The stock market has soared over the past two years, although it has faltered recently. Foreign investors are coming back, attracted by the Philippines' young population -- the average age of its 89 million people is 22 -- and the widespread use of English, a legacy of its past as an American colony. The call-center business is thriving, some of it poached from India. Not long ago, Fort Bonifacio, a sprawling old military base in the heart of Manila, was an emblem of economic malaise -- a stalled redevelopment taken over by cyclists, skateboarders and kite enthusiasts. Now, office towers, embassy buildings and shopping malls are going up there. Nike Inc., Starbucks Corp. and Nokia Corp. have opened stores, and the Manila stock exchange will be joining them soon. The Philippines could be the next India in terms of its ability to surprise, says Adrian Mowat, a stock strategist at J.P. Morgan Securities Ltd. in Hong Kong.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616482","date":"2007-08-31","texts":"The Wall Street Journal Online The Morning Brief, a look at the day's biggest news, is emailed to subscribers by 7 a.m. every business day. Sign up for the e-mail here. Low-income borrowers on the brink of losing their homes are said to be the main target of plans President Bush will outline today, in his administration's first policy response to the wave of defaulting mortgages that has reverberated through the global finance system and so shaken the markets. Ahead of this morning's speech, administration officials offered to news media a glance of what he will propose an expansion of the Federal Housing Administration's loan-insurance program to include borrowers who have missed payments but could still be helped by refinancing a higher limit on FHA insurance premiums, which could let the agency increase the number of high-risk loans it insures and a suspension of taxes on mortgage debt that lenders forgive, which could help people who still live in their homes and hope to avoid foreclosure by lowering their loan balance and payments. But the Los Angeles Times says it's unclear how much the program will help many struggling homeowners in high-priced markets like California and New York, where many people who took out adjustable-rate loans in recent years at low 'teaser' rates and now face sharp jumps in their payments may be unable to afford any new market-rate loan, even with government insurance. Administration officials said the FHA estimates the expansion of its default-insurance program can help another 80,000 homeowners qualify for refinancing next year -- raising the total number of its refinancing guarantees to 240,000 -- The Wall Street Journal reports. But the FHA's limits on loan size and borrower criteria mean the changes will only help a small portion of homeowners, the Journal adds. And more than two million loans are expected to adjust to higher rates over the next two years. Beyond the rule changes, the Treasury and Housing and Urban Development departments plan to work with lenders and other players in the industry to get less stringent loan products to people in danger of defaulting. And the New York Times cites an official saying there will also be a jawboning of lenders to persuade them not to foreclose on some borrowers.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617416","date":"2007-09-01","texts":"The Dow industrials jumped 119.01 points to 13357.74, down slightly for the week but up 1.1 for the month. New economic data, which showed that a key inflation measure remained tame in July, and a speech by Bernanke fueled hopes that the Fed will cut rates. The S&P 500 and Nasdaq both ended August higher. The Fed won't bail investors out of bad decisions but will act if recent market turmoil threatens economic growth, Bernanke said in a much-anticipated speech. --- Starwood named Coors Brewing CEO Frits van Paasschen as its new chief, hoping his experience managing brands can help propel the hotel company. ---","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830981723","date":"2007-09-02","texts":"The U.S. Border Patrol has just unveiled a total makeover of its traditional uniform. Shiny badges and other emblems of law enforcement are out. Our frontier troops will now have a look more in keeping with their role as frontier troops, with lightweight fatigues and better weapons. Agent Ramon Ramirez told the Associated Press that the new garb looks more military, like you mean business. In Stafford County, Va., a 50-man company called McQ has started work on a 100,000 contract to develop a smart rock for the Department of Homeland Security. McQ, whose motto is Tough sensors for an insensitive planet, says that its rocks, embedded with acoustic and motion sensors, will be able to detect illegal immigrants and other miscreants sneaking across our borders. The firm expects its contract for developing the rocks to grow to 1 million by fall -- a sure sign that while immigration reform bills may come and go, the threat of illegal immigration will continue to expand. This is a certainty not because of the state of the Mexican economy or because of government laxity here, but because border control is now an integral part of the military-industrial national security system, which has a long history of profiteering from purported dangers to our safety. These are that system's immutable laws 1 The threat, as portrayed to the public, always increases in direct proportion to the amount of money lavished on confronting it, and 2 every extra dollar appropriated for this purpose brings a progressively less effective counter to the threat, thus requiring that even more money be spent. Meanwhile, reality -- the scope and shape of whatever threat is being pressed into service -- is usually at sharp variance with the official picture, which leads to 3 The other side can usually be maneuvered to react in a way that justifies further efforts on our part. This system evolved, and reached its most perfect form, during the Cold War. Decade after decade, the American taxpayer was presented with a Soviet military machine that allegedly far outclassed our own puny efforts at military buildup and would shortly be in a position to have its way with us -- unless we invested the requisite treasure in various systems to counter the threat. Yet despite the billions lavished on our defenses, we never seemed to be able to match the foe's advertised military might.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983555","date":"2007-09-02","texts":"You read it here first The Federal Reserve will not lower interest rates when its policy committee meets Sept. 18. That's not to say it couldn't lower rates before Sept. 18 if financial markets experience another meltdown or if there is credible evidence of a dramatic slowdown in the overall economy. Or any time after Sept. 18, for that matter. But it ought to be clear to anyone who has been listening to Bernanke & Co. that the last thing they want to do on Sept. 18 is be seen as giving in to the pleading of overpaid traders, bankers and fund managers desperate not to confront the consequences of their own mistakes. In truth, it probably doesn't matter what the Fed does on Sept. 18. It was not primarily the Fed that created the credit bubble -- it was the traders, investment bankers and fund managers, working through unregulated global financial markets. And now that all that market-created credit and liquidity has suddenly disappeared, there is little the Fed can do to replace it, even if it wanted to. Which it doesn't. You don't have to agree with everything French President Nicolas Sarkozy said to an employer group last week to admire the boldness and clarity of his economic vision.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614820","date":"2007-09-05","texts":"House Committee Hearing Delves Into Subprime Mess The House Financial Services Committee is holding a hearing on the subprime-mortgage crisis and options for preventing a flood of homeowner foreclosures. Representatives from Treasury, the SEC, lenders and investment banks will testify. 10 a.m. EDT. Fed's 'Beige Book' Offers Some Economic Snapshots","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615732","date":"2007-09-05","texts":"Economy watchers, trying to triangulate the economy's position amid credit risks and the housing slump, found fresh numbers and economic utterances to crunch and parse today. The Organization for Economic Cooperation and Development -- which publishes comparable social and economic stats for some 30 countries -- reported Wednesday that the U.S. economic slowdown will be significant, as the real estate crisis continues. Housing is set to exert a longer and more potent than expected drag on the U.S. economy, said Jean-Philippe Cotis, chief economist for the Paris-based economic think tank. Consumers will also be tested by mortgage rate resets, tighter credit standards, weaker collaterals and slower job creation. In a press briefing, Mr. Costis also said he expects the Federal Reserve to ease rates sooner rather than later. Another ominous, yet inconclusive, indicator of the direction of the U.S. economy out early Wednesday, the ADP National Employment Report, said that jobs in the private sector rose by 38,000 in August, much less than expectations. This data tidbit shined one of the first statistical spotlights on the economy in August, when the worries over exposure to subprime securities spooked investors out of credit markets. Still, Goldman Sachs economists warned that the ADP report gives a picture of the labor market for the week of Aug. 12, only part way through the market turmoil and before employment could really react to the ongoing credit crunch. More weakness could well be yet to come. Also out Wednesday were housing numbers from the National Association of Realtors. The group's index of pending sales of existing homes decreased at a seasonally adjusted annual rate of 12.2 in July from June, the industry group said Wednesday. The NAR index, based on signed contracts for previously owned homes, was 16.1 below the level of July 2006. An NAR statement accompanying the data release also suggested existing-home sales will likely sag more as mortgage disruptions tied to credit concerns work their way into the housing market. BNP Paribas economists noted that most worryingly is that this report is clearly 'pre-turmoil', reflecting resale transactions agreed in July, so before August's financial market turmoil, lurch higher in jumbo mortgage rates and the freezing over of much of the mortgage market. How bad next month's pending sales index and this month's new home sales report might be is really quite frightening. Still more economic reports are on tap for later today, when the Federal Reserve will release its beige book report. Concerns over the credit crunch and statements from Fed Chairman Ben Bernanke last week will put extra weight on the regularly published collection of on-the-ground business anecdotes from the Fed's 12 regional banks. Housing figures proved particularly difficult for investors to digest, and major indexes reversed course after Tuesday's rally. The Dow Jones Industrial Average fell 172.74, or 1.28, just after midday to 13276.12. The Standard & Poor's 500-stock index lost 18.62, or 1.25, to 1470.80 and the technology-heavy Nasdaq Composite index was down 20.41, or 0.78, to 2609.83. Treasury prices gained, with the 10- year note rising to yield 4.484 after midday. The 30-year bond was up to yield 4.875. Crude prices were up five cents to 75.13. The dollar weakened against the yen and the euro. Shares in Europe sank and Asian markets closed mixed. ---","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616568","date":"2007-09-05","texts":"The Wall Street Journal Online The Morning Brief, a look at the day's biggest news, is emailed to subscribers by 7 a.m. every business day. Sign up for the e-mail here. Iraq may be the uber-issue of world affairs for a globe-trotting President Bush, but the U.S. relationship with China could nonetheless prove the dominant media topic at the Asia Pacific Economic Cooperation summit this week in Australia. A host of trade and political issues were already on the bilateral agenda for two of APEC's most powerful members, but reports of an alleged Chinese cyber attack on Pentagon computers this week provided a concrete focus for the simmering tension. The Pentagon hasn't confirmed or denied reports that it suspects the Chinese military was behind the breach, but President Bush was asked in Sydney if he would bring it up with Chinese President Hu Jintao. In terms of whether or not I'll bring this up to countries that we suspect may -- from which there may have been an attack, I may, he replied, adding that in this instance, I don't have the intelligence at my fingertips right now. As Mr. Bush went on to say, the Sino-American relationship is complex. Whether it be this issue, or issues like intellectual property rights, I mean, if you have a relationship with a country, then you've got to respect the country's systems and knowledge base, he said. And that's what we expect from people with whom we trade. From Beijing, Washington wants more consumption of American goods, more social support for a middle class, and looser currency restrictions that could help reduce the huge U.S. trade deficit, as Mr. Bush reiterated. The president said that, as usual, he'd express concerns over imprisoned political dissidents, the Chinese treatment of Tibet and Beijing's support for Sudan over Darfur. It's best to be able to discuss these issues in an environment that is frank and open and friendly, as opposed to one in which there's tension and suspicion, Mr. Bush said. And so when I say we've got great relations, I will sit down with the President and have a good honest, candid discussion, and he's going to tell me what's on his mind and I'm darned sure going to tell him what's on my mind.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985140","date":"2007-09-05","texts":"In the spring of 1923, a sick and frustrated Lenin penned an article for Pravda titled Better Fewer, But Better. The state he had willed into existence was mass-producing communists who knew nothing of communism. Better that the state should take its time, Lenin counseled, and turn out fewer but higher-quality commissars. In fact, the genius of the Soviet system was precisely its capacity to mass-produce thugs. One system that has taken Lenin's words to heart, however, is American manufacturing. Each year, our factories employ a smaller and smaller share of American workers, but each year the value of their output continues to rise. The dollar value of American-made goods today is three times what it was in the mid-1950s, The Post's Peter S. Goodman reported on Labor Day. Conversely, the percentage of American workers employed in manufacturing is a little less than a third of the level at mid-century 10 percent today, 34 percent in 1950. Employers have outsourced such labor-intensive industries as clothing and textiles, retaining the manufacture of high-value products for their domestic factories. America builds ever-more-innovative products, but ever-fewer Americans share in that bounty. We generate millions of jobs in lower-paying service-sector work even as the number of manufacturing workers continues to shrink 19 million in 1979, 14 million today. Nor do manufacturing jobs, immersed in the cauldron of global competition, offer anything near the security and middle-class living standards that many of them used to. With millions of digitizable service-sector jobs many requiring college educations subject to global competition as well, it's no wonder that the income of the typical American household has been flat even as national productivity rates continue to rise. Rebuilding mass prosperity in America will require two epochal shifts in the way our nation does business. First, non-manufacturing jobs not subject to global competition -- in transportation, construction, health care, sales -- must be upgraded and upskilled the way many of their counterparts in manufacturing have. Second, the workers in those jobs must regain the power to bargain for decent wages, a power that's eroded as the union movement has shrunk from representing close to 40 percent of private-sector workers in mid-century to just 7 percent today.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985053","date":"2007-09-06","texts":"Between now and the Nov. 6 election, Gov. Timothy M. Kaine D will be trying to help Democrats gain seats in the Republican-controlled Senate and House of Delegates. Kaine has recruited strong Democratic challengers in many competitive districts and raised more than 2 million. He has been hitting the campaign trail as if his name were on the ballot. Strategists from both parties say Democrats are well positioned to make substantial gains. But it's hard to unseat an incumbent, even in a year in which Republicans might be dragged down by voter fatigue with national party policies in Washington. It's not clear whether Kaine and Democratic leaders have a compelling message that will persuade voters it's time to replace Republicans in the General Assembly. Kaine has been betting that voters will reward him -- and Democratic candidates -- for the accolades Virginia has received under his leadership and that of his predecessor, Mark R. Warner D. Kaine frequently notes that Forbes magazine has named Virginia the Best State for Business for two years. Education Week has named Virginia one of the best states in which to raise a child. Virginia has several top-ranked public schools and one of the nation's lowest unemployment rates, Kaine notes.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613828","date":"2007-09-07","texts":"Help Wanted For Economy From Jobs Data The job market has been a bright spot for the economy. But, beneath the surface, it might not be as healthy as it looks. Consider what's happening in unemployment-benefit offices. There haven't been many changes in the number of people filing initial claims for government unemployment benefits, a closely watched indicator of layoffs. In the week ended Saturday, initial jobless claims held steady nationwide at a seasonally adjusted level of 318,000, not much more than the 315,000 who filed a year earlier.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615566","date":"2007-09-10","texts":"This summer's big story strikes all too close to home the collapse of the subprime-mortgage market and the impact on real-estate values across the country. To make sense of the tumult, we turned to Kenneth Heebner, who since 1994 has managed the 1.7 billion CGM Realty Fund. It has the best 10- year record of all real-estate-focused mutual funds, up an average 19.7 a year during the past decade, according to Morningstar Inc. We first spoke to Mr. Heebner in July 2006, when he predicted that a swelling number of homeowners would default on risky mortgages, causing a loud pop in parts of the country. So how does Mr. Heebner, 66, now view the landscape The bad news is that he is sticking by one of his predictions that has yet to materialize 50 price declines in some of the once-hottest regions. The good news He doesn't see a recession ahead, thanks to strong global growth. Mr. Heebner is well positioned to talk about prospects for the housing sector. His fund views its mission more broadly than most rivals, so he feels no pressure to make do with the best of a bad, narrowly defined real-estate lot. His fund, for instance, owns more coal-mining stocks than real-estate investment trusts these days. Coal companies own a lot of land.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614144","date":"2007-09-12","texts":"The time has come for the Federal Reserve to cut the federal funds interest rate substantially, starting on a path from the current 5.25 to 4.25 and possibly even less. Without such a policy shift, the U.S. economy faces the risk of a significant economic downturn. Three separate but related forces are now threatening economic activity a credit market crisis, a decline in house prices and home building, and a reduction in consumer spending. These developments compound the general weakening of the economy earlier in the year, marked by slowing employment growth and declining real spendable incomes. The current credit market crisis was started by widespread defaults on subprime mortgages. Borrowers with poor credit histories and uncertain incomes had bought homes with adjustable-rate mortgages characterized by high loan-to-value ratios and very low initial teaser interest rates. The mortgage brokers who originated those risky loans sold them quickly to sophisticated buyers who bundled them into large pools and then sold participation in those pools to other investors, typically in the form of tranches with different estimated degrees of risk. Many of the buyers then used these to enhance yields in structured bonds or even money market funds. Many subprime borrowers eventually had difficulty making their monthly payments, especially when teaser rates rose to market levels. The resulting defaults exceeded what investors in the mortgage pools had expected. Credit risk in financial markets had been underpriced for years, with low credit spreads on risky bonds and inexpensive credit insurance derivatives provided by investors seeking to raise their portfolio returns. With such underpricing of risk, hedge funds and private equity firms substantially increased their leverage.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614827","date":"2007-09-12","texts":"The biggest political battle in Washington over climate change may not pit Democrats against Republicans. Instead, it could be economists versus politicians. Many academics, even conservatives, favor a tax on carbon emissions. Many lawmakers, including some liberals, fear a political backlash against new fees. They lean toward a cap-and-trade system, which would set a limit on carbon-dioxide emissions and require companies to obtain permits to release carbon dioxide into the air. There may not be much practical difference between the two approaches. Caps would likely function much like a tax, levying new costs on business that would ultimately be passed on to consumers. Still, both sides say important principles are at stake. A cap-and- trade system, say its critics, could reward big polluters if it bases its allotment of permits on how much industries emit now. It also could spark a lobbying frenzy as industries fight to turn the system to their advantage. Defenders of cap and trade say it will provide a better incentive to cut emissions because companies can sell excess permits. They call a tax heavy-handed. The concern about taxes is understandable because people think you're going to raise their electricity bill by putting a tax on coal, says Kenneth Green, a resident scholar at the conservative American Enterprise Institute who advocates a carbon tax. But with cap and trade you're still going to raise the cost of their electricity.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614490","date":"2007-09-13","texts":"With pit traders screaming, Go, go, go -- and economists sounding alarms -- the world oil benchmark price briefly topped 80 a barrel yesterday for the first time. Last year, when crude was at similar levels, prices retreated and the economy stayed resilient. But this year, there are some significant differences, triggering concerns that prices could be headed higher and that the economy could be vulnerable. One main distinction This time around, the economy isn't looking quite as healthy amid concerns about the weakened housing market and mortgage defaults. In addition, in 2006, oil inventories were higher because of market incentives to store oil, which meant energy buyers had a stockpile. By contrast, today, different market incentives have led to much lower oil inventories in key regions. That's troublesome, because the lack of a stockpile cushion means that any supply crunch could lead buyers -- oil refiners and speculators alike -- to quickly bid up crude-oil prices beyond 80 a barrel, just as the economy appears vulnerable to recession.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614732","date":"2007-09-13","texts":"An analysis of federal data on nearly 14 million U.S. home loans made last year portends more misery for subprime borrowers, lenders and investors, as existing loans are pressured by falling home prices and lenders put tougher underwriting standards in place. The study by the Federal Reserve, based on data collected each year under the Home Mortgage Disclosure Act, found that the percentage of U.S. mortgages carrying high interest rates generally, subprime loans climbed to about 29 last year from 26 in 2005. In the report, Fed researchers said the data affirmed that the rise or fall of home prices is the biggest factor in predicting mortgage- loan performance, as opposed to the creditworthiness of borrowers and other variables. The study also linked higher concentrations of high- rate loans to rising rates of serious delinquency, or mortgages with payments overdue by at least 90 days. The study examined loans issued by 8,886 lenders nationwide, which generate an estimated 80 of U.S. home mortgages. The lenders are required to disclose dozens of pieces of information about each mortgage made or applied for, including pricing information for loans with interest rates exceeding certain thresholds. For first-lien loans, lenders must report which loans have interest rates at least three percentage points higher than Treasury securities of comparable maturity. The 2006 increase in high-rate loans was fueled partly by the flattened yield curve, or gap between long-term and short-term interest rates, which causes the number of loans exceeding the reporting thresholds to rise even if lenders don't charge borrowers higher interest rates. Still, the data suggest frenzied competition for subprime loans, even as the housing market was weakening.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614741","date":"2007-09-13","texts":"It seems hopes for Federal Reserve interest-rate cuts can carry stocks just so far. A day after sprinting 180.54 points higher on expectations that the Fed will lower short-term interest rates next week, the Dow Jones Industrial Average shed 16.74 points, or 0.13, to 13291.65, leaving it up 6.6 year-to-date. The Dow spent most of the day in positive territory, aiming for its first three-day advance in more than a month, but it lost steam after oil hit an exchange-record high for a second day. In addition, the dollar hit a low against the euro amid worries that the economy is weakening. Expectations that the Fed will cut interest rates at its Tuesday meeting, making the dollar less attractive to investors, also weighed on the U.S. currency. The Standard & Poor's 500-stock index was nearly unchanged, gaining 0.07 point to 1471.56, up 3.8 for the year. The Nasdaq Composite Index fell 0.2, or 5.40 points, to 2592.07, ahead 7.3 for 2007.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616069","date":"2007-09-13","texts":"The Wall Street Journal Online The Morning Brief, a look at the day's biggest news, is emailed to subscribers by 7 a.m. every business day. Sign up for the e-mail here. All in one day, oil prices reached a new record, car makers at the Frankfurt auto show jostled to display their most fuel-efficient models, and a federal judge in Vermont endorsed for the first time new state rules that would reduce emissions -- and, by extension, increase fuel efficiency -- in cars on American roads. GM, DaimlerChrysler, the Alliance of Automobile Manufacturers and a group of Vermont car dealers had banded together to sue that state over rules that would require a 30 reduction in greenhouse-gas emissions from cars and light trucks by 2016. The group argued that the rules would force them to redesign their vehicles, which would drive up car prices and drive down sales. Lawyers have pointed out that the industry must take into account safety, performance and cargo space in combination with improvements in fuel economy, as the Washington Post writes. Alan Weverstad, executive director of environment and energy for GM, told the court that compliance would cost his company 25 billion, and by 2016 it would still be seven miles-per-gallon short of the 43 mpg target, the Detroit News reports. However, an expert for Vermont contended the new rules would add 1,500 to the cost of a vehicle -- far less than the auto makers' estimate of as much as 6,000. Judge William Sessions rejected a host of industry arguments, including that the rules would limit consumer choice, create economic hardship for car makers, increase unemployment, undermine safety, and allow states to usurp federal authority, as the New York Times reports. It is improbable, he wrote, according to the Times, that an industry that prides itself on its modernity, flexibility and innovativeness will be unable to meet the requirements of the regulation, especially with the range of technological possibilities and alternatives currently before it. Vermont's rules, like those adopted by 12 other states, are a copy of California's, and altogether about a third of the nation's auto market is at issue, The Wall Street Journal reports. California has special dispensation under federal law to enact emissions rules that are tougher than the federal government's, a nod to California's record of dirty air, the Journal writes, adding that other states can replicate California's standards. As Vermont's effort is an extension of California's, and California is waiting for its latest federal waiver, the Vermont court decision could still be rendered irrelevant. Congress has essentially designated California as a proving ground for innovation in emissions control regulations, Judge Sessions wrote, according to the Sacramento Bee. History suggests that the ingenuity of the auto industry, once put in gear, responds admirably to most technological challenges. The Detroit Free Press writes that the industry's best hope for stopping the rules lies with the U.S. Environmental Protection Agency, but the paper notes that the EPA has never turned down California's request for a waiver to enact emissions rules -- and California has said it will sue the EPA if it does.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615157","date":"2007-09-15","texts":"NEW YORK -- The dollar advanced against the yen and the euro Friday in New York, reversing overnight losses to exit from active trading little changed from day-earlier levels. Most of the gains were attributable to profit-taking after the dollar's five-session slide, traders said. Ever since the release of the dismal U.S. employment report for August on Sept. 7, the dollar had been on the decline. It hit a series of all-time intradays lows against the euro, as well as 30-year lows against the Canadian dollar, during the week. Investors jockeyed for position Friday ahead of the weekend and a decision Tuesday by the Federal Reserve on U.S. interest rates, resulting in a moderate upswing for the greenback versus the yen and euro during the morning in New York. Late afternoon Friday in New York, the euro was at 1.3878 from 1.3886 late Thursday, while the dollar was at 115.30 yen from 115.25 yen. Also, the euro was at 159.78 yen from 160.04 yen. The British pound was at 2.0068 from 2.0303 late Thursday. The dollar was quoted at 1.1889 Swiss francs from 1.1868 Swiss francs late Thursday. Some of the intraday dollar strength seen Friday was a secondary effect of risk reduction, said John McCarthy, director of foreign exchange at ING Capital Markets.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616861","date":"2007-09-15","texts":"Geographic clusters of interconnected research institutions, businesses and suppliers -- think Boston and the biotechnology industry -- play a key role in fostering innovation. But not all of these regional systems are created equal. The best ones generate a greater number of jobs, attract more start-ups, and create more new products and services. So what do the most successful clusters have in common We studied more than 15 on three continents over the past four years. These networks are often anchored by an academic center or research institution, and nurtured by private or government-sponsored development agencies. The academic centers generate a constant stream of ideas and graduates, attracting companies looking for products and services to develop. The companies, in turn, pay royalties to the institutions, creating a virtuous circle of innovation and commercialization. While good science is at the core, we found three other factors to be especially powerful in determining a cluster's competitiveness and growth potential. -- NEW-VENTURE-ORIENTED The most-successful clusters are marked by research centers and companies that value innovation and risk-taking. They aren't afraid to venture outside established areas and into new markets.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985574","date":"2007-09-16","texts":"With the stock market whipping investors along gut-wrenching swings of 200 points or more in a day, the steady-as-she-goes FDIC-insured certificate of deposit has lately become an attractive shelter. For Lisa Bend, the time to act came when she kept seeing reports that the Federal Reserve may soon lower interest rates, which could cause CD rates to drop. Wanting to lock in a good rate, Bend, 43, recently put a portion of her retirement savings into nine- and 12-month CDs from Internet bank ING Direct. She got an annual percentage yield, or APY, of 5.25. I had it sitting there, and I didn't know what to do, said Bend, who lives near Philadelphia. I was looking at the stock market going up and down and up and down the past month. A safe investment, surely, in volatile times. But there is a price to be paid for a guaranteed return. If you tie up your money for six months to a year or two, you could miss out if stock prices suddenly take off again. So CDs, while a stable refuge, work most effectively as one component of a portfolio. Over the long term, stocks provide the best opportunity for your assets to grow. Historically, the U.S. stock market has offered investors annual returns averaging a little more than 10 percent if dividends are re-invested.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614266","date":"2007-09-20","texts":"Surging prices of oil and gold, and the increasingly enervated U.S. dollar, have fanned inflation worries after Tuesday's interest rate cut. After tumbling through a psychological barricade against the euro, the dollar also plunged to near parity with the Canadian dollar Thursday. The dollar briefly sank to C0.9998, marking the first time since 1976 that the U.S. currency fell below parity with its northern neighbor. In late New York trading the Canadian dollar was still dancing around levels roughly even to the U.S. dollar. The U.S. dollar's slide is partly an off-shoot of the Federal Reserve's decision to lop a half percentage point off its benchmark federal- funds rate two days ago. While Fed chief Ben Bernanke's move to hack away at the rate was welcomed on Wall Street, it also served to make it less appealing to hold dollar-denominated assets by cutting their cash yield. Coupled with the rate cut, the weaker dollar combines for various potential effects, including making imports pricier and raising risks of inflation while also making it easier for American companies to sell overseas. CIBC World Markets analysts say the dollar's retreat against the Canadian currency in particular points to the boom in commodities, which are a key component of the Canadian economy. Whether it's the exchange rate, the stock market, or housing prices, asset markets are all painting the same picture. Canada is getting richer relative to the U.S. Ultimately that's about the economy, they wrote. Whatever is driving the dollar lower, many observers expect it to lose even more strength. Adding to pressure on the buck was Saudi Arabia's decision to keep interest rates on hold this week, rather than cutting as it often does in lockstep with the Fed. The kingdom's currency is basically pegged to the dollar, and the fact that it hasn't followed the Fed's cut with one of its own has many speculating that they are moving closer to removing the dollar peg, said Camilla Sutton, currency strategist at Scotia Capital in Toronto. If the Saudis do clip their tight ties to the dollar, Ms. Sutton says, it would cause both a psychological and real drop in demand for the dollar-denominated assets, which would be U.S.-dollar bearish. Likewise, BNP Paribas analysts divined more weakness against European currencies and noted that the U.S. dollar index risks breaking its historical 1992 low, which would intensify the bearish U.S. dollar tone. The global head of currency research at Lehman Brothers in London, Jim McCormick, agrees, saying one thing that should be clear is that the rate cut was not dollar friendly. Historically, the worst combination for the dollar has been when U.S. yields have fallen vis- a-vis other currencies and equities and commodities have been rallying. He added that this is precisely the mix that had been building in recent days and one that should persist in the coming weeks. --- Stocks Slip, Oil Surges, Dollar Drops","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616808","date":"2007-09-20","texts":"European and Asian stocks roared ahead -- with Europe's gains the strongest in four years -- in a day-after response to the aggressive Federal Reserve interest-rate cut. Among the biggest rallies, Tokyo stocks wiped out Tuesday's plunge by jumping 3.7, the best advance in five years, and London was up 2.8 to mark its best two-day run since March 2003. Analysts warned that uncertainty remains after the recent bout of global financial turmoil, especially with major U.S. financial institutions set to continue reporting their results this week. Certainly these markets are not out of the woods yet, said Grant Williamson, an adviser at Hamilton Hindin Greene in New Zealand. What we have seen is a very short-term solution and we will have to see if the U.S. economy improves. In TOKYO, where many shares have been beaten down on fears about fallout from the U.S. subprime-mortgage problems, the benchmark Nikkei Stock Average of 225 companies rose 579.74 points to 16381.54. The Bank of Japan, as expected, held interest rates steady at the end of a policy meeting.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985056","date":"2007-09-20","texts":"Housing starts fell to their lowest level in 12 years last month, while permits for new construction also declined, pointing to a further weakening of an already battered housing market. Those numbers, as well as a report showing that builder confidence is at a record low, prompted Sen. Charles E. Schumer D-N.Y., chairman of the Joint Economic Committee, to declare during a hearing yesterday that the worst is still yet to come. The number of foreclosures has jumped in some parts of the country, as interest rates increase on adjustable-rate mortgages made to risky borrowers during the now long-over housing boom. Lawmakers and economists warned that problems in the subprime mortgage market could drag down the entire economy, despite the Federal Reserve's decision Tuesday to cut a key interest rate to decrease borrowing costs. For the first time in years, the 'R word' -- recession -- is being discussed far and wide as a real possibility, Schumer said. Robert J. Shiller, an economics professor at Yale University known for his study of investment bubbles, submitted written testimony saying that the collapse of home prices might turn out to be the most severe since the Great Depression.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614980","date":"2007-09-21","texts":"Fed Governor Warsh Speaks On Future of U.S. Economy On the heels of the Fed's half-percentage-point interest-rate cut, Federal Reserve Governor Kevin Warsh will speak at the State University of New York at Albany's School of Business. The Albany, N.Y., native will address the future of the U.S. economy and financial-market developments. Yom Kippur May Lighten Triple-Witching Volume","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615241","date":"2007-09-21","texts":"FedEx Corp. threw some cold water on hopes that holiday shoppers would give the uncertain economic outlook a boost. The Memphis, Tenn., shipping giant -- regarded as an economic gauge because it handles an average of more than six million packages a day across the world -- reduced its profit target for the year because of an economic outlook pinched by the weak U.S. housing market and higher energy prices. The company said that as a result, it would ratchet back on capital spending. We believe U.S. gross domestic product will grow less than 3 for the rest of FedEx's fiscal year, which ends May 30, said FedEx Chief Financial Officer Alan B. Graf Jr. He said the company lowered its profit guidance almost entirely based on freight market and economic forecasts. The reduced outlook overshadowed FedEx's results for the first quarter ended Aug. 31, which rose 4 from a year earlier. At 4 p.m. in New York Stock Exchange composite trading, shares of FedEx fell 2.88 to 104.63. Wall Street had hoped for a lift for sluggish freight-industry volumes from the annual holiday shipping surge. The peak shipping season traditionally begins in late summer and builds into the fall as retailers and other businesses load boats, planes, trains and trucks with products ahead of the holiday shopping crush.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616220","date":"2007-10-01","texts":"Might the 5.9 billion stumble Citigroup Inc. disclosed Monday -- the cost of its part in the credit crunch -- also cost Chief Executive Charles Prince his job In place for four years to the day and under growing pressure to turn around the largest U.S. bank by market capitalization, he has been unable to significantly lift its stock price, which has been underperforming the prices of its peers. Perhaps the 2.25 rise in the big bank's price Monday was due to more than just the reduced uncertainty about the credit crunch's impact. Like other Wall Street firms, Citigroup has been beset by the credit-markets turmoil that sidelined many investors and is saddled with loans it had expected to sell. Its news came hours after UBS AG said it will post a third-quarter loss and make changes following 3.44 billion of write-downs in its fixed-income portfolio. But while Citigroup's massive balance sheet can easily absorb the hit, the situation has called into question its ability to manage its risk appropriately. Last month, for example, Goldman Sachs Group Inc. reported unexpectedly strong results despite the market unrest, in part due to savvy bets that the value of home loans and related securities would fall. Not surprisingly, the news that Citigroup's third-quarter earnings will fall as much as 60 prompted a fresh round of calls for Mr. Prince to step down. After all, he had been promising a turnaround and had called 2007 a year of no excuses. Importantly, however, Saudi Prince Alwaleed bin Talal, the largest individual shareholder in Citigroup, said Monday that he fully supports the bank's management -- including Mr. Prince. Meanwhile, new UBS CEO Marcel Rohner, having led his bank through one of the more spectacular bloodlettings of the global credit crisis, now must work out how to shore up the bank amid the departure of key executives and the repercussions of a very bad bet on U.S. mortgages. The changes and strategy he unveiled Monday amount to a retrenchment as the Swiss bank slashes by nearly a third the assets of the investment-banking unit that has helped lead its growth in recent years. It will need to rely more heavily on its traditional money- management business and will place a pair of conservative Swiss managers in the top financial and operating posts. ---","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616927","date":"2007-10-01","texts":"Stock Strength Seems to Belie Economic Reality Remember all the trouble stocks ran into over the summer Neither does Wall Street. The Dow Jones Industrial Average advanced 75.44 points last week to 13895.63, putting it 1,050 points above its August low and not far from the all-time high of 14000.41 it tagged in July.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984771","date":"2007-10-06","texts":"Wall Street capped a huge week with a sharp advance Friday after the government's employment report for September and its revision of August's data cooled the market's fears of a recession. The Standard & Poor's 500-stock index reached a new closing high. The S&P 500 index gained 14.75, or 0.96 percent, to 1557.59. Its previous closing high was 1553.08, on July 19. The index, which is the basis of many mutual funds and other investments and used as a benchmark for others, also set a fresh trading high, at 1561.91. The Dow Jones industrial average rose 91.70, or 0.66 percent, to 14,066.01. It set a trading high, at 14,124.54. The technology-dominated Nasdaq composite index showed bigger gains, rising 46.75, or 1.71 percent, to 2,780.32. The Labor Department's report that employers added 110,000 jobs in September -- essentially what analysts had expected -- reassured Wall Street that the job market wasn't pulling back sharply, as was feared a month ago. Though the data appeared to lessen the likelihood of an interest rate cut when the Federal Reserve meets Oct. 30, investors were relieved that the economy does not appear headed for a precipitous slowdown. Strength in the job market during a housing downturn and a time of tighter credit conditions has been a pillar of the economy. With consumer spending accounting for about two-thirds of U.S. economic activity, investors are eager for workers to continue to collect their paychecks.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982530","date":"2007-10-07","texts":"The more we hear about the deadly Sept. 16 shootout in Baghdad involving contractors from the private military firm Blackwater USA, the worse it sounds. Despite investigations by the Iraqi government, the FBI and your department and last week's House hearings, we may never fully know what happened in the chaos that hospital records show left at least 14 Iraqis dead and 18 wounded. The contractors claim that they were fired on first, while Iraqi witnesses and officials say that the Blackwater guards opened fire on a small car, carrying a couple and their child, that wouldn't get out of the way in a busy traffic circle. But by now, we do know a great deal about the business of relying on hired guns -- more than enough to convince you that the Pentagon and State Department urgently need to change their ways. By your own department's count, more than 160,000 for-hire personnel are working in Iraq today, which, amazingly, is greater than the number of uniformed military personnel there. These private forces perform all sorts of key functions, such as moving fuel, ammunition and food, as well as protecting top U.S. officials and guarding bases and convoys. Handing those tasks over to U.S. troops would further overstretch a military that you've warned is already dangerously overstretched. Hence the allure of outsourcing the jobs to private firms. But while we can't go to war without 'em, we also can't win with 'em. Our military outsourcing has become an addiction, and we're headed straight for a crash. We've done poorly at a cold cost-benefit analysis here. It's far from clear that contractors save us money when pressed on this score by the House last week, Blackwater Chairman Erik Prince went from claiming cost savings to pleading ignorance of his own firm's profits. He did, however, let slip that he makes at least 800,000 per year more than you do, for overseeing a force that's a tiny fraction of the size. Oversight has been miserably lacking, as has the will to use civilian or military law to hold contractors accountable for bloody messes such as the Baghdad shootings. On balance, for all the important jobs that contractors are doing, Blackwater and its kin have harmed, rather than helped, our troops' counterinsurgency efforts. Lets policymakers dodge tough, politically costly decisions, which makes for bad operational choices. Since the end of the Vietnam War, the United States has sought to ensure that there's a link between the public and the costs of war, so that good decisions would be made and an ethos of responsibility fostered. With about half our operation in Iraq in private hands, that link has been jeopardized. Encourages a bigger is better approach to operations, contrary to the best lessons of U.S. military strategy. Turning logistics and operations into a for-profit endeavor helped feed the Green Zone mentality of having Americans huddle inside sprawling bases in Iraq. Bigger bases may yield bigger profits for the private firms, but they also entail an isolation that runs counter to everything your field commander, Gen. David H. Petraeus, told us we need to win a counterinsurgency campaign in the new Army-Marine Corps manual he helped write.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985216","date":"2007-10-07","texts":"Correction An Oct. 7 Business article incorrectly said that the Commerce Department produced the September employment report. The report came from the Labor Department. Published 10112007 The economy is slowing, the dollar is falling. Wall Street is laying off workers. Defaults by homeowners are rising. Corporate buyouts have lost momentum. But none of it has rattled stock market investors. Just weeks after the shock of the summer credit squeeze, they are shaking off one bad report after another, sending shares ever higher. Call them the Teflon investors. On Monday, the Dow Jones industrial average of 30 blue-chip stocks soared to a new high, even as two major investment banks announced that they lost billions of dollars in the credit market turmoil. Then a positive jobs report Friday gave investors an excuse to buy, and the Standard & Poor's 500-stock index, a broader market measure, surged to a record. But even as investors celebrate, the questions hovering over the economy's future are far from settled. If you're scratching your head about the seeming disconnect between stocks and the economy, you're not alone. The stock market, after all, is supposed to be a leading indicator of economic performance.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842614712","date":"2007-10-10","texts":"New York, New York, it's a helluva town -- prices go up and they never come down. Once again, inflation is skyrocketing in New York City. Witness the sharp price jumps over the past several years in real estate monthly residential rents rose a record 8.3 in the last year alone, despite a nationwide downturn, hotel rooms at the new Plaza, rates start at 775 a night, cab and commuting fares, Broadway shows tickets for Young Frankenstein, the new Mel Brooks musical, top out at 450 for some performances, museum admissions 20 at Museum of Modern Art and even movie tickets the Ziegfeld charged 25 for a reserved seat for Dreamgirls last year. You might think that the same is true for restaurants. But when we look at the numbers from our 2008 New York Restaurant Survey, dining out appears to be one of New York's last remaining affordable pleasures. Prices are holding steady at everyday restaurants, real deals a la 24 lunches can be found all over town, and more neighborhoods now offer a bounty of restaurants that give good quality at reasonable prices. Overall, the rate of inflation in New York City dining costs has been risen just 0.97 since 911 -- barely a third of the Consumer Price Index. The New York restaurant industry is riding a bull market, fueled in part by the rise of the brand name chef -- call it chef culture. Even as restaurant rents hit the 75,000-a-month stratosphere, these top chefs and their partners are opening new venues all over town. With the new trend toward less formal dining, they may not be shelling out as much for expensive china and crystal stemware, but their costs are high They want to cook with the best organic or seasonal ingredients, hire cutting-edge designers for eye-grabbing decor, and nab a spot in the hottest neighborhoods. As a result, there has been a high rate of inflation at these best- in-class venues. Since 911, the average meal cost at the restaurants on our 20 Most Expensive list has jumped to 143.06 from 84.85 -- 11.6 a year. The arrival of super expensive restaurants like Masa 485 and Per Se 301 contributed to this sea change, but even without these newcomers, inflation at top-of-the-line places is roughly 5. Among all New York restaurants, however, the average cost of a meal has risen only three cents since last year's survey -- to 39.46 from 39.43, a barely perceptible 0.1 This is thanks to a slew of inexpensive newcomers that keep the cost average steady. New York might be the most expensive city in America for dining out, but for average meal cost it's far behind Paris 71.51, Tokyo 73.11 and London 78.57.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615411","date":"2007-10-10","texts":"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. 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. 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. 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. 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.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617089","date":"2007-10-11","texts":"WASHINGTON -- As global trade talks teeter toward another collapse, the White House is mounting a major push for what remains of the Bush trade agenda a handful of bilateral deals with Latin American countries. This weekend, Commerce Secretary Carlos Gutierrez is scheduled to lead a delegation of U.S. lawmakers to Colombia, in an effort to dispel congressional concerns about the Andean nation's history of drug-related and political violence, which are among the stumbling blocks to approval of a U.S. trade deal with that country. In a rare foray into trade policy, Secretary of State Condoleezza Rice is arguing the proposed Colombia deal, along with pending pacts with Peru and Panama, makes good business sense and is of critical strategic value in the Western Hemisphere. President Bush himself is stepping into the fray. Tomorrow, he is expected to travel to Miami, where he is expected to press reluctant lawmakers to approve the Latin American trade deals and resist election-year pressures to turn away from free trade. The push for action on the bilateral agreements comes as the Doha Round of global trade talks appear to be sinking deeper into deadlock. The effort reflects concern among senior Bush officials over the growing sentiment among Americans against expanded free trade and globalization.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985263","date":"2007-10-12","texts":"Economists have been predicting that consumers would slow their spending but that the damage would be cushioned as U.S. businesses sold more products abroad. Yesterday, there was evidence that both are starting to happen. The U.S. trade deficit fell to 57.6 billion in August, and major retailers' sales at stores open at least a year rose a meager 1.7 percent in September from a year earlier, two reports said yesterday. Monthly results can be volatile, and economists caution not to read too much into what could turn out to be blips. But taken together, they are indicators of an economy in transition. The weak housing market is making consumers spend their money more carefully. That in turn means that retailers import fewer goods from abroad, lowering the trade deficit. Simultaneously, the slower U.S. economy and lower interest rates mean that the dollar is less valuable compared with other currencies than it was a few months ago. That makes U.S. goods cheaper and exporters more competitive than they have been in recent years, creating a source of growth that will ease the pain of the housing crunch. Trade is providing a pretty big offset to the drag of housing, said Brian A. Bethune, an economist with consulting firm Global Insight. It's not totally offsetting housing, but it is a buffer.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613548","date":"2007-10-15","texts":"Three American economists won the Nobel Prize for work that centers on how mechanisms such as markets and auctions can get people to admit how much something is worth to them. Americans Leonid Hurwicz, Eric S. Maskin and Roger B. Myerson were awarded the Nobel prize in economics Monday for their study of mechanism design. An abstract branch of economics that employs daunting formulas and heroic feats of mathematics, mechanism design is decidedly clear-eyed in its approach understanding always-less-than- perfect circumstances of economic exchanges. One way to understand the mechanisms these distinguished dismal scientists study is to think about an auction for, say, a Picasso painting. It's a pretty efficient way of getting people to admit -- by bidding -- how much they value the painting. And according to Tyler Cowen, a professor of economics at George Mason University and well-known economics blogger, essentially, these economists use math to analyze and describe that process of trying to get people to tell the truth or reveal information. Jeffrey Ely, an economics professor at Northwestern University who works in the field, explains mechanism design as a sort of reverse engineering of game theory, a field in which people try to understand how individual incentives and structural rules interact and result in certain behaviors. But instead of just understanding the rules of existing systems, mechanism design focuses on designing them in such as way that a certain outcome is achieved. They developed the basic tools for thinking about institutions in this way, Mr. Ely said of today's award winners. Alvin Roth is a professor of economics at Harvard University who has used some of the theories pioneered by today's Nobel award winners to help design programs such as the process by which medical students are placed in residency programs at hospitals. You might say that before modern game theory, economists looked at markets and other economic institutions sort of the way botanists look at plants, as naturally occurring mysteries to be studied, Mr. Roth wrote in an email. Mechanism design takes seriously that markets are built by people, and starts to ask what we can do with them, what we can't, and how best to go about it. As such, their work has applications in a wide range of fields, from regulatory policies such as the Federal Communications Commission's somewhat abstract auctions of bandwidth on the wireless spectrum, to the residency-placement system devised Mr. Roth, to the kidney-donation swaps highlighted in today's Wall Street Journal. And, more generally, the economists' theories can be used as a framework to help identify when markets, auctions or other mechanisms -- such as matching programs -- might be better -- or ill -- suited for providing a specific outcome. At 90 years old, Mr. Hurwicz is the oldest Nobel winner ever, according to the academy. Mr. Maskin, 56 years old, is professor at the Institute for Advanced Study at Princeton, N.J. and Mr. Myerson, 56, is a professor at the University of Chicago. The award is officially known as the Nobel Memorial Prize in Economic Sciences. It isn't one of the original Nobel Prizes, but was created in 1968 by the Swedish central bank in Alfred Nobel's memory. Nobel Prize winners receive 1.5 million, a gold medal and a diploma from the Swedish king on Dec. 10, the anniversary of Nobel's death in 1896. ---","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613541","date":"2007-10-31","texts":"The U.S. economy beefed up over the summer, despite weak-kneed financial and housing markets. Still, investors aren't expecting the data to keep the Federal Reserve from taking another whack at interest rates today. In its first pass at calculating growth for the July-through- September quarter, the Commerce Department estimated that gross domestic product -- a broad measure of the economy's physique -- rose at an annual rate of 3.9, up a tick from the second quarter's 3.8 growth and besting the guesses of 24 Wall Street shamans surveyed by Dow Jones Newswires. Their consensus call was 3.2 GDP growth during the quarter. True enough, there was housing-related softness in the report, as residential investment tumbled 20 and zapped more than a percentage point of growth out of the final number. But there were plenty of off-setting bright spots, such as the undaunted millions piloting our national fleet of shopping carts. Consumer spending is the biggest component of GDP and it climbed 3 during the third quarter after posting more of a pipsqueak percentage, 1.4, during the spring quarter. There were other signs of strength too, especially in exports, which shot up 16 thanks in part to the falling dollar, and business spending, which saw a 7.9 bump. In a separate report, U.S. construction spending unexpectedly jumped in September, with government-financed projects picking up the slack in the housing sector. Alas, nothing is simple for Fed Chairman Ben Bernanke and his elite squad of econo-wonks, who are, as of this writing, putting final flourishes on their latest masterpiece of a press release announcing their decision on interest rates. It's due at 215 p.m.. The rosier- than-expected GDP and construction numbers might not have much bearing on the Fed's decision-making, which most handicappers expect will produce a quarter-percentage-point cut in the federal funds rate. That is mostly because these numbers offer a slightly stale view of the economy. The question now is how well it can withstand even steeper declines in residential construction, the general tightening in credit conditions, falling house prices, oil prices at around 90 per barrel, and their negative implications for consumer and business spending, wrote Nigel Gault, an economist with research firm Global Insight. Such stresses would help make the case for easier credit. But not all dismal scientists discounted today's GDP figures. At Nomura Securities, analysts wrote that the surprising GDP strength could be enough to persuade the FOMC to defer any decision about the need for another rate cut until a clearer picture of the fourth quarter has formed. And analysts with Bear Stearns wrapped up their GDP commentary by noting refound strength in an employment report from payroll processing giant ADP. With the evidence from this morning's ADP report suggesting that private payrolls grew around 100,000 in October, and with back-to-back quarters of near 4 real GDP growth, the economic argument for a further rate cut at this point is unclear to us. In any event, investors will be surprised with anything other than a quarter-point rate cut today, as they were pegging the chances for such a snip -- via fed-funds futures -- at more than 90 early in the day ---","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616470","date":"2007-10-31","texts":"More Cuts From the Fed Seem Inevitable When Federal Reserve policy makers wrap up their meeting today, most of Wall Street is convinced that they will cut interest rates by at least a quarter of a point. Before that happens, the Commerce Department will release its initial take on how the economy did in the third quarter. Economists polled by Dow Jones Newswires estimate gross domestic product grew at an annual rate of 3.2, down from the second quarter's 3.8. The last time the economy grew at a better-than-3 rate for two quarters in a row was in 2004, when the Fed started raising rates. So why is the Fed, which cut its overnight target rate to 4.75 from 5.25 in September, lowering rates now","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615553","date":"2007-11-01","texts":"Dubai, United Arab Emirates -- In this oil-fueled boomtown, which runs on imported labor, the dollar's sharp tumble is contributing to civil strife. In recent days, thousands of expatriate construction workers walked off job sites to protest low pay and the rising cost of living. Law- enforcement officials -- who typically play down the scope of labor actions here -- have acknowledged widespread protests, isolated violence and dozens of arrests. Sporadic, small-scale strikes are nothing new in Dubai, where hundreds of thousands of low-paid laborers are building a soaring skyline and live in camps on the outskirts of town. After criticism by human-rights groups, officials launched a high-profile campaign to clean up labor practices. But officials are finding it more difficult to deal with what has increasingly become one of the workers' chief complaints A weak dollar, coupled with rampant inflation, means it is hard to send enough money home to make it worth sticking around. Dubai is one of seven emirates that make up the United Arab Emirates. Like most of the oil-rich Persian Gulf, the UAE links its currency to the dollar. With oil production dwindling, Dubai has diversified its economy, trying to remake itself as a regional hub for entertainment, tourism and financial services. It relies on imported workers for almost all of its construction and menial-labor needs.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617389","date":"2007-11-01","texts":"NEW YORK -- The dollar dropped to its seventh straight record low against the euro yesterday, a response to the Federal Reserve's cut in U.S. interest rates. The dollar also lost heavily against its Canadian counterpart, touching its lowest level in modern times. The dollar maintained gains on the yen, after the Bank of Japan voted to keep interest rates on hold during Asian trading. The euro broke the 1.45 barrier to 1.4508 after the Federal Open Market Committee announced its interest-rates cuts. At 4 p.m., the euro was at 1.4486, up from 1.4436 late Monday, while the dollar was at 115.35 yen, up from 114.69. The euro was at 167.10 yen, up from 165.67 yen. The United Kingdom pound was at 2.0793, up from 2.0683. The dollar was quoted at 1.1581 Swiss francs, down from 1.1590. The Canadian dollar extended its gains to C0.9422, its modern-day high against the U.S. dollar. At 4 p.m., the U.S. dollar was trading at C0.9448, down from C0.9529 Tuesday. The C0.9422 level dates from Aug. 21, 1957. It represents the strongest level reached by the Canadian dollar since the Bank of Canada was established and charged with managing the currency in the 1930s.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830981932","date":"2007-11-01","texts":"Education BA, natural science, MS, systems engineering, MBA, decision science, University of Pennsylvania. Elected officescivic activities President, Fairfax County Taxpayers Alliance member, Fairfax Committee of 100 past member, Fairfax County schools family life education advisory committee, professional and technical studies advisory committee, superintendent's advisory committee for the Fairfax Framework for Student Success past president, Thomas Jefferson High School crew boosters former Scoutmaster. Runaway taxes and government spending. Real estate taxes doubled between 2000 and 2007. The state raised taxes for transportation and imposed abusive-driver fees even though the state was running billion-dollar surpluses. Public school staff, statewide and in Fairfax County, is increasing two to three times faster than enrollment. Inflation-adjusted Medicaid spending is increasing five times faster than population. Government employees get generous pensions while the taxpayers are losing theirs. Also, between 2000 and 2007, county employees got 5 percent annual raises while taxpayer incomes were increasing 2 percent annually. My opponent voted for abusive-driver fees and higher taxes while soaring school and Medicaid spending were perpetuating the problems they were supposed to solve. Education BA, Fairfield University MA, public policy, Georgetown University JD, University of Virginia. Elected officescivic activities Member, Virginia House of Delegates, 2004-present co-founder, Metropolitan Washington Amber Alert system member, Lions International, Governor's Commission on Sexual Violence, Legislative Commission on Fuel Efficiency.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616635","date":"2007-11-03","texts":"NEW YORK -- Gold futures set a contract high Friday, reaching levels not seen in nearly 28 years as the U.S. dollar continued to weaken and crude oil surged. Additionally, higher-than-expected jobs data, Wednesday's Federal Reserve interest-rate cut and third-quarter gross-domestic-product data combined to ignite inflation fears. Nearby November gold rose 1.9, or 15, to close at 805.70 a troy ounce on the Comex division of the New York Mercantile Exchange. That is a nominal high and the loftiest the metal has been since the nearby contract high of 873 set in January 1980. Most-active December gold also rose 1.9, or 14.80, to 808.50 an ounce after setting a contract high of 810.70, surpassing its previous contract high of 808 set in May 2006. Other precious metals such as silver, platinum and palladium also rose amid gold's strength. They're starting to price in some inflation, said Bart Melek, a global commodity strategist at BMO Capital Markets. Higher oil prices combined with lower interest rates certainly harkens us back to a time when inflation is again possible, he said. There is the potential for the housing market to keep falling, balancing out the inflation equation as other goods move higher, and that might keep the Fed comfortable in a lower interest-rate environment, Mr. Melek said.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984931","date":"2007-11-03","texts":"-- Wall Street twisted its way through another difficult session Friday, discouraged about the economy's prospects but still managing a higher finish after some concerns about the beleaguered financial sector lifted late in the session. The major indexes ended the week mixed. The Dow Jones industrial average rose 27.23, or 0.20 percent, to 13,595.10 after being down more than 120 points in the session. The Standard & Poor's 500-stock index rose 1.21, or 0.08 percent, to 1509.65, while the Nasdaq composite index rose 15.55, or 0.56 percent, to 2810.38. For the week, the Dow dropped 1.53 percent and the S&P feel 1.67 percent. The Nasdaq managed a gain of 0.22 percent. Word shortly before the close that Citigroup's board plans to meet in an emergency session over the weekend helped the company's stock and other financials pare steep losses. Friday's session ended a week made turbulent not only by bad news from the financial sector but also by spiking commodity prices and hints from the Federal Reserve that it might be less generous with interest rate cuts in the coming months. A highly anticipated Labor Department report Friday showed employers added 166,000 jobs in October -- the most in five months -- but didn't give stocks much of a lift a day after a sharp pullback as investors' unease about the financial sector blanketed trading.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615147","date":"2007-11-06","texts":"Rattled by corporate shake-ups and write-offs at Citigroup and Merrill Lynch, and by the fear that more bad financial news could be lurking, investors sent the Dow Jones Industrial Average to its lowest finish since Oct. 19. It could have been worse. The blue-chip average finished down 51.70 points, or 0.38, to 13543.40, more than 600 points below its record 14164.53, hit Oct. 9. Late in the day, though, the industrials were off as much as 148.19 points. Reflecting how jittery investors have become, one catalyst for the late-day recovery was Goldman Sachs Group's denial of a rumor that it was about to announce its own write-offs as a result of exposure to bad mortgages. The denial by Goldman was broadcast by CNBC and the stock market began rebounding around that time. Goldman's comment gave some solace to the market, which has been looking for something to hold onto with the ship sort of adrift, said stock trader Joseph Benanti at Rosenblatt Securities in New York. If we weren't saddled with these financial issues, the market would be higher already.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614737","date":"2007-11-07","texts":"As oil flirted with 100 and credit markets continued to roil, stock indexes tumbled -- and tongues wagged. Crude-oil futures stayed below the century mark today, settling 33 cents lower at 96.37. But they drove above 98 earlier in the day after a weekly government report on oil inventories showed a decline, albeit a smaller one than expected. U.S. inventories fell by 800,000 barrels analysts surveyed by Dow Jones Newswires had expected a number about twice as large. In recent months, oil futures had approached and then vaulted over 90, making a march on 100 oil look inexorable. U.S. stocks plummeted on crude's gains today, although equities had often shrugged off recent crude rallies. The Dow fell 360.92 points, or 2.6, to 13300.02, and the Nasdaq and S&P 500 fell even more on a percentage basis, losing 2.7 and 2.9, respectively. European markets closed mostly lower, while Asian indexes were mixed. Bonds rallied. More rumblings in the credit markets also contributed to equities' slide Moody's downgraded about 36 billion in debt securities held in so-called structured investment vehicles, and analysts at Royal Bank of Scotland Group said banks and brokers could face as much as 100 billion in write-downs on various exotic, illiquid holdings. Adding to the angst was the U.S. dollar. The greenback continued its downward spiral -- first on bearish remarks from a Chinese political official, and then on pressure from crude prices and the expectation that U.S. interest rates would stay below rates elsewhere. The euro peaked earlier at 1.4371. The British pound hit 2.1070, the first time it has broken 2.10 since 1981. Stock indexes weren't alone in reacting to the oily mess. Energy prices are entirely too high, and really affecting small businesses and families all across America, not to mention our economy, White House spokeswoman Dana Perino said Wednesday. Ms. Perino also said the Bush administration hoped lawmakers would soon move a bill that aims to cut U.S. dependence on foreign oil and boost domestic energy sources. Meanwhile, Fed governor Kevin Warsh said that oil and commodity prices were likely to put upward pressure on overall inflation in the short term. There are . . . important reasons to be concerned about the outlook for inflation, he said today in an address to the New York Association for Business Economics. Although recent readings on core inflation have been favorable, prices of crude oil and other commodities have increased. These changes most likely will put upward pressure on overall inflation in the short run. Mr. Warsh also said the weakening dollar could lead to higher prices for imported goods. If these same forces cause inflation expectations to become less reliably anchored, then inflation could increase in the longer run as well. Separately, St. Louis Fed President William Poole warned today in a speech that excessive rate reductions would run the risk of fanning inflation and spurring market volatility. Since the summer, the Fed already has cut short-term interest rates twice as an antidote to the ills of the housing slump and the credit crunch. But the Fed last week released a policy statement that appeared to close the door on further cuts in the near future even as the economy appears to be downshifting. --- Red Ink at GM, Black at Toyota","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615161","date":"2007-11-07","texts":"Ten years ago we quoted a famed short seller from the 1980s who, in a casual meeting at a dinner, shared the insight that made him rich People always underestimate how bad things can get. Our subject at the time was McDonald's. Since then, the world's biggest restaurant chain has committed one of the great turnaround stories of the business world, with most of the gains coming in a U.S. market saturated with competitors everyone from Subway to Starbucks. We'll save the burger-by-burger account for another day. If McDonald's can do it, so can the Detroit-based auto industry. When large established businesses go bad, look at internal incentives. McDonald's operated for decades under a royalty system that rewarded the company for opening more and more stores. This approach worked for 40 years, until the new stores began cannibalizing the old ones and antagonized the existing franchisees, who tried to keep their heads above water by cutting back on service, cleanliness and quality.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616378","date":"2007-11-07","texts":"NEW YORK -- Short interest rose at the New York Stock Exchange in late October in the wake of the market's fresh records earlier in the month. For the period ending Oct. 31, the number of short-selling positions not yet closed out at NYSE -- so-called short interest -- rose 2.4 to 11,932,729,768 shares from 11,654,666,528 shares in mid-month. The short ratio, or number of days' average volume represented by the outstanding short positions at the exchange, fell to 8.4 from 9.6 in mid-October. Investors who short shares borrow them and sell them, betting the price will fall and they will be able to buy the shares later at a lower price for return to the lender. In general, the higher the short interest, the more investors expect a downturn.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982917","date":"2007-11-07","texts":"We are all waiting, it seems, for the next recession. Everyone knows that the business cycle hasn't been repealed, and so another recession is inevitable. Some indicators suggest that it might be sooner rather than later. The Conference Board's consumer confidence index has declined for three straight months. In March, 30 percent of respondents said jobs are plentiful now that's only 24 percent. All this inspires much foreboding, because a recession is widely regarded as a calamity or something close to it. Just last week, the Federal Reserve cut its key overnight interest rate for the second time since August. It now stands at 4.5 percent, down from its recent peak of 5.25 percent. Although the economy grew at a strong 3.9 percent annual rate in the third quarter, most economists regard this as an aberration. They expect slower growth or a recession, because three powerful forces are assaulting the economic expansion. First, housing. Its collapse deepens. Economist Richard Berner of Morgan Stanley notes that sales of new and existing homes have dropped 42 percent and 30 percent, respectively, from their peaks of more than two years ago. As supplies of unsold homes grow, real estate prices continue to fall. One index finds that prices in August were down 4.4 percent nationally from a year earlier. Second, oil prices. They're approaching 100 a barrel. Even before the latest price increases, energy costs rose to 6.2 percent of consumer spending in the second quarter that's up from 4.5 percent in 2002, notes consultant Jack Lavery, a former chief economist of Merrill Lynch. Higher energy costs will continue to weaken purchasing power for other goods and services, he says. Third, credit problems. As lenders and investors have suffered losses on subprime mortgages -- loans to weaker borrowers -- they've tightened lending standards for other borrowers. With the economy slowing, Diane Vazza of Standard & Poor's expects bond defaults to rise among shakier corporate borrowers, especially companies dependent on strong consumer spending retailers, fast-food chains, entertainment firms.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842616197","date":"2007-11-08","texts":"Dow Jones Newswires As oil flirted with 100 and credit markets continued to roil, stock indexes tumbled -- and tongues wagged. Crude-oil futures stayed below the century mark today, settling 33 cents lower at 96.37. But they drove above 98 earlier in the day after a weekly government report on oil inventories showed a decline, albeit a smaller one than expected. U.S. inventories fell by 800,000 barrels analysts surveyed by had expected a number about twice as large. In recent months, oil futures had approached and then vaulted over 90, making a march on 100 oil look inexorable. U.S. stocks plummeted on crude's gains today, although equities had often shrugged off recent crude rallies. The Dow fell 360.92 points, or 2.6, to 13300.02, and the Nasdaq and S&P 500 fell even more on a percentage basis, losing 2.7 and 2.9, respectively. European markets closed mostly lower, while Asian indexes were mixed. Bonds rallied. More rumblings in the credit markets also contributed to equities' slide Moody's downgraded about 36 billion in debt securities held in so- called structured investment vehicles, and analysts at Royal Bank of Scotland Group said banks and brokers could face as much as 100 billion in write-downs on various exotic, illiquid holdings. Adding to the angst was the U.S. dollar. The greenback continued its downward spiral -- first on bearish remarks from a Chinese political official, and then on pressure from crude prices and the expectation that U.S. interest rates would stay below rates elsewhere. The euro peaked earlier at 1.4731. The British pound hit 2.1070, the first time it has broken 2.10 since 1981. Stock indexes weren't alone in reacting to the oily mess. Energy prices are entirely too high, and really affecting small businesses and families all across America, not to mention our economy, White House spokeswoman Dana Perino said Wednesday. Ms. Perino also said the Bush administration hoped lawmakers would soon move a bill that aims to cut U.S. dependence on foreign oil and boost domestic energy sources. Meanwhile, Fed governor Kevin Warsh said that oil and commodity prices were likely to put upward pressure on overall inflation in the short term. There are...important reasons to be concerned about the outlook for inflation, he said today in an address to the New York Association for Business Economics. Although recent readings on core inflation have been favorable, prices of crude oil and other commodities have increased. These changes most likely will put upward pressure on overall inflation in the short run. Mr. Warsh also said the weakening dollar could lead to higher prices for imported goods. If these same forces cause inflation expectations to become less reliably anchored, then inflation could increase in the longer run as well. Separately, St. Louis Fed President William Poole warned today in a speech that excessive rate reductions would run the risk of fanning inflation and spurring market volatility. Since the summer, the Fed already has cut short-term interest rates twice as an antidote to the ills of the housing slump and the credit crunch. But the Fed last week released a policy statement that appeared to close the door on further cuts in the near future even as the economy appears to be downshifting. ---","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614224","date":"2007-11-12","texts":"A new fear is helping fuel the latest stock-market rout that booming global growth -- for years the engine of the world's financial markets -- may have trouble pulling U.S. markets out of their swoon this time around. Over the summer, when shaky credit markets first sent U.S. stocks lower, strong economic growth in China, India and Europe, together with intervention by the Federal Reserve, reassured investors and sent them back into stocks, pushing U.S. market indexes to new highs. Now, big financial companies like Citigroup Inc., Merrill Lynch & Co., Morgan Stanley and Wachovia Corp. are taking multibillion-dollar write-offs linked to the credit-market turmoil. The Fed, meanwhile, is warning that the nation's economic growth is likely to slow. Europe's growth prospects have weakened, and oil has continued to climb toward 100 a barrel. Those factors have left investors to wonder whether the Fed's skill in adjusting interest rates and China's economic power will be enough to save U.S. stocks from a steeper selloff. Money managers overseeing billions of dollars at hedge funds, pension funds and mutual funds have been hunkering down. Their pullback helped send the Dow Jones Industrial Average down 4.5 in the final three days of last week, to 13042.74 -- the sharpest three-day plunge since 2002.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615839","date":"2007-11-14","texts":"While crude-oil futures remain expensive, a recent slide in prices may mean the 100-a-barrel mark is out of reach, at least for now. After hitting an intraday high of over 98 last week, U.S. benchmark crude has fallen, shedding 2.4 to 92.33 as of late Tuesday morning on the New York Mercantile Exchange. A cluster of indicators explains the slip, including a slight firming of the dollar and growing daily output in Iraq, Angola and Saudi Arabia. A report from the International Energy Agency made a case for flagging demand -- the IEA lowered its prediction for fourth- quarter world demand by 500,000 barrels a day, thanks to signs of flagging demand in the U.S. and the former Soviet states. But reassuring words from Ali Naimi, Saudi Arabia's oil minister and the de facto leader of the Organization of Petroleum Exporting Countries, also help. The world economy is resilient and continues to be resilient, he said, and Saudi Arabia, the world's largest oil supplier, doesn't foresee a U.S. recession. Mr. Naimi has left open the possibility that OPEC may decide to raise its output ceiling next month, when ministers meet formally to discuss policy. This week, OPEC heads of state gather in Riyadh, Saudi Arabia, for a rare top-level, largely formal summit. Such a discussion wouldn't occur this week, he said. But Saudi Arabia is taking advantage of this week's media spotlight to assert that it has plenty of oil and no supply problems, as some analysts have argued. Read the report from Neil King Jr. in Riyadh, Saudi Arabia, and Ann Davis in Houston httponline.wsj.comarticleSB119500496515792235.html","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615936","date":"2007-11-14","texts":"The New York Stock Exchange is trying to even the playing field for odd-lot trades, typically trades of fewer than 100 shares, often executed by small investors. The exchange, operated by NYSE Euronext, has an odd-lot system to ensure that small trades, which are priced separately from larger orders, don't get left behind by the block trades sent to the Big Board by institutional investors such as hedge funds and pension funds. However, amid complaints that professional traders were abusing the system, the NYSE imposed volume limits on certain orders, aimed at stopping the alleged manipulation. Among the loudest critics calling for change specialist firm LaBranche & Co. In July, LaBranche wrote a letter to the Securities and Exchange Commission, accusing unknown traders working through a rival trading venue of engineering a series of fraudulent trades designed to earn a profit by exploiting the odd-lot rules. In general, the odd-lot rules require that orders under 100 shares be executed by the so-called specialist firm that manages trading in each stock, so that the small orders get the price of the next round- lot trade, be it 100 shares or 100,000.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617118","date":"2007-11-16","texts":"BEA Systems Inc. announced a long-awaited restatement of past earnings and a 59 jump in profit in its latest period. But the news had little immediate impact on BEA's stock price, which has been closely watched as a gauge for how much an acquirer might pay for the software company. In filings with the Securities and Exchange Commission, the San Jose, Calif., company restated earnings for its fiscal year ended Jan. 31, 2007, as well as several quarters of earnings, starting with the period ended July 31, 2006. For the period ended Oct. 31, BEA reported third-quarter net income of 56 million, or 13 cents a share. Revenue rose 11 to 384.4 million. The company also said that, if it achieves the midpoint of its fourth-quarter guidance, it will have fiscal-year earnings per share of 70 cents, excluding certain items, which would be 23 higher than analysts' consensus estimate of 57 cents per share. We're now able to see the very significant profitability improvements we've seen over the last several months, BEA CEO Alfred Chuang said in a call with analysts. We believe this outperformance will significantly impact how investors value BEA.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617448","date":"2007-11-16","texts":"WASHINGTON -- Rising energy costs pushed U.S. consumer prices higher last month, though the increase was partly offset by tame prices for housing and discretionary-spending items. The data should provide some comfort to Federal Reserve officials that high oil and commodity prices and the weak dollar aren't leading to higher underlying inflation. The consumer-price index rose 0.3 in October, the Labor Department said, matching September's increase. The so-called core CPI, which excludes volatile food and energy prices, advanced 0.2 for a fifth straight month. Unrounded, core CPI increased 0.159. In a separate report, the Labor Department said the average weekly earnings of U.S. workers, adjusted for inflation, fell 0.2 in October, as wages failed to keep up with inflation. Consumer prices in October were up 3.5 from a year earlier. Core CPI was up 2.2. The gap between the two inflation measures could widen as higher energy prices keep pushing up overall inflation while softness in housing and auto prices keep underlying inflation in check.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616221","date":"2007-11-20","texts":"European diplomats say they are confident the European Union will avoid a humiliating split over the future of Kosovo. The Serbian province, under United Nations control since the North Atlantic Treaty Organization intervened in 1999 to end Serbia's ethnic cleansing of the Albanian majority, wants independence. The U.S. and many European nations endorse that bid. Russia and a handful of EU countries oppose it. Since July, negotiators have been working to break that impasse in talks between Serbs and Kosovar Albanians set to end Dec. 10. The sides meet here again today, but diplomats said there is no sign of an agreement. The talks have, however, produced one benefit Intense lobbying within the EU appears to have persuaded the handful of countries opposed to recognizing Kosovo not to block the 27-nation EU's ability to conduct a joint policy toward Kosovo over the recognition issue. A split over Kosovo would risk repeating earlier divisions over the Bosnian War in 1992 and the U.S. invasion of Iraq in 2003 that left the EU unable to conduct an effective common foreign policy, diplomats said. It could also reward Moscow with an effective veto over EU policy in the Balkans, something few EU members want. Read Marc Champion's report httponline.wsj.comarticleSB119551393100498476.html","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982745","date":"2007-11-20","texts":"After improving in September and early October, markets in a wide variety of debt -- including for home mortgages, consumer loans, and corporate buyouts -- have sharply deteriorated in recent weeks. Investors view much of this debt as riskier than they did even at the height of the August credit crisis and are requiring higher interest rates as compensation. While markets are behaving in a more orderly fashion than they were in August, many on Wall Street fear that the situation will get worse before it gets better. This is just dragging on longer, said Axel Merk, a portfolio manager for Merk Hard Currency Fund. We're very early in this. Economists increasingly worry that banks are suffering such massive losses that they will be forced to cut back their lending to consumers and businesses. That would slow the economy, much as the savings and loan crisis did in the early 1990s. Yesterday, an analyst predicted that Citigroup, the world's biggest financial services company, would suffer another 15 billion in losses in the coming six months from its exposure to exotic types of debt. That prediction, along with fresh negative data about the housing market, drove the Dow Jones industrial average down 218 points, or 1.7 percent. Financial markets are pointing to a strong possibility of even more bad news. For example, futures markets indicate that there is a 20 percent chance that the Federal Reserve will cut interest rates by half a percentage point or more at its next policy meeting Dec. 11, even though it is widely understood that the central bank would do so only if there were highly negative economic news between now and then. An index measuring the cost of insuring against credit losses on 125 financially sound companies reached an all-time high yesterday. And the market for securities backed by commercial real estate loans, which had been little affected through the August crunch, is showing strain.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614020","date":"2007-11-23","texts":"In their intensifying search for havens, investors are bidding up Treasury securities and thumbing their noses at just about everything else, from stocks to municipal bonds to government-sponsored enterprises. Reacting to fears of a U.S. economic slowdown, investors dumped stocks on Wednesday. Not even low-risk sectors such as utilities or consumer staples were spared. Then in Asia yesterday, the Shanghai Composite Index dropped 4.4, leaving it down 16 this month. Hong Kong's Hang Seng Index, which includes a number of China plays, lost an additional 2.3, bringing its loss for November to 17. The U.S. stock selloff on Wednesday included a 211.10-point drop in the Dow Jones Industrial Average, the third straight drop. At 12799.04, the Dow is now up 2.7 on the year. It also is nearly 10 off its October highs -- the textbook definition of a correction that shakes speculative excess out of the market. It's no longer a need for return, said Treasury-bond strategist John Spinello at Jefferies & Co. It's preserving your capital. Stocks have often bounced after such corrections in the past. For now at least, investors seem to be heading somewhere else instead. The price of a benchmark 10-year Treasury note gained about 2.50 for each 1,000 invested Wednesday. That pushed its yield to 4.024, its lowest level since September 2005. Yields fall on bonds as their prices rise.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983808","date":"2007-11-24","texts":"Maryland educational leaders are bracing for the loss of about 190 million in projected state aid in the coming fiscal year after legislators decided to curtail additional funding. The impact at the local level varies widely, and officials are still assessing the damage to their budgets. But educators say they are working to ensure that the cuts do not affect the quality of instruction. Annual state education aid has increased by well over 1 billion since 2002 as a result of the Bridge to Excellence in Public Schools Act, better known as the Thornton plan for the commission that recommended it. But the plan never had a secured source of funding. With the state facing a 1.7 billion revenue shortfall, state lawmakers voted during a special session this month to eliminate inflation adjustments to the Thornton plan for 2009 and 2010 and limit the increases afterward. The cut will save the state about 190 million in 2009. By 2012, it is projected to save nearly 400 million. The savings may be partially offset by new revenue from the Geographic Cost of Education Index, a component of the Thornton plan that is to go into effect this year. Prince George's County, the hardest-hit system, stands to lose about 31.3 million, according to the fiscal analysis attached to the bill. The Prince George's superintendent said he expected to lose 40 million to 50 million.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983626","date":"2007-11-27","texts":"Investors in stocks and bonds are paying prices that indicate they believe a snowballing housing crisis and worsening credit crunch will soon tip the U.S. economy into a recession, analysts said. Many economists, including leaders of the Federal Reserve, don't think things will get that bad, but some say the risk of a serious downturn has risen in recent weeks. Investors were so eager to buy ultra-safe government bonds yesterday that they were willing to accept sharply lower interest rates. The rate on the 10-year Treasury bond fell to 3.84 percent from 4 percent Friday. The low rates indicate investors expect the Federal Reserve to cut interest rates aggressively in the coming year to ease the pain of recession. Stocks are now down more than 10 percent from their peak in October. The Standard & Poor's 500-stock index fell 2.3 percent yesterday, dropping the market to a level that Wall Street analysts say reflects an expectation that corporate profits will fall. Taken together, those and other data indicate that financial markets have a decidedly negative prognosis for the economy. They're saying the odds of a recession are pretty damn high, said Diane Swonk, chief economist at Mesirow Financial. There are reasons to think things will not get that bad, however. Holiday sales started Friday with a strong 8.3 percent gain over last year, and U.S. consumers have proven resilient in past periods of financial distress. With the dollar weakening, U.S. exporters will be at an advantage joblessness remains near historic lows, at 4.7 percent and the stock market, an old joke goes, has predicted nine of the past five recessions.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613724","date":"2007-11-28","texts":"This week's steep drop in oil prices may mean that crude is set to turn away from the 100-a-barrel mark amid gloomy U.S. economic forecasts and hints of higher supplies. That is the good news for consumers. The bad news, energy analysts say, is that even if prices continue to slump, oil is almost certain to cost more on average next year than this year. U.S. benchmark crude dropped sharply yesterday, falling 3.28 a barrel, or 3.4, to 94.42 in futures trading on the New York Mercantile Exchange. But analysts stopped short of calling the shift a correction. The market remains unusually volatile and could easily shoot upward again -- even breaking the 100 mark -- if the Organization of Petroleum Exporting Countries doesn't follow through on talk of a production increase or if Western stockpiles dip unexpectedly. Oil prices hit an intraday record of 99.29 a barrel last week. Oil reached its inflation-adjusted high of 102 a barrel in April 1980. Still, analysts point to a number of reasons prices are likely to ebb as the Northern Hemisphere heads into spring next year. Topping the list is the sluggish U.S. economy, which some economists say is heading toward a recession as the meltdown of the U.S. subprime-mortgage market crimps lending. That would damp oil demand in the U.S., the world's largest oil consumer. It could also prompt a slowdown in other economies, including in China, now the fastest- growing consumer of oil.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985169","date":"2007-11-28","texts":"Correction A headline on a Nov. 28 Business brief incorrectly said that the Food and Drug Administration had approved an anti-psychotic drug made by Vanda Pharmaceuticals. The FDA accepted the company's application for review of iloperidone. Published 11292007 Fieldstone Mortgage, a Columbia company under bankruptcy protection, won interim court permission to borrow as much as 1.5 million from its owner, Credit-Based Asset Servicing and Securitization. Credit-Based Asset, known as C-Bass, agreed to lend Fieldstone money so the two companies can negotiate an end to any legal claims they may have against each other, Fieldstone lawyer Joel I. Sher said. C-Bass recognized that they may be on the hook for several million dollars in claims, Sher said. Fieldstone and C-Bass will try to negotiate an end to any potential legal actions within 60 days. Capital One of McLean said it was reorganizing its leadership structure. Dave Lawson, president of the auto-finance business, said he would retire at the end of April. A combination of tighter credit and rising delinquencies led the auto-finance unit to post a 3.8 million loss last quarter, one of the reasons Capital One posted its first quarterly loss. Lawson earned 8.4 million last year, according to regulatory filings.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830981890","date":"2007-12-02","texts":"On Monday, the Dow Jones industrial average plunged more than 200 points, sliding past the 10 percent threshold marking an official correction from its October peak. Talk of recession intensified. But two days later, the market rallied, soaring more than 300 points to its biggest one-day percentage gain in at least four years. The wild swings agitated investors. Should they sell their stocks Should they move to less risky bonds, certificates of deposit and money-market funds Or should they sit tight and ride out the turbulence When everything is uncertain, you just don't know where to put your money, said Michael Fekete, a Northwest D.C. resident and technical editor who has about 350,000 in stocks, bonds and other investments. Where do you hide Wall Street is bracing for an even rockier period of further deterioration in credit conditions and the housing market. The dollar remains weak and oil prices high. Poor corporate earnings are also dogging the economy. A second consecutive quarter of declining profits could lead to an earnings recession, which some analysts say could prompt staff cuts, driving up the unemployment rate and further dampening consumer spending. These times are very volatile, so it is scary . . ., said Rita Cheng, a financial adviser at Ameriprise Financial Services in Bethesda. Investors have every right to be nervous. The advice that I give to clients is you don't want to panic. Still, Fekete, one of Cheng's clients, recently dumped some poor performers from his portfolio. He is not ruling out more changes but said, I think we're just going to sit tight right now and see how that does.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613950","date":"2007-12-03","texts":"The Wall Street Journal Online The Morning Brief, a look at the day's biggest news, is emailed to subscribers by 7 a.m. every business day. Sign up for the e-mail here. In his first official act as a new prime minister, Kevin Rudd today signed paperwork that will lead to Australia's ratification of the Kyoto Protocol, further isolating the U.S. on climate issues just as negotiators are meeting in Bali to start work on Kyoto's successor. Mr. Rudd's signature would seem to bolster the United Nations- sponsored Bali conference's momentum, already building since the Nobel Peace Prize was co-awarded to the Intergovernmental Panel on Climate Change and its work documenting human-induced global warming. The latest scientific warning came just yesterday, in a study published by peer-review journal Nature Geoscience, which found the earth's tropical zones have begun to spread toward the poles. While some of the earliest signs of climate change came through melting ice in the Arctic, the study reports evidence of tropical expansion that could threaten subtropical societies. Poleward movement of large-scale atmospheric circulation systems, such as jet streams and storm tracks, could result in shifts in precipitation patterns affecting natural ecosystems, agriculture, and water resources, it says, but cautions that the implications still aren't well understood. And yet, despite the warnings and burgeoning political consensus, there's also little certainty about what the Bali talks will produce. While the U.S. delegation declared it won't be a roadblock to a new agreement, the Bush administration remains opposed to mandatory emission caps for greenhouse gases and some other steps many of U.S. allies support. China, which has seen billions of dollars in crops destroyed by the pollutants of its coal-burning power plants, and India, threatened by melting glaciers and devastating droughts, have both said they won't sign a treaty that slows their pace of economic development, as the Associated Press reports. Both countries are allowed to keep polluting under the 1997 Kyoto treaty, which itself has led to little actual reduction in greenhouse-gas emissions. The product of much geopolitical wrangling, it required only 36 countries to limit pollution, and just over of third of those countries were former Soviet-bloc countries, the Los Angeles Times notes. The likes of Russia, Latvia and Romania have sharply lowered their carbon dioxide emissions since 1990, but that's more due to how the 1991 collapse of the Soviet Union shut down smoke-belching factories, the Times says. And the Kyoto emissions were set far above the countries' actual emissions.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615778","date":"2007-12-03","texts":"Beating down the dollar has become a popular sport lately. But the greenback may be about to get off the mat. The dollar's decline this year has been unrelenting. It has fallen 5 against the pound, 7 against the yen, 10 against the euro and 14 against the Canadian dollar. Against the Federal Reserve's trade- weighted basket of currencies, the dollar has dropped 8. For years, most economists have viewed the dollar as an accident waiting to happen. To finance its huge trade deficit, the U.S. has been borrowing heavily from the rest of the world. The thinking was that overseas savers eventually would tire of holding ever-greater quantities of dollar-based assets. When they'd had enough, the dollar would fall. And so it has. Many economists think the dollar will weaken further. Maurice Obstfeld of the University of California at Berkeley and Kenneth Rogoff of Harvard University calculated in 2005 that with the broadest measure of the U.S. trade deficit -- the current account -- running at more than 6 of the nation's economic output, the dollar needed to fall as much as 30 against the Fed's currency basket to bring the trade deficit back into balance. A weaker dollar makes U.S. exports cheaper to foreigners and makes imports costlier for Americans, shrinking the trade gap, as has been happening lately. By that reckoning, the dollar needs to drop an additional 20. And the Fed's new openness to cutting interest rates, if the textbooks are right, should further weaken the currency as global investors flock to places with higher returns.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614599","date":"2007-12-04","texts":"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. 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. There were reports from Caracas as early as 830 p.m. Sunday night that the No vote against the Chavez proposals was victorious. Intriguingly, it took the Chavez-controlled National Electoral Council until 115 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. 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. 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.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614738","date":"2007-12-04","texts":"Small stocks fell as mounting economic worries pulled the plug on a videogame celebration. The Russell 2000 index of small-capitalization stocks fell 7.8 points, or 1.02, to 759.97 the Standard & Poor's SmallCap 600 shed 3.62, or 0.91, to 395.15. Shares of videogame makers powered up after large-cap Activision and Vivendi's game unit agreed to a combination. Take-Two Interactive Software rose 1.30, or 8.7, to 16.28. I don't know if we're going to tumble into a recession under the classic definition, but we're certainly in pullback, or slowdown mode, said Georges Yared, chief investment strategist at Yared Investment Research, after some soft manufacturing data. When you look at spending, whether it be automotive or large-ticket items, consumers have pulled back. Jakks Pacific rose 1.33, or 5.3, to 26.57 after winning a crucial round in its legal tangle with World Wrestling Entertainment. A federal court dismissed the Stamford, Conn., wrestling promoter's suit related to how Jakks originally obtained a WWE toy license. World Wrestling Entertainment fell 12 cents to 15.64 on the New York Stock Exchange.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985109","date":"2007-12-05","texts":"Wall Street wilted Tuesday as investors awaiting next week's Federal Reserve meeting remained uneasy that the fallout from the slumping housing market could bring more bank losses and drag the economy into recession. The Dow Jones industrial average fell 65.84, or 0.49 percent, to 13,248.73. The Standard & Poor's 500-stock index fell 9.63, or 0.65 percent, to 1462.79, and the Nasdaq composite index fell 17.30, or 0.66 percent, to 2619.83. Retreating oil prices and signs of strength in non-financial industries could not keep the stock market from declining for a second consecutive day. Investors have tiptoed into December, which is usually a winning month on Wall Street most expect lower rates after the Fed meets Tuesday, but the size of the cut is under debate. Meanwhile, J.P. Morgan Chase downgraded major securities firms, warning that while further write-offs of bad mortgage debt might help the firms' stocks, longer-term concerns about their risk management might hurt their overall valuation. J.P. Morgan lowered its earnings estimates for some of Wall Street's biggest players Goldman Sachs, Lehman Brothers, Merrill Lynch and Morgan Stanley. Those investment banks and other financial companies fell, including Washington Mutual, Citigroup, Bank of America, Freddie Mac and Fannie Mae, and J.P. Morgan itself. The financial sector has been dragging on the broader market since the summer. A report by D.A. Davidson analysts said bank stocks are at three- to four-year lows.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842613607","date":"2007-12-07","texts":"You can't move these days without bumping into an economic pessimist. Recession in America looks increasingly likely, said the Economist magazine on Nov. 17. Two days later, in the International Herald Tribune, Nobel Prize winner Paul A. Samuelson brought up the specter of the Great Depression. And then, on Nov. 26, former U.S. Treasury Secretary Larry Summers wrote in the Financial Times that, the odds now favor a recession that slows growth significantly on a global basis. The pressure on policy makers to do something is intense. Not only is there a desire to see the government get even more involved in the housing loan market -- witness the Bush administration's plan to freeze starter rates -- there is also tremendous pressure on the Fed to make another large 50 basis-point rate cut in attempt to alleviate credit-market problems. This desire for government intervention to fix problems that grown adults have created for themselves is dangerous. Constantly counting on the government to save the economy undermines confidence in free markets, conditions people to believe they don't have to live with bad decisions, and creates a willingness to take imprudent risk. Actions to stabilize the economy in the short term can destabilize it in the longer term, and set the stage for even more intervention to fix the new problems at a later date. Moreover, all this pessimism makes serious economic problems less likely. If it really happens, a recession in the next year could be the most anticipated ever. That fact alone makes it improbable. Recessions usually surprise the consensus. When a recession is expected, the odds of rapidly rising inventories, excessive investment, or a surprise drop in new orders are reduced. In the past, when manufacturing was a larger share of the economy and inventory control was less exact, recessions often began abruptly, sometimes on the heels of very strong growth. Today, with services a larger share of the economy, and technology speeding up information flow, the economy tends to glide more gently into recession. Given this, all the doom and gloom seems unnecessary.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982865","date":"2007-12-09","texts":"Mutual fund managers have had a good run with Chinese stocks, but some managers are backing off now, saying China's market is a bubble that will burst sooner rather than later. The Chinese market appears to be in the later, waning stages of a bubble, said Justin Leverenz, manager of the nearly 13.5 billion Oppenheimer Developing Markets Fund. The fund is now extraordinarily lean in exposure to Chinese stocks, he said. Leverenz, who looks to double the fund's investment over the next three to five years, said he expects that a significant contraction in the valuation of Chinese equities will play out much more rapidly than that time period. He noted that China's domestic A shares have risen nearly 500 percent over the past two years. He predicts that 2008 will be an incredibly difficult year for Chinese equities. Other fund managers agree and are pulling money out of Chinese shares, though a few said they're still finding buys in select H shares, those of China-registered companies listed on Hong Kong's stock exchange. Antoine van Agtmael, chief investment officer of Emerging Markets Management, who is credited with coining the term emerging markets in 1981, said China's booming economic story is real, but its stock markets have been bought up in a mania.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984779","date":"2007-12-09","texts":"From our downunder perspective here in Australia, the United States is all about choice. Everywhere you look, there are so many options. The huge variety of breakfast cereals in the average American supermarket is enough to make me feel like I've just escaped the Soviet Union circa 1958. It's the same with your presidential politics the spectrum of candidates and political ideologies you have to choose from is positively dazzling. By contrast, Aussie politicians mostly tend to follow the Henry Ford principle, slightly modified Any color you like, as long as it's beige. We recently had an election here, and the whole thing was like that, pretty beige. We had precisely two candidates, and they were barely distinguishable, except that one headed the Liberal Party the main conservative group and the other was the candidate of Labor founded by the union movement. Our entire federal election campaign lasted exactly six weeks -- a long slog, according to pundits and voters alike. After a month, most people were moaning, I just want it to be over So you can see why, to us Aussies, your two-year process, from candidate announcements to Inauguration Day, might seem a tad excessive. If not downright, well, absurd. This past summer in Iowa, I had the chance to size up most of the current crop of U.S. presidential candidates, and I had to wonder how on Earth you're going to choose from this most diverse field ever of would-be presidents. Gadding about the Hawkeye State, I saw Rudy Giuliani and John McCain working the crowd with one-liners, Bill Richardson cornering people in dark alleys at the Iowa State Fairgrounds, and Sens. Chris Dodd and Joe Biden explaining how the six or seven candidates ahead of them in the polls were going to crash and burn just like Howard Dean in 2004.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615335","date":"2007-12-12","texts":"Not all borrowers are benefiting from the Fed's moves to cut interest rates. The problem Loans that are tied to a variety of interest-rate benchmarks -- some of which aren't necessarily moving in lockstep with Fed action. Yesterday, the Federal Reserve cut short-term interest rates by a quarter of a percentage point to 4.25 -- the central bank's third rate cut since mid-September -- to help ease the credit crunch and reduce the economy's chances of falling into a recession. The moves have helped some borrowers who have seen interest rates on their credit cards and home-equity lines of credit fall. Interest rates on many fixed-rate mortgages also have dropped amid a decline in Treasury yields as investors sought out safe investments. But rates remain stubbornly high on other loans, including student debt and many adjustable-rate loans made to the same type of subprime borrowers whose troubles are now reverberating throughout the global financial system. These rates remain high because many of these loans are tied to the London interbank offered rate, or Libor, and not to more conventional interest-rate benchmarks such as Treasurys or banks' prime rate. Libor, which is an interest rate banks charge on loans to each other, normally tracks the federal-funds rate closely. But continuing worries over the credit crisis have kept Libor unusually high -- partly because banks are reluctant to lend to one another -- even as other short-term interest rates have fallen in recent months. The U.S. dollar three-month Libor yesterday was 5.11, down from 5.36 in late June. Over the same period, three-month Treasury bill yields have fallen much more steeply, to 2.95 from 4.8. The Libor spread is screaming that there is a big, big stress point in the banking system, says James Bianco, president of Bianco Research LLC, a market-research firm in Chicago. Borrowers may need to read the fine print of their loan agreement or contact their lender to know what benchmark their loan is tied to. The biggest impact is likely to be felt among borrowers with ARMs that are about to reset. If you have a Libor-indexed ARM and you're facing a reset, that's going to be very disadvantageous because of the divergence between the Libor and Treasury yields, says Greg McBride, a senior financial analyst at Bankrate.com.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613496","date":"2007-12-15","texts":"The dollar jumped to one-month highs against the euro and yen Friday on hard evidence that the U.S. economy isn't about to shrivel into recession. New economic reports demonstrated the Federal Reserve's actions this week -- cutting interest rates a conservative quarter point and finding an alternative method to introduce more market liquidity -- were well-founded considering retail sales and inflation data reported Thursday and Friday, according to analysts. The Fed was roundly condemned on Tuesday afternoon for its seemingly detached attitude towards the crisis of confidence in the bank funding market, said Scotia Capital analysts. But the reports have introduced some clarity -- and struck U.S. equities down in the process on the realization that another Fed rate cut might not be such a simple prediction, currency analysts concluded. The dollar, consequently, shot up against the euro with a newfound yield appeal and against the yen with the help of a negative economic report in Japan. Late Friday in New York, the euro was at 1.4423 from 1.4625 late Thursday, while the dollar was at 113.40 yen from 112.22 yen. The pound was at 2.0172 from 2.0398, while the dollar was quoted at 1.1525 Swiss francs from 1.1413 francs.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830981925","date":"2007-12-25","texts":"The Federal Reserve Board's clout isn't what it was during Alan Greenspan's glory days. Back then, the Fed looked and acted all-powerful even though it wasn't. Now it's visibly failing to unfreeze key debt markets in which giant institutions lend to each other. Those markets have frozen out of fear No one knows what hidden time bombs are on other firms' balance sheets, or even on their own. The Fed hasn't been able to thaw the markets with interest rate cuts or by using its discount window, through which it lends directly to institutions, and it has been reduced to trying to bribe and cajole big players into borrowing its money as a substitute for borrowing from each other. It's not clear whether its recently created term auction facility, designed to induce institutions to borrow from the Fed, will unfreeze things. The first two auctions were a blowout success. The Fed said it got about 3 in bids for each 1 offered, but I suspect that's because the auctions were for a relatively small 20 billion each and because the Fed and its allies jawboned institutions to bid. Am I really saying that the Fed, which to many people still seems omniscient and omnipotent, has lost much of its mojo I am. Why should you care Because if the Fed continues to lose clout, it will be even harder than it is now to rescue the world's financial system when the next disaster strikes the markets. And there's always a next disaster. The mojo minimization isn't all the Fed's fault, of course. The United States has become less dominant financially, thus reducing the Fed's global influence. Meanwhile, markets have become enormous and transnational and, thus, harder to influence. Part of the problem is of the Fed's own making. Its power has always depended more on its reputation than on its actual resources. The Fed lost credibility for not trying to pop the stock bubble of the 1990s or the recent housing bubble it obsessed about nonexistent deflation it even unintentionally exacerbated the housing bubble by not stopping institutions it regulates from offering dangerous products, such as liar's loans and the teaser-rate mortgages that now plague the financial system. Finally, it keeps bailing out the enablers of financial excess while penalizing prudent Americans by reducing the rates that their savings earn and accelerating the dollar's decline relative to commodities and foreign currencies.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617134","date":"2007-12-27","texts":"Treasury prices fell heavily for much of the post-Christmas session, dragged by the dead weight of 22 billion in new two-year notes that drew only tepid demand at auction. The only short-lived boost for Treasurys yesterday came from the early release of weak figures on house prices, and evidence of declining regional business activity. The 10-city composite reading of Standard & Poor'sCase-Shiller indexes declined 6.7 in October -- the biggest monthly decline in existing single-family homes on record. Weakness in housing is hardly a new story, but the market reaction was exaggerated by meager trading volumes, and the compounded impact of a weak Richmond Federal Reserve survey of regional business activity. December's release showed the bank's manufacturing index falling to -4 from zero in November. The services sector reading reflected a slight improvement in this dominant area of the economy, rising to zero from -2 in November. But even holiday shopping did little to improve matters in the region's retail sector, which continued to contract in December. The impact had worn off by late morning, however, and prices were heading back down in the lead up to the 1 p.m. EST auction of two-year notes. It's hardly a good time of year for aggressive bidding, but the recent liquidity concerns were expected to ensure reasonable demand for the sale.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614328","date":"2008-01-02","texts":"When Iowa voters walk into their state's caucuses tomorrow night, they will be kicking off a milestone campaign year that promises a new political course for America. For the first time in 80 years, no incumbent president or vice president from either party is seeking the White House, creating an unusually unsettled campaign with no obvious front-runner. Power in Congress is divided so evenly between the two parties that neither has really been in control since the 2006 elections. Now, in the wide-open 2008 general election, voters will declare whom they want to run the executive and legislative branches. Americans will make that choice at a time when they are distinctly uneasy. Record numbers of voters are choosing to declare themselves politically independent -- and thus open to moving either left or right. Both the Republican president and the Democratic Congress are receiving historically low public-approval ratings, another sign of voter unease. More broadly, the Wall Street JournalNBC News poll has in recent months found the nation to be in the midst of the most prolonged period of public dissatisfaction in 15 years, as measured by the share of voters who say the country is on the wrong track. In one sense change is inevitable. This year marks the end of what can be considered the Reagan-Bush era in American politics that began when Ronald Reagan was elected in 1980. In six of the last seven general elections, a candidate named Reagan or Bush has appeared atop a national ticket, defining a brand of internationally engaged conservatism that has been the dominant strain in American politics for more than a generation. Now the stage is set for an ideological rethinking in both parties. The mood for change is more than one of small incremental adjustments, write Republican pollster Bill McInturff and Democrat Peter Hart, who conduct the JournalNBC News poll. It is concern for the next generation as well as widespread unhappiness with both President Bush and the Congress.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981818","date":"2008-01-02","texts":"A federal judge ordered Qualcomm to stop selling data chips that infringe on patents belonging to its smaller rival Broadcom. U.S. District Judge James Selna issued the ruling, the latest in a series of legal victories Broadcom scored over Qualcomm in the past year related to rights to technology for cellphones. The three patented chips use WCDMA technology, a small but fast-growing part of the wireless market used mostly in American T-Mobile and AT&T phones. Selna ruled that Qualcomm can continue to sell other disputed chips in the United States until January 2009, but must pay royalties on those chips, which use a different technology and are used on Verizon and Sprint networks. He also allowed Qualcomm to use a patented Broadcom walkie-talkie technology until January 2009. PHH Corp., a mortgage and auto-leasing company, scrapped a 1.8 billion sale to General Electric and Blackstone Group after the buyout firm said banks reneged on an agreement to lend the money. Blackstone's banks refused to finance the planned purchase of PHH's mortgage division, the private-equity company said. The lenders were J.P. Morgan and Lehman Brothers, according to a regulatory filing. China, the world's biggest grain producer, has started to curb overseas sales of milled grain flour by issuing export permits, the latest in a series of measures to boost domestic supply and curb food inflation. The temporary changes, effective yesterday, will apply to flour milled from grains -- including wheat, corn and rice -- and will last for an undetermined period based on market conditions, the Ministry of Commerce said. China is increasing measures to control inflation after food prices jumped almost 18.2 percent in November. It has begun to tax grain exports after removing incentives.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613793","date":"2008-01-03","texts":"U.S. house prices likely would have to fall considerably to return to a normal relationship with rents, says a study by one former and two current Federal Reserve economists. The study, which doesn't necessarily reflect the views of Fed policy makers, suggests prices would have to fall 15 over five years, assuming rents rose 4 a year. House prices would have to fall further if the adjustment took place more quickly. The study tracks rents and home prices back to 1960 and found annual rents fluctuated at around 5 to 5.25 of home prices until 1995. At the end of that year, the average monthly rent was about 553 or about 6,600 a year and the average home price was about 134,000. But starting in 1996, home prices started to grow much more rapidly than rents. By the end of 2006, they had more than doubled to an average of 282,000, while the average rent had risen 48 to 818. That drove the annual rentprice ratio down to 3.48. That means the rentprice ratio is about a third below its long-term average. To return to normal would require some combination of falling prices and rising rents. The paper suggests house prices would need to fall about 3 a year, if rents grew in line with their 4 average annual growth this decade.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614349","date":"2008-01-03","texts":"Treasurys prices gained significant ground on a much weaker-than- expected report on the health of the U.S. manufacturing sector, which has given fresh urgency to talk of a recession. The Institute of Supply Management's December manufacturing index showed the sector contracted after 10 consecutive months of expansion. The index fell to 47.7 last month from 50.8 in November, marking the weakest reading in nearly five years. A number above 50 indicates growth. It was a terrible number, said Mary Ann Hurley, vice president of fixed-income trading at D.A. Davidson in Seattle. It not only fell significantly below the important 50 area, but the component numbers were terrible, too. New orders fell to 45.7 from 52.6 in November while production fell to 47.3 from 51.9. Buying in the wake of the report pushed yields across maturities down more than 0.1 percentage point. The two-year yield fell faster than that of the 10-year note, causing the benchmark yield curve to steepen.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615590","date":"2008-01-03","texts":"Transparency is a hallmark of modern capitalism, and Federal Reserve Chairman Ben Bernanke has made transparency a hallmark of his new regime. Yet among our leading financial institutions, opacity, not financial transparency, has been on the rise. The combination -- increasingly opaque financial markets and increasingly transparent monetary policy -- has created a dangerous brew of financial excesses. Unless both trends are reversed, financial stability will remain elusive. The explanation for increasingly opaque financial markets lies chiefly in securitization -- the conversion of non-marketable assets into marketable obligations -- which has accelerated dramatically in recent decades. In theory, securitized markets are supposed to operate on the basis of accurate and readily available prices, the clear assessment of credit quality, and objective analyses of these obligations by rating agencies and those engaged in trading and underwriting them. These virtuous mechanisms presumably have been reinforced by a host of new credit instruments, especially financial derivatives that mitigate risk taking. Securitization also has been supported by a dazzling array of new quantitative analytical techniques that are capable, according to practitioners, of defining risk probability down to decimal point levels. So what went wrong In the broadest sense, the structural changes in the financial markets encouraged participants to become short-term oriented.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615717","date":"2008-01-03","texts":"You've heard about taking a long-term view. This month, we're giving it a twist. We examine how we got to where we are in the U.S. fund industry, with a long look back -- to the 1800s, when a forerunner of the mutual fund appeared in the United Kingdom. Can you name three giant U.S. fund companies that were started as the nation was recovering from the Great Depression If Vanguard Group founder John Bogle didn't create the nation's first index-based fund, who did Check out your history skills here 1. In what U.S. city was the country's first stock mutual fund launched A. New York B. Philadelphia","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984470","date":"2008-01-03","texts":"The price of oil briefly rose to 100 a barrel for the first time yesterday and fresh evidence emerged that the economy is slowing. To investors, the news raised the specter of stagflation, the toxic mix of stagnant economic growth and price inflation that made for hard times in the 1970s. The Dow Jones industrial average fell 1.7 percent, or about 221 points, as investors moved money into safer investments. Not very fun, is it said James W. Paulsen, chief investment strategist of Wells Capital Management. The news today just conjures up some frightening possibilities. Happy New Year. After months of flirting with a price of 100 per barrel, one midday trade for crude oil on the New York Mercantile Exchange yesterday was for that much. The price of a barrel closed at 99.62. Gold closed at an all-time high of 860 an ounce for the February contract. The prices of wheat, soybeans and frozen concentrated orange juice were all up sharply, too. The dollar fell against the Japanese yen and other currencies. And rising prices come as the nation's manufacturing sector appears to be contracting, according to the Institute for Supply Management, which surveys manufacturers. Its index, released yesterday, fell to 47.7 in December from 50.8 in November, a worse drop than even the most bearish analysts had predicted. A reading of more than 50 indicates expansion a reading of less than 50 denotes contraction.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614041","date":"2008-01-07","texts":"Little relief is in sight for the beleaguered dollar. Analysts expect the euro this week to advance toward its record high of 1.4968, struck Nov. 23. The dollar likely will weaken against the yen, falling from the current 108-yen level to around 107 yen. A whirlwind of disappointing U.S. economic data and record-breaking oil and gold prices has damped hopes for the dollar's resurgence. An early-year rally had been widely expected by many currency analysts. The expected dollar rally is still a way off, said Jim McCormick, head of currency research at Lehman Brothers in London. He pointed to the continued surge in commodity prices, slow growth, and inflation. Investors seeking havens have instead channeled funds into the yen and euro. More people were talking in a lot more optimistic terms about the dollar, said Steve Barrow, chief currency strategist for Bear Stearns in London. That was based largely on the perception that the U.S. has a lot of bad news priced in. The euro zone has stuff to come. But the dollar could instead have as many as four tumultuous months, he said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616154","date":"2008-01-08","texts":"The ghost of David Stockman still haunts us. It was Mr. Stockman, Ronald Reagan's budget chief, who proclaimed 27 years ago I'm just not going to spend a lot of political capital solving some other guy's problem in 2010. That other guy -- or gal -- will be the next president of the United States. To be sure, in many ways the federal budget is in better shape today than it was in Mr. Stockman's day. As a share of the economy, federal outlays and receipts were smaller last year than in fiscal year 1982. Because outlays fell more than receipts, the federal budget deficit amounted to only 1.2 of GDP last year, down from 4 in 1982. In fact, if the economy grows as projected and Congress maintains current tax laws and spending policies, the Congressional Budget Office CBO projects a federal budget surplus by 2012. That's the good news. Nevertheless, our next president will encounter three ticking tax bombs in the weeks following the inauguration, as he or she prepares the budget for fiscal year 2010. Should even one of them detonate, we all will suffer the consequences. The first ticking bomb is the fate of the Bush tax cuts. CBO's optimistic federal budget surplus projection is based on the assumption that Congress will allow the president's tax cuts to expire as scheduled at the end of 2010. That would trigger the largest tax increase in history nearly 1.9 trillion over seven years, raising taxes on 115 million taxpayers, and returning to the tax rolls 7.8 million low- and middle-income families who now pay no federal income tax because of the Bush tax cuts. If this bomb explodes, one thing is certain It will damage the economy. The Institute for Research on the Economics of Taxation estimates the tax hike would, in the short run, oblige the economy to flirt with recession or worse.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615916","date":"2008-01-12","texts":"The consumer leg of the economy, which has been remarkably stable throughout the housing downturn, may now be tottering. The Dow Jones Industrial Average tumbled 246.79 points, or 1.9 to 12606.30 yesterday on the back of fresh signs that consumer spending is slowing. In an indication that even well-heeled shoppers may be cutting back, luxury jeweler Tiffany & Co. said that its U.S. sales slumped during the holiday period. American Express Co. warned late Thursday of rising delinquencies and slowing spending among its cardholders. They joined a host of companies with close ties to consumers sounding alarm bells. A number of retailers, including Kohl's Corp., cut earnings projections after reporting weaker-than expected sales Thursday. Credit-card company Capital One Financial Corp. said its 2007 earnings would fall short of its earlier forecast. And AT&T Inc. said it has been cutting off more landline and high-speed Internet customers for non-payment. December auto sales also slumped broadly, with a 3 drop in sales compared to a year ago, according to industry tracker Autodata Corp. All of these things that are taking place -- credit markets, energy prices, housing -- are hitting consumers right now, says J.P. Morgan chief economist Bruce Kasman. We're in the teeth of the storm.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615932","date":"2008-01-14","texts":"ABU DHABI, United Arab Emirates -- President Bush offered a cautious critique of political repression in the Middle East, reassuring nervous Arab leaders of continuing U.S. support while calling political and social change inevitable. The best way to defeat the extremists in your midst is by opening your societies, and trusting in your people, and giving them a voice in their nation, Mr. Bush said to Gulf Arab leaders in the major speech of his nine-day Middle East trip. While Mr. Bush continued to tout democracy, he put more emphasis on the need for justice and broader societal changes. The rhetorical shift, while subtle, helps align the White House's agenda more closely with the changes that are under way in the oil-rich Gulf states. Boosted by their soaring oil revenue, many are investing heavily in education, infrastructure and social programs. At the same time, there is relatively little progress on the political front. Despite isolated changes, for instance in Kuwait, most Gulf Arab leaders still govern as hereditary and near-absolute monarchs. We believe that helping to build a strong regional economy is our best opportunity for lasting social stability in the Middle East, wrote Dubai's ruler, Sheikh Mohammed bin Rashid al Maktoum, in a commentary in The Wall Street Journal's opinion pages Saturday, during the Bush visit to the Middle East. We don't have political ambitions, he continued. The speech came as Mr. Bush barnstorms through the region that originally gave rise to his freedom agenda following the Sept. 11, 2001, terrorist attacks in the U.S. Mr. Bush often has blamed the rise of militant Islamists in part on repressive political cultures in the Gulf region, and he has called repeatedly for change.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614085","date":"2008-01-15","texts":"If our Washington, D.C., readers noticed a cortege of blue suits carrying a casket in front of the Brookings Institution last week, be not mournful. You were merely watching the leading economists of the Democratic Party burying the faith once known as Rubinomics. May it rest in peace. Rubinomics is the concept of deficit reduction as growth policy Lower the federal budget deficit and, as dawn follows night, interest rates will fall and prosperity will break upon the land. Named for former Treasury Secretary Robert Rubin, and much celebrated in the 1990s, the concept was embraced as gospel by nearly all Democrats as recently as a few weeks ago. But last week it officially expired, as those same Democrats reconverted to Keynesian deficit spending in the name of economic stimulus. Mr. Rubin's successor at Treasury, Larry Summers, started the bidding with a 65 billion tax rebate and spending plan. Hillary Clinton saw that and raised, and now wants 40 billion in tax rebates and 70 billion in new spending for unemployment insurance, housing assistance, home heating subsidies and green technologies. Barack Obama joined the fray Sunday, proposing a 75 billion stimulus that would have the government send millions of Americans a check for 250, plus another 250 in bonus Social Security payments. But wait, what about those evil Bush deficits Only weeks ago, Democrats claimed those were the road to perdition, even if the deficit had shrunk to 1.2 of GDP last year thanks to booming revenue growth. Remember the imperative of pay as you go budgeting Ah, that was all before Iraq faded as a political winner and the economy became their favorite issue for regaining the White House. Now, all of a sudden, their motto is tax cut and spend. Stimulus shouldn't be paid for, declared Mrs. Clinton on NBC's Meet the Press on Sunday. The stimulus, by the very nature of the economic problems we're facing, is going to require an injection of federal funding. And no less than the oracle himself, Mr. Rubin, appeared at Brookings last week to declare that a deficit-padding stimulus can give the economy a timely boost in the face of great uncertainty and concern with the short-term economic outlook. The coroner will note that the cause of death here is suicide.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614518","date":"2008-01-15","texts":"Some corporate mergers have little effect on customers. But when big airlines merge, it changes life for travelers, leading to higher ticket prices, poorer service and maybe even a switch in the credit card you carry. For the fractured airline industry, where nine big airlines fight coast-to-coast, removing large competitors and bulking up flight schedules could be a way to better survive high oil prices and recession instead of the bankruptcies and turmoil of past downturns. That's why Delta Air Lines Inc. may be considering formal merger talks with either UAL Corp.'s United Airlines or Northwest Airlines Corp., and why analysts think multiple major marriages could lie ahead. By default or design, I think it's going to happen. If it doesn't, they'll be back in the tank again, said Gordon Bethune, the former head of Continental Airlines who has been advising some big airline investors on merger prospects. But for travelers, big-airline couplings historically have meant headaches. Airline employees endure change and disappointment -- which could make them act grumpier toward customers. Some communities could see reduced service if mergers allow the combined airlines to close hub operations -- would a merged Delta and Northwest still need hubs in Cincinnati and Memphis, for example Higher ticket prices are likely airlines merge in part so that they will have more pricing power. But the biggest peril for consumers is poorer service -- late flights, lost baggage, confusion at airports, ticketing troubles and changes in frequent-flier program rules.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615215","date":"2008-01-17","texts":"Tokyo -- Japanese stocks are cheaper than they have been for decades. So why are so few investors interested in buying them Driving stocks lower is a combination of worry that Japanese shares will be disproportionally hit by a slowdown in the global economy and continuing concern that managers at Japanese companies aren't as sensitive to their shareholders as those at U.S. and European companies are. The slow pace of overhaul in the world's second-largest economy is also weighing on shares. Yesterday, the benchmark Nikkei Stock Average fell more than 3.3 as concerns continued to build that the U.S. economy -- which takes in slightly less than 25 of Japanese exports and helps power many of Japan's other markets -- might slide into a recession. So far this year, the Nikkei has fallen nearly 12 and now stands at 13504.51 -- a two-year low. The Dow Jones Industrial Average, by comparison, is off 6. The latest slump in the Japanese market, which has fallen irrespective of what stocks in the U.S. or elsewhere have done for the past three months, is damping optimism that shares here would rise as investors looked for bargains. The Nikkei's priceearnings ratio, which compares the price of a stock to its earnings, is now just below that of the S&P 500.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615479","date":"2008-01-18","texts":"At the end of a rough week for financial markets, the White House today threw its full weight behind efforts to get an economic stimulus package through Congress, even if the measure has yet to take its final shape. Speaking at the White House late this morning, President Bush said passing a growth package was our most pressing economic priority. Later, after traveling to a manufacturing plant in nearby Frederick, Md., Mr. Bush said, We need to get this deal done and get it out. Treasury Secretary Henry Paulson pitched in with an afternoon press conference, in which the former Goldman Sachs CEO appeared with Ed Lazear, chairman of the president's Council of Economic Advisers. Referring to a stimulus package, he said, If it's broad-based and simple, I believe we'll be able to get it out quickly, in time to make a real difference this year. Mr. Paulson said individual tax payers would receive the lion's share of the incentives in the package, which -- in its entirety -- would be in the ballpark of 140 billion and 150 billion, or roughly 1 of the country's gross domestic product. A Republican official, speaking to the Associated Press on the condition of anonymity, said that Mr. Bush wanted about 100 billion to go to individuals and about 50 billion channeled toward companies. In order to get it done, Mr. Bush and the Republican minority in Congress will have to sit down and hash out a deal with representatives from the Democratic majority. But, amid signs that country's economic engine is beginning to sputter, there seems to broad bipartisan support to get a bill done. House Speaker Nancy Pelosi, D., Calif. has said she hopes to have a bill enacted within a month. And in a prepared statement in response to Mr. Bush's comments today, Senate Majority Leader Harry Reid D., Nev. said, I am encouraged and share the president's view that we need prompt bipartisan action to strengthen our economy. I also agree that our focus must be on finding temporary measures that will do the job effectively. --- Stock Decline Again","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983848","date":"2008-01-19","texts":"When Ben S. Bernanke became Federal Reserve chairman two years ago, he set out to be the man in the gray flannel suit -- more anonymous bureaucrat than swashbuckling master of the economy. After months of criticism from people on Wall Street who argue that Bernanke has responded timidly to the crisis in the housing and credit markets, he has taken a more assertive approach. Last week, he gave a speech that used bold language to signal that Fed would cut interest rates to try to prevent a severe economic downturn. On Thursday, he told Congress how to design a stimulus package that would offer immediate help. The two moves are meant to assure financial markets, elected officials and the American public that the Fed is on the case. The financial markets and the whole society are crying out for leadership, said Alan S. Blinder, a Princeton economist and former Fed vice chairman. Bernanke as a person and the Fed as an institution are the places this leadership can come from. It is all but inevitable, in the view of Fed leaders, that the economy will grow slowly in the first half of 2008. There may even be a mild recession, they say. But Bernanke is trying to indicate that he and his colleagues at the central bank will not let a painful, self-reinforcing cycle set in that could cause a severe and prolonged downturn.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830984262","date":"2008-01-21","texts":"An unusually large share of workers have been out a job for more than six months even as overall unemployment has remained low, a little-noted weakness in the labor market that analysts said threatens to intensify the impact of the unfolding economic downturn. In November, nearly 1.4 million people -- almost one in five of those unemployed -- had been jobless for at least 27 weeks, the juncture when unemployment insurance benefits end for most recipients. That is about twice the level of long-term unemployment before the 2001 recession. The problem is ensnaring a broader swath of workers than before. Once concentrated among manufacturing workers and those with little work history, education or skills, long-term unemployment is growing most rapidly among white-collar and college-educated workers with long work experience, studies have found, making the problem difficult for policymakers to address even as it grows more urgent. What has happened is a polarization of the labor market. It was very strong at the very top and very strong until recently at the bottom, said Lawrence F. Katz, a labor economist at Harvard University. But in the recent weak recovery, and now recession, demand has been very weak for jobs in the middle. Caroline Dixon never contemplated any of that when she resigned in April after nine months as a program officer with the Spina Bifida Association. She left because the job was a bad fit, and she said she was confident that the economy was strong and she would soon find work. For a long time, she never stopped in the unemployment office on Naylor Road near her Southeast Washington home.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984036","date":"2008-01-23","texts":"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. 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. 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. 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. 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.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615005","date":"2008-01-25","texts":"Global market turmoil claimed its first fashion victim yesterday as Tommy Hilfiger Corp. shelved plans for an initial public offering of its shares on the Euronext Amsterdam exchange. The company and its owner, private-equity firm Apax Partners, said the decision to shelve the IPO came even though investor feedback has been positive. Considering recent volatile market conditions, management and shareholders decided to postpone an IPO process until such time that market conditions have stabilized, they said. The pullback illustrates how the once-confident luxury-goods industry is getting skittish about whether it can attract investors at a time of roiling global markets and looming recession in the U.S. It remains to be seen how the turmoil could affect Prada SpA and Salvatore Ferragamo SpA -- two of the industry's best-known brands, which are planning listings on the Milan stock exchange this year. Prada shelved a previous plan for an IPO after the Sept. 11, 2001, attacks in the U.S. We are working with our advisers to determine the best timing. No decision has been made, said Prada spokesman Tomaso Galli. A spokesman for Salvatore Ferragamo couldn't be reached for comment.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830981983","date":"2008-01-27","texts":"With the stock market gyrating wildly, bonds troubled by alternating inflation and recession fears, and real estate foreclosures making headlines every day, simply bailing out might be the most comforting thing to do. But finding a good place to park the resulting cash is a challenge. Investments that provide strong assurance against loss tend to pay modest returns, and those that offer a better yield can sometimes go south, taking investors' principal with them. What's more, most experts advise against selling in a downturn, especially if you are investing for the long term. But if moving some funds to the sidelines is for you, there are a number of safe choices. After inflation and taxes, these safe havens may offer little more than break-even returns -- but breaking even may not seem so bad compared with what has happened recently in the stock market and real estate. At the extreme end of the safety spectrum are securities issued by the U.S. Treasury. These are, as far as a loss of principal is concerned, about as safe as it is possible to be. But to get that level of safety in today's market, you have to be willing to accept an interest rate in the 3 percent range -- a trade-off that makes many people unhappy. Everybody's looking for a free lunch, but especially in the cash area, there is no free lunch. As soon as you move off of Treasurys, risk comes into play, said financial adviser Mary A. Malgoire of the Family Firm in Bethesda.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613906","date":"2008-01-28","texts":"Bond investors should get ready for another bumpy ride in Treasurys this week as stock markets remain unsettled and the Federal Reserve gathers for its rate-setting meeting. Markets continue to expect another interest-rate cut, although investors have scaled back bets for a half-percentage-point move in the federal-funds target rate to 3 and now see a quarter-point cut as more likely. The week also is laden with data from the durable-goods report to January readings on national manufacturing activity and payrolls. Investors are split as to where the two-year-note yield, the most sensitive to policy changes, is headed. The battle between safety and value will persist, said Chris Sullivan, who oversees 1.3 billion as chief investment officer at the United Nations Federal Credit Union. Mr. Sullivan said the two-year note's rally last week -- which took the yield down to levels not seen since 2004 -- had more to do with risk aversion than with economic fundamentals. He has shifted out of shorter-dated notes into the five- and 10-year sectors.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983912","date":"2008-01-28","texts":"VIRGINIA SEN. Ken Cuccinelli II R-Fairfax has introduced a piece of immigrant-bashing legislation that is meant to ease the way for bosses to fire workers who don't speak English. But the bill is so closed-minded and foul-tempered that it is too much for Mr. Cuccinelli himself. It would victimize employees who fail to speak only English at the workplace, a formulation even the senator now allows is a bit harsh who knows, maybe his own ancestors were known to utter a phrase or two in their native Italian on the job. So he has decided to remove the word only from his bill. Nice, but it doesn't help. The senator, long regarded as among the more intolerant lawmakers in Richmond, has outdone himself. He says glibly that the bill responds to a growing problem of employees who are unfit for their jobs because they speak English poorly. The rub, he says, is that employers cannot fire them without risking higher taxes to pay unemployment benefits. His evidence Well, says the senator, an employer complained to him about it. And who was that employer Mr. Cuccinelli can't recall. The senator's porous memory notwithstanding, his legislation highlights a few pertinent facts about the immigration debate First, xenophobia. Despite their protestations, the anti-immigrant crowd tends to blur the line between legal and illegal immigrants and tar them with the same brush. Although Mr. Cuccinelli spent much of his campaign for the state Senate last fall bashing illegal immigrants, this bill would apply only to legal immigrants, since illegal immigrants are already ineligible for unemployment benefits. Second, overzealousness. Mr. Cuccinelli's bill rates poor English as an offense on a par with substance abuse, lying about past criminal convictions, missing work and committing infractions that cost an employer his business license -- all of them equal grounds for denying unemployment benefits to a fired worker. That's absurd on its face.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614824","date":"2008-01-29","texts":"Politics Globalization Fuels Anti-Immigrant Mood The backlash against illegal immigrants has deeper roots than the economic impact of immigration, writes John B. Judis in the New Republic. It reflects a broader anxiety over the health of the U.S. and the impact of globalization. In states such as Iowa and South Carolina, voters' concerns do reflect a sudden and recent rise in the immigrant population. But strong anti-immigrant backlashes are also occurring in states where immigrants are scarce. In New Hampshire, exit polls from the primary showed that 25 of Republican and independent voters considered immigration the most important issue the country faces. Yet the state ranks 42nd when it comes to the number of illegal immigrants living there, according to the Pew Hispanic Center, and only 2.2 of New Hampshire residents are Hispanic. In such states, Mr. Judis writes, immigrants have become the scapegoats for the economic anxieties brought by globalization. Those who feel the strongest about immigration are generally workers from the lower middle class without technical qualifications -- those whose livelihoods are most at risk from outsourcing. A poll last year found the statement immigrants take more from our country than they give garnered the most support among men between the ages of 30 and 39 without a college degree.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616116","date":"2008-02-01","texts":"Stocks fell as an initial burst of buying after the Federal Reserve's interest-rate cut wilted amid fears about the potential damage to banks such as Merrill Lynch, Citigroup and UBS from exposure to troubled bond insurers. The turnaround was due to a combination of technical resistance and rising fears about downgrades for bond insurers, said Lorenzo Di Mattia, manager of hedge fund Sibilla Global Fund. Downgrades would be devastating for banks, Mr. Di Mattia said. Fitch Ratings cut its credit ratings on one closely held bond guarantor, FGIC, a major player in municipal-bond insurance. Oppenheimer warned that credit-rating downgrades at major bond insurers could generate 40 billion in write-downs at banks in 2008. Oppenheimer said the write-downs would be concentrated at Merrill, which fell 1.38, or 2.4, to 56.09 Citigroup, which shed three cents to 27.88 and UBS, which declined 79 cents, or 1.8, to 42.26. Usually, shares of banks and lenders lead rate-cut rallies, because the more favorable borrowing rates allow them to turn a greater profit when lending out those borrowings. Not this time. Even shares of Lehman Brothers Holdings, which increased its quarterly dividend in what some saw as a show of strength as its rivals seek capital to shore up balance sheets, gained six cents to 62.59.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615960","date":"2008-02-04","texts":"Call it alphabet-and-numbers soup The exchange-traded-fund industry is about to launch a 13030 ETF. The product, from ProShare Advisors LLC of Bethesda, Md., represents a move by the ETF industry into an increasingly popular category of funds that bet on share-price declines as well as gains in a bid to juice returns. These so-called 13030 funds have been proliferating in the mutual-fund industry as small investors clamor for investment vehicles that resemble hedge funds, those largely unregulated investment pools for wealthy individuals and institutions. Some financial pros say ETFs, which are akin to index-based mutual funds but trade on exchanges like stocks, may offer one of the cheapest ways for small investors to get access to generally pricey hedge-fund tactics, which aim to create positive returns with low volatility regardless of what the stock market is doing. The reason ETFs are tax efficient and usually have lower expense ratios than conventional mutual funds because they are based on indexes, not actively managed by salaried stock pickers. The 13030 is the fastest growing, hot new thing in the market, says Matt Hougan, editor of IndexUniverse.com, a Web site dedicated to index-based investing. This fund, by packaging that strategy into a passive product and charging what I expect to be a relatively low expense ratio and making it available to advisers and retail investors, is pushing the ETF industry to the next level. In simplest terms, a 13030 fund invests 100 in stocks expected to increase in value. It borrows and sells 30 worth of shares expected to fall in price, with the aim of replacing those borrowed shares with stock bought later at a lower price. The proceeds from that so-called short sale are used to buy stocks thought to be undervalued, so the fund ends up investing 130 in stocks expected to rise in price and 30 in shares expected to fall. The goal of ProShare Advisors' planned 13030 ProShares ETF is to mimic the performance of a 13030 index, before fees and expenses. The fund's prospectus doesn't name the index the fund will track, give details on expected expenses or say when the fund will be available to investors, and the company declined to elaborate. The fund will use a mathematical approach to determine the quantity and mix of positions to hold to approximate the performance of its benchmark, the prospectus says. Credit Suisse Group, meanwhile, said at a panel discussion last week that it and an ETF provider plan to launch a 13030 ETF this spring based on an index it created. Credit Suisse declined to name the provider.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614526","date":"2008-02-05","texts":"Banks are tightening lending standards for businesses and consumers -- even beyond real-estate loans -- and companies' demand for credit has weakened, a new Federal Reserve survey of senior bank-loan officers shows. The January survey offers the hardest evidence yet that the credit crunch is spreading. Although banks also reported some tightening of lending requirements on credit cards and other consumer loans, commercial and industrial loans have been the most severely affected. One-third of the U.S. banks and about two-thirds of the foreign banks responding told the Fed they had tightened lending standards on commercial and industrial loans during the three months ended Jan. 31. About half the banks said they have widened the spread between their cost of funds and what they are charging borrowers. Bankers are becoming more cautious, said Keith Leggett, economist at the American Bankers Association in Washington, but also borrowers are getting more cautious. About a third of the banks participating in the survey reported weaker demand for commercial and industrial loans, while about one in 10 reported strong demand. Among those that saw a reduced appetite for loans, a decrease in customers' needs to finance inventories and investment in plant and equipment was cited frequently. Additionally, 70 of the respondents cited a drop in businesses' needs for merger- and-acquisition financing as a reason for lower demand.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615095","date":"2008-02-05","texts":"The two dozen Super Tuesday contests under way today stretched the campaigns of the front runners to their limits, although the day's voting still might not determine the presidential nominees. The first result of the day came in the Republican race, which hinges on whether Sen. John McCain of Arizona can improve his status from front runner to prohibitive favorite. In West Virginia's winner- takes-all contest, former Arkansas Gov. Mike Huckabee, with apparent support from McCain followers, nipped former Massachusetts Gov. Mitt Romney. The day emphasized some recent themes of the Republican primaries animosity between Mr. Romney and Mr. McCain, apparent amity between the Arizona senator and Mr. Huckabee, and Mr. McCain's unpopularity with some conservatives. At the caucuses, Mr. Romney crystallized his critique against Mr. McCain, without naming any names. One of the guys running for president the other day said the economy wasn't his strong suit, he said. Well it is my strong suit. After the West Virginia vote, Mr. Romney's campaign also accused Mr. McCain of cutting a backroom deal with Huckabee supporters. For his part, Mr. McCain expressed outrage at Mr. Romney's dismissal of fellow Republican Bob Dole, who sent a letter defending Mr. McCain from the vociferous attacks of conservative radio host Rush Limbaugh. Mr. Romney said Mr. Dole was probably the last person I would have wanted to have write a letter for me. Mr. McCain, for obvious reasons, felt otherwise. It's sad to see that comment about an American war hero who served our party so well, Mr. McCain said on his chartered plane before taking off from Newark, N.J., to California. In the Democratic campaign, Sens. Hillary Clinton and Barack Obama will be satisfied to claim a slight lead in their neck-and-neck race. Last night, Mrs. Clinton made two appearances on television, which the scope of Super Tuesday has made into an even more important tool than usual. She appeared in a town-hall broadcast on the Hallmark Channel and on the CBS Late Show with David Letterman. She planned to appear on local television stations in Super Tuesday states via satellite. One big question the day will help answer is who will inherit John Edwards's supporters now that he has withdrawn from the Democratic race. Mr. Obama kept up the pressure on Mrs. Clinton by speaking at a 15,000-strong rally in Connecticut, where he has eroded her considerable lead. The final polls close in Alaska and Montana at midnight EST, although that might not be the end of it. A third of the 24 states holding contests today allow voters to submit ballots days before election day itself. But the counting of those ballots often take longer, and the votes may be enough to sway a race. In California, as many as two million early ballots may not be tallied until Wednesday. ---","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981922","date":"2008-02-07","texts":"Wall Street pulled back for the third consecutive session Wednesday after a Federal Reserve official suggested that rising inflation could prevent the central bank from making further interest rate cuts. The Dow Jones industrial average fell 65.03, or 0.53 percent, to 12,200.10, after rising more than 100 points in trading. The Standard & Poor's 500-stock index fell 10.19, or 0.76 percent, to 1326.45, and the Nasdaq composite index fell 30.82, or 1.33 percent, to 2278.75. Although the economic slowdown is a big concern, we must not lose sight of the other part of the Fed's dual mandate -- which is price stability, Federal Reserve Bank of Philadelphia President Charles Plosser said, according to Dow Jones Newswires. The economy has been weakening but costs remain high, leading some economists to believe that the United States is headed for a troubling predicament known as stagflation. The speech, along with a disappointing sales report from Macy's, cut short a rebound from Tuesday's plunge that gave the Dow its biggest percentage drop since Feb. 27. The reminder about inflation also sapped some of Wall Street's relief over better-than-expected fourth-quarter productivity and labor cost data and profit results from Walt Disney Co. Stocks have been volatile lately, given the uncertainty in the market about whether a we're in a recession, how long it might last, how deep it might be and how it could affect profits.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614669","date":"2008-02-08","texts":"Natural-gas prices are poised for a drop. The bulk of winter heating season has passed, barely making a dent in domestic supplies in storage, which are 3.1 above the five-year average. Putting further pressure on prices are expectations that U.S. production as well as imports in the form of liquefied natural gas will increase this year. Natural gas for March delivery settled 10.8 cents, or 1.4, higher at 8.102 a million British units on the New York Mercantile Exchange yesterday following a report showing that U.S. inventories declined more than expected last week. Even so, gas-futures prices are expected to stay in the range of 7- 7.75 a million British thermal units during the next six weeks, until the official end of winter heating season. U.S. supply is going to be up big, said J. Marshall Adkins, a Houston-based analyst with Raymond James. We still think LNG will be up somewhat and a combination of those two things is going to drive summer storage levels higher than last year, leading to record levels of gas in storage.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617214","date":"2008-02-10","texts":"A house isn't a stock. To be sure, you probably don't regularly confuse the bricks and mortar you occupy with the investments listed on your brokerage statement. Yet thinking about the differences between the two helps explain why folks love owning real estate -- but also why some homeowners are in such trouble today. Here are five key ways that homes differ from stocks and stock mutual funds. 1 You don't know the price until you sell. With a few minutes of spare time and an Internet connection, you can find out the share price of every stock and stock fund you own. But you don't really know what your house is worth until a buyer makes an offer. This leaves ample room for mental mischief. You can happily imagine that your house is a wonderfully stable investment, because -- unlike your stocks -- you aren't receiving continuous price updates. You can also happily imagine that your home sports some grand valuation.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616874","date":"2008-02-11","texts":"A widening array of financial-market problems threatens to trigger a new phase in the global credit crunch, extending it beyond the risky mortgages that have cost banks and investors more than 100 billion in losses and helped push the U.S. economy toward recession. In the past few days, low-rated corporate loans -- the kind that fueled the buyout boom of recent years -- have plummeted in value. As a result, banks are expected to try to unload some of those loans this week at fire-sale prices. Nervous buyers also have retreated in recent days from the market for securities backed by student loans and municipal bonds, roiling some corners of the short-term money markets. Similarly, investors have recoiled from debt backed by commercial real estate, such as office buildings. Over the weekend, the world's top banking authorities warned that the U.S.-led economic slowdown and continued uncertainty about securities could lead banks to further reduce their lending, and choke off economic activity. One sign of investors' anxiety Standard & Poor's said its index of the prices on high-risk corporate loans fell to a record low of 86.28 cents on the dollar at the end of last week.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983629","date":"2008-02-11","texts":"I am sick of everyone blaming the breakdown in the credit and housing markets on subprime loans. Subprime loans were certainly part of the problem, but they are a symptom of a deeper issue. What's happening in the market today is not the bursting of a five-year bubble but the bursting of a 40-year bubble and the failure of the mortgage loan system to meet the needs of the marketplace. The truth is that subprime lenders, by responding to demand, were the finger in the dike for the whole housing market. The real problem is affordability and the incongruity between incomes and home pricing. Forty years ago, the median national price of a house was about twice the median household income. In some parts of the country, this ratio was closer to 1 to 1. Twenty years ago, the median home price was about three times income. In the past 10 years, it jumped to four times income. But in most major economic centers, typical families haven't been able to buy a home for anything near the national median price for decades. Try to find a single-family home in the D.C. area for the national median of 221,900. In the major markets, there is tremendous dependency on alternatives to the standard 30-year fixed-rate mortgage, which in turn has created a dependency on the least scrupulous mortgage companies and lenders. The issue of affordability is not news to the major players in real estate. Each month, lenders, developers and government agencies study the National Association of Realtors' Housing Affordability Index. This index provides a way to track whether housing is becoming more or less affordable for typical households nationwide it incorporates changes in key variables such as home prices, interest rates and incomes.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613807","date":"2008-02-12","texts":"WASHINGTON -- With the ink still wet on a 152 billion government economic-rescue plan, the White House rejected hints from Democrats that more emergency measures may be needed to keep the economy from entering a recession. President Bush is expected to sign the initial stimulus plan as early as tomorrow. The combination of tax rebates for individuals and investment incentives for businesses cleared both houses of Congress last week. It would also extend the reach of the Federal Housing Administration's home-loan program. We think that's an effective stimulus, Edward Lazear, chairman of the White House Council of Economic Advisers, said yesterday of the initial plan. We think it will have the desired effect. We still think that policy is appropriate, and we'd stick with that. Democratic lawmakers have suggested that they might push for further steps to accelerate economic growth and cushion the blow of a slowdown. Efforts could include an extension of unemployment benefits, an expansion of food stamps and an increase in federal spending on roads, bridges and other infrastructure. Economists believe that this legislation will make a real difference in mitigating our current downturn, Senate Majority Leader Harry Reid D., Nevada said of the initial plan. However, it is far from a panacea, and much more should be done to address our economy's longer-term problems.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615121","date":"2008-02-15","texts":"WASHINGTON -- Federal Reserve Chairman Ben Bernanke warned that intensifying credit and financial-market pressures are likely to restrain economic growth and left the door open for a sizable interest-rate cut next month. Mr. Bernanke, testifying at the Senate Banking Committee, said he expects sluggish growth in the economy and a somewhat stronger pace later in the year, thanks to rate cuts and fiscal stimulus. But he cautioned that housing and labor markets could deteriorate more than anticipated, emphasizing that downside risks to growth remain. Treasury Secretary Henry Paulson, at the same hearing, said the government's recent actions -- including the 168 billion economic- stimulus package and efforts to modify homeowners' mortgages -- would help soften the housing-market correction. But he warned that those programs alone will not be sufficient . . . . It's going to take time and some pain before we work through this. Mr. Paulson urged action on legislation to overhaul the Federal Housing Administration and government-sponsored Fannie Mae and Freddie Mac, and, in response to questions, said the administration is willing to consider other housing-related proposals. The Federal Reserve has slashed the target for its benchmark federal-funds rate to 3 from 5.25 last summer. Futures markets expect the Fed to lower interest rates half a point March 18. Traders put one-in-three odds on a three-quarter percentage point cut. The market odds remained largely unchanged yesterday by Mr. Bernanke's testimony. Mr. Bernanke, who is likely to elaborate on the Fed's views when he delivers his semiannual report to Congress later this month, said market worries about mortgage defaults and the ripple effects of bond insurers' woes are contributing to tighter lending standards. More- expensive and less-available credit seems likely to continue to be a source of restraint on economic growth, Mr. Bernanke said. Declining home values and a softening labor market -- along with higher energy costs and lower equity prices -- are likely to affect consumer spending, he added.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984994","date":"2008-02-16","texts":"In my last two articles, I examined the Federal Reserve Board's proposals for tightening mortgage underwriting requirements and for limiting mortgage broker charges to borrowers. These are long-standing regulatory concerns. In contrast, the Fed seems to have discovered mortgage servicing abuses only recently. The regulatory proposals are weak, but they are a good first step. One proposal would require that servicers credit payments on the days payments are received. Another would require servicers to provide accurate payoff statements within a reasonable time to borrowers who intend to pay off their loans. Both are fair, clear and not onerous for the lender. A third proposal would prohibit servicers from imposing late fees or delinquency charges when scheduled payments are received on time but do not include previous late charges. This rule would eliminate the practice of pyramiding late fees, in which servicers continue to charge late fees until all previous late fees have been paid. But the proposal does not cover a worse type of pyramiding. When a scheduled payment is received on time but the escrow payment is short, the practice is to place the entire payment in a suspense account, charge the borrower a late fee and send a delinquency notice to the credit bureaus.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614499","date":"2008-02-20","texts":"A combination of mortgage-related selling and concerns over upcoming inflation data sent U.S. Treasury prices sharply lower and yields higher. Selling was the most pronounced in the five-year sector, in part due to mortgage servicers paring holdings as they re-hedged in a higher- rate environment. Inflation fears ahead of the government's January consumer-price- index report due this morning and in the wake of yesterday's record increases in commodity prices helped drive bond prices lower. Crude-oil futures hit a record intraday level of 100.10 a barrel, rattling the government-bond market and equities. The benchmark 10- year note was down 2532 point, or 7.8125 per 1,000 face value, at 96 3032. Its yield rose to 3.875 from 3.780 Friday yields move inversely to prices. The 30-year bond was down 3032 point at 95 1632 to yield 4.655, up from 4.595. It's gotten ugly, said Carl Lantz, fixed-income strategist at Credit Suisse.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614088","date":"2008-02-21","texts":"The U.S. faces an unwelcome combination of looming recession and persistent inflation that is reviving angst about stagflation, a condition not seen since the 1970s. Inflation is rising. Yesterday the Labor Department said consumer prices in the U.S. jumped 0.4 in January and are up 4.3 over the past 12 months, near a 16-year high. Even stripping out sharply rising food and energy costs, prices rose 0.3 in January, driven by education, medical care, clothing and hotels. They are up by 2.5 from the previous year, a 10-month high. The same day brought a reminder of possible recession. The Federal Reserve disclosed that its policy makers lowered their forecast for economic growth this year to between 1.3 and 2, half a percentage point below the level of their previous forecast, in October. They blamed a further slowdown on the slump in housing prices, tighter lending standards and higher oil prices. They warned the economy's performance could fall short of even that lowered outlook. Stocks fell on the Labor Department's morning inflation report. But shares rallied after the afternoon release of the minutes of the Jan. 29-30 meeting of Fed policy makers and their latest forecast for the economy. That's because investors took the Fed's darker outlook on growth to mean that it intended to cut its short-term interest rate next month at its next scheduled meeting. A simultaneous rise in unemployment and inflation poses a dilemma for Fed Chairman Ben Bernanke. When the Fed wants to fight unemployment, it lowers interest rates. When it wants to damp inflation, it raises them. It's impossible to do both at the same time.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614938","date":"2008-02-21","texts":"Everyone seems to have a plan to fix the problems of Wall Street's struggling bond insurers. From Warren Buffett to state insurance regulators to stock market short sellers, the many rescue plans being floated around for MBIA Inc., Ambac Financial Group Inc. and FGIC Corp. offer variations on a similar theme. They want to separate the industry's safer business of insuring municipal bonds from the riskier business of covering securities backed by, among other things, subprime mortgages, in essence splitting the insurers in two, creating one good and one bad. Each plan, in turn, is fraught with complications and contradictions. The latest to offer up a plan yesterday was hedge-fund manager William Ackman, head of Pershing Square Capital Management LLC, who has long bet against bond insurers and their shareholders.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615638","date":"2008-02-21","texts":"Hospitals, schools, public utilities and other institutions that have issued auction-rate securities to raise cash are scrambling to get out of this troubled corner of the credit market. Valley Medical Center, in Renton, Wash., moved to retire 170 million in auction-rate securities by issuing tax-exempt, 30-year bonds that will price today. The Long Island Power Authority, or LIPA, is looking to get out of all of its 993 million in auction-rate debt during the next several months, possibly replacing at least some of it with long-term, fixed- rate bonds. The University of Pittsburgh Medical Center also stepped up efforts to exit the market with the help of funding from local banks. Other issuers, including the Port Authority of New York & New Jersey, New York's Battery Park City Authority and Brazos Higher Education Corp., said they were evaluating their options. We're looking to address this as quickly as we can, LIPA Chief Financial Officer Elizabeth McCarthy said in an interview. You've got to deal with the fact that the market seems to be pretty much going away.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617085","date":"2008-02-22","texts":"FDA Ruling Expected On Avastin Indication The FDA is expected to decide whether to add breast-cancer treatment to the approved uses of Genentech Inc.'s Avastin, an effort that has split the cancer community. An agency advisory committee voted against approval in December. Fed's Fisher to Speak PG&E Reports Results","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983487","date":"2008-02-22","texts":"The stock market finished with a sharp loss Thursday after bleak readings on the economy heightened investors' fears of recession. The Dow Jones industrial average fell 142.96, or 1.15 percent, to 12,284.30. The Standard & Poor's 500-stock index shed 17.50, or 1.29 percent, to 1342.53, and the Nasdaq composite index fell 27.32, or 1.17 percent, to 2299.78. Wall Street was disappointed when the Philadelphia Federal Reserve reported that regional manufacturing fell more than predicted. The Conference Board's January index of leading economic indicators posted its fourth consecutive drop. The biggest loser among the 30 Dow components was General Motors after lender GMAC, which is part-owned by GM, said it will slash hundreds of jobs at its auto-finance business. Investors have already been pricing in another interest rate cut after minutes from the Federal Reserve's last policy-setting meeting indicated that central bankers will remain vigilant about the economy. Bond prices moved sharply higher on expectations of a rate reduction. The yield on the 10-year Treasury note, which moves opposite its price, fell to 3.78 percent from 3.89 percent late Wednesday.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982088","date":"2008-02-23","texts":"Freddie Mac reported Thursday that rates on 30-year, fixed-rate mortgages averaged 6.04 percent this week, up from 5.72 percent last week. For the next six weeks, the rate fell below 6 percent as the markets reacted to slowing economic growth and rising risk of a recession by pushing interest rates lower. One-year, adjustable-rate mortgages are still about one-half percentage point lower than they were at the start of the year, reflecting the Federal Reserve's aggressive rate cuts in January engineered to combat the economic slowdown. As the spread between long-term fixed-rates and adjustable rates widens, it is possible we could see a slight increase in the popularity of adjustable-rate mortgages, said Frank E. Nothaft, chief economist at Freddie Mac. Rates on 15-year mortgages, a popular choice for refinancing, jumped up to 5.64 percent this week, compared with 5.25 percent last week. Rates on five-year, adjustable-rate mortgages rose to 5.37 percent from 5.19 percent.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984600","date":"2008-02-27","texts":"Tom Brown, chairman of the Ward 8 Workforce Development Council, has perfected an approach to attacking urban poverty He takes employers on a job tour in Southeast Washington neighborhoods to personally meet with unemployed residents. Since October, more than 100 residents have found jobs in the twice-monthly sessions at churches and community centers in the heart of the neighborhood. The goal is to employ 300 residents a year. The success of it is because of the intimacy of the setup, Brown said. It's straight talk between unemployed residents and employers. If the city is going to reduce the number of families living in poverty, then innovative methods, such as Brown's, must be used to address unemployment, substance abuse, affordable housing, health care and education, he and others gathered at the Matthews Memorial Baptist Church in Southeast said yesterday. Brown was one of 200 business and religious leaders, housing advocates and social services providers who participated in the Poverty Reduction Coalition hosted by D.C. Council member Marion Barry D-Ward 8.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982814","date":"2008-02-29","texts":"Senate Republicans yesterday blocked consideration of a bill designed to prop up the struggling housing industry, declaring that the Democratic-backed provisions would harm mortgage lenders and inflame the housing crisis. With a 48 to 46 vote, the Senate did not gain the 60 votes needed to halt a threatened filibuster on the housing package. The vote capped a week of parliamentary gridlock in the Senate, which spent nearly three days mired in an Iraq war debate without casting a substantive vote on the underlying bill mandating troop withdrawal. Democrats, stymied in their effort to curb President Bush's Iraq policies, had hoped to begin debate on the housing bill to address the public's anxiety over the economy, which has supplanted the war in recent polls as the issue of greatest concern. The housing proposal includes billions of dollars for local communities to buy up subprime mortgages and a controversial rewrite of bankruptcy laws to allow judges to slash interest rates for low-income homeowners. The mortgage industry has waged a stiff lobbying campaign against the bankruptcy provision. Democrats mocked Bush's statements at yesterday's news conference, where he urged giving the 168 billion stimulus package approved this month a chance to kick in first. That, to me, is straight out of the Herbert Hoover playbook, Senate Majority Whip Richard J. Durbin D-Ill. told reporters, adding that his bankruptcy measure would save family homes. Right now, there will be a question on the floor of the Senate as to whether the mortgage bankers are going to win or the American families facing foreclosure are going to win.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615275","date":"2008-03-03","texts":"During his final swing through Ohio before the state's primary tomorrow, Sen. Barack Obama has ramped up his attacks on predatory lending while muting his criticism of rival Sen. Hillary Clinton's proposal to freeze interest rates for five years on adjustable-rate mortgages. Sen. Obama's approach underscores the tricky balancing act he faces He has staked out a centrist position on the foreclosure crisis while he courts the voters in Ohio who have been hit hard by the foreclosure crisis. Sen. Clinton advocates a more interventionist approach that promises immediate action. The New York senator's plan would freeze foreclosures for 90 days to allow lenders to work out problems with borrowers, and she wants the loan-rate freeze for certain mortgages. David Axelrod, an Obama campaign strategist, has acknowledged the political resonance of the Clinton plan, particularly in cities like Cleveland, which has the sixth-highest foreclosure rate in the country. But the Obama campaign has criticized the Clinton proposal as one that would dry up credit and exacerbate the current economic pain. While Sen. Obama supports a foreclosure freeze, the Illinois senator hasn't made it an explicit part of his economic proposal. During a town hall in the Cleveland suburb of Parma Heights on Saturday, he suggested that the Bush administration's agreement last week with major lenders to freeze some foreclosures for 30 days was insufficient. We should give them the time that they need, he said. The candidates disagree sharply on whether interest rates should be frozen on adjustable-rate mortgages. While many of the adjustable-rate mortgages will reset this year, before a new president is sworn in, their stances spotlight more fundamental differences about how each candidate might approach the economy.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984245","date":"2008-03-04","texts":"The U.S. Treasury said yesterday that its mortgage-assistance initiative helped 45,000 distressed subprime homeowners get new loans in its first month, but a veteran mortgage banker who helps run the program said many of them may not receive long-term relief and could ultimately face higher total costs. While some borrowers stand to benefit from a temporary reduction in their interest rates, others may not, instead being given loans that just allow them more time to repay their debt, said Bill Longbrake, a senior policy adviser for the Financial Services Roundtable lobbying group and vice chairman of Washington Mutual. The latter group of delinquent homeowners could face additional charges and late fees for missing payments. Only a very small group of borrowers could get their mortgage principal reduced outright, he said. When the Bush administration announced the effort last year, officials said they were offering a long-term solution to a growing foreclosure crisis. The program, which is being run by a Treasury-brokered alliance of lenders and nonprofit groups that calls itself Hope Now, offers loan modifications to subprime mortgage holders whose interest rates have jumped in the past year, granting them a five-year rate freeze so they can work out new terms with their lenders. But financial firms have been reluctant to offer generous loan modifications because they have to consider the returns of the investors who buy mortgages and provide the crucial financial backing for the loans, Longbrake said. A mortgage servicer's obligation is to get the maximum value to the investor over the life of the loan, he said. If you are going to modify the loan and keep the borrower in the house, the bias is to do that for a shorter rather than longer period of time. . . . There's a reluctance to do long-term modifications.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614576","date":"2008-03-07","texts":"Banks that lent money to hedge funds and other big risk-takers are asking for some of it back, adding a new dimension to the financial crisis. As the value of mortgage-backed bonds and other investments fall, lenders are demanding that borrowers put up more cash or assets. The resulting selloff by investors is troubling policy makers. The number of homes entering foreclosure hit a record in the fourth quarter. Homeowners' share of the equity in their homes fell to 48. --- The Dow industrials fell 214.60 points, or 1.8, to 12040.39 amid escalating problems in the bond market. Crude rose 95 cents to a record 105.47 a barrel. A Carlyle fund defaulted on loans backing part of its portfolio of U.S. mortgage securities. S&P slashed its ratings on a KKR fund.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614772","date":"2008-03-08","texts":"U.S. employers shed 63,000 jobs last month, the most in five years, reinforcing a widening view that the U.S. is falling into recession. Among economists and politicians, the debate is shifting to how deep the downturn will be and how to ease it. The jobs dropoff came after the nation lost 22,000 jobs in January, the Labor Department said. In the past, such back-to-back monthly employment declines have occurred only around recessions. Coming amid continued turmoil in the financial and credit markets, the report sent stocks lower, with the Dow Jones Industrial Average falling 146.70 points Friday to close at 11,893.69. The index lost 3 for the full week. The big financial news of the day was that Thornburg Mortgage Inc., which has big holdings of mortgage-backed securities, warned it is at risk of going under. Carlyle Capital Corp., an Amsterdam-listed investment fund affiliated with private-equity giant Carlyle Group, reported a new wave of demands by lenders to put up more collateral. Easing the worries slightly, the Federal Reserve said it is stepping up efforts to restore credit markets to health by injecting cash into money markets and making larger direct loans to banks.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982021","date":"2008-03-08","texts":"The Federal Reserve took strong action yesterday to restore order to frazzled lending markets while a new report showing unexpected job losses underscored the toll that credit markets are taking on the economy. The world's financial plumbing is so clogged that the central bank sees a need for new steps to clean it out to prevent severe damage. Mounting panic in the credit markets is making it harder for Americans to get mortgages and is increasing the rates they must pay on credit cards and auto loans. Even solid businesses are finding it difficult to raise money to expand. The nation shed 63,000 jobs in February, the Labor Department reported, the second straight month of losses and the worst monthly decline since March 2003. The construction and manufacturing industries continued to shed positions, as they have for months, but the decline broadened to include big job cuts by retailers and temporary help services. Forecasters had expected a modest employment gain, and the weak numbers prompted many top economists to conclude that the U.S. economy is now in recession. You've now strung together three months in a row of private-sector job losses, said Stuart G. Hoffman, chief economist of PNC Financial Services Group. That doesn't happen unless you're in a recession.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616164","date":"2008-03-10","texts":"It's sink-or-swim time for the U.S. dollar against the euro. After sharp and steady declines that culminated in an all-time low for the dollar Friday, concerns are mounting that the currency may be at risk of a precipitous fall. The euro reached as high as 1.5465 Friday, nearly 10 U.S. cents higher than where it was just 30 days ago. Driving the move is a swarm of dollar-negative news that includes a likely U.S. recession, a worsening housing crunch, shrinking liquidity in credit markets and likely Federal Reserve interest-rate cuts. Markets are even buzzing about the possibility of intervention, in which the Fed or another central bank would step in to buy dollars. The Fed hasn't intervened to boost a sagging dollar since 1995. Analysts continue to say intervention is unlikely, although they no longer ruling it out. But Federal Reserve Chairman Ben Bernanke, for one, doesn't appear to be sweating too much over the dollar.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613702","date":"2008-03-14","texts":"In recent times, most economists have pretended that the economy is essentially predictable and understandable. Economic decision- and policy-making in the private and public sectors, the thinking goes, can be reduced to a science. Today we are seeing consequences of this conceit in the financial industries and central banking. Financial engineering and rule-based monetary policy, by considering uncertain knowledge to be certain knowledge, are taking us in a hazardous direction. Predictability was not always the economic fashion. In the 1920s, Frank Knight at the University of Chicago viewed the capitalist economy as shot through with unmeasurable risks, which he called uncertainty. John Maynard Keynes wrote of the consequences of Knightian uncertainty for rational action. Friedrich Hayek began a movement to bring key points of uncertainty theory into the macroeconomics of employment -- a modernist movement later resumed when Milton Friedman and I started the micro foundations of macro in the 1960s. In the 1970s, though, a new school of neo-neoclassical economists proposed that the market economy, though noisy, was basically predictable. All the risks in the economy, it was claimed, are driven by purely random shocks -- like coin throws -- subject to known probabilities, and not by innovations whose uncertain effects cannot be predicted. This model took hold in American economics and soon practitioners sought to apply it. Quantitative finance theory became a tool relied on by most banks and hedge funds. Policy rules based on this model were adopted at the Federal Reserve and other central banks.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616295","date":"2008-03-17","texts":"HONG KONG -- Asian markets tumbled in early trading Monday as investors reacted to the latest wave of bad news in the credit markets, after J.P. Morgan Chase & Co. agreed to buy Bear Stearns Cos. for 2 a share, and the U.S. Federal Reserve cut the discount rate by a quarter percentage point. In Tokyo, the Nikkei 225 Stock Average lost 4.2 to 11726.99, dropping below 12000 for the first time since August 2005. Shares of exporters were hit particularly hard, with Toyota Motor Corp. and electronics maker Hitachi Ltd. slumping early, and Mitsubishi UFJ Financial Group and other banks hit as well. The dollar weakened to its lowest level in more than 12 years, trading below 97 yen to the dollar. Hong Kong's Hang Seng index dropped 4.7 in the first 15 minutes of trading, to 21,189.85, while the Shanghai Composite fell 1.9 to 3889.19. Jing Ulrich, chairman of China equities for J.P. Morgan Securities here, noted that Asian markets are still closely tied to those in the U.S. The mainland Chinese markets are also under some pressure these days, because of oversupply of shares in the markets from recent IPOs and the release of locked-up state-owned shares, she said. The confluence of those factors is contributing to today's weakness in the Chinese markets.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616769","date":"2008-03-17","texts":"The dollar's relentless decline looks set to continue this week, when an expected interest-rate cut by the Federal Reserve will add to the forces arrayed against the sagging currency. Already under intense pressure from signs the U.S. is in recession and the crisis atmosphere in the U.S. financial sector, the dollar's fall last week through some significant psychological levels has intensified negative market sentiment. The euro breached 1.55 to hit another set of lifetime highs against the dollar. The U.S. currency on Friday traded below parity with the Swiss franc for the first time. It likewise is in full retreat versus the yen, falling below 100 yen to its lowest levels in nearly 13 years. This is the dark corner from which the dollar confronts the likelihood of another considerable Federal Reserve rate cut tomorrow that would only put it at a greater disadvantage against currencies from countries where rates are higher. That prospect has many wondering whether tomorrow's expected rate cut might not tip the dollar's deterioration into a disorderly rout, in turn requiring coordinated central-bank intervention to restore some two-way risk to the market.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614697","date":"2008-03-19","texts":"Stocks surged as the Fed cut short-term interest rates by three- quarters of a percentage point to 2.25 and Goldman Sachs and Lehman reported better-than-expected earnings. The central bank hinted at more cuts to come. The Dow industrials rose 420.41 points, or 3.5, to 12392.66 despite expectations that the Fed would lower rates by a full point. A1, C1, D1 Bonds fell after the Fed's move, pushing yields up sharply. Crude gained 3.74 to 109.42 a barrel. The dollar rose against rivals. C2, C9, C11 Bear Stearns's shares soared 23 on bets that J.P. Morgan will have to pay more to seal its deal for the firm, now valued at 339 million. C1 The FAA ordered special maintenance checks at every U.S. airline in the wake of safety lapses at Southwest. A3 Delta is cutting 2,000 jobs and paring domestic flights a further 5 under a plan to cope with rising fuel prices. A3","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616693","date":"2008-03-19","texts":"If the Federal Reserve hadn't arranged the sale of Bear Stearns and taken over responsibility for its most questionable securities, the company likely would have had only one avenue as it ran out of operating cash late last week bankruptcy. That bankruptcy would have been painful, sending new waves of distrust through the financial system and likely forcing Bear's counterparties to book reserves for losses. But even in a world of bad choices, there's always a worst choice. And the Fed, by being so quick to jettison the bankruptcy process, cut off a valuable source of new information to financial markets and blurred the critical distinction between sophisticated and unsophisticated investors. True, a Bear bankruptcy would be a mess. To get an idea, pull up one of the Enron bankruptcy spreadsheets from six years ago creditor after creditor listed on page after page, with amounts owed from a few hundred dollars to hundreds of millions each. A Bear bankruptcy would also have caused shocks through the financial system. Institutional investors would have to rethink whether or not they trust the party on the other side of each of their trades, particularly in the opaque derivatives market. Is the company good for the money Hedge funds, and other personal and institutional clients, would have to worry about who has actual custody of their accounts. And so, to avoid those shocks, the Fed has done something unprecedented. It has provided 30 billion in guarantees behind Bear's most complex, illiquid securities, so that the much larger and more secure J.P. Morgan Chase & Co. would be willing to buy the company for 2 a share.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985356","date":"2008-03-19","texts":"The Federal Reserve Board's rate cut yesterday increased the chances that months of Fed moves could start to trickle down to homeowners in time to ease the pain when adjustable-rate mortgages reset this year. And people who borrow money to pay tuition, buy cars or cover unpaid credit card bills might eventually see some benefit. But the Fed's action could also revive inflation, many economists fear. By reducing the interest rate financial institutions charge each other for short-term loans, the Fed makes money more readily and cheaply available. If it miscalculates, it can pump too much money into the economy, fueling excessive demand for goods, housing and capital spending -- and driving up prices. That would undermine Fed Chairman Ben S. Bernanke's long-cherished notion of setting a low, narrow and predictable target range for inflation. Through higher consumer prices, all Americans would effectively help pay for the rescue of the financial industry. The decline in housing prices might be tempered, but inflation would eat away at real housing values. The good news is that this will take pressure off of housing prices, said Kenneth Rogoff, an economics professor at Harvard University. The bad news is that it will be very painful to squeeze the inflation out of the system when this mess is all over. The threat of inflation was evident in commodity markets yesterday. Though at historically high levels, prices for corn and copper rose on the expectation that the Fed rate cut would breathe new life into the economy and avert a drop in demand. Oil prices jumped more than 3 in New York to 109.42 a barrel.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615620","date":"2008-03-21","texts":"Short-selling activity soared at the New York Stock Exchange in the first half of March. For the twice-monthly reporting period ended March 14, the number of short-selling positions not yet closed out at the Big Board -- so- called short interest -- jumped 7.04 to 16,009,687,994 shares, from 14,956,961,052 shares in late February. Marketwide, the short ratio, or number of days' average volume represented by short positions outstanding at the exchange, fell to 3.5 from four at the end of last period, as volume soared. The figures are based on trading in NYSE-listed names across all exchanges. Investors who short shares borrow and sell them, betting the price will fall and they will be able to buy the shares later at a lower price for return to the lender. In general, the higher the short interest, the more investors expect a downturn. Downdrafts tend to boost the value of short positions and embolden bearish investors. Recent volatility in the stock market, in particular among bank and financial shares, has benefited short sellers who placed well-timed bets on the right companies, said Harry Strunk, a principal at Treflie Capital Management in New York. Mr. Strunk surveys a group of short- only managers on a monthly basis the value of the average short- selling portfolio gained 12.5 in the first two months of 2008, compared with 18.4 for the first three months of 2001, according to Treflie data.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613997","date":"2008-03-26","texts":"New-Home Sales Seen Continuing Decline New-home sales are expected to have fallen further in February, to a seasonally adjusted annual rate of 575,000 from 588,000 in January, which was the lowest point since early 1995. Commerce Department., 10 a.m. EDT. Oracle Is Set to Report Growth in 3rd Quarter","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613774","date":"2008-03-27","texts":"For Democrats, 30 billion seems to be the magic number. It's the amount Sens. Barack Obama and Hillary Clinton both say is needed to stimulate the economy out of its doldrums. Coincidently, it was the financial backing that the Federal Reserve originally offered for the Bear Stearns deal, before trimming it by 1 billion. Sen. Obama laid out his economic plan today, and it helped sharpen policy differences between the two Democratic rivals, as well as Republican candidate John McCain. The stimulus prescription, it seems, is the political divider. Of course, both parties have already voted through a much larger 152 billion stimulus plan. That measure was designed to get people spending and businesses investing, however. The monies the two Democrats suggest adding to the pot would go toward battling the fallout from the housing crunch. Sen. Clinton's 30 billion would mostly go to help states and cities buy foreclosed properties. Mr. Obama has the same idea, but he would dedicate 10 billion of his stimulus to helping states head off cuts in services as tax revenues decline and to expanding unemployment insurance. On the Republican side, Sen. McCain has sworn off using government money for bailouts, although he backed the Bear Stearns deal as a fix to systemic financial problems. He also doesn't approve lowering the down-payment requirements for Federal Housing Authority-backed loans as a way to help low-income homeowners. On the contrary, he wants to raise them. Sens. Obama and Clinton can agree on very little these days, but they have united in dismissing Sen. McCain's policy as fiddling while Rome burns. Sen. Clinton revived her 3a.m. phone call image that she had used in an attack ad on Sen. Obama, and applied it to Sen. McCain The phone is ringing, and he would just let it ring and ring. In his speech, Mr. Obama said Sen. McCain's plan amounts to little more than watching this crisis happen. Sen. McCain struck back in a statement before Sen. Obama's speech had even ended. There is a tendency for liberals to seek big government programs that sock it to American taxpayers while failing to solve the very real problems we face, he said. Sen. McCain agrees with his opponents in some areas. Like them, he thinks mortgage companies should do more to help cash-strapped but creditworthy borrowers with their loans. --- Oil Pipeline Struck in Iraq","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614156","date":"2008-03-27","texts":"The euro hit a seven-session high against the dollar Wednesday as traders rewarded the common currency for its resistance to U.S. economic weakness. In New York, the euro rose intraday to 1.5833 from a low of 1.5585, extending a rally started after the release of strong euro- zone data that contrast sharply with U.S. fundamentals. The euro's been bid pretty much all day, said Adam Boyton, currency strategist at Deutsche Bank in New York. It's that combination of strength in European data, weakness in U.S. data, and the interest-rate differential continues to widen in favor of the euro. Official rates in the euro zone stand at 4 compared with 2.25 in the U.S. At 4 p.m. in New York, the euro was at 1.5832, from 1.5611 Tuesday, while the dollar was at 99.33 yen from 100.16 yen. The euro was at 157.27 yen from 156.36 yen. The British pound was at 2.0073, from 2.0010 Tuesday, and the dollar was at 0.9901 Swiss francs, from 1.0081.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616856","date":"2008-04-01","texts":"FRANKFURT -- Inflation in the euro zone rose sharply in March, pushing back expectations of a European Central Bank interest-rate cut even as economic sentiment softened and the bank pumped more funds into strained money markets. Inflation in the 15 countries that share the euro rose to 3.5 in March from a year earlier, up from 3.3 in February and the highest since the series began in January 1997. ECB policy makers have said rising food and energy prices will keep inflation above their preferred range of just less than 2 most of this year, but the March surge suggests inflation could stay higher longer than expected and spill over into wages and other prices. Investors and many analysts now expect the ECB to defer a rate cut until September at the earliest, rather than June, as previously anticipated. The inflation news looks a whole lot worse than we'd expected therefore, to get rate cuts as soon as June, the economic or financial situation has to deteriorate much more rapidly than we've seen, said Ken Wattret, an economist with BNP Paribas in London.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985551","date":"2008-04-03","texts":"Wall Street turned lower Wednesday as investors worried that a sharp jump in oil prices could be another sign that consumers are under stress in an economy that is showing signs of a recession. The major indicators, which spent most of the session in a tight trading range, tumbled after oil prices shot higher in response to the Energy Department's report of an unexpected jump in gasoline demand. The Dow Jones industrial average fell 48.53, or 0.38 percent, to 12,605.83 after changing direction several times. Broader market indicators also fell. The Standard & Poor's 500-stock index fell 2.65, or 0.19 percent, to 1367.53, while the Nasdaq composite index fell 1.35, or 0.06 percent, to 2361.40. The credit crisis and weak economy have sent stocks tumbling in the past six months. But the market had shown some renewed confidence that the worst of the credit problems might be behind Wall Street that upbeat sentiment sent stocks up nearly 400 points on Tuesday, the first day of the second quarter. Some of the pullback late Wednesday also was pinned on profit-taking after that big advance. Also Wednesday, Fed Chairman Ben S. Bernanke said he expected the economy to contract in the first half of the year -- a trend that would mean the United States is in a recession. Treasury bonds moved slightly lower as investors weighed Bernanke's testimony before Congress fixed-income investors were focused on hints from Bernanke that the central bank might be less aggressive about lowering interest rates. The 10-year Treasury note's yield, which moves opposite its price, rose to 3.6 percent.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613988","date":"2008-04-04","texts":"Yesterday Wall Street and the government's top financial regulators were in a place they'd rather not be Wrapped in a bear hug from Congress. Whatever the merits of the case for the Federal Reserve's decision to let J.P. Morgan buy Bear Stearns, the deal raised sufficient and legitimate questions of public interest to justify Senator Chris Dodd and his Senate Banking Committee brethren getting up close and personal with Ben Bernanke and the rest of the boys who did the deal. No one should expect Congress to regard this as a once- only date. Details that emerged from the hearing offered a better understanding of the high drama during the days of the sale. These particulars make us inclined to give the Fed the benefit of the doubt on doing the basic deal to forestall systemic risk. We remain unconvinced about the new precedent of the government holding 29 billion in mortgage- related securities as collateral. As described, the Fed learned from the Securities and Exchange Commission on Thursday evening March 13 that Bear would have to declare bankruptcy the next morning. That Thursday, according to SEC Chairman Chris Cox, Bear's liquidity dropped to 2 billion from 12 billion. That would focus anyone's mind. Bear's customers and counterparties were accelerating their refusal to deal with the bank. As Mr. Cox summarized Run isn't normally associated with investment banks, but the analogy is nearly complete. At the most basic level of justification -- that Bear's collapse posed a systemic risk to both the financial market and the broader economy -- the regulators made a plausible case for their actions that weekend. But once past this first-order goal, we find much in the testimony to merit concern. Exhibit A remains that mammoth guarantee by the Fed to finance billions in illiquid Bear assets. The best face we can put on this decision, based on what was said yesterday, is that the regulators considered the 30 billion to be chump change against the larger, immediate threat to the system. Then as a gesture of mitigation, J.P. Morgan took on the first billion of potential losses from the assets.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983889","date":"2008-04-06","texts":"When the stock market becomes erratic, as it has in the past year, investors tend to play it safe, fleeing to recession-proof sectors such as consumer staples and utilities. After all, who's willing to give up shampoo and electricity Shares of U.S. home builders rose 18.5 percent in the first quarter, according to Capital IQ, a division of Standard & Poor's. Residential REITs, essentially real estate mutual funds, were up 12 percent. Land subdividers and developers jumped 17 percent. By comparison, the S&P 500-stock index was down 9.9 percent. So what's with the rebound in industries tied to home building, the root of the economic crisis that has spread across the globe It's one of those things where you can probably come up with a million theories and none would be right, said Greg Fernandez, a financial planner with Nations Capital Wealth Management in McLean. Chris Hussey, managing director of Goldman Sachs's small- and mid-cap research group, offered one theory These stocks are down a lot, he said. Investors say to themselves, 'What didn't work out last year Maybe they'll do well this year.'  Recent government intervention has buoyed hopes of a recovery for the industry. Congress passed an economic stimulus plan. The Federal Reserve slashed a key interest rate. And last week, Senate Democratic and Republican leaders agreed on a package that would provide billions of dollars in tax rebates to home builders.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985511","date":"2008-04-08","texts":"The D.C. government has serious flaws in its handling of finances in the public schools, Medicaid and the Office of Tax and Revenue, according to an independent audit to be released tomorrow. In its recently completed Comprehensive Annual Financial Report, BDO Seidman cited each of those areas as a material weakness in the District's internal financial controls, according to city officials who were briefed yesterday. Overall, BDO auditors gave the city a clean audit for fiscal 2007, D.C. Chief Financial Officer Natwar M. Gandhi said. But the three material weakness citations -- the most serious level of concern below an unclean audit -- are part of a disturbing trend and could pose a threat to the city's good standing on Wall Street if the problems remain uncorrected. In the audit for fiscal 2006, only the school system's financial controls were cited for material weakness, and the District received no citations in the two previous years. Furthermore, the 2007 audit found six reportable conditions -- one step removed from a material weakness. Among the reportable conditions were problems with the city's handling of federal grant money, its payment of unemployment and disability compensation, its system for approving overtime pay and the financial management of two now-defunct planning agencies.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842614236","date":"2008-04-10","texts":"Consumer prices in the U.S., Europe and other rich countries are projected to rise 2.6 this year, the highest inflation rate since 1995, the International Monetary Fund said. After several years of quiescent inflation, a wave of rising prices is washing over the world economy. It comes at a most inconvenient time. The Federal Reserve is sharply cutting U.S. interest rates -- the opposite of the usual response to rising inflation -- to prevent the housing bust and credit crisis from causing a deep, prolonged recession. That is making the global response to inflation more complicated. Food and energy prices are big drivers of inflation Core inflation, a measure that excludes volatile food and energy prices, is currently lower than overall, or headline, inflation. But commodity-price gains are beginning to work their way through the global economy. Read Andrew Batson's article about rising inflation and the markets affected by the price increases. httponline.wsj.comarticleSB120778643316903397.html","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615656","date":"2008-04-10","texts":"Short-selling activity fell on the Nasdaq Stock Market in late March amid hopes Wall Street's credit crisis is nearing an end. For the twice-monthly reporting period ended March 31, the number of short-selling positions not yet closed out at Nasdaq -- called short interest -- fell 1.2 to 9,657,092,223, from 9,778,201,744 shares at midmonth. Investors who short shares borrow and sell them, betting the price will fall and they will be able to buy the shares later at a lower price for return to the lender. In general, the higher the short interest, the more investors expect a downturn. Downdrafts tend to boost the value of short positions. The short ratio, or number of days' average volume represented by short positions outstanding at the exchange, rose to 4.5 from 4.2. The Wall Street Journal uses average daily composite volume to calculate short ratios.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985149","date":"2008-04-13","texts":"To Pope Benedict, experts say, the U.S. Catholic Church is a bit like an adolescent young and unpredictable. There are bankrupt dioceses and empty seminaries -- yet tens of thousands of laypeople are stepping into the chasm to lead their churches. One of every 10 American Catholics has left the faith -- yet close to half of U.S. Catholics attend Mass at least monthly. Tens of thousands of traditional Catholics have clamored for tickets to the pope's Thursday Mass at Nationals Park, yet many more think he's too rigid -- or irrelevant. At the Vatican, there is an admiration for American religiosity, said Monsignor Lorenzo Albacete, a theologian. But there is a question whether American religiosity is strong enough. It appears to be, from the Vatican point of view, content-free, more spiritual high and emotion than a serious question as to what is true and what is not.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982182","date":"2008-04-15","texts":"Stocks finished a quiet session moderately lower Monday as investors waited for a raft of quarterly results and economic data later this week. The Dow Jones industrial average fell 23.36, or 0.19 percent, to 12,302.06. The Standard & Poor's 500-stock index fell 4.51, or 0.34 percent, to 1328.32, and the Nasdaq composite index fell 14.42, or 0.63 percent, to 2275.82. Wachovia surprised investors by posting a first-quarter loss of 350 million and cutting its quarterly dividend by 41 percent. The bank, which analysts had expected to post a profit, also said it plans to raise 7 billion through a stock offering. But investors appeared to find some encouragement from a better-than-expected report on retail sales. The Commerce Department's reading on March sales, which showed a modest 0.2 percent rise after February's 0.6 percent decline, appeared to quell some unease about the economy. Excluding a 1.1 percent rise at gasoline stations, though, retail sales would have been flat last month. Ryan Detrick, senior technical strategist at Schaeffer's Investment Research, said many investors are holding off on major moves ahead of corporate results and economic figures on inflation due later in the week.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615502","date":"2008-04-19","texts":"WASHINGTON -- The U.S. and South Korea agreed on a plan to lift the Asian nation's ban on American beef exports, removing a major impediment to action in Congress on a free-trade deal with South Korea, though significant hurdles remain. The agreement came amid South Korean President Lee Myung-bak's first formal visit to Washington since taking office two months ago and was the result of a furious round of negotiations this week among trade officials for both countries. Seizing on the breakthrough, the White House vowed to press anew for action on the landmark trade deal. U.S. Trade Representative Susan Schwab said the new protocol providing for renewal of beef trade will take effect in mid-May and will allow for a full reopening of the market. Under the agreement, all U.S. beef and beef products from cattle of all ages will be allowed to be exported to South Korea. Before the ban, South Korea was the third-biggest importer of U.S. beef, buying 790 million worth in 2003. Since then, it has relied on Australia as its main supplier. For cattle ranchers and beef producers, the reopening of the South Korean beef market is a very good shot in the arm, said feedlot operator J.D. Alexander, based in Pilger, Neb. American beef producers are struggling to remain profitable as prices for corn feed and fuel continue to soar, causing cattle ranchers to liquidate their herds at a rapid clip to keep costs under control. Gregg Doud, chief economist at the National Cattlemen's Beef Association, says South Korea's market could become the top beef customer for the U.S., potentially amounting to 1 billion annually.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614059","date":"2008-04-23","texts":"SHANGHAI -- Beijing's apparent failure to boost its sagging stock market means it might turn to more-drastic measures to lift share prices before the Summer Olympics, analysts say. In the second trading session since regulators moved to cool investor concerns by limiting big share sales, the benchmark Shanghai Composite Index rose 1 to end Tuesday at 3147.79. The index is still down 40 since the beginning of the year and has declined 49 since its mid-October record of 6124.04. The index fell below the 3000 mark Tuesday -- the first time since March 20, 2007 -- before recovering to positive territory by the close. If a stronger recovery continues to prove elusive, officials may decide to take more measures, like cutting a tax on stock transactions, analysts say. But the government might be gambling by doing so, as it attempts to straddle a line between stabilizing the markets and adding unneeded fuel to the economy and inflation.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617218","date":"2008-04-28","texts":"For the past three decades, finance has claimed a growing share of the U.S. stock market, profits and the overall economy. But the role of finance -- the businesses of borrowing, lending, investing and all the middlemen in between -- may be ebbing, a shift that would redefine the U.S. economy. The role of finance in the economy is going to come down significantly in the coming years, says Carlos Asilis, chief investment officer at Glovista Investments, a New Jersey money manager. From a societal standpoint, we got carried away with finance. The trend already has hurt companies beyond banks and Wall Street firms. General Electric Co.'s first-quarter profits at its financial- services businesses were 21 lower than a year earlier. Retailer Target Corp., which got 13 of its before-tax profit last year from credit cards, last month wrote off 55.5 million in credit-card loans, 8.1 of its total portfolio at an annualized rate. I think you're seeing a clear inflection point, says Tom Gallagher, an ISI Group analyst. Whether it's financials as a share of the stock market or financials as a share of GDP, we've peaked. Finance was lifted by deregulation, globalization and technological innovation. Combined, these forces allowed capital to flow far more freely around the globe, brought flexibility to the economy and made finance lucrative.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615262","date":"2008-05-01","texts":"The economy expanded slightly in the first quarter, but its faint pulse didn't allay concerns the U.S. is in or headed toward recession. The gross domestic product -- the nation's total output of goods and services -- increased at a 0.6 annual rate, the same as in the fourth quarter of 2007. But underlying data -- on consumer spending, business investment and construction -- paint a picture of a deteriorating economy, one that expanded only because of a rise in exports and a buildup of inventories. Excluding inventories, GDP shrank at a 0.2 pace, the first contraction in more than 16 years. Excluding inventories and exports, the economy contracted at a 0.4 rate after increasing 1.3 in the fourth quarter. It would be a grave mistake to interpret the GDP number as even suggesting the economic and financial crisis is over, said Bernard Baumohl, managing director of the Economic Outlook Group LLC. Clearly, this economy will remain in a recessionary environment for the rest of the year. Many economists said the economy is likely to contract this quarter. Morgan Stanley economists predict GDP will decline 2. Forecasters said the rebate checks being distributed by the government should help spur consumer spending, which accounts for more than two-thirds of GDP. But they disagree over how big the impact will be and whether it will occur this quarter or sometime in the second half.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614515","date":"2008-05-03","texts":"NEW YORK -- The dollar advanced sharply against several key rivals Friday after the U.S. Labor Department reported that the April unemployment rate fell to 5.0 and 20,000 jobs were lost, far fewer than expected. The euro declined by more than a full U.S. cent to 1.5360, its lowest level in more than a month. This comes a week after the currency climbed to a historical high of 1.6020. Also Friday, the dollar increased to its highest level since February against the yen. U.S. employment fell in April for the fourth-straight month, but at a much slower pace than previously, suggesting the economy may be starting to find its footing after several months of stagnation. The dollar took this as positive news. The underlying nonfarm number was way better than the average market expectations, especially as markets priced in room for even deeper disappointment just before the report's release, said Tom Fitzpatrick, global head of currency strategy at Citigroup in New York. The report will probably help the dollar in the short term. The data included a surprising decline in the jobless rate and supported expectations that the Federal Reserve will keep official interest rates steady for an extended period as it gauges the effect of past rate cuts and recent credit initiatives on financial markets and the economy.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615206","date":"2008-05-03","texts":"Employers cut jobs in April for the fourth month in a row, but the small size of the drop -- 20,000 jobs -- and a dip in the unemployment rate offered a tentative sign that the U.S. economy might be escaping a deep recession. Despite the better-than-expected news, the economy is not healthy. Car sales hit their lowest level in nearly a decade in April, while the fall in home prices is accelerating and consumers are feeling the pain of higher food and energy bills. The decline in the unemployment rate to 5 from 5.1 reflects an increase in part-time jobs. The number of workers with full-time jobs declined. The U.S. economy needs to add 100,000 jobs a month to keep up with population growth. You can't lose jobs on a continual basis and have the kind of growth in the economy that you want, said Lehman Brothers economist Drew Matus. He predicted shrinking payrolls for the rest of this year. Still, the decline in payrolls in April -- Wall Street forecasters had anticipated an 85,000 drop -- suggests the economic fallout from the housing bust and credit crunch that began last year may be less severe than had been widely assumed as recently as last week. The jobs report buoyed an already-rising stock market and strengthened the dollar. The Dow Jones Industrial Average, which fell below 12,000 in March, rose 48.20 points Friday, or 0.37, to close at 13,058.20.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981877","date":"2008-05-03","texts":"Federal Reserve Chairman Ben S. Bernanke said yesterday that the agency's effort to regulate the credit card industry by requiring better disclosure forms has fallen short and that certain practices have to be banned to protect consumers. Based on our review of consumers' response to the Board's recent regulatory initiative, it seems clear that improved disclosures alone cannot solve all of the problems consumers face in trying to manage their credit card accounts, he said. Bernanke's comments came during a meeting in which the Federal Reserve board unveiled its proposal to prohibit practices by credit card issuers that it deems unfair and deceptive. The Fed joined the Treasury's Office of Thrift Supervision, which regulates all federal and some state thrift institutions, and the National Credit Union Administration, which oversees credit unions, in drafting the proposed rules, which could be finalized by the end of the year. If they are instituted, they would constitute the most significant crackdown on the credit card industry in decades. The rules would, among other things, specify when card issuers can increase interest rates on existing balances, ban finance charges on balances that have been repaid, and prohibit late fees on customers who were not given a reasonable amount of time to pay. Consumers have long complained about such practices. The Fed responded last year with a proposal, still under consideration, to require card companies to improve disclosure forms.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615665","date":"2008-05-06","texts":"The dollar lost its footing Monday in New York and declined against its major rivals after a steady climb a week earlier. The U.S. currency fell to intraday lows against the euro and yen Monday as currency traders began to re-evaluate the broader economic picture, one week after sending the dollar to multiweek highs when the Federal Reserve signaled a pause in easing interest rates and the government released a better-than-expected jobs report. It's true that Friday's jobs data beat expectations, but it's equally true that the economic effects of the credit-market crunch and housing decline will be felt for some time to come, said Robert Lynch, currency strategist at HSBC in New York. The euro was also lifted against the dollar during the New York session by a surge in crude-oil prices Monday, which rose above 120 a barrel for the first time, to 120.36, settling at 119.97. That struck the Dow Jones Industrial Average, pushing the dollar down against the yen. Trading was thin Monday as markets in several countries were closed for holidays, including the United Kingdom and Japan.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982207","date":"2008-05-06","texts":"Wall Street pulled back Monday after Microsoft decided to withdraw its bid for Yahoo and oil prices rose to a new record, near 120 a barrel. The Dow Jones industrial average fell 88.66, or 0.68 percent, to 12,969.54. Broader stock indicators also declined. The Standard & Poor's 500-stock index fell 6.41, or 0.45 percent, to 1407.49, while the Nasdaq composite index fell 12.87, or 0.52 percent, to 2464.12. Microsoft had offered 47.5 billion to buy Yahoo but scrapped the bid late Saturday after the software maker and the Internet portal could not agree on a sale price. The failed deal came as a disappointment to Wall Street. The jump in oil prices raised concern that inflation could force consumers, who account for more than two-thirds of the economy, to cut their spending on discretionary items. Crude oil futures surged to a new trading high of 120.21 a barrel on the New York Mercantile Exchange before pulling back to settle at a record 119.97, up 3.65. The jump came after worries over supply disruptions in Nigeria, Iran and Iraq. Energy is a very important piece, said Russell Croft, portfolio manager at Croft Leominster Investment Management in Baltimore, referring to the mood of both investors and consumers. It's the price at the pump it's what people read about.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982969","date":"2008-05-07","texts":"It's an election year, and partisan acrimony has escalated. Democrats and Republicans portray themselves as the nation's saviors against all the programmatic atrocities of the other side. Can we find a refuge of common-sense agreement amid this self-serving political din Well, here's a proposal for the economy Enact a temporary extension of unemployment insurance from the standard 26 weeks to 39 weeks. The proposal's virtue is precisely its modesty. Benefits have been extended in every recession except one since the 1950s. Although most unemployed usually find new jobs within the normal six months, the task becomes harder in a slump. Perhaps 3 million people will exhaust their benefits this year, estimates the Congressional Budget Office. The cost of added protection is also modest about 13 billion for a proposal that recently passed the House Ways and Means Committee. True, it's not yet clear that we're even in a recession. In the first quarter of 2008, the economy's output of goods and services gross domestic product increased at a 0.6 percent annual rate. Though meager, that's still growth and suggests the economy doesn't meet one basic test for a recession -- two consecutive quarters of negative GDP. But that verdict comes with a big caveat The job market is already in retreat. Look at the numbers. Though the April unemployment rate of 5 percent is not historically high the average for the 1990s was 5.8 percent, it's way up from the recent low of 4.4 percent in October 2006. For much of 2007, the number of new jobs was actually increasing, though not fast enough to absorb all the new entrants into the labor force. Even this growth has halted, and the number of jobs has begun to decline. Since December, payroll employment has fallen by 260,000. How does employment decline in an economy that's expanding, even if feebly Easy. Weak companies fail or shrink the survivors don't hire more people to handle the extra business. Productivity a.k.a. efficiency improves. Fewer workers do more work. By many indicators, the job situation may get worse before it gets better.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983852","date":"2008-05-13","texts":"China's inflation climbed to almost a 12-year high in April, swamping official efforts to cool surging living costs that could provoke unrest before the Beijing Olympics. The government, which took further steps to tame the inflation, faces the possibility of more sharp price increases, some analysts warned. The government ordered banks to increase reserves for a fourth time this year in a move meant to contain inflation by curbing lending, but it did not say whether it would boost interest rates. April's consumer prices rose by 8.5 percent over a year earlier, the National Bureau of Statistics reported. That was above March's 8.3 percent rate and was below February's 8.7 percent -- the highest in 12 years. April's inflation was driven by a 22.1 percent jump in food prices. Chloride Group, Europe's largest maker of backup power supplies, rejected a preliminary 1.3 billion takeover approach from U.S. rival Emerson Electric. Chloride shares rose 35 percent. Chloride, a British company that specializes in maintaining uninterrupted power to information technology systems, said the preliminary approach of an all-cash offer of about 5 per share materially undervalued the company and its prospects.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983425","date":"2008-05-17","texts":"When Melissa Jenkins received her college diploma last year, she was ready to get on with life -- and move in with her parents. The 23-year-old from North Reading, Mass., was saddled with student loans from her years at Saint Anselm College in New Hampshire and felt she had no solid career prospects. It didn't make sense for me to move out on my own, she said. I didn't have the appropriate funds. I was searching for a career path. Nearly half of students graduating this spring are expected to move back home, said Susan Shaffer, co-author of Mom, Can I Move Back in With You A Survival Guide for Parents of Twentysomethings. Their number has remained pretty consistent since the dot-com bust, a result of financial and social pressures unknown to previous generations, she said. The economy isn't entirely to blame This year's job outlook is better than last's, according to the National Association of Colleges and Employers, with companies planning to hire 8 percent more recent graduates this year.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982453","date":"2008-05-19","texts":"Number of workers injured zero. Number dead zero. The factory's steel-reinforced walls shook but held during last week's massive earthquake. After it was over, the only evidence that something nightmarish had taken place in other parts of the city was the presence of minor fractures in pipes that were easily fixed. Yet the fertilizer factory hasn't been operational since the quake struck last Monday. It isn't a problem with supplies or machinery. It's the employees. People have a sense of panic and dare not go into the factory to work, said Zhang, a salesman at Shifang Anda Chemical Co., which exports most of its products to the United States and Europe. As the initial chaos of the disaster zones is being replaced by an eerily orderly rescue and cleanup effort by the military, China's leaders are turning their attention to the survivors and the economic consequences of fear. Many thousands in and around the quake's epicenter in Sichuan province are living in tent cities or on their lawns -- even though their houses are perfectly fine.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983813","date":"2008-05-24","texts":"Billionaire investor Kirk Kerkorian said he has added 100 million to his funds for buying shares of Ford Motor a day after the automaker abandoned its forecast that it will return to profitability next year. Kerkorian may borrow as much as 600 million from Bank of America, an increase from 500 million, according to a regulatory filing by his investment company, Tracinda. Tracinda said last month it bought 100 million shares, or 4.6 percent, and on May 9 it began an offer to buy 20 million more at 8.50 each. That would bring Kerkorian's Ford stake to 5.5 percent. He said Ford officials would be agreeable to meeting with him. Ford's board has taken a neutral stance on Tracinda's tender offer, which runs through June 9 unless it's extended. Investigators at Societe Generale said they suspect a former futures trader had help as he tried to cover up unauthorized positions that led to more than 7 billion worth of losses at the French bank. In two reports, investigators said the bank's management failures and culture of risk-taking were partly to blame for failing to uncover the alleged fraud. The trader's hierarchy, constituting the first level of control, proved deficient in the supervision of his activities, the board of directors said in a statement to shareholders accompanying the reports.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982708","date":"2008-05-31","texts":"-- Wall Street closed out a winning week with a mixed performance Friday after the government reported that consumer spending rose in April to keep pace with rising costs. The Dow Jones industrial average fell 7.90, or 0.06 percent, to 12,638.32. The Standard & Poor's 500-stock index added 2.12, or 0.15 percent, to 1400.38, and the Nasdaq composite index rose 14.34, or 0.57 percent, to 2522.66. For the week, the Dow rose 1.27 percent, the S&P 500 gained 1.78 percent, and the Nasdaq picked up 3.19 percent. Investors who sent stocks higher for three straight sessions turned cautious after the Commerce Department said personal spending rose 0.2 percent and personal income rose 0.2 percent last month. The department also said prices at the personal-spending level, after stripping out food and energy costs, ticked up 0.1 percent in April. The readings were in line with the market's expectations and supported the notion that high commodities costs are not yet causing a sharp pullback in spending or lifting prices for other goods. Meanwhile, the technology sector got a lift after the computer maker Dell and the chipmaker Marvell Technology Group posted stronger-than-expected quarterly results.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982846","date":"2008-05-31","texts":"Manufacturers gave up on this small town in Southside Virginia years ago. Textiles disappeared. Tobacco wilted. But scrappy little Danville refused to give up on itself. Last week, its determination paid off when Ikea celebrated the opening here of its first furniture factory in the United States. Ikea, a Swedish company that has about a dozen factories in Europe, said it chose Danville in part because of the large, skilled labor force eager to work after years of layoffs and downsizing. The city paved its entry with new facilities, secured permits and state tobacco commission grants. You have two choices here You can fold up and die, or you can get it together, said Anne Moore-Sparks, a project manager with the city's Office of Economic Development. They come in here, and they see we have all the players in place and we are hungry. The powerful global economic forces that swept away thousands of jobs over the past two decades are now working in Danville's favor. The weakening dollar has made the United States more attractive to foreign investors. Companies from England, Canada and India have recently opened operations or expanded in Danville. At the same time, skyrocketing oil prices have increased transportation costs. Shipping Ikea's popular Expedit bookshelves to the United States, for example, costs more than it does to make them, said Joseph Roth, the company's U.S. public affairs manager.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614713","date":"2008-06-04","texts":"Depressed consumer spending and the global credit crisis created a double-edged sword that drove more than 5,000 businesses into bankruptcy last month, marking a 25 increase since the start of the year. The 5,233 new commercial bankruptcy filings in May also represented a 46 increase from May 2007, according to data from Automated Access to Court Electronic Records, or AACER. The filings include businesses seeking to reorganize under Chapter 11 of the U.S. Bankruptcy Code as well as companies that are liquidating their assets under Chapter 7. The increase is driven by the credit crisis, which started shortly after May 2007, said Stephen J. Lubben, a bankruptcy-law professor at Seton Hall University in Newark, N.J. Last summer, credit began tightening and it's remained tight ever since, so firms are not able to refinance their way out of trouble anymore. More than 8,700 businesses filed for bankruptcy during the first quarter of 2008, according to new federal court data released Tuesday. The 8,713 new filings represented an increase of nearly 39 from the 6,280 companies that filed in the first three months in 2007, the Administrative Office of the U.S. Courts said. Among the more than 5,000 businesses that sought bankruptcy protection last month were home-products retailer Linens 'n Things Inc. and restaurant chain Steakhouse Partners Inc., which joined an expanding list of distressed businesses such as electronic-gadget seller Sharper Image Corp. that depend on consumer spending.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982709","date":"2008-06-04","texts":"Prices have been soaring long enough and fast enough, economists say, that the nation is at risk of a self-reinforcing cycle of inflation like that experienced in the 1970s. It is a risk Federal Reserve Chairman Ben S. Bernanke highlighted in a speech yesterday, saying that the falling value of the dollar can feed into inflation expectations, and that rapid price escalation, if sustained, might lead the public to expect higher long-term inflation rates, an expectation that ultimately could become self-confirming. For some businesses that already is the reality. Many companies making long-term investments are assuming that prices will rise at a pace well above that of the past 20 years, as they pencil in larger price increases for the supplies they buy and the prices they charge. Consumers are coming to take rapidly escalating food and energy prices for granted. And labor unions are starting to push harder for across-the-board wage increases, though overall wages are still climbing slowly. U.S. consumers expect prices to rise 7.7 percent in the coming year, according to the Conference Board, a research company. Investors expect inflation over the coming decade to average 3.4 percent based on bond market data analyzed by the Cleveland Fed. That is well above the Fed's unofficial target of about 2 percent. When the price of food or gasoline goes up, economists generally think of it as a one-time bump. For the past four years, it hasn't been. The last time there were sharp and sustained increases in those prices, in the 1970s, a wage and price spiral developed that was so severe that the Fed had to engineer the deepest downturn since the Great Depression to end it.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617027","date":"2008-06-06","texts":"Small-cap consumer stocks climbed Thursday on some better-than- expected May sales reports, offsetting renewed concerns surrounding a return of rising oil prices. Also helping stocks was a surprising drop in the number of jobless claims last week, as the number of U.S. workers filing new claims for unemployment benefits fell to a six-week low, signaling some improvement in labor-market conditions ahead of Friday's employment report for May. As a result, key small-cap indexes closed at highs for 2008. Leading the way for consumer stocks was teen retailer Buckle, which continues to report outsize increases. The company posted a 35 increase in May same-store sales in the first four months of the year, the lowest growth was January's 19. Buckle ended the day up 1.72, or 3.7, at 48.57 on the New York Stock Exchange. Among other small-cap retailers posting better-than-expected May same-store sales, Cache rose 1.89, or 15, to 14.59, while Hot Topic increased 89 cents, or 17, to 6.16. The Russell 2000 index of small-capitalization stocks climbed 19.56 points, or 2.63, to 763.27, and the Standard & Poor's SmallCap 600 rose 9.34 points, or 2.38, to 402.07, marking their biggest one-day gains since April 16. Both closed at their highest points this year. The biggest one-day dollar increase in crude oil traded on the New York Mercantile Exchange did little to stop the momentum of consumer stocks, while driving several energy names higher. Within that sector, Swift Energy NYSE gained 3.66, or 6.4, to 60.80.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614259","date":"2008-06-10","texts":"The worries that drove the stock market to steep losses last week persisted, sending financial stocks sharply lower, though gains by a few large blue-chip companies contributed to a mixed finish for major indexes. The Dow Jones Industrial Average rose 70.51 points to 12280.32, a modest comeback from the previous session's nearly 395-point drop. Among its components, Alcoa was the biggest riser, up 7.5 on speculation that it might be a takeover target. McDonald's rose 4.1 after reporting strong sales for May. Developments at big financial firms overshadowed any good news. Lehman Brothers slid 8.7 after it projected a second-quarter net loss of about 2.8 billion and announced plans to raise 6 billion in new capital. The capital raising was anticipated, but the amount was above most expectations. It was a reminder that credit concerns continue to stalk Wall Street giants and a deteriorating economic environment could compound pressures facing the nation's leading financial institutions. Dow component J.P. Morgan Chase fell 6.4. There's probably another shoe to drop, said Dave Rovelli, head trader at Canaccord Adams. It's impossible to quantify because nobody knows what these financials have in their books -- even these financials don't understand what they have.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615774","date":"2008-06-11","texts":"Most U.S. stocks fell because of inflation fears, although one beneficiary of a weak dollar -- Coca-Cola Co. -- helped the Dow Jones Industrial Average hold its head above water. On top of the long-running worries about gasoline prices, a weakening labor market and the credit crisis, markets are now absorbing the impact of the commodity boom and inflation world-wide. Riots and protests over the cost of rice and fuel have erupted around the globe, most recently in Cameroon and Spain. Federal Reserve Chairman Ben Bernanke warned the surge in oil prices had increased risks of inflation. Oil's a tremendous pressure on economic activity generally. That, plus the fact that it's starting to feed into the consumer-price index globally, puts you in the worst-of-all-possible-worlds situation, said a veteran trader at a midsize Wall Street firm. I mean, we're talking 1972, 1973 here, he added, referring to a prior era of stagflation. Shares of Coke rose 2.15, or 3.9, to 58.01 after Deutsche Bank raised its rating on the beverage maker to buy from hold, saying the depressed dollar and emerging-market growth will help its exports. The Beijing Olympics likely will help sales in China, the broker added. The second-best percentage gainer on the Dow was Citigroup, which rose 66 cents, or 3.4, to 20.26. American International Group added 79 cents, or 2.4, to 34.28.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615824","date":"2008-06-11","texts":"Rarely do senators become president, but in less than five months either John McCain or Barack Obama will become the 44th president of the United States. That's change, and that's interesting. It's also what everyone seems to want -- change. Sen. Obama promises to provide Change We Can Believe In. Sen. McCain suggests that the choice is between the right change and the wrong change. If it's the war that is the focus of all this talk about change, well, that's understandable, and maybe people really do want change. But if it's the economy, it's hard to imagine that change could happen any faster. In fact, the U.S. economy really, the global economy is transforming at an absolutely astounding rate. We're living in Internet Time, where policies and their consequences travel the world at the speed of light. The normal human reaction to such a rapid pace of change is to be overwhelmed, stressed out, anxious and fearful. As a result, it is probably true that when voters listen to talk about change, what they really hear are promises of no change, which would be a huge difference from the status quo. They just want things the way they were. Look at the chart nearby See accompanying illustration -- WSJ June 11, 2008. America's manufacturing output, as measured by the Federal Reserve, is up seven-fold since 1950, but manufacturing jobs as a share of all jobs have fallen to 10 from 30. Your grandfather and father may have worked for General Motors and joined the UAW, but it's likely that you don't and won't. The problem, if it really is one, is not foreign competition or evil financiers. It is technology and productivity. In the 10 years ending in 2007, durable goods manufacturing productivity averaged an annual growth rate of 4.8. In other words, if real growth is less than 4.8, the sector needs fewer workers year after year.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614018","date":"2008-06-12","texts":"Following her broker's advice, Cecilia Walsh put her entire 375,000 divorce settlement into auction-rate securities last December, planning on using the money for her day-to-day needs. Yet before she ever withdrew a penny from the account, the auction- rate-debt market froze up, and Ms. Walsh, a 47-year-old actor in Delray Beach, Fla., was unable to withdraw any of her money. Her broker, UBS AG, gave her a margin loan secured by her account so that Ms. Walsh could pay her living expenses. But UBS later marked down the value of the securities in her account and has demanded that she repay part of the loan. In the four months since auction-rate securities stopped trading normally, investors like Ms. Walsh have been taking out loans, selling their securities at big discounts, filing arbitration cases against their brokers, or simply waiting and hoping that the market will start functioning again. The one thing they haven't found is an easy way to get their money back. For decades, individuals and companies bought auction-rate debt from municipalities, charitable organizations, student lenders and closed- end mutual funds. The securities had long-term maturities but functioned like a short-term investment, paying interest rates that were reset in weekly or monthly auctions conducted by Wall Street firms. Brokerage firms and financial advisers pitched them to investors as a safe place to stash one's cash and collect a higher yield than a money-market fund offered, often tax-free. As a result, the 330 billion auction-rate securities market attracted many investors who were risk-averse or, like Ms. Walsh, knew they would need the money in the near future. But beginning in February, as the subprime-lending crisis spread to affect nearly all areas of the credit markets, auctions failed to attract sufficient bidders. Wall Street firms stopped supporting the market, causing it to freeze up and blindsiding thousands of small investors.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984700","date":"2008-06-13","texts":"There, in the Ritz-Carlton ballroom Monday, stood Vernon Jordan -- the political insider, corporate networker and financial rainmaker, tall and impeccably turned out -- presiding over his last meeting as head of the Economic Club of Washington. During his four-year tenure, Jordan had used his incomparable connections to bring the heads of J.P. Morgan Chase, Kohlberg Kravis Roberts, American Express, Pfizer and General Electric, along with the secretary of the Treasury, the chairman of the Federal Reserve and the president of the United States, to speak to 400 of the city's top business executives. Now, for his final act, Jordan had reached beyond the Old Economy establishment and snared the chief executive of Google, the hottest company on the planet. Jordan had met Eric Schmidt the year before at Bilderberg, the super-secret gathering that falls between Davos and Bohemian Grove on the calendars of the global elite. By the end of that three-day meeting in Istanbul, Jordan had snared his final speaker. Depending on your point of view, Jordan represents everything that is right or wrong with Washington. To the cynical and conspiratorial, Jordan epitomizes the clubby and back-scratching Washington power broker, an amoral fixer who uses his web of connections to enrich himself and his clients while corrupting the political process.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982897","date":"2008-06-16","texts":"Last month the Wall Street Journal accused me of advocating subsidies for food-based ethanol. I ought to take a vow of embarrassed silence, it said, for claiming that ethanol's contribution to the food crisis is overblown. The Journal's claims would be laughable if the stakes were not so high. Cellulosic biofuels offer a chance to have an environmentally meaningful impact on petroleum use while benefiting farmers, entrepreneurs and consumers. I have many investments in biofuels companies. Some say I believe in biofuels because I have invested in them. The truth is that I invest in biofuels because I believe they can help our environment, economy and national security. Just as the word drug can refer to aspirin or cocaine, biofuel refers to a variety of products that vary dramatically in their environmental impact and effects on food prices. For instance, biodiesel from food oils such as soybean or palm oil has traditionally created environmental negatives. But corn ethanol has been a stepping stone to cellulosic ethanol, a preferred alternative that is likely to achieve unsubsidized market competitiveness with oil within a few years. We face an energy crisis, an environmental crisis and a terrorism crisis all related to oil. High-cost options to reduce consumption, such as hybrid and electric cars, sound good but are unlikely to materially reduce carbon emissions. To have a meaningful impact, at least half of the next billion cars manufactured on this planet must be low-carbon. The only cost-effective option measured in cost per ton of carbon emissions avoided or grams of carbon emissions per mile driven likely to achieve broad market acceptance in the next 20 years is cellulosic-fuel cars. Unfortunately, biofuels are the target of interested parties' paid campaigns. The Grocery Manufacturers Association, for example, is waging a multimillion-dollar campaign against ethanol the American Petroleum Institute is more concerned about food prices than oil prices. Slogans about how much corn and water are required to produce a gallon of ethanol are repeated frequently. In fact, a 16-ounce steak takes about the same amount of corn and more water. Should we ban steaks, too Similarly, hybrid cars are hyped, but we seldom hear that they reduce carbon emissions about as much as corn ethanol, and at a cost that is substantially higher than flex-fuel cars.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614347","date":"2008-06-25","texts":"The Federal Reserve stood pat on interest rates Wednesday, but it was hardly out of complacency. Caught between heightened inflation fears and persistent concerns about a sluggish economy, Ben Bernanke and his fellow policy makers decided to leave the Fed's key short-term interest rate unchanged at 2. The non-move marked the end of a series of rate cuts dating back to last summer, when credit woes were creeping up on the economy. The latest vote was 9-1, with Richard Fisher, president of the Federal Reserve Bank of Dallas, once again dissenting, this time opting for a rate increase. And, indeed, recent comments from Fed personages -- including Wednesday's commentary -- suggest the bank's next rate move will be upward. Although downside risks to growth remain, they appear to have diminished somewhat, and the upside risks to inflation and inflation expectations have increased, the Fed said in its statement. The bank is in a bit of a pickle. Reporter Sudeep Reddy writes that Fed officials are trying to avoid rate increases for now to avoid exacerbating the weakness in employment, financial markets and the housing sector. At the same time, they are trying to signal they're serious about fighting inflation by talking about the risks of rising inflation expectations and suggesting a willingness to act quickly if inflation expectations get out of hand. Assuming commodity prices don't go completely haywire, some economists think that won't happen, as the weakening economy, particularly the rising unemployment rate, restrain wages and a willingness to spend. Indeed, Joseph Brusuelas of Merk Investments thinks a rate increase won't be happening anytime soon. We anticipate that the rate hike currently priced in by markets for September will wither away in the heat of the summer slowdown in the economy, he said. Likewise, PNC economist Stuart Hoffman, while now more convinced that the Fed's next move will be an increase, sees the federal-funds rate holding at 2 until late 2008 or early 2009. --- Stocks Inch Up The Federal Reserve's announcement gave the Dow Jones Industrial Average a quick boost, but in the end the blue-chip gauge was ahead only 4.40 points, or 0.04, at 11811.83. Meanwhile, the S&P 500 rose 0.6, or 7.68, to 1321.97 and the technology-heavy Nasdaq Composite Index gained 1.4, or 32.98, to 2401.26. Crude-oil futures fell 2.45, or 1.8, to 134.55 a barrel in New York. The dollar weakened against other major currencies.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613929","date":"2008-07-05","texts":"WHEATON, Md. -- In another sign of the harsh toll being exacted by the economic downturn, the number of Americans unemployed for six months or more has risen sharply over the past year and is likely to increase even more. The number of people unemployed for at least 26 weeks has risen to 1.6 million -- up 37 in the past year. That is almost double the percentage increase for the overall unemployed, according to a Labor Department report released Thursday. More than 18 of the unemployed have been looking for work for more than half a year, compared with about 11 at the start of the 2001 recession. If the economic downturn continues, There's going to be greater pain hitting more people . . . than certainly happened in 2000, said Rebecca Blank, a Brookings Institution scholar who studies unemployment. One reason A combination of long-term and short-term economic changes is making new jobs harder to find and employers more reluctant to hire. Almost every day, Tenille Barratsingh, a 28-year-old Silver Spring, Md., resident who lost her job as a senior bank teller in January, visits a crowded state-run employment-assistance center here in suburban Washington. Ms. Barratsingh, who spends hours at the center sending faxes and emails and checking Internet postings, figures she has applied for more than a thousand jobs. It's really frustrating to go through this phase when you wake up in the morning and you're like, 'I'm not going to work, I'm going to look for a job,' she said. People say, 'Take anything you can.' But if nothing's coming at you, then you're stuck in a rut.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616845","date":"2008-07-05","texts":"KENT SNYDER 1959-2008 His Efforts Fueled Ron Paul's Campaign As the driving force behind Ron Paul's presidential bid, campaign chairman Kent Snyder turned his one-man operation into a national grass-roots phenomenon that now calls itself The Freedom Movement. It began in February 2007 with a personal computer in Mr. Snyder's Arlington, Va., apartment. It ultimately became a 35 million operation with 250 employees that helped deliver more than one million votes for the Texas congressman's bid in the Republican nominating contest. It was Kent more than anyone else who encouraged and pushed Ron to run for president, said Jesse Benton, a spokesman for Mr. Paul. Ron would not have run for the presidency if it had not been for Kent. Ron was really hesitant, but Kent drove him forward.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985291","date":"2008-07-06","texts":"The Securities and Exchange Commission has proposed a new rule that might have passed you by. I'm alerting you here because it speaks volumes about where trading is going in the United States. For many, it offers new opportunities. We'll also be importing new risks, in the future, that we may regret. The proposal allows overseas broker-dealers to solicit business directly from U.S. clients -- individuals as well as institutions -- with 25 million or more to invest. That's down from 100 million under the current rule. Any broker-dealer will be able to join the fray as long as it's regulated by a securities administrator in its home country. The broker-dealers won't have to register with the SEC and won't be regulated for net capital and other requirements under U.S. rules. They will be able to pitch any debt, equity and derivative security listed on their home exchanges, even though those securities aren't registered with the SEC. Before you say, That has nothing to do with me and scroll on, note the implications The door is opening to more direct global trading. This first step simplifies cross-border selling and reduces costs for large investors who are already trading abroad. Smaller U.S. broker-dealers will be able to open electronic windows to world investing for larger clients. In the background, however, something is happening that we need to think about. We're injecting other countries' accounting, disclosure and regulatory standards into our system, on the theory that they are good enough, although generally not as rigorous as our own. It's an unstated form of financial deregulation that Wall Street has been pushing for some time and has strong support in the SEC.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614763","date":"2008-07-08","texts":"NEW YORK -- Natural-gas futures made their biggest single-day drop since March 17 as crude oil slid from record highs and the first named hurricane of 2008 season tracked away from the U.S. Gulf of Mexico. Natural gas for August delivery on the New York Mercantile Exchange settled floor trade down 60 cents, or 4.4, at 12.977 per million British thermal units after hitting a low of 12.874 per million BTUs in combined electronic and floor trade. A lot of this is a sympathetic overflow from the oil complex, said Jim Ritterbusch, president of trading-advisory firm Ritterbusch & Associates. Crude oil settled down 3.92, or 2.7, at 141.37 a barrel, amid strength in the dollar and a possible easing in tensions over Iran's nuclear program. Oil's fall also coincided with a drop in the stock market, with the Dow Jones Industrial Average down more than 100 points at the 230 p.m. EDT close of the Nymex pit session. Oil and natural-gas traders took long positions last week ahead of the July 4th holiday weekend, expecting prices to continue their climb, said Tim Evans, an energy analyst at Citi Futures Perspective in New York. That sparked a selloff Monday, as the notion of downside risk re-emerged in the market, he added.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615204","date":"2008-07-09","texts":"Federal prosecutors, ramping up criminal probes stemming from the credit crunch, are investigating whether two former Credit Suisse Group brokers lied to investors about how they placed their money into short-term securities, according to people familiar with the matter. At issue is the 330 billion market for auction rate securities, which allow issuers such as municipalities and student loan companies, closed-end mutual funds or financial institutions to borrow money for the long term but at short-term, or lower, interest rates. Weekly or monthly auctions conducted by Wall Street firms reset those rates, but the market seized last February. When the auctions failed, investors were left without the ability to sell such securities. The investigation, by the Justice Department's U.S. attorney's office for New York's Eastern District, represents the first known criminal matter stemming from the crumbling auction-rate securities market. The rout in this market has punished thousands of U.S. investors, who are now stuck paying high penalty rates, and it has raised questions about whether Wall Street firms adequately disclosed the risks in such auctions. Until now, the fallout largely has been a civil-litigation headache for Wall Street firms and others, who have been hit with lawsuits seeking class-action status and more than 80 individual arbitration claims, according to the Financial Industry Regulatory Authority, a Wall Street self-regulatory organization.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615790","date":"2008-07-09","texts":"Stocks pushed higher Tuesday, as crude oil sold off for a second straight day and comments from government officials eased investors' worries about financial stocks. The Dow Jones Industrial Average ended 152.25 points, or 1.4, higher at 11384.21, helped by sizable gains in all its financial components. Bank of America jumped 9.3, Citigroup rose more than 6 and J.P. Morgan Chase was up more than 5. In separate speeches, Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson spoke about plans to resolve the broader economic and financial woes that helped drive major market indexes to bear-market levels and damaged the earnings of many financial institutions. James Lockhart, head of the Office of Federal Housing Enterprise Oversight, said it is unlikely that government-sponsored mortgage companies Fannie Mae and Freddie Mac will be forced to raise more capital due to an impending change in accounting rules. Fannie shares gained 12, and Freddie was up 13. Shares of bond insurers and regional banks rose strongly. MBIA shot up 22, and Ambac Financial Group soared 53. First Horizon National rose 14 and SunTrust Banks rallied 11.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982392","date":"2008-07-13","texts":"Nearly three out of five middle-class retirees will probably run out of money if they maintain their pre-retirement lifestyles, a new study from Ernst & Young has concluded. The study, set to be released tomorrow, finds that Americans will have to drastically reduce their standard of living before retirement to live comfortably, or even avoid destitution, later in life. Middle-income Americans entering retirement now will have to reduce their standard of living by an average of 24 percent to minimize their chances of outliving their financial assets, the study found. Workers seven years from retirement will have to cut their spending by even more -- 37 percent. People are going to have to adapt in a number of ways that they weren't anticipating or hoping for, said Tom Neubig, national director of the Quantitative Economics and Statistics practice at Ernst & Young. I think a lot of people are hoping to maintain roughly the same standard of living after retirement. Our study suggests they are going to have to make some changes. About 77 million baby boomers are expected to retire over the next few years. The study warns of an impending national crisis if workers, and lawmakers, do not react now to the changing pension structures in corporate America. Most companies have moved away from defined-benefit plans, in which they provided their retirees with a set benefit each month, to defined-contribution plans such as 401ks, in which the employee takes most of the responsibility for saving money. But with the U.S. savings rate abysmally low and people underestimating their life spans, economists warn that aspiring retirees will have to work longer if they do not spend less, no small feat at a time when inflation and the cost of living are rising. Fluctuating investment returns on 401k-style plans in this wobbly stock market are not helping matters. Most people, if they look at their life expectancy and they think they will live to 90, they are nuts to retire at 60. They're going to be living in poverty at 80, said Peter Morici, an economist at the University of Maryland. I think it's a wake-up call to baby boomers to get serious about getting their houses in order.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615660","date":"2008-07-15","texts":"Treasury Secretary Henry Paulson's non-nationalization nationalization plan for Fannie Mae and Freddie Mac sought to quell concerns over the firms' funding and capital. On the first score, the rescue effort engineered along with the Federal Reserve seems to have done the trick -- at least for now. By aiming to give Fannie and Freddie access to the Fed's discount window and saying the government would expand lines of credit, Mr. Paulson made clear the stock market's loss of confidence wouldn't hamper the firms from issuing debt. Indeed, Freddie sold a short-term debt issue as planned Monday. The cost of insuring against default on Fannie's and Freddie's senior debt also fell. But questions about capital haven't gone away. That is why the Paulson plan said the Treasury could take some sort of direct equity stake in the firms. The plan, which Congress must approve, was vague on details. What's unfortunate for existing shareholders is that the options for how it might play out likely will entail further pain.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616981","date":"2008-07-18","texts":"LONDON -- European shares surged Thursday, as investors were heartened by a continued retreat in oil prices and strong earnings from mobile-phone giant Nokia. Beaten-down financial stocks jumped on better-than-expected results from U.S. banks. The pan-European Dow Jones Stoxx 600 index jumped 2.9 to 276.27, its biggest one-day gain since April 1. Lower oil prices also helped boost stocks in Asia, as did buying in financial stocks. The rebound is not fundamentally driven. The markets will perhaps stabilize in the short term, but when you consider that nothing has changed, markets could head lower after a short gap, said Linus Yip, strategist at First Shanghai Securities in Hong Kong.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617428","date":"2008-07-28","texts":"Every few months since the credit crisis began a year ago, bank stocks have rallied on hopes that the worst is over. They did it again, loudly, a few days ago. But there are signs that it may be too soon to sound the all-clear. The rebound this time was impressive. From their July 15 low through Wednesday, U.S. bank stocks surged 45 according to the Dow Jones Wilshire bank index. Even after giving back some gains late in the week, the prices of some financial stocks have doubled from their July lows. Still, the hardest-hit, such as Washington Mutual, National City and Fannie Mae, remain down 80 or more from their 2007 highs. These sudden surges typically happen when stocks have fallen so drastically that short-term investors see the opportunity to cash in on a bounce. A government move to clamp down on short-selling, making it harder for investors to bet on stock declines, was a big catalyst for the recovery this time. If longer-term investors decide the worst is over and start buying, this sudden recovery can mark the end of a bear market. If the longer- term investors stay away, the stock bounce turns out to be a bear- market rally, and stocks retrace their steps. Each of the rebounds up to now ran out of steam and led to new lows. Some worry that the latest rally was running out of steam at last week's end. Considering how powerful the rally was, if some of the big rebounders, such as Fannie Mae and Freddie Mac, were to fall back to their recent lows, they would lose half their current value or close to it -- a big hit for anyone who bought last week.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985440","date":"2008-07-30","texts":"You might think that the two of these have nothing in common save the happenstance that both are the subject of devastating new reports Goodling about the stomach-turning politicization of the Justice Department the deficit about the stomach-turning state of the federal treasury. But the linkage goes beyond the adjective. The ousted Goodling and the lingering deficit are twin manifestations of the Bush administration's overarching contempt for government and blind adherence to ideology. This administration will leave office having trashed the place -- and I'm not talking about a few W's pried loose from White House computer keyboards by the exiting Clinton crew. I'm referring to the myriad ways in which this administration, dismissive of the role of government, abused the enterprise it was entrusted with overseeing. My favorite sentence in the Goodling report sums up the hiring practices in the department's supposedly nonpartisan career ranks Tell Brad he can hire one more good American. This was the response by Goodling, who served as Justice's liaison with the White House, to a request from Bradley Schlozman, the interim U.S. attorney in Kansas City, Mo., to bring aboard a new prosecutor. Good American is Goodling's code for Republican.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615316","date":"2008-07-31","texts":"With this fiscal year's budget deficit expected to more than double from the previous year, the U.S. government plans to nearly quadruple its borrowing to 555 billion. The increase reflects lower tax receipts due to the ailing economy, higher outlays from the economic-stimulus package, as well as large redemptions by the Federal Reserve in connection with its liquidity initiatives. This week, the Treasury estimated it will borrow 171 billion in marketable debt in the July-September quarter, 59 billion more than it previously projected and the second-highest borrowing figure on record. The highest was 244 billion in January-March 2008. It borrowed 13 billion of marketable debt in the second quarter. The increase in borrowing is primarily due to higher outlays and lower net issuances of state and local government-series securities, the Treasury said in a statement accompanying its borrowing-needs estimate. The latest projection for this quarter would leave the Treasury with an estimated cash balance of 45 billion Sept. 30.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982007","date":"2008-08-03","texts":"When Tonya King got off welfare in January and started working as an adult day-care provider for 9 an hour, she knew making ends meet would be tough. A few months later, her expectations were confirmed Her monthly paycheck barely covers her 700 rent and 235 in child care for her two sons. Utilities and other essentials are squeezed out of what's left, with a little help from her parents. She receives food stamps and is on a payment plan with the electric company, but she still finds herself in a hole every 30 days. This job is a blessing, said King, 33, of suburban Richmond, who was on welfare for six months. I would never want to go back on welfare. I believe in working. But I look at my bills and I look at how I was doing when I was getting help, and I can't help but notice that there isn't much difference. The state gives King and other recent welfare recipients 50 a month for a year to help them with the transition. The stipend is only available if clients maintain employment. Hey, every little bit helps, said King, who also is seeking child support from her ex-husband. The cash benefit is one of several efforts that Virginia and other states are using to address the hardships recently discharged welfare clients face.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983079","date":"2008-08-04","texts":"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. 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. 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. 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. 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.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616759","date":"2008-08-05","texts":"IRAN U.S. Says Major Powers To Seek More Sanctions Six world powers agreed to seek new sanctions against Iran over its nuclear program after the country failed to meet a weekend deadline to respond to an offer intended to defuse the dispute, the U.S. said. Representatives of the five permanent members of the U.N. Security Council and Germany decided in a high-level conference call that Iran's lack of response to an incentives package aimed at getting it to halt sensitive atomic activity left them no option other than to pursue new punitive measures, the U.S. said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617353","date":"2008-08-05","texts":"Stories of Reinventing a Career These days, Kenneth J. Thygerson, a savings-and-loan executive who spent much of the 1980s trying to deregulate the industry, has no desire to return to his days in finance. Before the collapse that changed the course of his career, the former economist from Northwestern University worked at the U.S. League of Savings for 11 years, served on a presidential commission on housing, held a post at Bank Western Savings & Loan in Denver, and became president of the Federal Home Loan Mortgage Corp., now known as Freddie Mac. While there, he and his team moved the institution closer to privatization and higher profitability. The then-39-year-old's success drew industry praise and a job offer from the board of San Diego-based Imperial Corp. of America in 1985. The troubled holding company -- then made up of small savings and loans -- had suffered heavy losses from a portfolio made largely of fixed-rate mortgages that were losing money because of rising interest rates. Mr. Thygerson took the job as a challenge -- along with a fourfold increase in pay -- feeling he'd already accomplished everything he'd set out to do at Freddie Mac. He pursued an aggressive investment strategy, including buying into bonds sold by Drexel Burnham Lambert. The new strategy paid off until the bond market collapsed and sent thrifts nationwide reeling. Imperial's own decline was accelerated by fraudulent auto loans. I was devastated, says Mr. Thygerson, who resigned from his post. I had never experienced failure.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616478","date":"2008-08-07","texts":"While slow growth and its symptoms continue to plague the U.S. economy, those attending to Europe's economic health showed increased concern about their patient Thursday. First, the New World and its ills. On Thursday U.S. retailers reported their results for July, and they were generally weak and in numerous cases short of expectations. The housing slump and high gasoline prices have damped consumer spending, but in previous month tax rebates made their way in store cash registers. That was less the case in July. With the end of the stimulus checks, we know consumers are spending more cautiously, and we continue to see a pronounced paycheck cycle at the end of the month, said Eduardo Castro-Wright, head of Wal-Mart's U.S. operations. The giant retailer, in fact, did relatively well, posting a 3 rise in sales, excluding fuel, at stores open at least a year. The conventional wisdom is that discounters are faring relatively well as budget-stressed consumers pinch pennies. However, Wal-Mart rival Target reported another stagnant month, while many apparel outlets continued to struggle. The latest weekly reading on unemployment claims was hardly encouraging, as they rose to a six- year high. Economists cautioned that a recent federal extension of benefits may have drawn in applicants in a one-time effect. Nonetheless, Merk Investments' Joseph Brusuelas wrote that the four- week-average for jobless claims looks to remain above the 400,000 threshold that traditionally implies a recession in the labor sector. In what passes for good economic news these days, the National Association of Realtors' index for pending sales of existing homes increased at a seasonally adjusted annual rate of 5.3 in June. Still, the index, based on signed contracts for used homes, was more than 12 below year-earlier levels, and some economists surmised that sales of foreclosed homes boosted the index. Now, onto the Old World. On Thursday, the European Central Bank and Bank of England left their key policy interest rates unchanged, at 4.25 and 5, respectively. Recent weak economic reports and deteriorating confidence measures in the 15 countries that share the euro clearly suggests the materialization of some risks to growth, said ECB President Jean- Claude Trichet, whose clear bias -- and mandate -- has been to fight inflation. Midyear economic activity will be particularly weak, he said, confirming the economy will trough in the second and third quarters amid a global slowdown, still-high commodity prices and credit-market woes. The U.K. economy, meanwhile, has been showing American-like housing woes. Its central bank in April cuts rates, but has held steady since as inflationary pressures persists. Old, new, the diagnosis isn't anywhere near robust. --- Stocks Retreat The U.S. jobless data and reports from retailers weighed on stocks, as did AIG's weak earnings report late Wednesday and a word of caution from Moody's about its credit rating on American Express. At the close, the Dow Jones Industrial Average was down 224.64 points, or 1.9, at 11431.43. The Nasdaq Composite Index slipped 1 to 2355.73. The S&P 500 dropped 1.8 to 1266.07. Crude-oil futures snapped a three-day losing streak to end 1.44 higher, up 1.2, at 120.02 a barrel in New York following reports that a key oil pipeline supplying crude to Europe could be shut for five weeks.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616590","date":"2008-08-08","texts":"Options Action Go With Gossip --- August's Slow Time Awards Extra Torque to Rumors, But Choppy Trading Can Mean Rallies Just Stall Out Regulators have plunged headlong into battling rumor-mongering in the markets. But in the dog days of August, when trading activity is scant and news flow is thin, few things can make the options market hum like a little corporate gossip.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617345","date":"2008-08-15","texts":"U.S. inflation accelerated in July, as prices rose 5.6 from a year earlier, the fastest pace in 17 years. The consumer-price index rose 0.8 from June, reflecting increased prices for food, energy, airline fares and apparel, the Labor Department said Thursday. That followed a rise of 1.1 the month before. Core inflation, which excludes food and energy, advanced 0.3 for the second consecutive month and was up 2.5 from a year before. That is well above the Fed's comfort zone of 1.5 to 2. A truly ugly inflation report, said Harm Bandholz, economist at UniCredit Markets and Investment Banking, in a note to clients. Slower inflation may already be on the way, economists said, because of a combination of factors the recent drop in prices for oil and other commodities the strengthening of the dollar, which lowers the price of imports and continued weakness in the U.S. economy. That suggests Federal Reserve policy makers are unlikely to raise interest rates despite their policy statement last week that inflation remains a significant concern. The Fed is generally expected to keep official interest rates steady into next year -- though rate increases could end up back on the table later this year if recent core- inflation increases persist.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982350","date":"2008-08-17","texts":"Investors who rushed to the relative safety of bond funds when the stock market began to stagger last year might have thought they had outrun the troubles in equities -- only to face the new threat of inflation when oil prices started soaring. But with the cost of crude now falling, some fixed-income investors could find themselves in an enviable position. While economists and market watchers debate the reasons behind the drop that has left oil down more than 30 a barrel from its July 11 high of 147.27, most investors are probably simply relieved to see a pullback. In the case of bonds, lower prices for oil and other commodities can reduce the risks of inflation eating into returns. And if the decline in oil signals a slowing global economy rather than an overheated market taking a break, the sure-footedness of bonds could look even more attractive. Most investors find it easier to rely on bond funds rather than trying to navigate the complexities of the bond markets. A fund also will probably mean holdings are more safely spread out over a range of investments. Compared with the stock market, which has been pounded by the credit crisis, many types of bond funds have fared reasonably well over the past year. The credit problems have exacted a toll on riskier parts of the market, including the asset-backed debt that includes mortgages, car loans and credit cards. But government bond funds, for example, have held up. However, despite bond funds' relative soundness, investors have been concerned about the problems that inflation poses for their holdings.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982690","date":"2008-08-17","texts":"Getting kids to eat the vegetables they are familiar with is hard enough. When Cindy Bjornsen was having bushels of kale delivered to her doorstep in Broadlands, making her kids clean their plates got even harder. Bjornsen was a member of a community-supported agriculture plan, designed to assure farmers a steady flow of revenue. Members pay a fee to a local farm and in return receive the farm's best crops of that season. For someone who wants to support local business and make a connection to the farming community, such plans can be attractive. But they are less than ideal for a household whose main goal is to keep the refrigerator well-stocked, because variables, such as the weather, make it hard to predict what the season's harvest will bring. Two years ago, when Bjornsen arranged to get produce from Great Country Farms in Bluemont, a drought caused farmers in the region to produce an unusually large amount of kale, a vegetable from the cabbage family. The bushels were too big for her family to finish. She gave away some of the produce to neighbors and did not renew her membership.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830981711","date":"2008-08-20","texts":"When Sen. John McCain R-Ariz. or Sen. Barack Obama D-Ill. starts work as president next year, he'll automatically get lots of perks without even passing a probationary period. He'll be able to fly without paying extra for baggage, food or decent leg room. He'll ride in a luxury car, but he won't have to pump fuel costing more than 4 a gallon. And he'll occupy the finest unit in all of public housing. On the other hand, he'll also have to deal with some tricky issues involving the federal workplace. We asked the candidates about some of those issues. We ran McCain's responses yesterday. Here is what the Obama campaign told us. QFederal labor leaders complain that outside contractors perform jobs that should be done by government employees. Do you favor any suspension of contracting out activities Do you favor legislation that would prohibit the IRS from using appropriated funds to hire private tax collectors ASen. Obama is concerned by the rising number of government contractors that are often unaccountable and frequently less efficient than government workers. As president, Obama will restore effective oversight of the government-contracting process and reduce our nation's increasing dependence on private contractors in sensitive or inherently governmental functions. Obama will eliminate the Bush administration's ideological bias towards outsourcing of government services and abandon initiatives, like the inefficient use of private bill collectors to collect federal taxes, that are a demonstrated waste of taxpayer money. The Bush administration would like to see pay for performance replace the General Schedule pay system for federal workers. If elected, what would you do regarding pay for performance","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985195","date":"2008-08-20","texts":"Wholesale prices jumped in July at the fastest rate in more than a quarter-century, the Labor Department reported yesterday, furthering concerns about a continued increase in inflation at a time when economic activity has ebbed. Stocks tumbled, with the Dow Jones industrial average posting its second straight triple-digit decline as the new government data suggested that an economic recovery may take longer than investors had expected. The economy faces more tough times ahead, which is uncomfortable for workers, businesses and investors, said Stuart Schweitzer, global markets strategist at J.P. Morgan Private Bank. But we're only going to have room to grow once inflation is contained, and unfortunately the slowdown we're in is what appears to be needed right now to keep inflation in check. Labor Department data showed that the cost of materials used by businesses increased 1.2 percent in July and has risen 9.8 percent in the past 12 months. It was the largest yearly increase since 1981, as businesses absorbed sharp cost increases for energy and other commodities. The report followed recent news that consumer prices also are rising faster than expected -- and faster than the Federal Reserve's generally accepted target rate of around 2 percent. Although wholesale inflation does not necessarily translate into higher consumer prices, it can be indicative of things to come.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842615830","date":"2008-08-21","texts":"Economic Symposium Opens in Jackson Hole Fed policy makers, economists, academics and international central- bank officials descend on Jackson Hole, Wyo., for a three-day symposium, sponsored by the Kansas City Federal Reserve. Retailers Post Results Jobless Claims Tallied","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983894","date":"2008-08-21","texts":"Just as the ghost dance of the Sioux failed to bring back the buffalo, so the declining dollar and the high price of gas have failed to bring back American manufacturing. To be sure, with the dollar down, exports are up, and with the price of shipping goods from Shenzhen to Los Angeles rising with the cost of oil, Chinese imports have slowed. Nonetheless, as the New York Times' Louis Uchitelle reported Monday, most of the rise in U.S. exports has come in corn, wheat and other agricultural commodities, not in aircraft or machinery. Will America ever get its manufacturing back Not unless we move to level a steeply tilted playing field China and a host of other nations offer generous subsidies to companies locating their plants there, while the United States shuns such mercantilist strategies. But even if we moved toward mercantilism, we'd still have to confront the global economic order of the past quarter-century. American banks and corporations have already made immense capital investments, bringing their technology and expertise to nations with far cheaper workforces. There's no evidence that they've hedged their bets with contingency plans to reinvest in Ohio. Besides, once you shutter enough factories, reopening or rebuilding them -- and their equivalently shuttered supplier and transportation networks -- is no simple matter. Nor is reacquiring skilled crafts workers in industries such as precision machine tool manufacturing, which have largely been offshored. Two years ago, I interviewed J. Bradford DeLong, a Berkeley economist who had served in the Clinton Treasury Department, for the American Prospect a magazine of which I'm an editor. He expressed concern that American manufacturing had a tipping point after which, if it were cut back far enough, it might not be capable of again becoming an export engine that fueled national prosperity. I worry that a lot of manufacturing capacity we could get back now we may not be able to get back in a couple of years, he said. It's looking now as if he was right. The problem with the decline in manufacturing isn't simply that it has helped turn us from an exporting, creditor nation to an importing, debtor nation. It's also that manufacturing jobs tend to pay more than the service and retail jobs that have replaced them. The loss of several million manufacturing jobs during the Bush presidency coincides with the first economic recovery in American history in which the average family's income actually declined. As it happens, the Americans most affected by these changes are the Americans most able to sway the outcome of the presidential election the beleaguered workers of our onetime industrial heartland. Barack Obama can claim the allegiance of the black workers so affected, but it's the white workers clustered in these swing states who will determine our next president.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615244","date":"2008-08-23","texts":"The U.K. pound fell to a fresh two-year low against the dollar Friday after U.K. economic growth rates hit their lowest level since 1992, signaling a looming recession. Broad strength in the U.S. dollar also pushed sterling lower, as a decline in oil prices Friday improved the overall U.S. economic outlook and hopes for a recovery, sending the dollar higher virtually across the board. Crude futures on the New York Mercantile Exchange settled at 114.59 a barrel, down 6.59. The pound fell to as low as 1.8507 Friday, its lowest point since July 2006, and down 14 from a 27-year high of 2.1160 reached late last year. Second-quarter gross domestic product data in the U.K. was flat, the Office for National Statistics said Friday, ending a streak of 63 quarters of economic expansion in the U.K. In annual terms, the U.K. growth rate stands at 1.4. The data was quite weak, and suggests the U.K. could be hitting a recession, said Ian Stannard, currency strategist at BNP Paribas in London.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983649","date":"2008-08-23","texts":"They have replaced incandescent light bulbs with compact fluorescents, cut the number of cars in their fleets and embraced hybrids. They have planted native grasses to cut down on lawn maintenance and, with it, fuel consumption. Now a growing number of businesses and state and local governments from Fairfax to Detroit to Salt Lake City are pondering a strategy for saving on utility costs and being kind to the environment telling their workers, stay home. Congress, too, is weighing in on the merits of flexible work schedules. This month, House Majority Leader Steny H. Hoyer D-Md. proposed that more federal workers shift to a four-day, 10-hour-a-day workweek to help eliminate unnecessary commuting and reduce road congestion. He asked the Office of Personnel Management to analyze whether such a shift would be possible and report back by the end of this month. Such scheduling arrangements, in which employees work longer hours but fewer days, share jobs or stagger start or quitting times, have been a part of the U.S. workplace for years. But in recent months, interest in flextime has been growing quickly. From Howard County to Chrysler's manufacturing lines, employers who want to cut costs, show environmental sensitivity and attract young workers who seek flexible schedules are brushing aside some critics' productivity concerns to embrace the new proposals. This month, Utah became the first state in the country to take the leap, shifting most of its 17,000 state employees to a mandatory 10-hour-a-day, four-day workweek and closing most state offices on Fridays. Hawaii is piloting a similar experiment with about 100 state workers, and officials in Fairfax County are studying whether such an arrangement would work for them. Even officials in governments that are not ready to move to a four-day week, such as those in Michigan and West Virginia, say they might allow more workers to do so or to work other alternative schedules to help them save money and reduce commuting stress. After taking other steps to reduce energy consumption, car giant Chrysler is pondering whether to shift about a dozen of its manufacturing facilities and several of its parts units to 10-hour, four-day workweeks. The change, which must be negotiated with unions, could affect more than 10,000 workers. Because it could mean plants would be shuttered three days instead of two, it could save the company millions in utility costs, spokesman Ed Saenz said.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982679","date":"2008-08-29","texts":"Wall Street barreled higher Thursday after a better-than-expected reading on gross domestic product and a drop in jobless claims gave investors some reassurance that the economy is holding up. A decline in oil prices also appeared to add force to the rally in stocks. But trading volume was again light heading toward the Labor Day weekend, a condition that can magnify price moves. The Dow Jones industrial average rose 212.67, or 1.85 percent, to 11,715.18, bringing its three-day advance to nearly 330 points. The broader Standard & Poor's 500-stock index advanced 19.02, or 1.48 percent, to 1300.68, and the Nasdaq composite index rose 29.18, or 1.22 percent, to 2411.64. The Commerce Department's report that gross domestic product rose at an annual rate of 3.3 percent for the April-June quarter followed several economic readings this week that have left investors somewhat optimistic. The weaker dollar helped boost U.S. exports, which pushed GDP growth beyond the government's initial estimate of 1.9 percent, as well as economists' forecast of 2.7 percent. It marked the economy's best performance since the third quarter of last year, when GDP rose at a 4.8 percent pace.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616381","date":"2008-09-04","texts":"When John McCain speaks to the Republican convention tonight, one of his priorities will be explaining his economic plans to a restive American middle class. He'll help his campaign, and the country, if his program includes separating himself from the Bush Administration's malign neglect of the dollar. In debates over the Bush economic record, the dollar's decline and its companion rise in prices are the great missing links. Democrats don't mention it because they'd rather indict the Bush tax cuts as a way to justify a huge new tax increase. Wall Street and big business don't talk about it because they've been complicit in urging devaluation. And the media mostly ignore it because so few of them even think about monetary policy. The mystery is why more Republicans don't regret it because the political consequences have cost them dearly. Consider the nearby chart, which chronicles the rise and fall of what the late economist Arthur Okun called the misery index in the late 1970s. By adding the national unemployment rate to the annual rate of inflation, the misery index offers a simple but revealing look at American economic well-being. As you can see from the chart, it's also a useful political indicator. Jimmy Carter was run out of office as the index soared above 20 in 1980, while Republicans benefited as it fell throughout the following decade. George H.W. Bush suffered as it spiked in the early 1990s, while Bill Clinton prospered through the 1990s as it fell again See accompanying table -- WSJ September 4, 2008. As for the political challenge that Mr. McCain faces, look no further than the misery spike of 2008. At 5.7 in July, the U.S. jobless rate isn't much worse than it was 5.4 when Mr. Clinton ran for re-election in 1996. The difference is the rolling 12-month inflation rate, which at 5.6 puts the misery mark at 11.3 -- back to heights not seen since the early 1990s. The opinion polls support what the misery index and common sense tell us. According to a Pew Research poll in July, no less than 45 of the public cited rising prices as the top economic problem. That was nearly double the 24 who cited prices in February. Nearly two-thirds 64 now say their incomes are not keeping up with the rising cost of living, according to Pew. By marked contrast, only 5 mentioned unemployment as the main issue.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615471","date":"2008-09-08","texts":"Deflation Buzz Drives Talk Of a Rate Cut After months of thinking the Fed's next move would be a rate increase, the market is suddenly toying with the idea of another cut. Inflation seems to have buckled under the heft of a global economic slowdown. Crude-oil prices are down 27 from their July peak. The dollar has rallied, throwing more dirt on inflation -- though the temporary government takeover of Fannie Mae and Freddie Mac could change that. Even gold, investors' friend when prices rise, has declined.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616612","date":"2008-09-13","texts":"Sales at retailers nationwide slumped during last month's back-to- school shopping season, a sign that consumer spending, the main driver of U.S. economic growth, is weak. Without the props from the fiscal-stimulus rebates, consumer spending is slowly caving in, said Brian Bethune, chief U.S. financial economist at Global Insight in Lexington, Mass. The government's economic-stimulus plan doled out some 107 billion to low- and middle-income Americans earlier this summer in an effort to boost spending. But the gains were fleeting and smaller than hoped. As a result, economists are largely opposed to calls for a second round of stimulus checks, a plan backed by Democratic presidential candidate Sen. Barack Obama. Republican rival Sen. John McCain has said he is open to a stimulus plan but hasn't committed to any specific proposal. Meanwhile, unemployment continues to rise and consumer spending is poised to decline this quarter for the first time since the 1990-91 recession. The decline would be a setback because consumer spending has proved resilient, even increasing during the 2001 recession when many thought it would drop. But a combination of falling home prices and stock-market wealth, rising unemployment, stagnant wages and heavy credit-card debt has left consumers in a difficult position. Global Insight expects consumer spending will drop about 1.1 this quarter, and many economists caution that spending could be weak through 2009.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617436","date":"2008-09-17","texts":"No matter who wins the White House, most taxpayers can look forward to some relief next year. Based on inflation data released Tuesday by the Labor Department, the personal exemption amount, standard deduction, federal income-tax brackets and many other tax-related numbers will increase in 2009, thanks to annual adjustments required by law. Once again, high-income taxpayers generally will benefit the most. For example, several so-called stealth taxes that ensnare millions of upper-income Americans each year will start at higher income levels for 2009, compared with 2008. Among these are limits on itemized deductions and personal exemption amounts. They're known as stealth taxes because they raise your taxes without changing the tax rates and thus can be difficult to detect by voters. In one of the biggest changes, the annual gift-tax exclusion is likely to increase by 1,000 to 13,000, says James C. Young, a professor of accountancy at Northern Illinois University. Starting in 2009, you will be able to give away as much as 13,000 to anyone you wish -- and to as many people as you wish -- without any tax considerations. Many wealthy people take advantage of this provision each year as part of their estate-planning strategy. You can give away even more than the exclusion amount by paying someone else's tuition or medical bills. However, you need to make those payments directly to the medical or educational provider.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617084","date":"2008-09-18","texts":"The Federal Reserve is facing a major challenge because high commodity prices, especially oil, have produced high headline inflation. But the Fed should not overreact. The Consumer Price Index CPI last month rose more than 5 over a year earlier, way above a rate that is consistent with price stability. At the same time, the federal-funds rate is at 2, so the real interest rate on federal funds -- the interest rate adjusted for inflation -- has turned very negative. Will this low real interest rate lead to inflation spiraling out of control Shouldn't the Fed react more to the currently high inflation numbers by tightening policy, a view often advocated on this page, or at least not further lower the fed-funds rate if the economy looks like it might go into a tailspin The answer is no. It is certainly true that central banks should be worried about high headline inflation caused by high commodity prices. After all, households daily pay for energy and food items, and they are a big chunk of people's budgets. But central banks cannot control relative prices for food and energy. When a cold snap freezes the Florida orange crop or a tropical storm hits the gasoline refineries along the Gulf Coast, monetary policy cannot reverse the resulting spikes in prices for fresh orange juice or for gasoline at the pump that lead to high inflation in the short run. Particularly volatile items like food and energy, which are included in headline measures of inflation, are inherently noisy and often do not reflect changes in the underlying rate of inflation, the rate at which headline inflation is likely to settle and which monetary policy can affect. This is why the Fed pays attention to measures of core inflation, which attempt to strip out or smooth volatile changes in particular prices to distinguish the inflation signal from the transitory noise. Relative to changes in headline inflation measures, changes in core measures are much less likely to be reversed, provide a clearer picture of the underlying inflation pressures, and so serve as a better guide to where headline inflation itself is heading. Of course, if a particular shock to noncore prices turns out to be more persistent, then the higher costs are likely to put some upward pressure on core prices.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617172","date":"2008-09-22","texts":"Once upon a time, in the land that FDR built, there was the rule of regulation and all was right on Wall and Main Streets. Wise 27-year- old bank examiners looked down upon the banks and saw that they were sound. America's Hobbits lived happily in homes financed by 30-year- mortgages that never left their local banker's balance sheet, and nary a crisis did we have. Then, lo, came the evil Reagan marching from Mordor with his horde of Orcs, short for market fundamentalists. Reagan's apprentice, Gramm of Texas and later of McCain, unleashed the scourge of deregulation, and thus were greed, short-selling, securitization, McMansions, liar loans and other horrors loosed upon the world of men. Now, however, comes Obama of Illinois, Schumer of New York and others in the fellowship of the Beltway to slay the Orcs and restore the rule of the regulator. So once more will the Hobbits be able to sleep peacefully in the shire. --- With apologies to Tolkien, or at least Peter Jackson, something like this tale is now being sold to the American people to explain the financial panic of the past year. It is truly a fable from start to finish. Yet we are likely to hear some version of it often in the coming months as the barons of Congress try to absolve themselves of any responsibility for the housing and mortgage meltdowns.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985100","date":"2008-09-23","texts":"Home sales in Fairfax County rose 10.7 percent last month, the county's first double-digit increase in a year and a half, according to the most recent data from the company that tracks local real estate listings. The flurry of sales activity suggests that prices have dropped low enough to lure buyers to the Washington area's largest county. But the uptick in sales is not widespread throughout the region, and unemployment data for August show a steady slowdown in the region's economy. The big unknown is to what extent the financial trauma we've seen in the news in the past week has scared buyers away, said Barry Merchant, senior policy analyst at the Virginia Housing Development Authority. We know it has shaken people's confidence in the economy and their own personal situations. Fairfax's median sales price was 375,000 in August -- meaning half the homes sold for more and half for less. That's nearly a 22 percent drop since August 2007. The last time prices fell lower was in April 2004, said John McClain, a senior fellow at George Mason University's Center for Regional Analysis. Perhaps we've seen enough cut out of prices to see a return to normalcy, McClain said. We're seeing buyers move back in from the sidelines in the past few months.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984843","date":"2008-09-24","texts":"On a day when other world leaders largely focused on the global economic crisis, President Bush sought to turn the attention of the United Nations to his core foreign policy goals of fighting terrorists and promoting freedom around the world. Bush's administration has had a testy relationship with the United Nations, particularly because of the widespread belief here that he took the United States to war in Iraq without a proper international mandate. In his address Tuesday, his final speech to the U.N. General Assembly, Bush seemed to hold out an olive branch, citing the group's extraordinary potential to solve world problems, while urging greater transparency, accountability and dedication to the war on terror. For eight years, the nations in this assembly have worked together to confront the extremist threat. . . . We witnessed successes and setbacks, and through it all a clear lesson has emerged The United Nations and other multilateral organizations are needed more urgently than ever, Bush told the delegates. Bush did try to assure the delegates that the United States is taking steps to put its economic house in order, telling them of his confidence that we will act in the urgent time frame required. But his focus on terrorism and democracy was a contrast to the emphasis of other leaders gathered here, some of whom expressed alarm that the U.S. economic crisis could worsen poverty, rising food prices and other global problems. U.N. Secretary General Ban Ki-moon warned that the global financial crisis is endangering U.N. efforts to combat poverty and avert an environmental cataclysm caused by global warming. French President Nicolas Sarkozy called on major financial powers to build new institutions to manage the financial markets. We cannot wait to bring ethics to financial capitalism, he said. We can no longer govern today's world, the world of the 21st century, with the institutions of the 20th century.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985016","date":"2008-09-24","texts":"Correction A Sept. 24 A-section photo caption incorrectly identified Democratic Sen. Tim Johnson S.D. as a Republican. Published 9262008 The Bush administration sent some of its most powerful figures to Capitol Hill yesterday to rally support for a 700 billion plan to revive the U.S. financial system, but they encountered stiff resistance from lawmakers who are deeply skeptical of the proposal and angered by the administration's push for its speedy approval. Vice President Cheney, White House Chief of Staff Joshua B. Bolten and other Bush advisers shuttled from meeting to meeting, selling privately to worried lawmakers what Treasury Secretary Henry M. Paulson Jr. and Federal Reserve Chairman Ben S. Bernanke pitched publicly at a Senate hearing a massive bailout for the financial markets. They urged Congress to authorize the plan quickly and without many alterations. The issue transcended party lines. Democrats voiced doubts, and many Republicans, particularly in the House, balked at the entreaties from Cheney, Bolten and other officials. Just because God created the world in seven days doesn't mean we have to pass this bill in seven days, Rep. Joe Barton R-Tex. said after exiting a two-hour meeting with Cheney.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614120","date":"2008-09-25","texts":"Health-care premiums paid by employers and their workers rose again in 2008, though more slowly than in recent years, and more employees grappled with deductibles of 1,000 and higher, a nationwide survey showed. The average premium rose 5 in 2008, according to an annual poll of nearly 2,000 employers by the Kaiser Family Foundation and the Health Research and Educational Trust. The widely watched barometer of health-care costs, released Wednesday, does offer some faint consolation The increase wasn't much changed from last year's and a far cry from the 13 to 14 increase of five years ago. Another large employer survey released Wednesday, by employee- benefits consultancy Towers Perrin, projected a 6 rise in premiums for 2009. That is in line with a survey by Hewitt Associates earlier this week, which predicted a 6.4 increase in companies' health-care costs next year. Consumers are struggling with record health-care costs -- which have climbed at several times the rate of inflation and wage increases for the past decade -- just as they face a barrage of economic pressures, from declining retirement-savings accounts to higher energy and food prices. The annual cost of an average family health plan rose to 12,680 this year, more than double the 5,791 it cost in 1999, according to the Kaiser survey. Workers' annual contributions to those premiums have also more than doubled, to 3,354 in 2008 from 1,543 in 1999. What's more, employees are taking on an increasingly greater share of health-care spending beyond premiums. The biggest shift in costs has come in the form of rising deductibles. About 18 of all workers with some kind of health coverage face deductibles of at least 1,000, up from 12 in 2007.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616007","date":"2008-09-25","texts":"Sales of previously owned homes declined in August, but in a promising sign the backlog of unsold homes shrank. Sales of existing homes fell 2.2 in August from the previous month to an annual sales pace of 4.91 million units, the National Association of Realtors said Wednesday. The data cover sales of homes, condominiums and townhouses. The inventory of unsold houses fell to a 10.4-month supply at the current sales pace, compared with July's 10.9-month supply. The current inventory is still large, and many analysts say prices must fall even more to attract buyers. The median home price was 203,100 in August, down 9.5 from the year before. We would not expect to see any real stability in the housing market until we work off more of this inventory, said Wachovia Corp. economist Adam York in a note to clients. Sales increased in parts of California, Florida and Nevada where subprime loans and foreclosures are heavily concentrated, the NAR said. Chief economist Lawrence Yun noted that sales of deeply discounted properties are accounting for a disproportionately high level of sales in the current market and helping to drive down the median sales price.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615921","date":"2008-09-26","texts":"The Wall Street turmoil is shaking an already-weakened U.S. economy and could hit households and businesses in the form of fewer loans and higher interest rates in the months ahead -- in turn sending unemployment higher and corporate profits lower. Economic data released Thursday show the stress in the economy leading up to the crisis and hint at how it may have gotten worse since. Demand for manufactured goods fell sharply in August as new- home sales slid to their lowest monthly level in 17 years. And in the week ended Sept. 20, new unemployment filings hit the highest level since just after the 911 terrorist attacks. U.S. leaders hope the government's massive interventions, plus plans for a big bailout now being negotiated, will soften the blow. The economy also is running on a reassuring quarter-century path of mostly sustained growth that could reassert itself. But ripple effects from a worsening credit crunch are already making their way from Wall Street to Main Street. General Electric Co. kicked off what could be a parade of profit warnings on Thursday. Many companies have seen their borrowing costs rise in the short-term commercial-paper market. History, and a close look at recent data, suggest the economy could travel any of four possible routes through the financial crunch. The most likely scenario is a recession marked by a protracted period of tight credit. But three other scenarios -- a dangerous run on the dollar, Japan-style deflation or surprising economic resilience -- are also within the realm of possibility.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830985546","date":"2008-09-26","texts":"At the beginning of this presidential campaign season, I was heartened that the Democratic and Republican nominees promised to focus on the issues and put an end to corrosive negative campaigning. As the electoral season has run its course, however, it is clear that whatever our candidates mean by change does not include staying out of the gutter. It is not my job to constantly research the assertions in your ads to figure out whether the information is true, a distortion of the facts or simply a lie calculated to produce a political advantage. The American public needs less hysteria and an end to gotcha campaigning, and we need more considered debate as we approach what may well be the most important election in the past 25 years. With the economic crisis threatening our freedom, with job losses and home foreclosures rising, with millions of Americans unable to secure medical insurance and millions choosing between filling their gas tanks to get to work and feeding their children, we need you to refocus your campaigns on the things that matter to Americans. We are not trying to find out who is better at political spinning or which campaign can elevate gotcha politics to the highest level. You may not be above that, but the American people are. What a pity that neither Sen. John McCain nor Sen. Barack Obama has had the wit to stick strictly to the facts without exaggerations, stretches or shadings, while, to be sure, responding swiftly pun intended and forcefully to any lies by his opponent. It may sound hopelessly naive to suggest that a presidential candidate deal only in the unvarnished truth. In fact, any such candidate would quickly become a national hero. Kevin Merida's Sept. 23 Style article, His Kind of Town, on Sen. Joseph R. Biden Jr. and Scranton, Pa., carried the subtitle Scranton Loves Biden, but Can It Warm to Obama In fact, Mr. Biden is not necessarily the saintly figure up there that one would assume he is after reading the article.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615309","date":"2008-09-27","texts":"NEW YORK -- Signs that scared depositors pushed Washington Mutual over the edge started a shareholder run from other institutions, yet WaMu's loss was a gain for J.P. Morgan Chase and the Dow Jones Industrial Average. All now await the U.S. government's progress on a rescue bill for the banking system. The fall of WaMu, a major mortgage lender and a household name, underscored the scale of the credit crisis the U.S. government is seeking to resolve. As the housing market continues to deteriorate, it is threatening the entire financial system. One trader at a Wall Street firm said markets were in a state of paralysis while the government rescue is in limbo. People are not doing anything until this bailout thing is resolved, he said. Shares of WaMu were almost wiped out, falling 1.53, or 91, to 16 cents, for a loss of 96 on the week. The concentration of loans in some of the hardest-hit areas of the housing bust eventually caused a crisis of confidence in the lender, which traces its roots to the 19th century, and it was unable to find a buyer in a recent auction. After the failure, however, J.P. Morgan Chase stepped in to buy WaMu's banking operations for 1.9 billion. Shares of J.P. Morgan rose 4.78, or 11, to 48.24, the Dow's leading gainer.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983857","date":"2008-09-29","texts":"Sens. John McCain and Barack Obama expressed cautious support for a 700 billion bailout of the nation's biggest financial institutions, though both reserved the right to change their minds after they have reviewed details of the hastily arranged deal. The candidates made their comments as both prepared to return to the campaign trail after an odd week in which electioneering was interrupted by the economic crisis, McCain's brief pledge to suspend his campaign and the first debate between the two candidates. Both camps now turn their attention to Thursday's debate between the vice presidential candidates, Alaska Gov. Sarah Palin and Sen. Joseph R. Biden Jr. The debate is sure to prompt particular interest in the performance of Palin, whose limited exposure to tough questions has been criticized by opponents and supporters alike. McCain's campaign announced that Palin will step off the trail entirely tomorrow and Wednesday as she prepares for her most significant unscripted event of the campaign. On the economic bailout, McCain said on ABC's This Week that he will swallow hard and go forward with the plan, adding that it is time to get this deal off the table, let's get this to the president.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613712","date":"2008-09-30","texts":"A major factor in the current financial crisis is the lack of transparency in the activities of the principal players in the financial markets. This opaqueness is compounded by vast sums of money that lie outside the jurisdiction of U.S. regulators and other supervisory authorities. The 700 billion in Treasury Secretary Henry Paulson's current proposed rescue plan pales in comparison to the volume of dollars that now escape the watchful eye, not only of U.S. regulators, but from the media and the general public as well. There is 1.9 trillion, almost all of it run out of the New York metropolitan area, that sits in the Cayman Islands, a secrecy jurisdiction. Another 1.5 trillion is lodged in four other secrecy jurisdictions. Following the Great Depression, we bragged about a newly installed safety net that was suppose to save us from such a hard economic fall in the future. However, the Securities and Exchange Commission, the Federal Reserve System, the Comptroller of the Currency and others have ignored trillions of dollars that have migrated to offshore jurisdictions that are secretive in nature and outside the safety net -- beyond the reach of U.S. regulators. We should have learned a long time ago that totally unsupervised markets, whether trading in tulips or subprime mortgages, will sooner rather than later get into trouble. We don't have to look back very far in history to understand this.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613974","date":"2008-10-01","texts":"Spending Crash Market Takes Toll --- As Dow Thrashes About, a Strategist Theorizes on Impact To Consumers Four Cents for Every Evaporated Dollar The market has recovered more than half of Monday's losses, and it's a good thing The decline may have cost consumers billions of dollars in spending cash at a time when they could really use it.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616034","date":"2008-10-01","texts":"The first week of the fall TV season brought grim news to network executives hoping for a swift recovery from last year's audience- zapping writers' strike. Many viewers haven't rushed back to their television sets to watch this year's highly promoted season premieres, preferring to catch the shows on digital video recording devices and online -- or not catch them at all. An average of 9 million people tuned in to prime-time programs on the top five English-language broadcast networks the night they aired last week, a 4.3 percent decline from the first week of the 2007 TV season, according to Nielsen Media Research. General Electric's NBC faced the steepest overall declines, with 16.3 percent fewer viewers. Older-skewing CBS, a unit of CBS Corp., was down 9.6 percent among viewers between the ages of 18 and 49. News Corporation's Fox and The CW, a joint venture between CBS Corp. and Time Warner Inc.'s Warner Bros., were both up over last year, but still ranked Nos. 4 and 5 in viewers among the English-language networks, respectively. Network executives blame an array of factors for the low ratings, including the increased penetration of DVRs the availability of broadcast network shows online the fragmentation of the TV audience and high interest in the presidential election and the economic crisis, which is drawing viewers away from prime-time programming toward news channels and the Internet.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616798","date":"2008-10-08","texts":"The luxury goods industry is bracing for fallout from the global financial crisis. Some companies, including jewelers' Tiffany & Co. and Bulgari SpA, are considering a brake on future store openings to reduce costs ahead of a likely sluggish holiday season. French fashion house Dior SA may close some boutiques in smaller U.S. cities. Until recently, the world of luxury perfumes, leather goods, jewelry and designer clothing seemed impervious to the retail slowdown affecting apparel and home furnishings. Their resilience was due largely to growing business in emerging markets, such as China and Russia, which offset a slowdown in the U.S., Europe and Japan. Now, the Chinese and Russian stock markets are faltering, putting pressure on their wealthy consumers and tugging on the luxury-goods sector's safety net. I'm not sure emerging markets are able to offset the weakness in other markets, Bulgari Chief Executive Francesco Trapani said in an interview. Everyone is going to be affected. He estimated only 10 of new Bulgari store projects now would be approved, compared with about 50 earlier.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615539","date":"2008-10-09","texts":"WASHINGTON -- The outlook for the global economy has darkened considerably, with the spreading financial crisis expected to push several advanced economies into recession, the International Monetary Fund said. The world economy is now entering a major downturn in the face of the most dangerous shock in mature financial markets since the 1930s, the IMF said Wednesday in its World Economic Outlook. Just a few months after upgrading its global forecasts, the IMF is now ratcheting down its expectations for the economy this year and into 2009. The world economy is now expected to expand at a 3.9 pace in 2008, down from the estimate of 4.1 in July. The 2009 forecast was slashed from 3.9 to 3, which would be the weakest level since 2002 and near the threshold of what the IMF considers a global recession. While the IMF still expects a recovery to begin late next year, it warned there are considerable downside risks to that scenario, which assumes U.S. and European governments will succeed in their efforts to stabilize markets.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984456","date":"2008-10-09","texts":"Wall Street brushed off the Federal Reserve's latest attempt to stem the financial crisis yesterday, taking wild swings before stocks plunged deep into the red. Investors have endured six straight days of losses and were caught between cheering a cut in a key interest rate yesterday and fearing that it is already too late to avoid a global recession. The Dow Jones industrial average fell 2 percent, or 189.01 points, to 9,258.10. The technology-heavy Nasdaq composite index and broader Standard & Poor's 500-stock index had smaller losses. The Nasdaq was down .83 percent, or 14.55 points, to close at 1,740.33. The S&P fell 1.13 percent, or 11.29 points, to 984.94. The markets fell in early trading after the Federal Reserve said it would cut the target federal funds rate to 1.5 percent from 2 percent and was matched by rate cuts in Canada, Britain, Sweden, Switzerland and by the European Central Bank. Stock prices fluctuated throughout most of the day, with the Dow surging as much as 2 percent. But the market turned negative in late trading after Treasury Secretary Henry M. Paulson Jr. reduced investors' expectations that a further federal intervention into the financial markets was imminent. I have never seen this type of volatility. It reflects very high levels of uncertainty, said Sean Ryan, a banking analyst at the Sterne Agee brokerage firm in New York. People who look at financials all day and understand the fundamentals very well still can't make heads or tails of what's going on.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615978","date":"2008-10-10","texts":"WASHINGTON -- The Treasury Department has begun canvassing financial executives to gauge their interest in participating in a program that would inject capital into banks, highlighting how quickly officials are shifting gears as the financial turmoil deepens. Treasury is trying to determine how to structure capital infusions into healthy banks so that the institutions can begin lending again. One possible option is to take equity stakes, such as buying preferred stock, under terms that are favorable to the institution. While details are still being discussed, the program would most likely be voluntary and aimed at encouraging healthy institutions to participate. Under one scenario, banks could come to Treasury and ask for an injection rather than having Treasury determine which banks would get an infusion. Treasury is also discussing a plan in which the government would inject capital into firms that raise a certain amount of money on their own from the private sector. Any program would include incentives for firms to participate, such as the government paying favorable prices for any equity stake. The government would most likely be a passive investor. Under the rescue legislation passed by Congress, institutions that participated would be subject to the executive-compensation restrictions in the law. Treasury thinks that wouldn't discourage participation.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614014","date":"2008-10-15","texts":"So is it over Have governments in the U.S. and Europe finally found the cure Has recession been averted No. We're still in for a rough recession, with U.S. unemployment, now at 6.1, likely to rise above 8, with all the misery that brings. But it could be worse. For a few scary moments last week, governments began to take action to protect their own countries that made other countries worse off. It looked like the world economy was lurching uncomfortably close to conditions that precipitated the Great Depression. The newfound trans-Atlantic unity -- particularly the move by the U.K., then the rest of Europe and now the U.S., to give the banking system a taxpayer-funded transfusion -- has significantly reduced the odds of a really bad outcome. That alone is reason to be less panicky today than many were this time last week. Paul Krugman, the newest Nobel laureate in economics, described in a CNBC interview Tuesday the latest government action as emergency battlefield medicine to keep the guy from bleeding to death. That's no small accomplishment given how bad the wounds were. If the treatments work as intended, banks should resume lending at least to each other, a necessary step toward recovery. The new U.S. plan is going to boost confidence that the most extreme downside risks have been diminished, but the damage has been done, and this isn't going to prevent the economy from being in recession and remaining weak for a while, Laurence Meyer, an economic forecaster and former Federal Reserve governor, said Tuesday. Exactly.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983695","date":"2008-10-15","texts":"A decade ago, long before the financial calamity now sweeping the world, the federal government's economic brain trust heard a clarion warning and declared in unison You're wrong. The meeting of the President's Working Group on Financial Markets on an April day in 1998 brought together Federal Reserve Chairman Alan Greenspan, Treasury Secretary Robert E. Rubin and Securities and Exchange Commission Chairman Arthur Levitt Jr. -- all Wall Street legends, all opponents to varying degrees of tighter regulation of the financial system that had earned them wealth and power. Their adversary, although also a member of the Working Group, did not belong to their club. Brooksley E. Born, the 57-year-old head of the Commodity Futures Trading Commission, had earned a reputation as a steely, formidable litigator at a high-powered Washington law firm. She had grown used to being the only woman in a room full of men. She didn't like to be pushed around. Greenspan, Rubin and Levitt had reacted with alarm at Born's persistent interest in a fast-growing corner of the financial markets known as derivatives, so called because they derive their value from something else, such as bonds or currency rates. Setting the jargon aside, derivatives are both a cushion and a gamble -- deals that investment companies and banks arrange to manage the risk of their holdings, while trying to turn a profit at the same time. Unlike the commodity futures regulated by Born's agency, many newer derivatives weren't traded on an exchange, constituting what some traders call the dark markets. There were now millions of such private contracts, involving many of Wall Street's top firms. But there was no clearinghouse holding collateral to settle a deal gone bad, no transparent records of who was trading what.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614994","date":"2008-10-16","texts":"Stocks had their biggest decline since October 1987 as recession fears and continuing doubts about the world financial system wiped out most of Monday's historic stock surge. The Dow Jones Industrial Average fell 733.08 points, or 7.9, to 8577.91. It finished fewer than 130 points above last Friday's close, its lowest in five years. It was the Dow's ninth-biggest one-day percentage decline in its 112-year history and the biggest percentage drop since a week after the 1987 crash. The broad Standard & Poor's 500-stock index fell 9, its worst percentage decline since it fell 20 on Black Monday in the 1987 crash. The decline diminished hopes that stocks had hit bear-market lows on Friday, when the Dow finished its worst week ever down 40 from its Oct. 9, 2007, record close. The Dow is now 39.4 below its record close and off 35.3 in 2008. It has fallen nearly 21 so far this month.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982507","date":"2008-10-16","texts":"Amid the chaos of recent days, as the federal government has taken gargantuan steps to stabilize the financial markets, realigning the U.S. economic system in the process, comes a nearly universal consensus This crisis resulted from government reluctance to regulate the unbridled greed of Wall Street. Many economists and market participants who were formerly averse to government interference agree that a more robust regulatory framework must be constructed to cage the destructive forces of capitalism. For the political left, which has long championed the need for such limits, this crisis is the opportunity of a lifetime. Absent from such conclusions is the central role the government played in creating the crisis. Yes, many Wall Street leaders were irresponsible, and they should pay. But they were playing the distorted hand dealt them by government policies. Our leaders irrationally promoted home-buying, discouraged savings, and recklessly encouraged borrowing and lending, which together undermined our markets. Just as prices in a free market are set by supply and demand, financial and real estate markets are governed by the opposing tension between greed and fear. Everyone wants to make money, but everyone is also afraid of losing what he has. Although few would ascribe their desire for prosperity to greed, it is simply a rose by another name. Greed is the elemental motivation for the economic risk-taking and hard work that are essential to a vibrant economy. But over the past generation, government has removed the necessary counterbalance of fear from the equation. Policies enacted by the Federal Reserve, the Federal Housing Administration, Fannie Mae and Freddie Mac which were always government entities in disguise, and others created advantages for home-buying and selling and removed disincentives for lending and borrowing. The result was a credit and real estate bubble that could only grow -- until it could grow no more.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615424","date":"2008-10-17","texts":"DUBAI -- The double whammy of tumbling oil prices and tight credit isn't all bad news for the petro-states of the Persian Gulf. For the time being, it's providing a much-needed breather from breakneck growth that just a few months ago threatened to overheat the region's small but booming economies. Oil prices would have to fall much further -- and stay low for perhaps several years -- before crimping government budgets. Meanwhile, a sudden slowdown in local and international financing could do what the region's central bankers have so far failed to rein in the region's runaway inflation. Five of the six countries that make up the Gulf Cooperation Council, a political and economic alliance, peg their currencies to the U.S. dollar, forcing regional central bankers to follow the U.S. Federal Reserve's moves on interest rates. That has robbed them of the ability to use rate cuts to cool their own exploding, petrodollar-fueled economies. A weakened dollar has also stoked prices in the import-dependent region.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616363","date":"2008-10-17","texts":"With U.S. consumer price inflation receding, the Federal Reserve has additional leeway to reduce interest rates further in the weeks ahead, though Fed officials currently don't see more rate cuts as a clear choice. The U.S. consumer-price index was unchanged in September, the Labor Department said Thursday, after falling in August for the first time in almost two years. Excluding volatile food and energy prices, so- called core consumer prices -- which are believed to give a more stable reading of inflation -- advanced just 0.1 last month. And the year-over-year rate of inflation, at 4.9, is coming down from high levels reached this summer. There was widespread softness in pricing. Transportation prices fell 0.6 as airline fares and new-car prices dropped. Housing, which accounts for 40 of the consumer-price index, fell 0.1 for a second straight month, the first back-to-back declines since 2001. Clothing prices fell 0.1 for the month. Other signs of economic weakness are building, including a report by the Fed on Thursday that U.S. industrial production dropped sharply in September. The inflation readings underscore a growing belief inside the Fed that inflation pressures are easing, as many senior officials expected earlier this year. Indeed, financial shocks like the one the U.S. is experiencing could eventually lead to the opposite of inflation -- deflation, or a broad decline in prices -- though that doesn't look like a serious risk, given the amount of stimulus going into the U.S. economy.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984524","date":"2008-10-17","texts":"As seniors struggle with the soaring costs of everyday expenses and hefty hits to their retirement saving accounts, the Social Security Administration yesterday announced a 5.8 percent increase in income benefits, marking the largest cost-of-living adjustment since 1982. The increase, which affects 55 million Americans, amounts to an extra 63 a month for the average recipient. Some retiree advocates and senior citizens, while welcoming the bump, worried it wasn't enough given even larger increases in other costs, such as health care. This will be very welcomed, but 6 percent is not much compared to everything else, said Elaine Destefano, a 72-year-old retiree volunteering yesterday at the Damascus Senior Center. She noted that certain Medicare premiums would rise more than 20 percent. This is what happens They gave us a raise, then they increase Medicare, and then you have nothing. Shannon G. Benton, executive director of the Senior Citizens League, said, It may take the edge off, but it's not going to lift the burden. Retirees and advocacy groups such as Benton's organization and AARP have been pushing for higher cost-of-living increases for years. Last year's bump of 2.3 percent came on the heels of low inflation and was the smallest since 2004.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982428","date":"2008-10-19","texts":"No one can complain of a shortage of information about the Great Financial Meltdown. The biggest growth industry today is words A whole new vocabulary has spread from board tables to kitchen tables. Superannuated whiz kids planting cabbages to offset their newly straitened means can blame their troubles on collateralized debt obligations, special investment vehicles, credit default swaps. Subprime mortgage holders find themselves censured for a new and virulent disease called toxic debt. But what is in even shorter supply than credit is an economic theory to explain why this financial tsunami occurred, and what its consequences might be. Over the past 30 years, economists have devoted great intellectual energy to proving that such disasters cannot happen. The market system accurately prices all trades at each moment in time. Greed, ignorance, euphoria, panic, herd behavior, predation, financial skulduggery and politics -- the forces that drive boom-bust cycles -- only exist offstage in their models. The Great Financial Meltdown would not have surprised the British economist John Maynard Keynes, who died in 1946, for he thought that this was exactly how unregulated markets would behave. The New Economics, as Keynesian economics was known in the United States until it became the Obsolete Economics, was designed to prevent such turbulence. It held that governments should vary taxes and spending to offset any tendency for inflation to rise or output to fall. The New Economics generated its own problems, causing it to collapse into stagflation in the 1970s. But for most Americans and Europeans, the years from 1950 to 1975 were a golden age. The developed world grew at an average annual rate of 3.2 percent with very moderate inflation, and without the benefit of the huge rewards now deemed necessary to keep executives properly incentivized. Above all, growth was stable. The business cycle was severely dampened. Keynes first became convinced of the instability of unregulated economies in the boom years of the Roaring '20s. In many ways, the 1920s were like the last 15 years in their technological dynamism, the extravagant lifestyles of the very rich and in their irrational exuberance. But they were especially like the recent past in their belief that prosperity would continue without interruption.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982580","date":"2008-10-21","texts":"An effort to boost the economy with a massive injection of public funds gained momentum yesterday, as Federal Reserve Chairman Ben S. Bernanke tentatively endorsed the idea of a new stimulus package and the Bush administration softened its opposition. The remarks by the nation's economist in chief were a boon for congressional Democrats, who have argued for weeks that the government should authorize billions of dollars in additional spending. But Bernanke, who generally resists inserting himself into political debates, made clear that any new package must be narrowly focused to quickly provide a shot of relief to the economy. Even though the government has taken dramatic steps to prop up financial firms in recent weeks, the underlying shape of that economy is looking worse, according to a slew of new data. The economy is likely to be weak for several quarters, Bernanke told the House Budget Committee, and there is some risk of a protracted slowdown. For that reason, he said, consideration of a fiscal package by the Congress at this juncture seems appropriate. The stock market soared in response to Bernanke's remarks, as well as to signs of healing in the troubled credit markets. The Dow Jones industrial average was up 413 points, or 4.7 percent.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615515","date":"2008-10-22","texts":"The survival of a great American business may now depend on whether private investors will be allowed to succeed where government seems to be failing. We're referring to insurance giant AIG, which under the terms of a federal bailout is threatening to become a loser for taxpayers. Maybe it's time for the feds to consider Plan B. With its September 16 rescue of the world's largest insurer, the New York Federal Reserve has managed to put taxpayers on the hook for more than 120 billion, but on terms so onerous that AIG may have to be sold in pieces at firesale prices. Most of the taxpayer exposure comes from an 85 billion revolving credit facility, in return for the government taking almost 80 of AIG's equity. The Feds are charging AIG more than 10 interest on the entire 85 billion, even if the company doesn't borrow that much. The interest rate on money actually borrowed is more than 14. One AIG shareholder likens it to a financial counselor advising someone struggling to pay the 6 interest on his mortgage to solve the problem by running up debt on his credit card. That's why the New York Federal Reserve recently had to bail out the bailout, lending another 37.8 billion at more attractive terms. But the first transaction is still crushing the company, forcing a virtual liquidation. According to a source familiar with the company, AIG is suffering declines in renewals among corporate customers as it loses business to competitors. An AIG spokesman says, Renewals worldwide are strong, but there are variations depending on the region and line of business. No one disputes, however, that interim CEO Ed Liddy's job is not so much to run the business as to prepare various AIG subsidiaries for quick and dirty sale, though there's no guarantee that the prices he gets will protect taxpayers from losses. We have little sympathy for a company that sought government assistance, except that in this case shareholders were never permitted to vote on the deal. The shareholder with the largest stake, former CEO Hank Greenberg, says the firm would have been better off in Chapter 11. AIG directors instead had every incentive to choose a transaction with the government -- even on horrible terms -- over bankruptcy. That's because a bankruptcy filing would have stripped directors of legal protection.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614497","date":"2008-10-25","texts":"Japan's stock and currency markets dealt the world's No. 2 economy a heavy blow Friday. The yen surged, battering shares of Japan's top exporters as the country nears recession. In Tokyo, the yen reached a 13-year high against even the rising U.S. dollar. In late afternoon trading Friday in New York, the euro was at 119.05 yen, a six-year low and down sharply from 125.12 yen Thursday. The dollar was at 94.6 yen. A strong yen wreaks havoc on Japan's export-driven economy, eroding the value of Japanese companies' overseas earnings, and often making the price of those products more expensive in overseas markets. After seeing sales to U.S. and Europe fall, exporters have been hit again as sales to the emerging markets have started to falter. Some experts warn that the Nikkei 225 Stock Average, which dropped 9.6 Friday, will tumble even further next week if Japanese exporters disappoint investors with poor results and outlooks, as the rising currency may lead many to do. For Japan, the rising yen and falling stock market come at a particularly delicate time. Gross domestic product shrank in the April-June quarter and most economists are expecting it to contract again in quarter that ended Sept. 30, which would qualify as a recession.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984488","date":"2008-10-25","texts":"Investor fears of a global recession sent stocks tumbling again yesterday, ending another brutal week with Wall Street in the red. But U.S. stocks escaped the level of losses overseas, where several markets plummeted after data showed that the British economy had contracted. Fear that U.S. markets would follow suit caused a morning frenzy in futures trading before the markets opened. The Dow Jones industrial average fell nearly 500 points in early trading, but regained ground. It closed down 3.59 percent, or 312.30 points at 8378.95, its lowest close since April 2003. The broader Standard & Poor's 500-stock index was down 3.45 percent, or 31.34 points, closing at 876.77. The Dow and S&P were down 5.45 percent and 5.8 percent, respectively, this week. The tech-heavy Nasdaq composite index, which was down 3.23 percent, or 51.88 points to close at 1552.03 yesterday, had the roughest week. It was down 9.3 percent for the week. Investors were unnerved by a series of poor earnings reports and indications the financial crisis would weigh down profits into 2009. Several blue-chip firms have lowered their earnings forecasts and announced thousands of layoffs.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613478","date":"2008-10-28","texts":"Hard-Hit Shares Put to Good Use --- CenturyTel, Embarq Turn to All-Stock Deal","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983990","date":"2008-10-28","texts":"A burst of selling in the final minutes of a volatile day of trading left stocks sharply lower yesterday as investors focused more on the deep strains in the economy than on a glimmer of optimism in a surprise gain in new-home sales. Trading was light as investors awaited the beginning of the Federal Reserve's two-day meeting today in which the bank's policymaking committee will consider lowering interest rates again to try to head off a prolonged economic slump. The Fed is expected to cut rates tomorrow by a half-percentage point, to 1 percent. Stocks got off to a negative start after a massive sell-off overseas, sending the Dow Jones industrial average down 170 points in early trading. The market reversed course on the housing news and on plans that the Treasury would start distributing much-needed money to nine major banks this week. After the swift sell-off near the close, the Dow finished down 203.18 points, or 2.4 percent, to 8175.77, its lowest level in 512 years. By the end of trading, the Dow had slid more than 400 points from its high during the day. The broader Standard & Poor's 500-stock index lost 27.85 points, or 3.2 percent, to 848.92, while the tech-heavy Nasdaq was down 46.13 points, or 3 percent, to 1505.90. As part of the Treasury's plan for bank infusions, 15 banks added their names to the list. Capital One of McLean, for example, will take 3.55 billion from the Treasury.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830985146","date":"2008-10-29","texts":"Stocks skyrocketed nearly 11 percent yesterday in the second-biggest point gain ever for the Dow Jones industrial average, buoyed by signs of improving credit conditions and expectations that the Federal Reserve would slash a key interest rate today. Investors were cheered by reports that the Fed was making progress in unlocking corporate debt markets through its program to buy commercial paper, or loans used for everyday operations, and by developments at major blue-chip companies Boeing and General Motors. GM chairman and chief executive G. Richard Wagoner Jr. was in Washington over recent days negotiating with Treasury officials for government money to help finance a proposed merger with Chrysler, said an industry source briefed on the matter. But analysts and investors warned that continuing global economic uncertainty could send the stock market tumbling again in coming days. They also said low trading volume made them cautious about declaring the market had turned a corner. Moreover, stocks often rally the day before the Fed's policymaking committee meets and then lose some of those gains soon thereafter. Is this a real bottom I'd be more convinced if there were more volume behind trading, said Alan Lancz, president of Alan B. Lancz & Associates, an investment firm in Toledo.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616774","date":"2008-11-05","texts":"A funny thing happened on the way to the Internet age A lot of parents stopped paying the nanny tax. Household-employment tax filings for nannies and other domestic workers fell 10 in the five years ended in 2006, based on the latest Internal Revenue Service data -- a period when the number of domestic employees actually rose, according to Labor Department data. Since 1996, filings are down 26, to 225,441. Growth in online hiring, and the casual, cost-averse attitudes of parents who find their nannies on the Web, are among the causes, parents and industry sources say. It's never wise to evade taxes, but the trend poses particular risks now. The slumping economy means more nannies are likely to be laid off and then file for unemployment benefits, drawing the scrutiny of tax regulators, attorneys say. Also, avoiding the taxes leaves nannies devoid of a safety net, including Medicare and Social Security benefits, in an era when they may need it more than ever. Of course, paying nanny taxes is about as much fun as having a root canal. People who pay household workers more than 1,600 a year are required to file onerous paperwork to cover Social Security and Medicare taxes of 7.65 of gross pay federal unemployment insurance of 0.8 state unemployment insurance, usually of 2 to 4, and other state and local taxes. The employee's share is another 7.65 for Social Security and Medicare, plus any state and local taxes. Many parents spend 30 to 70 a month to have a payroll service handle all the red tape. In the past, parents more often hired full-time nannies through brick-and-mortar agencies, which often exerted arm-twisting to persuade both parents and nannies to pay taxes. Also, periodic derailings of presidential cabinet appointees over nanny-tax violations, including most recently failed Bush nominee Bernard Kerik in 2004, highlighted the hazards for scofflaws.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984598","date":"2008-11-05","texts":"The former chief risk officer at investment bank Bear Stearns, which nearly collapsed in March, is now a senior official at the Federal Reserve division that supervises U.S. banks. Michael Alix, who worked at Bear Stearns for 12 years and was its senior risk manager since 2006, was named a senior vice president in the bank supervision group of the Federal Reserve Bank of New York, according to an announcement by the Fed. Boeing said it will delay the first test flight of the new 787 Dreamliner beyond the fourth quarter because of the just-ended machinists strike. The 787's first delivery to customers has already been delayed three times and was running 15 months late before an eight-week-long machinists strike that ended Nov. 2. The earlier delays were due to parts shortages and problems with the new production process, which uses suppliers around the world.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614501","date":"2008-11-06","texts":"The meltdown of Bear Stearns Cos. in March marked the collapse of the modern securities industry, and the careers of some on Wall Street. The financial crisis also claimed the life of a veteran Bear Stearns manager. Barry Fox, a research supervisor who worked for nine years at the brokerage firm, took a drug overdose and then jumped from his 29th- floor apartment the evening in May after he learned he wouldn't be hired by J.P. Morgan Chase & Co., which was about to buy his firm. A coroner recently confirmed in an autopsy report that the death was a suicide. Mr. Fox was devastated by the implosion of Bear Stearns and the financial hit he was likely to face, says Fred Philippi, his longtime companion. After several personal setbacks, this Bear Stearns thing happened to be the last straw that broke his spirit, Mr. Philippi said in an interview. J.P. Morgan, which hired nearly half the firm's 14,000 employees, has taken pains to help Bear Stearns workers displaced by the merger. The bank paid severance packages to those who weren't hired and set up an outplacement service to help them pursue job opportunities. James Dimon, J.P. Morgan's chief executive, also asked some of his bank's key clients to consider hiring Bear alums.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984384","date":"2008-11-06","texts":"Bolstered by exit polling data showing that union members played a pivotal role in President-elect Barack Obama's victory, the AFL-CIO served notice yesterday that it views the election results as ratification of organized labor's ambitious agenda. Labor's top priority is passage of legislation that would make it easier to organize unions, which advocates say would help labor groups expand their shrinking numbers and win better wages and benefits for average workers, whose pay has stagnated in the last eight years. In an economy that gives corporations far too much power, a union card remains the single best ticket into the middle class, said AFL-CIO President John Sweeney. Union membership has dropped from 20 percent to 12 percent of all U.S. workers over for the past quarter century. The Employee Free Choice Act, which would require employers to recognize unions once a majority of workers sign cards of support, is fiercely opposed by business groups that argue the measure would cost jobs and further weaken the nation's economy. Currently, employers can demand that workers hold secret-ballot elections to determine whether to form unions, something labor organizers say allows companies to run campaigns that pressure workers into voting against organizing. At the same time, business leaders say the so-called check card legislation would deny workers a secret ballot, leaving them vulnerable to being coerced into supporting the formation of a union.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982190","date":"2008-11-10","texts":"World economic leaders will gather in Washington Saturday for a summit to address the global financial crisis. It is no coincidence that Brazil, China, India and other emerging-market nations have not only been invited to the summit but are expected to play meaningful roles. The credit crunch, which began in the United States, has quickly spread to the developing world. The summit agenda will be dominated by monetary policy coordination and new roles for international institutions such as the International Monetary Fund. In his Nov. 3 op-ed, Fairness for Emerging Markets, Kemal Dervis made the case for making massive credit lines available to most emerging-market economies. But if we are to limit the depth of the looming global recession, trade finance must also be on the agenda. Cross-border lending by banks based in developed countries fell at a record pace in the second quarter and continued its decline at an accelerated rate in the third quarter. One casualty is the drying up of trade finance, the lifeblood of 14 trillion annually in global commerce. Wachovia's recent troubles, for example, have already led to a sharp reduction in short-term trade finance lines to Latin America. Other banks are reassessing credit lines for trading with Asia, Africa and Eastern Europe. The credit crisis has moved into trade finance as largely a funding problem. If bank lines are shut off, it would be devastating for the economies of the developing world. It would also have a boomerang effect on the United States and Europe, as key export markets -- and the jobs that go with them -- disappeared. Fortunately, there are institutions already built to promote trade finance export credit agencies. The Export-Import Bank of the United States was established by President Franklin D. Roosevelt in 1934, in the midst of the Great Depression. It is a lender of last resort that provides credit lines when private financial markets are not lending. Last year, the bank authorized more than 12 billion in guarantees and insurance to support U.S. exporters.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984480","date":"2008-11-10","texts":"As President-elect Barack Obama prepares to fill top positions for his incoming government, he faces a stubborn reality Some of the key individuals he will rely upon to tackle the country's most serious challenges are holdovers from the current administration -- a trio of Bush appointees who will likely stay in place for at least the first year or two of Obama's presidency. In confronting the financial crisis and weakening economy, Obama must turn to Ben S. Bernanke, a Republican and former chairman of President Bush's Council of Economic Advisers, who will lead the Federal Reserve for at least the first year of the new administration. In assuming control of the wars in Iraq and Afghanistan, Obama must work with Adm. Michael Mullen, chairman of the Joint Chiefs of Staff, who was appointed by Defense Secretary Robert M. Gates for a two-year term that will end in late 2009 and, by tradition, can expect to be appointed for a second term as the president's top military adviser. Mullen shares Obama's belief in focusing more on Afghanistan but is wary of a timeline for withdrawing troops from Iraq. And in guarding against terrorist attacks -- while correcting what he considers the Bush administration's excesses -- Obama will rely upon FBI Director Robert S. Mueller III, whose term expires in 2011. Obama has made it a point of pride to seek consensus with those who do not fully agree with him, and he is even considering keeping Gates at the Pentagon to ensure a smooth transition. But the need to rely heavily on officials who served in the Bush administration -- an era from which he promises a sharp break -- underscores his constraints. His campaign's success was based partly on the selection of a team he personally trusted, but in his first years in the White House, he will not be able to rely solely on advisers of his choosing.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985552","date":"2008-11-11","texts":"The Federal Reserve yesterday granted a request by American Express to become a bank holding company, opening the door for the credit card giant to accept deposits and permanently access financing from the Fed. The approval represented the latest reshaping of the financial services industry, which is undergoing its worst credit crisis in decades. In announcing the action, the Fed cited emergency conditions. The Fed's approval for American Express and American Express Travel Related Services was similar to a decision it made in September to transform the country's two biggest investment banks, Goldman Sachs Group and Morgan Stanley, into bank holding companies. That move bolstered the two institutions after the collapse of Lehman Brothers, the largest bankruptcy filing in U.S. history. Like American Express, Goldman and Morgan Stanley gained the ability to borrow federal money and build a base of deposits in an effort to reassure investors and other banks.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617379","date":"2008-11-19","texts":"Your editorial  A Barack Market Nov. 13 is on the mark. When a president-elect cannot say, in a bear market and a with recession on the horizon, whether he and his party will or will not raise any taxes it is at best an indicator that he has no knowledge or appreciation of capitalism and the markets, or at worst a cynical attempt to further weaken the public's confidence in both. Barack Obama and the Democrats will be unable to contain their pent-up desire to spend money on union bailouts i.e., automobile companies and other favored constituents, pay off MoveOn.org, Code Pink and all the other various groups that helped them get elected and raise taxes on the evil rich. Stephen J. McCann Salisbury, Md. ---","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616851","date":"2008-11-20","texts":"Worries about a drawn-out recession and the prospect of deflation gave Treasurys a boost, with the 30-year bond rocketing higher. Minutes from the Federal Reserve, which suggested further interest-rate cuts, added to the government-bond market's gains, as did the sharp falls in stocks. The Fed also downgraded both its growth and employment forecasts, signaling that weakness in the economy will persist into 2009. As investors sought safety in Treasurys, bond yields, which move inversely to prices, fell across the board. The benchmark 10-year Treasury note saw its yield fall to 3.390, from 3.537 Tuesday, as the price rose 1 832 points, or 12.50 for every 1,000 invested, to 103 132. The 30-year bond surged 3 532 points, or 31.5625 for every 1,000 invested, to 109 432, to yield 3.972, from 4.147 Tuesday. The two-year yield fell to 1.110, the lowest since June 13, 2003. Worries about deflation sent the 10-year break-even rate, the yield spread between the 10-year Treasury inflation-protected securities and 10-year nominal Treasurys, to a low of 0.37 percentage point, the lowest level since the Treasury Department started to sell TIPS in 1997. The gap suggests investors expect an average annualized inflation of 0.37 over the next decade, adding to the shift over the past few months from inflation concerns to deflation worries.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614175","date":"2008-11-21","texts":"TOKYO -- Japan reported an unexpected trade deficit in October as its exports to Asia weakened for the first time in almost seven years, raising the odds of a deeper economic slump in the fourth quarter. Exports to China showed their first drop in nearly three and a half years, according to data from the Finance Ministry. Shipments to the U.S. and Europe continued to decline as well. Japan's merchandise trade deficit totaled 63.9 billion yen 659.5 million during the month, the ministry said. Overall exports fell 7.7 from October last year, their first decline in four months and their biggest drop since a 14.5 slump in December 2001. The downturn in exports, coupled with an oil-driven 7.4 rise in the value of imports, pushed the trade balance into the red. It's a bad omen for Japan's export-dependent economy, which has been thrown into recessionby softening overseas demand. The downward momentum in exports is strengthening at an unexpectedly fast pace, said Taro Saito, senior economist at NLI Research Institute.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985032","date":"2008-11-29","texts":"There were no Christmas miracles for retailers yesterday as the holiday shopping season officially got underway. Pent-up demand could have sent retail sales skyward. Or the economic crisis could have kept them in the red. It was all up to the throngs of shivering shoppers waiting in the dark, cold morning. Would they buy that 598 flat-panel television or a 379.99 Toshiba laptop I would describe the customers as hit-and-run shoppers, said C. Britt Beemer, chairman of America's Research Group, a consumer behavior research firm. They went in, they got the deal and they left. If the deal was sold out, they left without anything. The day after Thanksgiving -- commonly called Black Friday -- is a key barometer of holiday spending, when retailers traditionally turn a profit. Retailers managed to rouse many shoppers out of bed through aggressive discounts in key categories such as electronics, toys and apparel, but consumers kept a close eye on their own bottom lines. Economists are closely watching this holiday season because the depth of the financial slowdown could depend on consumer spending, which accounts for roughly 70 percent of the gross domestic product. The next few weeks are also a make-or-break period for retailers because they count on holiday sales to help pay their costs the rest of the year. With the news of the economy, I wasn't certain of what to expect today, said Chris Poleto, general manager of Fair Oaks Mall. He said the 8,000-car parking lot was full by early afternoon and traffic seemed brisk compared with last year. It seems a little bit more faster and more furious.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842615820","date":"2008-12-01","texts":"While the economic news has most Americans in a state of near depression, hope abounds today that the country may use the current economic crisis as leverage to address some longstanding problems. Nowhere is that prospect for progress more worthy than the crisis in our public education system. So, from someone who realized rather glumly last week that he has been working at school reform for 40 years, here is a prescription for leadership from the Obama administration. We must start with the recognition that, despite decade after decade of reform efforts, our public K-12 schools have not improved. We can point to individual schools and some entire districts that have advanced, but the system as a whole is still failing. High school and college graduation rates, test scores, the number of graduates majoring in science and engineering all are flat or down over the past two decades. Disappointingly, the relative performance of our students has suffered compared to those of other nations. As a former CEO, I am worried about what this will mean for our future workforce. It is most crucial for our political leaders to ask why we are at this point -- why after millions of pages, in thousands of reports, from hundreds of commissions and task forces, financed by billions of dollars, have we failed to achieve any significant progress Answering this question correctly is the key to finally remaking our public schools.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982892","date":"2008-12-02","texts":"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. 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. 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. 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. 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.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842615615","date":"2008-12-05","texts":"Concerns about Friday's unemployment report pushed stocks lower, with General Motors tumbling on continued uncertainty about the fate of the U.S. auto makers and retailer J.C. Penney heading higher on better-than-expected monthly sales. General Motors acted as a hefty drag on the Dow Jones Industrial Average, falling 79 cents, or 16, to 4.11 after the company's chief executive told lawmakers that sales of GM vehicles have already begun to dip because of speculation that the company is on the verge of bankruptcy. Ford, which says it doesn't need immediate aid, lost 19 cents, or 6.7, to 2.66. The initial jobs report that came out Thursday was stronger than people expected, but everyone is looking for what the big unemployment report might show on Friday, said Randy Frederick, director of trading and derivatives at Charles Schwab. Many retail stocks jumped after November same-store sales lived up to expectations of a record drop Thursday, but, thanks to deep discounting during the month, the sales slide was smaller than expected. J.C. Penney gained 1.38, or 7.5, to 19.88. Nordstrom added 1.11, or 10, to 12.01. Saks was up 16 cents, or 3.2, to 5.23.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617177","date":"2008-12-05","texts":"Labor Pains Job Picture Isn't Pretty The job market is ugly and getting uglier. The Bureau of Labor Statistics releases November employment data Friday. Economists think unemployment rose to 6.8, from 6.5, the highest since October 1993. They estimate nonfarm payrolls shed 350,000 jobs, among the 20 worst monthly losses ever.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615686","date":"2008-12-06","texts":"Life-insurance stocks climbed sharply, when Hartford Financial Services Group Inc. became the second big insurer this past week to allay investors' concerns that it might have to raise additional capital. The company, whose shares doubled to 14.59 Friday on the New York Stock Exchange, said it had ample resources to maintain its financial-strength ratings even if the stock market worsens. Shares of life insurers have been widely sold off in recent months because of concerns about steep investment-portfolio losses and charges against earnings tied to their businesses of selling variable annuities with guaranteed minimum returns. Investors have worried that insurers will be hard-pressed to come up with additional capital they may need to show regulators they can deliver on promises to consumers. The Hartford is well capitalized with ample liquidity, Chief Executive Ramani Ayer told investors in a presentation Friday. Lizabeth Zlatkus, Hartford's chief financial officer, said that the falling stock market could trigger a big charge on the company's variable-annuity business but that the company has access to sufficient capital to retain its ratings under various bearish scenarios. Those include a drop in the Standard & Poor's 500-stock index to 700. The index finished Friday at 876.07. At Dec. 31, 2007, it stood at 1468.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614102","date":"2008-12-08","texts":"Damage Done May Require Bigger Moves So far in this recession, fiscal and monetary policy has been an effective antidepressant. But it may not be an effective stimulant, given the pain consumers have suffered. The government is committing trillions of dollars in various bailouts and lending programs. The Federal Reserve has slashed its target interest rate and is buying debt to lower other rates, too.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984308","date":"2008-12-10","texts":"President Richard Nixon appointed the first energy czars, John Love and later William Simon, in the wake of the 1973 gasoline shortage. Congress mandated a drug czar during the crack cocaine epidemic in 1982. And President Bill Clinton named Ira Magaziner his health czar to craft legislation in 1993. It's hardly a record of success problems persist in all those areas. But with the automobile companies in crisis and the public tired of providing bailouts for American corporations, Congress and the Bush administration are on the verge of creating a new czar or committee to oversee efforts to rescue Detroit's largest automakers. If they can no longer pay their own way, it is entirely appropriate for someone to put the hammer down and say 'That's it,'  said Richard Breeden, former chairman of the Securities and Exchange Commission and the court-appointed monitor for the scandal-ridden communications giant, WorldCom. If taxpayers are going to support General Motors, let's turn General Motors into a company worthy of it. The choice of a czar -- or czarina -- is the plan's first obstacle. President Bush, who would appoint the czar or overseers, and Democratic leaders in Congress have very different ideas about who would make the best choice. House Speaker Nancy Pelosi D-Calif. mentioned former Federal Reserve chairman Paul Volcker as the type of person she would support. As he exited an hour-long meeting with House Democrats yesterday afternoon, Volcker waved off reporters' questions, declining to state whether he was interested in the post. Volcker has already been tapped to advise President-elect Barack Obama on economic issues.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984274","date":"2008-12-13","texts":"Rates on 30-year mortgages dropped this week to their lowest level in more than four years, effects of a startling November unemployment report and a government plan to buoy the housing market. Freddie Mac reported Thursday that average rates on 30-year, fixed-rate mortgages dropped to 5.47 percent from 5.53 percent last week. The rate is slightly below this year's previous low of 5.48 percent, reached in January, and the lowest since March 25, 2004. Mortgage rates started falling after the Federal Reserve launched a sweeping new effort in late November to aid the housing market by buying up to 600 billion of mortgage-related securities and other debt issued by Fannie Mae, Freddie Mac and the Federal Home Loan Banks. Fannie Mae and Freddie Mac own or guarantee about half of the 11.5 trillion in outstanding debt on U.S. home loans.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984863","date":"2008-12-18","texts":"When the federal government approves new rules banning unfair and deceptive practices today by credit card companies, it will hand a victory to consumer groups who have long complained of lax oversight of the 970 billion industry. Even with all its lobbying power, the credit card industry was not able to beat back the most sweeping overhaul in decades. Financial companies and trade groups argue that regulators are overreacting to problems in ways that will limit the availability of credit to customers. Today's move by Federal Reserve, the Office of Thrift Supervision and the National Credit Union Administration is the first of what could be many attempts to further regulate the industry, as several members of Congress plan to codify the Fed's regulations next year and perhaps pass even more stringent rules. It also represents a significant shift in the thinking of the regulatory agencies, which still are run by Republican appointees. Analysts note that regulators have stepped back from an emphasis on educating customers about what they should do, primarily through disclosures, in favor of telling companies and customers what they can and cannot do. It just shows how the world has changed, said Brian Gardner, who follows financial regulation issues for the investment bank Keefe, Bruyette & Woods. Eighteen months ago the Fed was focused on disclosure and transparency, and now they're coming out with a prescriptive, rules-based guidance. It's a whole different world.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615799","date":"2008-12-20","texts":"WASHINGTON -- The U.S. government's rescue of the auto industry drained what remained in the first half of Treasury's 700 billion bailout fund, prompting Treasury Secretary Henry Paulson to call on Congress to release the rest of the money. The move sets off a period of uncertainty for financial markets as the Bush administration and the Obama team scramble to determine how to proceed. On Friday, Mr. Paulson said lawmakers should release the second 350 billion to support financial market stability. He said he would discuss tapping the money in the near future with congressional leaders and members of President-elect Barack Obama's transition team. Draining the current bailout fund raises the question of how the administration would handle an unexpected fiscal emergency. Mr. Paulson said in a statement Friday that Treasury, along with the Federal Reserve and the Federal Deposit Insurance Corp., has the necessary resources to address a significant financial market event. While the first 350 billion has been allocated, not all of the money has been spent and Treasury could dip into the unused funds. Mr. Paulson has not decided whether to formally request the second half of the Troubled Asset Relief Program -- known as TARP -- or leave that task to the Obama administration, according to people familiar with the matter. The White House suggested it may not make any requests before President George W. Bush leaves office, according to Deputy Chief of Staff Joel Kaplan.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616351","date":"2008-12-22","texts":"Monday, Dec. 22 The U.S. Treasury begins two days of auctioning short-dated debt, in which it aims to sell 54 billion in T-bills and 66 billion in two-year and five-year notes. --- Walgreen will release first-quarter results. Tuesday, Dec. 23","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985341","date":"2008-12-29","texts":"Howard Sosin and Randy Rackson conceived their financial revolution as they walked along the Manhattan waterfront during lunchtime outings. They refined their ideas at late-night dinners and during breaks in their busy days as traders at the junk-bond firm of Drexel Burnham Lambert. Sosin, a 35-year-old reserved finance scholar who had honed his theories at the famed Bell Labs, projected an aura of brilliance and fierce determination. Rackson, a 30-year-old soft-spoken computer wizard and art lover, arrived on Wall Street with a Wharton School pedigree and a desire to create something memorable. They combined forces with Barry Goldman, a Drexel colleague with a PhD in economics and a genius for constructing complex financial transactions. Imagine what we could do, Sosin would tell Rackson and Goldman as they brainstormed in the spring of 1986. The three men had earned plenty of money through short-term deals known as interest-rate swaps, a clever transaction designed to protect banks, corporations and other clients from swings in interest rates that threw uncertainty into the cost of borrowing the money necessary for their business operations. They believed their revolution could never happen if they stayed at Drexel. Swaps in those days typically lasted no longer than two or three years. The trio envisioned deals lasting decades that would lock in profits and manage risks with unprecedented precision. But the junk-bond firm's inferior credit rating sharply raised its borrowing costs, making it a dubious and risky partner for such long-term deals.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985565","date":"2009-01-04","texts":"When Nena Razmara was laid off in November from her 70,000-a-year job with a high-end residential building supplier, she thought she would be working again by Christmas. Having worked in residential construction for 20 years, she was used to finding work by flipping through her Rolodex. The 45-year-old Woodbridge resident made her three phone calls. Then three more. But she still had no leads. For the first time since she graduated from college in the 1980s, she scoured help-wanted ads. She sent out more than 150 resumes and posted one on Craigslist under the heading, I desperately need a job. In ordinary times, a college degree goes a long way toward securing employment, even during a recession. It also offers some measure of job security Workers with at least a college diploma are less likely to lose their jobs in down times. But college grads such as Razmara are now finding that a postsecondary education isn't necessarily enough. In fact, labor economists say the unemployment rate for workers with a bachelor's degree or higher is poised to hit a record high. This recession is so far-reaching, they contend, few are immune from the consequences.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614691","date":"2009-01-06","texts":"Tomorrow, the House Financial Services Committee will hold a hearing to discuss priorities for the Obama administration's use of Troubled Asset Relief Program TARP funds. Those priorities could include lending and other directives to financial institutions receiving TARP investments. These directives could be disastrous for taxpayers and the economy if they force banks to engage in unwise lending, or keep weak, troubled banks from being absorbed by stronger banks. TARP has two major shortcomings. The first is a lack of political support. Congress did not explicitly authorize capital investments in financial institutions when it created the 700 billion program three months ago. The Treasury originally was supposed to buy troubled assets of banks and other financial institutions. It quickly realized that this was unworkable due to challenges in determining asset prices. It then decided to invest TARP funds in the institutions, to increase their capital. But the lack of congressional consent for these investments has understandably stoked controversy about their purpose. Second, there is widespread confusion about the role capital plays in bank balance sheets, which has exacerbated this controversy. That confusion is evident in comments such as banks should be forced to lend the TARP monies the government has given them. Treasury invests TARP funds by purchasing preferred stock in a bank, which adds to the bank's capital. Bank capital, which also includes common stock and retained earnings, serves as a cushion to absorb losses from loans and other bank activities it is not loaned out directly. Most bank lending is funded by customer deposits and borrowings from third parties such as the Federal Home Loan Banks. Potentially, a bank could use its increased capital from TARP to absorb losses from loans and investments already on its books, to acquire banks too weak to remain independent, or to increase its lending. The higher capital boosts a bank's lending capacity because it enables the bank to safely increase its deposits -- and thus its loans -- without increasing its risk of insolvency.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616977","date":"2009-01-07","texts":"Investors are ringing in the new year by taking on more risk even though the economic outlook remains grim. From junk bonds to currencies, mortgages, stocks and commodities, the markets that were most battered in the second half of 2008 are staging rebounds, sometimes of 10 and more from their low points. The breather comes as the U.S. government continues to push investors toward taking more risk because the returns on risk-free assets like Treasury bonds are extremely low. No question about it, there's an improvement in risk, says Alan Ruskin, chief international strategist at RBS Greenwich Capital. But the rallies may prove fragile if early optimism fades amid the challenges of revamping the devastated mortgage industry and stimulating a weak economy prove too daunting. On Tuesday, the stock market continued its recovery from November's lows. The Dow Jones Industrial Average rose 62.21 points, or 0.69, while the Standard & Poor's-500 stock index added 0.78.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984337","date":"2009-01-11","texts":"Sure, some of that money may have disappeared by choice, either by those who were smart or lucky enough to foresee crisis and got out, or by those who threw in the towel after repeated pummeling. For the most part, however, the 7 trillion represents an old-fashioned destruction of wealth a long, relentless decline in stock price valuations. The wealth destruction went beyond stocks last year. Jeremy Payne, a senior vice president with market research and analysis firm S&P Capital IQ, estimates that about 10 trillion of wealth disappeared in the global housing market. Add that to the 7 trillion in U.S. stock market losses, another 5 trillion or so in equity losses overseas and the sharp decline in values of more exotic investments such as mortgage securities, and we're probably looking at 25 trillion worth of asset price deflation, Payne said. The downdraft in stocks began early -- so early that when the Standard & Poor's 500 touched 1471.77 points on the first day of trading in 2008, it turned out to be the benchmark stock index's best level of the year. It was a steady march lower from there over several months. Then came the rapid plunge in September, sparked by the collapse of Lehman Brothers and a gathering dread that the foundation of the global financial system was creaky. A six-week rally late in the year ignited theories that a bottom had been reached in November, and that investors would turn the page in 2009. Stocks surged in the new year's first day of trading, but all of that ground and more was given back last week. The scenario is radically different from the one investors faced during the last downturn in stocks, in 2001 and 2002, when a euphoric run-up in home prices around the country helped offset the pain of a bear market on Wall Street. I think consumers have been chastened this time, said Stu Schweitzer, global market strategist for J.P. Morgan Private Bank. Now, with their houses and investment portfolios and retirement accounts having been hurt, consumers need to step up their saving.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982585","date":"2009-01-14","texts":"Rising unemployment and the sinking economy are driving sharp increases in the number of Washington area families seeking state health insurance for their children, and more of these families are qualifying for coverage, records show. The increases are particularly pronounced in the region's largest and wealthiest jurisdictions as employers cut benefits and eliminate jobs. In Fairfax County, for instance, requests for the state's insurance program for children, Family Access to Medical Insurance Security FAMIS, were up 16 percent between November 2007 and November 2008. In Alexandria, caseloads increased 20 percent, and in Loudoun, they were up 16.5 percent. Overall, caseloads in Northern Virginia shot up 18 percent during that period, from 19,299 to 22,692, compared with 7 percent for the rest of the state. In Maryland's Washington suburbs, caseloads for the state's insurance plan for children have increased about 4 percent, from about 45,000 to 47,000. Not only are caseloads up, but the number of people applying for such coverage has increased substantially too. Last week, the Virginia Department of Medical Assistance Services reported that the number of people applying for FAMIS increased an average of 24 percent a month in 2008 over 2007, from 5,073 a month to 6,291. This included a 40 percent increase in applications in September and October 2008 over the same two months in 2007. In addition, the number of applications approved increased 10 percent statewide from 2007 to 2008.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984063","date":"2009-01-15","texts":"Richard I. Linhart, who was hired as chief executive and chairman of Reston-based Millennium Bankshares in 2007 to help turn the struggling company's operations around, will resign at the end of the month. Linhart, a longtime local banker, has led the company through a period of increased scrutiny from regulators as the housing downturn has taken a toll on Millennium's finances. The company, which operates four branches of Millennium Bank in Northern Virginia, said in a statement that Linhart resigned for personal reasons and intends to retire. John F. Novak, executive vice president and chief operating officer, will succeed him. Neither Linhart nor Novak returned calls for further comment. Dick Linhart has done a great job in leading the bank through some very rough patches, Novak said in the company's statement. Hopefully, with the groundwork laid and the vision clearly defined, the organization can move more quickly toward becoming, once again, a competitive, profitable community bank in Northern Virginia. In January 2008, the company disclosed that the Office of the Comptroller of the Currency had ordered it to improve its financial condition. In June, the bank said it had signed an agreement with the Federal Reserve Bank of Richmond in which it agreed to get approval before paying cash dividends, making quarterly interest payments on some of its securities, adding directors and making certain promotions.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985438","date":"2009-01-15","texts":"China leapfrogged over Germany to become the world's third-largest economy in 2007, sooner than predicted, underscoring how quickly the concentration of global economic power has shifted. While earlier estimates had put growth of China's gross domestic product that year at 11.9 percent, revised figures released by the government statistics bureau Wednesday show that its economy actually expanded by 13 percent to 3.38 trillion. That compares with Germany's 2007 GDP of 3.32 trillion. Whether the growth trajectory will continue, however, has been complicated by the global recession, which has already prompted massive layoffs and waves of company closures, especially across southeastern China, the heartland of its export-driven economy. If China were to continue to grow at its current rate, economists say it could surpass Japan in as soon as three years and the United States in 18 years to become the world's No. 1 economy. In 2007, the United States remained the world's largest economy with a GDP of 13.8 trillion and Japan the second-largest with a 4.38 trillion GDP, according to calculations based on an annual average of daily exchange rates by Merrill Lynch. China is one of the few major economies that is on track to have positive GDP growth this year. Merrill Lynch calculates that China will have a GDP growth of 8 percent as compared with a 2.8 percent decline for the United States, a 1.3 percent decline for Japan and a 0.6 percent decline for the European Union.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613509","date":"2009-01-16","texts":"U.S. wholesale prices sank further last month, a sign of how quickly the inflationary pressures of last summer have reversed. Producer prices fell a seasonally adjusted 1.9 in December from the previous month, the Labor Department said, led by lower energy prices. It marks the fifth-straight monthly decline and a stunning reversal in just a few short months from the price pressures seen in mid-2008. The lower prices bring some much-needed relief to hard-pressed businesses as the U.S. recession marches on -- but they also reflect weakness in global demand for goods. Manufacturing activity is down sharply in the world's biggest economies, including the U.S., Japan and Europe it also has slowed in markets like China that once had enormous demand for raw materials. U.S. producer prices in December were down 0.9 from the previous year, the biggest yearly drop since 2001. Energy prices fell 9.3 last month from November, as wholesale gasoline prices tumbled 25.7. Food prices declined 1.5. The declines are expected to be passed on to consumers, as businesses work to attract customers through heavy discounting. The Labor Department will release its December consumer prices on Friday. Excluding food and energy, core producer prices held up last month, rising 0.2 from November and 4.3 from the previous year -- the largest annual gain in two decades. But core prices are expected to decline in the months ahead, which, combined with falling wages, is stoking concerns about a looming downward spiral of lower prices and spending known as deflation.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984365","date":"2009-01-16","texts":"Bernard L. Madoff's investment fund may never have executed a single trade, industry officials say, suggesting that detailed statements mailed to investors each month may have been an elaborate mirage in the alleged 50 billion fraud. An industry-run regulator for brokerage firms said Thursday that there was no record of Madoff's investment fund placing trades through his brokerage operation. That means Madoff either placed trades through other brokerage firms, a move industry officials consider unlikely, or he was not executing trades at all. Our exams showed no evidence of trading on behalf of the investment adviser, no evidence of any customer statements being generated by the broker-dealer, said Herb Perone, spokesman for the Financial Industry Regulatory Authority. Madoff's broker-dealer operation, Bernard L. Madoff Investment Securities, underwent routine examinations by FINRA and its predecessor, the National Association of Securities Dealers, every two years since it opened in 1960, Perone said.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615079","date":"2009-01-17","texts":"The Nation Guide to the Nation By Richard Lingeman and the editors of The Nation Vintage, 384 pages, 19.95 FOR 143 YEARS, The Nation magazine has maintained, in its adorable way, the blue-faced scowl of an angry toddler shaking its fist at the grown-ups. But while you could go to The Nation in recent years for instruction on how to think about the latest perfidy of the Bush administration, the magazine was no help when it came to advice on, say, how to find a really good lesbian knitting cooperative within easy bicycling distance or where to buy anti-globalization comic books printed on recycled hemp. The long wait is over. Now comes The Nation Guide to the Nation, a travelogcatalogalmanac whatever you do, don't call it a bible for and about a community of committed, passionate people who have active consciences and a lively sense of social justice. In keeping with the spirit of the undertaking, here's what might be called The Guide to The Nation Guide to the Nation","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985256","date":"2009-01-21","texts":"Less than half the money dedicated to highways, school construction and other infrastructure projects in a massive economic stimulus package unveiled by House Democrats is likely to be spent within the next two years, according to congressional budget analysts, meaning most of the spending would come too late to lift the nation out of recession. A report by the Congressional Budget Office found that only about 136 billion of the 355 billion that House leaders want to allocate to infrastructure and other so-called discretionary programs would be spent by Oct. 1, 2010. The rest would come in future years, long after the CBO and other economists predict the recession will have ended. The report does not analyze the entire 825 billion package assembled by House leaders and aides to President Obama. Parts of the legislation are scheduled to be considered today in the House Appropriations Committee. Other portions of the proposal -- including 275 billion in tax cuts and nearly 200 billion for jobless benefits, health care for the poor and other entitlement programs -- are expected to pour cash into the nation's faltering economy much more quickly. But the CBO analysis appears to confirm the complaints of many Republicans and other critics, who have long argued that spending money on highway construction and other infrastructure projects is ineffective at quickly jolting a sluggish economy. The report was distributed to reporters yesterday by aides to Senate Minority Leader Mitch McConnell R-Ky. The report also suggests that the House measure would violate Obama's rules for the stimulus package Obama aides have said they want the bulk of the spending to occur before 2011. Obama has pledged that the measure would save or create at least 3 million jobs over the next two years.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614230","date":"2009-01-22","texts":"OAKLAND, Calif. -- Claremont Creek Ventures recently had to decide which of its young to forsake. The venture-capital firm had invested in such companies as online travel site cFares Inc. and genetic-technology start-up Gene Security Network Inc., with cash from a 130 million venture fund it launched in 2005. Amid the financial crisis and the plunging stock market, Claremont Creek decided to focus on the fund's best investments and stop backing the less-promising start-ups. It wanted to be sure it had enough cash for the next few years for the winners. The venture firm ranked the start-ups in the fund's 16-company portfolio with an A, B or C grade. We're doubling down on the As and likely won't invest any more capital in the C companies, says John Steuart, a Claremont Creek managing director. The portfolio is competing against itself and it's survival of the fittest. It's brutal. Gene Security, a fast-growing maker of genetic tests to identify potential abnormalities in embryos, got an A. Last month, Claremont Creek poured 3 million into the company on top of 2.7 million it has already invested.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982563","date":"2009-01-22","texts":"When Arlington's assessor released numbers recently showing that the county had healthier-than-expected finances, one reason was Obidio Gonzales. Despite the recession and sagging home values, he and hundreds of other construction workers stayed busy in Arlington last year on a host of commercial and residential projects. Those emerging buildings, such as the Residence Inn near the Courthouse Metro station where Obidio strung cable in icy winds late last month, are what nudged the county's tax base up this year. The increase was a scant 0.4 percent, but the performance helped cut the county's projected budget deficit from 40 million to 35 million and gave county officials some moderately good news in a region where the effects of the downturn have been felt unevenly. It's a relatively healthy real estate market, from what I know about surrounding areas, said Tommy Rice, the county's director of real estate assessments. There are still some cranes in Arlington. The construction helped offset the effects -- on the county government's finances, if not on individual homeowners -- of the national recession and sagging property values locally. The value of the average single-family house in Arlington dropped, on average, 2 percent in the assessments for this year, to 520,100. That follows a dramatic rise in values through much of the decade.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984208","date":"2009-01-22","texts":"Gov. Martin O'Malley announced a budget proposal yesterday that seeks to overcome a 2 billion shortfall next year by laying off 700 state workers, eliminating 1,000 vacant positions and paring spending across a wide swath of government in response to the national recession. Under O'Malley's 14.4 billion spending plan, state workers would get no salary increases next year. Community colleges would not receive expected funding increases, which would be likely to lead to tuition increases. The phase-in of a subsidized health initiative would be slowed down, delaying planned coverage to adults without children. An education program that benefits Montgomery and Prince George's counties would be scaled back. And state payments to nursing homes and doctors would be frozen at current-year levels. We're making more cuts in this budget than in any budget in our history, O'Malley D said. He also said the economic downturn had forced a painful array of cuts, spending reductions and level funding of worthy programs. The budget included some good news for public university students a proposed fourth straight year of no tuition increases. And O'Malley did not advocate a move feared by local leaders shifting the cost of teacher pensions from state to county budgets.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842615942","date":"2009-01-23","texts":"Some optimistic experts are now saying that though this will be a turbulent year for global markets, the worst of the financial crisis is now behind us. Would it were so. We believe that 2009 will be tougher than many anticipate. We enter the new year grappling with the most serious global economic and financial crisis since the Great Depression. The U.S. economy is, at best, halfway through a recession that began in December 2007 and will prove the longest and most severe of the postwar period. Credit losses of close to 3 trillion are leaving the U.S. banking and financial system insolvent. And the credit crunch will persist as households, financial firms and corporations with high debt ratios and solvency problems undergo a sharp deleveraging process. Worse, all of the world's advanced economies are in recession. Many emerging markets, including China, face the threat of a hard landing. Some fear that these conditions will produce a dangerous spike in inflation, but the greater risk is for a kind of global stag-deflation a toxic combination of economic stagnation, recession and falling prices. We're likely to see vulnerable European markets Hungary, Romania and Bulgaria, key Latin American markets Argentina, Venezuela, Ecuador and Mexico, Asian countries Pakistan, Indonesia and South Korea, and countries like Russia, Ukraine and the Baltic states facing severe financial pressure. Policy remedies will have limited effect as insolvency problems constrain the effectiveness of monetary stimulus, and the risk of rising interest rates following the issuance of a wave of public debt erodes the growth effects of fiscal stimulus packages. Only when insolvent banks are shut down, others are cleaned up, and the debt level of insolvent households is reduced will conditions ease. Between now and then, we can expect further downside risks to equity markets and other risky assets, given the likelihood that markets will continue to be jolted by worse-than-expected financial news. The U.S. twin fiscal and current-account deficits will rise over the next two years as the country runs trillion dollar-plus fiscal deficits. We're all aware that foreign actors have financed most of this debt over the past several years. During the 1980s, the U.S. also faced the burdens of twin deficits, but relied on financing from key strategic partners like Japan and Germany. This time, the situation is more worrisome because today's financing comes not from U.S. allies, but from strategic rivals like Russia, China and a number of relatively unstable petrostates. This leaves the U.S. perilously dependent on the kindness of strangers.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830985522","date":"2009-01-24","texts":"At Virginia Tech, newly arrived international students from China are usually paired with other international students who have been at the school at least one semester to help them acclimate to their new environment. Xin Yang arrived on campus Jan. 8 and, university officials said, met her assigned buddy, Haiyang Zhu. He spent the next two weeks showing her around campus, officials said, helping her look for a place to live. The two became familiar enough in that short time that Yang listed Zhu as one of two people to contact in case of an emergency. Friends and former teachers of Zhu, 25, spent yesterday in shock as investigators continued searching his Blacksburg townhouse, laptop computer, cellphone and other personal items to try to piece together why the promising PhD economics student allegedly cut off the head of the 22-year-old woman he had only recently met. Chinese-language Web pages of Zhu's began to surface yesterday, indicating that he had money problems. But university officials cautioned that one site in particular, which displays Zhu's mug shot and talks about him wanting to kill himself or someone else because of losses in the stock market, appears to be a total fake. Still, Will Segar, Zhu's landlord at Blacksburg's Sturbridge Square Apartments, said Zhu acted strange and was often hostile and belligerent. He said Zhu was so concerned about money that he refused to turn the heat on in the three-bedroom townhouse he shared with two roommates. Instead, Segar said, throughout the fall, Zhu gathered sticks and dumped them in the middle of the living room to burn in the fireplace. The apartment had no furniture at the time, Segar said.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616906","date":"2009-01-26","texts":"WINCHENDON, Mass. -- Money still grows on trees. Timberland, which a few years ago became a popular investment among institutions and wealthy folks, has held up amid market massacres for most other assets lately. Through Sept. 30, the value of timberland rose 5. When the National Council of Real Estate Investment Fiduciaries reports 2008's final quarter this week, this number is unlikely to move much. That marks a slower pace of growth, yet it is growth nonetheless. In 2007, timber appreciation was a towering 15. How can positive returns exist in these dark days of shrunken prices for everything ranging from real estate to commodities to stocks Oil, after a summer price spike, was down 54 in 2008, while corn lost 11 and copper 54. Gold, as a refuge commodity, rose 6. Prices for lumber, a key forest product, have fallen by 34 over the past year as housing construction has ebbed. The answer to this riddle is that timberland is the ultimate long-term investment, with relatively little bought and sold each year -- and demand still respectable for what does change hands. As long as the sun shines, the trees will grow, says Jeremy Grantham, chairman of Boston money manager GMO and a long-time fan of timber investing. Timber will never be an orphan.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616800","date":"2009-01-27","texts":"Your editorial The Bush Economy Jan. 17 states Democrats like to claim the 1990s were a golden age while the Bush years have been disastrous. For the Clinton years, their claim is accurate. The average annual growth rate of real GDP during Bill Clinton's presidency was 3.7. The average annual growth rate of real GDP during the first seven years of George W. Bush's presidency was just 2.3. When the growth rate for 2008 is announced, the average annual growth rate of real GDP for Mr. Bush's eight years in office will be less than 2. Bill Clinton presided over a huge expansion in private-sector employment during his eight years in office Payrolls increased by 21.14 million. Private-sector payrolls have increased by just 1.3 million under Mr. Bush. In other words, for every 16 private-sector payroll jobs created while Bill Clinton was in office, President Bush has overseen the creation of just one private-sector payroll job. To say the least, that is a significant difference, especially when one considers that Mr. Clinton raised tax rates and Mr. Bush reduced them. The robust economic and private-sector employment growth during the Clinton years was also reflected in the stock market. The S&P 500 index stood at 435.71 at the end of 1992. Eight years later it was 1,320.28, an increase of 884.57 points or 203. At the end of 2008 the S&P 500 index stood at 903.25, declining 417.03 points or 31.6 over eight years. There is one area where George W. Bush easily surpassed Bill Clinton the growth in federal spending. From the fourth quarter of 1992 to the fourth quarter of 2000 the annual rate of federal spending increased by 421.6 billion. By the third quarter of 2008 the annual rate of federal spending was running higher by another 1.244 billion.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613695","date":"2009-01-28","texts":"A bounce for beaten-down financial stocks pushed the broader market higher, although glum economic news kept the rally in check. The Dow Jones Industrial Average rose for a second consecutive day, up 58.70 points, or 0.7, to 8174.73. Bank of America added 8.3 and Citigroup rose 6.6. American Express led the gains, up 9 after reporting a 79 drop in fourth-quarter profit Monday. But it was profitable, unlike some financial firms. The Standard & Poor's 500-stock index rose 1.1 to 845.71, led by a 3.9 rise in its financial sector. The S&PCase-Shiller home-price indexes worsened in November, with many regions in the U.S. experiencing record monthly drops. The Conference Board said its consumer-confidence index fell to a historic low in January. Oil futures fell 9.1 as the weak readings cast a pall over the demand outlook. Traders also placed bets ahead of inventory data due Wednesday, which they expect to show rising U.S. stockpiles of crude and gasoline.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615729","date":"2009-01-28","texts":"Short-selling levels increased at both the New York Stock Exchange and the Nasdaq Stock Market in the first half of January. In the latest semimonthly period, ended Jan. 15, the number of short-selling positions at the NYSE not yet closed out, or short interest, rose 1.9 to 13,383,705,291 shares, from a revised 13,129,000,164 shares in the period ended Dec. 31. On Nasdaq, short interest rose 0.2 to 6,885,173,921 shares from 6,870,252,846 shares over the same period. Investors who short shares borrow and sell them, betting share prices will fall and they can buy them back at a lower price for return to the lender. Stocks also can be shorted for other reasons, including hedging strategies. I'm not surprised short interest was up, said Harry Strunk, a principal at Treflie Capital Management in New York. Short sellers are doing very well in January and coming off their second-best year ever.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615582","date":"2009-01-29","texts":"Starbucks Corp., posting a 69 drop in quarterly profit, said it will close another 300 stores and cut 6,700 workers as it continues to reel from overexpansion and a sharp sales slowdown amid the recession. Looking to share the pain, Chief Executive Howard Schultz asked the board last week to reduce his annual base pay of 1.2 million, according to a spokeswoman. Mr. Schultz suggested a token salary of 1, but the board's compensation committee ultimately decided to cut it to 10,000. Once benefits costs are deducted from his check, Mr. Schultz will earn less than 4 a month in base salary, though his pay package includes compensation in stock. Mr. Schultz said the closures are happening in places where Starbucks built stores under the assumption that the economy would remain strong. That economic environment no longer exists, he told investors on a conference call. The company has been particularly hard hit by home foreclosures in California and Florida, he said. Under its latest plan, Starbucks will close an additional 200 locations in the U.S. and 100 locations internationally by this fall. That is on top of more than 600 store closures the company announced last year. The chain currently has nearly 17,000 outlets and 167,000 workers. Starbucks plans to lay off 6,000 store workers because of the closings, though some will be placed at other stores. It also will cut 700 nonstore workers at its Seattle headquarters and other field offices. Starbucks is still finalizing the list of stores that will be shuttered.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984466","date":"2009-02-03","texts":"Macy's announced yesterday that it will eliminate 7,000 jobs by May 1 as it undertakes a massive reorganization in the face of slumping sales and depressed consumer spending. The cuts represent about 4 percent of the company's 180,000-person workforce. Stores will lose an average of five to six employees, while about 40 percent of management positions will be cut, Macy's said. The Washington region, however, is expected to get a boost of 70 jobs under the restructuring. In addition, Macy's said it will begin repurchasing about 950 million in debt that will mature later this year, which should help reduce interest expense. It also said that it was lowering the quarterly dividend to 5 cents per share from 13.25 cents. The company estimated that its cost-cutting will save 250 million this year and 400 million annually in the future. It is also slashing capital expenditures to 450 million from an original estimate of 1 billion, lowering contributions to employees' 401k plans and eliminating merit raises for executives this spring. We just believe that this is a time when nothing should be considered a sacred cow, Macy's chief executive Terry J. Lundgren said in a conference call with analysts. We challenged ourselves to come up with an expense plan that we thought we could live with.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615229","date":"2009-02-05","texts":"Costco Wholesale Corp. warned that its fiscal second-quarter profit will fall substantially below Wall Street estimates -- foreshadowing what's expected to be a glum parade of downbeat news in the January retail-sales reports that come out Thursday. Costco, the nation's largest warehouse club chain by sales, had outperformed the retail pack for much of 2008. But Wednesday it said U.S. same-store sales in January were flat compared with a year earlier, while sales at its foreign stores, including markets such as the U.K. and Japan, fell 9, partly because of unfavorable currency exchange rates. Citing the uncertainties surrounding the economy, Costco Chief Financial Officer Richard Galanti declared that the company will no longer publicly forecast financial performance for the remainder of its current fiscal year ending Aug. 30. Most big retailers report January sales Thursday, and many analysts and consultants are predicting more companies will yank earnings forecasts altogether, as growing unemployment depresses consumer spending and clouds timetables for recovery from the recession. At Costco, the recession cut into its sales of nonfood items and crimped profit margins in recent weeks as the company lowered prices to spur sales and boost market share, said Mr. Galanti.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982049","date":"2009-02-06","texts":"The Obama administration plans to announce its board of economic advisers today, building a team of experts outside the White House to help sculpt a response to the deepening recession. Former Federal Reserve chairman Paul A. Volcker, a longtime informal adviser to President Obama, is to chair the group, which is intended to offer the president fresh thinking on economic policy. The White House Economic Recovery Advisory Board, as it is called, is meant to prevent policy from being made in an echo chamber in Washington, Obama said when announcing the plans last year. The president already has many strong voices advising him on economic issues, including Volcker Treasury Secretary Timothy F. Geithner Lawrence H. Summers, director of the National Economic Council Christina Romer, chairman-designate of the Council on Economic Advisers as well as other staff members who were at his side during the campaign. A report yesterday by Bloomberg News said that Volcker has grown frustrated with delays in establishing the new advisory panel, and particularly with his dealings with Summers. The report, attributed to people familiar with the matter, said that Summers has not involved Volcker, who is widely regarded as a giant in the world of economic policy, in shaping decisions. Summers was quoted in the Bloomberg report as disputing that characterization, and praising Volcker. A source outside the administration who is in contact with key policymakers said yesterday that Volcker, who during the campaign spoke frequently with Obama, has been frustrated that Summers and other White House staff have not engaged him more extensively.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616506","date":"2009-02-07","texts":"U.S. companies slashed nearly 600,000 jobs in January, underscoring the deepening recession and helping spur the Senate toward action on a stimulus bill. The jobless rate rose to 7.6. Temporary-help firms were hit hard. In Canada, 129,000 jobs were lost last month. A1, A2, A6 The Dow industrials rose 217.52 points, or 2.7, to 8280.59, as the jobs data fueled hopes the stimulus would pass. Financial stocks led the rally. B1 Geithner's bailout revamp isn't likely to include plans for a government bank to buy bad assets. A new Fed program is luring hedge funds. A3, B1 Universal ended plans for a distribution deal with Spielberg's DreamWorks, which has resumed talks with Disney. A1 GM and Chrysler are expected to close several more plants as part of the viability plans they must present the government by Feb. 17. B1","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614979","date":"2009-02-10","texts":"LAS VEGAS -- An emerging plan to ensure that banks sell high-quality securities underpinned by well-underwritten mortgages is being met with criticism by some regulators and industry experts. The proposal, which is only under consideration and still in the early stages, would call for issuers of pools of mortgage loans to retain a slice of the debt, which is created through a process called securitization. In simple terms, banks would be required to keep some skin in the game. A wave of mortgage securitizations in 2005 through 2007 is now seen as a key culprit of the housing mess because banks created and then sold billions of dollars of securities without conducting due diligence on individual loans within the pools. Those offerings helped fuel the surge in housing sales in the U.S. and Europe and ultimately led to the global financial crisis. The 8.7 trillion securitization market, which also helped fund credit cards and auto loans, is largely dead, forcing the U.S. government to put into place plans such as the Term Asset-backed Securities Loan Facility, or TALF. At the American Securitization Forum's annual conference this week in Las Vegas, where the outlook largely is grim, industry participants are discussing with regulators other ways to bring investors back to buy debt pools. On Monday, several panels also tackled the TALF plan and whether or not it will help shore up the securitization markets. The central topic Monday was the plan to make banks keep a piece of the debt pool. Typically, debt pools are sliced into pieces or tranches based on risk and returns. Opponents of forcing banks to keep a debt slice point to the fact that banks such as UBS AG, Citigroup Inc. and Merrill Lynch & Co. kept the top layers of more complex debt pools known as collateralized debt obligations and then ended up writing down tens of billions of dollars.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613581","date":"2009-02-12","texts":"Even as job losses mount and profits plunge, some glimmers of stabilization are emerging in global markets. In the U.S., Europe and China, separate surveys of manufacturers' purchasing managers all inched upward in January, suggesting that the contraction in manufacturing activity could be slowing. The interest rates at which banks lend to one another are easing. And some credit markets are thawing. Analysts say rock-bottom official interest rates, promises of massive fiscal-stimulus packages and central banks' other efforts to revive markets have helped ease some tensions in financial markets and may help put a floor under falling business confidence. As the government rescue efforts work their way through the markets, they could lay the groundwork for the global economy to begin escaping the worst of the storm. But the current hints of stabilization come at very low levels, and with the financial system still fragile, suggesting the year ahead will be rocky at best. And the hopeful signs could still turn ugly, especially with employment falling and draining household incomes. Some of the numbers we had been seeing were just jaw-droppingly awful, said Ken Wattret, economist with BNP Paribas in London. What we're getting now is a sense that the pace of contraction won't continue at that rate. But it's really a question of being less bad.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614344","date":"2009-02-12","texts":"Investors put an estimated 3.76 billion into long-term mutual funds in the latest week as bond funds received 5.14 billion and more than offset outflows at other funds, according to the Investment Company Institute. Increased investor interest in bond funds comes as Treasury yields continue to rebound from historical lows at the end of 2008 and as the stock market remains rangebound. Outflows in stock funds totaled 739 million for the week ended Wednesday, as U.S. funds had outflows of 8 million and 731 million was pulled from foreign funds. Investors withdrew 638 million from hybrid funds, the third consecutive week of outflows, the institute said. Such funds can invest in both stocks and fixed-income assets. For the bond funds, taxable ones took in 3.68 billion while municipal ones had inflows of 1.46 billion.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617305","date":"2009-02-12","texts":"WASHINGTON -- The economic-stimulus agreement reached Wednesday expands federal aid to an array of programs aimed at the poor and jobless, with billions of dollars for health care, unemployment insurance, food stamps and other programs. Final negotiations between the House and Senate stripped away some of the more aggressive expansions that had been on the table, including an option to let states open their Medicaid programs to the unemployed. But the final deal still represents a larger federal contribution to nearly every major aid program the government administers. It targets relief to those hurting the most in the recession, said Sharon Parrot of the Center for Budget and Policy Priorities, a left-leaning group that advocated for many of the expansions included in the bill. The extra money is set to last a maximum of two years, but Republicans said that it will be hard to cut off the extra aid once it begins flowing. And they said that the increased funding, much of which is funneled to the states, won't create jobs or stimulate the economy. In the final bill, the unemployed will see fresh aid on two fronts an extension of unemployment benefits and help paying health-insurance premiums.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984428","date":"2009-02-13","texts":"The economic stimulus bill facing key votes in Congress would provide enough money to modernize more than 300 schools in the District, Maryland and Virginia and would boost unemployment benefits to more than half a million people in those jurisdictions hurt by the recession, according to White House projections released yesterday. The nearly 790 billion measure is expected to provide a windfall for road repairs, energy projects, education and hospitals. Information began to trickle out yesterday about its impact on the Washington area as officials await the release of additional details. The region would benefit not only from new education, transportation, Medicaid and other funds provided to all states, but also from an extra jolt of money for repairing government buildings and helping federal institutions, officials said. The Obama administration predicted that the bill would create or save 66,000 jobs in the next two years in Maryland, 12,000 in the District and 93,000 in Virginia. Some economists said the administration's figures appeared too high, however, and others cautioned that it was difficult to predict exactly how the stimulus package would translate into jobs. The numbers, as we understand them, are very positive for Maryland, said Shaun Adamec, a spokesman for Gov. Martin O'Malley D. There appears to be a good variety of funds that will provide flexibility to shore up shortfalls in our general fund and provide strategic investments in transportation and education.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617300","date":"2009-02-15","texts":"Even with massive efforts to prop up the economy and banking system, the stock market is facing significant head winds that may persist through much of 2009. That means remaining cautious with your investments for many months to come until it becomes clearer whether these steps will bear fruit. It's now been nearly two years since the collapse of the real-estate bubble began. But it was only late last year that the real impact began to be felt by consumers. In previous downturns, consumers mostly kept spending, thanks in large part to easily available credit from banks and credit-card companies. Meanwhile, in recent decades the already dominant role of the consumer in the U.S. economy became even larger. By the end of last year, consumer spending accounted for 70.4 of U.S. gross domestic product, up from around 63 in the late 1970s. In recent years, the savings rate in the U.S. turned negative, meaning consumers were spending more than they made. But that lending has been choked off, and jobs have vaporized, sending the unemployment rate to its highest in 16 years. Consumers have responded by pulling back on their spending.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616001","date":"2009-02-17","texts":"My, how the mighty have fallen. Just months ago, China was the envy of the investing world. Funds tracking that country posted 50 average annual returns in 2006 and 2007. But as if on cue, when the torch went out at the Beijing Olympics, so, too, did the prospects for this marketplace. Since then China has experienced slowing growth, rising unemployment and huge stock-market losses. China-focused offerings lost 52.7 in 2008 and are down an additional 6.3 so far this year. China's fall from grace isn't a singular incident. Emerging markets in general have undergone a dramatic comeuppance as the recession that started in the U.S. spread to almost every part of the globe. Brazil, a market that enjoyed a run based on soaring oil prices, has seen its stock-market returns cut in half as prices for black gold plummeted, according to Standard & Poor's. Russia and Taiwan experienced pullbacks just as severe. And Iceland saw its economy spiral out of control when its currency, the krona, went into a freefall. Not surprisingly, investors have been pulling their money out of emerging-market funds. According to Citigroup, 480 million was pulled out of these funds in December, marking the sixth consecutive month of net outflows. At the end of 2008, emerging-market fund assets stood at 78 billion, down from 174 billion earlier in the year. That tally is right about where these funds were in 2006 and 2007 before they took off. Poor performance and net outflows can be a disastrous combination for mutual-fund investors. So this week we're focusing on this niche in order to provide a little insight into their prognosis -- and to highlight offerings we think are top-notch. We knocked out emerging-market funds that charge a load and searched for ones that met our usual performance and fee criteria. Only four funds made our final cut.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982503","date":"2009-02-21","texts":"Maryland resisted slot machine gambling for years only to launch a program this month at what could be the worst possible time, leaving state leaders divided about whether to simply ride out the recession or take more aggressive action. As it stands, gaming companies are over-leveraged and short on cash. Borrowing money to build slots parlors is difficult with frozen credit markets. And the state has insisted on offering operators one of the lowest shares of revenue in the nation. So it is that Maryland has only four bids to operate five slots sites and requests to use only 6,550 of the 15,000 machines that voters authorized in November. As they try to regroup, state leaders are weighing whether to offer better deals to operators, lobby current bidders to accept more machines or even change locations where slots are allowed. But there appear to be no easy or quick fixes. If they had done this in 2005 or 2006, they probably would have done fine, said William Eadington, director of the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada at Reno. But right now, the whole industry is in a very bad position to be bidding on anything.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613491","date":"2009-02-24","texts":"HEALTH Recession Likely to Boost Government Outlays on Care Government spending on health care is expected to jump 7.4 to 1.191 trillion this year as the recession curbs private health-care spending and swells the rolls of Medicaid and other government programs, a federal study concludes. Overall, the nation's health-care expenditures are expected to reach 2.510 trillion, a 5.5 increase from 2008, when expenditures grew at a 6.1 pace, according to the study by economists and actuaries at the Centers for Medicare and Medicaid Services being published Tuesday in the journal Health Affairs.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830985619","date":"2009-02-25","texts":"As General Motors and Chrysler seek another infusion of government funds, Ford is standing apart for now -- and may be benefiting. Ford's staggering 40 percent plunge in U.S. light-vehicle sales last month was actually a victory of sorts. GM's sales declined by an even steeper 49 percent, and Chrysler's fell 55 percent from January 2008, according to Ward's Automotive Group, which tracks the industry. Part of the explanation may be that car buyers believe Ford is more likely to survive the recession, industry analysts said. Unlike its domestic rivals, Ford didn't seek a federal bailout late last year, and it didn't turn to the government again last week begging for a second big infusion of taxpayer funds to avoid bankruptcy. One of the factors is that Ford's not asking for money in Washington, so consumers may be less concerned about Ford, said John A. Casesa, automotive analyst and managing partner of the consulting firm Casesa Shapiro Group.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616278","date":"2009-02-27","texts":"Con-way Inc. used to spend 500,000 a month on advertisements seeking drivers for its fleet of 2,950 long-haul trucks. Now, the company spends less than half that amount. For years, a shortage of drivers was the single biggest problem for the trucking industry. Con-way, J.B. Hunt Transport Services Inc. and other companies spent millions of dollars annually trying to attract applicants for a notoriously unappealing job that involves spending weeks on the road, sleeping in cramped cabs and showering at dirty truck stops. Annual driver turnover has routinely approached or exceeded 100. In the cut-throat competition to lure new drivers, companies offered everything from signing bonuses to letting drivers take their pets on the road. Now, these trucking companies suddenly have more applicants than jobs, thanks to a recession-driven jump in applications from the ballooning ranks of the unemployed and a decline in the number of trucks on the road as freight volumes plummet. In January alone, the industry, which employs roughly 1.32 million people, lost 25,000 jobs, according to the American Trucking Associations. Some companies say they are seeing a tripling or quadrupling of inquiries from types of people who have historically snubbed driving a truck. They include people laid off from hard-hit industries such as construction and auto-manufacturing. I've never seen it like this in 24 years, I can tell you, said Herb Schmidt, president of Con-Way Truckload, the San Mateo, Calif., company's long-haul division.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983352","date":"2009-02-27","texts":"The gangly, bespectacled official who yesterday laid down the fiscal footprint of a new presidency is an unassuming man who proudly refers to himself as the administration's super-nerd. The gangly, bespectacled official who yesterday laid down the fiscal footprint of a new presidency is an unassuming man who proudly refers to himself as the administration's super-nerd. I hope I don't bore everyone else in the room, Office of Management and Budget Director Peter Orszag deadpanned to an auditorium full of reporters as he unveiled President Obama's first budget. Orszag, at 40 the youngest member of the Cabinet, has assumed an outsize influence among the tight circle of wonks Obama has dubbed his propeller heads a team of economists with big personalities and bigger intellects. Orszag has already surprised lawmakers on Capitol Hill with his apparent overnight transformation from the low-key academic they remember from his tenure at the nonpartisan Congressional Budget Office to a political dealmaker instrumental in negotiations over passing Obama's economic recovery plan. In the past week, Orszag has unveiled a 3.6 trillion budget and convened a fiscal responsibility summit aimed at easing the country's economic crisis and advancing the president's domestic agenda. He is also expected to play a leading role in efforts to reform the nation's health-care system. A self-described economic centrist who fought President George W. Bush's proposal to privatize Social Security, Orszag thinks the soaring costs of health care pose the biggest threat to the nation's fiscal health. Left unchecked, he fears, health-care costs will become the primary driver of a crisis.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984622","date":"2009-03-01","texts":"Gov. Timothy M. Kaine oversaw the conclusion of his final General Assembly session last night, virtually assuring he will leave office without fulfilling his most conspicuous campaign promise to resolve Virginia's transportation mess. Facing the worst economic crisis in generations and stiff resistance from Republican lawmakers who felt burned by past efforts at compromise, the commonwealth's 70th governor discovered that the ambitious agenda he laid out to voters in 2005 would remain largely beyond his reach. As the gavel fell Saturday night on the 2009 legislative session, he acknowledged leaving his efforts to address vexing traffic issues unfinished and his pledge to fund pre-kindergarten programs statewide unresolved. But Kaine, ever upbeat, said he found other ways to deliver for voters, including Saturday's accord on revisions to the state's 77 billion budget and last month's decision to impose a statewide ban on smoking in restaurants and bars. There are things I wanted to do that I will not get done, and then there are things I have gotten done that I would have never imagined in my wildest dreams, Kaine said in an interview. It's been a weird three years. The House and Senate adjourned about 845 p.m., signaling to Kaine that they had completed their work. The close of this year's session marks the start of a 10-month transition for Kaine from elected chief executive to full-time chairman of the Democratic National Committee.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616230","date":"2009-03-02","texts":"Though the IPO window appears closed to all but a select few companies, that hasn't stopped an optimistic breed of start-ups from pinning their dreams on going public. Their initial public offerings aren't underwritten by investment banks, they price their stock for 1 a share or less, and they are hoping to sell enough to eventually list on the OTC Bulletin Board. Although they span a wide variety of industries, from mining to technology, they have a lot in common no revenue and, in most cases, no product or operating business. Some own land they seek to explore or develop. Others have product prototypes they want to manufacture and distribute. All are willing to give the public markets a shot at a time when only two mature companies have gone public in the past six months. You put it out there, and whatever comes back, comes back. But my ideal would be to have one investor with deep pockets buy all the shares and become a long-term partner, said Trevor Blank, chief executive of Skyhigh Resources Inc., which registered in October to raise 25,000. The company, which incorporated nearly two years ago, has no revenue but owns a 1,200-acre property in Canada that it wants to explore for gold, silver and platinum. Its cash balance, according to its prospectus nil.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615167","date":"2009-03-04","texts":"In normal times, the best advice after a market decline is Don't be afraid. But these are not normal times, and anyone who is not afraid after a 50 market decline has a few screws loose. The trick is to channel your fear into sensible action that will improve your financial future. Instead of big impulsive steps you may regret later, you should take small and careful steps that will make you feel you have taken charge. Mental-health experts have found that merely believing you have some control over a painful situation is enough to make the pain more bearable. At a time like this, taking a little bit of action can give you a lot of comfort -- both as an immediate salve for your market wounds today and as a portfolio strengthener in the years to come. For investors, that means being deliberate in everything you do and making sure that all your decisions are gradual and incremental, rather than sudden and drastic. Call it smart panic -- calculated actions that free you from the chains of inertia without compelling you to go haywire. Normally, inertia keeps investors locked into all their investments, good and bad. As Sir Isaac Newton might have put it, an investor at rest stays at rest, and an investor in motion stays in motion, unless acted upon by an outside force. Severe losses can shock any investor out of inertia, often in destructive ways. Here is a list of constructive steps you can take instead","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983895","date":"2009-03-08","texts":"Dave Kansas has written The Wall Street Journal Guide to the End of Wall Street as We Know It What You Need to Know About the Greatest Financial Crisis of Our Time -- And How to Survive It Collins Business. For the Color of Money Book Club selection for March, I recommend you read Kansas's book, which at 15.99 is a bargain look at how we came to be in what I call the Millennium Meltdown. Kansas is an experienced financial journalist who has covered the good, bad and ugly of the financial markets. He's editor-at-large for FiLife, an online personal finance Web site. He spent four years as editor of the Wall Street Journal's Money & Investing section and was once editor-in-chief of TheStreet.com. We're experiencing a moment when nothing and no one feels safe, Kansas summarizes in the book's introduction. People are understandably frustrated and angry. . . . It is a time of high anxiety with moments of panic arguably not seen in this nation since the Great Depression, even if the present circumstances don't exactly mirror the calamity of that age. Part of the reason we're fuming about our financial state is that we were hoodwinked. We were told not to worry because Wall Street wanted us to win. So, in good faith, we invested. We invested our money in retirement plans or college funds hoping not necessarily to become Rockefeller rich but to earn a decent return.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613923","date":"2009-03-09","texts":"SPARTANBURG, S.C. -- At a factory here that churns out plastic parts for everything from spray cans to blasting caps, laying off just one worker can be more trouble than it's worth. The plant, owned by Cleveland-based Parker Hannifin Corp., has become so lean over the past decade that many assembly lines run with only a handful of highly trained workers. So while mass layoffs have driven the U.S. unemployment rate to its highest in 26 years, Parker and other companies like it are responding to the slump in more surgical ways, mainly by cutting hours and shedding temporary workers. Because of productivity gains, every one of my people carries more dollars in sales today, says Donald Washkewicz, Parker's chief executive. In 2000, the average Parker worker represented about 125,000 a year in sales. Today, that figure tops 200,000. If I need to cut back, I have to cut back fewer people to achieve the same goal. Similar trims are taking place at each of Parker's nearly 300 factories. And to varying degrees, this is happening at thousands of other large and small factories across the U.S.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617346","date":"2009-03-09","texts":"Collapse of the Financial Sector Harder, Deeper Than Tech Wreck --- In 18 Months, an 83 Drop a Drag on Entire Economy The stock-market damage in the financial sector over the past 18 months has surpassed the similar destruction of value in the technology sector after the Internet-stock bubble collapsed.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984026","date":"2009-03-14","texts":"Along with the stock market and the foreclosure rate, a less-heralded barometer has signaled the arrival of hard times the landfill. In an extravagantly wasteful society that typically puts 254 million tons of unwanted stuff at the curb to be thrown away each year, landfill managers say they knew something was amiss in the economy when they saw trash levels start steadily dropping last year. Now, some are reporting declines as sharp as 30 percent. The trash man is the first one to know about a recession because we see it first, said Richard S. Weber, manager of the Loudoun County landfill. Circuit City's closing, so people aren't going there and buying those big boxes of stuff and throwing away all that Styrofoam and shrink-wrap . . . and whatever they were replacing. Trash volume has dropped so much, Weber said, that instead of running out of space in 2012, as had been projected, the Loudoun landfill will gain a year and a half or so of use. That's huge, he said. In Prince William County, which has been particularly hard hit with foreclosures, the amount of discarded refrigerators, washers, dryers and other appliances that are usually sent to the landfill has fallen by 20 percent since the recession started. People aren't buying new, said Tom Smith, solid waste program manager. They're making do with what they have.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614710","date":"2009-03-16","texts":"Forget the froth-laden cappuccinos and the double-shot lattes. More people want their coffee without frills and the fancy price tag. Companies that cater to customers who want a decent cup of coffee at an affordable price are capitalizing during the economic crisis, while high-end retailers struggle to avoid losing revenue and customers. We try to keep ourselves recession-resistant, said Margaret Chabris, spokeswoman for 7-Eleven, the world's largest convenience-store chain. Coffee is the No. 1 sales category at the company, owned by Japanese retailer Seven & I Holdings Co. The company offers coffee from 99 cents to 1.79 for the largest cup. It recently introduced its Brazilian Bold coffee as a response to customers' desire for a stronger coffeehouse blend, Ms. Chabris said. Total coffee sales at 7-Eleven in February rose 1.1 from a year earlier. The chain sells an estimated one million cups of coffee a day globally, she said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614948","date":"2009-03-19","texts":"The dollar tumbled Wednesday afternoon after the Federal Reserve surprised markets by escalating its quantitative-easing program, signaling a more aggressive approach to keeping longer-term yields low and stabilizing credit markets in the U.S. The dollar sold off sharply and broadly after the Fed said it would expand its purchases of mortgage-backed securities by an additional 750 billion and spend as much as 300 billion to purchase Treasurys. The euro reached 1.3499, its highest level since Jan. 9, after the Fed's statement, marking one of its biggest intraday gains. The dollar's selloff was widespread, with the currency moving sharply lower against the yen, Swiss franc, pound and Canadian dollar as well as a range of emerging-market currencies. The U.S. dollar took a significant hit right across the board, said Dustin Reid, director of G11 foreign-exchange strategy at RBS Greenwich Capital Markets in Chicago.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616207","date":"2009-03-19","texts":"The Federal Reserve's controversial decision to buy long-term Treasury securities is a step Chairman Ben Bernanke has been contemplating for much of this decade in thinking about how to prevent a return of deflation and depression. He hopes Wednesday's move will push down long-term borrowing rates benchmarked to Treasury bonds, from car loans to mortgage debt to corporate bonds. But it could backfire and fuel fears that the Fed, by using its power to print money to help the government finance soaring budget deficits, is kindling inflation. Those fears could, paradoxically, send Treasury yields higher. The market's initial reaction was mostly positive. Treasury yields dropped sharply, as previous research conducted by Mr. Bernanke suggested would happen. The Bank of England's decision earlier this month to begin purchasing government debt provided comfort that the move would work. Yields on British gilts have declined by roughly half a percentage point after it decided to buy gilts. An explosion of federal borrowing had started to put upward pressure on Treasury yields, said Brian Sack, an economist at Macroeconomic Advisers LLC. Fed purchases could relieve some of that pressure and have a meaningful impact on yields. But in a hint of potential worries among investors about the Fed flooding the economy with even more money, the dollar dropped against the euro and the yen. The euro landed at 1.34 in late trading, up from 1.30 the day before, the biggest one-day gain since its birth in 1999.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615286","date":"2009-03-20","texts":"Best Check On Inflation Broken Banks With the Fed training a monetary fire hose on the financial system, many in currency and other markets are getting itchy about inflation. But without an effective fix for the banking sector, they are likely getting ahead of themselves. Inflation may be a monetary phenomenon, to paraphrase Milton Friedman, but money is only inflationary if it gets spent quickly. Right now, it isn't getting spent very quickly at all.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614809","date":"2009-03-21","texts":"'What can we do that would be beneficial One thing is lower corporate taxes and businesses taxes and maybe taxes in general. Particularly, you want to lower the tax on capital so you raise the after-tax return to investing and get more investing going on. Gary Becker, the winner of the 1992 Prize in Economic Sciences, is in New York to speak to a special meeting of the Mont Pelerin Society on the global meltdown. He has agreed to sit down to chat with me on the subject of his lecture. Slumped in a soft chair in a noisy hotel coffee lounge, the 78-year-old University of Chicago professor is relaxed and remarkably humble for a guy who has achieved so much. As I pepper him with the economic and financial riddles of our time, I am impressed by how many times his answers, delivered in a pronounced Brooklyn accent, include an I think and sometimes even an I don't know the answer to that. It is a reminder of why he is so highly valued. In contrast to a number of other big-name practitioners of the dismal science, he is a solid empiricist genuinely in search of answers -- not the job as the next chairman of the Federal Reserve. What he sees is what you get. What Mr. Becker has seen over a career spanning more than five decades is that free markets are good for human progress. And at a time when increasing government intervention in the economy is all the rage, he insists that economic liberals must not withdraw from the debate simply because their cause, for now, appears quixotic. As a young academic in 1956, Mr. Becker wrote an important paper against conscription. He was discouraged from publishing it because, at the time, the popular view was that the military draft could never be abolished. Of course it was, and looking back, he says, that taught me a lesson. Today as Washington appears unstoppable in its quest for more power and lovers of liberty are accused of tilting at windmills, he says it is no time to concede.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984220","date":"2009-03-21","texts":"New money is about to flow into a part of the real estate market that has been squeezed hard by the credit crisis mortgages too large to be purchased or backed by Fannie Mae, Freddie Mac or the Federal Housing Administration. Higher-cost areas throughout the country traditionally have depended on the ready availability of jumbo mortgages to finance houses. Such neighborhoods are heavily concentrated in California, portions of Florida and the Northeast, including the Washington region. With the collapse last year of the private mortgage bond market on Wall Street, home buyers, builders and refinancers who relied on jumbo financing were left with few sources -- except with punitively high interest rates and huge down payments. Now, though, major banks are heading into the jumbo segment, originating big loans at affordable rates -- not for Wall Street bond traders, but for their own investment portfolios. Bank of America, the country's largest mortgage lender, is rolling out a large program to finance jumbo loans between roughly 730,000 and 1.5 million, with fixed 30-year rates starting in the upper 5 percent range. The loans will be available through the bank's retail network and also through its Countrywide Home Loans subsidiary. After April 27, Countrywide will be rebranded -- shedding the name it has had since 1969 -- and morph into Bank of America Home Loans. Bank of America acquired Countrywide, once one of the biggest subprime lenders, last year. Barbara Desoer, the bank's head of consumer real estate operations, said there's a real need for capital in the jumbo arena, where interest rates last fall sometimes exceeded conventional loan rates by three to five percentage points -- if financing was available at all.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984264","date":"2009-03-21","texts":"In the nearly 16 years that I've been writing this column, I've never seen a better market in which to be a first-time home buyer. The rising tide of foreclosures has pushed down home prices significantly over the past 18 months. Homes, relative to income, are about at the historic norm, which means they're more affordable than they've been in at least a decade. Beyond that, if you buy a foreclosed property, you might wind up spending even less, as lenders struggle to process all of the foreclosures and short sales that are piling up. If there were no more foreclosures in Florida, it would take the courts nearly two years to process all of the foreclosures on the docket today. Not only have homes come down in price significantly, but 30-year fixed-rate loans are at about 5 percent. Some first-time buyers are getting 15-year rates at 4.5 percent or lower. These are historically low interest rates that will seem downright cheap if rates rise above 7 percent, which they will probably do several years from now. Spending less to finance a property means you can get more for your money or save more for retirement or other purposes. With interest rates so low and home prices falling, homeownership becomes affordable to many first-time home buyers.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982023","date":"2009-03-25","texts":"A wave of indignation swept over France when it became known Tuesday that the head of a large auto parts company who was edged out because of poor results walked away with a severance package worth more than 4 million. The outrage, which intensified government threats to pass a law limiting executive pay, reflected a growing sense of unease as the global financial crisis bites ever more deeply into the French economy, with unemployment surpassing 2 million and recrimination mounting against President Nicolas Sarkozy's attempt to remedy the situation by propping up ailing banks and businesses. As it has in the United States, the issue of stratospheric compensation packages for executives who were in charge when the crisis erupted has become a rallying cry for fired workers, labor unions and politicians. Many French people, like their U.S. counterparts, have complained they are being made to pay for the greed and heedlessness shown by political and business leaders who allowed world financial markets to spin out of control. Aware of the mounting resentment and its political implications, the government was quick to react when news spread that Thierry Morin, who left the Valeo company Monday, received a 4.1 million goodbye gift from the board of directors. The package was granted, the newspaper Liberation reported, even though the company lost more than 250 million last year, laid off about 1,600 employees in France and received nearly 25 million in government aid to weather the crisis. The budget minister, Eric Woerth, said it was provocative and abnormal for a struggling company that received aid from the government -- and in which the government has a minority interest -- to pay out such a generous severance package to someone who was let go over what were described as strategic differences with the board of directors.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616184","date":"2009-03-27","texts":"NEW YORK -- Up for the year to date is a phrase that nobody in the stock market had heard for a long time. Until Thursday. U.S. stocks surged, and the Nasdaq Composite Index burst into positive territory for 2009 as traders ignored signs of rising unemployment and positioned for a recovery, buying economically sensitive stocks such as Research In Motion, Best Buy and FedEx. General Motors was the strongest stock in the Dow Jones Industrial Average as the U.S. government looked likely to give the auto giant another shot at a turnaround. GM surged 42 cents, or 14, to 3.41. Overall, the Dow rose 174.75 points, or 2.25, to 7924.56, its highest close since Feb. 12, bringing its gains to 21 from the 12-year closing low on March 9. That eclipses a 19 gain between Nov. 20 and Jan. 2 and is the first time the Dow has entered a technical bull market, a gain of 20 or more since the current bear market began in October 2007. The broad Standard & Poor's 500-stock index rose 18.98, or 2.33, to 832.86 and is up 23 from its closing low on March 9, rivaling its 24 gain between November and early January.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983227","date":"2009-03-28","texts":"By any measure, 2008 was a brutal year for the local real estate market, as gains made during the housing boom continued to unravel. Home sales fell throughout the region as credit dried up and buyers fearful of an increasingly uncertain job market sat on the sidelines. No local jurisdiction except the District was spared from falling home prices, and some of the hardest hit Zip codes in the suburbs had declines of more than 100,000. Region-wide, the median sales price for single-family houses and townhouses fell 8 percent, to 382,500 from 417,000, in 2007, according to a Washington Post analysis of government sales records. The median price for condominiums also fell 8 percent, to 268,000 from 289,900. The median is the point at which half the homes cost more and half cost less. The economic events of the year played out in every segment of the market. The wave of distressed sales -- those homes sold by banks or by homeowners facing foreclosure -- dragged down prices at the lower end. Meanwhile, the stock market's dive in 2008, 38 percent as measured by the Standard & Poor's 500-stock index, kept wealthier home shoppers from committing to purchases at the higher end, real estate agents said. It was depressing, said Mark Smith, a real estate agent with Coldwell Banker Residential Brokerage in Gaithersburg. We saw an increase of properties coming on the market, a decrease of credit flowing to what banks consider 'marginally qualified people' and an increase in short sales and foreclosures.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984954","date":"2009-04-01","texts":"Four regional banks from around the country yesterday became the first firms to repay emergency aid from the government, but the show of strength also underscored concerns about the health of a key element of the federal economic recovery program. The Treasury Department has invested almost 200 billion in more than 500 banks to support new lending to consumers and businesses, but the growing clamor among recipients to repay the aid earlier than planned threatens to diminish the impact. The largest bank to exit, Signature Bank of New York, which returned 120 million, said it was acting to avoid the effects of congressional restrictions on aid recipients, including limits on pay that could drive away its most productive employees. Chief executive Joseph J. DePaolo also said that the aid had become an undeserved scarlet letter because of public perception that the program was being used to save troubled banks, rather than buttressing healthy firms. Other returns included 100 million from Old National Bancorp of Indiana, 90 million from IberiaBank of Louisiana and 28 million from California's Bank of Marin Bancorp. The repayments are the latest challenge for the investment program, which was introduced in November with the stated goal of investing 250 billion in thousands of banks. The Treasury immediately put half the money in the largest banks but since has distributed less than 60 percent of the remaining funds.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613925","date":"2009-04-02","texts":"The dollar was modestly stronger against the euro Wednesday, first on general risk aversion following a raft of disappointing data and then on cautiousness ahead of the European Central Bank meeting. Discouraging data overnight helped to erode market confidence, setting a risk-averse tone that typically favors the dollar. When a glimmer of improvement in a U.S. manufacturing report helped to lift U.S. stocks, though, the euro remained down with traders unwilling to take new bets ahead of a euro-zone monetary-policy meeting Thursday. Analysts widely expect a half-percentage-point cut to the ECB's key rate to 1, while some predict new nontraditional easing measures. The risks are that the ECB is going to move more slowly than the market is expecting, and that will be euro-constructive, said Ron Leven, a currency strategist at Morgan Stanley in New York. Meanwhile, the dollar weakened against the yen, one day after sharp gains associated with the close of the fiscal year in Japan. Mr. Leven said the reversal of that move Wednesday may indicate a seasonal trend as investors re-enter the market. Wednesday afternoon in New York, the euro was at 1.3232 from 1.3286 late Tuesday, and the dollar was at 98.67 yen from 98.95 yen. The euro was at 130.56 yen from 131.47. The U.K. pound was at 1.4438 from 1.4383, while the dollar was at 1.1460 Swiss francs from 1.1383 francs.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614438","date":"2009-04-02","texts":"U.S. stocks surged, and the Dow Jones Industrial Average rose 152.68 points as traders focused on the bright side of manufacturing data and auto-sales reports and ignored a worrisome labor-market survey. Stock-market bulls saw signs the bear market and the economic and financial crises have reached their lowest ebb. A measure of pending-home sales ticked up in February, and the manufacturing survey showed improvement in March from February. General Motors shed a penny to close at 1.93. Shares of the auto maker pared losses after its executives suggested on Wednesday that U.S. industry sales had reached their lowest level despite a decline of 45 for GM's sales in March from a year earlier. Ford Motor rose 11 cents, or 4.2, to 2.74 as new incentives drove March sales higher than February levels. Ford sales fell 41 in March, topping analysts' expectations. American depositary shares of Toyota Motor rose 4.60, or 7.3, to 67.90 after the Japanese auto maker said it saw signs of optimism in U.S. sales trends even as its March sales fell 39. Phil Roth, chief technical market analyst at Miller Tabak, isn't reading too much into data on home sales, consumer spending or manufacturing that are better than dire expectations. That doesn't tell you very much, Mr. Roth said. In a recession, you're going to have months not as bad as the previous month.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617036","date":"2009-04-03","texts":"LEWISTOWN, Pa. -- The growing ranks of unemployed Americans are turning to the traditional fallbacks -- retail, restaurants, customer service -- to ride out a rough economy. The bad news is job openings there are growing scarce, too. Widespread trading down is sparking a fight for low-wage jobs that employers once struggled to fill. Mark Hall, 24 years old, of Alexandria, Pa., lost his 12-an-hour gig as a videographer when his employer folded and is now looking for anything to make ends meet. Finding a regular job, not even in my field, is very challenging, said Mr. Hall. Even working for Lowe's, I'd settle for that, and I have a four-year degree. Last week, Mr. Hall joined more than 500 people at a job fair in Lewistown, a fading manufacturing hub. Hardware and appliance retailer Lowe's was among 30 employers recruiting, down from 46 last year, and looking for mostly part-time and seasonal employees. Despite what objectives they may have put atop their resumes, when asked to describe the work they really wanted, the job seekers largely had the same goal I'll take anything right now.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983004","date":"2009-04-03","texts":"International efforts to tackle the financial crisis and a move to give U.S. banks more leeway when valuing their distressed assets sent the stock market soaring yesterday, pushing prices to their highest level in more than a month. This extends a rally that began last month as investors embraced signs that the country's economic deterioration could be slowing. The Nasdaq composite index is in positive territory for the year, up 1.6 percent it has gained 26 percent since it hit its low for the year less than a month ago. The Dow Jones industrial average traded above 8000 yesterday for the first time since February. The average closed up 2.8 percent, or 216.48 points, at 7978.08. It has bounced nearly 22 percent from its low point earlier this year. The Standard & Poor's 500-stock index gained 2.9 percent, or 23.30 points, to 834.38, while the tech-heavy Nasdaq climbed 3.3 percent, or 51.03 points, to 1602.63. Every major sector had gains, including financial and energy stocks, with oil company shares leaping after crude oil prices surged 9 percent, to 52.64 a barrel. Exxon Mobil and Chevron were up 1.5 percent and 2.9 percent, respectively, while ConocoPhillips climbed 4.1 percent.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830982209","date":"2009-04-04","texts":"Rates on 30-year mortgages fell to the lowest level on record for the second consecutive week after the Federal Reserve launched a new effort to assist the U.S. housing market. Mortgage finance giant Freddie Mac said Thursday that average rates on 30-year, fixed-rate mortgages dropped to 4.78 percent this week from 4.85 percent last week. It was the lowest in the history of Freddie Mac's survey, which dates to 1971. Rates are down by more than a full percentage point from a year ago. Mortgage rates followed other interest rates lower this week amid reports of slower economic growth Frank E. Nothaft, Freddie Mac vice president and chief economist, said in a prepared statement. Low rates have sparked a surge in refinancing activity. The Mortgage Bankers Association said Wednesday that its weekly application index climbed 3 percent for the week ended March 27, on top of a 30 percent increase a week earlier. Nearly 80 percent of applications came from borrowers seeking to refinance.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983033","date":"2009-04-06","texts":"Jeff Johnson knows how to make his audiences squirm. The young, black radio and TV political commentator waits for the discussion to turn to the topic being talked about ceaselessly, incessantly, ad nauseam the meaning of the barrier-breaking election of Barack Obama. Then, in his laid-back style, he says, The real issue for me is that history is not enough. That's when the mood becomes tense. Black folks, in particular, get irritated, says Johnson, who travels the lecture circuit, hosts a half-hour show on Black Entertainment Television and has a weekly spot for social criticism on a radio program popular with black listeners. Get past Obama the personality and see Obama the president, he says. Otherwise all you're being is a political-celebrity groupie instead of a citizen. . . . It starts with acknowledging he's my president, and not my homie. As the nation's first black president settles into the office, a division is deepening between two groups of African Americans those who want to continue to praise Obama and his historic ascendancy, and those who want to examine him more critically now that the election is over. Johnson is one of a growing number of black academics, commentators and authors determined to press Obama on issues such as the elimination of racial profiling and the double-digit unemployment rate among blacks.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842616461","date":"2009-04-13","texts":"Investors are bracing for ugly numbers as U.S. airlines start reporting their first-quarter results this week amid a recession that has pushed industry traffic off a cliff. They also will be seeking clues from airline executives on whether passenger demand is starting to rebound or whether they will institute new capacity cuts as they enter the April-August flying season, typically when carriers make most of their money. Airlines already slashed their available seat miles by about 7 in the first quarter compared with the same period in 2008. Traffic has fallen further, though, declining at least 10 in March compared with a year earlier. Revenue is being dragged down even more by fare sales and a plunge in pricier cross-border and premium-class bookings. Most U.S. airlines are expected to unveil big first-quarter losses, including AMR Corp.'s American Airlines, the first major carrier to report, on Wednesday. Some low-cost carriers, including Southwest Airlines Co., which reports on Thursday, could post small quarterly profits. U.S. airlines also likely will be weighed down by further losses from fuel hedges during the first half of 2009 as they continue unwinding derivatives contracts. The contracts -- designed to lock in lower fuel prices after energy costs soared -- began backfiring last year as oil prices plummeted.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982234","date":"2009-04-14","texts":"A largely party-line vote by Virginia Republicans last week to reject 125 million in federal unemployment funds -- and a full-throated push yesterday by Democrats to reverse that decision -- is part of a broader political fight over which party should be trusted to help lead workers and businesses out of the recession. Democrats slammed the action by the Republican-led House of Delegates, with Del. Kenneth R. Plum D-Fairfax calling it disgusting, and sought to take the offensive in the campaign for control of that body and the governor's mansion. Republicans said the vote reflected a principled bid to keep employers, who would have had to pick up the tab once the federal stimulus funds ran out, from being further burdened. At issue is whether Virginia should change its law to allow some part-time workers or those in some training programs to receive unemployment benefits. But the election-year dust-up includes a mixture of impassioned declarations of principle, mutual accusations of political opportunism and starkly divergent bets on what voters want. I would use the word 'tone-deaf,'  said Del. Kristen J. Amundson D-Fairfax, who added that her GOP colleagues in Richmond had misread the voters' mood. They were rallying against Barack Obama and discussing federalism, and we kept talking about people. So it was an interesting debate. These are people who, in my opinion, had not quite gotten over the results of last November. Amundson yesterday joined fellow Democratic leaders from Northern Virginia, including Rep. Gerald E. Connolly, outside a Fairfax County government services building on Route 1 in the Mount Vernon area. Also among those present was Greg Werkheiser, who is running against Del. David B. Albo R-Fairfax in Virginia's 42nd District, a key race in the fight for control of the House.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615004","date":"2009-04-15","texts":"Station Casinos Inc. said Tuesday it delayed an expected bankruptcy filing to continue negotiating with lenders on a pre-packaged bankruptcy plan. The Las Vegas-based casino company, its lenders and bondholders have accepted a 30-day extension, until May 15, to reach agreement on a plan, company spokeswoman Lori Nelson said. If the parties do not agree on a plan by then, they could extend negotiations, or the company could file for bankruptcy-court protection without a pre-packaged plan. The Las Vegas casino industry is struggling with a dramatic decline in consumer spending and heavy debt loads taken on to fund big expansion plans and buyouts. Station, which caters to residents of the Las Vegas area, has been among the hardest hit as unemployment in Nevada soared and thousands of casino workers have lost their jobs, or had their work hours reduced. As of December 2008, Station had 5.78 billion in debt, mostly taken on to fund a private buyout of the company by its founders, the Fertitta family, and Los Angeles-based investment firm Colony Capital LLC.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615548","date":"2009-04-15","texts":"WASHINGTON -- Retail sales tumbled in March as job losses and tight credit left consumers cautious and constrained, damping hopes for a rapid economic turnaround. After some improvement earlier this year from a dismal autumn, retail sales in March fell 1.1 from February, the Commerce Department said Tuesday. Credit turmoil continued to hit automobile sales especially hard, but the declines also came in most major categories, from appliances to furniture to clothing stores. Retail sales, a broad tally that also includes food services, were down more than 9 from the same month a year ago. The decline signaled that consumer spending, which accounts for 70 of U.S. economic activity, probably won't bounce back quickly from the depths of the recession. Consumers, hit by a weak job market and steep declines in household wealth, remain worried that more tough times lie ahead. The retail-sales report comes after weeks of hope that the recession was nearing its low point. Federal Reserve Chairman Ben Bernanke, in a speech Tuesday at Morehouse College in Atlanta, cited recent data on home sales, home building and consumer spending, including sales of new vehicles, as tentative signs that the sharp decline in economic activity may be slowing. But the central-bank chief warned that we will not have a sustainable recovery without a stabilization of our financial system and credit markets. The economy continues to deteriorate at a rapid pace. Unemployment is rising, and consumers who have seen their wealth vanish are expected to keep socking away cash to replenish their savings.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830985288","date":"2009-04-17","texts":"Six months after Washington rescued Wall Street, exasperated banks insist they want to leave the lifeboat. Jamie Dimon, the chief executive of J.P. Morgan Chase, said yesterday that he regrets accepting 25 billion in federal aid. He called the money a scarlet letter, pledged quick repayment and renounced further borrowing from the government, saying, We've learned our lesson about that. But the company, which announced a 2.1 billion first-quarter profit yesterday, has not entirely had it with Washington. J.P. Morgan said it plans to continue using a separate federal aid program through which it has borrowed more than 40 billion. Other large banks are attempting the same combination of breakup and embrace. Even as they clamor to exit the most prominent part of the bailout program by repaying government investments, firms continue to rely on other federal programs to raise even larger amounts of money. The Treasury Department so far has invested slightly less than 200 billion in banks. Meanwhile, the Federal Deposit Insurance Corp. has helped companies, including J.P. Morgan, borrow more than 336 billion through the end of March, by guaranteeing to repay investors if the firms defaulted. And financial firms hold more than 1 trillion in emergency loans from the Federal Reserve.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616755","date":"2009-04-18","texts":"Junk-bond investors snapped up nearly 4 billion of new issuance this week and pushed prices higher when the bonds traded, marking one of the best weeks in this market since last year. This is the most raised in one week since June 2008, according to data provider Dealogic. On Thursday, strong demand allowed computer-disk manufacturer Seagate Technology to place 430 million of junior 10 notes at a discount of 95.32 cents for a lower-than-expected yield of 11.25. The Seagate deal indicates investors are becoming more comfortable with risk, a positive sign for the high-yield market and the companies that depend on it for financing. While Seagate is rated at the top of the speculative-grade spectrum, the junior, or second-lien, notes mean they are further down in the repayment pecking order than other recent note offerings. Even with the lower-than-anticipated yield, buyers bid up the new Seagate notes, which were trading higher at 99.25 cents on the dollar in the secondary market on Friday.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615893","date":"2009-04-20","texts":"California's fiscal woes aren't over yet. Only months after state lawmakers in February had to raise taxes and slash spending to close a 42 billion budget deficit, legislators in May will begin work on filling a new multibillion-dollar shortfall. A state agency projects an additional 8 billion budget gap for the fiscal year that ends in July 2010, a result of declining tax revenue amid the recession. The figure could grow if revenue plummets further. And it could get worse yet if voters defeat a series of ballot measures on May 19 aimed at closing the earlier deficit. That is a possibility, as a March 25 poll by the nonpartisan Public Policy Institute of California shows 50 of Californians against Proposition 1C, which would allow the state to borrow 5 billion against future lottery revenue, versus 37 who support it. The proposition's backers, who include Republican Gov. Arnold Schwarzenegger and legislative leaders, said they expect increased support for the measures as they begin campaigning. As they step back and we get information to them, they'll say, 'You know what, this makes sense,' said Republican Mike Villines, the Assembly's minority leader. About 2 billion of the new deficit can be wiped out by using cash reserves that were built into the plan approved in February. Legislators are waiting until May 28, when the governor is scheduled to release his revised budget, to get into specifics on how they will close the rest of the gap.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614111","date":"2009-04-21","texts":"Federal Reserve Vice Chairman Donald Kohn said Monday that the pieces were falling into place for a modest economic recovery this year, with some chance it could be stronger than expected. The crosscurrents in the recent data and a bit more favorable financial news of late stand in contrast to the uniformly bleak picture of a few months ago, Mr. Kohn said. The developments may be an early indication that the economy's contraction is slowing and it will stabilize later this year, he said. After Fed Chairman Ben Bernanke, Mr. Kohn is the most influential Fed board member. His comments, coming just before next week's Federal Open Market Committee policy meeting, suggest that the view among Fed officials has improved in recent weeks. Mr. Kohn, in a speech earlier this month, had said, We are not out of the woods yet, a sign of the reluctance of officials to read too much into glimmers of improvement. With the outlook still uncertain, and the economy burdened by considerable slack, it's too early for the Fed to begin considering pulling back its rescue programs for the U.S. economy. Still, Mr. Kohn's comments suggest Fed policy makers may nod to the improved tone in economic data in the statement they are scheduled to release next week.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984567","date":"2009-04-21","texts":"President Obama will meet directly with credit card executives this week and plans to tell them to support strict measures that curb lending abuses or face the wrath of angry consumers and a determined Congress, according to banking industry officials. The heads of the credit card divisions at 14 major banks are set to meet with the president and his top economic officials at the White House on Thursday, administration aides confirmed yesterday. They are bracing for a warning that the president will join the chorus of condemnation if they resist efforts to protect their credit card customers from unfair practices. The high-profile meeting comes as members of Congress launch new efforts to crack down on credit card companies for such practices as arbitrarily raising interest rates on existing balances, charging late fees when enough time was not given between the billing and due dates, and charging interest on debt that was paid on time. Lawmakers in the House plan to begin work tomorrow on a bill that would codify new Federal Reserve regulations aimed at curbing those practices. A separate bill in the Senate, sponsored by Sen. Christopher J. Dodd D-Conn., would go even further, prohibiting companies from applying a variety of charges. The measure includes capping over-limit fees at one per billing period, allowing no interest charges on fees and no fees to make a payment. The legislation also would prevent companies from raising interest rates at any time for any reason and limit aggressive marketing by card issuers aimed at borrowers under 21. Industry sources said the president will tell the executives on Thursday that he wants to go further than the House bill without specifically endorsing all of the provisions of Dodd's bill. Administration officials confirmed that the president will push for stronger rules in some areas than those proposed in the legislation but is broadly supportive of the bills working their way through Congress.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615597","date":"2009-04-22","texts":"From Minnesota to Alabama, battered regional banks are warning that a turnaround from the economic malaise is nowhere in sight. A series of large regional banks reported Tuesday that rising losses from bad loans plagued first-quarter results. That is forcing major institutions such as U.S. Bancorp and Regions Financial Corp. to put more money aside to fortify against more defaults. The results showed how widespread the damage is as banks of all sizes pay a steep price for extending credit to shaky borrowers when times were good. Banks throughout the U.S. are feeling the pain, telling investors that a protracted recession means the situation will get worse before it gets better. No significant turnaround will occur this year, said Huntington Bancshares Inc. Chief Executive Stephen Steinour after the Columbus, Ohio, bank posted a 2.43 billion quarterly loss, or 6.79 a share, compared with year-earlier profit of 127.1 million, or 35 cents a share. Huntington took a nearly 300 million credit-loss provision as it faces potential losses from commercial loans. The tight credit environment makes it more difficult for consumer and business borrowers to pay their debts. Falling stock markets and rising unemployment also demonstrate the depth of the economic stress, regional bank CEOs said.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615626","date":"2009-04-22","texts":"For the second time in a year, Martha Stewart Living Omnimedia shook up its executive suite, placing Martha Stewart herself squarely on the hot seat during the harshest ad recession in decades. The company said Tuesday that Wenda Harris Millard, a fixture in advertising circles who was named co-chief executive in June, is leaving. She will join Media Link LLC, a Los Angeles consulting firm run by well-known ad executive Michael Kassan. Ms. Millard's departure -- following clashes with Ms. Stewart, according to people familiar with the matter -- costs the company a key link to Madison Avenue at a time of weak marketing spending. Earlier this month, Jacki Kelley, an ad executive close to Ms. Millard, left Martha Stewart Living Omnimedia for a top job at Universal McCann, a media-buying firm owned by Interpublic Group. The latest shake-up comes after ad pages plummeted 37 from a year earlier at Martha Stewart Living magazine in the first quarter and declined by half at Everyday Food. A contract with Sears Holdings' Kmart stores that has been a significant contributor to the company's profits is slated to expire in coming months. Martha Stewart Living Omnimedia has posted just one profitable year in the past five, and investors have long complained about its spending, including its executive-compensation packages. Ms. Millard's departure comes a little less than a year after Susan Lyne stepped down as CEO. Ms. Lyne had helped stabilize the company during Ms. Stewart's legal troubles.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615611","date":"2009-04-23","texts":"With the U.S. dollar rebounding and the global recession weighing on other currencies, conditions are ripe for travelers from the U.S. to get more cheaply to destinations that might have been prohibitively expensive in the past. Here are two places that give you a big bang for your U.S. buck. -- Buenos Aires, Argentina Often called the Paris of South America, Buenos Aires is a much cheaper version of its European counterpart. And, after six years of growth, Argentina's economy is slowing, says Michael Woolfolk, a currency specialist at the Bank of New York. Fly on United Airlines to Buenos Aires from Washington, D.C., in mid-July and stay in the four-star Park Chateau Hotel for five days for 964 a person when you book on Expedia.com.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983226","date":"2009-04-24","texts":"Our leading financial institutions announced that they had actually made a profit in the year's first quarter through the creative manipulation of rules and regulations, lobbied Congress to preserve their ability to raise credit card interest rates just for the heck of it and opposed the administration's plan for restructuring Chrysler, which would save some jobs and honor pension obligations, in the hope that they can redeem the company's bonds at a higher level than they're trading at just now. And, to round out the picture, the Wall Street Journal reported this week that lending at the 19 largest TARP recipients was 23 percent lower in February -- by which time these banks had received hundreds of billions of dollars in public funds intended to enable them to lend more -- than it had been in October, before the floodgates of tax dollars had been fully opened. The week began with a burst of creative accounting. Citigroup, into which we've sunk more dough than any other company, with the possible exception of AIG, claimed a profit for the first quarter of this year because its bonded debt has lost value, which under the rules of accountancy enabled it to register a one-time gain equal to that lost value, because Citi could, in theory, buy back its own bonds for less. J.P. Morgan Chase, whose fire-sale purchase of Bear Stearns we taxpayers backed, declared a similar profit because of a similar decline in the value of its bonds. As events would have it, the very same Citigroup and J.P. Morgan Chase are the lead negotiators for the banks that are objecting to the Obama administration's efforts to restructure Chrysler. Chrysler's bonds, which these banks hold, are trading at 15 cents on the dollar, the amount the government offered to pay the banks in its initial proposal to restore the company to viability. Yesterday, the government upped that amount to 22 cents, plus a 5 percent equity share in the company. Citigroup and J.P. Morgan Chase, however, insist that they and their fellow banks are entitled to more, though that more could only come at the expense of Fiat the auto company that is providing the new car lines and technology without which Chrysler will fold or the company's retirees to whose health-care fund Chrysler is legally obligated who built the company, or the taxpayers who are keeping Chrysler alive. Instead of playing Scrooge and a publicly subsidized Scrooge, at that, what the banks should do is lend Chrysler their accountants. Maybe they'd show that the company turned a profit last year. The banks' lobbyists, meanwhile, have been hard at work, too. Bills to limit credit card fees and penalties -- my favorite fee is the one banks charge some customers for making not missing, making a payment -- are moving through both houses of Congress, but the Senate version has yet to receive any support from Republicans. A bill that would enable bankruptcy judges to modify mortgage terms has also hit a wall in the Senate, with Republican leaders claiming the backing of all 41 of their members to filibuster the bill when it comes to the floor.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842617264","date":"2009-04-26","texts":"Immediate annuities promise that your money will be there when you need it. But many investors are questioning how good those guarantees really are. The reality is that insurance companies offering annuities can, and have, failed. But policyholders can take comfort from a well-established, industry-financed safety net. Although investments aren't always covered in full, history suggests these annuities are about as safe an investment as you can get without the full backing of the U.S. government. That said, there's no reason to court trouble. The current environment shows why -- even in good times -- investors should seek out the strongest companies in the marketplace. A recent Encore column discussed the ins and outs of immediate annuities. These insurance products convert your cash into income that can be guaranteed to last the rest of your life. Many readers wondered, however, about the safety of insurance companies. And it's no wonder. The near collapse of AIG -- American International Group -- and concerns about other big-name insurers such as Hartford Financial Services and Lincoln National have made headlines.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617158","date":"2009-04-28","texts":"Conde Nast Publications Inc. absorbed nearly two decades of losses at the New Yorker. On Monday, it pulled the plug on Portfolio magazine after less than two years. The closure of the monthly business glossy shows how profoundly the advertising downturn has shifted the paradigm at Conde Nast, a publisher with a reputation for operating less out of concern for profit than the cachet its slate of prestigious titles conferred. The recession has accelerated the erosion of advertising across print media, including at Conde Nast's newspaper and magazine properties that for years helped prop up its unprofitable but respected titles. Executives at Conde Nast determined the next 18 months will be too difficult to continue investing in Portfolio. Editorially, we were proud of the product and the team that produced it, said David Carey, group president of a collection of Conde Nast titles that includes Portfolio. But our timing, in terms of building an advertising franchise, proved to be terrible. That Si Newhouse, chairman of Conde Nast's parent, closely held Advance Publications Inc., and perhaps the biggest champion of its most prestigious titles, was willing to cut his losses with a publication in which he was so heavily invested could signal more dramatic change both at his publishing house and others. A spokeswoman for Conde Nast, publisher of titles including Glamour, Vogue and Vanity Fair, said, At this time, we do not foresee further changes to our lineup of titles.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984506","date":"2009-04-29","texts":"When it comes to justifying state control of big corporations, Barack Obama is no Francois Mitterrand. When France's late president nationalized huge swaths of the country's financial and industrial base in the 1980s, he made no apologies. Seizing a dozen industrial conglomerates and three banks, Mitterrand insisted that government control was in the interest of the economy. He asserted that the state, which already owned much of the nation's energy and transport industries, was best able to allocate resources. Today the Obama administration finds itself in control of many of the pillars of U.S. finance and industry, but it is playing its role reluctantly. Obama's goal is to fix them, not run them, the White House says. With regard to GM, for example, one official said this week that the administration's goal is to exert as little influence as possible and to exit as quickly as possible. Yet the Obama administration, on behalf of American taxpayers, has become -- or will soon become -- the controlling shareholder of General Motors and Chrysler, mortgage behemoths Freddie Mac and Fannie Mae, and insurance giant AIG, not to mention the 29 banks taken over this year by the Federal Deposit Insurance Corp. And that puts the president in the awkward position of balancing public policy goals with the financial interests of taxpayers as investors in these ailing corporations. I think it's going to have to be both, said Dean Baker, director of the Center for Economic and Policy Research. The president shouldn't seek to micromanage by deciding what cars to make if he were CEO. On the other hand, Baker added, the administration can't escape responsibility for whatever actions the companies do. It can't wash its hands. In many ways, we are in uncharted and potentially treacherous water here, said N. Gregory Mankiw, a professor of economics at Harvard University who was chairman of former president George W. Bush's Council of Economic Advisers. It is almost inconceivable that the political process will be good at corporate governance. The most one can hope for is that this period will be temporary, that the federal government will sell off its equity stake to private investors as soon as possible.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614173","date":"2009-04-30","texts":"Paolo Pellegrini, the hedge-fund manager who helped Paulson & Co. amass gains before leaving to start his own firm, has hired Merrill Lynch & Co.'s former chief international economist to help identify and wager on global financial trends. Alex Patelis, 38 years old, starts this week with Mr. Pellegrini's new hedge-fund firm, called PSQR Management LLC, according to both men. Mr. Pellegrini, 52, in December left John Paulson's hedge-fund firm. So far, Mr. Pellegrini has been trading about 100 million of his own money but plans to start raising funds from outside investors this summer. Much of Mr. Pellegrini's personal wealth came from Paulson & Co.'s bets that subprime-mortgage defaults would skyrocket. Paulson & Co. made some 15 billion in profit in 2007 and added several billion more last year, after the firm extended the trade to include wagers against a range of financial firms. As co-manager of the firm's big credit funds, Mr. Pellegrini helped identify what mortgages to target and how to formulate the trades.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983106","date":"2009-05-03","texts":"Twenty years ago, a few charities launched what they thought would be a sure-fire hit The stay-at-home fundraiser. Donors were asked to buy tickets, but didn't have to show up for yet another black-tie dinner in a hotel ballroom. No tux, no traffic, no hassle. Just the thing after all the excess of the '80s, right Wrong. After a few embarrassing flops, the idea was quickly abandoned when organizers realized that their patrons liked going to parties. Fast-forward two decades, when nonprofits face shrinking resources, fewer donors and boards keeping nervous eyes on the bottom line. Arts organizations have a tougher time making their case when people feel their spare dollars should go to human services rather than culture. So What to do Cancel the galas and just ask for direct donations instead Risky move, even in this economy. Events are about creating memorable moments, said David Adler, founder of Bizbash, the party industry bible. Doing nothing or cutting back so much kills the gala's future more than the recession.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615315","date":"2009-05-04","texts":"The dollar remains in heavy demand from banks around the world, a sign trust among banks remains fragile. While a number of indicators show credit markets are thawing, economists, central bankers and investors are paying keen attention to the rate at which foreign banks are pulling dollar deposits out of their U.S. branches. That pace has set records for several months, according to the latest data from the Treasury Department. The moves, analysts say, suggest banks still are scrambling for ways to finance investments in dollar-denominated securities such as U.S. mortgage-backed bonds. Before the credit crisis hit in August 2007, foreign banks could freely borrow dollars from U.S. banks and one another. Bank affiliates also could sell short-term IOUs. Now banks are demanding bigger lending premiums for certain loans. On the bright side, the banks' increased reliance on U.S. deposits is making them less dependent on central-bank lending programs, which were put in place as an emergency backstop. Still, it also demonstrates how brittle the lending markets remain. Until banks develop more trust among one another, even short-term borrowing rates will remain relatively expensive, making economic recovery more costly for businesses and individuals. This has had an unexpected effect on the London Interbank Offered Rate, or Libor, which is supposed to reflect the interest rates banks charge each other for loans. A large gap has appeared between the one-month and three-month Libor, in what analysts say is a worrying sign that banks remain reluctant to make longer-term loans to one another. As of Friday, three-month dollar Libor was 1.01, 0.59 percentage point more than the rate on one-month loans. Historically the gap hovered close to zero.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615090","date":"2009-05-05","texts":"Thursday's stress-test results will bring fresh scrutiny to the nation's biggest banks. They also are likely to highlight the woes from commercial real-estate loans that are piling up at large and small banks alike. In the worst-case scenario, federal regulators examining the 19 largest U.S. banks are projecting losses of up to 12 on commercial real-estate loans over two years, according to a document viewed by The Wall Street Journal. The regulators are likelyto cite commercial-property debt problems as a major reason why at least some of the large banks need additional capital. Such losses likely would cause even deeper misery, and risk of failure, at small and medium banks because they tend to have disproportionally more exposure to commercial real-estate loans than giant institutions. While regulators have indicated they won't allow the 19 stress-tested banks to fail, that group doesn't include more than 500 banks with assets of less than 1 billion that have too much exposure to commercial real estate and are at the most risk of failing, according to an analysis by Foresight Analytics LLC. During the housing boom, small and regional banks doubled down on lending to home builders and commercial-property developers and investors as they were largely squeezed out of the home mortgage market by large banks and Wall Street firms. Now many of those loans are going bad as vacancies rise, rents fall and developments open to anemic demand. Analysts already had been forecasting hundreds of bank closures in the next five years. The stress-test assumptions, including a 10.3 jobless rate at the end of 2010, raise the specter that some of the failures could occur sooner.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615438","date":"2009-05-08","texts":"A decline for small-caps reflected a flood of traders bracing for the upcoming reports on banks' stress tests and consumers' employment. For stocks large and small, the day's trading revolved around economic sentiment. Economically sensitive sectors like materials, consumer discretionary and industrials fell, while defensive areas such as health care and utilities rose. The bank stress-test results were partly to blame as few investors wanted to be heavily exposed to the market with such a highly watched report on tap, but consumer stocks also were hurt by concern over a nonfarms payroll report on tap for Friday morning. And, as small-caps are more economically sensitive than their larger counterparts, they fell broadly. Notably, the Russell 2000 index of small-capitalization stocks lost 12.15 points, or 2.41, to 492.94. Year-to-date, the index is down 1.3. The Standard & Poor's Small Cap 600 fell 5.89, or 2.18, to 264.43.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616111","date":"2009-05-08","texts":"NEW YORK -- Nasdaq Stock Market parent Nasdaq OMX Group Inc. is examining further pricing initiatives amid a continuing decline in its share of U.S. stock trading and a 22 fall in first-quarter net profit. Robert Greifeld, chief executive of the trans-Atlantic exchange operator, said Thursday that he was disappointed with performance of the firm's U.S. equity business, but he pointed to potential earnings drivers in other areas, such as clearing and derivatives. He also noted some signs of life for initial public offerings of stock, with 98 applicants on file. We are one or two 'good-news cycles' away from having the IPO market come back in a reasonable format, Mr. Greifeld said. Nasdaq OMX posted net profit of 94 million, or 44 cents a share, in the quarter ended March 31, down from 121 million, or 69 cents a share, a year earlier. Excluding merger-related impacts and assuming the merger of Nasdaq and Nordic exchange operator OMX had been completed a year earlier, earnings would have risen to 48 cents a share from 44 cents. The acquisition of OMX closed Feb. 27, 2008.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616485","date":"2009-05-09","texts":"Stars Aligned for Movie Deals Is it time for movie-studio executives to get cosier with their colleagues 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. The fastest way to do that is to team up with another studio. Time Warner, for instance, saved 140 million annually by combining New Line and Warner Bros.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615653","date":"2009-05-11","texts":"Economy Mild Inflation Readings Shouldn't Portend Danger ---- By Brian Blackstone","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982935","date":"2009-05-12","texts":"As Virginia gears up for a governor's campaign with national implications, a growing debate over federally funded unemployment insurance has become an early popularity test of President Obama's stimulus package and his vision of government's role in an economic downturn. Democrats have been pounding the Republican-led House of Delegates and Robert F. McDonnell, the GOP's candidate for governor, since the House voted last month to reject 125 million in federal stimulus funds to bulk up unemployment benefits. Democratic candidates are increasingly convinced that voters will see the rejection of the federal dollars as a betrayal of struggling workers. But Republicans have not backed down. Accepting the money would have meant agreeing to adjust Virginia's insurance program and accepting strings imposed by Congress that GOP leaders have said are symptomatic of an expansion of the federal government under Democratic control. The fight represents a deep philosophical divide between the parties that voters are expected to weigh when they go to the polls in November. This is one that really matters. It's a very direct issue about what is the role of government and how should we respond to people in a very tough time, said Gov. Timothy M. Kaine D, who accused lawmakers of turning their backs on the unemployed April 8 when the House voted 53 to 46, largely along party lines, to reject the funds.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983812","date":"2009-05-12","texts":"So maybe Republicans should stop obsessively gazing at it. Instead, the GOP might focus on taking on the Obama administration, whose policies are surprisingly vulnerable to political and substantive attack. Battling Barack Obama is an enterprise that offers better grounds for Republican hope than indulging in spasms of introspection or bouts of petty recrimination. No, the payoff from a policy confrontation with Obama won't be immediate. The economy appears to be set for a short-term uptick. Obama remains popular. Many of his proposals look superficially attractive. But we haven't yet had a thorough airing of their implications, to say nothing of their real-world consequences if they are enacted. So one should assume Obama will stay strong through the summer and perhaps even the fall. But 2009-10 could be the winter of Obama's discontent. Republicans should be making the case against Obama's policies now so that citizens know whom to blame next year. To make things simple for busy and easily distracted GOP pols, I'll organize the Republican anti-Obama agenda into five categories, all beginning with the letter D as in Democrat. Debt. The extraordinary circumstances of the financial meltdown have dulled the shock that this year's budget deficit will top 1.8 trillion, four times last year's record amount. I'm not sure, though, that people understand the government is now borrowing one dollar for every two it spends. And are Americans fine with next year's deficit of 1.3 trillion on a budget of 3.6 trillion This is to say nothing of endless record deficits in the future, never dipping below 500 billion and totaling more than 7 trillion between 2010 and 2019, even under Obama's rosy economic forecast.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983707","date":"2009-05-14","texts":"The number of self-reported million-dollar earners in Maryland has dropped by roughly a third compared with this time last year, renewing debate yesterday about whether the state's year-old millionaires' tax is driving rich people beyond its borders. The data from April's tax filings, released by the comptroller's office, came with a couple of big caveats. At least part of the drop-off in Marylanders whose returns showed more than 1 million in taxable income was certainly due to the recession and the decline it has brought in earnings from capital gains and real estate. And the figures do not include taxpayers who filed for extensions. Still, the substantial decline in million-dollar earners filing on time was enough for the comptroller's office to announce that it will be thoroughly analyzing these returns and their implications. And it was enough for opponents of the state's new surcharge to say, in essence, I told you so. I don't think anyone can dispute that some people have left Maryland, said Senate Minority Leader Allan H. Kittleman R-Howard. That's what we were trying to explain when we were voting on this. Among the skeptics, however, was Warren Descheneaux, the chief fiscal adviser to the legislature, which last year raised the state's top marginal tax rate, applied to income above 1 million, from 5.5 percent to 6.25 percent. The new rate, which is set to expire after three years, was expected to affect roughly 6,000 taxpayers, about 40 percent of whom reside in Montgomery County, based on the previous year's tax data.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616273","date":"2009-05-16","texts":"U.S. consumer prices registered their steepest one-year drop in April in more than a half century, but the risk of deflation remains remote since the declines were mainly in energy and energy-related products. On a monthly basis, the consumer-price index was unchanged in April from March, the Labor Department said Friday. However the core CPI, which excludes food and energy prices, jumped 0.3 last month, the largest increase since June 2008. A 9.3 rise in tobacco prices generated about 40 of the core CPI increase as a federal excise tax kicked in. It was the second-straight month that tobacco lifted the core index. Separately, U.S. industrial production fell 0.5 in April, its 15th decline in 16 months, an indication that businesses continue to draw down inventories in the face of weak demand. Meanwhile, a gauge of consumer sentiment by Reuters and the University of Michigan rose to 67.9 in mid-May, from 65.1 in April. That suggests some improvement in confidence, although the index remains low by historical standards. I still think there are some sources of optimism, White House economic adviser Austan Goolsbee said in an interview Friday. But until the economy stops shedding more than 500,000 jobs a month, he said, keep your hands and arms inside the car with your seatbelt fastened. We've still got a bumpy ride to go. Consumer prices fell 0.7 compared with one year ago, the largest 12-month decline since June 1955. It's also significantly under the 2 annual rate of inflation that most Federal Reserve officials think is consistent with their dual mandate of price stability and maximum employment.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984615","date":"2009-05-16","texts":"In most of the Washington area, it's gotten cheaper to buy a townhouse, condo or house. However, the increased affordability has complicated government programs to help moderate- and low-income families own homes. Each jurisdiction has a different emphasis in affordable housing, including both subsidized rentals and homeownership opportunities. In Montgomery County, for instance, builders are required to sell a few of their new townhouses or condos at cost to families chosen by the county. Those families can't make more than 70 percent of the median income for the region, meaning the limit is about 50,000 for a single person, 72,000 for a family of four. The District occasionally provides tax dollars to groups of tenants in decaying rent-controlled buildings who want to buy and renovate them. The vacant units available after the buildings have reopened have to be sold to those making less than 80 percent of regional median income. For instance, Las Marias, a condo conversion by low-income tenants in Columbia Heights, opened a little more than a year ago. One of the largest condos in the Northwest Washington building, priced at 363,000, has been on and off the market for a year. Two other subsidized units remain unsold there, too. A three-bedroom townhouse in Germantown that cost just over 125,000 sold to a nonprofit group in April when no modest-income families applied to buy it.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985163","date":"2009-05-21","texts":"More Washingtonians are likely to leave home this Memorial Day weekend than last, a hopeful sign that close-to-home holiday travel here may be somewhat recession-proof, transportation and tourism officials said yesterday. You can sum up the numbers in four words There is a rebound, said John Townsend, a spokesman for AAA Mid-Atlantic. After thousands of vacationers stayed put last Memorial Day -- when gas prices topped 3.80 a gallon -- AAA predicts that 730,000 area residents will travel 50 miles or more from home this three-day weekend, about 4 percent more than last year. Just 6.7 percent of them will board a plane because of the expense, officials said, leaving 83 percent to travel by car. The auto club predicts that rail and bus travel will drop 10 percent. The price of gas has risen 25 cents a gallon in the past three weeks, but at 2.29 a gallon it is still about 1.50 less than this time last year. Another factor making local travel more likely is the region's huge workforce of federal workers and contractors, which has been less buffeted by the downturn than those in other parts of the country. What you see is a certain resiliency on the part of the local economy, Townsend said at a news conference in Stevensville, Md., with the Chesapeake Bay Bridge as backdrop.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615851","date":"2009-05-26","texts":"The stock market's gains over the past couple of months have money managers at Farr, Miller & Washington LLC taking a more cautious stance these days. The recent run-up is probably more than reflecting the current economic conditions, said analyst and portfolio manager Keith Davis. Farr, Miller & Washington, with some 500 million in separately managed accounts, is expressing that uncertainty via its cash position. Generally representing between 5 and 10 of assets, cash has topped 10 lately as the firm trimmed some stakes to lock in recent gains. Mr. Davis said investment managers are searching for large-cap growth companies with rock-solid balance sheets, but they look hard at valuations to avoid overpaying. While I think the market lows we saw in March could ultimately be the lows for the cycle, it wouldn't surprise me if we got another round of economic data that scares the heck out of people, said Mr. Davis, one of five members of the firm's investment committee.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617291","date":"2009-05-30","texts":"Kindle Is a Page Turner for Amazon Investors Amazon.com CEO Jeff Bezos said the Kindle e-book reader is turning into something special. But just how special for investors Right now, it likely isn't adding to Amazon's bottom line. Mr. Bezos gave a clue Thursday when he told shareholders at the annual meeting they should regard the digital-books business as being in investment mode right now rather than a big cash-flow generator for us. His comment reinforces speculation in the publishing industry that Amazon is losing money on at least some of the books it sells for the Kindle. Most of the 290,000 titles available sell for 9.99 or less, a price point in many cases probably below what Amazon pays publishers. Generally speaking, retailers pay 50 of the publishers' list price, which for new, popular titles can be as much 25 to 30. Any losses are likely to increase as Kindle-book sales become a bigger part of Amazon's business. E-books are a tiny but rapidly expanding part of the overall market, nearly doubling last year while the overall book market shrank, estimates the Association of American Publishers. Mr. Bezos said Thursday that Kindle sales account for 35 of Amazon's physical book sales for titles available in both formats.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613579","date":"2009-05-31","texts":"Your teen wants to make money this summer, but jobs are scarce and competition is fierce. So what's a hopeful young worker to do Traditional summer spots, such as working at a summer camp, may already be filled. But other opportunities remain for those with creativity and the will to pound the pavement, experts say. They have got to be really tenacious, says Renee Ward, founder of career site Teens4Hire.org. There is a lot of talent in the market that business owners can choose from. The younger and the inexperienced are definitely going to be floundering this summer. The seasonally adjusted unemployment rate for 16- to 19-year-olds hit 21.5 in April, compared with the overall rate of 8.9, according to the Labor Department. Teens face such a tough uphill battle during a recession because they have less experience than other workers and are easier for employers to let go, says Harry Holzer, a professor at Georgetown University and former chief economist at the Labor Department. Plus, teens face stiff competition for jobs from older job hunters and immigrants.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984128","date":"2009-05-31","texts":"U.S. stocks rose last week, producing the first three-month gain for the Standard & Poor's 500-stock index since 2007, as commodities posted the biggest monthly rally since 1974 on bets that an economic recovery will boost demand for fuel, metals and crops. Cabot Oil & Gas rose 18 percent, leading energy shares 5 percent higher as crude completed its biggest monthly gain in a decade. CIT Group and SanDisk led financial and technology firms to the steepest advances among 10 industries in the S&P 500 as consumer confidence climbed the most since 2003. The summer doldrums are being washed away by optimism that the economy didn't slip into a permanent black hole, said Diane Garnick, the New York-based investment strategist at Invesco. Prices on inputs to business such as oil and natural resources are rising on the hopes of an economic turnaround. The S&P 500 rallied 3.6 percent, to 919.14, continuing a rebound from a 5 percent loss two weeks earlier that was the steepest weekly loss since March. The Dow Jones industrial average added 223.01 points, or 2.7 percent, to finish at 8500.33. The Nasdaq composite index added 4.9 percent, to close at 1774.33. U.S. Steel surged 16 percent and Freeport-McMoRan Copper & Gold gained 13 percent, leading gains among raw-materials producers.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617037","date":"2009-06-03","texts":"Gold is reaping the benefits of both sides of the debate over whether the world's central banks can stimulate the global economy without sparking a surge in inflation. On Tuesday, gold settled at 983.20 a troy ounce, up 0.5, and is now just 2 shy of its all-time high of 1,003.20 scored in March 2008. Among the main drivers is the decline in the U.S. dollar -- a result, many analysts say, of a conviction that the global economy is on the path to recovery, thanks to central banks' stimulus efforts. Dollar-denominated commodities like gold typically rise when the dollar falls, as producers ask for higher prices and consumers outside the U.S. buy more. While the dollar has dropped 9 since mid-April, gold has gained 13. Also fueling the rally has been the fear that the Federal Reserve and others won't be able to control inflation once those stimulus efforts kick in. Hard assets like gold are seen as a good hedge against rising prices as they tend to retain their value. The rally has caught many in the market off guard. Gold has averaged 910 this year, surpassing analysts' forecast of 881, as calculated by the London Bullion Market Association.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614269","date":"2009-06-04","texts":"To the Red Sox winning the World Series, we can now add another miracle for the ages A politician demanding tighter money. We refer to German Chancellor Angela Merkel, who in a Berlin speech Tuesday rebuked the world's central bankers, notably including the U.S. Federal Reserve, for being too politically accommodating. Hallelujah, sister. The independence of the European Central Bank must be preserved and the things that other central banks are now doing must be retracted, Mrs. Merkel told a meeting sponsored by Germany's association of metal- and electrical-industry employers. We must return together to an independent central-bank policy and to a policy of reason, otherwise we will be in exactly the same situation in 10 years' time. Referring to the U.S. central bank specifically, she said I view with a great deal of skepticism the extent of the Fed's powers. Usually when a politician lobbies a central bank, it's to demand easier money. We can't recall a similar tight-money intervention from a national leader, save perhaps Ronald Reagan's quiet support for Paul Volcker in the 1980s. Mrs. Merkel may have been channeling Ludwig Erhard, the great Chancellor whose hard-money policies helped to catapult the German economy from the ruins of World War II. Looking further back, she no doubt knows that the Weimer inflation of the 1920s paved the way for Hitler. Whatever her inspiration, this is the second time Mrs. Merkel has volunteered to be the designated driver amid the G-20's fiscal and monetary binge. Three months ago, she led a revolt against President Obama's demand that Europe follow his Keynesian spending spree. Her spending restraint is already looking wise as the U.S. asks the world to finance a debt burden rising to World War II levels. Now she's taking aim at monetary excess, even as the European Central Bank is being lobbied to pursue the same kind of quantitative easing that the U.S. Fed has carried out. The ECB is preparing to announce the details of its purchase of 85 billion in low-risk mostly corporate debt, and Ms. Merkel may have wanted to send a signal that it ought to stop there. She also rightly fingered monetary policy in the United States that was politically supported as a main cause of the current mess.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613873","date":"2009-06-05","texts":"Stocks edged higher to resume their recent rally, helped by a rebound in the financial sector and renewed buying in energy and materials stocks as oil prices rallied. After a brief decline in the morning, the Dow Jones Industrial Average turned up in the afternoon to end 74.96 points higher, or 0.9, at 8750.24. It was the Dow's highest close in five months, leaving it fewer than 30 points from breakeven for the year. Bank of America rose 5.9. Chevron advanced 2.2. RBC Capital Markets upgraded its view on the banking sector as a whole to overweight from market weight, saying it believes the broader financial crisis has ended. Oil prices jumped 4.1 to 68.81 a barrel, a seven-month closing high in New York, helped when Goldman Sachs lifted its price target to 75 a barrel.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984396","date":"2009-06-07","texts":"It hadn't even hit the bookstores before this month's Color of Money Book Club selection, Busted, set off a flurry of Internet conversations. Sanctimonious critics have slammed this book in the blogosphere, where people can sling anonymous potshots they would never have the guts to say to someone's face. Busted Life Inside the Great Mortgage Meltdown W.W. Norton, 25.95 by Edmund L. Andrews is the story of how a well-educated, highly paid economics reporter for the New York Times, whose beat includes covering the Federal Reserve, ended up with almost a half-million-dollar mortgage that he and his wife, Patty, couldn't afford. Unfortunately, a rather regrettable omission mars this intriguing personal account. Andrews failed to mention that his wife had filed for bankruptcy -- twice. She filed once to get out from under debt accumulated because of her failed first marriage and a second time to again shed debt amassed while raising four children as a single mother with little, if any, child support. Had I to do it again, I would have included that material, Andrews told me in a telephone interview. I could have written a whole chapter about Patty's problems with her ex-husband and her problems with getting child support.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613824","date":"2009-06-10","texts":"Easy Money Tugs Two Ways at Trade Gap The trade deficit is a case study in the unintended consequences of easy money. The Commerce Department releases April trade data Wednesday morning. Economists think the deficit widened a bit, to 29 billion, from 27.6 billion in March. That would end an eight-month streak of narrower deficits that has cut the gap roughly in half, thanks first to a surge in exports and then to tumbling oil prices. A narrower trade deficit is potentially good economic news on several fronts. For one, from an accounting perspective, exports add to gross domestic product, while imports subtract from it. From a fundamental standpoint, it is often healthier for a country to export more than it imports -- though collapsing imports can also signal weak demand at home, as they have in this recession. Here's where the unintended consequences of fighting that recession come in The money being pumped into the economy by the Federal Reserve has made some investors anxious about inflation, sometimes defined as the result of too much money chasing too few goods.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617105","date":"2009-06-11","texts":"Rising interest rates threaten to dim prospects for a housing recovery and choke off a refinance wave that was a major plank of the Obama administration's economic-stimulus efforts. Rising interest rates threaten to dim prospects for a housing recovery and choke off a refinance wave that was a major plank of the Obama administration's economic-stimulus efforts. On Wednesday, rates on 30-year fixed-rate mortgages climbed to 5.79, up from 5 two weeks ago, according to HSH Associates. That jump will cut roughly in half the number of borrowers with an incentive to refinance, according to FTN Financial. On Wednesday, rates on 30-year fixed-rate mortgages climbed to 5.79, up from 5 two weeks ago, according to HSH Associates. That jump will cut roughly in half the number of borrowers with an incentive to refinance, according to FTN Financial. Refinance activity at J.P. Morgan Chase & Co. is already really down since rates began rising, a spokesman says. A rate of 4.75 seemed to be the switch that turned on refinance activity, he says. Now, rates are a full percentage point higher. Refinance activity at J.P. Morgan Chase & Co. is already really down since rates began rising, a spokesman says. A rate of 4.75 seemed to be the switch that turned on refinance activity, he says. Now, rates are a full percentage point higher. Mortgage rates at these levels will hobble the housing recovery, and it was just the beginning of the recovery, says Kenneth Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley. Mortgage rates at these levels will hobble the housing recovery, and it was just the beginning of the recovery, says Kenneth Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley. Investors have been anxiously watching bond yields climb over the past few weeks, pushing up mortgage rates, which normally track 10-year Treasury notes. The yield on the those briefly hit 4 on Wednesday afternoon for the first time since mid-October before ending the day at 3.937. Investors have been anxiously watching bond yields climb over the past few weeks, pushing up mortgage rates, which normally track 10-year Treasury notes. The yield on the those briefly hit 4 on Wednesday afternoon for the first time since mid-October before ending the day at 3.937.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983361","date":"2009-06-12","texts":"The Obama administration is facing new pressure from key Democratic and Republican lawmakers to centralize banking oversight in a single regulator, a proposal the White House had seriously considered before shelving it as widespread opposition grew. Sen. Charles E. Schumer D-N.Y., a leading voice on financial policy and vice chairman of the Joint Economic Committee, urged Treasury Secretary Timothy F. Geithner in a letter yesterday to propose a single banking regulator and dispense with the alphabet soup of agencies that now oversee banks. Republicans on the House Financial Services Committee also proposed yesterday that one agency be responsible for bank supervision. They called for stripping existing powers from the Federal Reserve and Federal Deposit Insurance Corp. and merging the Office of Thrift Supervision and Office of the Comptroller of the Currency. The salvos presaged what could be a massive congressional debate after the Obama administration formally proposes its plan for overhauling financial regulations. An announcement is scheduled for June 17. While some lawmakers are wary of consolidating power into few agencies as originally favored by top Obama officials, others on Capitol Hill worry the administration isn't planning to take on entrenched interests.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614884","date":"2009-06-16","texts":"DETROIT -- They call this the Motor City, but you have to leave town to buy a Chrysler or a Jeep. Borders Inc. was founded 40 miles away, but the only one of the chain's bookstores here closed this month. And Starbucks Corp., famous for saturating U.S. cities with its storefronts, has only four left in this city of 900,000 after closures last summer. There was a time early in the decade when downtown Detroit was sprouting new cafes and shops, and residents began to nurture hopes of a rebound. But lately, they are finding it increasingly tough to buy groceries or get a cup of fresh-roast coffee as the 11th largest U.S. city struggles with the recession and the auto-industry crisis. No national grocery chain operates a store here. A lack of outlets that sell fresh produce and meat has led the United Food and Commercial Workers union and a community group to think about building a grocery store of its own. One of the few remaining bookstores is the massive used-book outlet John K. King has operated out of an abandoned glove factory since 1983. But Mr. King is considering moving his operations to the suburbs.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614298","date":"2009-06-17","texts":"Washington Post Co.'s Newsweek will cut an issue this summer, a spokesman for the magazine said, in another sign of the deteriorating advertising climate for print media. The 76-year-old weekly typically skips a week of publication around Christmas, the Fourth of July and in August, printing a double issue to cover each two-week period. This summer, however, Newsweek readers will receive two double issues in August, on top of the one in July. The decision comes less than a month after Newsweek unveiled a redesigned magazine in a move to adapt to the changing preferences of readers and marketers, whose gradual shift away from print has accelerated during the recession. In the overhauled Newsweek, the publisher has dropped its focus on breaking news in favor of columns and narrative features. Newsweek said it also is curtailing its guaranteed circulation to 1.5 million readers from 2.6 million and targeting a more highbrow audience, including Beltway insiders and policy wonks. We've moved away from the remedial model of current events, Newsweek editor Jon Meacham said in a recent interview.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615682","date":"2009-06-17","texts":"Aspiring Quant Traders Get Taste Of the Fantasy Behind Equations --- Web Site Allows Users to Practice in Simulated Setting Aspiring investors can connect on a number of Facebook-like Web sites to discuss the nuts and bolts of the stock market and to practice trades in a simulated setting. But curious amateurs and fantasy traders have had far fewer options when it comes to quantitative trading, computerized trading that uses mathematical models and an assortment of data and variables.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983435","date":"2009-06-17","texts":"She has never felt confident with big numbers, so Kip Fordney brings along a college math major to count the money sure to pile up. Fordney, the head of Shippensburg's parks and recreation department, walks through downtown carrying a one-pound deli container turned into a collection cup and stops at each storefront to deliver a rehearsed pitch. We're trying to save the Fourth of July fireworks, she says, over and over. Can you help After each stop, Fordney, 49, hands the donations to her assistant, who thumbs through the checks and bills before offering a running total. No matter how many times they recount, the numbers don't add up. Fireworks, held in Memorial Park every summer since the 1940s, would cost 5,300 a dwindling budget and lackluster donations have left Fordney responsible for raising every cent. If she fails to secure the money in the next few days, the town of 5,600 people in south-central Pennsylvania will forgo fireworks and cancel the disc jockey on its self-proclaimed Best Day of Summer. The residents who gather annually at the high school football field to lie on blankets, listen to The Star-Spangled Banner, and drink free Wild Cherry Pepsi and Mountain Dew will instead be left to contemplate a dark sky, in yet the latest reminder of the economic crisis. More than 40 communities across the country have already canceled their Fourth of July fireworks, conceding to a new reality Shooting off a colorful array of explosives, an American birthright since 1777, is now a luxury that borders on wasteful. Unlike in Washington, where tens of thousands will fight for position on the Mall, these are places that represent what Independence Day means in most of America -- a hillside covered with friends and neighbors, a few dozen fireworks set off by the volunteers from the fire department, a sweet, small-town sense of community on a warm summer night. And yet the mayor in Lowell, Mass., laid off 48 employees and canceled fireworks earlier this month, reasoning that it saved employee No. 49. Some towns near Washington, from Herndon to Laurel, said sluggish fundraising could force them to scale back. Chesapeake Beach, Md., will shoot off fireworks on July 3 because it procured a discounted rate organizers in Charlottesville warned that next year, fireworks might be canceled entirely.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614566","date":"2009-06-19","texts":"WASHINGTON -- Lawmakers peppered Treasury Secretary Timothy Geithner with questions about the Obama administration's proposed overhaul of financial-markets supervision, underscoring how the revamp might become bogged down as it inches through Congress. Speaking before the Senate Banking Committee Thursday, Mr. Geithner provided the first public defense of the proposal, warning that the country cannot afford inaction and must make broad changes to consumer protections and improve the everyday workings of financial markets. Our economy has been brought too close to the brink for us to let this moment pass, Mr. Geithner said before the panel. The Treasury secretary faced questions about the White House's push to expand the authority of the Federal Reserve, the fate of finance companies owned by commercial firms, mortgage giants Fannie Mae and Freddie Mac, and financial literacy. The role of the Fed was a flash point. Panel members expressed a strong desire for changes to the current regulatory system, but lawmakers on both sides of the aisle were wary of giving the Fed new and extensive powers to oversee risks across the financial system.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617239","date":"2009-06-22","texts":"In Indio, a small city east of Los Angeles, the supply of foreclosed houses for sale is plentiful. Even so, work crews are finishing a batch of new homes for Lennar Corp. While the recession wiped out many small builders, mortgage lenders and homeowners, the nation's biggest builders have hung on, in part through favorable land deals, loan agreements and tax strategies. Now, the worst appears to be over for most of them. Nationwide, new-home sales are showing signs of bottoming out. The stocks of the big home builders have rebounded from their November lows, and some have bolstered their cash and borrowing ability. Lennar and Toll Brothers Inc. each sold 400 million of bonds in April, and Ryland Group Inc. sold 230 million worth, a sign that some investors think these companies will make it. A look at how Lennar navigated the worst housing crisis in decades reveals that timely land deals have been critical to its survival. Land can humble you, says Emile Haddad, Lennar's chief investment officer. On the surface it looks like the simplest real-estate asset, but it's really the most complicated.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617136","date":"2009-06-23","texts":"WASHINGTON -- Some governors are pushing to scale back or kill proposals to expand Medicaid to provide health-care coverage to the uninsured, raising a new challenge to President Barack Obama's effort to overhaul the system. Medicaid, the health-care program for the poor, is funded through a combination of federal and state tax money. Proposals in the House and Senate would expand the program to cover at least a third of the nation's 46 million uninsured, but states are worried they would get stuck with a big part of the tab. Several governors, including Democratic Gov. Christine Gregoire of Washington and Republican Gov. Haley Barbour of Mississippi, plan to come to Washington this week to discuss health issues with White House and congressional officials. Medicaid is expected to be a primary topic. We're wary of additional financial obligations when we're struggling to cover the obligations we have, said Jonathan Seib, a Gregoire health-policy adviser. In private meetings, Senate Democrats working on health care have assured the governors that the federal government will assume all the costs for the expansion at first, followed by a transition to shared responsibility. House Democrats are pressing to have the federal government take on the full cost permanently.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613951","date":"2009-06-26","texts":"Corrections & Amplifications Families in Michigan can receive welfare benefits for a maximum of four years. A U.S. news article Friday incorrectly said the maximum was two years. WSJ June 29, 2009 Michigan's generous jobless benefits and strict eligibility rules have kept the welfare rolls down despite the state's 14.1 unemployment rate, the highest in the country. But a surge in jobless workers reaching the time limit for unemployment benefits in coming months could change that. A major test for the state's welfare system could come by January, when nearly one in seven unemployed workers will have exhausted their jobless benefits, unless the laws change, said Norm Isotalo, a spokesman for Michigan's unemployment-insurance agency. Many of the more than 680,000 unemployed workers in the state are collecting jobless benefits, which last for as long as 79 weeks.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614452","date":"2009-06-26","texts":"The euro regained some of its day-earlier losses against the dollar with a broad rebound in risk appetite but stayed within recent ranges. Advancing U.S. stocks and crude-oil futures encouraged traders to buy riskier currencies and sell the safe-haven dollar. Crude-oil futures rallied above 70 a barrel for the first time in three days. Also, many analysts said the dollar's relief rally against the euro on Wednesday, on what was perceived as a less-dovish Federal Open Market Committee policy statement, was misguided, as policy was essentially unchanged. However, the euro didn't advance far past the 1.40 level on Thursday. A third suspected intervention in two days by the Swiss National Bank to weaken the franc may have weighed on the euro, some analysts said. Market uncertainty remains high amid mixed economic data. Thursday's slate included better-than-anticipated revisions to the U.S. first-quarter gross domestic product but also a jump in jobless claims last week.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615950","date":"2009-06-26","texts":"NEW YORK -- Stocks staged a broad rally as Bed Bath & Beyond rose on a profit report and SLM spiked on an analyst upgrade. Investors seem to be changing their mind every couple days about when they think the economy is going to bottom, said Uri Landesman, head of global growth strategies at ING Investment Management. Investors wanted to see the glass as half full Thursday. They were taking pieces of news and interpreting it positively, he said. I'm not sure we can say Happy days are here again. Positive earnings from a retailer helped consumer-discretionary stocks do well. Bed Bath & Beyond Nasdaq gained 2.69, or 9.5, to 31.08. The retailer's fiscal first-quarter profit jumped 14 on higher sales. SLM, commonly known as Sallie Mae, added 87 cents, or 10, to 9.20. J.P. Morgan upgraded the stock to overweight, saying that the company's transition to primarily a loan servicer will lower interest-rate and funding risks, thus improving earnings visibility. Nike fell 1.74, or 3.3, to 51.28. The shoemaker's fiscal fourth-quarter profit dropped 30 on 195 million in restructuring charges, as revenue and margins slid and future orders dropped in all regions.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616248","date":"2009-06-27","texts":"A suggestion that the U.K. economy was making a speedy recovery has fizzled, with recent numbers showing that banks still aren't helping businesses invest, and consumers still aren't spending enough to spur faster growth. Data including retail sales, house prices and manufacturing orders had suggested that the recession-plagued U.K. might be moving faster in the right direction. The numbers helped trigger rallies earlier this month in stocks, bonds and sterling. More recent figures, however, were a reminder of the recession's reality. The Organization for Economic Cooperation and Development predicted Wednesday that weak lending will contribute to a 4.3 fall in U.K. gross domestic product this year -- more pessimistic than a U.K.-based economists' consensus forecast for a 3.7 decline, or the 2.8 fall the OECD predicts for the U.S. Conditions are fragile elsewhere in Europe. This week, European Union statistics agency Eurostat said new industrial orders in the euro zone posted their sharpest year-to-year drop on record in April -- a sign that the currency area's recovery could be painfully slow.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614768","date":"2009-07-07","texts":"DAVENPORT, Iowa -- The lush red strawberries caught the attention of Rachel Patrick, a mother of five shopping at a farmers market along the Mississippi River here. She selected two cartons and ignited a little-noticed chain reaction that is an important part of President Barack Obama's economic stimulus plan. Ms. Patrick handed a plastic card loaded with her monthly food-stamp allocation to farmer Ed Kraklio Jr., who swiped it through his electronic reader. Mr. Kraklio now regularly takes in several hundred dollars a month from food-stamp sales, a vital new revenue stream that has allowed him to hire another assistant to help tend a cornucopia of fruits and vegetables. The new worker, in turn, spends her income in nearby stores, restaurants and gas stations. The president's stimulus plan has been aimed primarily at the top of the economy, pumping money into banks and car companies and state and city governments. But it also has put more money into the hands of the poorest Americans by boosting monthly food-stamp allocations. Starting in April, a family of four on food stamps received an average of 80 extra. Money from the program -- officially known as the Supplemental Nutrition Assistance Program -- percolates quickly through the economy. The U.S. Department of Agriculture calculates that for every 5 of food-stamp spending, there is 9.20 of total economic activity, as grocers and farmers pay their employees and suppliers, who in turn shop and pay their bills. While other stimulus money has been slow to circulate, the food-stamp boost is almost immediate, with 80 of the benefits being redeemed within two weeks of receipt and 97 within a month, the USDA says.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614792","date":"2009-07-08","texts":"Employers were less willing to hire in May and employees were more reluctant to quit, making it more difficult for the unemployed to find work, the Labor Department reported Tuesday. There were about 5.7 unemployed workers for every job opening in May, up from about 5.5 a month earlier. As the growing number of job seekers meets the shrinking pool of openings means people are out of work longer, crimping consumer spending and shrinking government budgets. There are huge lines in front of the door of every job opening, said Heidi Shierholz, an economist at the Economic Policy Institute, a left-leaning think tank in Washington. May data on job openings and labor turnover showed the drop in the rate of job openings at employers has started to flatten out. The report's silver lining was the latest in a string of indicators that show the U.S. economy may be nearing bottom. There were 2.6 million job openings on the last day of May, about the same as a month earlier, but down from four million openings in May 2008. The seasonally adjusted job-openings rate was 1.9 in May, the same as in April and down from 2.8 in May 2008.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982840","date":"2009-07-08","texts":"Around midnight on April 15, 1912, there were a few minutes when Capt. Edward Smith of the Titanic realized his ship was going down -- six watertight compartments breached, less than two hours to float -- yet his passengers slept in happy ignorance. A historical fate hardened while most of the participants dreamed on. The jobs report last week opened a long gash beneath the waterline of President Obama's legislative agenda. Few realize it, but a scramble for lifeboats is about to begin. On closer inspection, the economic news, which seemed bad, is even worse. Not only did unemployment rise to 9.5 percent but wages fell, undermining the consumption needed to revive a consumption-driven economy. Unemployment increased among breadwinners -- married men and women who head households -- also making major family purchases more difficult. Recent increases in unemployment benefits and food stamps have helped many Americans pay for food and rent. Jobs, however, are what lead to the purchase of furniture, cars and homes. Paired with a decline in business investment, these trends make a second-half recovery less likely. The stimulus package hasn't been very stimulating -- as many economists predicted. Pouring money into the economy through a thirsty sponge of federal programs -- the preferred method of Congress -- is slow and inefficient. In retrospect, all of the stimulus funds should have been given to individuals directly from the tap. Obama's spending ambitions would have been jaw-dropping even in the best of economic times. Federal spending this year is about 28 percent of gross domestic product -- a figure exceeded only when Franklin Roosevelt was fighting a global war against Germany and Japan. Along the fiscal path Obama has chosen according to the Congressional Budget Office our national debt will more than double in 10 years and will amount to 82 percent of the entire economy.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616299","date":"2009-07-11","texts":"Tentative signs of life in global trade are emerging, buoying growth forecasts in the U.S. and China, two of the world's most important economies. U.S. exports grew in May, while imports fell, helping to narrow the trade deficit to its lowest level in nearly nine years. The report prompted economists to revise up their estimates of second-quarter gross domestic product. Some even suggested the economy might have grown slightly in the second quarter. The trade gap decreased to 26 billion in May from April's 28.8 billion, the Commerce Department said Friday. Exports rose 1.6 in May to 123.3 billion on a seasonally adjusted basis. Imports fell 0.6 to 149.3 billion. It's a very good sign for GDP, says Paul Ashworth, senior U.S. economist for Capital Economics in Toronto. The economy didn't shrink by much in the second quarter, and there's an outside chance it recorded a gain. Forecasting firm Macroeconomic Advisers increased its second-quarter GDP forecast from minus 1.6 to plus 0.2 on the news. New figures from China offered more support for the prospect that the massive drop in global trade is abating. Exports in June fell 21.4 from a year earlier, a smaller drop than May's 26 decline, China's state-run Xinhua News Agency reported Friday, citing official data.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614528","date":"2009-07-12","texts":"So you still have your job, but you're getting a lot less work these days. Maybe that overtime you used to count on has disappeared. Or your boss asked you to take a few weeks of unpaid vacation. Perhaps the number of hours you put in each week has been dwindling. Whatever the case, your paycheck is smaller, you have more time on your hands and your benefits may be at risk. The cuts are often in lieu of -- and sometimes in addition to -- layoffs, and they may be spreading. More than half of the 200 companies surveyed in May by outplacement consultant Challenger, Gray & Christmas said they had instituted salary cuts and freezes. That was double the number from January. Government data show that in June, average weekly hours for all jobs shrank 2 from a year ago. And it's not clear when or if workplaces will ever return to normal. A June survey by consulting firm Watson Wyatt Worldwide found that 10 of companies that imposed mandatory furloughs were not planning to get rid of them. More than half of respondents expect smaller staffs three to five years from now.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614008","date":"2009-07-13","texts":"The unemployed don't spend much. They do, however, brush their teeth and power their homes and seek medical care. And the companies that sell such products or services could remain attractive investments as the economy heads into what many see as a jobless recovery. The U.S.'s unemployment rate recently hit 9.5, its highest level since the early 1980s. Many economists see it going above 10 and only slowly receding. They say an economic recovery won't inspire much hiring as companies grapple with slower economic growth, overcapacity in numerous sectors, and slack demand driven in part by a newfound saving ethic among overleveraged consumers. Double-digit unemployment, says Peter Gutmann, economics professor at Baruch College of the City University of New York, could be with us for some time. A jobless recovery might not decimate the stock market overall since high unemployment limits wage pressures and keeps interest rates low. Low rates are helpful for the PE priceearnings multiples on stocks because investors perceive better upside in equities than in safe, low-return Treasury bonds, says Richard B. Hoey, chief economist at Bank of New York Mellon.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985264","date":"2009-07-19","texts":"If you're older than 40, you would be forgiven if you took the glass-half-empty view of the economy. After all, your retirement account has been decimated, your home's value has plummeted, your credit has dried up and your job may be teetering on a cliff. But if you're in your 20s or 30s, you have time to rebound from any personal setback and even use the crisis to your advantage. It's a great time to invest. Yes, the stock market has been in the toilet lately, but that's what makes investing so attractive, especially to first-timers. As of July 8, the Standard & Poor's 500-stock index stood 44 percent below the all-time high set on Oct. 9, 2007. Yes, that's a good thing -- for you. You have 30, 40, maybe 50 years until you retire. That's plenty of time to come out ahead. The stock market has never lost money over a 30-year period. Even if you had invested in 1928, before the Great Depression, you would have earned an average annual return of about 8.5 percent over the next 30 years, according to T. Rowe Price. You can get a deal on a home. Median home prices have dropped about 25 percent since 2006, with some metro areas seeing values drop by more than half, according to the National Association of Realtors. Mortgage rates are also near record lows, making for smaller monthly payments. Plus, Uncle Sam is sweetening the deal with a tax credit worth up to 8,000 for first-time home buyers. Your career options are still open. The nation's unemployment rate topped 9.5 percent in June. And hiring for new grads has slowed significantly. But this is a minor setback when you're young, compared with the blow it would be if you were older and more established. In fact, the recession may lead you to explore life and job paths you might not have considered otherwise.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842613596","date":"2009-07-20","texts":"WASHINGTON -- A plan to end a program that would cut government payments to doctors is emerging as the flash point in the debate over whether President Barack Obama's effort to overhaul the health system would increase the federal budget deficit. The proposal was crucial to winning support from the politically powerful American Medical Association -- but it has also made it tougher to argue that the health overhaul would pay for itself. President Obama this week plans to continue his bid to drum up support for his goal to expand health insurance to the nation's 46 million uninsured Americans, after suffering some setbacks last week. On Capitol Hill this week, House members hope to pass their health bill through a third and final committee, and senators are expected to resume talks to hammer out an agreement on the only bipartisan health bill taking shape in Congress. Administration officials on Sunday expressed confidence that lawmakers could pass legislation before Congress's August recess. The chances are high that Congress can meet the deadline, White House budget director Peter Orszag told Fox News Sunday, but he added that lawmakers should amend the legislation to help contain costs. Health and Human Services Secretary Kathleen Sebelius, appearing on NBC's Meet the Press, said costs associated with the legislation could be reduced significantly if lawmakers included the administration's recommendation to bolster the power of the Medicare Payment Advisory Commission, or MedPAC, to set Medicare payment policies.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615818","date":"2009-07-20","texts":"It usually doesn't happen this quickly in Washington. But President Barack Obama and congressional Democrats are finding that the old maxim that what goes around, comes around applies to them, too. Less than six months into his term, Mr. Obama's top initiatives -- health-care reform and cap and trade energy legislation -- are in serious jeopardy and he has himself and his congressional allies to blame. Their high-pressure tactics in promoting and passing legislation, most notably the economic stimulus enacted in February, have backfired. Those tactics include unbridled partisanship, procedural short cuts, demands for swift passage of bills, and promises of quick results. With large majorities in Congress and an obsequious press corps, Mr. Obama was smitten with the idea of emulating President Franklin Roosevelt's First 100 Days of legislative success in 1933. Like FDR, Mr. Obama tried to push as many liberal bills through Congress in as brief a time as possible. He made a rookie mistake early on. He let congressional Democrats draft the bills. They're as partisan as any group that has ever controlled Congress, and as impatient. They have little interest in the compromises needed to attract Republican support. As a consequence, what they passed -- especially the 787 billion stimulus -- belongs to Democrats alone. They own the stimulus outright. That makes them accountable for the hopes of a prompt economic recovery now being dashed. With the economy still faltering and jobs still being lost, Mr. Obama's credibility is sinking and his job approval rating is declining along with the popularity of his initiatives. Republicans, who had insisted the stimulus was wasteful and wouldn't work, are being vindicated.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615301","date":"2009-07-21","texts":"Morgan Stanley has been named as a primary financial adviser for any public offerings or divestitures for units of American International Group Inc., according to documents released by the New York Federal Reserve. The New York Fed, which has played a leading role in the government bailout of AIG, said it paid Morgan Stanley an initial 4 million advisory fee along with 2.5 million each quarter since October. The investment bank also can bill expenses related to work done on behalf of the insurer up to 5 million without needing approval from the New York Fed. The documents also showed that the Fed agreed to pay Ernst & Young LLP as much as 60 million for its advice relating to AIG. The accounting firm in September had a 40 million limit before it was amended in May, according to the documents. Ernst & Young is charging 775 an hour for work done by partners or executive directors. The New York Fed will also reimburse Ernst & Young for expenses related to AIG work, not to exceed 10 of the hourly fees charged. AIG, Ernst & Young and Morgan Stanley declined to comment.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616515","date":"2009-07-21","texts":"UnitedHealth Group Inc. said Monday that it will take over the northeastern units of rival insurer Health Net Inc. The deal, valued at roughly 450 million, will allow UnitedHealth to assume the membership base of Health Net's northeastern operations in stages. UnitedHealth will win the rights to renew Health Net's health-plan contracts as they come up for annual renewal. The deal is expected to close within a year. With more than 30 million health-plan members nationwide, UnitedHealth won't dramatcially expand its overall customer base with the deal. But the purchase lets it build a firmer foothold in the competitive Northeast, giving it a new entree to employers -- its potential customers -- in Connecticut, New York and New Jersey. And it will gain access to nearly 578,000 health-plan members at a time when most major health insurers have been suffering membership losses amid rising unemployment and health care costs. Health Net, long considered a potential takeover target itself, has been looking for a buyer for its northeastern and Arizona operations since last fall. The Woodland Hills, Calif.-based insurer shook up its top management and launched a strategic review in November after a sharp tumble in profits and steep membership decline. Health Net said it will now keep its Arizona operations. Credit By Avery Johnson and Vanessa Fuhrmans","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981699","date":"2009-07-22","texts":"Federal Reserve Chairman Ben S. Bernanke launched a more aggressive defense of the central bank's multitrillion-dollar campaign to prop up the economy, as government bailouts came under fire Tuesday from all directions on Capitol Hill. Lawmakers were reluctant to second-guess rescues and interventions in the darkest days of the financial crisis. But now, with the financial system stabilizing and the unemployment rate at 9.5 percent and climbing, there is deepening frustration in Congress and around the country that there is not more to show from the trillions of dollars the government has put at risk. Bernanke argued before the House Financial Services Committee that the Fed's actions helped prevent a global economic calamity, and he promised an exit strategy to head off fears of inflation. His comments came as other government officials were also sharply criticized for their handling of the financial rescue. Just down the hall, a separate House committee assailed the Treasury Department's execution of the financial system rescue, arguing that it has been deployed without enough accountability. The taxpayers now have a 700 billion spending program that's being run under the philosophy of 'don't ask, don't tell,'  said Rep. Edolphus Towns D-N.Y. in a hearing on the Troubled Assets Relief Program. In the same building, members of a third committee were enraged that Chrysler and General Motors dealerships in their districts were being shut down despite government bailouts of the companies. Related stories, A11.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614687","date":"2009-07-23","texts":"General Electric Co., the largest user of a government program to guarantee corporate debt, said it had begun to wean itself from the federal assistance. GE, which tapped the Federal Deposit Insurance Corp. guarantees after credit markets seized up last fall, said it would stop using the guarantee on short-term loans known as commercial paper and would restrict its use of the guarantee for longer-term debt. The markets are recovering, said Kathryn Cassidy, GE senior vice president and treasurer, in an interview. We would like to see us return to a regular market funding rather than using the government guarantee. In one sign of GE's improved health, the company raised nearly 3 billion in nonguaranteed debt this week. Analysts and investors said GE's motivations were more complex, as the firm seeks to fend off potential new federal regulations and criticism from some business partners about its reliance on the government program.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983232","date":"2009-08-02","texts":"Correction Aug. 2 obituary for economist Stanley Lebergott incorrectly reported his age at the time of death. He was 91. Published 842009 Stanley Lebergott, 93, a retired economist and professor whose influential books and articles maintained that consumerism had brought positive changes to the American standard of living, died July 24 of cardiac arrest at his home in Middletown, Conn. Mr. Lebergott, a former government economist and Wesleyan University professor, took issue with those who disdained consumerism as wasteful, pointless, even immoral. Consumption, he maintained, has always been an expression of human longing rather than mere acquisitiveness. Reviewing his book, Pursuing Happiness American Consumers in the Twentieth Century 1993, Washington Post book critic Jonathan Yardley praised Mr. Lebergott's lucidity, wit and forthrightness. In Yardley's words Lebergott argues that the great American shopping spree is not mere self-indulgence but an essential part of what has been a remarkably successful pursuit of happiness. He believes that rather than focus on the self-indulgent aspects of consumerism, we do better service to the truth if we credit it with permitting Americans to liberate themselves from the onus of repetitive, unrewarding labor.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614568","date":"2009-08-05","texts":"Stock Market Runs With Aging Bulls What might be the sequel to the surprise summer hit The Incredible Rising Stock Market At 1005.65, the Standard & Poor's 500-stock index is nearly 50 above its March low. The potency of the surge caught just about everyone off-guard. Yet the rally shouldn't be that surprising, as stock markets nearly always rebound when investors see an end to a recession. The big question is what happens after that initial surge. Excluding the current downturn, there have been seven recessions since 1960. In the 12 months from the midpoints of those contractions, the S&P 500 rose a solid 17 on average. But in the following 12-month period, gains were harder to come by, with the S&P 500 adding only an extra 4 on average. What does this history tell us If the recession ended in June -- and most economists predict gross domestic product will grow in the third quarter -- the midpoint of this downturn would be September last year. In the 10 months since then, the S&P 500 is actually down by around 14. So it wouldn't be surprising if the market rallied further from here. And with the Federal Reserve still intervening heavily to hold down borrowing costs and the government spending money hand over fist, few want to bet against this bull run.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616717","date":"2009-08-05","texts":"WASHINGTON -- Top U.S. regulators rebuked Treasury Secretary Timothy Geithner on Tuesday and continued criticizing the administration's proposed revamp of financial regulation, signaling that turf battles will continue over one of the White House's top domestic agenda items. During a Senate hearing, federal banking regulators took aim at central aspects of the administration's proposal, questioning the creation of an agency to protect consumers and the concentration of regulatory power in the Federal Reserve. Comptroller of the Currency John Dugan said parts of the proposal to overhaul bank rules were not consistent with its own stated objective. Federal Deposit Insurance Corp. Chairman Sheila Bair said the plan was focused on the wrong solutions. It is difficult to see why so much effort should be expended to create a single regulator when political capital could be better spent on more important and fundamental issues, Ms. Bair told the Senate Banking Committee. The criticisms came days after Mr. Geithner called top regulators to the Treasury and told them during an expletive-laced meeting to quiet their public criticism of the proposal. Mr. Dugan, Ms. Bair, and Federal Reserve Chairman Ben Bernanke were among those at the meeting, where Mr. Geithner told regulators they had been given the chance to air their grievances but that it was time to stop.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615795","date":"2009-08-06","texts":"Treasurys ended a volatile session lower, buffeted by economic and market-based forces. In the market's starting hours, prices had been able to hold relatively steady after data showed the service sector contracted more than expected last month. But that buoyancy offered only a temporary reprieve from persistent selling pressure over recent days, as the market was weighed down by a modest pullback in stock prices and turbulence tied to deals in the corporate-bond market. Most losses were spread evenly across the curve, but the long bond was a standout loser in the session. The selling led to wider spreads between short- and longer-dated bonds. Late afternoon, the benchmark 10-year note was down 2132, or 6.5625 per 1,000 face value, at 94 2632. Its yield rose to 3.764 from 3.680 Tuesday, as yields move inversely to prices. The 30-year bond fell 1 2032 to yield 4.564. Bonds had gotten support as the Federal Reserve bought 7.248 billion in Treasurys maturing between December 2013 and August 2015.On the supply side, the Treasury Department said it would sell 75 billion in notes and bonds next week, a record amount for a quarterly refunding.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983507","date":"2009-08-06","texts":"During a recent online discussion, an interesting debate developed over a chat participant's comment about not taking unemployment benefits. The participant wrote Last year my husband got laid off and was out of work for four months. We had an emergency fund and made it through without taking unemployment, and without going into debt, not even one cent It's okay to take unemployment It's more than just okay. If one is unemployed and eligible for unemployment insurance, it's downright financially reckless not to take it. Unless one has money to burn, of course. What's great about not taking unemployment when you lose your job That's what you've been paying into it for It's an insurance program, not welfare. You're smart not to spend it if you don't have to, but why deplete your savings rather than take it It was clear from the responses I received that many people don't understand how unemployment insurance works and who pays for it. I applauded the couple for relying on their own resources It's why you establish an emergency fund. However, if you need unemployment compensation, by all means take it. But also recognize this isn't free money. The money for the weekly checks paid out to the millions of people out of work through no fault of their own is raised through state and federal unemployment insurance taxes on employers. With the exception of a few states -- New Jersey, Pennsylvania and Alaska -- workers do not contribute directly to the program. According to the Government Accountability Office, which has looked at the funding of unemployment insurance, the program was established in 1935 for two primary reasons to give workers temporary financial help during unemployment and to help stabilize the nation's economy in economic downturns by maintaining workers' purchasing power.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985615","date":"2009-08-09","texts":"Maybe it's the dog days, but three friends recently got in touch within a 24-hour period to catch up. Or more like it, to catch their breath. One reported the onset of panic attacks. Another is seeking treatment for depression. The third began an e-mail asking for help with Reports of my employment have been greatly exaggerated. The first two were women, 40-something and 50. The third is a man in his 50s. They all have one thing in common No job. What if I can't find a job Ever asked Sandra. She laughed, but it was nervous laughter. Sandra isn't at all sure things will work out. Though mired in the unemployment doldrums, none of my friends fit into the categories of outraged citizens known as teabaggers or townhallers. Teabaggers are conservatives who staged tax protests this year townhallers are those now confronting congressional leaders as they return home to chat up constituents.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615585","date":"2009-08-10","texts":"Corrections & Amplifications U.S. office vacancies rose one percentage point to 15.4 in the second quarter compared with the prior quarter, according to Colliers International. A Marketplace article Monday about Maguire Properties Inc. incorrectly said the change was from the same period last year. WSJ August 12, 2009 Maguire Properties Inc., one of the largest office-building owners in Southern California, is planning to hand over control of seven buildings with some 1.06 billion in debt to creditors, the latest sign that rising vacancies and falling rents are causing stress in the commercial real-estate sector. Maguire, which borrowed heavily during the go-go years to make disastrous top-of-the-market investments, mostly in Orange County, notified the buildings' mortgage holders Friday that it expected imminent default on the loans. The buildings are all worth less then their mortgages and aren't generating enough cash to pay debt service and finance leasing expenses.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615353","date":"2009-08-14","texts":"Putting Supply and Demand Together Again If you build it, will they come Two reports Friday morning, industrial production and the consumer-price Index, should help answer the question. There is a lot of faith that rebuilding inventories will boost gross domestic product and even pull the economy out of recession. The concept is simple Companies start producing more products, which boosts or at least stabilizes employment and wages, which drives consumer economic activity. There is only one problem. Producers haven't been producing much. And consumers haven't been demanding much, either. Market watchers are eager for signs that one or both of those things are starting to change.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983405","date":"2009-08-18","texts":"The country's growing unemployment is overtaking subprime mortgages as the main driver of foreclosures, according to bankers and economists, threatening to send even higher the number of borrowers who will lose their homes and making the foreclosure crisis far more complicated to unwind. Economists estimate that 1.8 million borrowers will lose their homes this year, up from 1.4 million last year, according to Moody's Economy.com. And the government, which has already committed billions of dollars to foreclosure-prevention efforts, has found it far more difficult to help people who have lost their paychecks than those whose mortgage payments became unaffordable because of an interest-rate increase. It's a much harder nut to crack, unemployment, said Mark A. Calabria, director of financial regulation studies at the Cato Institute. It's much easier to bash lenders than to create jobs. During the first three months of this year, the largest share of foreclosures shifted from subprime loans to prime loans, according to the Mortgage Bankers Association. The change to prime loans -- traditionally considered safer -- reflects the growing numbers of unemployed who are being caught up in the foreclosure process, economists say. Rep. Barney Frank D-Mass., chairman of the House Financial Services Committee, has proposed using 2 billion in government rescue funding to provide emergency loans to these borrowers. We are going to be seeing more foreclosures because of prolonged unemployment, he said. These are people who weren't in trouble and wouldn't be in trouble if they hadn't lost their job.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614859","date":"2009-08-21","texts":"The swoon in sales at Sears Holdings Corp. has spread to the company's profits, leading investors to question again the future of the pioneering retailer controlled by financier Edward S. Lampert. After surprising investors with a small profit earlier this year, Sears posted a quarterly loss Thursday on a 10 drop in revenue from a year earlier. The 94 million loss spooked investors who had been expecting Sears Holdings to post a profit. Sears shares tumbled 12, or 8.76, to 65 in 4 p.m. trading Thursday on the Nasdaq Stock Market as analysts surmised that the previous quarter's 26 million profit, achieved largely due to aggressive cost cuts, may have been an anomaly. Mr. Lampert was hailed by some analysts as the next Warren Buffett when he combined the struggling Sears and Kmart chains in 2005 and vowed to return them to prosperity. But the billionaire investor, who controls most of Sears Holdings stock through his Greenwich, Conn., hedge fund, ESL Investments Inc., has been unable to reverse longstanding sales declines at Sears and Kmart. Sales at U.S. stores open at least a year dropped 3.9 at Kmart and 12.5 at Sears. The company attributed the declines to lower clothing sales and the effect of the housing slump on appliance and furniture sales. Sears declined to make Mr. Lampert or company executives available for comment.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615933","date":"2009-08-21","texts":"HONG KONG -- Foreign firms that include some of the biggest names in U.S. private equity are rushing to raise Chinese funds that offer a new route to getting deals done in the world's fastest-expanding major economy. In the latest example, Carlyle Group LLC is in advanced discussions to raise a local-currency private-equity fund of several billion yuan, according to people familiar with the situation, after already setting up a previously undisclosed smaller yuan fund earlier this year for growth-capital investments. Kohlberg Kravis Roberts & Co. also is actively studying setting up a yuan-denominated fund, according to people familiar with the situation. In recent days, other foreign private-equity firms and banks, including Blackstone Group LP and Macquarie Group Ltd., have announced plans to raise a total of about 4.5 billion in funds from local investors. The allure of the Chinese market is powerful for U.S. private-equity firms that have watched dozens of leveraged buyout deals sour over the past year amid turmoil in credit markets and a global recession. By contrast, China's economy is emerging from the global financial crisis in better shape than many had expected, expanding 7.9 in the second quarter.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982900","date":"2009-08-23","texts":"Gil Hembree was 20 years old and working the counter at Kitt's Music on G Street NW when he spotted a 1962 Gibson catalogue featuring the music-making duo of Les Paul and Mary Ford. It wasn't the couple that caught his attention but rather the guitar slung over Paul's shoulder an original-style, single-cutaway Gibson Les Paul model with a gold finish. That was 1966. Soon after, Hembree saw an Evening Star classified ad for a 1952 Gibson Goldtop Les Paul. He paid 100 to a country-music fan in the Maryland suburbs. Hembree later sold it to a musician for 400, booking a profit he used to help cover tuition at American University, where he studied accounting. He had no idea, and I didn't really either at the time, what these were worth, Hembree said of the transaction. I just thought they were cool. Today a 1952 Goldtop in excellent condition is valued at 15,000 by Vintage Guitar magazine, which publishes an annual price guide.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842613492","date":"2009-08-26","texts":"In this decade, we have had more than our share of big-time booms and busts the tech bubble, the housing bubble and, this year, what Warren Buffett has called the Treasury bubble. For some years now, I have been a student of these extreme financial cycles. In the 1980s, I witnessed firsthand the Texas real-estate bubble and covered companies crushed in the junk-bond bubble. I wrote a book about the crash of 1929. And to my terrific shame, at the top of an inflated market, I once paid 50 for a 5 Beanie Baby named Peace. In studying what drives bubbles, I've come to believe that they follow fairly regular patterns. If we could learn to recognize these, we might be more astute in reacting and adjusting our own behavior. And even if we can't see beyond the excitement they generate, there are underlying lessons for investors. -- Fertile ground. The biggest bubbles appear to develop during periods of rapid and radical innovation, which may leave us more vulnerable to accepting the bizarre rationalizations that often accompany financial speculation. In the 1920s, the automobile came into its own, and many homes were wired for electricity. Radio wasn't around at all in 1920 by 1929, it was in one of three households, bringing entertainment, music and headlines to millions. Amid all that, there were two tremendous financial bubbles -- the 1925 Florida land grab and the roaring stock market that preceded the crash.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984850","date":"2009-08-26","texts":"No matter which way he turns, President Obama can't seem to shake the legacy of George W. Bush's presidency. On two issues this week, the Obama administration broke with and embraced the policies of his predecessor, drawing criticism on successive days from both ends of the political spectrum. The biggest break came with the decision Monday by Attorney General Eric H. Holder Jr. to initiate an investigation into allegations of detainee abuse by CIA interrogators and contractors. Obama, who in his first days as president ordered an end to the agency's harshest interrogation techniques, has said repeatedly that he does not wish to re-litigate the past or subject officials to criminal prosecution if they believed they were operating within parameters approved by their superiors. Holder's decision undercuts Obama's desire to move forward. The appointment of career prosecutor John H. Durham to determine whether there is enough evidence to warrant prosecutions does not guarantee that criminal charges will be filed. But the decision keeps the controversy alive indefinitely at a time when Obama has more than enough controversies to occupy him. The decision pleased neither liberal nor conservative critics. Anthony Romero, executive director of the American Civil Liberties Union, argued that there is more than enough evidence to warrant prosecutions and accused Holder of appeasing the political interests in Washington.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613737","date":"2009-08-29","texts":"Consumer spending rose slightly in July as Americans swapped their old cars for new ones in a program meant to help steer the U.S. economy out of recession. Spending rose 0.2 compared with June and personal income was unchanged, the Commerce Department said Friday. Inflation wasn't threatening, a price gauge showed. The increase marked the third-straight month that spending climbed and reflected the effects of the federal cash for clunkers program, which let motorists swap gas-guzzlers for more fuel-efficient models. It began in late July and ended Monday. Outside of the clunkers program, consumer spending was still weak, underlining the challenges to an economic recovery. About three-quarters of the spending increase came from outlays for new vehicles. Economists expect the program to register a similar effect for August. The economy did not come into the third quarter like a ball of fire, said Ken Mayland, who runs ClearView Economics.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981858","date":"2009-08-29","texts":"During last year's campaign, President Obama vowed to enact a bold agenda without raising taxes for the middle class, a pledge budget experts viewed with skepticism. Since then, a severe recession, massive deficits and a national debt that is swelling toward a 50-year high have only made his promise harder to keep. The Obama administration has insisted that the pledge will stand. But the president's top economic advisers have refused to rule out broad-based tax increases to close the yawning gap between federal revenue and government spending and are warning of tough choices ahead. Republicans are already on the attack, accusing Obama of plotting to break his no-tax vow, the same political transgression that cost Democrats control of Congress under former president Bill Clinton and may have cost president George H.W. Bush his job. Democrats say Obama is highly unlikely to break the pledge before next year's congressional election and observe that it would be safer to wait until his second term if a tax increase becomes unavoidable. Some lawmakers are focused instead on setting up an independent commission to solve the deficit problem. Senate Budget Committee chairman Kent Conrad D-N.D. plans to hold hearings on the topic when Congress returns to Washington this fall. Obama, meanwhile, has vowed to pay for any new initiatives and to draft an overhaul of the health-care system that eventually would save the government money, driving deficits down. But effective health reforms would take decades to produce savings. In the meantime, White House budget director Peter R. Orszag acknowledged, there are additional steps that will be necessary. The administration is very concerned about these future deficits, and getting those deficits under control is a top priority of the administration, Orszag told reporters this week as he rolled out a new economic forecast that added 2 trillion to deficit projections from 2010 to 2019.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982247","date":"2009-08-30","texts":"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. 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. 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. 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. 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.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982960","date":"2009-08-31","texts":"The problem of the burgeoning government debt is mainly political, but the adverse consequences may be economic. The trouble is that we don't know what those consequences may be, when they may occur or even whether they will occur. Without some impending calamity, politicians of both parties recoil from doing anything unpopular that might bring the budget into balance over, say, the next six or seven years. The idea of anticipating and preempting future problems is not on their agenda. Although the recent surge of budget deficits -- the annual gaps between outlays and revenue, resulting in more federal debt -- reflects the savage recession, the true cause is political. Deficits allow liberals and conservatives to maintain self-serving public positions. Liberals claim we can have more government more health care, more education, more transportation without taxing anyone but the rich. Conservatives promise that taxes can be cut without depriving anyone retirees, veterans, cities and states of existing government benefits. Neither claim is remotely believable under the assumption that, over the long run, government benefits and programs ought to be paid for with taxes. The truth is that government, again under both parties, has promised far more in benefits than can be covered by existing taxes. Only borrowing could reconcile the rhetorical claims with underlying economic realities. There have been 43 deficits in the past 48 years. Until recently, the borrowings, though usually undesirable, were not alarming. But the recession and an aging population signify that we have crossed a threshold where actual and prospective borrowings are so huge that no one can foresee the consequences. The best measure of debt burden is its relation to the nation's annual income, or gross domestic product. The same approach applied to a household with 25,000 of debt and 50,000 of income would produce a debt-to-income ratio of 50 percent. In 1946, after World War II, the ratio of publicly held federal debt to GDP was 108.6 percent. Since then, the economy our income has generally grown faster than the debt. In 1974, the debt-to-GDP ratio reached a post-World War II low of 23.9 percent, and even in 2007, it was only 36.9 percent. That was manageable.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984754","date":"2009-09-01","texts":"Preventive services for the chronically ill may reduce health-care costs, but they are unlikely to generate the kind of fantastic savings that President Obama and other Democrats have said could help pay for an overhaul of the nation's health system, according to a study being published Tuesday. Using data from long-standing clinical trials, researchers projected the cost of caring for people with Type 2 diabetes as they progress from diagnosis to various complications and death. Enrolling federally-insured patients in a simple but aggressive program to control the disease would cost the government 1,024 per person per year -- money that largely would be recovered after 25 years through lower spending on dialysis, kidney transplants, amputations and other forms of treatment, the study found. However, except for the youngest diabetics, the additional services would add to overall health spending, not decrease it, the study shows. There's no free lunch here. Prevention will not pay for everything. But it's not as expensive as it looks at first blush, said Michael J. O'Grady, a senior fellow at the National Opinion Research Center at the University of Chicago, and one of four authors whose work is being published on the Web site of Health Affairs, a leading journal of health policy research. The study comes a week before lawmakers are due back in Washington to continue the debate over Obama's signature domestic initiative, a debate that has come to focus heavily on cost. With budget deficits soaring in the wake of a global recession, Republican critics -- and a growing number of moderate Democrats -- say the nation cannot afford a vast expansion of the health-care system unless it includes measures to reduce federal spending on care over the long term.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982084","date":"2009-09-04","texts":"Half a year after Congress enacted the largest economic stimulus plan in the nation's history, the measure is contributing to what increasingly looks like a budding recovery, analysts say, but significant concern remains about rising unemployment and the initiative's contribution to the federal budget deficit. With the Obama administration under fire for what critics call unrestrained spending and polls showing the American public ambivalent about the impact of the stimulus plan, officials are pushing back, seeking to highlight the role played by their polices in fueling a recovery. Vice President Biden, making what the White House billed as a major speech Thursday, touted the role of the 787 billion stimulus program in lifting the economy. The Recovery Act has played a significant role in changing the trajectory of our economy and changing the conversation about the economy in this country, Biden said in a speech at the Brookings Institution, a Washington think tank. Instead of talking about the beginning of a depression, we are talking about the end of a recession. While some congressional Republicans and others are dubious about the success of the stimulus plan, economists generally agree that the package has played a significant part in stabilizing the economy. They are less certain about the size of the impact.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830982203","date":"2009-09-06","texts":"Top finance officials from rich and developing countries agreed Saturday to curb hefty bonuses for bankers, but the proposed crackdown on high payouts fell short of European demands after the United States and Britain shied away from imposing a cap. The Group of 20 finance ministers also pledged to maintain stimulus measures such as low interest rates and additional government spending to bolster the global economy, warning that the fledgling recovery that provided the backdrop to their meeting here is by no means assured. The financial system is showing signs of repair, U.S. Treasury Secretary Timothy F. Geithner said. Growth is now underway. However, we still face significant challenges ahead. The G-20 joint statement issued at the end of the ministers' London meeting said that fiscal and monetary policy will stay expansionary for as long as needed to reduce the chances of a double-dip recession. The International Monetary Fund has said that the global economy is beginning a sluggish recovery from its worst recession since World War II, and in July it raised its estimate for global economic growth in 2010 to 2.5 percent, from an April projection of 1.9 percent. But the IMF also downgraded its forecast for this year, saying the global economy would shrink by 1.4 percent instead of 1.3 percent.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983005","date":"2009-09-06","texts":"Japan's voters have thrust power on an incoherent coalition of hungry politicians distinguished only by their willingness to promise anything to anybody anytime. Good for them. In many ways we should applaud the Japanese who voted for what is being described as change they can't believe in. The distorted echo of President Obama's campaign slogan is hardly accidental. Japan's Aug. 30 national election may turn out to be the first of many examples of the Obama factor reshaping politics in other countries. The victorious Democratic Party of Japan skillfully linked its opponents to George W. Bush and free-for-all, destructive capitalism while identifying themselves with the new U.S. president's push for economic recovery and social transformation through government spending. Similar campaign dynamics could come into play over the next few weeks in Greece, which is now committed to early parliamentary elections, and next spring in Britain, where change at almost any price seems the mood. Like the Democrats in Japan, the outs of the world will cite the American audacity in electing the young, relatively untried Obama as the path to follow in hard times. But Japan's upheaval also presents Obama with a significant challenge in Asia. The president will have to walk a fine line in correctly identifying and strengthening the moderates in the new government while containing the coalition's left- and right-wing extremists. And the president has done himself no favor at this moment by choosing John Roos, a California lawyer and a mega-fundraiser for Obama in 2008, as his ambassador to Tokyo. Over time, Obama's complicity with Chief of Staff Rahm Emanuel in stuffing the most important U.S. embassies with campaign bagmen instead of experienced foreign policy professionals will come back to haunt this White House -- nowhere more so than in Japan.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614513","date":"2009-09-08","texts":"While the deficits caused by the fiscal stimulus package will end in 2011 and will help to sustain a fragile recovery in 2010, the deficits projected for the longer term are a threat to our economic future. The starting point for controlling those future deficits is for Congress to abandon the administration's health-care plan -- a plan that will cost more than 1 trillion. The deficits projected for the next decade and beyond are unprecedented. According to an assessment released in March by the Congressional Budget Office CBO, the president's budget implies that deficits will average 5.2 of GDP over the next decade and will be 5.5 of GDP in 2019. Without the president's proposals, the budget office forecasts a 2019 deficit of only 2 of GDP. The CBO's deficit projections are based on the optimistic assumptions that the economy will grow at a healthy 3 pace with no recessions during the next decade that there will be no new spending programs after this year's budget and that the rising national debt will increase the rate of interest on government bonds by less than 1. More realistic assumptions would imply a 2019 deficit of more than 8 of GDP and a government debt of more than 100 of GDP. Such enormous deficits would crowd out productivity-enhancing investments in new equipment and software as the government borrows funds otherwise available to private investors. The result would be slower economic growth and a lower standard of living. In the nearer term, the projected deficits could cause interest rates on bonds and mortgages to rise sharply if bond investors fear that the government will not prevent inflation. This is a greater risk now that more than half of the U.S. government debt is held by the Chinese and other foreign investors. Such an interest rate rise could kill a recovery in 2010 or 2011 and depress growth in the years that follow.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614625","date":"2009-09-08","texts":"As investors return from the Labor Day weekend, they are preoccupied with one big worry whether the enormous stock rally of the past six months can continue. The days after Labor Day historically are a time to reassess and evaluate. The bottom line is that after a series of positive surprises in economic and corporate reports has pushed the Dow Jones Industrial Average up 44 since March 9, the stock market remains on precarious footing. As long as the happy news keeps coming, the gains can continue. But the more good news investors get, the harder it is to surprise them, and the bigger the risk that some lurking disappointment could spoil the party. World economies are no longer 'on the brink of an abyss' and economic growth seems within reach, says Gordon Fowler, chief investment officer at Philadelphia money-management firm Glenmede Trust, in a report to clients. But consumers and government need to reduce their substantial debts, and that has the potential to derail the pleasant uptrend. The good news is that a whole series of items that appeared poised for disaster six months ago seem now to be getting steadily better.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616057","date":"2009-09-15","texts":"WASHINGTON -- After a year of extraordinary interventions in the economy, the federal government is starting to pare its support for the private sector. It doesn't look that way to Peter Lansing, president of mortgage firm Universal Lending. The Denver home lender sees every day how dependent the housing market has become on the government. At the height of the boom, just 20 of Universal's mortgages were backed by the Federal Housing Administration, an arm of the government that guarantees loans to borrowers who can't afford big down payments. Today, the FHA accounts for more than 80 of his business. For Mr. Lansing, this represents a new way of life -- more government, more paperwork, but also a lot of sales that wouldn't have happened otherwise. Over 29 years in business, we've always thought of ourselves as being in the free-enterprise system. Today I think of myself as a government contractor, Mr. Lansing says. My business strategy is to get more of my employees to embrace that idea. Plan B would be to sell pencils on the corner. In a speech on Wall Street a year after Lehman Brothers collapsed, President Barack Obama said Monday the need for the government to keep stabilizing the financial system is waning. His administration released a 51-page report detailing rescue programs that are slowly being scaled back. But the Treasury Department, author of the report, noted that housing is one area where it's too early to exit. Over the past year, the government has intervened heavily at essentially every stage of the home-buying process. In fact, more than 80 of the new residential mortgage loans made this year benefited from some form of government support, according to the trade publication Inside Mortgage Finance.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982601","date":"2009-09-15","texts":"Getting a meticulously prepared legal brief to a courthouse or federal agency on time used to require a bit of comic-book valor. Just before deadline, exhausted lawyers handed off the document to a character in the tight Lycra of a superhero, the shoulder bag of a Pony Express rider and the bulging thighs of an athlete. One of Washington's legions of bicycle messengers would then dart through perilous traffic and any weather to deliver the goods in the nick of time. Now, as the last of the area's courts and agencies begin to allow electronic filings instead of demanding piles of paper, deadline dramas in many law offices are being reduced to little more than hitting the send button. The courier business -- for decades a quirky by-product of Washington's No. 1 industry, paper-pushing -- finds itself in rapid decline. Tighter security restrictions imposed after the Sept. 11, 2001, attacks have closed off many government office corridors to couriers, and the recession has dampened activity at law firms and lobbying shops, rendering the life of a time-sensitive document in the District a lot more boring. The number of full-time couriers in Washington has fallen from a high of about 400 in the 1990s to about 150, said Andy Zalan, a longtime bike messenger and head of the D.C. Bicycle Couriers Association. Those of us left are making a lot less money, Zalan said. This last week, I set a personal best for futility I sat out here for seven hours and made 25.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615269","date":"2009-09-16","texts":"Richard Baker, a big investor in shopping centers and retailers, raised 400 million in 2007 for a blank-check company that would buy operating businesses like restaurants and casinos. But he didn't do a deal as the economy fell off a cliff. Now he has another strategy that is being watched closely in the real-estate industry. Instead of returning the money -- which he would be required to do soon if he didn't spend it -- Mr. Baker wants to convert the company, named NRDC Acquisition Corp., into a public real-estate investment trust. The new company, named Retail Opportunity Investments Corp., would be geared toward buying retail properties from distressed owners. The move is the latest sign real-estate investors are looking to the public markets for capital at a time banks are reluctant to lend and private capital is scarce. The strategy has paid off for many. Investors have bought more than 15 billion in REIT secondary stock sales so far this year. Several companies have completed initial public offerings to raise money to invest in distressed real-estate debt, including Starwood Capital Group LLC's 810 million IPO last month. But Mr. Baker's attempt is different from these mortgage REITs because he would focus on buying actual properties -- specifically, supermarket-anchored strip shopping centers on the East and West coasts of the U.S. -- rather than the debt behind them. If successful, Mr. Baker's attempt could set the stage for other companies to ask stock-market investors to fund blind pools for investing in shopping centers, warehouses, office buildings and other kinds of commercial real estate whose owners face loan defaults.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615632","date":"2009-09-18","texts":"It is an old story The government rushes in to fix a problem of its own making, enlarging its role in the economy and society ever more, and setting the stage for a bigger problem, bigger rescue and more encroachment in the future Lehman's Legacy Government's Trial and Error Helped Stem Financial Panic, page one, Sept. 14. Look how the brave central bankers, politicians and regulators have saved us But who will save us from them Eventually, we will have to save ourselves. Thomas A. Shively Wayland, Mass. ---","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982868","date":"2009-09-20","texts":"The United States has entered a new energy era, ending a century of rising carbon emissions. As the U.S. delegation prepares for the international climate negotiations in Copenhagen in December, it does so from a surprisingly strong position, one based on a dramatic 9 percent drop in U.S. carbon emissions over the past two years and the promise of further huge reductions. Prominent among these carbon-cutting initiatives are stronger automobile fuel-economy standards, appliance efficiency standards, and the potential to heat, cool and light buildings with carbon-free sources of electricity. On the supply side are efforts supporting the development of U.S. wind, solar and geothermal energy resources. Even though part of this decline in carbon emissions was caused by the recession and higher gasoline prices, part of it came from gains in energy efficiency and shifts to carbon-free sources of energy, including record amounts of new wind-generating capacity. This impressive drop in carbon emissions should enable the United States to push for a steep cut in Copenhagen. For a country where oil and coal use have been growing for more than a century, the fall since 2007 is startling. Last year, oil use dropped 5 percent, coal 1 percent and overall carbon emissions 3 percent. Projections for this year, based on Energy Department data for the first eight months, show oil use down by an additional 5 percent. Coal is estimated to fall by 10 percent. Altogether, carbon emissions from burning fossil fuels, including natural gas, dropped 9 percent over the two years. In the past, I've been considered a pessimist in my work on mounting population pressures and looming food crises. I'm still very concerned about these issues. But today the improving numbers on carbon emissions are not debatable.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614108","date":"2009-09-21","texts":"Monday, Sept. 21 The Conference Board's index of leading indicators is expected to show another monthly gain. Tuesday, Sept. 22 FOMC begins its two-day meeting. ---","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615381","date":"2009-09-23","texts":"In his weekly radio address on Saturday, President Barack Obama said that we cannot allow the thirst for reckless schemes that produce quick profits and fat executive bonuses to override the security of our entire financial system and leave taxpayers on the hook for cleaning up the mess. A day earlier, Treasury Secretary Tim Geithner told the New York Times that you don't want people being paid for taking too much risk. So now the administration wants to control the pay of employees of banks and Wall Street investment firms. Kenneth Feinberg, the administration's pay czar, is being tasked to oversee employee compensation at firms that took bailout money from the government's Troubled Asset Relief Program TARP. The Federal Reserve will require thousands of bank holding companies and state banks to submit their compensation plans for approval. The administration has it wrong. It wasn't reckless schemes and excessive risk that sunk banks and Wall Street it was excessive leverage. And thanks to cheap money and twisty regulations, risk was extremely undervalued. Banks owned huge portfolios of real-estate loans and mortgages specifically because they, and regulators, didn't think they were taking much risk at all. Populist pay limits are squarely aimed at Wall Street, not local banks, yet for the most part Wall Street doesn't take much risk. Highly profitable investment banking and sales and trading are agency businesses, doing work for customers for a fee. Of course bad trades happen, and there are the rare rogue traders like Barings' Nick Leeson, who hid losses and sunk the firm, or Jerome Kerviel, the young trader who lost 7 billion for the French bank Societe Generale. But Wall Street firms are quite good at managing day-to-day trading risk.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616123","date":"2009-09-26","texts":"The Japanese yen registered sharp gains Friday during a session in which activity in the dollar and many other currencies featured narrow ranges and little departure from the previous day's levels. The catalyst for the yen's surge was comments from Japanese Finance Minister Hirohisa Fujii, who said in a Thursday evening meeting with U.S. Treasury Secretary Timothy Geithner that he opposed intentionally devaluing the yen or any other currency. Japan's currency cracked the psychologically important 90 yen barrier against the dollar, hitting to its highest intraday levels in more than seven months on the greenback. The new Japanese finance minister's reluctance to control currency levels was taken as a strong suggestion that Tokyo wouldn't intervene even if the dollar sustains its fall below the 90 yen level, said Eisuke Sakakibara, a former top official at Japan's Finance Ministry. Before recovering modestly, the dollar fell as far as 89.51 yen, its lowest level since early February. The yen also chalked up solid gains against other currencies, including the euro. Late Friday in New York, the yen was trading at 89.85 yen from 91.22 yen a day earlier, while the euro fell to 131.81 yen from 133.69 yen. The euro against the dollar was at 1.4670 from 1.4656 late Thursday, and the U.K. pound was at 1.5930 from 1.6064. The dollar was at 1.0293 Swiss francs from 1.0300 francs.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985525","date":"2009-09-27","texts":"U.S. stocks had their worst week since July as disappointing reports on housing and durable goods raised concern that the market's record six-month rally has outpaced the prospects for an economic recovery. Shares of most of the Dow Jones industrial average's 30 companies lost ground as sales of new homes rose less than forecast and demand for goods that are made to last for several years unexpectedly fell. Bank of America dropped 5.8 percent and American Express lost 4.9 percent as the Federal Reserve said it will cut the size of two programs meant to bolster credit markets. Commodity producers declined as crude oil and metals prices retreated. The Standard & Poor's 500-stock index fell 2.2 percent, to 1044.38, as all 10 of its industry groups declined. The Dow Jones industrial average lost 155.01 points, or 1.6 percent, to 9665.19. The Nasdaq composite index slid 2 percent, to 2090.92. Over the last six months, we've had a huge, huge rally, said E. Keith Wirtz, chief investment officer at Fifth Third Asset Management, a Cincinnati firm that oversees 20 billion. It wouldn't be unusual at all for this market to show some churn a bit, some pullback from this great run that we've had.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842615945","date":"2009-09-28","texts":"Corrections & Amplifications The last name of Bob Eidson, a recent graduate of UCLA's Anderson School of Management, was misspelled as Keidson in Monday's Outlook column. WSJ September 29, 2009 New companies will be crucial to the strength of any economic recovery. Businesses in their first 90 days of life accounted for 14 of hiring in the U.S. between 1993 and 2008, according to the Bureau of Labor Statistics. But this recession is taking a particularly heavy toll on business creation, as sources of small-business funding dry up and would-be entrepreneurs become more risk-averse. When entrepreneurs do launch businesses, they are hiring fewer employees on average. The trends threaten to damp growth in jobs and economic output for years.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614110","date":"2009-10-01","texts":"The dollar's slump worsened in the third quarter as economies chugged back to life and investors moved their cash into riskier investments in search of higher returns. The greenback may tumble further in coming weeks as investors bet that other countries will raise interest rates before the Federal Reserve, boosting returns on those currencies. But the dollar's weakness could come to a halt if it drops too low Eventually, policy makers in Asia and Europe may start complaining that a weak dollar hurts their ability to export goods to the U.S., which could help the buck, while bearish investors may move to lock in profits by unwinding negative bets. There's potential for a little more pain, but the dollar's weakness has pretty much run its course, says Alan Wilde, head of fixed income and currency at Baring Asset Management in London. In the quarter, the dollar lost 4.1 of its value against the euro and dropped 6.8 against the Japanese yen, dipping to 89.77 yen on Monday, its lowest level since late January. The dollar's losing streak, which began when stocks started rallying in March, has picked up steam in recent months. Currencies of big commodity-producing nations soared against the dollar, with Australia's currency rising 9.5 partly on optimism about China, a big buyer of its natural resources. While the dollar was weak, the British pound was even weaker. It lost 2.9 against the dollar and 6.9 against the euro. That decline came after the pound gained 15 against the greenback in the second quarter.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613635","date":"2009-10-03","texts":"NEW YORK -- A disappointing report on the labor market and continued concern about a possible overextension during the market's third-quarter surge pushed stocks into the red for the seventh time in eight sessions Friday, led by industrials such as General Electric, Boeing and Caterpillar. The Dow Jones Industrial Average fell 21.61, or 0.2, to 9487.67. For the week, the index slipped or 1.8, marking its second weekly decline in a row, though it remains up 8.1 for the year to date. The entire third quarter was one big run. To me, this is just a healthy working off of an overbought condition, said Gary Flam, a portfolio manager with Bel Air Investment Advisors. Still, putting money to work right now is akin to picking up nickels on the train tracks. You may get a couple dollars in your pocket, but you run a significant risk of getting run over. For Friday, the Standard & Poor's 500 lost 4.64, or 0.5, to 1025.21, including a 1.5 drop for industrials. For the week, the S&P 500 declined 19.17, or 1.8, losing 4 in the past two weeks. Among the slate of industrials, GE fell 61 cents, or 3.8, to 15.36 Boeing lost 71 cents, or 1.4, to 51.40 and Caterpillar fell 62 cents, or 1.3, to 48.83.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984796","date":"2009-10-04","texts":"Oh, the glorious 1990s communism's fall the triumphant gospel according to Hayek, Friedman and Rand and the promise of tranquillity and prosperity out to the far horizons. In Misadventures of the Most Favored Nations, former Washington Post reporter Paul Blustein extols one of the dream's key tenets, free trade among nations, in this tale about the bureaucracy advancing it the World Trade Organization. He is, however, more than a little leery of the WTO, born in 1995 at the brave new world's flood tide. Blustein has thoroughly mastered the craft of breathing life into intrinsically dull material with compelling thematic narrative and delicious character studies. And it doesn't get much duller than meetings of the WTO and the General Agreement on Tariffs and Trade GATT, which can include hours of dickering over the difference between must and can. We learn, for example, that then-European Trade Commissioner Pascal Lamy, the closest ally of U.S. Trade Representative Robert Zoellick, believed that bananas and brown bread turbocharged his analytical skills, and subsisted on these two foodstuffs during negotiations. Unlike many journalists, the author excels not only at the 800-word dash, but also at the long form, skillfully interweaving both his characters and engaging vignettes through the larger loom of world events. The further the author strays from the gilded, stilted venues of the trade negotiations, the more he sparkles. The few pages spent with Honduran textile worker Daunbia Rodriguez alone are worth the price of the book. Her meager pay, shantytown home and miserable working conditions must surely rouse the concern of many in the developed world, but Rodriguez doesn't see things quite this way her hut's gas stove, indoor plumbing, television and, most miraculous of all, electricity to run them exceed her wildest dreams. She recognizes her job for what it is the prized first rung on the ladder out of rural poverty. The author deftly tracks the minute twists, turns and details of the latest round of negotiations, known as the Doha Round. He is scarcely enamored of the WTO's main cast of characters. For starters, there is Mike Moore, the profane, washed-up New Zealand politico who lusted after the WTO directorship to the point of expending most of his personal fortune on a shameless, and ultimately successful, globetrotting campaign for the job. Or the overachieving, overbearing Zoellick, who cynically seized on the Sept. 11 attacks as the central rationale for launching the Doha Round. Free trade, Zoellick argued, would make the world's most impoverished nations more prosperous, and thus shut off the supply of unemployed, bitter jihadist recruits. Never mind that the most successful terrorists, including the majority of the Sept. 11 hijackers, were anything but poor or uneducated. Unfortunately, Blustein's love of detail distracts him from trade's broader historical context. The inevitability of the Doha Round's collapse cannot be fully understood without at least a dab of history. The intransigence of French and German farmers, for example, falls neatly into place when considered against the background of their impoverishment by the late 19th-century flood of far cheaper American and Australian grain. Similarly, Indian resistance to open markets becomes easily comprehensible in the context of the massive unemployment among the subcontinent's textile makers caused by cheaper and higher-quality imports from Lancashire's mills.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613979","date":"2009-10-05","texts":"Investors seeking income growth with less risk than that posed by the broad stock market have long bought shares of companies that regularly boost dividends. But amid the financial crisis of the past year, the strategy -- and, along with it, dividend-focused mutual funds -- took a big hit as banks and other once-reliable sources of dividends slashed payouts to conserve cash. The shares of these companies also plummeted, making it one of the worst periods in memory for dividend-oriented funds. Many such funds posted returns of minus 25 or worse for 2008. Although that wasn't quite as bad as last year's almost 40 drop in the Standard & Poor's 500-stock index, the poor performance of such funds stunned shareholders who thought they had chosen a fairly conservative investment approach. Many of those investors are now looking for income and greater principal stability in places such as the bond market, while some advisers are steering clients toward different stock strategies. But if you are thinking about throwing in the towel on dividends and dividend-focused funds, there may be reasons to reconsider.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985573","date":"2009-10-06","texts":"Correction An Oct. 6 A-section article about China's role in the global economy incorrectly described a Morgan Stanley report on Chinese consumer spending. The report did not say that Chinese consumer spending will exceed U.S. consumer spending by 2018. It said that between now and 2018, Chinese consumers are likely to add more to global consumption than U.S. consumers, and that by 2018, Chinese consumers will be spending 40 percent as much as U.S. consumers, up from 16 percent in 2008. Published 1092009 Chen Zizheng wheeled his shopping cart down one of the aisles at the Carrefour store near his house and paused in front of the bottles of Remy Martin, Johnnie Walker and Hennessy, each selling for an amount about equal to the annual salary he earned when he was a young government employee. But those days were about 30 years ago, around the time Deng Xiaoping launched China on a path of economic reform and opening up. Now China's thriving economy has made it possible for people like Chen, a 67-year-old semi-retired aerospace industry official, to plop down 1,168 yuan, or 170, for a bottle of liquor at a branch of a French hypermarket chain. It's not that expensive for ordinary Chinese people now, he said, adding that he planned to serve Johnnie Walker Green Label to guests he was expecting to share moon cakes with during last weekend's mid-autumn festival. As Chinese society has developed and opened up, people have a better appreciation of imported liquor, said Chen, who used to buy the traditional Chinese stiff drink known as maotai. When you choose a gift, other people will look at it and if it is brand stuff they will feel respected because you chose it for them.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842614221","date":"2009-10-09","texts":"The worst recession since the Great Depression will weigh on the labor market and the broader economy for years to come, economists in a Wall Street Journal forecasting survey said. On average, economists don't expect unemployment to fall below 6 until 2013. Meanwhile, new jobless claims fell last week. Shoppers snapped up school supplies and apparel in September, resulting in the first overall rise in retail sales in more than a year. The federal government said it had met its goal of beginning trial loan modifications for 500,000 financially troubled homeowners. --- Stocks gained as investors welcomed Alcoa's earnings and retail-sales data. The Dow industrials rose 61.29 points, or 0.6, to 9786.87.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613531","date":"2009-10-13","texts":"ST. LOUIS -- White House economic adviser Lawrence Summers said Monday that there were signs the U.S. economy was returning to normal, but he warned that major slack remained and that weak demand would continue to crimp output. Lack of demand will be the major constraint on output and employment in the American economy for the foreseeable future, Mr. Summers told the annual meeting of the National Association of Business Economics here. The combination of low capacity utilization and substantial leveraging of household balance sheets raises questions about the sustainability of demand growth going forward. Mr. Summers spoke after the NABE released its annual forecast. The good news is that this deep and long recession appears to be over, and with improving credit markets, the U.S. economy can return to solid growth next year without worry about inflation, said NABE President-elect Lynn Reaser of Point Loma Nazarene University in California. More than 80 of the 44 forecasters surveyed by the NABE believe the economic recovery has begun, but they anticipate modest growth -- a 2.9 pace in the second half of 2009 and a 3 rate next year. They predict the Federal Reserve won't begin raising interest from the current zero-0.25 range until late next spring and won't lift its key short-term interest rate above 1 before 2011. The NABE members said markets would take time to heal from the economic crisis. Most said markets wouldn't improve to the point where they no longer hurt economic growth until after the first half of next year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613679","date":"2009-10-13","texts":"For oil prices, subject to such vagaries as Nigerian politics and Atlantic winds, rules of thumb are alluring. One currently in vogue is that oil, priced in dollars, rises as the greenback falls. Working the other way, expensive oil widens the U.S. trade deficit, undermining the dollar. Both arguments offer only a partial explanation. Oil has roughly doubled since February as the dollar fell 15 against the euro. But oil also roughly doubled in 2004 and 2005 while the dollar held steady. Similarly, the U.S. trade deficit is subject to factors other than oil. For example, it ballooned in the late 1980s, even as oil prices sank. Meanwhile, Marc Chandler, author of Making Sense of the Dollar, questions how much trade deficits really drive the dollar anyway. While increasing U.S. exports coincided with a weakening dollar earlier this decade, exports were likewise on a roll in the late 1990s, when the greenback was also strong. Changing correlations between the dollar and different assets suggest cyclical factors rule. The late 1990s and the middle part of this decade both saw strong U.S. economic growth and high or rising interest rates. Those contexts supported the buck, regardless of what oil was doing.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616364","date":"2009-10-14","texts":"FRANKFURT -- The European Central Bank on Tuesday drained 169.68 billion euros 250.82 billion in overnight funds from the money market amid signs that the ample liquidity it has provided to banks isn't fully flowing into the economy. The ECB mopped up excess reserves held by banks in a special fine-tuning operation, paying them 0.8, which was above the overnight interbank interest rate of 0.5. The central bank slashed interest rates and pumped huge amounts of extra funds into the banking system -- in return for adequate collateral -- after the liquidity shortage that followed the collapse of U.S. investment bank Lehman Brothers last fall. While those actions have helped keep banks afloat, the money hasn't been fully passed on to the wider economy, analysts say. ECB President Jean-Claude Trichet last Thursday chided banks in the 16-country euro bloc for failing to pass on more liquidity to households and businesses.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616813","date":"2009-10-16","texts":"PLATTSBURGH, N.Y. -- The rise of conservative tea party activists around the country has created a dilemma for Republicans. They are breathing life into the party's quest to regain power. But they're also waging war on some candidates hand-picked by GOP leaders as the most likely to win. In upstate New York, Dede Scozzafava, 49 years old, is the choice of local party leaders to defend a Republican seat in the U.S. House of Representatives, an abortion-rights candidate who could appeal to independents. Doug Hoffman, 59, is a local accountant backed by tea-party activists who has jumped into the race declaring himself the real conservative. Mr. Hoffman has siphoned so much support from Ms. Scozzafava that their Democratic rival has vaulted into the lead, according to a poll released Thursday. The election is Nov. 3. I am not your run-of-the-mill politician, and maybe that's why the Republican bosses didn't like me, Mr. Hoffman told a recent health-care forum sponsored by the Upstate New York Tea Party. In an interview, Ms. Scozzafava acknowledged her discomfort at the event. I knew it wasn't going to be an easy audience for me, she said. Republicans are poised to pick up a number of seats in next year's congressional elections, pollsters estimate, on the back of a deep recession, public unease about the growth of government and the size of the nation's deficit. Anti-Obama activism manifested in rallies and town-hall meetings has galvanized conservatives, injecting enthusiasm into the Republican base.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613890","date":"2009-10-17","texts":"General Electric Co. reported signs of a slow global economic recovery, even as it posted a 42 third-quarter earnings decline driven by lower-than-expected revenue and more write-downs at its finance unit. The global environment has definitely improved, Chairman and Chief Executive Jeff Immelt told investors. We are expecting a gradual recovery. GE, of Fairfield, Conn., posted net income of 2.49 billion, or 23 cents a share, down from 4.31 billion, or 43 cents a share, a year ago. Revenue fell 20 to 37.8 billion from 47.2 billion, on declining orders for industrial equipment and the ongoing shrinkage of the finance unit, known as GE Capital. Earnings at GE Capital fell 87 to 263 million amid rising delinquencies and write-downs at its consumer, business-loan and commercial-real-estate units. A tax benefit helped the results. The real-estate group swung to a 538 million loss from a 244 million profit a year ago. Delinquencies in the 84 billion real-estate portfolio rose to 4.19, from 0.19 a year ago. GE said delinquency rates in its consumer-loan portfolio appeared to have leveled off in the third quarter at 4.78, up from 2.74 a year ago.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981805","date":"2009-10-17","texts":"Foreclosures will peak by the end of next year and unemployment will climb above 10 percent as the housing market and U.S. economy grapple with the aftermath of the recession, the Mortgage Bankers Association's chief economist said this week. Jay Brinkmann's forecast, released Tuesday at the trade association's annual convention and expo in San Diego, envisions a slowly growing economy and improving housing market, with home price declines abating and fixed mortgage interest rates remaining below 6 percent. But the strength of any rebound will hinge on whether consumers -- many still concerned about job security -- will ramp up spending, he said. The recession is behind us, but the effects of the recession will linger for some time in the form of higher unemployment and lower levels of business investment and home construction, he said. Brinkmann projects that economic activity will slow again in the first half of next year but pick up in the second half. That won't be enough to slow unemployment, which is expected to peak at 10.2 percent by mid-2010 and not fall below 8 percent until late 2012.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983691","date":"2009-10-20","texts":"Correction The headline on an Oct. 20 A-section article about possible support in the Obama administration for a deal last year to protect Bank of America from losses incurred by its purchase of Merrill Lynch said Bank of America deal had White House support without citing the source of that assertion. It should have attributed the information to internal Bank of America documents. Published 10212009 Top economic advisers to President Obama signed off on a deal to protect Bank of America from losses incurred by its purchase of failed Wall Street firm Merrill Lynch a month before the new administration took office, according to Bank of America documents. The documents, describing internal discussions at the bank in late 2008, assert that executives were told that incoming National Economic Council Director Lawrence H. Summers and incoming Treasury Secretary Timothy F. Geithner had endorsed the deal to provide new guarantees to Bank of America. The acquisition has been a source of protracted debate since earlier this year, when questions arose about whether federal officials exerted an inappropriate amount of pressure on Bank of America to complete the deal. There's also been debate about whether the bank made appropriate disclosures to its shareholders about losses at Merrill Lynch, its negotiations with the government for additional support and compensation plans at Merrill Lynch. These issues have been the subject of investigations by the House Oversight and Government Reform Committee, the Securities and Exchange Commission and New York's attorney general.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830981871","date":"2009-10-21","texts":"Loudoun County budget officers dipped into public school reserves to help fill a 28 million revenue shortfall this week, surprising the School Board, which was saving money for the lean years expected ahead. The county's chief financial officer, Mark D. Adams, said the transfer amounted to a rebalancing of accounts after an audit of the fiscal year that ended June 30, which showed that some funds were low and others high. Adams said the accounting change would not affect services or operations for the county or the schools this year. Unfortunately for the school system, most of the low funds were on the county side. The county had expected to end the year with a balance of 39 million, but depressed real estate revenue led to a balance of 11 million. The school system was in better shape and ended the year with a surplus of 36 million. The School Board had hoped to save the surplus for next year. Early estimates put the schools' shortfall for next fiscal year at 70 million. The county decision prompted the School Board to schedule a special meeting Monday to talk to its attorneys and grapple with the effect of the funding transfer. Vice Chairman J. Warren Geurin Sterling said the board is not pleased with the changes when Loudoun County's checkbook does not balance.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983300","date":"2009-10-24","texts":"Existing-home sales climbed 9.4 percent in September to their highest level in more than two years, fueled by demand for cheap properties and an 8,000 tax credit for first-time buyers, according to industry data released Friday. Sales of existing homes, including condos and single-family residences, reached an annual rate of 5.57 million units in September, their highest level since July 2007, according to the National Association of Realtors. The monthly increase was the largest on records that date back to 1999 and was far better than analysts had expected. Sales were up 9.2 percent from the same period a year ago. This is the latest sign that the housing market has begun to rebound, if only temporarily, as buyers take advantage of record-low mortgage rates and pounce on cheap foreclosed properties, analysts said. Sales have increased five of the last six months and rose throughout the country last month. In the South, which includes the Washington region, sales rose 9 percent last month. Also, the inventory of homes on the market shrank again, though analysts said it needs to come down more. It would take 7.8 months to sell all of the homes on the market at the current rate. The supply of used homes for sale is also steadily declining, an encouraging trend, said Mike Larson, a real estate analyst at Weiss Research, a research firm. But analysts said the market rebound may be temporary. An 8,000 tax credit for first-time home buyers expires Nov. 30, and sales will likely flatten or fall in the following months, analysts said. The tax credit generated temporary demand as buyers who otherwise may have waited to buy a house rushed to cash in before the credit vanished, analysts said.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985101","date":"2009-10-25","texts":"Consumers are increasingly turning away from traditional bank accounts and credit cards in favor of a different form of plastic prepaid cards. Consumers typically buy them from a retailer, load them with money -- sometimes from directly deposited paychecks -- and use them at checkout counters or to pay bills online. And the cards are advertised with a phrase rarely used by financial institutions since the beginning of the credit crisis No credit check necessary. So it's no wonder that in 2008, consumers loaded 8.7 billion on prepaid cards that carry Visa, MasterCard, American Express and Discover logos and can be used anywhere, up from about 4 billion the year before, according to Mercator Advisory Group, a research firm that focuses on the payments industry. Consumer advocates warn that the cards can carry an assortment of fees. Nevertheless, prepaid cards have become popular among those who cannot get traditional bank accounts, many of them immigrants who rely heavily on more expensive check-cashing institutions. Many college students use them as an introduction to plastic, and industry experts say they expect that practice to increase when a credit card law takes effect in February that will make it difficult for anyone under 21 to obtain a credit card without an adult co-signer.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617440","date":"2009-10-28","texts":"Real-estate prices increased for the fourth consecutive month, but consumers are feeling more glum, a disconnect that shows how rising unemployment continues to weigh on households even as the economy improves. The S&PCase-Shiller home price composite 20-city index rose 1.2 in August from July, with help from lower mortgage rates and a push from the 8,000 federal first-time home-buyer tax credit that expires next month. The 20-city index is down 11.3 from a year ago. Separately, the Conference Board on Tuesday reported that its gauge of consumer confidence fell to 47.7 in October, the second fall in two months. The present-situation index fell to 20.7, the lowest since February 1983, largely on consumers' downbeat assessment of the labor market. High unemployment has made the Conference Board's index generally more negative than the ReutersUniversity of Michigan gauge of consumer sentiment, said Anthony Crescenzi, a portfolio manager and strategist at Pimco, a money-management firm in Newport Beach, Calif. The housing report showed a real-estate market that is slowly improving but is still a long way from healthy. In 17 of 20 cities, the not-seasonally adjusted price index was higher in August than in July. Affordability has improved, providing an opportunity for some households that were priced out of the market as well as for cash-toting investors. Home prices have returned to 2003 levels, according to Standard & Poor's.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983761","date":"2009-10-28","texts":"Over the past year, the U.S. government has thrown almost every tool at its disposal toward making the economy grow again. And it has worked, at least for now. The trillion-dollar question for the economy now is What will happen when those government supports are gone While the government has successfully jump-started the U.S. economy, there are emerging signs that its engine still isn't running very well, and may even sputter out. The government has deployed about half of 787 billion in spending and tax cuts that were part of its stimulus package. It has executed the Cash for Clunkers program that boosted auto sales over the summer, and it has taken a wide range of steps to support the housing market. The Federal Reserve, besides cutting its target interest rate to nearly zero, has committed 1.75 trillion to unconventional programs meant to reduce interest rates. The combined results of all those efforts will be on display Thursday, when the Commerce Department reports on gross domestic product for the July through September quarter. Economists expect that broadest measure of economic activity to have risen at a 3 percent annual rate, compared with a 6.4 percent drop in the first quarter, and forecasters expect growth to continue through year's end. The patient is out of intensive care, but is still highly medicated, said David Shulman, senior economist at the UCLA Anderson Forecast. So you don't know how much of this growth is driven by short-term stimulus and how much of it is self-sustaining. My guess is this is going to be the best quarter of growth for a long time.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842616238","date":"2009-10-29","texts":"New-home sales fell but orders for durable goods rose in September, according to two government reports released Wednesday that show the economy remains on a wobbly path upward. Sales of new homes fell 3.6 in September as the effect of the federal government's tax credit for first-time home buyers faded, the Commerce Department said Wednesday. A separate Commerce report showed that orders for big-ticket items such as cars and washing machines increased 1 in September and that a key measure of business spending rose, suggesting consumer demand and business confidence are inching back. The recovery thus far has been heavily supported by federal money, casting a question mark over the economy's underlying strength as government support dwindles. A better picture of the economy's health comes Thursday, when third-quarter gross domestic product is released. Economists forecast growth of about 3 after four consecutive quarters of contraction. The increase in orders for durable goods -- products designed to last more than three years -- was the second in three months. Orders of so-called core durable goods, a category that excludes orders for civilian planes and defense capital goods, also returned to growth, increasing 0.5 in September after a 0.4 drop in August. Businesses continued to reduce their inventories of durable goods, but have eased up from the deep reductions over the past few months. Inventories decreased 1 in September, slower than the 1.5 pace in August. While inventories will continue to decline in the months ahead, the rate of liquidation is likely to moderate, Joshua Shapiro, chief U.S. economist at research firm MFR Inc., wrote in a note to clients.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982664","date":"2009-11-01","texts":"Home prices posted another modest rise in August, according to data released Tuesday, but economists cautioned that the expiration of a home-buyer tax credit and rising unemployment could reverse signs of stabilization in the housing market. In 20 large metropolitan cities, home prices rose 1 percent on a seasonally adjusted basis in August compared with the previous month, according to the S&PCase-Shiller Home Price Index. That was the third month-over-month increase in the closely watched index. Prices are still falling compared with a year ago, down 11.3 percent in August, and are off 30.2 percent from their peak in 2006, hovering at 2003 levels, according to the index. But bolstered by historically low interest rates, cheap foreclosure properties and the 8,000 tax credit for first-time home buyers, prices are falling at a slower rate and the monthly increase reflects stabilization, economists said. It's a sign that there is a bottom in sight, said Cameron Findlay, chief economist for LendingTree.com, an online mortgage company. It bodes well, he said, for stabilization of home prices.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984088","date":"2009-11-01","texts":"Is your retirement secure para For some people who thought they had taken care of everything, the answer may be riding on another question Is your retirement community secure para Anne Bradt, 83, said she and fellow residents thought they had bought themselves worry-free retirements when they put down hundreds of thousands of dollars -- upwards of 900,000 each -- to move into Sherburne Commons in Nantucket, Mass. Then, a year ago, the nonprofit company that runs the place sought bankruptcy protection. Food service was cut to one meal a day. Activities such as dance and music disappeared, along with the activities director and other members of the staff. Residents could still pull a cord if they needed emergency help in the shower, but they would have to pay extra for the lifeline, and the person answering the call would no longer be on the premises.para Bradt's life became caught up in a complex legal proceeding, with her entire deposit at risk. para It's been one year of absolute hell, Bradt said. It's taken its toll physically and mentally. The recession and the real estate crisis have raised new concerns for people who paid hundreds of thousands of dollars, as much money as it might take to buy a home, just to enter retirement communities. The deposits typically earn seniors the privilege of moving in they do not confer any ownership in the real estate, and they are in addition to monthly fees that can total thousands of dollars. In theory, residents can reclaim the money when they move out, or their heirs can recoup it when they die. But the model can break down when the communities' economic assumptions prove too optimistic. The October bankruptcy filing of another firm -- Erickson Retirement Communities, a major developer and manager of campuses for senior citizens -- casts a spotlight on the risks. Erickson has been a leader in the world of continuing care retirement communities -- CCRCs -- which offer independent living, assisted living and nursing home care. In the Washington area, Erickson communities include Riderwood in Silver Spring and Greenspring in Springfield. People move in while they are still able to live independently, hoping it will be their last major move. One of the main advantages is that seniors can stay in the same community as their health deteriorates, and couples can avoid being separated in their declining years. For some Erickson residents, including early occupants of the Ashby Ponds development in Ashburn, it may not work out that way. The weak economy prompted Erickson to halt development of several projects before completing the assisted-living or nursing facilities.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985274","date":"2009-11-01","texts":"For many people, speaking the language of money is like trying to learn a foreign tongue. It can be frustrating. Many books seek to help you learn the language. And every month, I search for those I find useful or unique. For this month's Color of Money Book Club pick, I'm recommending a book that literally translates the language of money. Lynn Jimenez, an award-winning business reporter for KGO Radio 810 in San Francisco, has written Se Habla Dinero The Everyday Guide to Financial Success Wiley, 19.95. What's so fabulous about this book, which was published last year, is that from the table of contents right through to the index, Jimenez provides side-by-side Spanish and English translations. The Spanish is on the left-side pages, the English on the right. Although anyone will benefit from this basic personal finance guide, Jimenez wrote this bilingual guide specifically to appeal to multigenerational Hispanic families.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616991","date":"2009-11-04","texts":"Warren Buffett's Berkshire Hathaway Inc. has joined Goldman Sachs Group Inc. in the investment bank's bid to buy 3 billion in tax credits from government-owned mortgage giant Fannie Mae, according to people familiar with the matter. The involvement of Mr. Buffett adds a twist to what was already a politically sensitive deal. The Treasury Department is considering blocking any potential sale on the grounds that it wouldn't benefit taxpayers the money Fannie Mae would earn would be offset by the fall in the government's tax income. Fannie Mae and Freddie Mac were seized by the government last year, and the Treasury Department has invested close to 100 billion in the housing-finance giants. Almost all their business decisions are vetted by government officials. What would have been simple deal a couple of years ago is now fraught with political calculations, such as the perception of aiding a Wall Street giant at a time of populist anger against bankers. The credits are virtually worthless to Fannie Mae and require the company to take losses each quarter as their value declines. Companies such as Berkshire Hathaway and Goldman Sachs could use them to offset federal tax expenses. A Berkshire Hathaway spokeswoman didn't have an immediate comment. Goldman Sachs and Fannie Mae declined to comment. Treasury officials say they are still reviewing the proposal.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617434","date":"2009-11-05","texts":"The Federal Reserve affirmed its plan to keep interest rates exceptionally low for a long time despite signs of economic recovery. But the Fed began to lay rhetorical groundwork for an eventual shift in its stance, suggesting that when the unemployment rate falls or if expectations of inflation turn up, it could change course. Economic activity has continued to pick up, the Fed said in a statement following a two-day meeting. It noted that consumer spending has improved, housing activity has increased and businesses were retrenching at a slower pace. Fed officials voted unanimously to maintain their target for the key federal-funds interest rate -- at which banks lend to each other overnight -- near zero and said they expect to keep it there for an extended period, which suggested increases are at least several months off. Central banks in smaller economies -- such as Australia, Israel and Norway -- have started raising interest rates. But the Fed made clear the U.S. economy isn't nearly strong enough to begin moving in that direction, even though the economy grew at a 3.5 rate in the third quarter and is expected to keep growing into 2010. While consumers are spending, the Fed noted they were constrained by ongoing job losses, sluggish income growth, lower housing wealth and tight credit. Meanwhile, businesses are still cutting back on fixed investment and staffing, though at a slower pace.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830981946","date":"2009-11-08","texts":"The engineer accused of fatally shooting one employee and wounding five others at the Orlando firm where he once worked is very mentally ill and crumbled under the stress of his divorce, bankruptcy and unemployment, his lawyer said Saturday. Jason Rodriguez, 40, was ordered held without bail at the Orange County Jail, where he is under suicide watch after Friday's shooting. His mother, Ana Rodriguez, apologized Saturday, telling reporters she is so sorry for everything that has happened. Sorry for the families involved. I'm really very sorry, it is very hurtful. Public defender Bob Wesley asked the judge at a brief court appearance Saturday that police and prosecutors have no contact with Rodriguez without Wesley's permission. Wesley told reporters that Rodriguez is a very, very mentally ill person who lost his emotional stability because of deep financial problems. This guy is a compilation of the front page of the entire year -- unemployment, foreclosure, bankruptcy, divorce -- all of the stresses, Wesley said. He has been declining in mental health. There is no logic whatsoever, which points to a mental health case. It looks like a classic case of stress overload.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616859","date":"2009-11-10","texts":"Financial stocks led a broad rally, and the Dow Jones Industrial Average hit a high for the year as investors became more confident in the flow of easy money. The Dow climbed for a fourth consecutive day, up 203.52 points, or 2, to 10226.94, its highest finish since Oct. 3, 2008. The blue chips have risen 4.7 since the Federal Reserve's policy statement last Wednesday indicated that the central bank wouldn't raise interest rates any time soon. J. Stephen Lauck, chief executive and portfolio manager at Ashfield Capital Partners, said investors don't want to miss out on more of the rally that has driven the Dow up 56 since its bear-market low in March. You don't want to be left out of a market where you're seeing the prospects for substantially higher earnings, low interest rates and ample liquidity, he said. You don't want to be left out of that because stocks are likely to head higher in that environment. American Express led the Dow's gains in percentage terms, up 4.9, followed by Bank of America, which rose 4.8. Financials benefited from expectations that low interest rates will boost banks' profits in the months ahead.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982956","date":"2009-11-12","texts":"Sen. Christopher J. Dodd D-Conn. this week joined the generations of dreamers who have advocated for eliminating the nation's muddle of bank regulators, arguing that a single agency would be more efficient and would end the ability of banks to choose the most lenient supervisor. The financial crisis, Dodd said Tuesday, exposed a financial regulatory structure that was the product of historic accidents, one after another, over the past 80 years, created piece by piece over decades, with little thought given to how it would function as a whole and unable to prevent threats to our economic security. But Dodd confronts a broad range of critics including bankers, regulators and fellow legislators who warn that his plan overlooks the strengths of the current patchwork and ignores the potential downsides of consolidation. They argue that community banks and international behemoths need different kinds of oversight. They also note that the various agencies possess meaningfully different perspectives. The Federal Deposit Insurance Corp., for example, tends to look out for the interests of smaller banks, while the Office of the Comptroller of the Currency traditionally has been mindful of the concerns of larger institutions. Bob Pasley, a banking consultant who has studied the history of proposals to consolidate the banking agencies, said that the Federal Reserve pressed Congress as early as 1921 -- less than a decade after the central bank's creation -- to streamline banking regulation by eliminating the OCC. The Fed renewed its push in the late 1930s.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614600","date":"2009-11-17","texts":"Stocks hit new highs for the year, commodities prices rose and the dollar slipped as traders focused on signs of economic growth in Asia and Fed chief Bernanke's commitment to low interest rates. The Dow industrials rose 136.49 points, or 1.3, to 10406.96. Gold climbed to 1,138.60. Bernanke warned that unemployment, tepid lending and troubles in commercial real estate will weigh on recovery. He also said the Fed is watching the dollar's trajectory. --- The New York Fed caved in to demands by AIG's trading partners that they be paid in full for complex securities they had insured with the firm, a government audit found. ---","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616143","date":"2009-11-19","texts":"NEW YORK -- Prices of longer-dated Treasurys declined after a government report showed U.S. consumer prices rose more than economists' forecasts last month. Short-dated Treasurys recovered from early losses as housing starts unexpectedly dropped last month while a Federal Reserve official said the central bank could keep its key interest rate near zero until 2012. The two-year note, whose yield is closely tied to changes in official interest-rate outlook, was the outperformer. The yield touched as low as 0.734, the weakest level since late January. Federal Reserve Bank of St. Louis President James Bullard said if the Fed sticks to the pattern set after the last two recessions, interest rates will remain unchanged until 2012. Mr. Bullard cautioned that this pattern isn't set in stone, because central bank officials are mindful of the possible mistakes of keeping interest rates too low for too long, as many believe was the case in the middle years of this decade. Mr. Bullard will vote on monetary policy in 2010. The benchmark 10-year note was down 1232 point, or 3.750 per 1,000 face value, at 100 232. Its yield rose to 3.368 from 3.323 Tuesday, as yields move inversely to prices. The 30-year bond was down 2732 point to yield 4.299. While inflation pressure near term remained subdued, the bigger-than-expected increase in the consumer-price-index data raised angst for many investors worried about the outlook for long-term price pressure. Mr. Bullard said the economy faces a substantial inflation risk, but that won't occur for another two, three, or four years.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616098","date":"2009-11-20","texts":"The euro and other higher-yielding currencies slumped against the dollar and Japanese yen Thursday as riskier assets fell out of favor on investor concerns about the slow pace at which the world economy is recovering from recession. We've got a global recovery under way, but people are beginning to question it, and that's taken them out of the euro and back into the dollar and yen, said Andrew Wilkinson, senior market analyst at Interactive Brokers in Greenwich, Conn. Slumping stock and commodity prices pushed investors back into the U.S. and Japanese currencies. Indications from around the globe of a more restrictive official stance toward capital flows and currency volatility also contributed to a more cautious investment environment. Worries about the global economy tend to favor the dollar and the yen, and erode demand for assets sensitive to economic growth, including stocks and so-called commodity currencies. Late in New York, the euro was at 1.4919 from 1.4960 late Wednesday. The dollar was at 89.08 yen from 89.378, while the euro was at 132.90 yen from 133.69 yen. The U.K. pound was at 1.6659 from 1.6740. The dollar was at 1.0134 Swiss francs from 1.0101 francs. The Dollar Index, which tracks the greenback's moves against a trade-weighted basket of six currencies, was at 75.264 from 75.079. Meanwhile, the dollar got another show of support Thursday from Saudi Arabia. The International Monetary Fund's Special Drawing Rights can't replace the U.S. dollar as a reserve currency, the governor of the Saudi Arabian Monetary Agency, Muhammad Al-Jasser, said in Frankfurt.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616418","date":"2009-11-20","texts":"Wanted National Jobs Czar Employer The Democratic Party Job Type Crisis ManagementComplex MathematicsMental Health Professional Start Date Now. Like, Right Now. Description The Democratic Party seeks a wildly optimistic individual to oversee a national jobs-creation program. Jobs can be real, or not, so long as the public thinks the party is doing something. The National Jobs Creator will have at his disposal Congress to pass new jobs legislation aka The It-Is-Not-Another-Stimulus Act of 2009.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983882","date":"2009-11-22","texts":"They're antsy and edgy, tired of waiting for promotion opportunities at work as their elders put off retirement. A good number of them are just waiting for the economy to pick up so they can hop to the next job, find something more fulfilling and get what they think they deserve. Oh, and they want work-life balance, too. Not necessarily, say people who track the generations. In these hard times, they're also hearing strong rumblings of discontent from Generation X. They're the 32- to 44-year-olds who are wedged between baby boomers and their children, often feeling like forgotten middle siblings -- and increasingly restless at work as a result. All of a sudden, we've gone from being the young upstarts to being the curmudgeons, says Bruce Tulgan, a generational consultant who's written books about various age groups, including his fellow Gen Xers. This isn't the first time Gen Xers have faced tough times. They came of age during a recession and survived the dot-com bust of 2000. In recent years, though, more members of the generation -- stereotyped early on as jaded individualists -- had families or began settling down in other ways. It was time, they thought, to enjoy the rewards of paying some dues. We were starting to buy into the system, at least to some extent, Tulgan says, and then we got the rug pulled out from under us. Now, in the latest economic slump, nearly two-thirds of baby boomer workers, ages 50 to 61, say they might have to push back their retirement, according to a recent survey from Pew Research.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984856","date":"2009-11-25","texts":"The unemployment rate will remain elevated for years to come, according to a forecast released Tuesday by the Federal Reserve that addresses for the first time economic conditions at the time of the next presidential election. It paints a grim picture. Top Fed officials expect the unemployment rate to remain in the 6.8 to 7.5 percent range at the end of 2012 and said it could take about five or six years from now for economic activity to return to normal. The jobless rate was 10.2 percent in October. That sober forecast came on top of a revised government estimate also released Tuesday of economic output in the third quarter showing that the recovery got off to a slower start over the summer than previously thought. Government efforts to prop up the economy -- including the 787 billion stimulus package passed in February, the Cash for Clunkers program to support auto sales this summer, and a zero interest rate policy by the Federal Reserve -- are helping. The contribution of government spending to gross domestic product in the third quarter was actually higher than originally reported, the Commerce Department said. It is a slow-motion recovery, said Stuart Hoffman, chief economist at PNC Financial Services Group. It sure doesn't look like the beginning of a normal, rapid recovery.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613622","date":"2009-11-29","texts":"Americans have forgotten how to save in recent years. First, we came to regard the stock market as our piggy bank if we needed a little spending money, surely we could always sell a few shares of stock or a bit of a mutual fund at a profit. Then, we viewed our houses as money machines that would always provide a surplus of cash on a moment's notice, since real estate never goes down in value. All that has changed, at least for now. People finally have again realized how important it is to save. After all, thrift was once one of the quintessential American virtues Just think of Benjamin Franklin intoning, A penny saved is a penny earned. Our ancestors knew what we had forgotten until recently Unless you save, you cannot make your wealth grow. It's much easier to tell ourselves that our horse will come in at the racetrack, or that we will win the lottery if we just keep playing 4-7-10-14-36-51, or that some stock we heard about online is the next Google, or that we can simply use our credit cards to buy whatever we feel like today and pay it all back tomorrow . . . after our horse comes in at the racetrack. But Benjamin Franklin was right when he wrote Human felicity is produc'd not so much by great pieces of good fortune that seldom happen, as by little advantages that occur every day.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985626","date":"2009-12-05","texts":"With his popularity slowly eroding as the nation's unemployment rate has risen, President Obama spent Friday reassuring people in Pennsylvania's struggling Lehigh Valley that his administration is focused on stemming the nation's jobs crisis. The visit here marked the start of what the White House is calling a Main Street tour, aimed at connecting the president's economic policies to workaday Americans, many of whom feel like they have yet to benefit from them. One day after hosting a high-profile jobs forum at the White House, Obama traveled here to visit a job training center and a local pet food plant and to hold a town hall meeting at Lehigh Carbon Community College to discuss his ideas for stemming unemployment and growing the economy. During his remarks at the college, Obama struck a populist theme, telling several hundred people packed into a gymnasium that all of his economic policies -- from the financial and auto bailouts to health-care reform -- are aimed at stabilizing the economy and creating jobs. I didn't undertake them because they were popular or gratifying -- they weren't. . . . But I did them because they were necessary to save our country from an even greater catastrophe, he said. Obama also said that he planned to summon the nation's top bankers back to the White House this month to press them to loosen credit for small-business owners and others on the front lines of job creation. And part of what our message to the banks is, the taxpayers were there for you to clean up your mistakes, he said. You now have a responsibility to be there for the community now that we're bearing the brunt of a lot of these problems that you caused.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617369","date":"2009-12-08","texts":"Kroger Charges Less What Price Victory While some investors tremble at the prospect of inflation, grocers like Kroger wouldn't mind a little more of it. The biggest U.S. grocery-store chain is due on Tuesday morning to report earnings for its fiscal third quarter, which ended in November. Analysts, on average, estimate it earned 37 cents a share in the quarter, down slightly from 39 cents a year ago. So far, recession-generated price competition is hurting most traditional grocery-store chains, as shellshocked consumers have fled to cheaper, big-box competitors such as Wal-Mart Stores and Costco Wholesale. On Wal-Mart's earnings call last month, Chief Executive Mike Duke said Wal-Mart plans to widen the gap with our competitors on price leadership. Those grocery chains that have managed to maintain or expand their market share, like Kroger, have done so at the expense of profit margins. Kroger's size has helped it cut prices more deeply than smaller peers such as Safeway and Supervalu, leading to market-share gains.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830985294","date":"2009-12-10","texts":"And at Rep. Ron Paul, the 2008 presidential candidate who had the zany idea -- as many laughing people thought -- that the Federal Reserve system could become a sizzling political issue. Ben Bernanke, chairman of the Fed, who does not laugh promiscuously, knows that it is no laughing matter that Paul has 317 co-sponsors 180 Republicans, 137 Democrats for a bill to open the Fed's books to audit by the comptroller general. The canny congressman cannot accomplish what the title of his best-selling book recommends End the Fed. But he probably hopes that if the Fed's transactions with financial institutions were publicized, he and kindred spirits could stir populist resentment of the mysterious institution. Although profoundly mistaken in his objective -- breaking the Fed to Congress's saddle -- Paul is not frivolous. His rage against the Fed is rooted in his rejection of fiat money -- paper money backed by nothing but confidence in Congress really, and his libertarian enthusiasm for maximizing the role of unmanaged markets in allocating social rewards. Bernanke on Monday told the Economic Club of Washington that Congress already can examine the Fed's balance sheet. His worry is that Congress, by ordering audits when it dislikes Fed monetary policy decisions, might make the Fed seem subject to, and eventually actually make it subject to, congressional pressure. At Bernanke's recent confirmation hearing on his nomination for a second four-year term, Jim DeMint, a South Carolina Republican who is co-sponsoring a Senate version of Paul's bill, asked Bernanke Do you believe that employment should be a mission, a goal of the Federal Reserve Bernanke, who had already noted Congress's mandate that the Fed achieve maximum employment and price stability, answered that the Fed can assist keeping employment close to its maximum level through adroit policies. That mandate was, however, improvidently given. Congress created the Fed and can control it, and eventually will do so if the Fed eagerly embraces the role of the economy's comprehensive manager. America's complex, dynamic economy cannot be both managed and efficient. Attempting to manage it is an inherently political undertaking, and if the Fed undertakes it, the Fed will eventually bring upon itself minute supervision by Congress.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615769","date":"2009-12-12","texts":"WASHINGTON -- The House of Representatives, in a display of anti-Wall Street sentiment, passed sweeping legislation Friday that rewrites the rules governing financial markets, aiming to restrict the operations of big banks and the powers of the Federal Reserve. The legislation, if enacted, would bring the biggest change to financial rules since the 1930s, changing business practices for everyone from mortgage brokers in California to traders on Wall Street. The vote advances a major White House initiative designed to tackle the perceived causes of last year's financial crisis. The House's action isn't the final word. The Senate has yet to act, and an early version of its bill is different from the House version in many respects. But senators hope to have an agreement in principle by the end of December and to pass a bill in the first half of 2010. Under the House version, large financial companies including Goldman Sachs Group Inc. and J.P. Morgan Chase & Co. would be hit with billions of dollars in fees and would see new restrictions on their operations. The bill would strip nearly all of the Federal Reserve's powers to write consumer-protection laws and would allow -- for the first time -- an arm of Congress to audit the Fed's monetary policy decisions, supposedly a politics-free zone. The Fed has fiercely resisted the idea.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985633","date":"2009-12-13","texts":"U.S. stocks inched up last week, overcoming concern that credit losses will rise, as data on jobless claims and retail sales signaled the economic recovery is strengthening. Delta Air Lines gained 13 percent and US Airways Group surged 9 percent as crude oil extended its decline to eight straight days, the longest losing streak in six years. Gannett soared 28 percent, the most in the Standard & Poor's 500-stock index, as the publisher forecast more profit than analysts estimated. Alcoa jumped 12 percent as J.P. Morgan Chase boosted its earnings projections for the aluminum producer. The S&P 500 added less than 0.1 percent, to close at 1,106.41. The Dow Jones industrial average rose 82.60 points, or 0.8 percent, to 10,471.50. The Nasdaq composite index fell 0.2 percent, to 2,190.31. There is an underpinning of greater confidence than there has been for a long time, said Matthew P. Kaufler, a money manager at Federated Clover Investment Advisors, which oversees 392 billion. The S&P 500 lost 1.3 percent in the first two days of the week after Federal Reserve Chairman Ben S. Bernanke said the U.S. economy faces formidable headwinds, while a reduction in Greece's debt rating added to speculation that global credit markets are struggling to recover.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614896","date":"2009-12-14","texts":"LA HABRA, Calif. -- In the Republican race to take on Democratic U.S. Sen Barbara Boxer next year, underdog Chuck DeVore lacks the star power of GOP rival Carly Fiorina, but what he does have going for him are impeccable conservative credentials. Mr. DeVore, a California assemblyman, is a hawk on everything from taxes to spending to abortion rights. He received the top conservative score of 100 last month by a citizens' group called the California Republican Assembly, which rates state legislators. If we don't stop the trillion-dollar deficits in their tracks, we'll be enslaving our children to higher taxes, Mr. DeVore told about 30 members of a Republican Women Federated chapter on a recent campaign stop in this Orange County, Calif., city. Ms. Fiorina, for her part, wasn't ranked by the conservative group, but the former chief executive of Hewlett-Packard Co. is widely regarded as a moderate. Mr. DeVore's chief selling point as a staunch conservative may sound like a drawback in a heavily Democratic state, but Republicans in California need the right flank, which comprises much of the party's base here. Combined with the populist anger nationwide over the overhaul of health care and other liberal issues, Mr. DeVore's strategy of emphasizing his conservative bent could succeed in the Republican primary in June, said some political analysts.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985386","date":"2009-12-17","texts":"For the first time in more than two years, state budget officials reported that tax revenue had stopped falling significantly faster than expected and, in fact, would probably begin growing again by the end of the current budget year. I don't want to jinx us, said Comptroller Peter Franchot D, but I'm hoping the days of massive write-downs are behind us. The state's latest forecast -- 77 million less in tax revenue than projected -- represents a loss about one-tenth the size of those in each of Maryland's previous four quarterly reports, and it amounts to a fraction of the 3.2 billion in combined revenue write-downs since last December. It was good news, but it also laid bare the treacherous course that Maryland and other states have to climb to escape the effects of the recession. After using furloughs instead of widespread layoffs and one-time cost cuts instead of the wholesale elimination of programs, Gov. Martin O'Malley and the state's Democratic-controlled General Assembly face a projected budget gap of nearly 2 billion in the coming fiscal year -- a shortfall as big as at any point since the recession began.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984257","date":"2009-12-18","texts":"Employers might grumble about state unemployment insurance taxes whenever they do their books, but the fees make headlines only when there's a problem -- and there is a serious one in Maryland, business owners say. Battle lines were drawn Thursday in what promises to be one of the first and most contentious battles when Maryland's General Assembly reconvenes in Annapolis next month. Unemployment insurance costs for Maryland business owners are slated to jump 267 percent from 51 for each employee to 187 per employee annually under a law intended to keep the state's unemployment insurance fund from going bankrupt as early as March. The fund has a balance of about 200 million, but the state has been forced to pay as much as 24 million weekly, or twice as much as usual, to cover unemployment claims. The fund won't receive enough new money to keep it solvent until tax returns are filed in April. Gov. Martin O'Malley on Thursday released a package of proposals his administration said would keep the fund in the black until then, and limit employers' new costs to 153 annually for one employee. He said his plan would reduce penalties for business owners to pay the tax over time through payment plans. O'Malley would accomplish that largely by bowing to changes that Congress and President Obama want states to make in unemployment insurance systems. For Maryland, those changes would mean 127 million in federal stimulus funding.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830985634","date":"2009-12-18","texts":"Ben S. Bernanke cleared a key hurdle Thursday to being confirmed for a second term as Federal Reserve chairman, but the discussion and vote by a Senate committee suggested that confirmation is not a foregone conclusion. The banking committee voted 16 to 7 to send Bernanke's nomination for another four-year term to the full Senate when his current one expires Jan. 31. While it still appears likely that Bernanke will be confirmed, the tense debate foreshadowed what could be the most controversial confirmation of a Fed chairman since at least the early 1980s, when Paul Volcker was reappointed during a deep recession. The majority of senators argued that Bernanke deserves reappointment for his aggressive actions to contain the financial crisis and prevent an even deeper economic downturn. But many of the votes in Bernanke's favor -- which came from four of 10 Republicans and 12 of 13 Democrats -- were accompanied by significant misgivings about the weak economy and failures by the Fed that contributed to the financial crisis. Some senators who voted to move the nomination forward did not commit to voting for his confirmation on the Senate floor. Time could be Bernanke's enemy. The Senate is scheduled to reconvene after a holiday recess on Jan. 19, and banking committee Chairman Christopher J. Dodd D-Conn. expects the body will only then take up Bernanke's confirmation. That will leave just nine business days for the Senate to act before Bernanke's term expires. Sen. Bernard Sanders I-Vt. has said he will put a hold on the nomination, a procedural step that could delay a vote and means that Bernanke would need 60 votes to remain chairman.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984185","date":"2009-12-22","texts":"The recession's jobless toll is draining unemployment-compensation funds so fast that according to federal projections, 40 state programs will go broke within two years and need 90 billion in loans to keep issuing the benefit checks. Debates over the state benefit programs have erupted in South Carolina, Nevada, Kansas, Vermont and Indiana. And the budget gaps are expected to spread and become more acute in the coming year, compelling legislators in many states to reconsider their operations. Currently, 25 states have run out of unemployment money and have borrowed 24 billion from the federal government to cover the gaps. By 2011, according to Department of Labor estimates, 40 state funds will have been emptied by the jobless tsunami. There's immense pressure, and it's got to be faced, said Indiana state Rep. David Niezgodski D, a sponsor of a bill that addressed the gaps in Indiana's unemployment program. Our system was absolutely broke. The Indiana legislation protected the aid checks, Niezgodski said, but it came after a give-and-take this spring in which Gov. Mitchell E. Daniels Jr. R said the state had been providing Rolls-Royce benefits and several thousand union workers countered by protesting proposed cuts at the state capitol. In January, the legislature is slated to consider a bill to delay the proposed tax increases intended to refill the fund.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983221","date":"2009-12-24","texts":"After decades of rapid growth in which housing developments sprouted in swamps, farmland and deserts, the number of Americans moving to several states in the South and the West has slowed sharply because of the recession and housing bust, according to Census Bureau figures released Wednesday. The longtime magnets of Florida and Nevada, which had benefited most as people fled the dreary cold of the Northeast and Midwest, saw more Americans move out than move in during the year that ended July 1. California also had a net loss of so-called domestic migrants, although in all three states the impact was blunted by immigration from other countries and by natural growth because of births. The state population figures foreshadow a political realignment that will occur after the 2010 Census, which is used to determine the reapportionment of seats in the House of Representatives. Texas, which had the biggest population growth last year, 478,000 people, is among the states that stand to gain seats, and states in the Northeast and Midwest could lose. The economic downturn and the upheaval it has spawned are creating an unusual set of challenges for next April's national count. Foreclosures and job losses have caused many to give up their homes and move in with friends and family, and Census Bureau officials fear that those people could be undercounted. As the latest data suggest, hard times have led many people to abandon once-booming locales, and increasing numbers of others to stay put, when they cannot sell their houses or land new jobs. The economy has also reshuffled the growth rates of states, transplanting some onto the losing side of the ledger for the first time in recent memory, according to William Frey, a demographer with the Brookings Institution.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615208","date":"2009-12-28","texts":"Retailers won the closely watched holiday skirmish with shoppers, who opened their wallets a little bit despite a still struggling economy, fewer discounts than last year and limited variety on store shelves, according to newly released data. A late boost from procrastinating consumers and an extra day of shopping between Thanksgiving and Christmas helped to lift total retail sales, excluding automobiles and gas, by 3.6 over the year-earlier period through Christmas Eve, according to MasterCard Inc.'s SpendingPulse unit. Excluding the extra shopping day, the sales increase would have been closer to 1, MasterCard said. While some retail sectors fared better than others, overall I'd call it a good season because the profits will be good, said Maggie Gilliam, president of Gilliam & Co., an independent retail research and advisory firm in New York. Retailers are increasingly confident that the shopping season this year performed substantially better than last year's, when consumer appetites for anything but essentials were minimal and stores cut their prices to the bone to try to lure customers. Despite these efforts, the 2008 holiday season was the worst in decades.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616732","date":"2009-12-30","texts":"Real-estate stocks took investors on a wild ride in 2009 and ended the year with strong gains. Don't count on so much excitement in 2010. The Dow Jones Equity All REIT Total Return Index is up 31 this year, reversing a 38 decline in 2008. The most recent performance outpaced the 25 return posted by the Standard & Poor's 500-stock index and was the strongest performance since 2006. It's been very much a roller-coaster ride this year. And we're about to end this year on a high note, said Alexander Goldfarb, an analyst with Sandler O'Neill & Partners LP. If you go back to the beginning of 2009, the market was staring into the abyss, he said, adding that sentiment began to change as the stock market rebounded, credit spreads tightened and the recapitalization wave began. For real-estate investment trusts, or REITS, sentiment swung from dismal to ecstatic. Early in the year, many investors were reading the funeral rites for large numbers of REITs as credit dried up amid the recession. By March 9, the Dow Jones REIT index had tumbled 76 from its high in February 2007. REITs survived by tapping the stock market and using the proceeds to pay down debt. Other cash-preserving measures included dividend cuts. Others paid dividends by using stock instead of cash. By year's end, only one large property-owning REIT, mall company General Growth Properties Inc., filed for bankruptcy protection.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982326","date":"2009-12-31","texts":"Charities and nonprofit agencies are hoping for an end-of-year surge in giving to mirror the recent increase in consumer spending and help compensate for a difficult 2009, according to charity officials. This is basically the most critical giving season since the Great Depression, said Glen O'Gilvie of the Center for Nonprofit Advancement. This will be the litmus test, to see whether the nonprofit sector is coming out of this, remaining stable or getting worse. Every trickle, every sign of growth is helpful in that. Officials at some groups report that they are doing better than expected others said they have not seen the increase they hoped for. Final numbers will not be available until next month. The poor economy forced cuts in funding to nonprofit groups from all sides in 2009 at the same time, it left more families in need of help. Demand for emergency aid, such as food and shelter, surged. Northern Virginia Family Service, for example, had a 30 percent increase in requests for help with housing and a more than 50 percent increase in requests for health care in the past 18 months. Many nonprofit groups are counting on individual donors to help make up what they lost in contributions from businesses, governments and foundations this year.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984044","date":"2010-01-01","texts":"It might have been a year marred by lost wages, shrinking businesses and soured hopes, but even so, on the last night of 2009, event planners across the region were bracing for a crush of revelers. At the Gaylord National Hotel at National Harbor on Thursday, staff scrambled to prepare food for 6,500 and to make sure no one would wait in long lines for vodka tonics at Big Night DC, the region's largest New Year's Eve gala. The mood was calm. Gaylord and HiBall Events, which work together to stage the 750,000 event, began planning almost as soon as the confetti was swept up last January. On Wednesday, they set up 15 party areas throughout the cavernous hotel and convention center, with such themes as shamrocks and Mardi Gras. That left Thursday to cook 500 pounds of pasta, 1,500 pounds of chicken, 900 pounds of roast beef and 5,000 shrimp for the gala, for which tickets cost 110 to 210 per person. We start by cooking the pasta in 80-gallon kettles then we can make something like 400 gallons of sauce, said executive chef Rigoberto Lemus. We always prepare more than we need, because to run out would be bad for our customers. Mike Harrigan, president of HiBall Events, said he had worried that the recession might hurt ticket sales, but Big Night DC sold out 36 hours before the event, and 3,000 hotel rooms at National Harbor and several hundred more in Old Town Alexandria which is accessible by water taxi after the party were booked.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982230","date":"2010-01-03","texts":"Inflation may be subdued today, but the debate over inflation is anything but tame. Pessimists, such as hedge-fund manager Julian Robertson of Tiger Management, say rampant inflation is a looming threat. I ask anyone to give me an example of an economy beefed up by huge amounts of fiscal and monetary stimulus that did not inflate tremendously when the economy improved, he recently told us. Optimists such as David Herro, co-manager of the Oakmark International fund, disagree. The global economy is soft, and there's excess capacity, so I believe inflation is still preventable, Herro says. The debate over gold, considered an excellent inflation hedge by some, is equally lively. Top investors, such as Paulson & Co.'s John Paulson and Greenlight Capital's David Einhorn, placed big bets on gold in 2009. Einhorn explained his rationale at the recent Value Investing Congress Gold does well when monetary and fiscal policies are poor and does poorly when they appear sensible. Prospectively, gold should do fine unless our leaders implement much greater fiscal and monetary restraint than appears likely. At the same conference, Bill Ackman of Pershing Square Capital Management said he avoids gold because it is a greater-fool investment. In other words, making money on the yellow metal is less a function of a rise in its fundamental value and more a function of finding someone who is willing to pay you more for it. Tiger's Robertson describes his aversion to gold similarly It's less a supply-demand situation and more a psychological one -- better a psychiatrist to invest in gold than me. Because inflation hasn't afflicted America in some 30 years, it's worth reviewing what rising prices might mean for stock investors. In a 1977 article on the subject in Fortune, Warren Buffett went to great lengths to disabuse shareholders of the notion that they could skate through inflationary times unscathed. He wrote that companies have little ability to improve returns on capital when inflation is high, so investors aren't willing to pay as much for each dollar of corporate earnings. The subpar 5.2 percent annualized return for the Standard & Poor's 500-stock index from 1973 through the end of 1981, a span during which inflation rates often hit double digits, provides ample support for that argument adjusted for inflation, stock returns were negative.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616751","date":"2010-01-07","texts":"When President Obama didn't meet with the Dalai Lama during his October trip to Washington, it gave many the impression that human-rights promotion was not central to this administration's foreign policy. This impression needs to be promptly corrected. While the U.S. accepts that Tibet is part of the People's Republic of China, for decades our country has supported Tibetan autonomy, especially in culture and religion. If the U.S. were to step back from this position, increased Chinese repression of Tibetans would likely follow. Such repression would also have adverse consequences for China. A China that engages in harsh repression is incapable of ensuring domestic stability. An oppressive China is also unable to function as a responsible global player -- something that the U.S. has long sought to encourage. The view that repression in Tibet would have negative consequences for China is shared by our European allies. As British Foreign Minister David Miliband has said Like every other EU member state and the United States, we regard Tibet as part of the People's Republic of China. Our interest is in long-term stability, which can only be achieved through respect for human rights and greater autonomy for the Tibetans. Contrary to the oft-repeated, but erroneous claims to the contrary, the U.S. commitment to Tibet -- which began during the Nixon administration -- has not harmed U.S.-Chinese relations. The overarching principle for both China and America has been stability and consistency. Any alteration of America's long-standing policy toward Tibet would prompt the opposite result. It would certainly not earn us any lasting gratitude from Beijing. Any rebalancing of American policy toward China would most likely cause the Chinese to conclude that the U.S. -- beset by an economic crisis -- is retrenching from many of its traditional commitments and can't be counted on to pursue robust policies across a range of international issues. If China were to reach such a conclusion, it would be inclined to be less helpful to the U.S. on such issues as Iran, North Korea or even economic cooperation.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985422","date":"2010-01-09","texts":"The job market remained in a deep funk in December, according to a government report Friday showing that employers view the economic recovery as too weak and too fragile to begin hiring again on any large scale. The pace of layoffs has slowed sharply in recent months, but businesses still cut 85,000 net jobs in December, the Labor Department said. The unemployment rate was unchanged at 10 percent, but economists suspect this is only because hundreds of thousands of frustrated workers stopped looking for jobs. With the jobless rate stuck in double digits and Democrats worried that the weak economy will prompt voters to turn on them in fall elections, the White House plans more public events in coming weeks to underscore its concern about jobs and the economy. On Friday, President Obama called the employment report a setback during his announcement of 2.3 billion in tax credits to support renewable energy, which the administration says will create 17,000 jobs. The road to recovery is never straight, Obama said, and we have to continue to work every single day to get our economy moving again. Senate Democrats, meanwhile, have begun crafting a bill to encourage job creation, which Democratic aides said will likely focus on small business, infrastructure spending and green energy. The House passed a 154 billion jobs bill in December.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613996","date":"2010-01-11","texts":"WASHINGTON -- Treasury Secretary Timothy Geithner wasn't involved in deliberations between the Federal Reserve Bank of New York and American International Group Inc. over what the insurer should disclose in regulatory filings, a top bank official said in a letter to a U.S. lawmaker. Thomas Baxter Jr., general counsel at the New York Fed, said in a Friday letter to Rep. Darrell Issa R, Calif., ranking Republican on the House Committee on Oversight and Government Reform, that then New York Fed President Geithner played no role in, and had no knowledge of, the disclosure deliberations and communications referenced in those emails. The emails in question, released by Mr. Issa's office Thursday, show that officials at the regional Fed bank told AIG not to disclose key details of their agreements to make big payouts to banks in late 2008. AIG later had to amend its regulatory filings several times and provide the information after the Securities and Exchange Commission requested more disclosure. This letter raises more questions on the inner-workings of the New York Fed during one of the most pivotal periods in our nation's history, Mr. Issa said. Credit By Michael R. Crittenden","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614901","date":"2010-01-14","texts":"In What Direction Will Intel Point U.S. Intel's earnings growth last year helped power gains in the stock market and signaled recovery in the broader economy. The company's predictive power is worth keeping in mind should its fourth-quarter earnings report on Thursday disappoint. The semiconductor company is expected to post earnings of 30 cents a share, up from four cents a share in the fourth quarter of 2008, according to analysts polled by Thomson Reuters. Intel's revenue is forecast to hit 10.2 billion, up 23. The chip maker has benefited from a stronger recovery in demand for servers and personal computers than initially expected. Consumer electronics were a bright spot of the holiday sales season, likely helping bolster Intel's fourth-quarter results. The company's shares, which closed Wednesday at 20.96, up 35 cents, or 1.7, have surged 67 since March, outpacing the Dow Jones Industrial Average's 63 gain during the same period. Even so, some say Intel has further to rise.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616231","date":"2010-01-15","texts":"The dollar dropped against the yen and most other major currencies as falling Treasury yields combined with weaker-than-expected U.S economic data. But the greenback edged up on the euro. Any time U.S. rates squeeze down, it puts downside pressure on the dollar, said Jacob Oubina, currency strategist at Forex.com in Bedminster, N.J. Late Thursday in New York, the euro was at 1.4499 from 1.4511 late Wednesday. The dollar was at 91.10 yen from 91.45 yen, while the euro was at 132.09 yen from 132.70 yen. The U.K. pound was at 1.6324 from 1.6288. The dollar was at 1.0188 Swiss francs from 1.0184 francs late Wednesday. The worse-than-expected U.S. economic data led investors to believe U.S. interest rates will remain low. It does look like the market . . . has pushed out even further the timing of when the Fed hikes rates, said Meg Browne, senior currency strategist at Brown Brothers Harriman in New York. That's positive for foreign currencies because it means U.S. rates will remain low for a longer period.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983165","date":"2010-01-15","texts":"For its Topic A feature last Sunday, The Post invited a panel of political operatives to offer their advice to the Democratic Party on strategy for 2010 Sunday Opinion, Jan. 10. Improbably, one of the operatives asked was Karl Rove, President George W. Bush's longtime chief strategist. Rove has some impressive campaign victories to his credit. But given the shape in which the last administration left this country, I'm not sure I would solicit his advice. And given the backhanded advice he offered, I'm not sure he was all that eager to help. Of all the claims Rove made, one in particular caught my eye for its sheer audacity and shamelessness -- that congressional Democrats will run up more debt by October than Bush did in eight years. The day the Bush administration took over from President Bill Clinton in 2001, America enjoyed a 236 billion budget surplus -- with a projected 10-year surplus of 5.6 trillion. When the Bush administration left office, it handed President Obama a 1.3 trillion deficit -- and projected shortfalls of 8 trillion for the next decade. During eight years in office, the Bush administration passed two major tax cuts skewed to the wealthiest Americans, enacted a costly Medicare prescription-drug benefit and waged two wars, without paying for any of it. To put the breathtaking scope of this irresponsibility in perspective, the Bush administration's swing from surpluses to deficits added more debt in its eight years than all the previous administrations in the history of our republic combined. And its spending spree is the unwelcome gift that keeps on giving Going forward, these unpaid-for policies will continue to add trillions to our deficit.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616709","date":"2010-01-20","texts":"Bank of New York Mellon Corp.'s fourth-quarter earnings soared as the asset manager and security adviser freed itself of the securities losses that hobbled it in past quarters. Meanwhile, State Street Corp. fourth-quarter profit more than doubled as the institutional money-management firm's revenue from servicing and management fees strengthened. The parent of State Street Global Advisors has seen business stabilize but previously warned that results would weaken in the second half of last year because of the slow pace of economic recovery and its trend of collecting fewer transaction fees. Bank of New York Mellon, a custodial bank that holds investments and securities for other investors, said total fee revenue jumped 43 to 2.58 billion, while net securities gains were 15 million, after 1.24 billion in losses a year earlier. Net interest revenue fell by a third to 724 million but rose slightly from the previous quarter. In the third quarter, the bank, formed in July 2007 when Bank of New York acquired Mellon Financial Corp., sold or restructured billions of dollars in risky investments, a move that hurt its bottom line at the time but set it up for fewer one-time charges or losses. It struggled last year with investment write-downs and securities losses because of troubles at secondary businesses, such as those related to real estate, and ongoing weakness in fee revenue. Bank of New York Mellon Chief Executive Robert Kelly said the continuation of low interest rates continued to weigh on net interest and fee revenue. But he noted the company saw excellent growth in asset and wealth management revenue during the quarter.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614804","date":"2010-01-21","texts":"WASHINGTON--President Barack Obama proposed new limits on the size and activities of the nation's largest banks, pushing a more muscular approach toward regulation that yanked down bank stocks and raised the stakes in his campaign to show he's tough on Wall Street. With former Federal Reserve Chairman Paul Volcker at his side, Mr. Obama said he wanted to toughen existing limits on the size of financial firms and force them to choose between the protection of the government's safety net and the often-lucrative business of trading for their own accounts or owning hedge funds or private-equity funds. Mr. Volcker has been an outspoken advocate of such rules until recently Mr. Obama's top economic advisers, including Treasury Secretary Timothy Geithner and Lawrence Summers, were less than enthusiastic. Never again will the American taxpayer be held hostage by a bank that is too big to fail, Mr. Obama said Thursday, two days after voters crimped his ability to pursue his agenda by sending a Republican to the Senate to fill a vacancy created by the death of Edward M. Kennedy. The election deprived Democrats of the 60 votes often needed to get major measures through the Senate. Administration officials said they weren't trying to resurrect the Depression-era law--known as Glass-Steagall--that strictly divided commercial banks from the business of underwriting securities. Nor would their proposals force existing financial firms to downsize, officials said. If accepted by Congress, the Obama proposals could force significant changes in how the nation's biggest banks do business. The specter of new profit-crimping regulation battered bank stocks Thursday, dragging down the Dow Jones Industrial Average by 213.27 points, or 2, to 10389.88. Some financial stocks sank by more than 5, though they recovered slightly after Barney Frank, the Massachusetts Democrat who is chairman of the House Financial Services Committee, said the new rules would take effect over three to five years, not immediately. J.P. Morgan Chase & Co.'s stock was the hardest hit, sinking 6.6.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616571","date":"2010-01-23","texts":"WASHINGTON--Coming off one of the most difficult weeks of his presidency, Barack Obama has beefed up his political staff and is expected to deliver an uncompromising State of the Union address. Aides said Sunday that the White House wasn't making any abrupt policy shifts, even as the message was retooled to focus more sharply on job creation. If anything, an unfinished agenda from 2009 will grow larger as, in addition to tackling health care and unemployment, the president presses for a bipartisan commission to tackle the budget deficit against resistance from Republicans. White House officials said Obama campaign manager David Plouffe would be brought on as a political consultant as the White House gears up for the midterm elections. The president's party is facing a stiff headwind from an electorate angry about high unemployment and what they see as ineffectual government, White House officials said. Republican Scott Brown's capture of the Massachusetts Senate seat Tuesday was a first shot in what Democrats worried would be hard-fought contests in November. People are working harder, White House senior adviser David Axelrod said Sunday on ABC's This Week, referring to the economy. If they have a job, they're working harder for less. They're falling behind. That's been true for a decade. They look at a wave of irresponsibility from Wall Street to Washington that led to that. And those were the frustrations that got the president elected in the first place, and they were reflected again on Tuesday in the Massachusetts election.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981702","date":"2010-01-24","texts":"The stock market has performed magnificently of late. But the gurus at the No-Load Fund Analyst newsletter forecast that returns for U.S. stocks over the coming five years will be in the low to middle single digits -- far below the long-term annualized return of just under 10 percent. I don't share the newsletter's depressing outlook. But I take what its editors say seriously. They are smart, careful investors. In recent years, I've found their asset-allocation calls more helpful than their fund picks. What's more, the lousy returns they're predicting are in line with what a lot of other top market strategists are saying. To earn healthier returns in the coming years, Jeremy DeGroot, chief investment officer at No-Load Fund Analyst, is most excited about a handful of unconventional bond funds. But don't expect them to return 10 percent a year, either. These are long-term investors who don't try to time the markets or make drastic changes to their recommended asset allocations. They tend to adjust those allocations on the margin based on their assessment of economic conditions and valuations of different asset classes. DeGroot and his colleagues forecast grim returns for nearly every part of the stock market. We don't think this is a typical recession cycle, he says. Recoveries from financial crises, such as this one, tend to be worse than average recoveries.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842614931","date":"2010-01-27","texts":"NEW YORK -- The dollar and yen strengthened on increasing worries that further monetary-policy tightening in China and lingering credit concerns in the nations that use the euro will hurt an incipient global economic recovery. The yen was the biggest winner among the major currencies in the hunt for safe-haven assets, hitting a nine-month high against the euro intraday. The yen also benefited after the Bank of Japan frustrated expectations for further monetary stimulus at its Tuesday's policy meeting. Investors pared back bets on higher-yielding currencies ahead of the Federal Reserve's rate-setting decision set for Wednesday. The New Zealand dollar, for example, slid as much as 1 against its U.S. counterpart. The overriding factor in the currency markets is the concern that a self-sustaining global economic recovery will be able to gain traction, said Carl Forcheski, director of foreign exchange at Societe Generale in New York. You have fiscal problems in a lot of governments in Europe as well as in the U.S. And on top of that, you have China instituting initiatives to slow things down, when what we need right now is general economic growth. By late afternoon Tuesday in New York, the euro had weakened to 1.4079 from 1.4154 late Monday. The dollar moved to 89.64 yen from 90.23 yen. The euro weakened to 126.20 yen from 127.71 yen. The U.K. pound weakened to 1.6143 from 1.6241. The dollar strengthened to 1.0461 Swiss francs from 1.0397 francs.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615667","date":"2010-01-28","texts":"NEW YORK -- The first dissent vote in a year on the Federal Reserve's interest-rate decision Wednesday afternoon killed an early rally in the Treasury market and sparked a bout of selling, led by shorter-dated maturities. Bond prices rallied in the morning as concern resurfaced over the Greek government's ability to fund its budget shortfall. This fueled decent demand for the afternoon's 42 billion five-year note sale, the second leg of this week's 118 billion Treasury note supply. An unexpected drop in U.S. new-home sales spurred many investors to seek comfort in low-risk U.S. government debt, pushing yields on some Treasury securities maturing in a month, known as one-month T-bills, slightly below zero. Such securities are sold initially at a discount, so a negative yield means some investors are willing to buy the bills while forsaking the chances of earning interest. But the market flipped in afternoon trade, the selling driven by Kansas City Fed President Thomas Hoenig's vote against the central bank's decision to keep the main policy rate near zero. A Fed veteran, Mr. Hoenig was concerned that the stimulus pumped to fight the financial crisis may stoke inflation. This is a little bit of culture shock for the market, said Ward McCarthy, chief financial economist in the fixed-income group at Jefferies & Co. It is also an indication that at least some FOMC members will be persistent in pursuit of an exit strategy that is implemented sooner rather than later.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615086","date":"2010-01-30","texts":"Peter Orszag spent most of his professional career mapping out the dangers of budget deficits and devising such solutions as restructuring the tax code and revamping Social Security. Now, as director of the White House Office of Management and Budget -- the nation's bean counter-in-chief -- he has found it's not easy being a deficit hawk in the Great Recession. Chief of Staff Rahm Emanuel and National Economic Council Director Lawrence Summers believe moves to reduce the deficit would throttle recovery. Republican leaders refuse to consider higher taxes. Democrats who had championed fiscal responsibility fear spending cuts when unemployment stands at 10. Mr. Summers said spending on administration priorities would not be sacrificed to the deficit If we as a country are not successful in establishing job growth and economic growth soundly, we will not achieve any of our other objectives. Mr. Orszag's dilemma will be seen Monday when the president unveils a 2011 federal budget that expresses concern about the widening deficit but offers only modest solutions to reduce it. The White House proposes freezing a small slice of domestic spending, and projects the deficit falling from a sum equal to 10 of U.S. gross domestic product to half that by 2013, according to officials briefed on the budget. That's still about 800 billion.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983433","date":"2010-01-30","texts":"Rates on 30-year mortgages remained almost flat this week as the Federal Reserve said it would keep interest rates near record lows to help the economy recover. The average rate on a 30-year, fixed-rate mortgage was 4.98 percent this week, down from 4.99 percent last week, Freddie Mac said Thursday. Last year at this time, the average rate for a 30-year fixed mortgage was 5.10 percent. Rates are still above the record low of 4.71 percent set in early December. They've been held around 5 percent by a Federal Reserve program to pump 1.25 trillion into mortgage-backed securities to try to keep home-loan rates low, making home buying more affordable. On Wednesday, the Fed said it still expects to end the program as scheduled on March 31. However, the central bank did say that it remains open to changing the timetable if necessary. The average rate on 15-year, fixed-rate mortgages fell slightly, to 4.39 percent from 4.40 percent. Rates on five-year, adjustable-rate mortgages averaged 4.25 percent, down from 4.27 percent. Rates on one-year ARMs dropped to 4.29 percent from 4.32 percent.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"830983659","date":"2010-02-01","texts":"Once this city had its own car, 23,000 busy factory workers and the 55.7 million Silverdome, a storied Teflon-coated stadium where the Detroit Lions played, Elvis Presley sang, WrestleMania's Hulk Hogan stalked and Pope John Paul II prayed. Today, Pontiac is in such bad shape -- a 7 million deficit, roughly 100 million in debt -- that the state has declared a financial emergency and sent in a turnaround expert to oversee finances. The car is gone -- General Motors is killing off its Pontiac brand. Most of the factories are deserted -- GM has only 3,882 employees here now. And the turnaround expert, Fred Leeb, has sold the Silverdome to a Canadian developer, who paid just 583,000 for the 80,300-seat stadium and 127 acres of land -- less than many Washingtonians pay for a house. In their efforts to live on ever-shrinking revenue, governments across the country are trying to get unprofitable public property off their books. Arizona, facing a 1.5 billion budget shortfall, has started auctioning off a passel of buildings, including the governor's and legislators' offices, in a sale-leaseback plan in hopes of getting enough money to totter along another month. California, confronting a 20 billion deficit, talked about selling the Los Angeles Memorial Coliseum and San Quentin State Prison. Instead, the state put the Orange County Fairgrounds up for auction and decided to sell and lease back 11 state office buildings. Here in Pontiac, the process has unsettled many residents. How could the Silverdome go so cheaply What was Leeb thinking Leeb, 57, arrived last year and quickly took aim at unprofitable projects. Over the years, the city has invested about 80 million building and maintaining the Silverdome, a theater, an outdoor entertainment pavilion and other projects that have become a major burden in a time of recession and a diminished GM, the largest taxpayer.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983881","date":"2010-02-03","texts":"Former Federal Reserve chairman Paul Volcker urged a Senate panel Tuesday to adopt new rules that would limit the investment activities of large banks as part of an overhaul of financial regulations, but lawmakers said the proposal could complicate ongoing negotiations on sweeping reform legislation. Volcker told members of the Senate Banking Committee that he supports government safety nets, such as deposit insurance for commercial banks, but that taxpayers should not be on the hook for risky practices that aren't aimed directly at helping a firm's customers. There is not . . . a similar rationale for public funds -- taxpayer funds -- protecting and supporting essentially proprietary and speculative activities, Volcker said. Backed by Volcker, President Obama proposed the new rules last month in an effort to restrict banks from making speculative investments using their own capital -- an activity known as proprietary trading -- and from owning a hedge fund or private equity fund. Although receptive to the overall merits of the proposal, Banking Committee Chairman Christopher J. Dodd D-Conn. said that Congress had already spent months hashing out the details of regulatory reform and that the new proposals were adding to the problems of trying to get a bill done. There are tipping points. There's only so much that this institution will tolerate at a given point in time, Dodd said. I don't want to be in a position where we end up doing nothing because we tried to do too much at a critical moment.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616386","date":"2010-02-04","texts":"MasterCard Inc.'s fourth-quarter profit rose 23 as the company reported higher processed transactions and improved spending, but the results were below analysts' expectations, sending the stock sharply lower. MasterCard shares fell 25.47, or 10, to 222.11 in 4 p.m. composite trading on the New York Stock Exchange. The results included higher operating expenses and a spike in rebates and incentives. MasterCard lagged behind bigger rival Visa Inc., which reported better-than-expected quarterly results Wednesday aided by higher consumer spending and growth in its debit card segment. For MasterCard, the expenses and rebates and incentives were higher than what expectations were, said Sanjay Sakhrani, an analyst at Keefe, Bruyette & Woods. Visa was able to beat expectations on all accounts.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616719","date":"2010-02-05","texts":"Concerns are growing that the world hasn't seen the last of the economic crisis. Jitters about the U.S. economy and signs that Greece's debt woes are spreading across Europe roiled markets on Thursday, driving the Dow Jones Industrial Average briefly below the 10000 mark. U.S. stock investors, waking up to a turbulent European trading session, were further unnerved by an unexpected rise in the latest report on initial claims for jobless benefits. Ahead of a key January employment report due out Friday, the claims numbers revived on-again, off-again concerns about the strength of the U.S. economic recovery. The resulting selloff took the Dow below the psychologically important 10000 level in the final moments of trading. It managed to finish at 10002.18, but nevertheless had a 2.6 decline, led by big drops in financial stocks. The 268.37-point fall was its biggest one-day loss since last April. Asian markets, which had eased modestly Thursday, opened sharply lower on Friday, underscoring the global impact of the market tremors.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617043","date":"2010-02-10","texts":"John Hofmeister , op-ed, Feb. 8 makes some excellent observations about the sorry state of industry in the U.S., but his analysis about what went wrong is off-base. Innovation cuts both ways when it comes to jobs. Sometimes it creates them, but often it results in doing more with less--as in people. Further, shipping jobs overseas is less supply-chain driven than a chasing of lower labor costs in the face of global competition. American workers' wage and benefits demands priced them out of the world market in many of the industries Mr. Hofmeister laments. Thus, while most of his proposed ideas about shifting corporate tax incentives will do some good no matter what, bringing back manufacturing to the U.S. will require much more. Until we have a cultural and legal shift in expectation about what constitutes appropriate compensation, those jobs will stay where they are. Susan Michaelson Radnor, Pa.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616152","date":"2010-02-11","texts":"The crush of multiple snowstorms over the past week may have frozen economic activity for a couple of days, but it's unlikely to ice the economy's rebound. Snow accumulations broke records across a wide swath of the eastern U.S., closing schools and governments, canceling flights and shuttering private businesses. But Snowmaggedon's swift blow to business activity isn't expected to last. Generally, these kinds of things don't have a meaningful effect on the economy, said Moody's Economy.com economist Mark Zandi. It affects the timing of economic activity, but in terms of dollars and cents these kinds of things don't add up to much. Losses from weather events come in two forms One is business that can be made up, such as retail sales that shift to a later date--the sweater not bought today, but bought next week. The other is transactions like restaurant meals, which are lost forever because people can't make it through snowdrifts to spend money. Economists believe most disruptions cause business to shift, rather than be lost, which is why the longer-term impact is muted. The reality is that both go on simultaneously. The storm kept travelers out of Washington, D.C.'s hotels, for instance, but some filled up rooms with local residents who lost power at home. That's why Jill and Michael Gold checked into Washington's downtown Mayflower Hotel last Saturday with three children and four pets, including a dog named Ziggy and a gecko named Gordon. They checked out Tuesday, just as another storm was about to wallop the nation's capital.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616448","date":"2010-02-12","texts":"Vietnam's devaluation will help shore up its currency system, but inflation and a big trade deficit mean the government has more work ahead--and that could include further devaluations and sharply higher interest rates. The Southeast Asian nation, which has seen an influx of Western investment capital in recent years, grew 5.5 in 2009, World Bank estimates show, despite the global financial crisis. But in the transition to a more urban, market-based economy, the country has struggled to keep a lid on inflation and trade and budget deficits, which in turn has put pressure on its currency. Vietnamese residents have responded by hoarding dollars and gold out of fear the currency--the dong--will become even less valuable in the future. The State Bank of Vietnam on Thursday lowered by 3.4 the official value of the dong, which is pegged to the U.S. dollar, bringing the currency more in line with how it trades on the street in nongovernment sanctioned venues. Now, one U.S. dollar will buy 18,544 dong, compared with 17,941 dong earlier in the week. The country also capped the interest rate on some U.S.-dollar bank accounts at 1 in order to encourage businesses and state enterprises to hold dong instead of dollars. Vietnam's problems are unlikely to spread to neighbors such as China, Thailand and Indonesia, which enjoy strong foreign exchange reserves and trade surpluses. The rest of the region is facing pressure for their currencies to rise, rather than weaken.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982066","date":"2010-02-12","texts":"According to D.C.'s Department of Employment Services, 202,000 of the jobs in Washington were federal government positions as of November 2009. There were 471,000 private-sector positions. At a time when unemployment in the District is at a record high, this intermingling can result in uniquely D.C. conversations He was a level G-I-don't-even-know-what, but definitely something up there, says Alex MacLennan. MacLennan is at happy hour at a 14th Street NW bar, talking with a friend about the government worker he used to date. And he was on that schedule where he got every other Friday off. And he was also at the gym at 9 a.m., says MacLennan, instead of at his desk. Plus, the ex's boss let him leave early once or twice a week. The stereotype of the government worker used to fall within one of two categories. He could be the noble office drone, a human widget who bravely battled red tape. Or he could be the cobweb-covered sloth, overindulged compared with his private-sector counterparts, the ones who watch their unused vacation days float away like dreams deferred. Either way, the most remarkable characteristic of the civil servant was being blandly unremarkable, which is why the Google phrase movies about federal employees will turn up exactly zero hits. But during the dark days of the Great Recession, the sexiest fringe benefit to any job became security. Stodgy is hot. Civil servants  genius Visits to federal jobs site USAJobs.gov were up 18 percent in 2009 from 2008, according to the Office of Personnel Management, and up 61 percent for those who came to the site more than once. In May 2009, a Gallup poll found that 40 percent of Americans would consider a federal career, compared with 24 percent in 2006. On Facebook groups for federal employees, there are sightings of fed groupies -- wall postings by people who are not employed by the government, but really wish they were.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842614849","date":"2010-02-13","texts":"Retail sales rose in January as consumers bought more electronics and appliances, but a separate consumer-sentiment index fell in February, highlighting the mixed signals coming from the economy. The revival of consumer spending is a key to a broad economic recovery, because consumer spending accounts for about two-thirds of all demand in the U.S. economy. The Commerce Department said Friday that retail sales climbed a moderate 0.5 in January from December to a seasonally adjusted 355.8 billion. The government also revised upward the December number, noting that sales fell 0.1, less than the 0.3 decline reported previously. Retail sales did pick up fairly nicely in January, and that certainly is a good story, said Millan Mulraine, a TD Securities analyst. Clearly, we are not at the point where we believe consumer spending will drive the U.S. economic recovery . . . but we do think at some point down the road that's likely to be the case. Consumers are still feeling the sting of job losses and the difficulty getting access to credit, which fueled much of household spending during the boom. But recent easing in job losses and improving credit conditions have helped Americans feel slightly more comfortable about spending.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613900","date":"2010-02-16","texts":"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. So why hasn't China revalued Part of the answer is Japan. 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. 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. 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.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616986","date":"2010-02-16","texts":"Corrections & Amplifications A Sunday appearance by the band Guns N' Roses in connection with New York Fashion Week took place at the Gramercy Park Hotel. A Tuesday article about designers adopting heavier, warmer fabrics incorrectly identified the location as a John Varvatos boutique. WSJ February 19, 2010 This winter's unexpectedly cold weather has done more than raise mistaken doubts about global warming in some corners. It appears to have inspired several New York designers to turn back to heavier, warmer fabrics for the collections they plan to sell in the fall. Tweed, mohair and wool flannel are sweeping the runways at New York Fashion Week.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615054","date":"2010-02-17","texts":"The economic slump has yet to damp innovation in Silicon Valley, at least not by one widely followed measure patent production. Silicon Valley denizens received 13,231, or 7.9, of the total 167,350 utility patents granted in the U.S. in 2009, according to IFI Patent Intelligence, a unit of Wolters Kluwer Health that analyzes patent data from the U.S. Patent and Trademark Office. That is on par with Silicon Valley's share of patents nationwide in 2008 and 2007, according to IFI. Utility patents are typically granted to those who invent or discover a new and useful process or machine. Darlene Slaughter, IFI's general manager, said Silicon Valley's patent production was especially strong compared with other areas of the country, outstripping New York, for instance, which drew 5.3 of total utility patents in 2009. Texas generated 3.5 of such patents last year, and Massachusetts produced 2. The 2009 numbers could come as a relief to Silicon Valley executives and investors, who recall how the recession of the early 2000s crimped research and development.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616749","date":"2010-02-17","texts":"Like many Americans, Mike Ferrari says his retirement plans aren't what they used to be. Since the stock market crashed in September 2008, Ferrari, 49, is not only investing more conservatively than he used to, he is spending more time monitoring his investments. He is also putting off retiring for another three to six years to build up a larger starting nest egg. Why Things are just too risky these days, Ferrari says. The term 'playing the market' didn't used to mean that you were literally gambling. Now, with all of the derivatives -- and derivatives of derivatives -- one can be 100 on target about fundamentals, but still lose money because folks on the other side of the trade have not just hedged, but taken huge positions using derivatives. Ferrari, who co-owns the Integrity Group, a security consultancy in Pleasanton, Calif., says those positions have forced him to change his own. Normally, at this point in my life, I'd be 90 invested in the stock market I'd have bonds and real estate, as well, he says. Today, I'm just not feeling comfortable. He's not alone. Just 13 of workers surveyed in January of 2009 were very confident about having enough money to retire comfortably, down from 16 in 2008 and 27 in 2007, according to the Employee Benefit Research Institute's latest Retirement Confidence Survey. Another 44 of workers were split evenly between being not too confident and not at all confident about having enough for retirement. Current retirees were also feeling insecure about their savings. Only 20 of retirees expressed full confidence in having enough funds to last them through retirement, down from 29 in 2008 and 41 in 2007, according to the EBRI survey.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615496","date":"2010-02-18","texts":"The economic slump has yet to damp innovation in Silicon Valley, at least not by one widely followed measure patent production. Silicon Valley denizens received 13,231, or 7.9, of the total 167,350 utility patents granted in the U.S. in 2009, according to IFI Patent Intelligence, a unit of Wolters Kluwer Health that analyzes patent data from the U.S. Patent and Trademark Office. That is on par with Silicon Valley's share of patents nationwide in 2008 and 2007, according to IFI. Utility patents are typically granted to those who invent or discover a new and useful process or machine. Darlene Slaughter, IFI's general manager, said Silicon Valley's patent production was especially strong compared with other areas of the country, outstripping New York, for instance, which drew 5.3 of total utility patents in 2009. Texas generated 3.5 of such patents last year, and Massachusetts produced 2. The 2009 numbers could come as a relief to Silicon Valley executives and investors, who recall how the recession of the early 2000s crimped research and development.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617311","date":"2010-02-18","texts":"Beware inflated expectations. Investors are beginning to bet that a return of food-price inflation will boost grocery-store profits. Retailers can sometimes keep their percentage markups constant when input costs rise. The cost of food for home consumption does indeed look set for a rebound. After falling 2.4 last year, according to the Bureau of Labor Statistics, retailers are beginning to predict that it will resume its upward march. This week, Wal-Mart Stores said it expects food deflation to abate this year and Winn-Dixie forecast outright inflation in the second quarter. Friday's consumer-price index data for January could add to the evidence. This year could be more complicated than usual. First, the initial round of food inflation is likely to occur in perishables such as milk, whose price has already rebounded in recent months. Just as some grocers saw perishables volumes rise last year when prices fell, the reverse could be true if prices rise. Second, packaged-food prices could keep falling for some time. Even if raw ingredient costs begin to rise, many manufacturers have locked in lower raw-material prices using hedges. Meredith Adler of Barclays Capital estimates packaged food accounts for 40 of the average grocer's revenue. Finally, moves by the likes of Costco and Wal-Mart to sell more private-label products could damp food-price inflation.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616504","date":"2010-02-19","texts":"Federal Reserve officials stepped up efforts to assure markets that a Thursday increase in the discount rate, an interest rate it charges on emergency loans to banks, wasn't a signal that the central bank was trying to tighten credit more broadly. Stock-futures and credit markets initially reeled late Thursday when the Fed announced it was boosting the rate to 0.75 from 0.50 Thursday. But the stock market edged up Friday, with the Dow Jones Industrial Average rising 9.45 points to 10402.35, and prices for 10-year Treasury notes climbing, while their yields fell to 3.78. We made a very small technical change, Federal Reserve Bank of New York President William Dudley said Friday during a question-and-answer session after a speech in San Juan, Puerto Rico. The action yesterday Thursday was really an action about the improvement in banks. These institutions no longer need the emergency source of cheap funding as they did during the depths of the financial crisis, he said. The Fed described the Thursday move as a step toward further normalization in its emergency-lending programs initiated during the worst of the financial crisis. It follows the lapsing of unusual lending programs put in place during the crisis, such as one offering short-term loans to blue-chip companies. Officials chose to announce the discount-rate increase between scheduled meetings of its policy committee in part to underscore the clear separation between this move and the move--still in the future--to lift more economically significant rates, according to Fed insiders.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613734","date":"2010-02-20","texts":"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. 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. 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. A Blackstone spokesman declined to comment. 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.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616253","date":"2010-02-20","texts":"Consumer prices in the U.S. are barely rising, a boon to shoppers for everything from computers to clothing and a big reason that the Federal Reserve is willing to keep interest rates exceptionally low a while longer. Because of a spurt in energy prices, the consumer-price index rose 0.2 in January and has climbed 2.6 over the past 12 months, the Labor Department said Friday. But stripping out volatile food and energy prices, as policy makers do to gauge underlying trends, consumer prices actually fell by 0.1 in January, the first time that has happened since 1982. That so-called core-inflation measure was up a meager 1.6 in the past 12 months. There is just no inflation pressure in the U.S., so our focus has to be on growth and jobs, said William Dudley, president of the Federal Reserve Bank of New York, at an event Friday in San Juan, Puerto Rico. The absence of inflation partly soothed market fears -- sparked Thursday by an increase in an interest rate that the Fed charges on emergency loans to banks -- that the Fed might be on the verge of raising other short-term interest rates, especially its benchmark federal funds rate.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614959","date":"2010-02-24","texts":"It's no secret that the tea party faithful regard the Obama administration as a Constitution-shredding tyranny. But in a profile of the movement published last week, the New York Times reported the surprising news that many of the protesters have come to this view as a result of their experiences in the recession Their families upended by lost jobs, foreclosed homes and depleted retirement funds, they said they wanted to know why it happened and whom to blame. An account of a conservative uprising published a few days later by the Washington Post under the headline, Appalachia is slipping from grip of Democrats, told the story of a hard-bitten congressional district in western Virginia where the response to the recession has been a dramatic swerve to the right. The free-market system blunders into recession its victims flock to the free-market banner. And here we go again. The backlash against liberalism has been going on for more than 40 years. It is as immediate as this morning's newspaper but as old as those Silent Majority buttons you find at antique stores. Since the days of George Wallace, conservatives have been leading rebellions against hippies, against busing, against Hollywood, against property taxes, against welfare, against evolution, against whatever. The formula is familiar beyond the point of tedium Middle-American righteousness, resentment of liberal elites, weepy fantasies of persecution set to a country-music melody. Yet its power never wears off. Today conservatives are giddily anticipating another electoral disaster for the Party of the People.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615947","date":"2010-02-24","texts":"Treasury bills fell Tuesday, pushing up yields, as the government announced an unexpected increase in supply to fund a temporary borrowing program. The fall in bills contrasted with the gains seen in Treasury securities that mature in more than a year, which benefited from renewed worries about the economic recovery in the U.S. and elsewhere -- concerns that helped attract buyers to the Treasury's sale of 44 billion in two-year notes. The Treasury's increase in the size of its Supplementary Financing Program, or SFP, from 5 billion to 200 billion in the next two months, will come as relief to money-market funds, which have been stymied by a lack of supply and short-term yields near zero percent. These funds, which are required to buy financial assets maturing in a year or less, have seen outflows of more than 400 billion over the past year. Tuesday's announcement will help to put some air under short-term rates, said Ward McCarthy, chief financial economist within the fixed-income group at Jefferies & Co. Short-term rates are so low that it is difficult for investors in short-term instruments, such as the T-bill sector, to make any money. The Supplementary Financing Program was initially set up in September 2008 at the height of the financial crisis and was used to provide funding to the Federal Reserve to support its liquidity programs to rescue banks and the credit markets. Late last year, as the federal government's borrowing approached the debt ceiling, Treasury scaled back the program to 5 billion. Earlier this month, Congress raised the debt ceiling by 1.9 trillion to 14.3 trillion, allowing the program's resumption.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613869","date":"2010-02-25","texts":"A surge in durable goods orders showed life in the manufacturing sector, while claims for jobless benefits rose, another troublesome sign for the labor markets. Manufacturers' orders for goods designed to last three years increased 3.0 last month, to a seasonally adjusted 175.75 billion, the Commerce Department said Thursday. Economists surveyed by Dow Jones Newswires had projected a 1.5 climb in durables, which include cars, computers, and toasters. Over the course of the year, new orders have been gently climbing amid substantial volatility, suggesting that new orders have troughed and are now recovering after falling significantly in 2008, Insight Economics analyst Steven Wood said. But the report had its soft spots. Orders for nondefense capital goods excluding aircraft, for instance, fell, by 2.9. The orders are seen as a barometer of capital spending by businesses. Non-defense capital goods excluding aircraft shipments, used in calculating gross domestic product, fell 1.5. The declines caused Macroeconomic Advisers to lower its tracking forecast of gross domestic product growth in the first quarter, by one-tenth to 3.0.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616626","date":"2010-02-25","texts":"HONG KONG -- John Tsang, Hong Kong's financial secretary, warning against an increased risk of a bubble forming in the property market, raised taxes on luxury-home transactions and announced plans to loosen its land-auction policies. The measures elicited mixed reactions, with some critics saying they didn't go far enough in addressing a growing problem. Stock investors shrugged off the comments Wednesday, pushing shares of property developers higher even as the broader market weakened. Residential property prices soared nearly 30 last year due to an influx of foreign funds and ultra-low interest rates. Hong Kong, with its freely convertible currency, has become a magnet for foreign investors looking to capitalize on growth in mainland China, which maintains strict foreign-exchange controls. Mr. Tsang said Wednesday that the government will raise the transaction tax on luxury apartments valued at more than HK20 million, or US2.6 million, to 4.25, from 3.75, warning that officials would extend the tax to the mass market if there is excessive speculation in the trading of these properties. He also said the government would tinker with its land-auction system to increase land supply for residential development. Lau Kwok-yu, a professor at the City University of Hong Kong specializing in housing policy, said that the housing policy measures announced Wednesday were very modest and limited. The only thing I can say for certain is that the measures aren't going to meet the needs of the mid-to-low end of the market, Mr. Lau said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616050","date":"2010-02-28","texts":"Every few years, critics say Warren Buffett has lost his touch. He's too old and too old-fashioned, they claim. He doesn't get it anymore. This time he's wrong. It happened during the dotcom bubble, when Mr. Buffett was mocked for refusing to join the party. And it happened again last year. As the Dow tumbled below 7,000, Mr. Buffett came under fire for having jumped into the crisis too early and too boldly, making big bets on Goldman Sachs and General Electric during the fall of 2008, and urging the public to plunge into shares. Now it's time for those critics to sit down for their traditional three course meal humble pie, their own words and crow. On Saturday, Mr. Buffett's Berkshire Hathaway reported that net earnings rocketed 61 last year to 5,193 per share, while book value jumped 20 to a record high. Berkshire's Class A shares, which slumped to nearly 70,000 last year, have rebounded to 120,000. Those bets on GE and Goldman They've made billions so far. And anyone who took Mr. Buffett's advice and invested in the stock market in October 2008, even through a simple index fund, is up about 25.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616531","date":"2010-03-03","texts":"U.S. Treasury debt has been a surprising standout investment so far this year, but further gains may get tougher from here. Ten-year Treasury notes returned nearly 2.7 through the end of February, according to Bank of America Merrill Lynch indexes, outstripping returns in the stock and corporate-debt markets. Worries about Greek debt and of the U.S. economy pushed investors back into the ultimate safe-haven asset, outweighing anxieties about government deficits and the potential inflationary risks of ultralow Federal Reserve interest rates. Still, Treasury returns this year are small in comparison with their moves in 2008 and 2009. And most analysts don't see an easy path to bigger gains, barring another financial crisis. The market is not very emotional at this point, said David Ader, head of government bond strategy at CRT Capital.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616938","date":"2010-03-07","texts":"The dollar is expected to advance against the yen but struggle against the euro this week after encouraging U.S. jobs data renewed investors' confidence in the global economic recovery. The main beneficiaries of the more positive outlook for growth are likely to be higher-yielding currencies such as the Australian and New Zealand dollar, which already Friday posted solid gains as investors, emboldened by the better-than-expected reading on the U.S. labor market, returned in strength to growth-sensitive assets. The euro could also benefit--at least against the dollar and the yen--though much will depend on further developments in Greece, with investors still concerned over the debt-laden nation's ability to significantly shrink its budget deficit as demanded by the European Union. The yen, the classic refuge in times of trouble, is set to decline further against the dollar. I think the U.S. dollar is going to stay pretty heavy against the euro, said Daniel Katzive, foreign-exchange strategist at Credit Suisse in New York. But against the yen, after the jobs report, it's going to be pretty well supported, he said. With prospects looking better for global recovery, but the U.S. data calendar rather light this week, attention will continue to focus on the resolution of Greece's fiscal woes. Analysts see the single currency moving between 1.35 and 1.37, while the dollar holds between 89 yen and 92 yen.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616204","date":"2010-03-08","texts":"Financial conditions have started to tighten sharply again. Or so says a new financial conditions index produced by a group of academic and Goldman Sachs economists. And that's important, because financial conditions are a significant determinant of overall economic performance. Financial conditions indexes already exist. In fact there's a plethora that have been developed by investment banks and economic agencies or consultancies. They try to measure the degree to which changes in credit availability, interest rates, risk premia, money supply, wealth effects and other factors are likely to influence future economic activity. Analysis shows they don't work particularly well as predictors of real economic activity. The new index tries to get around these problems by, among other things, broadening the data series included and by trying to strip out the effects of past changes in economic activity that affect the financial variables. In other words, it's looking for evidence of financial shocks rather than the normally dynamics of financial indicators, which tell us plenty about the past but not a lot that's new about the future. Having done that, the new indicator diverges substantially from the existing ones. Established FCIs show that general financial conditions are back to normal or even better than normal. The new index points to a big deterioration during the past quarter, retracing nearly half of last year's big rebound.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616711","date":"2010-03-08","texts":"The dollar is expected to advance against the yen but struggle against the euro this week after encouraging U.S. jobs data renewed investors' confidence in the global economic recovery. The main beneficiaries of that more-positive growth outlook are likely to be higher-yielding currencies such as the Australian and New Zealand dollar, which advanced Friday as investors, emboldened by the better-than-expected reading on the U.S. labor market, returned in strength to growth-sensitive assets. The euro could also benefitat least against the dollar and the yenthough much will depend on further developments in Greece, with investors still concerned over the debt-laden nation's ability to significantly shrink its budget deficit as demanded by the European Union. The yen, the classic refuge in times of trouble, is set to decline further against the dollar. I think the U.S. dollar is going to stay pretty heavy against the euro, said Daniel Katzive, foreign-exchange strategist at Credit Suisse in New York. But against the yen, after the jobs report, it's going to be pretty well supported, he said. With the U.S. data calendar rather light this week, attention will continue to focus on the resolution of Greece's fiscal woes. Analysts see the euro ranging from 1.35 to 1.37, and the dollar from 89 yen to 92 yen.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613729","date":"2010-03-09","texts":"Investors celebrating the new bull market's first birthday on Tuesday may remember a less happy milestone on Wednesday the 10-year anniversary of the peak of the technology-stock bubble. The great debate among stock-market analysts these days is whether the market has finally worked off years of excessive prices and can return to steady growth. Optimists argue that two brutal bear markets have left stocks cheap and attractive, especially if the government's economic-recovery initiatives succeed. They say investors who were too optimistic in the 1990s are too pessimistic now, and that a recovery in corporate performance could offer investors happy surprises. But some of those who warned of trouble a decade ago are worried again today. They say government interventions in the economy and the market in 1998, 2001 and 2008 kept stocks from fully correcting. Some see signs of bubbles starting to inflate again, notably in certain developing-country stocks. This uncertainty has fueled a prolonged debate between two old friends, renowned economists Robert Shiller and Jeremy Siegel. They say they've been chewing over the issue during vacations together at the New Jersey shore. Mr. Shiller, a Yale University professor whose book Irrational Exuberance warned of the tech bubble just before it burst in 2000, still worries about the market's future. Prof. Siegel of the University of Pennsylvania's Wharton School, whose book Stocks for the Long Run was the bible for many investors in the 1990s, is bullish.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615080","date":"2010-03-09","texts":"PENNSYLVANIA Democrats Pick Nominee To Fill Murtha's Seat Pennsylvania Democrats have chosen former congressional aide Mark Critz as the nominee for a special election to fill the U.S. House seat once held by late Rep. John Murtha. Party officials cite Critz's weekend victory in a nonbinding straw poll by local party members. Chairman T.J. Rooney calls Critz a phenomenal candidate and says the party looks forward to a spirited and exciting race.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614837","date":"2010-03-11","texts":"NEW YORK--The Treasury's 21 billion 10-year note sale Wednesday afternoon saw some of the strongest demand since at least the 1980s, helping long-dated Treasury securities recoup most of their early losses. The whole market, however, remained lower ahead of Thursday's 13 billion 30-year bond auction. The 10-year note auction, an additional sale of the offering in February, drew 72.47 billion in bids--3.45 times the amount on offer. It followed a strong auction of 40 billion in three-year notes a day earlier. Demand from foreign investors, including central banks, was stronger than the recent average in both auctions, allowing the U.S. government to continuously fund an unprecedentedly high budget deficit at historically low borrowing costs. Wednesday afternoon, the U.S. government reported its largest-ever monthly budget deficit in February as the country's fiscal year-to-date deficit ballooned more than 10 to a record of 651.60 billion. The strong bid is even more impressive given the heavy load of corporate bond supply competing for investors' money. More than 25 billion of new corporate debt supply has flooded the fixed-income market since Monday. Even in the euro zone, easing worries about fiscal and debt problems helped Portugal sell euro990 million of a long-maturity government bond after planning to sell only euro750 million. The response to this auction was just astounding to us, and once again confounds those equating large issuance with a spike in yields, said Dan Greenhaus, chief economic and bond strategist at Miller, Tabak & Co. in New York. That is not to say higher yields won't materialize eventually, but for now, the Treasury is incredibly able to bring monster amounts of debt to market with almost no difficulty.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615418","date":"2010-03-11","texts":"Companies are aggressively borrowing in the debt markets once again -- a sign of renewed confidence in the world economy following recent fears that struggling European countries could have difficulty financing their budget deficits. In the U.S., bond sales by companies such as Bank of America Corp. and GMAC Financial Services are on pace to conclude their busiest week since the beginning of the year. In Europe, borrowing by companies so far in March is already more than 60 of February's totals. It tells us that financial liquidity is very much on the rise, said John Lonski, chief economist at Moody's Investors Service. No longer do corporations suffer from a dearth of liquidity. This puts them in a better position to take advantage of opportunities that arise. So far in 2010, U.S. corporations have issued 195.2 billion of debt, excluding government-guaranteed bonds, according to data provider Dealogic, up from 166.8 billion during the same period in 2009. The resurgence of the corporate debt markets comes after a shaky February, when several companies were forced to delay bond sales as worries about Greece's problems sent investors fleeing to safer assets such as U.S. Treasurys. Those concerns have subsided and money is again flowing into corporate bond funds, giving managers cash to invest. Risk premiums, the extra interest corporate borrowers pay over U.S. Treasurys, are falling again for corporate bonds. This allows companies to seize the opportunity to borrow cheaply. The raft of sales point to an increase in economic activity as companies can use the money on new business spending, hiring and mergers. That's good news for companies eager to reduce their cost of borrowing and extend the life of their debt.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616825","date":"2010-03-11","texts":"European stocks closed lower Thursday as investors fretted about potential tightening of monetary policy in China, the country which has been the main driver of global growth, while lackluster U.S. economic data weighed on Wall Street. The pan-European Stoxx Europe 600 Index declined 0.3 to 257.55, while the U.K.'s FTSE 100 Index fell 0.4 to 5617.26, France's CAC-40 Index declined 0.4 to 3928.98, and Germany's DAX eased 0.1 to 5928.63. Late in Europe, the Dow Jones Industrial Average was down 0.12 at 10,556.07. Asian stocks were mixed coming into Europe's trading day. At the same time, the dollar strengthened against the euro, but slipped slightly against the yen, as U.S. trade data showed a shrinking trade deficit, mainly due to slowing imports, prompting concern about the pace of the U.S. recovery. In addition, weekly jobless claims data showed a smaller-than-expected drop. On Friday, investors will look out for the University of Michigan Consumer Sentiment measure in the U.S. as well as European industrial production figures. Early Thursday, strong economic readings out of China reignited concerns that Beijing may try to curb growth in order to damp potential excesses. China's consumer price index rose a higher-than-expected 2.7 in February and industrial production surged 20.7 in the first two months of the year compared with the year-earlier period.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982331","date":"2010-03-12","texts":"Senate banking committee Chairman Christopher J. Dodd D-Conn. said Thursday he will move forward next week with sweeping legislation to revamp the nation's financial regulatory system, despite failing to resolve key differences with Republicans. Although Dodd said he will continue bipartisan talks, unveiling the measure on Monday puts pressure on GOP senators by creating a sense of urgency and forcing the debate into the open. Republicans opposed to key elements of the bill, such as new protections for consumers, would have to make their case publicly. After months of talks, the two sides have been unable to reach final agreement over the enforcement powers of a new consumer watchdog, the scope of the Federal Reserve's regulation over banks and the financing of a new authority that would allow the government to wind down large, troubled financial firms without cost to taxpayers. Dodd said he decided to introduce his bill so the committee could begin discussing it before the Easter recess in early April. He also had been facing pressure from liberals who feared he was compromising too much during recent negotiations. Clearly, we need to move along . . . as time moves on, it does limit the possibility of getting something done, Dodd told reporters. The idea of putting something on the table is not a reflection of something breaking down. Quite the opposite.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615971","date":"2010-03-16","texts":"NEW YORK--The Treasurys market rallied Tuesday after the Federal Reserve reined in rate-increase speculation by reiterating its firm pledge to keep interest rates low to help the economy recover. Prices of short-dated Treasurys rose and yields fell after the Federal Open Market Committee kept its key policy rate, the federal-funds target rate, in a range of zero to 0.25 for an extended period. Short-dated maturities, especially the two-year sector, are the most sensitive to changes in official rate outlook. Short-dated Treasurys suffered a bout of selling in the run-up to the Fed's meeting as many investors bet policy makers would tweak their commitment to keeping rates exceptionally low for an extended period to reflect the improvements in the economy. Changes to this language are seen as paving the way for an eventual tightening in monetary policy. But with the Fed repeating its low-rate stance, these investors were forced to buy short-dated Treasurys to cover their bets on further bond-price declines. There is a bit of a relief rally, said Ted Ake, head of Treasury and agency trading in New York at Societe Generale SA. This release is telling the market that it will be at least six to nine months before they are ready to tighten.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614597","date":"2010-03-17","texts":"NEW YORK--The dollar declined against higher-yielding currencies, as bets that interest rates will remain ultralow in the U.S. and Japan for a while prompted investors to snap up growth-sensitive assets. The Australian dollar hit a nearly two-month high against the greenback, while the Canadian currency moved closer to parity against the dollar, which dipped as low as 1.0070 Canadian dollars, a 20-month low. The New Zealand dollar jumped as much as 1, before relinquishing some of the gains. With the U.S. renewing its intention to keep U.S. rates near zero until later in the year at the earliest, combined with Japan's further loosening of policy, investors are a bit more optimistic about the outlook for the global recovery, said Joe Manimbo, a currency strategist at Travelex Global Business Payments in Washington. The rally in riskier assets comes in the wake of the Federal Open Market Committee's policy meeting Tuesday, when it affirmed its pledge to keep interest rates low for an extended period. The Bank of Japan also left rates unchanged and added further monetary stimulus as part of its attempt to fight deflation. The dovish status quo from the Fed remains the best recipe for market risk appetites and further equity-market gains, said Vassili Serebriakov, a currency strategist at Wells Fargo in New York.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615520","date":"2010-03-17","texts":"MUMBAI --Tata Consultancy Services Ltd. isn't seeing any rise in staff departures, a senior executive said Wednesday, unlike its competitors where employee resignations have increased as a revival in demand for outsourcing services has opened up more job opportunities. Staff resignations had fallen during the economic crisis when most software companies froze recruitments and fired people as they cut costs to wade through the slowdown. But most of the companies are now back in the market for hiring staff as they get new orders. Tata Consultancy is India's largest software exporter by revenue. Last week, its nearest rivals Infosys Technologies Ltd. and Wipro Ltd. confirmed that staff resignations have risen in the past three months. In a bid to control the rise in staff resignations, most technology companies are offering a raise in salaries. While Infosys increased staff pay in October and is considering another hike in April, Wipro raised salaries in February. We will announce a salary hike in April, Tata Consultancy Chief Financial Officer S. Mahalingam told reporters on the sidelines of an industry conference. He didn't say what will be the quantum of the pay raise.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983105","date":"2010-03-17","texts":"The Federal Reserve stood by its policy of keeping interest rates at rock-bottom levels for the foreseeable future at its policymaking meeting Tuesday even as central bank officials took a more positive tone about the economy. The Federal Open Market Committee left its target for short-term interest rates near zero, where it has been for the past 15 months. Fed officials also repeated language from previous statements that rates are likely to remain exceptionally low for an extended period, which they have said means at least six more months. The Fed will also go forward with a plan to end its support for the mortgage market at the end of March. By then, the central bank will have completed the purchase of 1.25 trillion in mortgage-backed securities, a key factor in keeping interest rates low for those buying a house. On balance, the Fed's assessment of the economy seemed slightly better than it had been at the last policy meeting, in late January. Recent data suggest that the labor market is stabilizing, the statement accompanying the rate decision said. At the January meeting, the Fed had said that deterioration in the labor market is abating. The unemployment rate has edged down in recent months to 9.7 percent, and forecasters expect the nation to have added jobs in March.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616834","date":"2010-03-20","texts":"The stock market's most closely followed volatility index dropped this past week to its lowest level in nearly two years. Some investors who study volatility believe low readings are a bullish indicator for stocks. Historically, the market has tended to rise as volatility falls, and vice versa. So the latest numbers are a surefire buy signal, right Not necessarily. Dig a little deeper and you might even spot a contrarian indicator telling you to sell. The Chicago Board Options Exchange's volatility index, or VIX, is a gauge of investor sentiment. But its predictive power is limited to tallies of trades that have been made in the past. The VIX is an important tool, says Ben Londergan, co-chief executive of Group One Trading. But it's not the be-all and end-all factor to time your entrances and exits to the market. The index, launched in 1993 with data stretching back to 1990, moves up and down depending on the price that investors are paying for options on the Standard & Poor's 500-stock index. When investors buy bearish options on the S&P, known as puts, the options become more expensive and the VIX moves higher. Conversely, when investors sell those put options on the S&P, the options become less expensive and the VIX moves lower. Traders' Expectations","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617133","date":"2010-03-21","texts":"THIS WEEK Faster Phone Sprint Nextel will unveil the Supersonic, a 4G cellphone that works on a faster wireless network, at an industry conference this week. Finance Bill Sen. Christopher Dodd D., Conn. hopes the Senate Banking Committee can begin voting this week on a bill that would give the government more power to crack down on risky practices and give the Federal Reserve a leading role in monitoring the financial system. Consolidation On Thursday, a U.S. judicial panel will begin consolidating consumer lawsuits against Toyota Motor. LAST WEEK","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617282","date":"2010-03-21","texts":"U.S. President Harry S Truman, weary of hearing his economists conclude on the one hand, but then on the other hand, famously asked for a one-armed economist. He's fortunate he never found one. For any economist who feels certain about his reading of the economic tea leaves, who sees no other hand, is, to put it mildly, more than a little overconfident. All by way of excuse for this attempt to figure out just what is going on in the European Union and euroland. On the one hand, things are brighter than they were last year, when the areas' economies were contracting at a rapid rate. No one is expecting that dismal performance to be repeated this year or next. But on the other, neither is anyone expecting anything like satisfactory growth. The Economist Intelligence Unit is guessing that growth will be at an annual rate of 1.0 and 1.1, this year and in 2011, respectively. The move out of recession is the result of an increase in exports. On the one hand that's good news Otherwise, the EU economies would continue to shrink. But on the other hand, some of the increased exports, especially those from Germany to other euro-zone countries, are exacerbating serious imbalances. Germany's trade surplus with its EU partners is causing serious problems, especially for the struggling periphery countries. Germany's...trading partners cannot sustain deficits forever, notes the Economist.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616987","date":"2010-03-24","texts":"Deciding on which country's debt to invest in comes down to three basic points, said bond king Bill Gross, which include a central bank's ability to use low or negative real interest rates to reflate its economy without creating a currency crisis. In his monthly missive, the managing director of Pacific Investment Management Co. said, 2010 promises to be the year of choosing 'which government' can most successfully substitute the governments' fist for Adam Smith's invisible hand and for how long. Can individual countries escape a debt crisis by creating even more debt and riding another rocking horse winner Can the global economy To figure that out, Mr. Gross wrote there are many conditions, and they vary by country, but they boil down to three --Can a country issue its own currency and is it acceptable in global commerce --Are a country's initial conditions outstanding debt, structural deficit, growth rate, demographic balance moderate and can it issue future public debt as a substitute for private credit","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984741","date":"2010-03-24","texts":"New census statistics released Tuesday show that the Washington region's population has continued to grow at a brisk pace since the onset of the economic downturn, another indicator that the area has weathered the recession better than other parts of the country. In the two years preceding July 1, 2009, the region added 163,000 people, bringing the total to almost 5.5 million residents -- a growth rate of about 3 percent, faster than that of any other Eastern Seaboard city. Metropolitan New York, Philadelphia and Baltimore all grew by less than 1 percent during the same period, and the Boston area's population increased by about 2 percent. The two-year period encompasses a year and a half of the recession, which officially began in December 2007. While the Washington area has shed jobs, it has lost far fewer than other metropolitan areas, said John McClain, deputy director of the Center for Regional Analysis at George Mason University. The region was down 29,000 jobs in January, compared with January 2008. During the same time, New York lost 224,000 jobs, Boston lost 62,000 and Baltimore was down 35,000 positions. It's got to be people moving here for jobs, McClain said of the population jump. We are the healthiest economy of the whole country, in terms of how we have fared during the recession, relative to jobs.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615357","date":"2010-03-25","texts":"WASHINGTON--Bruce Reed, a former Clinton administration official who now heads the centrist Democratic Leadership Council, has been tapped to be executive director of President Barack Obama's fiscal commission. Mr. Reed's appointment, announced Thursday in a statement by panel co-chairs Alan Simpson and Erskine Bowles, rounds out the bipartisan commission, whose 18 sitting members have already been named by Mr. Obama and congressional leaders from both parties. The group, created in an executive order last month, has been given the task of finding ways to bring down the U.S.'s soaring deficit, with a goal of slashing the budget gap to around 3 of gross domestic product from its projected level of around 11 this year. The panel will send its recommendations, likely to be a mix of tax increases and cuts to federal benefit programs Medicaid, Medicare and Social Security and other federal spending, to Congress by Dec. 1. Mr. Reed was President Bill Clinton's top domestic-policy adviser, helping to write the 1996 welfare-reform bill and enact the administration's education agenda. More recently, he co-authored a book with Rahm Emanuel, Mr. Obama's chief of staff. The Commission will benefit from Bruce's years of experience in public policy to help us complete our challenging and crucial work, Mr. Simpson said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616274","date":"2010-03-25","texts":"Companies boosted their orders for capital goods such as machinery and computers in February, in an encouraging sign that U.S. business is confident enough to support the economic recovery. A key barometer of business investment -- orders for nondefense capital goods, excluding aircraft -- rose 1.1 last month, erasing part of a sharp drop in January, the Commerce Department said Wednesday. Overall orders for durable goods -- long-lasting items ranging from semiconductor chips to semi-trailer trucks -- rose 0.5 to a seasonally adjusted 178.12 billion. The uptick in capital-goods orders added to economists' hopes that rising business spending can help lead the recovery, compensating for cautious consumers and a moribund housing market. So far, though, the pace of the business-sector expansion doesn't appear to be fast enough to drive a sharp economic rebound.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614793","date":"2010-03-28","texts":"The struggling housing market appears as if it will sustain less damage than expected this year from a spike in the monthly payments on hundreds of thousands of exotic adjustable-rate mortgages. The number of such loans scheduled to adjust to higher payments this year has shrunk. Lower-than-expected interest rates, coupled with efforts to aggressively modify loans, are likely to mute payment shocks for some borrowers. Many others already have defaulted on their loans even before their payments adjusted upward. The peaks of the reset wave are melting very quickly because the delinquency and foreclosure rates on these are loans are already very high, says Sam Khater, senior economist at First American CoreLogic. The housing market still faces enormous challenges, and a full recovery is likely to take years. The threat posed by resetting payments, Mr. Khater says, is a drop in the bucket compared to problems posed by the sheer volume of borrowers who owe more than their homes are worth, known as being under water. Still, for years, housing analysts have worried about the threat of an aftershock from a big spike in mortgage defaults from so-called option adjustable-rate mortgages, which require low minimum payments before resetting to sharply higher levels, and interest-only loans, for which no principal payments are due for several years.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616937","date":"2010-03-28","texts":"Superhero movies usually include a disturbing phase when the savior-figure becomes overwhelmed by opposing forces. But, right now, the market sees no such upset for Brilliant Ben and the Fantastic Federal Reserve, as they continue their rescue of the U.S. economy. Mr. Bernanke's extraordinary policies have undeniably succeeded in persuading investors to plow their cash hoard into riskier assets. The S&P 500 has leapt a staggering 43 in a year. Junk bonds currently yield 5.85 percentage points more than adjusted Treasury yields, according to Bank of America. That's far tighter than the 9.61 percentage points seen nine months after the 2001 recession. Indeed, only 18 months after debt markets shut down completely, companies now seem to believe that they will be open indefinitely. For instance, Fitch Ratings recently noted that corporate borrowers have started to wait to renegotiate expiring credit facilities, believing they'll get better terms in the future. The bull thesis is seductive. The easy money is creating self-sustaining growth in the real economy that will in turn provide the earnings needed to keep stock and bond prices rallying. And if first-quarter earnings exceed expectations, the upswing will likely continue. What's obvious, though, is that investors are giving little credence to the idea that the Fed could slip up. Such trust might yet prove justified. A double-dip recession doesn't look imminent. Meanwhile, the market can take comfort from the fact that the Fed hasn't allowed a serious inflation break-out since the 1970s.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614327","date":"2010-03-29","texts":"Apple Inc. shares set an all-time high Monday as investors look ahead to the launch of the iPad tablet computer at the end of the week. Apple shares hit 233.87 in morning trading on the Nasdaq stock market. By midafternoon shares had eased to 232.13, up half a percent on the day. The stock has risen about 15 since the company introduced the iPad at a media event in late January, and has more than doubled from its level at this time last year. The iPad goes on sale in the U.S. Saturday at prices from 499 to 829, depending on memory and options. Apple says the device will be sold online through its Web site, at its retail stores and at most stores owned by Best Buy Co., its retail partner for the launch. Expectations for the device are high. Analysts for Morgan Stanley wrote in a note Monday they expect Apple to ship about 2.5 million units in its first quarter on the market, and more than 6 million units this year. Lead analyst Katy Huberty estimates that every 1 million units equates to 25 cents a share on the company's bottom line. Recent upward revisions to iPad-build rates point to strong initial preorders, and should help deliver upside relative to consensus expectations in the June quarter and calendar year 2010, she wrote.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613920","date":"2010-03-30","texts":"TOKYO -- Astellas Pharma Inc. said Tuesday it has agreed to obtain non-public information from OSI Pharmaceuticals Inc. in exchange for freezing its takeover attempt. Japan's second largest pharmaceutical company by sales said it agreed to OSI's standstill provision prohibiting any attempt to buy OSI shares through May 15, shortening the standstill period to six weeks from the two years OSI had originally wanted. The agreement keeps alive Astellas' hope to buy the U.S. cancer drug maker by allowing it to more accurately estimate OSI's value and make a fresh offer in as soon as six weeks. It also gives OSI more time to find a buyer willing to top the Japanese company's 52-a-share offer. OSI's new stance on the non-disclosure provision comes after a recent recommendation by the company's board to management. Extending its takeover attempt could improve Astellas' chances to successfully acquire OSI. Analysts didn't see 52 as an attractive offer, considering the recent OSI share price of around 59 on the Nasdaq stock market. With a more accurate evaluation of OSI and a fresh offer price, Astellas has a better chance of convincing OSI shareholders to tender their shares.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982138","date":"2010-03-31","texts":"Robert L. Ehrlich Jr. said Tuesday that he will try to win his old job back in November, confirming plans for a much-anticipated rematch with Maryland Gov. Martin O'Malley, who defeated him in a bitter contest four years ago. A formal announcement, planned for next Wednesday in Montgomery County, will set up a rematch between two of the state's dominant political personalities. Both are fierce competitors. Their 2006 race was highly negative and at times intensely personal, with Ehrlich R repeatedly calling O'Malley a whiner and running ads that highlighted the homicide rate and struggling schools in Baltimore, where O'Malley was mayor. O'Malley D accused Ehrlich of dirty tricks and portrayed him as cozy with energy lobbyists and an unpopular President George W. Bush. Ehrlich said Tuesday that he plans to run a forward-looking campaign, disputing characterizations of the race as a grudge match. The last thing that people want to see is a schoolyard, middle-school, who-struck-John, bully stuff right now, he said. They want to hear your ideas about how you're going to fix it. They want to hear about your ideas about what you want to do.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616826","date":"2010-04-01","texts":"WASHINGTON -- U.S. Treasury Secretary Timothy Geithner and Federal Reserve Vice Chairman Donald Kohn will meet with a range of financial leaders to discuss bilateral economic policies between the U.S. and India, a senior Treasury official said Wednesday. Mr. Geithner and Mr. Kohn will travel to India April 6-7 and are slated to meet with Prime Minister Manmohan Singh in New Delhi. The U.S. officials will take part in economic and financial partnership discussions--in particular, infrastructure investments. The senior Treasury official said the U.S. and India can learn from each other's infrastructure investment strategies. For instance, how the U.S. uses municipal bonds to fund infrastructure projects can be useful to Indian authorities, the official said. U.S. officials are adamant about increasing mutual understanding and cooperation with India, which is a top reason the Fed's Kohn is participating in the Treasury Department's trip. An exchange of views and information on financial markets and financial institutions, as well as on macroeconomic policies and prospects, are critical to this mutual understanding, a Federal Reserve official said, noting that the Fed is uniquely positioned to provide the U.S. perspective.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614910","date":"2010-04-02","texts":"NEW YORK -- U.S. stocks climbed broadly as better-than-expected data on jobs and manufacturing lifted a broad swath of stocks, including Walt Disney and Alcoa. The Dow Jones Industrial Average rose 70.44 points, or 0.7, to 10927.07, the highest close since Sept. 26, 2008. With the stock market closed Friday, the Dow finished the trading week up 0.7, its fifth consecutive week of advances. That is the Dow's longest weekly winning streak since April 2009. The measure was led by some of its most economically sensitive components. Alcoa was the best performer, jumping 46 cents, or 3.2, to 14.70. Disney climbed 64 cents, or 1.8, to 35.55, and Caterpillar rose 1.14, or 1.8, to 63.99. The Nasdaq Composite Index rose 4.62, or 0.2, to 2402.58. The measure climbed 0.3 this week, the fifth week in the black in a row and the longest weekly win streak since May. The Standard & Poor's 500 stock index rose 8.67, or 0.7, to 1178.10, the highest close since Sept. 26, 2008. All of the S&P 500's sectors ended in the black, led by materials and energy. It rose 1 this week for its fifth positive week.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615193","date":"2010-04-02","texts":"The job market is showing signs of life, though its slow recovery suggests unemployment will remain high for years to come. Employers added 162,000 jobs in March, the biggest monthly gain in three years, with one-third of the growth coming from the government's hiring of 48,000 temporary workers for the 2010 Census. Despite those gains, the jobless rate held steady at 9.7 as new workers entered the job market and people who had previously quit the labor force returned. The average length of unemployment rose last month to the highest point since record keeping began in 1948 more than 31 weeks. The number of workers out of work for six months or more rose sharply. The latest report, which marks the third month since November in which payrolls increased, indicates the labor market is pulling out of a deep downturn that slashed more than eight million jobs since the recession hit in late 2007. It confirms that the economy has turned an important corner, says J.P. Morgan Chase & Co. chief economist Bruce Kasman. It's been growing for a while, but I think what we're seeing is that this growth is now broadening out to include jobs.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615624","date":"2010-04-02","texts":"New jobs numbers will be released Friday morning, and they are expected to show, at last, some significant creation of new jobs. A cheer will go up at the White House at this sign that the long climb out of the recession's unemployment hole may have begun. But any cheering will be tempered by nagging concern over an insidious problem lurking within the numbers the startling number of Americans who have fallen into the ranks of not just the unemployed, but the long-term unemployed. The numbers of long-term unemployed--defined as those unable to find a job for six months or longer--are swelling because of the peculiar causes and character of this deep recession. The consequences are troubling The long-term unemployed tend to be particularly hard to get back into jobs, and they generate their own set of social problems along the way. President Barack Obama and his team are particularly worried about the phenomenon, and have set out to find ways to combat it. But they're finding policy prescriptions limited by politics and money. Statistics from the Bureau of Labor Statistics tell the grim story. The number of long-term unemployed in February rose to more than six million, fully double the number in the same month one year earlier.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616624","date":"2010-04-05","texts":"The stock market's powerful rally over the past year has gone a long way toward reducing the losses that many mutual-fund investors suffered in late 2007 and 2008. But the rebound--with the Standard & Poor's 500-stock index up 74 from its March 9, 2009, low--has done nothing for one group of investors those who bailed out of stocks and have remained on the sidelines. Some of these investors have poured large sums into bond funds, even though those holdings may take a beating whenever interest rates rise from today's unusually low levels, possibly later this year. Some forecasters, meanwhile, believe that stocks may finish 2010 up as much as 10. So, for investors who want to step back into stocks but are still anxious, here's a modest suggestion You don't have to take your stock exposure straight up. You can dilute it by buying an allocation fund that spreads its assets across many market sectors, from stocks and bonds to money-market instruments and convertible securities. Such funds typically have less dramatic swings than pure stock vehicles. And you will never be in a situation where everyone did well except you because you were in the wrong market niche,'' says Ned Notzon, who oversees allocation strategies at T. Rowe Price Group Inc. The most cautious of these offerings, classified as conservative allocation funds by Morningstar Inc., may hold as little as 20 in stocks--and that number doesn't usually change much over time.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614535","date":"2010-04-06","texts":"NEW YORK--Prices of Treasury debt were up Tuesday afternoon but fell below the highest levels of the day, failing to benefit from strong demand on a 40 billion sale of three-year notes. Investors braced themselves for the minutes for the March rate-setting policy meeting due at 2 p.m. EDT. Federal Reserve Bank of Minneapolis President Narayana said that the central bank will need to sell its mortgage-backed securities at some point as part of the efforts to normalize its bloated balance sheets and easy monetary policy. The amount of bids for the three-year notes auction was 3.1 times the amount on offer, compared with 3.13 last month and 2.83 in February. Indirect bidders, a proxy for demand from foreign buyers including central banks, took 52 of the supply, compared with 51.8 in March and 51.2 in February. The direct bidders, a category including non-primary dealers, banks, money managers and depository institutions who have direct accounts to submit bids to the Treasury auctions, was 11, compared with 10.3 in March and 10.1 in February. This was a solid auction that hit all of the six-auction averages above, said William O'Donnell, head of U.S. government bond strategy at RBS Securities in Stamford, Conn.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617095","date":"2010-04-06","texts":"Betting on inflation Better mind the gap. Tuesday's release of minutes from the Federal Reserve's March meeting may give some hints if policy makers are getting on board with the idea of a sustainable U.S. recovery and the threat of inflation. Investors already are there. On Monday, the yield on 10-year Treasury notes punched through 4 for the first time since June, while oil and copper traded at their highest levels in more than 18 months. This followed strengthening economic data. Friday's Labor Department report showed private-sector hiring rose in March for the fourth time in five months, while a gauge of March service-sector activity released Monday hit a four-year high. Traders are betting the Fed will have to soon fend off that pressure. Futures markets expect the central bank to raise its target federal-funds lending rate to 0.5 by its November meeting, if not sooner, from current near-zero levels.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985577","date":"2010-04-09","texts":"So here's a paradox to ponder By now everyone has heard about traders who saw the housing crash coming -- and made millions betting on it. Yet most economists agree that central bankers won't prevent the next bubble from inflating. One group sides with Alan Greenspan, who argues that regulators can't know when a strong market has crossed into bubble territory. Another sides with Paul Krugman, who thinks that regulators can know -- but that they may choose to shirk their duty. Either way, what's up Why can't regulators preempt bubbles if the hedge-fund crowd is smart enough to short them The answer tells you something big about the financial reform brewing in Congress. There is a reason private traders beat public servants when it comes to anticipating crashes, and it points to the difference between a good reform package and a missed opportunity. The reason boils down to conviction. Hedge-fund traders do not have to know that a bubble will pop in order to bet against it. They may not even need to feel that a crash is more than a 50-50 possibility. All they need to believe is that the odds of a crash are higher than others perceive them to be. The threshold for action is relatively low, so traders can act easily. Take the example of John Paulson, whose hedge funds made 15 billion betting against the subprime bubble. When Paulson made his bets in 2006, the market consensus was that a nationally synchronized housing collapse was almost inconceivable. As a result, banks were willing to sell extremely cheap insurance on bundles of mortgages -- Paulson found he could pay 1.4 million for a contract that would pay him 100 million if the mortgage securities defaulted. With that overwhelmingly skewed payout, it made sense to bet against the mortgage bubble even if the odds of it popping were merely even. Paulson was like a roulette player who bets on red vs. black, but with a payout that more closely resembles the reward from betting correctly on a single number. Now contrast Paulson's incentives with those of a central banker. As the Fed chairman in February 2000, Greenspan appeared before a Senate committee and explained why he was raising interest rates. Inflation had yet to pick up, but the powerful advance of technology stocks had fueled such strong growth that price pressure seemed likely. Of course, Greenspan could not know that he was right. But whereas Paulson had the prospect of that overwhelmingly skewed payout to compensate him for the risk of being wrong, Greenspan was greeted with a torrent of abuse. Then-Sen. Paul Sarbanes, Democrat of Maryland, charged that the Fed's preoccupation with runaway tech stocks harmed the job prospects of inner-city youths. Sen. Jim Bunning, Republican of Kentucky, railed that higher interest rates threatened the economy more than inflation. I think people hear what you are saying and conclude that you believe that equities are overvalued, said then-Sen. Phil Gramm, the committee chairman. I would bet that equity values, given what's going on, are not only not overvalued, but may still be undervalued.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614854","date":"2010-04-12","texts":"'He got us out of the Great Depression. That's probably the most frequent comment made about President Franklin Roosevelt, who died 65 years ago today. Every Democratic president from Truman to Obama has believed it, and each has used FDR's New Deal as a model for expanding the government. It's a myth. FDR did not get us out of the Great Depression -- not during the 1930s, and only in a limited sense during World War II. Let's start with the New Deal. Its various alphabet-soup agencies -- the WPA, AAA, NRA and even the TVA Tennessee Valley Authority -- failed to create sustainable jobs. In May 1939, U.S. unemployment still exceeded 20. European countries, according to a League of Nations survey, averaged only about 12 in 1938. The New Deal, by forcing taxes up and discouraging entrepreneurs from investing, probably did more harm than good. What about World War II We need to understand that the near-full employment during the conflict was temporary. Ten million to 12 million soldiers overseas and another 10 million to 15 million people making tanks, bullets and war materiel do not a lasting recovery make. The country essentially traded temporary jobs for a skyrocketing national debt. Many of those jobs had little or no value after the war. No one knew this more than FDR himself. His key advisers were frantic at the possibility of the Great Depression's return when the war ended and the soldiers came home. The president believed a New Deal revival was the answer -- and on Oct. 28, 1944, about six months before his death, he spelled out his vision for a postwar America. It included government-subsidized housing, federal involvement in health care, more TVA projects, and the right to a useful and remunerative job provided by the federal government if necessary.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615651","date":"2010-04-12","texts":"Monday, April 12 President Barack Obama hosts world leaders for summit on securing the world's nuclear materials. --- Alcoa kicks off quarterly earnings season. ---","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616778","date":"2010-04-12","texts":"New York Governor David Paterson wants to reduce state aid to local school districts next year by 5 to address the state's 9.2 billion budget deficit, and state educators are complaining that the cuts could result in teacher layoffs. Maybe so, but the reality in New York and other states is that teacher hires in recent years have far outpaced student enrollment. A new report from the Empire Center for New York State Policy found that New York public schools added 15,000 teachers between 2000 and 2009, even though enrollment fell by 121,000 students over the same period. New York City, home to the nation's largest school system, added 7,000 teachers and 4,000 nonteaching professionals guidance counselors, administrators, nurses even as its enrollment was decreasing by 63,000 kids, according to state data. Teachers unions prefer fewer students per class because it means more dues-paying jobs, but the evidence that it improves academic outcomes is thin. In any case, the Empire Center report found that by national standards, class sizes in New York were small even before the further staff expansion of the past nine years. In 2008 New York's pupil-teacher ratio was 13.1, the eighth lowest among the 50 states, and its per-pupil spending 16,000 leads the nation. This disconnect between student enrollment and the number of teachers hired is growing nationwide. Between 2001 and 2007, 12 states saw student enrollment fall while teaching staffs grew, according to data from the Census Bureau and the National Center for Education Statistics. And in another half-dozen states, teachers were hired out of all proportion to increased enrollment. For example, Virginia's student enrollment grew by 5 and the number of teachers grew by 21. In Florida, student enrollment rose by 6 and the number of teachers rose by 20. Student enrollment was up by 9 in North Carolina, where the number of teachers was up by 22.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615236","date":"2010-04-13","texts":"The committee of academic economists that dates the beginning and end of U.S. recessions stopped short of calling an end to the downturn that started in December 2007, drawing public criticism from a committee member. Most members of the National Bureau of Economic Research's Business Cycle Dating Committee have said the recession probably ended in mid-2009, when several key economic indicators reached their trough and the economy started growing again. But the seven-member group said Monday that it wasn't ready to mark the official end date, given the chance -- however small -- that the economy could start shrinking again or that revised data could shift the timing of the economy's low point. Although most indicators have turned up, the committee decided that the determination of the trough date on the basis of current data would be premature, the committee said. Many indicators are quite preliminary at this time and will be revised in coming months. The decision bred controversy on the committee, underscoring the range of opinions about the state of the economy.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613475","date":"2010-04-14","texts":"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. 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. 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. 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. 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.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613585","date":"2010-04-15","texts":"Home-mortgage rates fell this week, returning to levels seen two weeks ago, according to Freddie Mac's weekly survey of conforming rates, released on Thursday. The 30-year fixed-rate mortgage averaged 5.07 for the week ended April 15, down from 5.21 last week. A year ago, the mortgage averaged 4.82. The 15-year fixed-rate mortgage averaged 4.40, down from 4.52 last week and 4.48 a year ago. The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.08, down from 4.25 last week and 4.88 a year ago. And the one-year Treasury-indexed ARM averaged 4.13, down from 4.14 last week and 4.91 a year ago. After rising for four consecutive weeks, mortgage rates eased back to where they were two weeks ago and still remain historically low, said Frank Nothaft, Freddie Mac vice president and chief economist, in a news release. But rates will rise in the future, some say.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613754","date":"2010-04-15","texts":"WASHINGTON -- China came under more pressure to let its currency rise as Federal Reserve Chairman Ben Bernanke said flatly that the yuan is undervalued . . . to promote a more export-oriented economy and an International Monetary Fund study suggested that a currency move wouldn't harm Chinese growth if handled properly. Mr. Bernanke, making his strongest comments on the subject in speaking before Congress's Joint Economic Committee, said, It would be good for the Chinese to allow more flexibility in their exchange rate to address inflation and bubbles within their own economy and to help bring more balance to a global economy in which China relies too much on exports and the U.S. too much on borrowing to import. But Mr. Bernanke, responding to questions from China critic Sen. Chuck Schumer D., N.Y. also said that moving the exchange rate alone wouldn't have a major short-term effect on trade flows -- though over time it would have an impact. The Fed chairman's remarks come amid growing expectations that China will allow its currency to rise, perhaps before leaders of the Group of 20 industrialized and developing countries meet in Canada in June. The U.S. Treasury recent postponed a decision on whether to label China a currency manipulator, an apparent effort to give China some political breathing space to revalue its currency without appearing to bow to U.S. pressure.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614747","date":"2010-04-15","texts":"The Securities & Exchange Commission voted 5-0 to propose new rules to cap trading fees for customers of some options exchanges. The proposal seeks to more closely align the actual cost of executing an options trade with the additional costs of accessing quotes on exchanges and the wide range of fees charged by different markets, according agency documents. The proposal addresses a debate in the options industry over whether exchange fees should be assessed in a way that is similar to the U.S. stock market. It would cap access fees at 30 cents a contract, and extend rules prohibiting exchanges from imposing unfairly discriminatory terms to cover options trading. The cap would apply to any fee based on the execution of an incoming order against an exchange's best bid or offer.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615776","date":"2010-04-15","texts":"In the increasingly bitter struggle over regulating financial markets, senior Republican lawmakers are coalescing around a blunt line of attack, warning that White House-backed legislation headed to the Senate floor would entrench rather than end federal bailouts of Wall Street. The strategy aims to pit Republicans against the administration's financial overhaul without appearing to side with Wall Street. Elements of the critique focus on conditional language in the bill that might easily be made more definitive, and some Democrats have pledged to ensure no bailouts are allowed. But the charge is designed to score political points at a time when public anger about Wall Street bailouts remains high. Senate Minority Leader Mitch McConnell of Kentucky said Thursday that the legislation is seriously flawed and would allow taxpayer dollars to bail out Wall Street banks. With a showdown looming, Democratic leaders said Thursday they would bring the legislation to a floor debate next week, in essence calling Republicans' bluff. The Obama administration is reaching out to rank-and-file Republicans, hoping to win backers even as top GOP senators were hardening against the bill. Treasury Secretary Timothy Geithner is among those leading the outreach. He has scheduled a Friday meeting with, among others, Sen. Orin Hatch R., Utah, who complained the administration just won't work with us. Part of Mr. Geithner's mission is to walk senators through the bill's details, including highlighting GOP-backed ideas in it.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616796","date":"2010-04-17","texts":"Since hitting a low in February, the stock market has roared higher in almost-uninterrupted fashion. The Standard & Poor's 500 has racked up a good year's gain -- nearly 13 -- in just two months' time, and now, near 1200, sits at levels not seen since September 2008. The Nasdaq, meanwhile, has turned back its clock to June of that same year -- three months before Lehman Brothers collapsed. Yet many small investors are still watching the rally from the sidelines. Through mid-April, investors have put about 6 billion of new money into domestic stock funds so far this year, according to Lipper data. By contrast, they've invested just over 101 billion in taxable and municipal bonds. So is now the time to wade back into stocks Perhaps -- if you're looking to put a little money to work in well-run, large companies with strong balance sheets. But many pros say investors who've sat out the rally should continue to husband their cash. With the market up so strongly, and with underlying economic fundamentals still sketchy -- foreclosure just surged again, underemployment remains rife and consumer sentiment has fallen again -- the balance has shifted toward risk and away from return. Even the pros seem to be getting twitchy. News Friday that the Securities and Exchange Commission has charged Wall Street giant Goldman Sachs with fraud tied to subprime mortgages helped push the Dow Jones Industrial Average to a quick 126-point selloff.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614992","date":"2010-04-20","texts":"LONDON--Russia could sell its first Eurobond since it defaulted on its domestic debt in 1998 in the coming days, people familiar with the matter said. The investment-grade nation intends to offer both five-year and 10-year debt, those people said. Initial talk is that the five-year paper could yield about 1.25 percentage points above U.S. Treasurys and the 10-year tranche could yield about 1.375 percentage points over Treasurys, one investor said. Investors have said they expect Russia to raise between 3 billion and 5 bilion. Meetings with prospective investors are due to finish in New York Wednesday, with pricing expected thereafter, subject to market conditions. The Russian government is returning to the international bond markets to plug holes in its budget, which is expected to have a deficit worth 6.8 of gross domestic product this year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615203","date":"2010-04-20","texts":"Free markets depend on truth telling. Prices must reflect the valuations of consumers interest rates must be reliable guides to entrepreneurs allocating capital across time and a firm's accounts must reflect the true value of the business. Rather than truth telling, we are becoming an economy of liars. The cause is straightforward crony capitalism. Thomas Carlyle, the 19th century Victorian essayist, unflatteringly described classical liberalism as anarchy plus a constable. As a romanticist, Carlyle hated the system--but described it accurately. Classical liberals, whose modern counterparts are libertarians and small-government conservatives, believed that the state's duties should be limited 1 to provide for the national defense 2 to protect persons and property against force and fraud and 3 to provide public goods that markets cannot. That conception of government and its duties was articulated by the Declaration of Independence and embodied in the U.S. Constitution. Modern liberals have greatly expanded the list of government functions, but, aside from totalitarian regimes, I know of no modern political movement that has shortened it. While protecting citizens against force, both at home and abroad, is the government's most basic function, protecting them against fraud is closely allied. By the use of force, a thief takes by arms what is not rightfully his he who commits fraud takes secretly what is not rightfully his. It is the difference between a robber stealing brazenly on the street and a burglar stealing by stealth at night. The result is the same the loss of property by its owner and the disordering of civil society. And government has failed miserably to perform this basic function. Why has this happened Financial services regulators failed to enforce laws and regulations against fraud. Bernie Madoff is the paradigmatic case and the Securities and Exchange Commission the paradigmatic failed regulator. Fraud is famously difficult to uncover, but as we now know, not Madoff's. The SEC chose to ignore the evidence brought to its attention. Banking regulators allowed a kind of mortgage dubbed liar loans to flourish. And so on.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614261","date":"2010-04-24","texts":"The Consumer-Lending Outlook Brightens Citigroup suggested its worst losses from bad loans may be past. When it reported first-quarter earnings, the banking giant said it had reduced provisions for loan losses in the U.S. and abroad by 16 from a year earlier. That signals consumer balance sheets may be improving. More Evidence of a Housing Rebound","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614926","date":"2010-04-24","texts":"The Federal Reserve has acquired more than 1 trillion worth of mortgage-backed securities in the past 15 months. At their policy meeting in the coming week, Fed officials will try to decide how and when to get rid of them without jarring financial markets and the nascent economic recovery. The Fed's thinking on interest rates is straightforward. The recovery has gained traction but hasn't been vigorous or long lasting enough to warrant raising them soon after its Tuesday and Wednesday meeting it is likely to repeat its signal that rates will stay low for an extended period. The more challenging issue will be agreeing on a long-term plan to shrink a balance sheet bloated to 2.38 trillion -- more than double precrisis levels -- according to Fed insiders. Sales of mortgage-backed securities aren't likely soon. It is also possible that the Fed won't signal its intentions on the matter in its post-meeting statement Wednesday. But markets are on edge because its mortgage bonds holdings are so large. At 1.1 trillion in holdings of mortgage debt guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae, the Fed owns roughly a fifth of all these outstanding instruments. The sheer size of the portfolio makes these decisions so key. The Federal Reserve Bank of New York estimates Fed purchases of mortgage and Treasury bonds pushed long-term interest rates down about half a percentage point. The mere announcement of sales could have the opposite effect, as investors price in future sales.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985316","date":"2010-04-24","texts":"Since the collapse of the housing market, home buyers trying to a secure mortgage of more than 729,750 have faced higher interest rates and tough new standards to even qualify for a loan. Now the market for these jumbo loans is starting to thaw. The average interest rate for a 30-year fixed-rate jumbo mortgage stood at about 5.8 percent this week, according to HSH Associates. That is near historic lows and down significantly from the height of the financial crisis, when it was near 8 percent. Things have been steadily getting better, said Keith Gumbinger, vice president at the research firm. But the market is still far from normal, he said. The disparity in the rates offered for jumbo mortgages and traditional ones which also carry rates near record lows remains wider than normal, Gumbinger said. Normalcy is returning, but I would by no means say it has returned, he said. Before the housing market collapsed, jumbo loans were those for more than 417,000. But Congress temporarily increased that limit for high-priced parts of the country, including the Washington area. Through at least the end of this year, jumbos start at 729,750. They are still considered the most difficult to get.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614822","date":"2010-04-26","texts":"After years of finger pointing for the housing bubble and credit crisis, from Washington to Wall Street and back, the upshot is this a Securities and Exchange Commission complaint targeting one of the few people who realized the mortgage market would implode. This is the surprising significance of the high-profile and complex complaint the agency filed earlier this month against Goldman Sachs for its work with hedge-fund trader John Paulson. The investment bank crafted securities that let him put his money where his analysis was, pointing to the housing boom as unsustainable. One of the frequently asked questions about the housing bubble is why no one saw the problem until it blew up. The answer is that a few people did. Mr. Paulson, who was not charged in the SEC lawsuit, is chief among them. Beginning in 2006, Mr. Paulson concluded that the end of the bubble was near. Goldman Sachs created special securities to facilitate trading, in this case synthetic collateralized debt obligations -- synthetic because this instrument didn't include mortgage-backed securities but was designed to move in line with them. Mr. Paulson thus communicated his wisdom to the market through these securities, which, far from undermining markets are best understood as an efficient information medium for resetting prices. By analyzing the low quality of mortgages, he saw early the combination of easy money by the Federal Reserve, easy mortgages mandated by Congress, and what turned out to be too-easy math by Wall Street traders who failed to realize that this rare combination of factors would undermine their risk models. It is easy to forget that before the collapse, the overwhelming view of investors, ratings agencies and economists was that the housing market was strong and would continue to get stronger, Mr. Paulson told his investors last week. He warned them in 2006 that he would start risking their money by shorting what he thought were bad mortgages.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613567","date":"2010-04-27","texts":"The recession knocked Procter & Gamble's stock out cold. Have the smelling salts finally arrived Shares of the world's largest consumer-products company have gained just 2 since the start of 2009, compared with a 22 rise for rival Colgate-Palmolive. The latter relies less on high-end products that consumers have forgone and has a stronger emerging-markets position. Since long before the economic crisis unfolded, Colgate's shares have traded at a premium priceearnings multiple. Procter should have a healthier glow when both companies report quarterly earnings Thursday. Price reductions appear to have helped Procter win back market share in recent months, which should have underpinned strong sales. But those price cuts have been limited to about 10 of the company's portfolio and could damage Procter's margins and brands if extended much further. The bigger question for Procter is whether consumers in the U.S. and Western Europe are ready to trade back up to its premium products. A survey of both high and low-income groups shows consumers have become willing to spend more on consumer products in the last two months, according to Bill Pecoriello of Consumer Edge Research. That could drive an impressive sales recovery, but only if developed economies stay on course and labor markets improve steadily. Colgate's prospects look more dependable. Unlike Procter, which is saddled with low-growth products such as diapers and toilet paper, Colgate has a smaller portfolio generating faster sales increases.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615387","date":"2010-04-27","texts":"Miners and industrial stocks gained in Europe, underscoring investors' belief that the global economy is recovering. But Greece's stock market dropped for the fourth consecutive session, as investors appeared far from appeased by the country's formal request on Friday for financial aid. Worries about the risk of default remained strong, and the cost of insuring the country's debt against such an event hit fresh records. The pan-European Stoxx 600 index closed up 1 at 270.10, the U.K.'s FTSE 100 added 0.5 to 5753.85, Germany's DAX rose 1.2 to 6332.10 and France's CAC-40 firmed 1.2 to 3997.39. The Athens General Index slumped 2.9 to 1696.68, its lowest level since April 7, 2009. It has skidded 8 over the last four sessions. Rising metal prices and optimism about economic recovery from U.S. heavy-equipment maker Caterpillar boosted sentiment in Europe. Copper miner Antofagasta, a play on the global economy surged 7.1 in London.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616065","date":"2010-04-27","texts":"United Parcel Services Inc.'s first-quarter profit jumped 33 as the shipping company reported higher package volume, led by a significant increase abroad. UPS, a bellwether of the broader economy, disclosed the better-than-expected preliminary results two weeks ago, and was one of the first to signify a rebound in the freight-transport sector was underway. Tuesday, UPS executives said the broad economic recovery appears poised to gain steam, although they described the upturn as more measured than dramatic to this point. Chief Executive Scott Davis said demand picked up throughout the first quarter, a trend that has continued so far in the second quarter. Economies around the world are showing signs of recovery, Davis said.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616554","date":"2010-04-27","texts":"3M Co.'s first-quarter profit climbed 79, as sales surged across all its businesses, causing the company to boost its financial outlook for the rest of the year. Total sales at the consumer and industrial manufacturer rose 25 to 6.35 billion, fueled by new products, growth in emerging markets and improved demand from 3M's customers in automotive manufacturing and consumer electronics. The sales growth was a quarterly record for 3M, which reported double-digit increases in each of its six major business segments. The St. Paul, Minn., company now expects to earn 5.40 to 5.60 a share this year, up from its earlier forecast of 4.90 to 5.10 a share. 3M also forecast sales growth, excluding revenue from acquisitions, of 10 to 12, compared with the company's January view of 5 to 7 growth 3M--whose products include Post-It notes, sand paper, Ace bandages and reflective films for flat-screen televisions--said the cost cuts and changes to its manufacturing process that it imposed during last year's recession are helping the company's margins now.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614465","date":"2010-04-28","texts":"Visa Inc.'s fiscal second-quarter profit grew by a third, topping analysts' expectations, as consumers ratcheted up spending and the company processed more payments. The results offer fresh evidence on the rising optimism of consumers as the economy stabilizes. Higher spending by borrowers also bolsters hopes of a turnaround in the broad credit-card industry and shifts the spotlight from consumer defaults and delinquencies. Our performance was fueled by higher-than-expected payments-volume growth, said Chairman and Chief Executive Joseph Saunders. He added Visa was increasingly optimistic that economic growth will gradually improve. For the quarter ended March 31, Visa reported a profit of 713 million, or 96 cents a class A common share, compared with a profit of 536 million, or 71 cents per class A common share, a year earlier. Revenue for the fiscal second-quarter jumped 19 to about 2 billion. Analysts polled by Thomson Reuters expected a profit of 91 cents on revenue of 1.93 billion. For the second-quarter, payments volume, representing spending on Visa-branded cards, rose 13 from a year ago to 745 billion. The total number of transactions processed in the second-quarter rose 14 over a year ago to 10.6 billion.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613694","date":"2010-04-29","texts":"BANGALORE -- India's Hexaware Technologies Ltd. posted a 33 drop in its first-quarter consolidated net profit, but forecast robust revenue growth in the current quarter as it expects more outsourcing orders on a spike in technology spending by clients. Hexaware joins bigger rivals Infosys Technologies Ltd. and Wipro Ltd. in projecting strong growth in coming quarters as a rebound in global technology spending helps India's software service exporters recover from the impact of the economic downturn. We have a strong deal pipeline. We expect to receive additional work from existing clients as they start on new projects, Chairman Atul Nishar told Dow Jones Newswires Thursday. The company's profit for the January-March period fell to 116 million rupees 2.6 million from 173 million rupees a year earlier. Consolidated revenue slipped 16 to 2.22 billion rupees from 2.64 billion rupees. Analysts had mixed views on the results.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616373","date":"2010-05-01","texts":"NEW YORK -- Crude-oil futures rose to a three-week high, bolstered by restored confidence in the global economic recovery and the potential interruption of crude imports to the U.S. Gulf Coast by a huge oil spill. Light, sweet crude for June delivery gained 98 cents, or 1.2, to settle at 86.15 a barrel on the New York Mercantile Exchange, just below the 2010 settlement high of 86.84 a barrel on April 6. It gained 2.9 for April, its third consecutive monthly rise. Oil rose as the dollar continued to back off a one-year high against the euro hit Wednesday. The euro rose after Greece accepted new austerity measures as a condition of getting aid from the European Union and International Monetary Fund. Investors also were encouraged by a 3.2 expansion in first-quarter U.S. gross domestic product. While slightly below the consensus forecast, the increase was fueled by stronger consumer spending, a positive indicator for future growth.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983431","date":"2010-05-02","texts":"After 10 hours and 43 minutes of testimony before the Senate Permanent Subcommittee on Investigations, the witnesses -- a handful of hapless Goldman Sachs employees -- and the interrogators -- a handful of angry senators -- seemed no closer to a warm handshake and a promise to keep in touch. I firmly believe that my conduct was correct, said a tired-looking Fabrice Tourre, the Goldman employee who structured the now-infamous Abacus trade. The problem for Tourre -- and Wall Street -- is that they're so intent on proving that what they did was legal that they can't see that what they did was wrong. These are men and they mostly are men of the market, and they played by the market's rules Make as much money as you can without going to jail. This is a world in which people are applauded for blowing up the customer -- that is to say, offloading a crappy product on a dim investor. But it's not the world the rest of us live in. And if Wall Street doesn't realize that quickly, financial regulation might turn out very badly for the banks. During the 1980s and 1990s, a variety of economists in a variety of countries conducted a series of experiments that shocked their profession. The experiments were called ultimatum bargaining games, and they were very simple A participant was given a pot of money to divide between himself and one other person. The player on the other side of the table could see all the action and could accept or reject the deal. But here was the catch If the second person rejected the deal, neither party got any money. Market man -- and his bible, textbook economics -- would've thought this easy The second person would take any deal that's offered. After all, even a little bit of free money is better than no free money. But that's not how it worked out. When the second person was offered less than 30 percent, he generally blew up the deal. This was true across countries, age groups and even dollar amounts.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830982509","date":"2010-05-04","texts":"Congress will appropriate more than 1 trillion this year, and all the Congressional Black Caucus wants is 1.3 billion. But after six months of haggling over the funding for a youth jobs program, the group is running out of time. The 42-member CBC has pushed for months for Congress to extend funding for a youth summer jobs initiative that was created in last year's economic stimulus bill. Similar to a program in the District, the initiative gives localities money to hire young people ages 14 to 24 for clerical work, construction and other entry-level jobs that last six to eight weeks. The funding is not specifically allocated based on race, but localities are encouraged to offer jobs to youths who are most in need, such as high school dropouts and children whose parents are incarcerated -- groups that are disproportionately African American. The CBC hopes the funding will provide for about 300,000 jobs. The failure to secure the money illustrates a broader challenge for the CBC. In the midst of the recession, black lawmakers and civil rights advocates have called for specific policies to aid African Americans and other low-income people. Their argument is twofold At 16 percent, the unemployment rate among blacks is higher than for other groups, and the increase in federal spending to ease the recession could help address persistent unemployment and other long-standing problems for blacks and low-income people. Rather than focus their efforts on President Obama, who has expressed reluctance to target funds for blacks or any other group, the CBC has tried to push measures through Congress. But as deficit concerns rise in both parties, the black lawmakers have had little success.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983956","date":"2010-05-04","texts":"German Chancellor Angela Merkel's cabinet approved legislation on Monday that would give Greece 29.6 billion over three years as part of a wider bailout, as the German government acknowledged that letting Greece go bankrupt could send the euro into a tailspin and hurt Germany's own economy. It doesn't only mean that we help Greece, but that we stabilize the euro as a whole, which helps people in Germany, said Merkel, who had been battered by critics for waiting to decide until Greek bonds were relegated to junk status last week. The remark was a nod to the popular discontent in Europe's biggest economy about having to pay so much to rescue a fellow European Union country that many Germans feel has been fast and loose with its finances for years. Both moves were mandatory after European governments and the International Monetary Fund agreed Sunday to give 145 billion in loans to Greece over three years. The loans came after Athens adopted a new round of austerity measures that provoked fresh uproar among Greek workers. Germany would contribute 11.1 billion for this year, followed by 18.5 billion over 2011 and 2012. The money would come in the form of credit extended to Greece from KfW Development Bank, which is backed by the German government.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614876","date":"2010-05-06","texts":"NEW YORK -- History repeats. You just don't expect it to repeat this quickly. There are eerie parallels between this week's chaos in global financial markets and the dislocations of the 2008 financial crisis. Yet there are also significant differences, which investors, still smarting from past crisis, should bear in mind. But first, the spooky stuff 1. As a crisis trigger, Greece is analogous to the subprime mortgages market in 2007, since it also represents a relatively small, low-profile sector of its broader asset class. When the Greek government first revised up its budget deficit estimates late last year, few predicted it would eventually put the entire euro zone at risk--much as few foresaw the initial subprime mortgage defaults threatening the entire U.S. financial system.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984107","date":"2010-05-06","texts":"Here's how some major bills fared recently in Congress and how local congressional members voted, as provided by Thomas Voting Reports. The District's congressional delegate is not permitted to vote on final passage of legislation. NV means not voting. The House of Representatives voted to join the Senate in blocking a congressional pay raise set for January 2011. The bill HR 5146 will freeze salaries at levels in effect since January 2009, which are 174,000 for rank-and-file members, 193,400 for the House and Senate majority and minority leaders and the Senate president pro tempore, and 223,500 for the House speaker. Under federal law, lawmakers automatically receive cost-of-living increases each January unless they vote to block them. Other top federal salaries are 400,000 for the president, 230,700 for the vice president, 223,500 for the chief justice of the United States, 213,900 for associate Supreme Court justices, 199,700 for Cabinet officers, 184,500 for appellate judges and 174,00 for district judges. When Congress freezes its own pay, it usually follows up by freezing other top salaries as well. The House passed a bill HR 2499 authorizing Puerto Rico to hold a plebiscite on whether it wishes to remain a U.S. territory or seek independence or statehood. If the mandate is for change, a second vote would be held to determine the new status. However, only Congress could grant statehood. Although Puerto Rico's 4.1 million residents are U.S. citizens, they lack voting representation in Congress and cannot vote in presidential elections, among other exceptions to full citizenship. The House refused to stipulate English as Puerto Rico's official language if it were to choose statehood under HR 2499 above. The motion also sought to affirm residents' Second Amendment right to bear arms if Puerto Rico becomes a state.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617144","date":"2010-05-08","texts":"Lest anyone had thought the rally of the past 14 months had restored calm to the stock market, Thursday's trading action was a reminder that the investing game is as dicey as ever. During one brief afternoon spasm in which the Dow Jones Industrial Average plunged nearly 1,000 points, happy assumptions about the markets' solid footing and the U.S. economy's enduring recovery were wiped away. More selling on Friday reinforced the growing sense of unease. People had been thinking, 'Oh, that global financial crisis thing I'm glad that's over,' and we're back to the races again, says Rob Arnott, chairman of Research Affiliates, a Newport Beach, Calif., investment firm. But when expectations are that everything is fine again, a bolt from the blue can come from anywhere to send this market lower very quickly. It's a wake-up call that risk remains in the system. Most unsettling was the apparent lack of an explanation for Thursday's violent swing. With the Greek debt crisis as a backdrop, some pointed to glitches in computer-trading programs. But upsets in a mechanism as complex as the global financial markets have no simple causes. Regulators and economists are poring over the trading tape in search of an answer. It wasn't only individual stocks that were whipsawed. Several exchange-traded funds-portfolios that are listed on stock exchanges-traded at zero for a spell on Thursday. One, Vanguard Industrials, a basket of 372 stocks, fell from 54.66 to zero at 246 pm, then shot back up around 40 by 248 pm, then crashed right back down to 20 cents at 254 pm, then leaped back up by 54 by 306 pm.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616287","date":"2010-05-12","texts":"What the recession giveth, the recovery taketh away. One welcome side effect of the recent downturn was a substantial narrowing of the U.S. trade deficit. In less than a year, from July 2008 through May 2009, the monthly deficit shrank from 64.9 billion to 25.7 billion. That is a level not seen since 1999. And the full-year 2009 deficit of 378.9 billion was the smallest since 2001. While the causes were worrisome--in particular, a slowing of imports due to slumping U.S. demand--it helped ease a strain on the nation's finances. But, as the recovery progresses, that relief looks fleeting.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985243","date":"2010-05-12","texts":"Senate lawmakers voted unanimously Tuesday to increase oversight of the Federal Reserve, but the two parties diverged on whether a bill to rewrite financial regulations should include an overhaul of government-backed mortgage giants Fannie Mae and Freddie Mac. The Fed amendment was submitted by Sen. Bernard Sanders I-Vt. and co-sponsored by colleagues on both sides of the aisle. It gives the Government Accountability Office expanded power to audit the Fed and requires the central bank to disclose details about firms that received emergency aid during the financial crisis. We are beginning to lift the veil of secrecy on what is perhaps the most important agency in the United States, Sanders said. Facing pressure from the Obama administration and fellow lawmakers, Sanders agreed last week to narrow his initial proposal, which would have required the Fed to submit to regular audits. Instead, under the legislation, the Fed must undergo a one-time examination of its massive emergency lending programs and post details on its Web site by December about the firms that benefited from its lending during the crisis. The new language, however, prevents investigators from peering into the central bank's deliberations on interest rates and other elements of monetary policy.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614869","date":"2010-05-13","texts":"The world has had a terrifying brush with another Great Depression. Although the recent scare in Europe is a reminder that this isn't over yet, it looks like we've escaped that -- in no small measure because of taxpayer-financed bailouts and fiscal stimulus, as maligned and imperfect as they were. Yet no one is throwing ticker tape parades for Barack Obama or Angela Merkel, or the legislators, central bankers or finance ministers. A new Wall Street JournalNBC News poll finds that 42 of Americans doubt the Obama fiscal stimulus will ever help the economy, and another 20 say the benefits have yet to arrive. The ousting of a longtime, business-friendly incumbent senator by rebellious Republicans in Utah is the latest manifestation of political discontent. They're angry and they're angry at Washington. And I'm in Washington, the victim, Republican Sen. Robert Bennett told his hometown paper. Nearly a third of the respondents to the Wall Street Journal poll say they almost never trust the government to do the right thing. The distrust goes beyond government People are angry at pretty much the entire establishment. More than 60 of Americans in Pew Research Center polls say banks, big corporations and Congress have a negative effect on the way things are going in the U.S. -- and the national news media don't do much better. Corporate chief executives frequently complain that the president and Democrats in Congress are stirring animosity toward business. It has been easy to vilify business, the head of the Business Roundtable, John Castellani, said in a TV interview earlier this year. That raises questions and that inhibits investment. People say wait a minute, am I next","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616700","date":"2010-05-13","texts":"Home-mortgage rates fell to the lowest level of the year in recent days as Treasury yields slumped due to investors seeking a haven following last week's stock-market turmoil, according to Freddie Mac's weekly survey of mortgage rates. Mortgage rates tend to follow Treasury yields. The benchmark 10-year note dropped to a five-month intraday low last Thursday as the Dow Jones Industrial Average suffered an intraday drop of nearly 1,000 points. The latest week was the fifth in a row that interest rates on fixed-rate mortgages fell, noted Freddie Chief Economist Frank Nothaft. The 30-year fixed-rate mortgage averaged 4.93 for the week ended Thursday, down from last week's 5 average but up from 4.86 a year ago. Rates on 15-year fixed-rate mortgages were 4.3, compared with 4.36 and 4.27, respectively. Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 3.95, a low since Freddie began tracking such mortgages in early 2005, down from last week's 3.97 and 4.82 a year earlier. One-year Treasury-indexed ARMs were 4.02, down from 4.07 and 4.71, respectively.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617029","date":"2010-05-13","texts":"The price of imports flowing into the U.S. notched their largest gain in three months, but there's little indication those higher prices are being passed through to the ultimate consumers. Separately, new claims for jobless benefits declined last week as layoffs have slowed but mass hiring hasn't resumed. Import prices increased 0.9 in April, after rising 0.5 in March, the Labor Department said Thursday. Fuel prices were a major contributor to the increase. But excluding fuel, prices still climbed 0.5 as the cost of industrial supplies and materials and food also rose. With the price increases largely confined to commodities--the price of consumer goods, excluding autos, was flat--economists aren't yet worried about pricier imports fueling inflation in the near-term. The government's measure of core inflation, which strips out volatile food and energy prices, will be released next week and increases are expected to be mild. Barclays Capital Research analysts predict the core consumer price index will increase 0.1. But sustained increases in commodities prices could eventually be passed on to consumers and cause inflation to bubble up next year or in 2012.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982615","date":"2010-05-13","texts":"The Treasury Department said Wednesday that the federal deficit for April soared to 82.7 billion, the largest imbalance for that month on record. That was significantly higher than last year's April deficit of 20 billion and above the 30 billion deficit that private-sector economists had expected. The government generally runs surpluses in April, as millions of taxpayers file their income tax returns. But income tax payments were down this April, reflecting the impact of the recession, which has pushed millions of people out of work. The Obama administration forecast in February that the deficit for this year would hit 1.56 trillion, surpassing the record of 1.4 trillion set last year. Many private-sector economists think that this year's imbalance will be closer to the 1.4 trillion set last year and that deficits will remain high for years to come. The trillion-dollar-plus deficits are being driven by the effects of the recession, which has cut government tax revenue while driving up spending. Analysts estimate that roughly one-third of the increase in deficits over the past two years can be attributed to lost revenue -- the result of fewer people working and lower corporate profits. Another third was from increased government spending that normally occurs in a downturn, such as higher payments for unemployment benefits and food stamps. The final third reflects added government spending on the 787 billion stimulus bill and the 700 billion financial bailout.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842616490","date":"2010-05-14","texts":"Mahindra & Mahindra would become the first company to sell an Indian-made vehicle in the U.S. with its plans to offer a compact diesel pickup truck in the country by the end of the year, an executive said Thursday. Pawan Goenka, president of Mahindra's auto and farm-equipment operations, said in an interview that the new truck has been road-tested according to U.S. government requirements and that the company expects to gain certification from the U.S. Environmental Protection Agency no later than July. Production would begin in India in early fall and the truck would arrive in U.S. showrooms by December, Mr. Goenka said. Mahindra hopes to model its effort on the recent success of entrants to the U.S. market such as Hyundai Motors Co., Mr. Goenka said. But the hurdles for Mahindra to crack the already-crowded U.S. car market are high. Though Mahindra is a major vehicle maker in India, and sells in many other countries, its name is virtually unknown to most Americans. Moreover, the U.S. market declined sharply during the recession.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615890","date":"2010-05-15","texts":"Stocks sank as concerns over European debt and the advance of financial-overhaul legislation sent investors scuttling away from American Express, Visa and MasterCard. The Dow Jones Industrial Average fell 162.79 points, or 1.5, to 10620.16. Still, the measure ended up 2.3 on the week, its biggest point and percentage gain since the week that ended March 5. The Standard & Poor's 500-share index tumbled 21.76 points, or 1.9, to 1135.68, but closed the week up 2.2. The Nasdaq Composite slid 47.51 points, or 2, to 2346.85, but climbed 3.6 on the week, also its biggest point and percentage gain since the week ending March 5. Credit-card issuers weakened after the Senate voted to allow the Federal Reserve to regulate fees on debit-card transactions. The measure also will allow retailers more leverage in negotiating with credit-card firms and banks over the fees for card transactions. Visa tumbled 8.47, or 9.9, to 77.26, while MasterCard dropped 19.86, or 8.6, to 212.45. American Express declined 2.17, or 5.1, to 40.64.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982703","date":"2010-05-16","texts":"Future historians tracing the crackup of the Republican Party may well look to May 8, 2010, as an inflection point. That was the day, as is now well known, that Sen. Robert Bennett, who took the conservative position 84 percent of the time over his career, was deemed not conservative enough by fellow Utah Republicans and booted out of the primary. Less well known, but equally ominous, is what happened that same day, 2,500 miles east in Maine. There, the state Republican Party chucked its platform -- a sensible New England mix of free-market economics and conservation -- and adopted a manifesto of insanity abolishing the Federal Reserve, calling global warming a myth, sealing the border, and, as a final plank, fighting efforts to create a one world government. One world government Do our friends Down East fear an invasion from the Canadian maritime provinces A Viking flotilla coming from Iceland under cover of volcanic ash I was pondering this mystery while on the elliptical machine this week and watching Glenn Beck I find he increases my heart rate, when I heard him inform his viewers that they -- President Obama and friends -- are creating a global governance structure. Social and ecological justice and all of this bullcrap, Beck told his viewers, is man's work for a global government. Beck -- who is second in popularity only to Sarah Palin among the type of Tea Party activists who hijacked the Maine GOP -- tossed out phrases such as global standards and global bank tax -- all part of a conspiracy by the global government people. He further provided the news that Jesus doesn't want a cap-and-trade system.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613677","date":"2010-05-17","texts":"In the depths of the credit crunch, community lenders became a popular financing source for Main Street. But small-business owners may need to work harder to get support from local banks these days. Even though most community banks came through the financial collapse in good health, with lots of capital and liquidity to extend loans, some of them have gone under. So, the Federal Deposit Insurance Corp., Federal Reserve and other regulatory agencies are increasing their scrutiny of local lenders to spot troubled assets and keep the banks in solid financial shape. As part of the effort, the watchdogs are asking the banks to boost their capital and loan-loss reserves even further--which means raising more money, getting more selective about making new loans and canceling the risky loans on their books. The upshot for business owners Local bankers now demand a lot more information about the business and its operations before they sign off on a loan. Entrepreneurs who land a loan need to give frequent updates about the state of affairs--and not just routine financial information, such as sales figures. Bankers need deeper information about what's going on with the business...for instance, if one of the borrower's customers is in financial trouble, says Kevin Tenpas, chief executive of Heartland Business Bank in De Pere, Wis., a part of Heartland Financial USA Inc. in Dubuque, Iowa. Small-business owners who don't work closely with their lenders will find it much tougher to get financing. I think it's even more important to have that relationship now than before, says Mr. Tenpas. I think the tendency is for owners to not communicate if it's not good news, which is when it's most important.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614339","date":"2010-05-17","texts":"Please see Corrections & Amplifications item below Soon after the Black Monday crash of 1987, exchanges and regulators scrambled to enact new rules to prevent a repeat of the biggest stock market shock in 50 years. Even then, they worried they hadn't done enough. I simply cannot give you assurances that we have fixed the system, the chairman of the Securities and Exchange Commission at the time, David Ruder, told the Senate Agriculture Committee in early 1988. After two decades of rule-changing and technological advancements, those comments seem haunting, especially as investigators of May 6's flash crash stumble upon echoes of the Black Monday meltdown. Technological innovation has been widely touted as having made the market more efficient--and more resilient. Instead, the May 6 drop--while much smaller than the 1987 crash--showed that technology mainly served to speed up trading and magnify the market moves.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613768","date":"2010-05-18","texts":"President Barack Obama used the backdrop of Ohio's struggling Mahoning Valley Tuesday to lay out one of his strongest attacks on Republican critics of his economic policies, accusing them of rooting for failure and hindering the nation's recovery. He also proposed a trust fund of more than 800 million to pay for the cleanup of nearly 90 shuttered General Motors sites in 14 states. If the just-say-no crowd had won out--if we had done things that way--we'd be in a deeper world of hurt, he told workers at the V&M Star steel plant in Youngstown. The steady progress we are beginning to see across America just wouldn't exist. ... So I invite anyone who thinks we shouldn't have taken those actions or made those investments to come to places like this and tell us why. Mr. Obama's trip to Ohio was the latest in an almost weekly effort to talk up the economic recovery outside of Washington. But this speech was notable for its sharp tone and its location, just over the border from Pennsylvania, where Sen. Arlen Specter could face defeat in Tuesday's Democratic primary, despite the president's support. The president declined to make a last-ditch appearance in Pennsylvania to rally Democratic voters to Sen. Specter, who left the Republican Party in the face of a GOP backlash for his vote in favor of the Obama stimulus plan. Instead, the president laid out the economic argument he is likely to make a mainstay of the midterm election season.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614077","date":"2010-05-18","texts":"CHRYSLER HOLDING 'Old Chrysler' Pays Back 1.9 Billion of U.S. Loan The U.S Treasury Department said Monday it received a 1.9 billion payment from the bankrupt assets of Chrysler Holding to cover a loan given to the company's former main lending arm, Chrysler Financial. This repayment, while less than face value, is significantly more than the Treasury expected to recover on this loan, and is greater than an independent valuation of the loan . . . the Treasury said in a statement. The Treasury, then under the Bush Administration, originally made a 4 billion loan to the company in January 2009.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614628","date":"2010-05-20","texts":"NEW YORK--The stock market's fear gauge jumped a whopping 30, reflecting a high level of uncertainty among investors as stocks took a dive. After closing on Wednesday at 35.32, the Chicago Board Options Exchange's volatility index ripped to an intraday high of 46.37 before closing just below that point. Finishing at 45.79, the VIX gained 29.6 on the day and has nearly tripled in the last month alone. It was the index's highest close since March 2009, the month that stocks fell to multiyear lows. Thursday's move in the VIX coincided with a steep drop in stocks, with the Dow Jones Industrial Average losing 3.6. Weighing on the market were continuing concerns about Europe's debt problems, unemployment in the U.S. and structural problems in the stock market. It's easy for investors to talk themselves into buying protection in times like this, said Todd Salamone, senior vice president of research at Schaeffer's Investment Research.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616393","date":"2010-05-20","texts":"Several clothing retailers posted stronger first quarter earnings Thursday as sales and margins improved. Children's Place Retail Stores Inc.'s fiscal first-quarter earnings rose 19, handily beating its own forecasts. Its full-year earnings guidance was raised to 3.05 to 3.15 a share from 2.90 to 3.10 as it forecasts a second-quarter loss of 33 cents to 38 cents on a low-single-digit increase in same-store sales. Analysts surveyed by Thomson Reuters expected a 35-cent loss. We will continue to keep a tight rein on expenses as consumer spending remains constrained by lingering weakness in the economic environment, said Chairman and Chief Executive Jane Elfers, who took the helm in January. Children's Place has reported better results recently, excluding one-time items. Like many retailers, it had been hurt by the consumer-spending downturn during the recession, though items like children's clothing weren't hit as hard as others. The company has developed a five-pronged plan for growth that includes accelerating store growth and sharpening marketing to push online sales. For the quarter ended May 1, Children's Place reported a profit of 27.9 million, or 1 a share, up from 23.5 million, or 79 cents a share, a year earlier. The company in March forecast 85 cents to 90 cents.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614025","date":"2010-05-21","texts":"Q. My husband and I own a co-op and have about 320,000 worth of equity. We're looking to buy a house in Prospect-Lefferts Gardens in Brooklyn for 595,000. It's not a foreclosure, but it doesn't have a functioning kitchen or bathroom. Nearby, a similar, smaller house in good condition is for sale for 879,000. We think we can get the place for 475,000. Rehabbing it could cost as much as 400,000. But our real estate agent says that we'll have to pay all cash because no one will lend on a house in this condition. Is that true We only have about 80,000 in cash, but our income and credit are excellent. New York City A. Your real estate agent is mistaken you do have financing options. Your best bet is an FHA 203k rehabilitation mortgage. It allows you to roll the purchase price, rehabilitation and closing costs, and even up to six months of mortgage payments if you don't plan to live in the house during renovation into one fixed- or adjustable-rate loan. However, you won't be able to borrow the entire 875,000 that you estimate it would take to buy and renovate this home. In Brooklyn, according to New York mortgage broker Melanie Crawford, FHA203k mortgages cover up to 96.5 financing of the purchase price and rehabilitation cost, to a base loan amount of 729,750. You can go higher than that if you install energy-efficient improvements, but cannot borrow more than 110 of either the value of the property plus the cost of rehab, or the appraised value of the property after rehab, whichever is less. You'd have to make up any shortfall. For more rules on this program, see the Housing and Urban Development.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617018","date":"2010-05-21","texts":"Regarding Mark C. Brickell's  op-ed, May 14 Let me just address two aspects of the 464 trillion derivatives market. First, the size of the market is so huge compared to our 14 trillion gross domestic product that everyone should be worried and should demand transparency and regulation. Another of the real dangers of interest-rate swaps is the floating interest end. Let's recall the Orange County, Calif., bankruptcy when it lost 2 billion because it was on the wrong end of inverse floaters. We are currently in a low interest rate environment, but it is very likely that we will see very high rates if the euro collapses or if China withdraws its money from the U.S. Then we will see disaster for all those on the floating end of these interest rate swaps 400 trillion. It will be far worse than being on the wrong end of the subprime derivatives market 1 trillion. William Thayer San Diego In 20 years, Mr. Brickell tells us, these swaps have expanded 200-fold to 464 trillion and someone made money writing every contract. This is seven times the GDP of the whole world.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615571","date":"2010-05-23","texts":"Monday, May 24 The National Association of Realtors reports on existing home sales for April. Tuesday, May 25 More housing data, with the S&PCase-Shiller home price index for March. The Conference Board releases its consumer confidence survey for May.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616415","date":"2010-05-24","texts":"One by one, Wall Street investors are losing legs to stand on. A reflex rally such as the one seen on Friday can do wonders for short-term sentiment on Wall Street, but investors need a reason to keep buying. With the Dow Jones Transportation Average and the Dow Jones Industrial Average both showing signs of medium-term weakness, what started out as a fleeing from riskier assets is starting to evolve into fundamental weakness. One of the basic tenets of the century-old Dow Theory of market analysis, which assumes in the long term that the economy drives the stock market, is that both the industrial and transport indexes have to conform each other's trends. That is based on the premise that Dow transports have a symbiotic link with the Dow industrials, since the industrials make the goods the economy needs and the transports move those goods around the country. Basically, to have a balanced economy one can't work without the other. Investors relied on continued strong growth in China and the strengthening recovery in the U.S. to cushion the blow to U.S. stocks when the European sovereign-debt crisis first started to unfold. Over the last couple weeks, however, China's stock market transitioned from just underperforming to an outright downtrend. And recent data suggests the U.S. recovery may be slowing. After the Conference Board's U.S. Leading Economic Index unexpectedly dipped in April for the first time in more than a year, Conference Board economist Ken Goldstein said the economic recovery will likely continue but it could lose a little steam. Don't forget overly tame consumer inflation and shaky housing data for April. And the minutes of the Federal Reserve's last policy-setting meeting revealed that some members expressed concern that the crisis in Greece could spread to other European countries and eventually slow the U.S. recovery.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830983429","date":"2010-05-24","texts":"Congress is headed for a showdown this week over government spending, an issue that is dividing Democrats as lawmakers prepare to face voters still hurting from the recession but also angry about the huge cost of federal efforts to revive the economy. After delivering key pieces of President Obama's first-term agenda, Democratic leaders will be turning to the more mundane work of passing budget bills and renewing tax breaks set to expire. Ordinarily, they would have little trouble drumming up votes. But they are facing stiff resistance in both chambers of Congress, not only from Republicans but also within their own ranks. With midterm elections looming and Republicans blaming Democrats for a national debt bloated by the downturn and its aftermath, many lawmakers are unwilling to sign off on more spending. It's time to start paying for things, said Rep. Kathy Dahlkemper D-Pa., a freshman who voted for last year's economic stimulus bill but said she is likely to oppose the next spending package, scheduled to hit the House floor Tuesday. We've done some good things, but one of the best things we could do right now is get control of our fiscal house. With the national debt at its highest level in nearly 60 years, the question of whether to cut spending -- and if so, how -- is pitting liberals against conservatives, and Congress against the president. The White House has proposed a three-year freeze in programs unrelated to national security and warned House leaders Friday that it might go further, targeting the Defense Department for cuts. Meanwhile, House leaders unable to agree on a long-term budget blueprint are considering other ways to signal fiscal toughness, including a one-year budget plan that would cut 2011 spending even more deeply than Obama's freeze.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615140","date":"2010-05-25","texts":"Short-selling rose at the New York Stock Exchange and at the Nasdaq Stock Market during the first half of May. In the exchanges' latest twice-a-month statistics, this time for the period ended May 14, the number of short-selling positions at the New York Stock Exchange not yet closed out, known as short interest, increased 0.4300. The positions stood at 13,893,726,160 shares from a revised 13,834,228,633 shares in the period ended April 30. On Nasdaq, short interest increased 1.33 to 7,175,835,162 shares from 7,081,816,511 shares, over the same period. Institutional money managers are increasing their short exposure to reduce the impact of further downturns in the market, said Todger Strunk, senior analyst at DBL Investment Management in Palm Beach Gardens, Fla. On the retail side, suddenly, the bitter taste of 2008 losses are fresh in the mind of investors, said Mr. Strunk.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615197","date":"2010-05-27","texts":"Assets in money-market funds climbed 4.92 billion in the latest week, posting a rare period of inflows, according to the Investment Company Institute. For the week ended Wednesday, total fund assets increased to 2.849 trillion, according to ICI. Earlier this year, the total funds tracked by ICI fell below 3 trillion for the first time since October 2007. ICI has reported outflows in all but three weeks this year, many of them steep. The fund group said outflows through April totaled 462.96 billion. Cash has been leaving money-market funds as investors seek higher returns, which drove a 17-week outflow streak that was broken this month as stock markets were rattled by the flash crash and European sovereign-debt issues. Often, an investor's gut reaction to news that sends the market into a panic is to move stock investments into money-market funds. Retail-class funds climbed 3.79 billion, to 996.04 billion. Taxable government funds rose 1.18 billion, to 173.96 billion, while taxable nongovernment funds had 3.43 billion of inflows, raising the level to 608.89 billion. Tax-exempt funds saw 820 million of outflows, putting the total at 213.19 billion.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617278","date":"2010-05-28","texts":"Crude-oil prices fell, as the dollar strengthened following a credit rater's downgrade of Spain's sovereign debt. In early afternoon trading in New York, the price of the light, sweet crude-oil futures contract for July delivery dropped 84 cents or 1.1 to 73.71 a barrel on the New York Mercantile Exchange as news broke that Fitch Ratings downgraded Spain's debt rating to AA from AAA. North Sea Brent crude on London's ICE futures exchange shed 88 cents, or 1.2, to 73.82. The euro weakened to 1.2324 against the dollar from 1.2370 before the Fitch downgrade was announced. A stronger dollar puts pressure on oil prices, as it makes oil more expensive for holders of other currencies and could thus crimp demand. Oil's decline demonstrates how the energy markets remain sensitive to swings in the currency markets caused by Europe's debt problems. Signs of stabilization in Europe and strong economic data from the U.S. and China helped crude stage a strong recovery this week from a sell-off that had brought prices to as low as 64.24 a barrel. On Thursday, oil prices posted the strongest advance of the year, rising 3.04 a barrel, or 4.3, as Spain agreed to budget cuts and China reiterated its commitment to European bond investments. Stock markets and other commodities posted sharp price increases as investors regained an appetite for risk following a three-week sell-off sparked by concerns over Europe's debt situation and the pace of economic recovery in the U.S. and China. Those fears were lessened this week as economic data showed continued recovery in the U.S. and strong growth from China.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617437","date":"2010-05-28","texts":"Kudos to the Journal for getting it right in the article , page one, May 20. As you wrote, Logically, states would cut the most expensive, least efficient services and keep the most cost-effective. However, they are doing anything but by targeting home and community-based services for persons with developmental disabilities. Leaving aside the inhumanity of targeting such a vulnerable population, it is simply bad fiscal policy. Cutting these services results in adverse situations for the individuals, families and communities involved. When hours for personal-care attendants are cut to levels that no longer allow individuals to live in their own homes, one result is far costlier and undesirable nursing-home care. Additionally, direct-care workers lose jobs, further increasing state unemployment rates and, ironically, adding to Medicaid rolls. Moreover, states forfeit significant federal matching funds for home and community-based services. People with cerebral palsy and other developmental disabilities and their families face these tragic problems daily. These are real lives at risk due to misguided state policy. Stephen Bennett President and Chief Executive","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617014","date":"2010-05-30","texts":"Are you ready for a lot more turmoil You had better be -- because there's a good chance that's what you're going to get. Nobody knows for certain, of course. All stock-market predictions need to be taken with a little salt. But there are reasons to suspect that the sudden plunges of the past few weeks may be unhappy omens of what's to come. Like last week, with stocks lurching wildly with the headlines -- up by triple digits one day, down the next. For the month, the Dow Jones Industrial Average dropped 7.9 and is negative for the year. The Nasdaq Composite and the Standard & Poor's 500-stock index also are in the red for the year. Some pretty smart people are cautious. Seth Klarman at Baupost Group is worried. John Hussman of the Hussman Funds says all sorts of warning lights have lit up across his screen. Even Ron Muhlenkamp of the Muhlenkamp Fund, who usually takes a sunnier view of things, says he has moved a big chunk of his mutual fund into cash in case there's a plunge.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985283","date":"2010-05-30","texts":"MONTGOMERY COUNTY has just completed a nightmarish budget year. Stressed, squabbling and besieged elected officials savaged services and programs and jacked up taxes to eliminate an eye-popping deficit of almost 1 billion in a 4.3 billion spending plan. Meanwhile, across the Potomac River in Fairfax County, all was sweetness and light by comparison. With a budget roughly equal to Montgomery's, Fairfax officials erased a deficit a quarter as large with relative ease and far less drama. The picture isn't likely to change anytime soon. Montgomery, having already pruned the low-, medium- and some high-hanging budgetary fruit, is facing annual deficits in the hundreds of millions of dollars as far as the eye can see. Fairfax, though facing tough choices and further cuts in an economy clouded by recession, has a brighter future. The region's two largest jurisdictions -- demographic cousins with populations around 1 million, school systems among the nation's biggest and best, and public spending equal to that of small countries -- have parted ways. To put it bluntly, Montgomery is lurching under the weight of irresponsible governance, unsustainable commitments and political spinelessness -- particularly in the face of politically powerful public employees unions. Over the past few months, some readers have asked why we lately have devoted attention to those unions. The diverging paths of Montgomery and Fairfax provide one explanation. We respect the public employees in both counties and their dedication to public service. Clean parks, cheerful classrooms, safe streets, bustling libraries -- the work of these employees helps keep these counties such attractive places to live. But when 80 percent of all outlays are related to personnel, labor contracts that get out of whack can endanger the public welfare. Take a snapshot of one year, 2006, when times were flush. In Fairfax, the county executive, an unelected technocrat, proposed a budget with a relatively robust spending increase of about 6 percent. In Montgomery, County Executive Douglas M. Duncan, a career politician then running in the Democratic primary for governor, pitched a gold-plated, pork-laden grab bag of political largess that drove county spending up by 11 percent.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984540","date":"2010-06-01","texts":"The U.S. government debt is rising inexorably, according to the conventional wisdom in Washington, and the political system is too paralyzed to take unpopular actions to rein it in. Privately, many policymakers take it as a given that the situation will change only when the nation faces a Greek-style fiscal crisis. But apparently nobody told the people who lend the U.S. government money. On Friday, they were willing to hand over their cash to the Treasury for 10 years for 3.3 percent interest, a level so low it implies they consider the United States among the safest investments in the world. Collectively, those investors -- think mutual funds, pension funds and foreign central banks -- could lose hundreds of billions of dollars if they're mistaken and the United States has a debt crisis. Perceptions inside the Beltway rest on this idea Although the current large budget deficit is caused mainly by the weak economy and a short-term economic stimulus that will soon expire, in the longer run the government faces a vast unfunded burden, particularly tied to Medicare and Medicaid. The mix of spending cuts and tax increases that could close the gap are wildly unpopular. With the threat of a filibuster in the Senate hanging over anything remotely controversial, a bipartisan budget accord seems unlikely. And many Republicans have declared they will not vote for a package that includes a tax increase under any circumstance. This situation led Moody's, the debt-rating firm, to state in March that the U.S. government is nearer to being at risk of losing its Aaa credit rating and that maintaining the rating might require adjustments to tax and spending policy of a magnitude that, in some cases, will test social cohesion.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614407","date":"2010-06-03","texts":"WASHINGTON--Home-mortgage rates were little changed last week, holding steady for the most part at or near recent lows, including a record for the 15-year fixed-rate loan, Freddie Mac said. The 30-year fixed-rate mortgage average rose slightly to 4.79 for the week ended Thursday, according to Freddie's weekly survey. In the prior week, the average rate was 4.78, the lowest since December. The year-ago average for the 30-year home loan stood at 5.29. The economy grew at a slower rate than originally reported in the first three months of the year ... which suggests inflation will remain tame in the near term, said Freddie Mac chief economist Frank Nothaft, referring to revised data on U.S. gross domestic product. As a result, he said, mortgage rates held at historic levels this week.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615808","date":"2010-06-03","texts":"Regarding Rep. Jim McDermott's letter of May 28 on the virtue of extending benefits to the unemployed The Journal has noted that increasing the period over which unemployment benefits may be paid tends to reduce incentives for the recipients to seek jobs. Any increase in such benefits will induce the job seeker to narrow his list of job targets. The reason for this assertion is that, after ranking possible job opportunities in order of preferences, and because of the additional unemployment benefits, the seeker will forgo exploring inferior openings in favor of the relatively more attractive ones. He can afford to be more choosy. These reduced options become his new set of opportunities. It is in this sense that the incentive to search for jobs is reduced. In turn, the reduced set implies a longer period of job search and a lengthening of the average period of unemployment. Because of lengthening unemployment spans, it also implies, all other things being given, a tendency for total unemployment to rise. William Beranek Aiken, S.C.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616775","date":"2010-06-03","texts":"Continued strains in the labor market are weighing on Federal Reserve officials more than recent turmoil in Europe, their public comments Thursday suggested. Federal Reserve Bank of Atlanta President Dennis Lockhart indicated that the central bank may raise interest rates even if joblessness remains high. Good policy, even in circumstances of unacceptable levels of unemployment, may incorporate higher interest rates. Mr. Lockhart, whose views tend to mirror the consensus on the Fed's policy committee, said the time is approaching when it will be appropriate for the Fed to consider raising rates, but that time hasn't arrived yet. However, as the economy continues to improve and financial markets find firmer ground, extraordinarily low policy rates will not be needed...will become inconsistent with maintaining price stability. He acknowledged that the European concerns have added to uncertainty in financial markets. But neither he nor other Fed officials who spoke Thursday suggested Europe is a predominant concern. Federal Reserve Bank of Kansas City President Thomas Hoenig said the situation in Europe reminds us to be wary, and noted the shift from riskier assets will have a modest negative net effect on U.S. economic growth in the near term. But the officials' comments suggested that the path for interest rates hadn't been altered much by recent developments overseas.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613738","date":"2010-06-04","texts":"Credit-ratings firms say they plan to delay issuing any credit-rating downgrades to the largest U.S. banks as a result of new financial regulation. Moody's Investors Service analysts on Thursday said that, under the overhaul bill passed by the Senate last month, the government still has some room to bail out the biggest banks, at least in the short term -- an option it will likely choose as long as the economy and markets are unsettled. Consequently, we expect that the senior debt and deposit ratings of systemically important banks in the U.S. will continue to benefit from unusual levels of support, Moody's analysts wrote in a report, until the economic recovery is sustained, financial market health is restored, and the risks of attempting to unwind an interconnected institution are reduced. Moody's didn't specify which banks it considers systemically important, but the short list likely includes Bank of America Corp., Citigroup Inc., J.P. Morgan Chase & Co., Wells Fargo & Co., Goldman Sachs Group Inc. and Morgan Stanley. The Moody's Corp. unit and McGraw-Hill Cos.' Standard & Poor's in the past have warned that the government's implied support of banks considered to big to fail means they get higher credit ratings than they otherwise would, usually between one and five notches. The ratings companies have said that any overhaul bill undercutting that support could result in downgrades.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614381","date":"2010-06-04","texts":"Author Brett Arends In , I said there was a chance gold might be about to go vertical. In , I explained why I don't trust it, and wouldn't want to risk a lot of my money on it. Where does that leave you You can see signs of a gold rush everywhere, from the nonstop TV commercials in the U.S. to the Emirates Palace Hotel in Abu Dhabi, where a vending machine now dispenses gold coins.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616978","date":"2010-06-04","texts":"CUSTER, S.D. -- Some towns ban liquor sales on election day. Here, liquor sales are on the ballot. Pruning government's role in the economy is a hot topic in an election year, and for voters in this Black Hills city, Tuesday will bring a chance to decide whether their municipal government should quit the spirits business. South Dakota is one of two Great Plains states -- Minnesota is the other -- where cities and towns own and operate bars and liquor stores. In South Dakota, the practice precedes statehood. City fathers promoted saloons to raise funds from the purchases of ranchers, miners and railroad workers in an era before sales taxes. After Prohibition, communities were allowed to vote on whether they wanted to resume the sale of liquor themselves or let private operators handle the trade. Today, 121 South Dakota cities and towns -- several with under 100 residents -- remain in the liquor business. That is just over a third of all the state's municipalities, most of which have fewer than 500 people. Many of the stores lose money but hang on, anchoring retail strips in dying farm communities. Others, generally the bigger ones, shovel funds into their cities' coffers each year, thanks to a booze biz monopoly. The store in Brookings, home to the campus of South Dakota State University, had more than 3.4 million in sales last year Sturgis, 1.7 million.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617238","date":"2010-06-04","texts":"Edelweiss The misspelling of this European alpine plant was all it took to run Ben Bernanke out of Washington, DC. This departure was not the result of an error he made at the Federal Reserve. It happened in a final round of the Scripps National Spelling Bee in 1964, when he was 11 years old. The Federal Reserve chairman will no doubt reflect on this tonight, as millions of Americans tune in at 800 p.m. to watch the spelling bee finals on ABC. The first national spelling bee was held in 1925, and this year's competition will feature 273 spellers from the U.S. and around the world. Interestingly, English is not even the first language of 21 of those spellers, and Scripps reports that 102 of the contestants speak other languages, from Hebrew to Hindi. Given this amazing diversity united under one language, the author of America's first dictionary and the originator of uniform spelling in America which makes the Bee possible would be proud. That's Noah Webster, to whom the Bee owes its official dictionary, Merriam-Webster's Third New International Dictionary.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614255","date":"2010-06-07","texts":"Author Donna Kardos Yesalavich NEW YORK--Stocks fell, with Bank of America, Caterpillar and Alcoa among the decliners as investors continued to worry about European sovereign debt, while data on U.S. consumer spending also sparked concerns about the economic recovery. The Dow Jones Industrial Average fell 115.48 points, or 1.16, to 9816.49, its lowest close since Nov. 4. The Dow is now below the intraday low it hit during the May 6 flash crash. Bank of America was the Dow's worst performer, falling 52 cents, or 3.4, to 14.83. Unit Countrywide Home Loans agreed to pay 108 million to settle federal charges it collected excessive fees from homeowners struggling to keep their homes. The bank didn't admit or deny the allegations. Caterpillar slid 1.93, or 3.3, to 55.83. Caterpillar exports to Europe, and investors are concerned about how its profitability may be impacted by currency translations given the euro's weakening against the dollar. Monday, the dollar gained 0.41 versus the euro to its highest level since March 2006.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616878","date":"2010-06-07","texts":"Target-date funds drew a lot of criticism during the bear market for big losses. Whether or not the criticism was deserved, one thing is clear Average investors need to better understand the risks and benefits of these popular retirement-savings vehicles. Designed as hands-off, long-term holdings, target-date funds typically contain a retirement year in their names and shift to a more conservative asset mix as that year approaches. But as the market tanked in late 2008 and even supposedly conservative funds for people retiring in 2010 took a hit, questions arose about how well people really grasp these products. Securities and Exchange Commission Chairman Mary Schapiro has asked her staff to prepare rule recommendations about how target-date funds are marketed, and the Labor Department's Employee Benefits Security Administration plans to require fund providers to give plan participants more information about target-date funds when they are among the default options in retirement-savings programs such as 401ks. Target-date funds rebounded strongly along with the broad stock market last year. Funds geared to retirement in years between 2000 and 2010, for example, returned an average 22.4 last year after falling an average 22.5 in 2008, according to researcher Morningstar Inc. this year, they're down a slight 0.7. The rebound since 2008 takes some of the immediate pressure off these funds, but there's still a lot of questions out there, says Laura Lutton, editorial director in the mutual-funds research group at Morningstar. Here are five questions investors should ask","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613813","date":"2010-06-09","texts":"Author Min Zeng Mark Gongloff After months of deriding U.S. Treasury bonds, Bill Gross and his fund managers at Pacific Investment Management Co. have switched sides. Pimco had been the biggest and most vocal of a large group of Treasury bears, predicting that Treasury prices would fall, and yields rise, as the U.S. economy strengthens and the government borrowing binge continued. In the opposing camp was Pimco's chief rival, BlackRock Inc., which said in March that it was buying up Treasurys. So far, BlackRock's view has proven to be the winning bet. The debt crisis in Europe sparked a global flight to safe-haven assets such as U.S. government debt. Treasury bond prices soared, pushing down their yields to near-record lows.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614724","date":"2010-06-09","texts":"Author Jon Hilsenrath For months the Federal Reserve has been plotting a strategy to exit from its easy money policies while promising that it won't do so for a while. On Wednesday, Fed Chairman Ben Bernanke urged lawmakers to take the same approach with the budget deficit Devise a plan now, but act on it later. In testimony to the House Budget Committee, Mr. Bernanke said that having a credible deficit-reduction plan in place will help keep interest rates down and help growth in the near term, but indicated the economy was too fragile to start cutting the deficit now. Advancing a theme he has emphasized in the last few months, Mr. Bernanke said that if Congress pursued more fiscal stimulus to sustain the recovery, it should be accompanied by a concrete plan to bring the deficit back into line in the long run. Without a fiscal exit strategy, he said, the U.S. could, in the worst case, see financial instability like in Greece.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985345","date":"2010-06-09","texts":"The threat of U.S. jobs heading abroad has become such a potent campaign issue this year that congressional Democrats are moving quickly to capitalize on it -- and to use it against Republicans. Democratic leaders are pushing a package of hefty corporate tax increases intended to discourage businesses from moving their operations overseas. They have attached the proposed increases to a bill that would extend unemployment benefits and tax breaks to businesses, all but daring GOP lawmakers to vote against it. Republicans and their allies in the business community say the effort, pending in the Senate, could backfire. They say it will slow the recovery and inflict more pain on American workers. But with unemployment hovering close to 10 percent, Democrats are using whatever legislative tactics they can think of to demonstrate leadership on the economy before the Nov. 2 midterm elections. It's not rocket science, said Eddie Vale, a spokesman for the AFL-CIO. People are unemployed, or their brother is, or their next-door neighbor is. If Democrats want to win races in 2010, they need to show people they're creating jobs for them. And repealing tax breaks that send jobs overseas is a direct corollary. At issue are nine corporate tax changes in the American Jobs and Closing Tax Loopholes Act of 2010, approved by the House on May 28 and introduced in a modified form Tuesday in the Senate. The provisions would alter long-standing laws on overseas income intended to prevent U.S. companies from facing double taxation. Together, they would raise an estimated 14 billion over 10 years.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842613892","date":"2010-06-10","texts":"NEW YORK -- The euro eked out an advance against the dollar as investors turned modestly optimistic about the pace of the global economic recovery, despite lingering concerns over the euro-zone debt crisis. Unconfirmed reports of strong Chinese export figures boosted currencies closely tied to global economic growth, while Federal Reserve Chairman Ben Bernanke's cautiously optimistic tone on the U.S. economy also supported the rally. But a late-afternoon slip in U.S. stocks threw cold water on the run-up in riskier currencies, and investors likely pared their euro holdings ahead of Thursday's meeting of the European Central Bank, said Ron Leven, currency strategist at Morgan Stanley in New York. The central bank isn't expected to increase its target rates. Still, investors will listen closely for details on how the bank is dealing with issues related to euro-zone sovereign debt. As investors took risk off the table in late afternoon, the dollar hit an intraday low against the yen. The Japanese currency tends to strengthen when investors unwind bets on higher-yielding currencies. By late afternoon in New York, the euro was at 1.1987, compared with 1.1947 late Tuesday in New York. The dollar was at 91.17 yen from 91.39 yen. The euro was at 109.28 yen from 109.18 yen. The U.K. pound strengthened to 1.4533 from 1.4426. The dollar weakened to 1.1478 Swiss francs, from 1.1527 francs.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982305","date":"2010-06-11","texts":"Unemployment, a shaky recovery, mounting government debt and a host of other fiscal anxieties have distilled into a single question dominating the Maryland governor's race Whom do voters trust more to control taxes and spending Gov. Martin O'Malley or his Republican rival, former governor Robert L. Ehrlich Jr. In a state that has generally fared better in the recession than others -- but has also raised a bevy of taxes over the past eight years -- each is racing to cast his opponent as a tax-happy, out-of-control big spender. In so doing, each has concocted a convenient history of his opponent's time in Annapolis and assigned sinister motives that often only make sense in the candidates' jumbled versions of the past. The two candidates' pithy campaign lines about egregious tax and spending changes almost always omit any nod to the dire budget situation the other faced. And through a hail of numbers, they each grossly inflate totals for the other's spending and tax increases by counting the same cuts, taxes and fees over and over again.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842613562","date":"2010-06-13","texts":"Author Moshe A. Milevsky Sit back for a moment and ponder something unpleasant How would a large, sustained drop in the stock market affect your personal finances More specifically, imagine the Dow Jones Industrial Average hitting 6500--its March 2009 level--and staying there. I suspect that most of you are thinking about the wretched blow this would deal to your retirement savings and stock portfolio. And it no doubt would. But here's my advice Think more broadly. Most important, think about how such a drop would affect your paycheck and your career. It will depend on the person, of course. Earnings in some professions are tightly linked to the stock market--an investment banker, say, or portfolio manager or financial adviser--while others, such as hospital nurses or tenured professors, are relatively immune to these zigs and zags. Most people will fall somewhere in between. Consider this an exercise in personal risk management. It isn't intended to gauge whether you believe the stock market will test those levels again, and I'm not asking whether you are bullish or bearish. That is not what personal risk management is about, even if it is how most people practice it. The issue here is If the bear returns for a prolonged visit, regardless of your subjective view of these odds, how would it affect your current and future earning power And--more important--are you properly considering it when creating your investment portfolio","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984720","date":"2010-06-13","texts":"U.S. stocks rose last week, pushing the Standard & Poor's 500-stock index to the biggest weekly advance since March, as China's exports jumped the most in six years, Federal Reserve Chairman Ben S. Bernanke said the economic recovery is intact, and commodity prices rallied. Alcoa, DuPont and Dow Chemical helped lead raw-material producers higher as reports showed the global economy is strengthening. A measure of apartment developers, hotel operators and warehouse owners rallied the most in seven weeks after Fitch Ratings boosted its outlook on the industry. Bristol-Myers Squibb soared 12 percent, the biggest gain in 15 months, after studies showed two of its cancer drugs worked better than current therapies. The S&P 500 gained 2.5 percent for the week to 1,091.60 as its 10 main industries rose. The Dow Jones industrial average had its first gain in four weeks, rising 2.8 percent to 10,211.07. The Nasdaq composite index climbed 1.1 percent to 2243.60. The bear is running out of fuel, said Don Hays, who manages more than 1 billion at Hays Advisory Group. We're virtually on the threshold of what you only get at the bottom of major bear markets. It's one of those amazing times to buy stocks. Reports last week showed property prices in China rose at a near-record pace and exports surged 48.5 percent in May, signaling Europe's crisis hasn't slowed the world's fastest-growing major economy.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842616988","date":"2010-06-14","texts":"Author Kristina Peterson Small-capitalization stocks advanced modestly, as hopes for global growth spurred riskier investments. Small-caps clung to a slim lead as euro-zone data and comments from a Federal Reserve policy maker brightened the outlook for a global economic recovery. The Russell 2000 index rose 3.27 points, or 0.5, to 652.27, its fourth consecutive positive day. That marks the measure's longest advancing streak since the four days ended April 23. The Standard & Poor's SmallCap 600 index advanced 1.62 points, or 0.5, to 348.49.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985156","date":"2010-06-14","texts":"It's psychology, stupid. Not since World War II has an economic recovery been so hobbled by poor confidence. Every recession leaves a legacy of anxiety and uncertainty. But the present residue is exceptional because the recession was savage and -- more important -- its origins housing bubble, financial crisis were unfamiliar. People are super-sensitive to the latest news, for good or ill, because their vision of the future is blurred and their bias is gloomy. Having underrated economic risk during the boom, Americans may be overrating it now. Unfortunately, perceptions can become self-fulfilling. The Obama administration is grappling uneasily with this reality. It can rightly claim that its economic policies quelled the near-hysteria of late 2008 and early 2009. But the success was partial, and the administration isn't getting much credit even for that. Only 23 percent of the public say President Obama's policies have improved the economy, reports a new Pew survey. By contrast, 29 percent think his policies made matters worse and 38 percent believe they made no difference. For or against, those policies haven't restored faith in the economy's underlying strength. Decisions by people and companies to spend or hoard, hire or fire reflect fickle hopes and fears. These fluctuate, but today's common starting point is pessimism. In May, 56 percent of American families expected flat or declining incomes over the next year, reports the University of Michigan's Surveys of Consumers. Before the recession in early 2007, 89 percent of families expected higher or level incomes in the year ahead. The weak labor market is clearly a powerful psychological poison. Almost everyone knows someone who is or was unemployed -- a jobless recent college grad, an idle construction worker, a fired manager. True, the unemployment rate 9.7 percent in May is below the post-World War II high 10.8 percent in late 1982, but underemployment and prolonged joblessness hover near postwar peaks. Once lost, a job is hard to find. Almost half 46 percent of the 15 million unemployed have been jobless six months or longer. Nearly a fifth of the labor force is unemployed, working part time involuntarily or so discouraged they've stopped looking for work. The stock market also shapes psychology. Our economy has become very sensitive to the stock market, says Mark Zandi of Moody's Economy.com. The wealthiest 20 percent of Americans represent about 60 percent of consumer spending, says Zandi. These same people are most heavily invested in the market. When the market rises, they feel wealthier, save less and spend more -- and vice versa. In mid-2007, their savings rate plunged to 1 percent of disposable income but when the market dropped, savings jumped to 16 percent and spending suffered.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615403","date":"2010-06-15","texts":"WASHINGTON -- The Food and Drug Administration said Monday it will propose stronger regulations for drug companies that outsource manufacturing, putting more responsibility on them to ensure the purity and safety of products made by contractors. During a conference at Xavier University's Med-XU program on pharmaceutical global outsourcing, the FDA's Brian Hasselbalch said the agency may soon require companies to conduct on-site audits at outside contract manufacturing facilities, according to slides of his presentation. Mr. Hasselbalch and Kathleen Culver, an official at the agency's Cincinnati office, indicated the agency wants to hold sponsor companies more accountable for flaws in manufacturing processes of outside contractors both in the U.S. and abroad, and for certifying that contractors have followed FDA standards, according to conference director Marla Phillips. An FDA representative and Mr. Hasselbalch couldn't immediately reached for comment. Credit By Alicia Mundy","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614750","date":"2010-06-17","texts":"Author Alan Greenspan An urgency to rein in budget deficits seems to be gaining some traction among American lawmakers. If so, it is none too soon. Perceptions of a large U.S. borrowing capacity are misleading. Despite the surge in federal debt to the public during the past 18 months--to 8.6 trillion from 5.5 trillion--inflation and long-term interest rates, the typical symptoms of fiscal excess, have remained remarkably subdued. This is regrettable, because it is fostering a sense of complacency that can have dire consequences. The roots of the apparent debt market calm are clear enough. The financial crisis, triggered by the unexpected default of Lehman Brothers in September 2008, created a collapse in global demand that engendered a high degree of deflationary slack in our economy. The very large contraction of private financing demand freed private saving to finance the explosion of federal debt. Although our financial institutions have recovered perceptibly and returned to a degree of solvency, banks, pending a significant increase in capital, remain reluctant to lend. Beneath the calm, there are market signals that do not bode well for the future. For generations there had been a large buffer between the borrowing capacity of the U.S. government and the level of its debt to the public. But in the aftermath of the Lehman Brothers collapse, that gap began to narrow rapidly. Federal debt to the public rose to 59 of GDP by mid-June 2010 from 38 in September 2008. How much borrowing leeway at current interest rates remains for U.S. Treasury financing is highly uncertain.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615423","date":"2010-06-17","texts":"Corrections & Amplifications The name of the company MacAndrews & Forbes Holdings was misspelled as McAndrews & Forbes in a Thursday U.S. News article about a philanthropic challenge issued by Warren Buffett and Bill Gates. WSJ June 18, 2010 See related letter Letters to the Editor Job Creation Is the Very Best Charity -- WSJ June 24, 2010 Warren Buffett and Bill Gates called Wednesday on their billionaire peers to give away half of their wealth.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615407","date":"2010-06-18","texts":"As the House and Senate move to finalize regulatory-overhaul legislation, the Federal Reserve has emerged as likely to retain most of the power and independence Fed officials have feared they might lose. On Thursday, senators on a panel meant to reconcile competing versions of the bill voted 10-2 to kill a provision that would have made the president of the Federal Reserve Bank of New York a White House appointment. The position is now an internal Fed appointee. Fed officials said the change would have politicized the institution. Lawmakers' efforts to remake the Fed comes amid popular angst directed toward the central bank for its failure to head off the financial crisis and for the dramatic corporate rescues it engineered. A rethink of the Fed has been part of the broader financial overhaul legislation expected to be completed in Congress this month. The House-Senate conference also has resisted a House attempt -- popular in Congress but adamantly opposed by the Fed -- to subject the Fed's interest-rate decisions to regular audits by the Government Accountability Office, which Congress oversees. In a tentative compromise, the GAO would gain authority to scrutinize the Fed's 2008 crisis decisions and the Fed would disclose, with a two-year lag, details of loans it makes to banks through its discount window. The Fed now does not disclose discount window loans.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617090","date":"2010-06-20","texts":"The best that can be said for China's weekend decision to drop its dollar peg and again adopt more exchange-rate flexibility is that it may avert a trade war. What no one should believe is that China's move will rebalance the world economy or send manufacturing jobs rushing back to America. The People's Bank of China asserted that its decision was made in China's own economic interests, and no doubt that's true. But its timing a week before the Group of 20 meeting in Toronto is no coincidence, comrade. China did not want its exchange rate to become the conclave's focus, diverting attention from the failures of U.S. and European economic policies. Senator Chuck Schumer and other U.S. protectionists have also been promising a new tariff against Chinese goods if Beijing didn't move on the exchange rate. And this time the New York Democrat seemed to have corralled such key party colleagues as Max Baucus, chairman of Senate Finance, and Sander Levin of House Ways and Means as his Smoot and Hawley. Given the Democratic panic about their November election prospects and President Obama's ebbing political authority, a protectionist mistake from the U.S. Congress cannot be ruled out. China's move reduces the odds of such a blunder, at least in the short run, and that should help the fragile world recovery. We say short run because China's decision won't end the global demands for a revalued yuan. The People's Bank of China statement made clear that a big one-time revaluation is not in the offing, and the band in which the currency trades daily will not be widened. U.S. Treasury Secretary Timothy Geithner immediately responded that China's move is an important step but the test is how far and how fast they let the currency appreciate. Mr. Schumer demanded even more aggressive revaluation and said he'll still try to move an anti-China trade bill.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613479","date":"2010-06-23","texts":"Author Kristina Peterson NEW YORK--Blue-chip stocks eked out a tiny gain after the Federal Reserve kept interest rates at record lows, but energy companies Chevron and Exxon Mobil slid as oil prices fell. The Dow Jones Industrial Average rose 4.92 points, or 0.05, to 10298.4, paring an early jump after the Fed's statement led the euro to strengthen. The Fed's policy-making body kept key interest rates near zero, as expected, but cast its policy statement with more downbeat language, compared with its previous statement in late April. Still, Fed officials continued to say they expect to keep the benchmark federal-funds rate low for an extended period. Investors said weak home sales, lingering unemployment and low inflation combined to persuade the Fed to signal that rates will stay low for some time.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613858","date":"2010-06-24","texts":"Prices of mortgage securities issued by government agencies -- Fannie Mae, Freddie Mac and Ginnie Mae -- climbed to 15-year highs amid a surge in demand for investments that are as safe as Treasurys but offer better returns. These bonds, which are effectively guaranteed by the U.S. government, now trade above their face value. Fannie Mae 30-year bonds with a 4.5 coupon rose to 103.406 for each 100 of face value. The 4 coupon bond rose as high as 101 before fall back to 100.781. At those prices, these so-called agency bonds yield about 1.5 more on an annual basis than comparable Treasury securities, and many buyers consider them just as safe as Treasurys. Mortgages have become a flight-to-quality instrument, said Mahesh Swaminathan, strategist with Credit Suisse. The perception that these bonds are guaranteed by the U.S. government, which took control of the faltering mortgage companies in the depths of the credit crisis, has been a lure to many foreign investors.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613480","date":"2010-06-25","texts":"DETROIT -- The city of Detroit plans to close 77 public parks as part of a bid by Mayor Dave Bing to cuts costs due to a budget deficit pegged at hundreds of millions of dollars. Roughly 1,400 acres of parkland will be affected by the closures, which are scheduled to take place July 1. Basically, this was how can we close the lowest number of places, said Dan Lijana, spokesman for the mayor. Some of these are the largest, most sprawling parks in the city, and some of the most scenic. Mr. Bing pledged more fiscal responsibility when he took office in May 2009, and has been pushing for cuts citywide to stave off financial insolvency. He has won concessions from just over half the city's public-sector unions but he hasn't seen eye-to-eye with the city council, which has pushed for even deeper cuts than he is proposing. Detroit has closed dozens of schools in recent years and cut back on other city services, such as busing, as the city as a whole has begun to respond to a decline in population that has left whole blocks and neighborhoods sparsely populated.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982340","date":"2010-06-25","texts":"The average rate on a 30-year fixed-rate mortgage dropped to 4.69 percent this week from 4.75 percent last week, Freddie Mac reported Thursday. That marks the lowest level since the company started tracking the data in 1971 and breaks the most recent low set in December. Rates have hovered below 5 percent since early May. Yet home sales are tumbling and mortgage applications are slipping. Potential buyers have retrenched, discouraged by employment fears, the recent expiration of a home buyer's tax credit and tough lending standards, industry experts said. Interest rates have no effect on buyer psychology anymore, said Glenn Kelman, chief executive of Redfin, a real estate company. Now, interest rates fall to the floor and nobody cares. The lull in home purchases follows a burst of activity in April and May, when people were rushing to take advantage of the tax credit -- 8,000 for some first-time buyers and 6,500 for certain repeat buyers. To qualify for that subsidy, buyers had to sign a contract by April 30 and they must close the deal by Wednesday. As the program wrapped up, home purchases plummeted. Industry figures released this week showed that sales of existing homes fell 2.2 percent in May from April, and government data showed that sales of new homes plunged nearly 33 percent during the same period.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614293","date":"2010-06-26","texts":"Author Scott Patterson Companies from airlines to oil drillers to fast-food chains could see some costs climb as a result of the financial-overhaul bill, even though those industries weren't at the center of the credit crisis. The bill agreed to early Friday by lawmakers will force financial firms, which use derivatives to bet on the direction of everything from the price of oil to interest rates, to trade most of these complex financial instruments on an exchange and process them through a central clearinghouse. So-called end users, which use derivatives to hedge against risks such as a jump in oil or corn prices, will be swept up in these changes, though many questions remained late Friday about the exact impact. The counterparties of derivatives trades made with end users, or the dealers that buy and sell derivatives, might be required to put up an extra chunk of cash when entering into a trade with a nonfinancial firm, or when a trade moves against them. That could lead to higher prices for the contracts, because dealers likely will try to pass along their additional expenses.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613617","date":"2010-06-29","texts":"The Federal Reserve is having trouble tying up the loose ends of its 1.25 trillion program to buy mortgage-backed securities, prompting an announcement Monday that it would buy different bonds than planned. The Fed said it hasn't been able to complete the last 9.2 billion worth of deals to buy 5.5 30-year bonds issued by Fannie Mae and Freddie Mac because the debt is in such short supply. Instead, the Fed said it would buy other securities with lower nominal interest rates. The 5.5 notes are now so scarce that would-be sellers -- financial institutions called primary dealers -- are struggling to find enough of them to hand over to the Fed. Many are failing to deliver them. The Fed's dilemma shows just how tight the mortgage market has become -- fewer mortgages are being made, resulting in fewer mortgage-backed bonds being created. Tighter supply, however, has helped drive up prices by 3 to 4 on the 5.5 coupons securities under the purchase agreements those gains belong to taxpayers. While the Fed ended its 15-month program to buy mortgage-backed securities at the end of March, several deals were designed to close this summer. Some of the buying was made in the forward market, so the agreement was set before the program ended, but the securities didn't have to be delivered until later.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616974","date":"2010-06-29","texts":"The European Central Bank is scrambling to reassure markets that Thursday's expiration of a bank-lending facility won't destabilize the financial system, even as banks across the region remain wary of lending to one another. The Bank for International Settlements warned governments and central banks that keeping interest rates too low or failing to act quickly to cut deficits could sow the seeds for the next crisis. --- Treasury yields are falling as uneasiness about the global economic outlook is causing investors to gravitate toward U.S. government debt. The Dow industrials fell 5.29 points to 10138.52. ---","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615544","date":"2010-06-30","texts":"After two moribund years, the market for closed-end funds finally may be back, with two new funds launching last week and one garnering more than 1 billion, the largest such total since 2007. The closed-end-fund business was hit hard by the financial crisis, with just two new funds appearing in 2008 and 13 funds last year, according to research firm Thomas J. Herzfeld Advisors. Before last week, six funds had launched in 2010, but none attracted more than about 500 million. It's been challenging for a while, said Herzfeld analyst Cecilia Gondor. Unlike conventional mutual funds that create new shares whenever investors want to buy in, closed-end funds typically raise money just once, in an initial public offering designed to reach individual investors through financial advisers, a process that often involves heavy commissions. The funds then trade on an exchange at prices that may or may not match the value of the fund's underlying holdings. Closed-end funds held about 233 billion at the end of April, according to the Investment Company Institute.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614440","date":"2010-07-01","texts":"Author Jerry A. DiColo Matt Day Commodities closely tied to global economic growth fell sharply Thursday as disappointing economic data heightened concerns about the sluggishness of the global recovery. Crude-oil futures fell 3.5 in New York trading, gasoline futures dropped below 2 a gallon and copper futures tumbled 2.5, hurt by U.S. reports on manufacturing, unemployment, home sales and construction spending that added pressure to a market already skittish over the prospect of a slowdown in growth in China. Even gold--which hit record highs in recent weeks as investors sought refuge in the metal amid concerns about debt problems in Europe and the deteriorating economic outlook--settled nearly 40 lower, the biggest one-day decline in five months. The decline in gold appeared to be tied to a sharp move higher in the euro, traders said, as investors turned more optimistic about the health of Europe's banks. A bearish bet on the euro, coupled with a bullish bet on gold, has been a popular trade among certain investors.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615968","date":"2010-07-01","texts":"Just when you're thinking all hope is lost, along comes the void-for-vagueness doctrine, invoked this past week by the Supreme Court to restrict a hopelessly vague law. If our era needs a bumper sticker, this is it Void for Vagueness. Paste it on the 2,000-plus pages of the new ObamaCare law, paste it on the 2,000 pages of the floundering financial regulation bill. Hand it out in front of Elena Kagan's confirmation hearings. Heck, chisel it on the facade of the U.S. Capitol. But my enthusiasm is racing ahead of the story. In 2006, the most hated man in America was probably Jeff Skilling, who once sat atop Enron, perhaps the most hated corporate name in all American history. This heap of unpopularity notwithstanding, the Supreme Court said last week the government wrongly prosecuted the abominated Jeff Skilling under something called the honest services fraud law. The Court ruled -- unanimously -- that the law was, in a word, too vague. Here is the classic description of the void-for-vagueness doctrine from Justice George Sutherland in 1926 a statute which either forbids or requires the doing of an act in terms so vague that men of common intelligence must necessarily guess at its meaning . . . violates the first essential of due process of law. That any such common-sense rule still exists in law, politics or life is a wonder. Strictly, the vagueness test applies only to penal law, but in a better world would it not also apply to much else in public life The world was simpler in 1926.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616052","date":"2010-07-04","texts":"Author Bradley Davis Traders say the forces that have fueled the rally in the euro are likely to continue in the coming weeks, possibly giving the common currency more room to rise. The euro has rebounded 2 over the past month because of easing concerns over the European banking system and sovereign-debt problems. Analysts such as Brian Kim at UBS in Stamford, Conn., say the currency could go as high as 1.27 in the near term. The euro is likely to advance further before investors assess whether the longer-term picture in the euro zone, which is still struggling with high levels of sovereign debt, makes the common currency ripe to sell. The euro has successfully navigated several risk events, while U.S. economic data has disappointed, UBS said in a research note.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984253","date":"2010-07-04","texts":"Sometimes provocative people become that way because they were provoked. Sharron Angle, 60, could be enjoying the 10 grandchildren she loves even more than her .44 magnum. Instead, she is the Republican nominee against Senate Majority Leader Harry Reid's quest for a fifth term as senator. Her campaign began, in a sense, three decades ago, when a judge annoyed her. When her son was depressed about having to repeat kindergarten -- He was a 6-year-old dropout -- she decided on home schooling, which Nevada law permitted. But a judge construed the law to require that parents who home-school must live at least 50 miles from a public school. She and many kindred spirits descended on Carson City to get the Legislature to correct this. One legislator, irritated by such grass-roots impertinence, said, If I'd known there would be 500 people here instead of 50 and it would take five hours instead of 30 minutes, I would have thrown it the legislation in my drawer, and it would never have seen the light of day. Angle asked a cowboy standing next to her, Can he do that The cowboy said yep. She has been politically incandescent ever since. Even when asked where she was born, she is on message I was conceived in Lovelock Nevada but -- if you're not pro-life -- I was born in Klamath Falls Oregon. During her four terms in Nevada's 42-seat Assembly, many votes were 41-to-Angle. She wears as a badge of honor having been voted Nevada's worst legislator, a disparagement she says is always bestowed on a conservative because the voters are members of the press and the political class the legislators and their staff. Her favorite legislators U.S. Sens. Jim DeMint and Tom Coburn and Minnesota congresswoman Michele Bachmann. They are coming here to help her. She says she will be 73 at the end of two Senate terms, but notes that her 103-year-old aunt lives in Arizona with her two sons, both in their 80s.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615468","date":"2010-07-06","texts":"Some Wall Street firms aren't waiting until the Volcker rule kicks in to shake up the trading desks that wager the banks' own money. As the financial-regulation overhaul heads toward a final vote in the Senate next week, banks are scrambling to find new positions for star proprietary traders, who basically trade company money in hopes of fattening bank profits and their own paychecks but could become an endangered species once the rule takes effect. Citigroup Inc. is considering moving roughly two dozen proprietary traders onto desks that trade with company clients, according to people familiar with the situation. Other firms already have switched proprietary traders to customer-focused trading operations. The moves don't necessarily mean the days of wagering with a bank's capital are numbered. Many expect an increase in risk-taking in trading operations that cater to clients as traders build an inventory of stocks and bonds to meet demand from hedge funds, money managers and other customers. At Morgan Stanley, one proprietary trader whose desk was closed after the financial crisis now trades using capital from a trading desk that serves stock-trading clients, said a person familiar with the matter. Another Morgan Stanley proprietary trader who left for Deutsche Bank AG also essentially bets with the German bank's capital on a trading desk for clients, this person added.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613502","date":"2010-07-09","texts":"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. 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. 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. 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. 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.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616093","date":"2010-07-11","texts":"Author Irwin Stelzer America was a big loser in the recent Polish presidential election. The Law and Justice Party's pro-American Jaroslaw Kaczynski lost his presidential bid to more Europe-oriented Bronislaw Komorowski's Civic Platform. Mr. Komorowski knows that Barack Obama sacrificed the missile defense system he had promised Poland in pursuit his goal of a reset to U.S. relations with Russia. And that Mr. Obama failed to visit NATO-ally Poland on his trips to Europe. Which explains the desire of Poland's new president to improve his nation's ties to Europe rather than maintain the rigidly Atlanticist policy of his predecessor, and to improve relations with his Russian neighbor. Despite the made-in-Greece upset to the euro, Mr. Komorowski holds to his plan to trade in Poland's zloty for the euro, although not immediately. America's president has invited his new Polish counterpart to him to visit the White House, to discuss Mr. Komorowski's plan to withdraw Poland's troops, the seventh-largest contingent, from Afghanistan. Both men will welcome the traditional photo-op such visits produce. Especially Mr. Obama. After all, congressional elections are looming, and a significant number of Polish voters are concentrated in several key congressional districts, not least among them several in Mr. Obama's home town of Chicago, which has the largest Polish population outside of Warsaw.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616555","date":"2010-07-13","texts":"Author A.D. Pruitt When Weyerhaeuser Co. first disclosed it would become a real-estate investment trust last year, it looked like the forest-products provider would have lots of company. Lured by strong gains in REIT stocks last year--the Dow Jones Equity All REIT index rose 31, compared with a 24 rise in the S&P 500-stock index--a number of companies assembled plans to become a REIT. On Monday, Weyerhaeuser said it will distribute 5.6 billion in retained earnings and profits to its shareholders in the form of a special dividend, a required step to becoming a REIT. But with the stock market experiencing bouts of volatility, some companies that had planned to become REITs are getting cold feet, especially private companies that were planning to become REITs via initial public offerings of stock. It's unlikely all of them will go public unless we see a more stable market, said Ron Sturzenegger, managing director and global head of real estate, gaming and lodging investment banking for Bank of America Merrill Lynch.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617024","date":"2010-07-13","texts":"Author Jon Hilsenrath Federal Reserve officials, who are likely to reveal Wednesday a cut in their assessment of the growth outlook, are divided on how aggressively the central bank should act if the economy slows further. Fed officials still expect the U.S. economy to keep growing. But an updated forecast to be released Wednesday afternoon with the minutes of the Fed's late-June policy meeting is likely to show that officials have trimmed their second-half forecasts--as have many private forecasters. One topic under debate is the possibility that today's already-low inflation may turn into a debilitating bout of deflation, a broad drop in prices across the economy. Fed officials disagree on the risk of deflation. A few see it as a threat others call it very unlikely, Fed officials said in recent interviews.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830982947","date":"2010-07-13","texts":"Correction A July 13 Page One article about people who have been unemployed so long that they are no longer eligible for benefits misstated the period for which Maryland provides benefits. Maryland offers a total of 73 weeks, not 86 weeks, of unemployment benefits. Published 7202010 Even before his unemployment checks ended, Dwight Michael Frazee's days were filled with the pursuit of any idea that could earn him a buck. But few are working out, and now his nights are filled with dread. In the coming weeks, the Senate is expected to resume its debate about whether to extend the emergency jobless benefits that were passed in response to the steep increase in unemployment caused by the recession. But people like Frazee, who have suffered the longest in the downturn, will not be part of that conversation. They are among the 1.4 million workers who have been unemployed for at least 99 weeks, according to the Labor Department, reaching the limit for the insurance. Their numbers have grown sixfold in the past three years. The 99ers are glaring examples of the nation's most serious bout of long-term joblessness since the Great Depression. Nearly 46 percent of the country's 14.6 million unemployed people have been out of work for more than six months, and forecasters project that the situation will not improve anytime soon. Currently, the Labor Department says there are nearly five unemployed people for every job opening. Frazee, 50, has applied for work at more places than he can remember since he lost his construction job two years ago. He has tried car dealerships, Kmart, Home Depot and the funky shops on the boardwalk in Seaside Heights, near Toms River. He looked into becoming a commercial crabber, working in title insurance and as a bail bondsman. But no dice.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617117","date":"2010-07-14","texts":"The dollar fell as a strong start to the U.S. earnings season and a smooth treasury-bill sale in Greece eased fears about economic recovery and the euro zone's financial system. The euro reclaimed the 1.27 level. Over the last couple of days or a week, markets seem to feel a little bit more comfortable with life in general, said Carl Forcheski, director of foreign exchange at Societe Generale in New York. In a sign that investors remain cautious, the dollar was unable to gain on the yen. The yen's resilience reflects skepticism about the stock market's rally, said Phillip Streible, senior market strategist at futures broker Lind-Waldock in Chicago. Late Tuesday in New York, the euro was at 1.2715, up from 1.2593 late Monday. The common currency was at 112.46 Japanese yen, up from 111.60, while the dollar was little changed at 88.45 yen from 88.62. The pound rose to 1.5163 from 1.5031. The dollar was at 1.0549 Swiss francs, down from 1.0604 francs. The sovereign-debt crisis in the euro zone was in sharp focus during European trading, with the euro initially under pressure as credit rater Moody's Investors Service dropped Portugal's rating two notches to A1. The downgrade prompted worries about Greece's debt auction, stoking concerns about the euro zone's peripheral members.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613676","date":"2010-07-15","texts":"NEW YORK -- A strong earnings report from Intel boosted U.S. blue-chip stocks Wednesday, extending the Dow Jones Industrial Average's winning streak to seven sessions. Still, the Dow's gain was slim and the broader Standard & Poor's 500 index snapped a six-day streak as optimism over the pace of corporate earnings gave way to a chilly economic forecast from the Federal Reserve. Intel's results were seen as proof that businesses have joined consumers in snapping up new computers, and the numbers provided a big boost to other technology stocks. Intel Nasdaq climbed 35 cents, or 1.7, to 21.36 Cisco Systems Nasdaq advanced 65 cents, or 2.8, to 23.74 Microsoft Nasdaq advanced 31 cents, or 1.2, to 25.44 and Hewlett-Packard rose 57 cents, or 1.2, to 47.34. What the Intel report tells you is that the world really wants technology. We've had 10 years of business either moderately investing or underinvesting in technology, and now we're in a refresh cycle, said Morris Mark, president Mark Asset Management. Still, he added, that's not enough to get employment and housing where it ought to be.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614049","date":"2010-07-15","texts":"Author Matt Day Gold futures ended with small gains, as mixed U.S. and Chinese indicators clouded an already-hazy economic picture. The most actively traded contract, for August delivery, settled up 1.30, at 1,208.30 an ounce on the Comex division of the New York Mercantile Exchange. Futures closed within 15 of the 1,200-an-ounce mark for the 10th consecutive day Thursday, as the uncertain economic outlook has provided little direction for precious-metals prices. We're in a sort of holding pattern, said Caesar Bryan, portfolio manager of Gamco's Gold Fund. The commentators seem to be somewhat cautious about gold, but the price doesn't seem to want to go down.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613777","date":"2010-07-16","texts":"WASHINGTON -- The Obama administration's nominees to the Federal Reserve Board stressed the importance of fighting a weak economy, indicating support for policies aimed at reducing the high unemployment rate. Over the next few years, the Fed must craft policies that ensure that our economy accelerates its progress along the recovery path it has begun to trace, Janet Yellen, the nominee for Fed vice chairman who has served as president of the Federal Reserve Bank of San Francisco since 2004, told the Senate Banking Committee. With unemployment still painfully high, job creation must be a high priority of monetary policy. Ms. Yellen appeared at a confirmation hearing Thursday alongside two other nominees to become Fed governors Massachusetts Institute of Technology economist Peter Diamond and Maryland financial regulator Sarah Bloom Raskin. If confirmed to the seven-member Fed board, the trio would likely push the balance of power at the Fed toward those who worry more that the economy isn't expanding quickly enough rather than those worried about the risk of unwelcome inflation. Senate Banking Chairman Christopher Dodd D., Conn. noted that recent data suggested that the economy was moving toward price deflation. It is evident that the economy is going to need all the help the Fed can provide over the coming year, he said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614936","date":"2010-07-17","texts":"West Virginia Gov. Joe Manchin named a political ally Friday to temporarily succeed the late Sen. Robert C. Byrd, clearing the way for Mr. Manchin to seek the seat in a special election. Carte Goodwin, a 36-year-old Charleston attorney and Mr. Manchin's former general counsel, will hold the Senate seat until a special election expected in November. Mr. Manchin is likely to be a candidate in that race Mr. Goodwin said he won't run. Both are Democrats. State lawmakers were meeting Friday to set the process for the election. The term of Mr. Byrd, who died last month at age 92 after more than 50 years in the Senate, expires in 2012. I'm truly confident that Carte Goodwin will look out for West Virginia and will do us proud, said Mr. Manchin on Friday at the state capitol in Charleston. He praised Mr. Goodwin for helping draft state mine-safety laws in 2006 after several deadly coal-mining accidents. Minutes after Mr. Goodwin is sworn in as a senator Tuesday, he will make the 60th vote needed to ensure passage of a bill to extend unemployment benefits, said Sen. Jay Rockefeller D., W.Va.. The bill has been stalled since Mr. Byrd's death. Republicans and one Democrat, Nebraska Sen. Ben Nelson, have opposed the bill because it would add to the deficit.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615067","date":"2010-07-17","texts":"Charles Schwab Corp. posted flat second-quarter profit, but showed signs of emerging from the damage inflicted by low interest rates and money-market fund-fee waivers. Schwab, the largest discount brokerage by market capitalization, waived 113 million in such fees over the past three months, posting its first decline in three quarters. With interest rates remaining low, Schwab waived 224 million in such fees in 2009 so that clients' returns wouldn't turn negative. In an interview with Dow Jones Newswires, Schwab Chief Financial Officer Joe Martinetto said that if interest rates stay where they are, we would expect some moderate improvement as we get to the second half of the year. Mr. Martinetto declined to provide a specific forecast for fee waivers for the remainder of 2010. Reflecting some further optimism for the franchise, Chairman Charles Schwab, in a statement, said cost cuts, stabilizing interest rates and an improving U.S. economy should help results improve from second-quarter levels the rest of the year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614818","date":"2010-07-18","texts":"So-called managed-payout funds, introduced with much fanfare just two years ago, were supposed to be a boon for retirees. Some of the hype might have been premature, however. It has long been one of the biggest questions and challenges for people entering retirement How do I generate a steady paycheck from my savings Managed-payout mutual funds offer an answer. Designed by some of the biggest names in the financial-services business -- Vanguard Group, Fidelity Investments and Charles Schwab, among others -- these investments use different strategies but start with the same concept Place a pool of money in a range of investments, much like an endowment at a university. Ideally, the funds generate a predictable, but not guaranteed, stream of income in a format that gives investors easy access to their money. That kind of predictability already was available from insurer-run annuities. But many retirees are loathe to turn over their money to annuities, from which it can be difficult to withdraw funds. What's more, insurers generally keep any remaining money when you die. Bear-Market Debut","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984017","date":"2010-07-18","texts":"Virginia's unemployment rate is 7.1 percent. Some areas of Virginia have twice this rate, with Martinsville topping the list with more than 20 percent. These cold numbers translate into nearly 300,000 Virginians and their families who are in desperate need of help from their elected officials. Yet the U.S. Senate and Virginia state officials seem disconnected from families hardest hit by the worst economic situation since the Great Depression. The Senate in June failed to extend long-term unemployment benefits and has continued to dither, a delay highlighted by The Post's July 13 editorial Jobless benefits, now. And Virginia Gov. Bob McDonnell and members of the General Assembly also have failed to help, by allowing 125.5 million in federal aid to languish. Virginia's elected leaders still have an opportunity to assist unemployed Virginians, but they will have to be willing to reconsider prior decisions of the Virginia General Assembly. The American Recovery and Reinvestment Act of 2009 authorized 7 billion to the states for their unemployment insurance programs. As a condition of receiving Virginia's full share, which is an additional 125.5 million not yet received, the state would be required to amend its eligibility criteria for unemployment benefits to include two of these four categories 1 people seeking part-time work 2 people who are in a state-approved training program who have lost their jobs in a declining industry 3 people who became unemployed because of a compelling family reason, such as caring for a sick or disabled family member or the state can 4 offer eligible claimants with dependents a stipend of at least 15 per week for each dependent. In both the 2009 and 2010 sessions of the Virginia General Assembly, the legislature failed to pass legislation expanding the eligibility criteria, thus preventing Virginia from collecting this 125.5 million in economic stimulus funds. Virginia must apply for these funds no later than Aug. 22, 2011.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613680","date":"2010-07-20","texts":"WASHINGTON -- New York's budget took another blow on Monday, as Congress pulled away from providing more than 1 billion in expected health-care funding. If the money doesn't show up soon, officials warn, there will be layoffs. Senate aides said Monday that a measure to extend unemployment benefits is likely to pass this week, but won't include the extra Medicaid money that Gov. David Paterson and Mayor Michael Bloomberg had been seeking to plug budget holes. In previous versions of the bill, the money had been included along with unemployment benefits. Now, Senate Democrats have decided the only way to get the unemployment bill passed is to strip out the other spending. Democrats had tried to gather enough support for a stripped-down version of the health-care funding measure, but even that did not have enough support. Sen. Kirsten Gillibrand D., N.Y. blamed lawmakers who feel it is in their best political interest to obstruct everything right now, even critical medical assistance for communities in New York and across the country. New York officials weren't giving up hope of getting the money in the next few months, but that possibility is receding fast as lawmakers, fearing the wrath of voters in an election year, retreat from most new spending proposals.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616198","date":"2010-07-20","texts":"Author Brett Philbin NEW YORK--TD Ameritrade Holding Corp.'s fiscal third-quarter profit climbed 5.2, as the online brokerage benefited from the stock market's May 6 flash crash, posting its highest quarter of trading volume to date. However, during a conference call, TD Ameritrade Chief Executive Fred Tomczyk warned analysts that investors are taking a breather from trading and said he has seen signs that a summer slowdown appears to be in progress. Shares of TD Ameritrade recently traded down 48 cents, or 3, at 15.34. The company's stock is down almost 14 over the past year. The Omaha, Neb. online brokerage and rivals experienced a burst of trading during the quarter. Volatility has remained the prevailing market theme amid concern about European economies and fears that the U.S. economic recovery might be stalling.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616310","date":"2010-07-20","texts":"Author Jonathan Cheng Kristina Peterson NEW YORK--Stocks staged a strong rally to finish in positive territory for the second day in a row, shaking off deep losses as optimism grew ahead of a fresh wave of bank earnings and guidance from the Federal Reserve. The Dow Jones Industrial Average erased triple-digit losses to finish up 75.53 points, or 0.74, at 10229.96, with materials and energy stocks leading the way. The market started the day down heavily on the back of lower-than-expected corporate earnings, before launching a noontime surge that lasted the rest of the session. Traders said the market's afternoon change of heart was initially sparked by speculation over what the top central banker might say in semiannual congressional testimony on Wednesday, including the possibility of a further loosening of monetary policy.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613917","date":"2010-07-21","texts":"Author Jonathan Cheng Stocks fell broadly after Federal Reserve Chairman Ben Bernanke called the U.S. economic outlook unusually uncertain but signaled the central bank wouldn't act in the near term to bolster the flagging recovery. Left with a picture of a sluggish economy that policy makers are either unable or unwilling to boost, investors unloaded shares as Mr. Bernanke reaffirmed earlier promises to take further policy actions as needed. This is what the Fed has been saying for a while now, said John Stoltzfus, senior market strategist with Ticonderoga Securities. This is just replaying the tape. The Dow Jones Industrial Average dropped 164 points at one stage before closing down 109.43 points, or 1.1, at 10120.53. The S&P 500 fell 1.3 while the Nasdaq Composite fell 1.6.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615255","date":"2010-07-21","texts":"Author Michael Casey NEW YORK--Federal Reserve Chairman Ben Bernanke left investors disappointed after he painted a gloomy picture of the U.S. economy but gave no indication the Fed is preparing any new stimulus measures. Stocks and other assets with greater exposure to risk fell, while U.S. Treasurys and the dollar gained as Mr. Bernanke delivered his much-awaited semiannual address to Congress, describing the economic outlook as unusually uncertain. The Fed chairman reiterated the Fed's official view that interest rates would stay near zero for an extended period. But although he stressed that it is prepared to take further policy actions as needed to foster a return to full utilization of our nation's productive potential, he offered no new policy options for reversing the recent slowdown in the U.S. economic recovery. In answer to senators' questions, Mr. Bernanke later explored the possibility of further stimulus measures if the recovery seems to be faltering, but in failing to address this in his prepared remarks he left investors disappointed. In the lead-up to his appearance, there had been growing speculation that the Fed chairman might signal the central bank's willingness to cease paying interest on the reserves it holds on banks' behalf, a move that would be an incentive for banks to lend that money to customers. Indeed, Mr. Bernanke mentioned that idea, along with other prospects for added stimulus in the question-and-answer session, although he said that for now the Fed was still intent on gauging the strength of the recovery.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616964","date":"2010-07-21","texts":"U.S. Treasury prices rose, sending the two-year note's yield to a record low, as concerns over the economic outlook bolstered demand for low-risk assets. The two-year yield, the most sensitive to official rate changes, touched a low of 0.565 before ending the session at 0.593. Speculation among market participants that Federal Reserve Chairman Ben Bernanke will give a downbeat outlook in his semiannual testimony to Congress on Wednesday, highlighting the need for the central bank to provide more stimulus to the economy, gave stocks a boost, causing Treasurys to give back some gains Tuesday. The Fed has downgraded its outlook for both the economy and inflation, according to the central bank's minutes of its June policy meeting released last week. As a result, investors expect interest rates to remain at ultralow levels well into 2011 to prevent the economy from slipping back into recession. Bernanke is likely to give some reassurance to the markets that they are ready to provide further monetary stimulus should the economy deteriorate further, but they won't pull the trigger yet, said Kevin Walter, head of Treasury trading at BNP Paribas in New York.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615422","date":"2010-07-22","texts":"Author Bob Sechler United Parcel Service Inc.'s second-quarter profit jumped 90, driven by Asian trade and what the company said was a moderate but steady U.S. recovery. UPS boosted its full-year profit forecast to between 3.35 and 3.45 a share, from 3.05 to 3.30. The company's stock was up 5.8 Thursday afternoon on the New York Stock Exchange at 63.48, its highest level since late May. Other U.S. shipping companies have forecast a return to the typical, fall peak shipping season after the global recession sapped strength in recent years. The global networks of Atlanta-based UPS and rival FedEx Corp. make them barometers of international trade. I think there's pretty good confidence out there, UPS Chief Executive Scott Davis said on a conference call Thursday. I think overall our shippers feel pretty good.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616542","date":"2010-07-22","texts":"There's nothing like the prospect of an electoral rout to concentrate the incumbent mind, and so all of a sudden rank-and-file Democrats in Congress are saying maybe they shouldn't let the 2003 tax rates expire after all. Now if they can only persuade their Speaker of the House, the Treasury Secretary and President Obama. The revelation that tax increases could hurt the economy has recently been heard from Senators Evan Bayh of Indiana, Ben Nelson of Nebraska, and, most surprising, even from Kent Conrad of North Dakota. On a scale of unlikely events, this is like the Pope coming out against celibacy. As Senate Budget Chairman, Mr. Conrad has rarely seen a tax increase he didn't like, but this week he averred that As a general rule, you don't want to be cutting spending or raising taxes in the midst of a downturn. Over in the House, Bobby Bright of Alabama even dared to defend the rich Americans who Democrats have been pounding for years. I don't care if it's the wealthiest of the wealthy. You don't raise their taxes, he told The Hill newspaper. In a recession you don't tax, burden and restrict. Better don the body armor on your next visit to the Speaker's office, Bobby. Even Jerrold Nadler, a liberal from central casting, is worrying publicly that the tax hike will hit his New York constituents too hard. And he's certainly right given that the combined top state and federal income tax rate will be close to 54 in 2011 in New York City. Mr. Nadler is proposing--seriously--to adjust the income tax brackets based on regional cost of living so fewer New Yorkers pay the rates Mr. Nadler has spent a decade saying the rich should pay. How about if we compromise and keep rates lower for both Nebraska and New York These are hardly supply-side conversions, but they're a start. The economic recovery is far from robust, and socking it with one of the largest tax increases in history in January is not going to make anyone more eager to invest or create new jobs. Even Lord Keynes opposed raising taxes in a recession, and good Keynesian Democrats like the late economist Walter Heller persuaded JFK to cut tax rates in the 1960s. Those cuts kicked off that decade's economic boom. Only in the age of Obama have Democrats convinced themselves that the best stimulus is higher spending and higher taxes.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984123","date":"2010-07-24","texts":"The federal budget deficit, which hit a record 1.4 trillion last year, will exceed that figure this year and again in 2011, the White House predicted Friday, providing fresh ammunition to Republicans who are hammering President Obama for all the red ink as they campaign to regain control of Congress in November. The latest forecast from the White House budget office shows the deficit rising to 1.47 trillion this year, forcing the government to borrow 41 cents of every dollar it spends. Contrary to official projections, the budget gap will not begin to narrow much in 2011, because of an unexpectedly big drop in tax receipts. White House budget director Peter Orszag said in a conference call with reporters that Obama is still on track to cut the deficit in half by the end of his first term. But the forecast provides no relief from the gloomy outlook that has been forcing Obama to consider deeper cuts to defense and non-security programs as well as additional tax increases. This week, the administration also repeated its intention to let tax cuts for the wealthy expire in January. With polls showing high public anxiety over the economy and government borrowing, Republicans wasted no time blasting the new forecast. They accused Obama and congressional Democrats of orchestrating a government expansion that threatens to push the nation toward a European-style debt crisis while failing to create jobs. For more than a year and a half, the president and his Democrat allies on Capitol Hill have pushed an anti-business, anti-jobs agenda on the American people while adding trillions to the debt, Senate Minority Leader Mitch McConnell R-Ky. said in a statement. It's time for a new approach, one that listens to the American people rather than forcing Washington-based mandates.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615296","date":"2010-07-26","texts":"The best-performing asset this year is one that will earn you zero interest for the next 20 years. Zero-coupon Treasurys maturing in more than 20 years have returned 21 this year through Thursday, the latest data available, beating out investments from stocks to corporate bonds and gold. Zero-coupon Treasurys maturing from 10 to 20 years have handed investors a return of nearly 17 in the same period. Investors have flocked to these securities because they offer double protection -- not just against weak economic growth but also against further declines in yields -- a big risk for fixed-income investors. A nominal 10-year Treasury note pays interest twice a year, leaving investors with funds that have to be reinvested as yields continue to decline. Last week, the two-year yield hit a record low of 0.545, while the 10-year benchmark note's yield touched a 15-month low of 2.851. In late trading Friday, the two-year yield was at 0.592, while the 10-year benchmark note yielded 2.997. Zero-coupon Treasurys, in contrast, are sold at a discounted price but redeemed at face value. The difference between the two prices represents the investor's profit, which technically amounts to the accumulated interest.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615415","date":"2010-07-26","texts":"Author Andrew Johnson Jr. CHICAGO--Corn prices slid on forecasts for weather in the Midwest that is conducive to a boost in supplies. Corn futures fell together with soybean and wheat futures, which have rallied in recent weeks on inclement weather in top exporting nations. Midwest temperatures do not look to be hot enough to threaten ... heading into August, according to a forecast from DTN Meteorlogix. And scattered showers will also offer the prospect of more soil moisture. The world's largest corn grower and exporter, the U.S. is expected to harvest a record crop, thanks to more acres planted and an above-average yield. The Midwest accounts for a bulk of the U.S.'s corn, which is used in an array of processed foods and in animal feed.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613669","date":"2010-07-28","texts":"Author Matt Day NEW YORK--Gold futures edged higher, rising above three-month lows on bargain buying but showing little direction as demand for refuge assets remains low. The most actively traded contract, for December delivery, settled up 60 cents at 1,162.40 an ounce on the Comex division of the New York Mercantile Exchange. July gold gained 2.40, or 0.2, to 1,160.40. We could see gold stabilize here, said Ralph Preston, senior market analyst with Heritage West Financial in San Diego, Calif. But unless markets get spooked again, gold isn't likely to sustain a rally, he said. Gold rose to records in May and June on worries about euro-zone sovereign debt and a slowdown in the economic recovery. Precious metals are sometimes bought as a hedge against uncertainty or inflation on the belief that they hold their value better than other assets during economic turmoil.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614061","date":"2010-07-28","texts":"Author James Glynn SYDNEY--Australian consumer-price inflation was less than expected in the second quarter, causing the currency to fall on the likelihood that interest rates will be kept on hold for several months at least. The consumer-price index rose 0.6 from the first quarter and 3.1 from a year earlier, the Australian Bureau of Statistics said. Economists had expected the CPI to rise 1.0 from the first quarter and 3.4 from a year earlier. The Australian dollar fell sharply after the data were released. It was trading at 89.28 U.S. cents late morning in New York Wednesday, down from 90.03 U.S. cents just before the report. Government bond prices rallied. Core inflation was a mild 0.5 from the first quarter and 2.7 from a year earlier, well within the tolerances of the Reserve Bank of Australia, which targets inflation between 2 and 3.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616632","date":"2010-07-29","texts":"Author Mark Gongloff, Chris Dieterich Alex Frangos Please see Corrections & Amplifications below. The global corporate-bond boom is gathering steam as companies rush to take advantage of some of the lowest borrowing costs in history. Companies from global giants McDonald's Corp. and Kimberly-Clark Corp. to Indonesian telecommunications company PT Indosat Tbk are rushing to sell debt. This month has been the busiest July on record for sales by U.S. companies with junk-credit ratings. Asia's debt market is on pace for a record year, and European companies are also raising money apace.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984765","date":"2010-07-29","texts":"Unemployment in the Washington region rose to 6.4 percent in June from 6 percent the previous month, according to federal government data released Wednesday, highlighting the fragility of the recovery in the local labor market. The Bureau of Labor Statistics data contrasted with numbers it released last week on the District, Maryland and Virginia that showed their unemployment rates had dropped in June. The difference is attributable in part to Wednesday's data not taking in the entire states of Maryland and Virginia. At the same time, experts say the Washington area's relatively positive labor market has been drawing job seekers from outside the region faster than it has been adding jobs. Experts also say that June is typically the month with the highest unemployment. That is when college and high school students flood the labor force looking for summer jobs. The BLS defines the labor force as working-age people who are either employed or unemployed and looking for work. A surge of job seekers can push the unemployment rate up, and a surge of long-term unemployed people who stop looking can push it down. Unemployment had been dropping steadily in the region until May. But, experts say, most of the jobs are going to newcomers to the labor force -- recent college graduates and recently transplanted residents -- and not to long-term unemployed people.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616950","date":"2010-07-31","texts":"Author Mark Gongloff Bonds continue to trounce stocks, sending mixed signals to investors and raising the question Are stocks too cheap or are bonds too expensive After consistently lagging behind bond performance this year, stocks appear historically cheap compared with bonds, offering investors reason to favor stocks, particularly if they are optimistic about the economic outlook. But stocks may be cheap because the outlook is dim, meaning bonds--from Treasurys to corporate debt--could continue to outperform for the foreseeable future. So far this year, the stock market's total return is slightly negative, while normally staid investment-grade corporate bond returns are up nearly 8, according to Bank of America Merrill Lynch indexes. Even risk-free Treasury returns are up 6. Stocks made up some ground with a 7.1 rally in the Dow Jones Industrial Average in July. But such stock rallies have stalled repeatedly in recent months as weak economic data have outweighed signs of hope from corporate earnings. The yield on the 10-year Treasury note has dropped below 3 as investors scramble for safe havens, and the demand for corporate bonds is booming.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984013","date":"2010-07-31","texts":"I don't want to overreact. I'd hate to prematurely dis President Obama's National Commission on Fiscal Responsibility and Reform, which held its fourth public meeting Wednesday. But the commission's Democratic co-chair, Erskine Bowles, may have already blown it. In little-noticed remarks a few weeks ago, Bowles suggested that the long-term goal the commission should adopt for federal spending should be 21 percent of gross domestic product. This sounds like a bookkeeping matter. But Bowles's goal would end progressive ambition, ratify America's declining competitiveness and bury the American dream. Why For starters, federal spending under Ronald Reagan averaged 22 percent of GDP. Under Bowles's view, therefore, the outer limits of the Democratic Party's 21st-century aspirations would be to run government at a size smaller than did a 20th-century conservative icon. What's more, Reagan ran government at this size at a time when 76 million baby boomers weren't about to hit their rocking chairs. In 1988, 32 million retirees received Social Security and 33 million were on Medicare, our two biggest domestic programs. By 2020, about 48 million elderly Americans will receive Social Security, and 62 million Americans will be on Medicare then the numbers really soar. As a matter of math, if you run the government at a smaller level than did Ronald Reagan while accommodating this massive increase in the number of seniors on our health and pension programs, you have to decimate the rest of the budget.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614582","date":"2010-08-02","texts":"Fresh worries over a slowing U.S. economy could give the euro an additional near-term boost as concerns over the euro zone's sovereign-debt crisis ease. Disappointing U.S. data -- especially in the housing, labor and consumer sectors -- have fanned fears the U.S. economy could slow appreciably in the second half. Some openly fear a double-dip recession, a possibility many analysts see as unlikely but still has led investors out of the dollar. The U.S. fears have moved front and center just as well-received government debt auctions and bank-stress tests in Europe have fueled positive sentiment toward the euro. Everyone's ready for a potential weaker half of the year for the U.S. economy, said Robert Tull, vice president and managing director of foreign exchange and commodity derivatives at Fifth Third Bancorp in Cincinnati. The ICE Dollar Index, which tracks the dollar against a trade-weighted basket of currencies, fell to a three-month low Friday. The euro on Thursday moved above 1.31 to its highest point in nearly 12 weeks, after rising more than 10 on the dollar since the June 7 low of 1.1876.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613467","date":"2010-08-03","texts":"Author James B. Stewart The dreaded D word is back in circulation, and I don't mean depression. Having skirted that potential calamity, the worry for policy makers and investors now is deflation. On the face of it, deflation--falling prices--doesn't seem like it would be so bad. Who wouldn't welcome discounts that just keep getting better, like those sales at Filene's Basement where prices got lower the longer merchandise stayed on the racks Of course, who knows what it really feels like, since most of us have never experienced prolonged deflation in our lifetime. Maybe deflation would be a nice thing for people with secure, steady incomes. But deflation erodes profits and asset values. People wait to buy expecting lower prices, reducing demand. Lower profits cause companies to cut expenses, including employees. It is a downward spiral that, if Japan's experience is any indication, is difficult to arrest.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617045","date":"2010-08-03","texts":"Author Melissa Korn NEW YORK--MasterCard Inc.'s second-quarter profit jumped 31, beating analysts' expectations, as higher consumer spending in Latin America, Europe and Asia boosted the top line. Though sales of discretionary items in the U.S. have slumped in recent months, the company said spending in Europe hasn't been hurt by macroeconomic uncertainty, and Asia-Pacific and Latin America continue to expand by double digits on a percentage basis. Still, President and Chief Executive Ajay Banga said during a conference call on Tuesday that there could be some tempering in topline growth in the second half of the year compared with the 9.7 revenue increase the company posted for the six months through June, citing an uneven pace of economic recovery, especially in the U.S., as well as tough comparisons to strong year-ago figures. Roll-offs of some debit portfolios will continue to damp processed-transaction results as well, though MasterCard expects the effects of those terminated contracts to wane after the third quarter.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614564","date":"2010-08-04","texts":"NEW YORK -- MasterCard Inc.'s second-quarter profit jumped 31, beating analysts' expectations, as higher consumer spending in Latin America, Europe and Asia boosted the top line. Though sales of discretionary items in the U.S. have slumped in recent months, the company said spending in Europe hasn't been hurt by macroeconomic uncertainty, and its Asian-Pacific and Latin America businesses continue to expand by double digits on a percentage basis. Still, President and Chief Executive Ajay Banga said during a conference call on Tuesday that there could be some tempering in top-line growth in the second half of the year compared with the 9.7 revenue increase the company posted for the six months through June, citing an uneven pace of economic recovery, especially in the U.S., as well as tough comparisons to strong year-ago figures. Roll-offs of some debit-card portfolios will continue to damp processed-transaction results as well, though MasterCard expects the effects of those terminated contracts to wane after the third quarter. Shares of MasterCard fell 1.61, or 0.8, to 200.91, in 4 p.m. New York Stock Exchange composite trading.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615683","date":"2010-08-04","texts":"Treasurys and mortgage-backed securities gained Tuesday as weak economic data further fanned expectations that the Federal Reserve may need to restart its asset purchases to support the economy. The two-year yield was pushed down to a record low of 0.515 at one point, as the price rose, after surprisingly weak reports on consumer spending, pending home sales and factory orders. Talk that the Fed could revive its bond purchase program was set off by a Wall Street Journal article that said policy makers will consider changing the way the bank manages its securities portfolio at next week's meeting. The Fed could use the cash from its maturing mortgage bond holdings -- about 200 billion in 2011 -- to purchase new mortgage bonds or Treasurys. While the technical impact of rolling MBS proceeds into new Treasurys would not be large, it is a signal to the market that the Fed is concerned and willing to do more to support the economy, said John Briggs, U.S. interest rate strategist at RBS Securities Inc. in Stamford, Conn. It will push even further out the date for the first Fed rate hike, and lower rates overall. The Fed has already pledged to keep rates ultralow for an extended period which has helped keep Treasurys yields low and borrowing costs down for consumers and corporations. The two-year note's yield, among the most sensitive to changes in official rate policy outlook, has consistently hit fresh record lows over the past two weeks.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614274","date":"2010-08-05","texts":"One consequence of the financial crisis is that U.S. money-market funds have been buying more European bank debt. The combination of U.S. banks issuing less debt and funds looking to diversify has seen European banks play a dominant role in U.S. money-market-fund portfolios. Even European debt fears haven't stemmed the appetite. The percentage of foreign-bank obligations -- which largely are European and include Eurodollar certificates of deposit, Yankee dollar CDs and bankers' acceptances -- in prime money-market funds rose to 11.5 as of July from 9.8 a year earlier and 7.9 in July 2008, according to research firm iMoneyNet. The research firm doesn't break out time deposits, such as fixed-term savings accounts and certificates of deposit, by geography. But one study at a Wall Street firm estimated most of those holdings are from European banks, and suggests European deposits are the single-biggest part of money-market funds' holdings. Debbie Cunningham, head of money-markets funds at Federated Investors, said the financial crisis pushed funds overseas in two ways The shock of Bear Stearns and Lehman Brothers Holdings going bust meant that fund managers saw greater imperative to diversify more to international holdings, while the recession -- and disappearing banks -- has shrunk the domestic commercial-paper-supply market as growth has stalled.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615490","date":"2010-08-05","texts":"Intel agreed to broad restrictions to settle U.S. charges it unlawfully stifled competition to preserve its dominant position in the computer-chip market. --- Stocks and the dollar rose following encouraging reports on private-sector hiring and the services sector. The Dow gained 44.05 points to 10680.43. --- Job growth remained weak in July as employers continued to expand slowly, surveys found.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616217","date":"2010-08-06","texts":"Author Kristina Peterson NEW YORK--Stocks fell modestly in a day of volatile trading after a disappointing jobs report cast fresh doubts over the pace of the U.S. economic recovery. The Dow Jones Industrial Average fell 21.42 points, or 0.2, to 10653.56. That left the average up 1.8 on the week, its third straight rise, and up 2.2 for the year. J.P. Morgan Chase was the weakest component, sliding 83 cents, or 2, to 40.44, on a day when riskier stocks took the biggest hit as the economic outlook darkened. The weaker-than-expected July jobs report and the added blow of a sharp downward revision to June's jobs losses, had the benchmark sliding to a triple-digit decline, but losses were pared when cautious investors stepped back, anticipating that the weak data could prompt the U.S. Federal Reserve to take further measures at its meeting next week to stimulate the economy. The Nasdaq Composite Index fell 4.59, or 0.2, to 2288.47, leaving it up 1.5 for the week and 0.9 for the year. The Standard & Poor's 500-share index shed 4.17, or 0.4, to 1121.64, weighed by its energy and financial sectors. It rose 1.8 in the week and now is up 0.6 for 2010.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617417","date":"2010-08-06","texts":"Author Sudeep Reddy The government's latest snapshot of the job market was bleak, a sign the economic recovery is running out of steam with 14.6 million Americans still searching for work. Job growth proved anemic in July as governments cut jobs and private-sector employers barely expanded. The economy shed 131,000 jobs, as 143,000 temporary Census workers fell off federal payrolls. Private-sector employment grew by 71,000 in July after a downwardly revised 31,000 in June. Government employment, not counting Census workers, fell by 59,000. The unemployment rate held steady at 9.5 largely because people gave up hope of finding work and left the labor force.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614708","date":"2010-08-09","texts":"Friday's weak employment report reminds us anew of the flagging U.S. economic recovery. While the Obama administration discusses additional stimulus packages, Treasury Secretary Tim Geithner is arguing that we should roll back key elements of the Bush tax cuts passed in 2001 and 2003. The administration is particularly skeptical about the benefits of today's lower rates on dividends and capital gains. The tax on dividends, for example, is currently 15, but it could increase to as high as 39.6 if the 2001 and 2003 tax cuts expire. On top of this, a new 3.8 tax on investment incomes for high-income earners begins in 2013 to help pay for ObamaCare. The administration's arguments for higher taxes on capital center on fairness and the need for deficit reduction. These arguments are seriously mistaken. The relationship between investment, capital and wages is such that workers are better off if capital is not taxed at all. Think of the economy as a pie split among workers, savers and the government, with the government's slice fixed. The savers' slice will equal the after-tax return on each unit of the capital stock, and what's left goes to workers as after-tax wages. The fairness advocates in effect claim that low tax rates on dividends and capital gains increase the share of the pie that goes to high-income savers. But the low tax rates increase the absolute size of the workers' slice by making the entire pie bigger. That's because low tax rates encourage capital accumulation, productivity and wage growth. To understand how this works, it's worthwhile to return to President Bush's proposal, in January 2003, to substantially reduce the double taxation of corporate income by eliminating investor-level taxes on dividends. The actual law reduced tax rates on dividends and capital gains to 15.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616911","date":"2010-08-09","texts":"WASHINGTON -- U.S. financial regulators this week will take their first steps to replace private credit ratings in their review of bank capital levels, a big step for regulators eager to ensure they are able to accurately assess firms' financial condition. The Federal Deposit Insurance Corp. on Tuesday will lay out a number of options to the use of credit ratings in capital evaluations, part of a joint effort with the Federal Reserve and other federal banking agencies. Among the options being discussed is a greater use of credit spreads, having supervisors develop their own risk metrics and a reliance on existing internal models, say people familiar with the matter. Agency officials aren't expected to endorse a particular approach and instead plan to encourage input from banks, academics and other regulators. It's very difficult to come up with a perfect substitute, a person familiar with the situation said, noting that regulators have been using credit ratings for decades.We have to be very explicit if we're going to take external ratings out, we're going to have to put something extremely specific in. This person added that some combination of measures could be used. The move is required under the recently passed Dodd-Frank financial legislation, which gives regulators a year to review the use of private credit ratings and then calls for private credit ratings to be replaced. The FDIC's move marks one of the first big rule-writing steps by regulators under the new legislation, part of a broader rethinking of capital levels required to be held by banks by regulators who want financial institutions to maintain the cushion necessary to weather market gyrations","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613792","date":"2010-08-10","texts":"Author Kelly Evans Retail stocks are starting to mount a comeback. But investors shouldn't expect the rally to last. The S&P Retail Index is up nearly 8 from its early July lows, amid some hopeful data from retailers. On Wednesday, for example, Macy's Inc. is expected to turn in solid second-quarter results. The department-store chain has already reported that sales at stores open a year or more posted year-on-year gains of 7.3 in July and 4.9 for the quarter as a whole. And on Friday, the Commerce Department is expected to say retail sales rebounded to gain 0.4 in July after slipping in May and June. That would put sales up by about 5.4 since July 2009. This is all reassuring for investors. Moreover, the Federal Reserve's signal Tuesday that it would keep interest rates at near-zero levels and purchase government debt to stimulate the economy should be a favorable backdrop for cyclical sectors like retail.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615679","date":"2010-08-11","texts":"Author Kathy Chen WASHINGTON--The U.S. trade deficit with China in June hit its highest level in nearly two years and could spur congressional pressure on Beijing to revamp its currency policy. America's trade deficit with China jumped 17 in June over the previous month to 26.2 billion, the biggest gap since October 2008. Earlier this week, China said its overall trade surplus hit 28.7 billion in July, an 18-month high. The Commerce Department figures could set the stage for a fight in Congress this fall over China's currency policy. Some lawmakers, arguing that China has set the yuan artificially low to make its exports more price competitive on global markets, are keen to pass laws that would penalize countries that are found to be manipulating their currencies. China, under pressure from the U.S. and other countries, announced a shift to a more-flexible exchange rate in June. But the yuan has appreciated less than 1 since then, and some economists say that it remains undervalued against the dollar by at least 25.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613973","date":"2010-08-12","texts":"Author Katy Burne NEW YORK--Johnson & Johnson is set to price its 1.1 billion, two-part bond offering at the lowest rates ever for 10-year and 30-year bonds, in a sign that investors are continuing to bet on corporate debt at a time of record-low interest rates on government bonds. Corporations with the best credit ratings have been able to take advantage of this demand and raise cash very cheaply. Some of the best-known issuers that have tapped the debt markets at near record-low rates in recent weeks include International Business Machines Corp. and Wal-Mart Stores Inc. The tranches on the deal are split equally, with 550 million in each maturity bucket, and the issuer is on track to borrow at interest rates around 3.10 for the 10-year maturity and 4.5 for the 30-year paper if market conditions hold, according to one person familiar with the sale. The lowest rates on record for these maturities to date were scored in recent weeks by McDonald's Corp. and Northern States Power Co. of Minnesota, a subsidiary of Xcel Energy Inc.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616103","date":"2010-08-14","texts":"Long-dated Treasurys rose on Friday as worries about the global economic outlook bolstered demand for safe assets. The 10-year Treasury note climbed 1332 to 99 1432, pushing its yield down to 2.690. The 30-year Treasury bond rose 3032 to 100, leaving its yield at 3.875. The five-year note rose 132 and yielded 1.462, while the two-year note ended flat, for a yield of 0.545. Yields on the 10-year and 30-year Treasurys have dropped from 2.82 and 3.991, respectively, at the end of last week. The market was led by strong gains in longer-dated issuance, while shorter-dated securities were little changed. Concerns about the state of the global economy persist even as the euro zone's gross domestic product for the last quarter beat analysts' expectations, as U.S. retail sales rose 0.4 in July and as U.S. consumer sentiment improved. The narrow gain in U.S. retail sales was driven by sales of cars and gasoline as demand fell at many other merchants. Consumer prices showed a moderate increase that matched economists' forecasts, pointing to tame price pressure and reducing a major threat to the fixed returns on bonds.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983187","date":"2010-08-14","texts":"Economic indicators released Friday confirmed what tight-fisted American consumers have already concluded The economy may be recovering, but barely. Retail sales grew 0.4 percent in July after falling a revised 0.3 percent in June, the Commerce Department reported. The increase was the first one in three months and was mainly attributable to a rebound in auto sales boosted by dealer incentives. Department store sales declined 1 percent, and sales at clothing stores fell 0.7 percent. Despite the slight gain, sales failed to meet expectations. Business inventories, a key piece of data that economists use to judge the growth of the wider economy, rose for the sixth consecutive month in June to 0.3 percent. Sales at the wholesale level fell for the second month in a row, although the 0.6 percent decline was significantly less than the 1.2 percent drop in May. Consumer sentiment is similarly lukewarm. An index of what they think about the economy by Thomson ReutersUniversity of Michigan rose to 69.6 in early August from 67.8 in July, which had been the lowest level since November, Reuters reported. Despite the small increase, consumers did not anticipate an improved economy any time soon. Consumer inflation edged up for the first time in four months and slightly above forecasts to 0.3 percent in July, adjusted for seasonal variations, according to the Labor Department. The gain was mainly due to an increase in energy costs. Overall inflation, excluding the volatile statistics for energy and food, rose only 0.1 percent.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842614239","date":"2010-08-15","texts":"Author Min Zeng Bulls turned more bullish and bears were less pessimistic about Treasury prices, according to the latest Dow Jones Newswires survey of major trading banks in the U.S. government bond market, as investors sought safety in the low-risk securities on rising anxiety over the global economy. Deutsche Bank and Jefferies & Co. joined the bulls in the survey, which was conducted Wednesday through Friday. The poll covered all 18 primary dealers, the exclusive club of banks that trade directly with the Federal Reserve and are obligated to bid on Treasury auctions. Deutsche Bank said it expected the yield on the 10-year note to fall to 2.5 by the end of the year, down from its June forecast of 4.25, while Jefferies cut the yield call to 2.7 from 4.55 in June. The median forecast sees the 10-year yield ending the year at 2.88, down from 3.75 in a previous survey in June and 4.15 polled in March. Only six of the 18 said they see the yield ending the year above 3.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984322","date":"2010-08-15","texts":"I regard my home as a place to live, not as an investment. It is not a substitute for retirement savings. I invest regular amounts every month, in both rising and falling markets. I know I cannot gauge market tops and bottoms. If I receive a windfall -- a bonus, bequest or gift -- I gradually feed it into my regular investment mix. My share of bonds roughly equals my age. I will allocate to stocks a declining portion of my financial assets as I get older. I rebalance my portfolio every quarter. If the stock market plunges, pushing my stock allocation way below its target percentage, I sell bonds and use my cash to buy stocks. I force myself to sell high and buy low by periodic rebalancing -- just what is temperamentally difficult for most investors to do.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617106","date":"2010-08-17","texts":"Author Nick Timiraos Aparajita Saha-Bubna While mortgage delinquencies are easing, banks are facing a new round of losses from loans made just before the financial crisis, and the fight to keep them off their balance sheets is intensifying. Leading the charge to make originators repurchase their loans are Fannie Mae and Freddie Mac, the two government-owned finance agencies that guaranteed the mortgages. The firms are sorting through delinquent loans for signs of any violations of the representations and warranties, known as reps and warranties. In essence, they are looking for lies made by borrowers or lenders in loan applications. Freddie last week said it would begin taking tougher action against banks that drag their feet on buybacks as it renegotiates its contracts to renew loan-sales agreements from those banks. Freddie said it had received 2.7 billion from lenders on repurchases during the first half of the year, up from 1.7 billion in the year-earlier period. The number of repurchase requests that haven't yet been satisfied jumped to 5.6 billion at the end of June, up from 3.8 billion six months earlier. While the company isn't likely to cut off its partners, it could use those renegotiations to force banks to settle up on repurchases.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830981974","date":"2010-08-19","texts":"After a bad day on the job as a Border Patrol agent, Eddie DeLaCruz went home and began discussing with his wife how to celebrate her upcoming birthday. Then he casually pressed his government-issued handgun under his chin and pulled the trigger. It was the ugliest sound I ever heard in my life, his widow, Toni DeLaCruz, recalled of that day last November. He just collapsed. A month later, one of DeLaCruz's colleagues at the Fort Hancock border post shot himself, too. Suicides such as these have set off alarms throughout the agency responsible for policing the nation's borders. After nearly four years without a single suicide in its ranks, the Border Patrol has had at least 15 agents take their own lives since February 2008. It's unclear why the agents killed themselves. Few of them left notes. And the agency seems somewhat at odds with itself over the issue. Federal officials insist that the deaths have nothing to do with the Border Patrol, which has doubled in size since 2004, or the increasingly volatile U.S.-Mexican border. But administrators have quietly undertaken urgent suicide-prevention initiatives, including special training for supervisors, videos about warning signs and educational programs for 22,000 agents nationwide.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614007","date":"2010-08-23","texts":"Author Brendan Conway Investors may be asking too much if they think the recent spate of deal making will be enough to finally ignite technology stocks. Hewlett-Packard launched a bidding war Monday to wrest data-storage company 3Par from Dell, but technology stocks largely failed to respond. The Nasdaq Composite Index fell Monday and technology stocks were among the Standard & Poor's 500-share index's worst performers. Macroeconomic worries appeared to drown out the boost that merger-and-acquisition activity provided Monday, at a time when technical analysts see the sector as primed for a rally off recent lows. The upshot may be that while M&A activity certainly provides a boost for stocks, it isn't necessarily the panacea that many investors had hoped for. Mergers certainly looked like a big boost last week. Technology stocks were showing encouraging signs last week amid efforts like Intel's 7.7 billion bid for McAfee Inc. The S&P 500's technology components started to turn around what had been a tough August, in which they were notable underperformers.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614082","date":"2010-08-24","texts":"Investors may be asking too much if they think the recent spate of deal making will be enough to finally ignite technology stocks. Hewlett-Packard launched a bidding war Monday to wrest data-storage company 3PAR from Dell, but technology stocks largely failed to respond. The Nasdaq Composite Index fell Monday and technology stocks were among the Standard & Poor's 500-share index's worst performers. Macroeconomic worries appeared to drown out the boost that merger-and-acquisition activity provided Monday, at a time when technical analysts see the sector as primed for a rally off recent lows. The upshot may be that while M&A activity certainly provides a boost for stocks, it isn't necessarily the panacea that many investors had hoped for. Mergers certainly looked like a big boost last week. Technology stocks were showing encouraging signs last week amid efforts like Intel's 7.7 billion bid for McAfee. The S&P 500's technology components started to turn around what had been a tough August, in which they were notable underperformers. And the sector looks to have better news ahead from a technical standpoint. Janney Montgomery Scott market technician Daniel Wantrobski predicted last week that technology stocks, particularly semiconductors, should outperform the S&P 500.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617187","date":"2010-08-24","texts":"NEW YORK -- Deal activity represented a glimmer of hope for a market struggling to show conviction during these low volume, summer trading days. But it wasn't enough to lift small-caps, which extended their losing streak to three consecutive sessions amid one of the lowest volume days of the year. Traders must be at the Hamptons or something, said Brett Hawkins, portfolio manager at Thompson, Siegel & Walmsley. On really low volume days like this, it's tough to glean a lot about what's going on in the market. Investors on Monday continued to focus on the economic recovery as tepid job growth, a fragile housing market and weak consumer spending overshadowed more acquisition offers. The Russell 2000 index of small-capitalization stocks fell 8.11 points, or 1.3, to 602.67. The measure has dropped 4 throughout its three-day losing skid. For the month, the index is down 7.4. The Standard & Poor's SmallCap 600 fell 4.08 points, or 1.3, to 322.89. Materials were small-caps' biggest decliners, losing 1.9 on the S&P 600. Building-products firm Headwaters fell 19 cents, or 5.9, to 3.06, and paper-products maker Neenah Paper fell 97 cents, or 6.3, to 14.52.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615180","date":"2010-08-26","texts":"Author Peter Eavis If Ben goes wacko in Jacko, could stocks spike like the Grand Teton Trumpeting any formal policy change would, of course, be a huge surprise. But as central bankers gather this weekend in Jackson Hole, Wyo., investors would nevertheless cheer any sign that Federal Reserve Chairman Ben Bernanke is considering another big bout of bond purchases to invigorate the U.S. economy. In an unorthodox policy dubbed quantitative easing, the Fed bought 1.7 trillion of bonds during the financial crisis. QE didn't work as well as many had hoped--much of the freshly printed money ended up idling in the banking system--and it can distort markets and interrupt important economic adjustments. Regardless, if Mr. Bernanke intimates the Fed is ready to launch QE2, stocks should rally. What stock investors are hankering for is an unequivocal sign from the Fed that it won't allow a double-dip recession. Quantitative easing is arguably the most powerful weapon in the Fed's arsenal. After a slew of downbeat economic data, the Fed has cover to openly consider using the big gun again.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615877","date":"2010-08-26","texts":"Author Jonathan Cheng Kristina Peterson The Dow Jones Industrial Average stumbled back below 10000 on Thursday, an unwelcome milestone as worries about the U.S. economy increase. The blue-chip index erased early gains to finish down 74.25 points, or 0.74, at 9985.81. The close is its first finish below the psychologically important level since July 6. The Dow has toyed with 10000 for the past few days before finally closing below. The key risk now is that the benchmark will plumb the year's lows reached in July. One clue to the market's direction may come on Friday when Federal Reserve Chairman Ben Bernanke speaks at the Fed's annual huddle in Jackson Hole, Wyo. The last time Mr. Bernanke spoke, his reference to an unusually uncertain economic outlook wiped more than 100 points from the Dow.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614070","date":"2010-08-27","texts":"Seven years after the U.S.-led invasion, Iraq's petroleum industry shows signs of living up to the potential that American planners hoped for at the start of the military operation, a potential boost to the war-ravaged country's economic recovery. After fits and starts, Iraq's oil production has rebounded to prewar levels. The government thinks the field-development deals it has handed out to international companies are on the way to boosting output significantly. With Iraq depending on oil exports for some 90 of its government revenue, that is expected to provide a broader boost to an economy that is already benefiting from high growth and tame inflation. No one is predicting an economic miracle in Iraq, which is still smarting from decades of sanctions, underinvestment and a creaky, centrally planned economy. Unemployment remains high, posing a continued risk that jobless youth will be lured to the insurgency. Power outages are common, leaving residents sweltering in darkness and complaining at times that things were better before the invasion. The Bush administration denied going to war over oil. But senior officials in Washington suggested early in the military operation that Iraq's oil wealth offered a quick way to rebuild. Years of trying to lure outside capital and know-how, however, foundered. During the invasion, oil production went to zero. Afterward, the country's oil infrastructure and power grid -- never reliable in the first place -- were heavily looted. Then, political opposition to foreign involvement in the country's oil fields flared.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983377","date":"2010-08-31","texts":"To win back his old job, the former Republican governor of Maryland has set his sights on an unlikely target the Democratic bastion of Montgomery County. Despite lackluster performances there in his previous two bids, Robert L. Ehrlich Jr. is betting that anxiety about the faltering economic recovery and discontent with the status quo will penetrate even a left-leaning jurisdiction that is home to more federal workers than any other in the state. Ehrlich, who plans to campaign again in Montgomery on Tuesday, has mapped a strategy that in part seeks to win votes in the western and northern parts of the county, which are more conservative than the communities that hug the Capital Beltway. He hopes a message of lower taxes and a friendlier business climate will sell in a county that has an increasingly diversified private sector. This is the type of election cycle where Democrats are more willing to cross party lines, Ehrlich said as he took a break recently from greeting seniors arriving at the county fair in Gaithersburg. We think the low 40s is doable here. That might not sound terribly ambitious, but in Maryland's largest county even a modest uptick in Ehrlich's support could add thousands of votes to his statewide total in what is shaping up as a competitive rematch against Gov. Martin O'Malley D.","wsj":0,"wapo":1,"economy":1,"noneconomy":0}
{"id":"842614011","date":"2010-09-01","texts":"Author Gina Chon Anupreeta Das Corrections & Amplifications An earlier version of this article incorrectly said 3i Group PLC was among those in talks over a possible purchase of Burger King Holdings Inc.    Burger King Holdings Inc. has been in talks with potential buyers in recent weeks about a possible sale of the second-largest hamburger chain, people familiar with the matter said. The status of the talks is unclear but one interested firm was New York-based investment fund 3G Capital, these people said. It's uncertain whether these discussions will result in a sale.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615973","date":"2010-09-01","texts":"Author Bob Tita Whirlpool Corp. will disclose on Wednesday the planned construction of a new plant in Tennessee that will serve as the centerpiece of a 300 million upgrade of domestic manufacturing facilities at the world's largest household appliance maker by revenue. The move highlights a shift by even export-driven U.S. manufacturers away from low-cost overseas locales in favor of rationalizing domestic operations to boost productivity. Whirlpool considered sites in Mexico and elsewhere in the U.S. before opting to replacing a century-old factory in Cleveland, Tenn., where it assembles built-in cooking ranges and ovens. It will add 130 staff to an existing work force of 1,500. The Benton Harbor, Mich., company has been aggressively reorganizing its North American assembly plants and distribution centers, consolidating smaller sites into larger facilities following its 2006 acquisition of rival Maytag Corp. It has closed plants in Evansville, Ind., Oxford, Miss., and recently outlined plans to close a Michigan plant.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613753","date":"2010-09-03","texts":"Author Min Zeng NEW YORK--A better-than-forecast jobs report eased fears about a double-dip recession in the U.S. and fueling broad selling in Treasurys and government bonds in Germany and the U.K. The Treasurys market lost ground for a third straight session, and the benchmark 10-year note posted a second consecutive weekly loss. At the peak of the selling, the 10-year Treasury note's yield, which moves inversely to the price, touched 2.770, the highest since Aug. 10. The yield has risen about 0.30 percentage point since hitting a 19-month low of 2.418 on Aug. 25. Investors across asset classes had soured enormously on the economy and were leaning on one side of the boat and were thus caught by surprise by stronger data, said Tony Crescenzi, portfolio manager at Pacific Investment Management Co. in Newport Beach, Calif. The pain trade is higher in yields.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614828","date":"2010-09-04","texts":"The U.S. economy lost jobs for the third month in a row in August, but modest hiring by the private sector eased concerns the economy might be tumbling back into recession. Private-sector employers added 67,000 jobs on a seasonally adjusted basis, the Labor Department said Friday. Overall, nonfarm payrolls fell by 54,000, as the U.S. shed 114,000 temporary Census workers and state governments also reduced employment. The jobs report was consistent with other recent economic reports, including a strong factory report earlier this week, that show the economy continues to recover, though at a painfully slow rate. The unemployment rate ticked up to 9.6 from 9.5 in July, not because of layoffs but because more people entered the work force. Some 14.9 million people remain jobless, and the unemployment figure marked the 16th straight month above 9, the longest stretch in a quarter-century. That promised to keep the pressure on Democrats in Congress as midterm elections approach, with Republicans pressing the case that the party that dominates both Congress and the White House isn't getting Americans back to work.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614647","date":"2010-09-05","texts":"Author Jennifer Waters Consumers will be protected from debt-relief companies that charge hefty upfront fees and make questionable claims, thanks to new government rules that take full effect in late October. The new rules are a huge first step, says Lauren Bowne, staff attorney for Consumers Union. They're going to prevent companies from charging upfront fees until they actually do something for you. But consumers shouldn't get too complacent. The amendments to the Telemarketing Sales Rule, or TSR, apply only to for-profit companies and do not cover ambiguous claims that might be made by such companies on the Internet or in face-to-face meetings. The rules come amid a growing number of consumer complaints, and as the number of companies promising consumers relief has skyrocketed in the recession. In 2002, for example, there were only eight debt-relief companies in the business. Today there are at least 2,000, and they're managing a total of about 20 billion in credit-card and other unsecured debt, according to the Association of Settlement Companies, a trade organization.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615930","date":"2010-09-09","texts":"Author Amy Chozick Nothing about Donald Trump's gilded condos, private helicopters or jaunts around the golf course scream recession, but that's exactly what The Donald will focus on in the latest episode of his reality show The Apprentice. Two years ago it began, an economic crisis that swept the world, Mr. Trump says in the voiceover opening of the 10th season premiere on NBC Sept. 16. This time the Mark Burnett-produced reality contest handpicked 16 contestants all hard hit by the economy. A woman who used to be a corporate lawyer now sells cupcakes for 2 a piece out of a hot pink truck. A financial advisor laments that there's no Plan B if he doesn't win the prize of becoming Mr. Trump's apprentice. A man who owned a construction company had to sell his house and all his belongings when the housing went bust. The Apprentice is one of the network's longest-running and best performing reality series, but ratings have sagged. Eight million viewers watched the show each week in the season that ended in May, down from 21 million in 2004, according to Nielsen Co.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616783","date":"2010-09-09","texts":"Hedge-fund manager John Paulson's Advantage Plus Fund declined 4.3 in August, as it continues to suffer for betting too soon on an economic recovery, a person familiar with the situation said Wednesday. The August decline brings the fund's year-to-date loss to 11, the person said. Mr. Paulson was among the big hedge-fund managers to build a stake in banks last year, reversing course after winning big in betting against subprime mortgages during the financial meltdown. However, banks underperformed broad market indexes as investors were disillusioned about a pickup in economic growth. Among Mr. Paulson's bank holdings are Citigroup Inc., Goldman Sachs Group Inc. and warrants of Bank of America Corp., according to a quarterly filing with the Securities and Exchange Commission last month. Mr. Paulson's Gold Fund rose 9 in August, the person said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830985307","date":"2010-09-14","texts":"The number of former workers seeking Social Security disability benefits has spiked with the nation's economic problems, heightening concern that the jobless are expanding the program beyond its intended purpose of aiding the disabled. Applications to the program soared by 21 percent, to 2.8 million, from 2008 to 2009, as the economy was seriously faltering. The growth is the sharpest in the 54-year history of the program. It threatens the program's fiscal stability and adds to an administrative backlog that is slowing the flow of benefits to those who need them most. Moreover, about 8 million workers were receiving disability benefits in June, an increase of 12.6 percent since the recession began in 2007, according to Social Security Administration statistics. Though policymakers anticipated the program's rolls growing with the aging of the baby-boom population, they suspect the current surge has less to do with any worsening in the health of the workforce than with the poor health of the economy.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614334","date":"2010-09-15","texts":"Politicians argue for increased stimulus spending, as opposed to spending cuts, on the grounds that it would speed up economic recovery. This argument might have it exactly backward. Indeed, history shows that cutting spending in order to reduce deficits may be the key to promoting economic recovery. In Europe today, the risk of a renewed recession comes not from the spending cuts that some governments have enacted, but from a sovereign debt overhang and multiple bank failures. July's stress tests were not reassuring because they didn't test the exposure of European banks to sovereign debt had they done so, many banks would have failed. Those banks remain a threat to the European economy. In the U.S., meanwhile, recent stimulus packages have proven that the multiplier -- the effect on GDP per one dollar of increased government spending -- is small. Stimulus spending also means that tax increases are coming in the future such increases will further threaten economic growth. Economic history shows that even large adjustments in fiscal policy, if based on well-targeted spending cuts, have often led to expansions, not recessions. Fiscal adjustments based on higher taxes, on the other hand, have generally been recessionary. My colleague Silvia Ardagna and I recently co-authored a paper examining this pattern, as have many studies over the past 20 years. Our paper looks at the 107 large fiscal adjustments -- defined as a cyclically adjusted deficit reduction of at least 1.5 in one year -- that took place in 21 Organization for Economic Cooperation and Development OECD countries between 1970 and 2007.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615196","date":"2010-09-15","texts":"NEW YORK -- Investors behind the day's most notable options trade bet that Bank of America Corp.'s stock can stage double-digit percentage gains this fall. Shares in the Charlotte, N.C. bank fell as much as 2.2 ahead of a much-awaited speech by Chief Executive Brian Moynihan. But investors behind this options move used the occasion to ramp up a bullish bet. Specifically, they traded in 70,000 14 Bank of America September call options to buy the same number of November 15 contracts. A call conveys the right to buy shares at a fixed price some time in the future, and typically signals bullish intent. Traders who move up a dollar in strike price are able to pay less money for their new bets and also signal higher expectations for the stock.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615836","date":"2010-09-16","texts":"EURO ZONE Inflation Rate Eases, Cushioning Monetary Policy The euro zone's annual inflation rate eased in August, indicating the European Central Bank has ample room to maintain its ultra-loose monetary policy, data from the European Union's Eurostat statistics agency showed. Average annual inflation in the 16 countries that share the euro eased to 1.6 from 1.7 in July, in line with the preliminary estimate published Aug. 31, Eurostat said. On a month-to-month basis, the consumer-price index rose 0.2 in August after falling 0.3 in July. The figures matched market watchers' forecasts. The annual rate has been under the ECB's medium-term target of just below 2 since December 2008, Eurostat said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615881","date":"2010-09-17","texts":"Author Mark Whitehouse U.S. households saw their wealth decline in the second quarter despite their efforts to save more money, underscoring the economy's struggle to recover from the recession. The Federal Reserve reported Friday that household net worth--stocks, bonds, homes and other assets, minus mortgages and other debts--fell 2.8 to 53.5 trillion in the second quarter, driven by a sharp decline in the value of stock investments. The drop, the first since the darkest days of the financial crisis in early 2009, left average net worth at about 182,000 a person--though the average is pulled up by a small group of the very wealthy. The numbers highlight the extent to which erratic financial markets are adding to the job troubles already weighing on consumers. While markets have rebounded somewhat in recent weeks, many people are keeping a lid on spending and focusing on repairing damaged nest eggs. I worry every day about our financial future, said Steve Gohmann, a 62-year-old retired insurance industry executive. He said that he and his wife were cutting their discretionary spending by some 18 this year while they try to rebuild their investments, which are down about 13 from their peak in 2007. Among the cuts Golf outings and membership in a California wine club.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614642","date":"2010-09-20","texts":"Author Kristina Peterson U.S. stocks closed at their highest level in more than four months a day ahead of a Federal Reserve meeting, as encouraging financial and home builder earnings boosted confidence in the economic recovery. Adding to its three straight weeks of gains, the Dow Jones Industrial Average rose 145.77 points, or 1.4, to 10753.62, its highest level since May 13. Already this month, the measure has climbed 7.4, its best September performance so far since 1939. The Standard & Poor's 500-share index rose 17.12, or 1.5, to 1142.70, also its highest close since May 13. The Nasdaq Composite added 40.22, or 1.7, to 2355.83, buoyed by a wave of deal activity in the fast-consolidating technology industry. We're beginning to get some indications it's more of a muddle-through economy in the U.S., rather than a double dip, said Sean Kraus, chief investment officer at Citizens Trust. There was so much negative news built into the markets that anything positive is good.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617025","date":"2010-09-20","texts":"The Game Plan takes a look at how individuals and families are saving for retirement -- and then asks financial advisers to comment on those strategies. You're invited to share your own retirement-savings plans by sending an email to reportswsj.com. Enough for Fun and More Josh Vogel isn't willing to sacrifice his social life just to stick a few extra dollars into his bank account. But that doesn't mean the 27-year-old from Brookline, Mass., has no long-term savings plan. Mr. Vogel, who does internal reporting and applications development at Children's Hospital Boston, brings his lunch to work and cooks dinner in order to offset weekend entertainment expenses. He buys frequent-skier cards at several ski resorts within a few hours of where he lives. And the avid sailor often rides as a crew member on yachts for which, as he says, his only financial outlay is the cost of a few beers. I have plenty of funds to have plenty of fun, says Mr. Vogel.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616838","date":"2010-09-22","texts":"Author Nick Timiraos Government backing for many pricey home mortgages is set to expire at the end of the year, which could begin to ratchet down federal support for the housing market but also jeopardize the sector's shaky recovery. Congress allowed government-chartered mortgage titans Fannie Mae and Freddie Mac to back loans as high as 729,750 two years ago to help resuscitate the housing market. The new limits, which offer exceptions in some locales to the standard 417,000 limit, also applied to the Federal Housing Administration. The fewer bank-issued mortgages that the three agencies guarantee, the harder it is for borrowers to qualify for loans and the higher their interest rates. Unless lawmakers intervene, those higher limits, which mostly affect high-cost areas such as San Francisco, New York and Washington, D.C., will fall at year end to around 625,500. If that happens, home prices would drop precipitously because it would be impossible to finance homes in most parts of Los Angeles and certain other major cities with high prices, Rep. Brad Sherman, a member of the House Financial Services Committee, said at a hearing last week. The California Democrat has introduced a bill to make the larger limits permanent and has attracted 74 co-sponsors.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616275","date":"2010-09-23","texts":"Author Ruth Simon When a borrower hears a no from the bank, sometimes it really means maybe. Many of the biggest U.S. banks, criticized since the financial crisis erupted for making fewer loans and toughening borrowing standards, have launched what industry officials call second look programs to review rejected loan applications. Some bank employees hunt for credit-report errors that hurt borrowers the first time their applications were vetted, or unreported sources of income that would make a consumer loan look less risky. Even more common are reviews of rejected small-business loans by loan officers and other bank employees. The moves are a throwback to traditional roll-up-the-sleeves loan underwriting, emphasizing a potential borrower's track record and relationship with a bank over credit scores and other data that powered the industry's loan machine when credit was fast and cheap.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616579","date":"2010-09-23","texts":"The prospect of further Treasury buying by the Federal Reserve continued to drive financial markets, pushing gold to a fresh record high and beating down the dollar. Investors snapped up Treasurys in anticipation of a possible Fed move, pushing the yield on the benchmark 10-year note down toward 2.5. The dollar resumed its slide, falling to its lowest point in five months against the euro, trading at 1.3393. Blue-chip stocks fell to break a five-day winning streak, with the Dow Jones Industrial Average losing 21.72 points, or 0.2, to close at 10739.31. Even so, the Dow remains on pace for its best September since 1939, up 7.2 this month. Gold rose to 1,292.20 an ounce -- its fifth record high in seven sessions -- after approaching the 1,300 mark in intraday trading.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616029","date":"2010-09-24","texts":"Nike Inc.'s quarterly profit rose 9 as it benefited from a continued improvement in demand for its athletic apparel and less costly discounting. Nike posted a profit of 559 million, or 1.14 a share, for its fiscal first quarter ended Aug. 31. That compares with profit of 513 million, or 1.04 a share, in the same period a year earlier. Revenue increased 7.8 to 5.18 billion. The company has seen revenue rebound in the last three quarters after flagging demand during the recession induced it to cut costs and inventory to protect the bottom line. Chief Executive Mark Parker said Thursday the results demonstrate the power of our growth strategy. In June, the company unveiled an aggressive sales-growth goal for the next half-decade, aiming to increase sales 40 by opening new stores and swiftly expanding subsidiary brands like Converse and Umbro. Gross margin in the recent quarter rose to 47 from 46.2 because of fewer, and more profitable, discounts, as well as better profitability in the company's e-commerce operations. Inventories were down 3.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616955","date":"2010-09-24","texts":"NEW YORK-- Rite Aid Corp. posted a wider fiscal second-quarter loss as revenue fell amid store closures and fewer prescription sales. The drugstore chain also forecast a wider loss for the year. The Camp Hill, Pa., company now expects a loss for the current fiscal year of 46 cents to 67 cents a share. In March, the company forecast a full-year loss of 41 cents to 65 cents a share. Rite Aid also Thursday cut its revenue forecast by 200 million, and is now expected to post between 25 billion and 25.4 billion. In 4 p.m. composite trading, Rite Aid shares were down 14 to 95 cents on the New York Stock Exchange. The drugstore chain's cost-cutting and refinancing have failed to lift results since its 2007 acquisition of Brooks Eckerd, which saddled the company with debt just before a pullback in consumer spending. Sales have remained weak and have been especially sluggish at the pharmacy as consumers are using fewer medical services.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616341","date":"2010-09-25","texts":"U.S. stocks got another shot in the arm on Friday, closing out the week with a surge that put the Dow Jones Industrial Average on track for the best September in 71 years. The Dow leapt 197.84 points, or 1.9, to 10860.26. The Dow rose 2.4 this week, extending its weekly win streak to four. The benchmark is up 8.4 this month, the best September since a 13.5 rise in 1939. Investors snapped up commodities and the euro, all signs of an increasing tolerance for riskier assets. Gold set another record and briefly pierced 1,300 an ounce. The day's advances began in Europe, after a strong German business sentiment survey helped reassure investors that the export giant's economic machine was humming. U.S. economic data a few hours later showed companies spending more, helping paint a picture of increasing corporate aggressiveness at a time when the global economy looks to be on the rise. That's what this market needed solid signals that companies are spending their money, at a time when global demand is intact, said Quincy Krosby, chief market strategist at Prudential Financial. With the dollar weakening against most other currencies, she said, that's supportive of export-driven companies.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614573","date":"2010-09-27","texts":"Author Edward P. Lazear As Washington debates the fate of the 2001 and 2003 tax cuts, many lawmakers have fallen into a logical trap of their own making. Although they recognize that tax increases hurt the economy, they argue that our huge deficit requires Congress to raise revenue through a tax hike. This argument rests on the flawed premise that we can reduce the deficit only by increasing taxes, as if high levels of spending are a given. Not so. To reduce spending and reignite growth, this Congress or its successor should take two actions. First, immediately cut the level of spending that has been increased so dramatically since 2008. Second, institute an inflation-minus-one rule to constrain future spending increases. Much public discussion focuses on the deficit, which is indeed at critical levels of around 10 of GDP. But even if President Obama succeeds at lowering the deficit to 4 of GDP by 2013, our public-debt-to-GDP ratio will still be dangerously high, at over 70, or nearly twice what it was during the Bush years. As the economists Carmen Reinhart and Kenneth Rogoff have shown in the journal American Economic Review, such high debt-to-GDP ratios are associated with low growth.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615543","date":"2010-09-27","texts":"Corrections & Amplifications 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. WSJ Sept. 28, 2010 Financial Analysis and Commentary 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 133 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.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615755","date":"2010-09-27","texts":"Author Andy Kessler What's wrong with Wall Street I don't mean the painfully slow and dreadful new Oliver Stone movie. I mean the real Wall Street. The stock market has been on a tear this month and is up a few percentage points for the year. But the stocks of most Wall Street firms are actually down close to 15 for the year. It wasn't supposed to be this way. The Federal Reserve's near-zero interest rate policy makes it almost impossible for Wall Street not to make money by borrowing at next to nothing and buying anything, especially Treasury bonds. This gives banks easy profits and the wiggle room to write off the toxic mortgage assets that never got cleared out. While most firms won't release earnings for another three or four weeks, Jefferies investment bank set off air raid sirens last week by announcing disappointing earnings, which CEO Richard Handler blamed on painfully slow trading. And there's more trouble down the road. One obvious problem is that the yield curve has flattened. While short-term rates are near zero, Ben Bernanke's Fed, via quantitative easing, has been working furiously to lower long-term mortgage rates. In January, Wall Street could borrow in the short-term market at 0.15 and buy 10-year bonds paying close to 4. Today they can still borrow cheap at 0.14--but 10-year bonds are only paying 2.6. That's a huge difference in nine months, and profits suffer.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614607","date":"2010-09-28","texts":"Discount carrier Southwest Airlines Co. said Monday that it plans to acquire smaller rival AirTran Holdings Inc., in a 1.4 billion cash-and-stock deal that reflects intensifying consolidation in the industry. The friendly takeover would give Dallas-based Southwest a major presence at Hartsfield-Jackson Atlanta International Airport, the busiest in the world and AirTran's main hub. It would also extend Southwest's service outside the U.S. for the first time, with the addition of AirTran routes to Mexico and the Caribbean. Southwest's expanded footprint could increase pressure on larger network airlines, particularly Delta Air Lines Inc., the dominant carrier in Atlanta. Those carriers are typically saddled with higher costs and charge steeper fares. But Southwest also is entering uncharted territory after shying away from acquisitions for most of its history. The airline has produced 37 straight years of profits. Airline mergers are picking up as the industry returns to profitability after soaring fuel prices and the recession pummeled demand for air travel.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617162","date":"2010-09-29","texts":"Author Dan Fitzpatrick Bank of America Corp. is cutting a third of its proprietary-trading-desk staff as it complies with new legislative restrictions on the risks banks can take with their own capital. The decision affects as many as 30 traders at Bank of America, said a person familiar with the situation. David Sobotka, who runs the desk, isn't among the people whose positions are being eliminated. The bank is still weighing what to do with the rest of the group, this person said. Bank of America's move is the latest example of how Wall Street is scrambling to comply with an aspect of the Dodd-Frank financial-overhaul law known as the Volcker rule. Named after former Federal Reserve Chairman Paul Volcker, the new regulation curtails proprietary trading, private equity and other investments where banks use their own capital, as opposed to bets made on behalf of clients. Goldman Sachs Group Inc. recently decided to close the principal-strategies unit that handles proprietary equities trading for the firm, affecting about 60 positions. Some moved elsewhere within the firm, while others left Goldman for new jobs with private-equity firms and hedge funds. J.P. Morgan Chase & Co. is exiting from all proprietary trading, having eliminated 20 proprietary commodities traders and moving three other desks to a new alternative-investment-management group housed within the bank's asset-management division.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617395","date":"2010-09-29","texts":"Author David Roman SINGAPORE--The central banks of South Korea, Singapore, Thailand and Indonesia were suspected of intervening in foreign exchange markets Wednesday to contain gains in their currencies, but analysts say the continued weakness of the U.S. dollar means Asian units should extend their rallies. The wave of intervention, which has continued across the region for most of this year, hasn't been strong enough to reverse the strengthening trend in Asian currencies, as many policymakers are allowing their currencies to rise slowly to limit imported inflation. That stance was reinforced after China, the top trading partner for key Asian countries, said in June it would let the yuan strengthen against the dollar--meaning that other Asian countries can maintain their export competitiveness against China even if their currencies rise a bit. On Wednesday the Thai baht and the Malaysian ringgit hit their highest levels since the 1997 Asian currency crisis, while the Singapore dollar rose to an all-time high.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615992","date":"2010-09-30","texts":"Author Kenan Machado, Romit Guha Satish Sarangaraja HYDERABAD -- Satyam Computer Services Ltd., which is recovering from India's biggest-ever corporate scandal, said Wednesday its net loss for the fiscal year ended March 31 narrowed to 1.25 billion rupees 27.8 million from 81.77 billion rupees a year earlier, as the company's one-time costs fell sharply while it reduced staff and administrative expenses. Satyam Computer hadn't reported results since the July-September quarter of 2008, as in January 2009 it was plunged into turmoil after its founder and then chairman, B. Ramalinga Raju, confessed to overstating profits for years, using a fictitious cash balance of more than 1 billion. The Hyderabad-based company was taken over by software company Tech Mahindra Ltd. following a government auction in April 2009 and re-branded Mahindra Satyam, though it is still listed as Satyam Computer Services. Satyam said Wednesday it posted revenue of 54.81 billion rupees last fiscal year, down from 88.13 billion rupees the previous year, but in line with expectations. The average view in a Dow Jones Newswires poll of five analysts was for revenue of 54.74 billion rupees. The analysts' net profit estimates ranged from 1.80 billion rupees to 6.57 billion rupees.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613518","date":"2010-10-01","texts":"Author Ben Levisohn Bond yields hit record lows again this week. Is it time to start positioning your portfolio for rising rates At first blush such a move might seem like portfolio suicide. The main drivers of rising interest rates--economic growth and inflation--are nowhere in sight. In fact, Treasury yields could fall further if the Federal Reserve starts buying bonds again in a widely anticipated maneuver known as quantitative easing. But step back from day-to-day market gyrations and a different picture emerges. Bond yields have fallen for most of the past three decades. A 1,000 investment in the U.S. government debt in 1980 would be worth about 12,970 today, according to the Ryan Labs Treasury Composite Index. Treasury prices, which move in the opposite direction of yields, have surged 9.3 this year alone. Now consider a different era 1949 through 1979. Over that 30-year span, a 1,000 initial investment in Treasurys would have turned into a far humbler 2,950. That's because yields soared during the period by 1980 the yield on the 10-year Treasury had reached a record high of nearly 16.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613663","date":"2010-10-01","texts":"Author Joseph De Avila The New York State Department of Labor sent notices on Thursday to 80,590 New Yorkers who allegedly committed unemployment fraud and ordered them to repay their debt, or risk having their federal income-tax returns garnished. The 80,590 New Yorkers who allegedly received unemployment illegally collectively owe the state 140.7 million. This marks the first year New York is able to recoup illegally collected unemployment benefits from federal tax refunds under a new federal law passed in 2008. We want to make sure we collect every dollar in our trust fund to give out benefits, said New York's Labor Commissioner Colleen C. Gardner. The New York State Unemployment Insurance Fund currently faces a 3.1 billion deficit, she said. Last month about 564,000 people including out-of-state claimants were receiving unemployment insurance, according to the Labor Department.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615842","date":"2010-10-01","texts":"NEW YORK -- Though the dollar weakened slightly against the euro and yen, the currency posted its first broad advance in three days after U.S. economic data eased fears that the Federal Reserve would need to kick start the sluggish economy. Second-quarter gross domestic product data, weekly jobless claims and a survey of Chicago-area purchasing managers gave investors heart that the economy may be regaining some steam. Thursday's data gave rise to the possibility that Fed policy easing is not yet a done deal, said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington. Still, next week's U.S. unemployment report for September will be a much bigger test for gauging the likelihood of added federal stimulus, analysts said. By late in New York, the ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, had inched up to 78.762 from 78.759 late Wednesday. The euro moved to 1.3634 from 1.3629. The dollar was at 83.48 yen from 83.65 yen. The euro weakened to 113.82 yen from 114.07 yen. The U.K. pound weakened to 1.5711 from 1.5784. The dollar strengthened to 0.9826 Swiss franc from 0.9770 franc.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830981744","date":"2010-10-02","texts":"Consumer spending has stalled along with the economic recovery, new data show, muting expectations for the critical holiday shopping season. The Commerce Department reported Friday that spending rose a modest 0.2 percent in August from the previous month when adjusted for inflation - well below last year's August gains. In addition, economists say the increase was boosted by the federal government's temporary extension of unemployment benefits, which also padded incomes and savings. The feeble appetite of shoppers is one of several factors holding back the economic recovery. The stubborn unemployment rate and continued fallout in home prices have not only taken their own toll on the nation's financial health, but they also have consumers cautious, keeping their wallets in their pockets. A monthly survey by the University of MichiganReuters that was released Friday showed consumer sentiment dipped in September, dropping seven-tenths of a point on the index to 68.2. That falloff was driven by declines in long-term expectations, even though consumers recognized that their current situations had improved since the depths of the recession. I think the consumer is a little better off. . . . But I don't think they feel better off, said Jeff Kleintop, chief market strategist for LPL Financial.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614276","date":"2010-10-04","texts":"Author Tara Loader Wilkinson Didier Duret, chief investment officer at ABN Amro Private Banking, tells The Wall Street Journal why he likes high-yield bonds and quality enhancement. WSJ What are your top picks at the moment Mr. Duret Historically low interest rates maintained by central bank policies create a strong incentive for investors to actively seek risk and yield, albeit cautiously and through diversification. Therefore, low-grade corporate and high-yield bonds should be considered, along with equities generating strong dividends, especially those in or with exposure to emerging markets. WSJ What makes low-grade corporate and high-yield bonds a good investment","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614928","date":"2010-10-04","texts":"Author Bob Davis WASHINGTON--The global economy is recovering at such a tepid pace, said World Bank President Robert Zoellick, that countries must guard against creating tensions that could undermine further growth. Among the issues that warrant particular attention are foreign-currency fights, protectionism, asset bubbles and food-price volatility, he said in an interview with The Wall Street Journal. When you have slow growth and high unemployment in wealthy countries you run the risk of frictions, whether they be currency, trade and social issues like immigration escalating into larger problems, he said on Monday, a few days before the 187 member nations of the World Bank and International Monetary Fund gather for their annual meetings. It will be very important for leading countries to manage their differences. At the top of the list, he said, was the economic relationship between China and the U.S., in which the U.S. is pressing China to revalue its currency as a way to cut its large trade deficit with China. Other countries in Asia have been intervening to keep their currencies low partly as a way to meet Chinese competition.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614005","date":"2010-10-06","texts":"CHICAGO -- Charles Evans, president of the Federal Reserve Bank of Chicago, called for the Fed to do more to charge up the economy, including a new program of U.S. Treasury bond purchases and possibly a declaration that it wants inflation to rise for a time beyond its informal 2 target. In the last several months I've stared at our unemployment forecast and come to the conclusion that it's just not coming down nearly as quickly as it should, Mr. Evans said Monday in an interview with The Wall Street Journal. This is a far grimmer forecast than we ought to have, he added. As result, he said, he favors much more monetary accommodation than we've put in place. The comments are significant because Mr. Evans tends to reflect the broad center of gravity at the central bank. His prescription for aggressive action, though not uniformly held by his colleagues, suggests a shift in the mood at the Fed. On the heels of remarks by Fed Chairman Ben Bernanke and New York Federal Reserve Bank President William Dudley, it is likely to reinforce a growing conviction among investors that the Fed will restart a bond-buying program when it meets Nov. 2 and 3. It also suggests Fed deliberations are going beyond resuming bond-buying plans to contemplating new strategies for inflation and for communicating the Fed's stance to the public.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615579","date":"2010-10-06","texts":"Author Sudeep Reddy The Federal Reserve spent the past three decades getting inflation low and keeping it there. But as the U.S. economy struggles and flirts with the prospect of deflation, some central bank officials are publicly broaching a controversial idea lifting inflation above the Fed's informal target. The rationale is that getting inflation up even temporarily would push real interest rates--nominal rates minus inflation--down, encouraging consumers and businesses to save less and to spend or invest more. Both inside and outside the Fed, though, such an approach is controversial. It could undermine the anti-inflation credibility the Fed won three decades ago by raising interest rates to double-digits to beat back late-1970s price surges. It's a big mistake, said Allan Meltzer of Carnegie Mellon University, a central bank historian. Higher inflation is not going to solve our problem. Any gain from that experience would be temporary, adding that the economy would suffer later. Others warn that pushing inflation higher than the target could create public confusion and risk fueling financial bubbles and market instability. They say Fed policy already is weakening the dollar and as a result prompting a gold and commodity boom. The Fed is treading upon a mine-laden path that has never been tip-toed through in this country, said Andrew Busch, a currency strategist at BMO Capital Markets.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614183","date":"2010-10-07","texts":"Author Naftali Bendavid China is emerging as a bogeyman this campaign season, with candidates across the American political spectrum seizing on anxieties about the country's growing economic might to pummel each other on trade, outsourcing and the deficit. In television ads, China is framed as an ominous foreign influence in a time of economic anxiety, often accompanied by red flags and communist-style stars and sometimes by Asian-sounding music. Democrats say Republicans support tax breaks that reward companies for moving jobs to China Republicans blame Democrats for a federal budget deficit they say forces the U.S. to borrow money from China. Candidates are looking to speak in a visceral way to the fears and concerns of voters about jobs, said Lawrence Jacobs, a political scientist at the University of Minnesota. Bashing China is safe. The heated rhetoric puts the White House in a bind. Administration officials often don't mind Congress putting pressure on China, and Treasury Secretary Timothy Geithner himself in a speech Wednesday offered a blunt critique of Beijing's currency policy. But officials also worry that a confrontational approach could backfire.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614227","date":"2010-10-07","texts":"Federal Reserve Chairman Ben Bernanke is a student of monetary history, so perhaps he remembers Sumner Slichter. In the 1950s, the Harvard economist made his reputation as the leader of an intellectual band that Time magazine dubbed the limited inflationists--the idea that some inflation was good for an economy, and that the Fed should encourage a gradual rise in prices. In a hearing on Capitol Hill, his views drew a famous rebuke from Fed Chairman William McChesney Martin, but Slichter's ideas gained currency in the 1950s and 1960s and eventually laid the groundwork for the not-so-gradual inflation of the 1970s. Slichter died in 1959, but he is staging a rebirth at none other than Martin's former home, the Federal Reserve. A galaxy of Fed officials has fanned out to argue for another round of quantitative easing, or a further expansion of the Fed balance sheet to boost the economy. The limited inflationists are once again at America's monetary helm, promising happier days from rising prices while downplaying the costs and risks.  In the first QE go-around in spring 2009, financial panic was still in the air and the Fed's justification was to save us from Depression. Today, the panic is over and an economic recovery is underway. So the Fed's new justification is that growth is still too slow, unemployment is still too high and prices aren't rising fast enough.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616048","date":"2010-10-07","texts":"Author Sara Schaefer Muoz LONDON--U.S. authorities ordered HSBC Holdings PLC's North American unit to beef up its risk management and compliance with federal anti-money laundering laws after an investigation found the banking giant's procedures to be subpar. Thursday's action, which came in the form of a cease and desist order from the Federal Reserve and the Office of the Comptroller of the Currency, is embarrassing because of the spotlight it shines on compliance lapses in a global bank with a cautious reputation and operations around the world. The orders give the board of HSBC North America Holdings Inc., based in New York, 30 days to submit a plan to strengthen the unit's oversight of business risk management. The HSBC operation was ordered to employ a permanent full-time regional compliance officer for risk management. HSBC also must retain an outside consultant approved by the Fed to review the unit's compliance program. The agreement announced Thursday included no fine, but HSBC could still face civil penalties down the road, regulators said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615575","date":"2010-10-08","texts":"Author Deborah Lynn Blumberg NEW YORK--Most Treasury prices rose, leaving the market with a weekly gain, after a bleak U.S. jobs report that added to investors' already lofty expectations that the Federal Reserve will have to lend more support to the economy this year. The two- and five-year yields fell to record lows once again in the wake of the report, which showed the economy lost 95,000 jobs last month, to 0.335 and 1.070, respectively. The 10-year yield slipped to a yearly low as well, to 2.332, a level last seen in January 2009. The 10-year yield hit an all-time low of 2.037 in December 2008. Yields and prices move inversely. Treasurys gained as the data confirmed for many that the Fed will have to launch another quantitative-easing program involving large-scale bond buying this year to keep the economy from slipping back into a recession. Many believe that buying will take Treasury yields lower still, with the 10-year possibly hitting 2. The report gives us no reason to argue a slowing of the QE2 train based on the data, said John Briggs, U.S. interest rate strategist at RBS. Akin to the overall growth picture, today's data was 'just not good enough,' Briggs said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617142","date":"2010-10-11","texts":"Author Wayne Swan It's an unfortunate reality that two years from the start of the financial crisis, many of the world's advanced economies are still grappling with near double-digit unemployment rates, an anemic private recovery and high sovereign debt. Many countries are still yet to recoup the output lost during the crisis. But that's not the Australian story, and it's important to understand why, and what lessons can be learned from our experience. In 2009 the global economy contracted for the first time since the 1930s but the Australian economy continued to grow. We have an unemployment rate of 5.1--around half the levels seen in the United States and Europe. Our net debt will peak at just 6 of GDP in 2011-12. By comparison, the collective government net debt of major advanced economies is expected to hit 90 of their GDP in 2015. And we're on track to get the budget back to surplus in 2012-13--years ahead of every major advanced economy. So how have we come through the crisis in such good shape Our banking system is one of our great strengths. Only nine of the hundred largest banking groups in the world are rated AA or above--and four of those are Australian. Even at the height of the crisis, no Australian bank, building society or credit union required an injection of government funds. We also have tough and effective regulators. And we didn't suffer the financial market excesses of Europe and the U.S. But it wasn't only the strength of our banks prudent monetary and fiscal policy played a role, too. When the crisis began, the Reserve Bank of Australia aggressively cut interest rates to emergency levels and the government immediately put in place powerful fiscal stimulus to support jobs and growth. Our response was quick enough and big enough not just to arrest the decline in confidence, production and spending, but to turn them around.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617320","date":"2010-10-11","texts":"Author Kristina Peterson Stocks ended the session slightly higher, as investors await bellwether earnings reports due in coming days. The Dow Jones Industrial Average closed up 3.63 points, or 0.03, to 11010.11. The Nasdaq Composite edged up 0.42 point, or 0.02, to 2402.33, while the Standard & Poor's 500-stock index rose 0.15 point, or 0.01, to 1165.30. Monday's trading came on lighter-than-average volume, with just over three billion shares changing hands in New York Stock Exchange composite trading compared with the daily average of about four billion. Bond markets and federal offices were closed in the U.S. for the Columbus Day holiday. More than anything, it's just a holiday-type trade, with low volume kind of whipsawing around, said Jamie Cox, managing partner at Harris Financial Group.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615700","date":"2010-10-13","texts":"Author Darrell A. Hughes WASHINGTON--Treasury Secretary Timothy Geithner said the U.S. wants to make sure the yuan appreciates at a gradual but still significant rate. Mr. Geithner, according to a transcript of an interview on the Charlie Rose talk show, noted that China allowed its currency to rise by a significant amount--about 2.5--over the previous six weeks. But U.S. officials would prefer for China to continue to let the value of its currency rise to reflect market forces, Mr. Geithner said. What we want to do is to maximize the incentives they have to let that process go as far as it needs to go, Mr. Geithner said. I'm very confident over time that this is going to happen, he added.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615156","date":"2010-10-14","texts":"Communities hit hardest during the recession could continue to fall behind the rest of the country for decades, research released Wednesday by the Brookings Institution's Hamilton Project suggests. In regions that suffered disproportionately in the recession of the early 1980s, for example, average earnings have risen at a quarter of the rate of the rest of the U.S. Employment grew more slowly, young people left the region, population growth slowed and, as a result, demand for housing weakened. A similar fate could be in store for areas of the country that faced the deepest housing and employment shocks in the latest downturn, the report warned. This is a structural change, said Michigan Gov. Jennifer Granholm, a Democrat, referring to the latest recession. The economy is just not going to come back the way it has before. To avoid repeating the scenario that followed the 1980s downturn, papers commissioned by the Hamilton Project -- formed by some Clinton administration Democrats to devise policies to improve the economy -- recommended revitalization efforts targeting the worst-off communities. Among the proposals a government-sponsored bank that would provide loans of up to 10,000 for people who have been laid off in the past five years and are looking to move. The cost would run the government between 500 million and 800 million annually, estimated the University of Chicago's Jens Ludwig and the University of California, Berkeley's Steven Raphael, who wrote the proposal.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613573","date":"2010-10-16","texts":"Author Dave Kansas The stock market has had a heady few weeks. The Dow Jones Industrial Average has mustered above 11000 for the first time since April -- and it has managed to stay there through the early part of the third-quarter earnings season. But the swift rise of the market -- the Dow is up about 10 from its Aug. 31 close -- comes against a backdrop of somewhat unsettling news. The jobless rate remains stuck just below 10 with little respite in sight. The housing market is still very weak, and is enduring further shocks as lenders' foreclosure problems keep getting worse. The political situation seems a bit chaotic. And the global recovery is uneven enough that the Federal Reserve is thinking of yet more extraordinary measures to get things rolling. Even with those headwinds, the mood among stock investors as we near the end of October is surprisingly upbeat. Third-quarter earnings are coming in better than expected and optimism about the Fed's latest extraordinary plan -- quantitative easing part two, or QE2 -- is rampant in the stock market. We entered the dreaded September-October period in fear we are leaving it with bliss breaking out. Such sudden shifts in sentiment, especially with uncertainty on the rise, makes me a little queasy. Given the widespread gains, it might make sense to examine your portfolio now with an eye toward rebalancing, rather than wait for the end of the year. In so doing, you may want to pare back some of the bigger winners and salt away the gains for the coming year.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616324","date":"2010-10-16","texts":"Financial Analysis and Commentary As Federal Reserve chairman, Alan Greenspan's communication style was famously opaque. When it comes to understanding his successor, just follow the italics. The select few listening to Friday's speech on monetary policy by Fed Chairman Ben Bernanke heard a fairly balanced description of an economy that is slowly recovering but still burdened by excessive unemployment. The option of further quantitative easing, or QE, was discussed in terms reflecting both the potential benefits and the risks. But for the masses reading the 15-page document, the message from the Fed chairman -- sledge-hammered home by four instances of italics -- was crystal clear. First, Mr. Bernanke said the Fed takes its cues from two primary objectives the longer-run sustainable rate of unemployment and the mandate-consistent inflation rate. He later made clear what the Fed thinks about both right now Inflation is too low and unemployment too high.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613909","date":"2010-10-18","texts":"Author Brian Blackstone Policy makers at the European Central Bank face the same high unemployment and slow growth that dogs their friends across the Atlantic at the Federal Reserve. But don't expect the ECB to follow the Fed in taking extraordinary measures to try to get things moving again. The Fed thinks it can and should use the tools at its disposal, in this case buying U.S. Treasury bonds to bring down long-term interest rates and goose growth, because doing so will bring down the jobless rate. The Europeans won't have any of it. They view their unemployment problem as more structural, the result of rigid labor rules that discourage hiring of workers who won't move to the places where jobs exist or shortages of workers with skills employers demand. To the Fed, by contrast, the problem at least in the U.S. is seen as more likely a collapse in demand. If that is true and if the Fed can reignite growth, it will mean a quick drop in unemployment.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614378","date":"2010-10-20","texts":"It is now common to hear the current economic downturn described as the worst since the Great Depression. Yet as we approach the second election since this downturn began, it is clear that the politics of the two could not be more dissimilar. Three generations ago, Democrats rode the Depression to congressional gains in four straight elections. They more than doubled their House and Senate totals between 1929 and 1937. If current polls are accurate, today's Democrats are about to see their winning streak end at two elections. Why Today's Democrats face economic variables far less daunting than those of their 1930s predecessors. Unemployment had been 3.2 in 1929. By 1933, when FDR took office, it was 24.9. It fell, but not far. Over FDR's first term, unemployment averaged 18.6. Even by 1940, as FDR sought his third term -- and despite direct intervention through programs like the Work Projects Administration WPA and the Civilian Conservation Corps CCC -- it was still 14.6. Today's 9.6 rate is about half of FDR's first-term average. The same comparative advantage holds true for economic growth. During the Depression, the economy shrank for four straight years following the 1929 stock market crash. This included FDR's first year in office. In real terms, the economy did not regain its 1929 level until 1936, and the Depression did not end until World War II's massive mobilization. Within those dozen years, FDR also endured his own double dip, dubbed the Roosevelt recession, in 1938. This reality hardly reflects the simplified conventional wisdom that the New Deal quickly ended the Depression. If today's experts are correct and the recession has already ended, President Obama's economic record compares very favorably to FDR's. Since the third quarter of 2009, his first year in office, the economy has grown -- hardly robustly, but progress nonetheless. On taxes too, Mr. Obama holds an advantage over FDR. Between 1932 and 1936, revenue collected by the government doubled, rising to 3.9 billion from 1.9 billion. At their 1938 peak, federal receipts were 6.8 billion -- three-and-a-half times 1932's level. These increases were no accident. FDR sought, and got, significantly higher taxes.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615859","date":"2010-10-20","texts":"Author Min Zeng NEW YORK--The 30-year Treasury bond rallied Wednesday, leading a rebound in the bond market on speculation that the Federal Reserve will step up government-debt buying to support the economy. The benchmark 10-year note erased earlier losses to trade flat. The 30-year bond gained for a third-straight session. I still believe that the continued evidence of a lack of inflation coupled with a Fed pledge to buy longer dated assets give investors a window of investment opportunity that is rarely available and with so much clarity, said Kevin Giddis, president of fixed income capital markets at Morgan Keegan Inc. in Memphis, Tenn. As of 4 p.m. EDT, the price of the benchmark 10-year note was flat to yield 2.481 and the 30-year bond was 1232 higher to yield 3.893. The two-year note was 132 higher to yield 0.351. Bond prices move inversely to yields.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616444","date":"2010-10-20","texts":"Bank of America Corp. and some of its largest mortgage investors clashed on Tuesday as the bank vowed to fight government-backed demands that it repurchase loans that allegedly didn't meet underwriting guidelines and other promises. The bank acknowledged receiving a Monday letter from investors alleging that a Bank of America unit didn't properly service 115 bond deals. The investors include Freddie Mac, the government-owned mortgage company. Freddie Mac and Fannie Mae, its larger sibling, have boosted demands on lenders over the past year to buy back defaulted loans that had been sold to and guaranteed by the mortgage titans. But Tuesday's action marks the first step by either company to force banks to buy back mortgage-backed securities that were issued by Wall Street, not by government-backed mortgage giants. Other investors, some of whom were acting on behalf of their clients, include the Federal Reserve Bank of New York, Neuberger Berman Group LLC, BlackRock Inc., Western Asset Management Co. and Allianz SE's Pacific Investment Management Co., or Pimco, according to people familiar with the matter. The Charlotte, N.C., bank hoped the lifting of its foreclosure sale moratorium would debunk fears that the mortgage process was flawed. But investors grappled with new concerns Tuesday that the bank could be overwhelmed with investor requests to repurchase flawed mortgages made before the U.S. housing collapse. Its shares dropped 54 cents or 4.4 to 11.80. The shares have declined more than 30 since the end of April amid worries about regulatory reform, lackluster revenues and weak loan demand.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983368","date":"2010-10-20","texts":"The Federal Reserve on Tuesday moved to stop credit card issuers from using a regulatory loophole to charge the most vulnerable customers exorbitant sign-up fees. The proposed regulation is aimed squarely at fee-harvester cards, targeted at consumers with poor credit histories. The cards carry interest rates as high as 79 percent and typically have limits of a few hundred dollars. They also come with hefty annual fees and other charges that can quickly eat up the available credit. One card described in a 2007 report by the National Consumer Law Center, an advocacy group, had a 300 limit with 247 in monthly and annual fees, leaving consumers with only 53 to spend. The landmark Credit Card Act that was enacted last year sought to tamp down such practices by capping card fees at 25 percent of the credit limit for the first year of use. Web sites of some credit card companies state the cards are no longer available. But some issuers found a way around the law by charging a sign-up fee before the account is actually opened. One such card advertised on First Premier Bank's Web site assesses a 25 processing fee to register for the card. The site notes, however, that for convenience this Processing Fee can be paid over time.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615613","date":"2010-10-21","texts":"General Mills Inc. said it will increase prices next month on a quarter of its breakfast cereals as a result of rising grain and other commodity prices, illustrating the pressures more companies face to pass along sharply higher costs on everything from corn to copper. The Minneapolis food supplier said some cereals will increase by a low single-digit percentage rate effective Nov. 15. Kraft Foods Inc. is also raising prices, according to people familiar with the matter, although its scope wasn't clear. A Kraft spokesman declined to comment. Across corporate America, more companies are wrestling with when and how much to raise prices as raw materials costs climb. The increases pose new hurdles to profits as consumers continue to resist increases. General Mills is not alone in wanting to pass along the costs. United Technologies Corp., which builds helicopters, jet engines, elevators and air conditioners, expects to try and balance commodity increases with higher prices on its own products. Finance chief Gregory Hayes said Wednesday that higher prices for copper, oil and other commodities represent a between 40 million and 50 million expense headwind next year. Food inflation, including cheese and meats hurt our company-owned store margins during the third quarter, Domino's Pizza Inc. finance chief Michael Lawton told investors Tuesday. Cheese prices were up almost 29 compared to a year ago, he said, and food costs, cheese costs in particular, look to be higher in the fourth quarter versus last year, Chief Executive J. Patrick Doyle added.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615935","date":"2010-10-21","texts":"Author Deborah Solomon WASHINGTON--A key plank of the U.S. financial overhaul, aimed at preventing a potential collapse of a large financial firm, is being complicated by international disagreement over what, if any, additional steps such firms should take to withstand potential losses. The Federal Reserve is required under the new law to impose stringent capital requirements on large, complex financial institutions that could pose a risk to financial markets. The goal is to prevent the need for taxpayer bailouts by ensuring large firms have enough capital to avoid any collapse. But some top U.S. officials, including Treasury Secretary Timothy Geithner, are wary of imposing additional capital requirements on large U.S. firms unless other countries follow suit, according to people familiar with the matter. Mr. Geithner has privately expressed the view that U.S. banks already are better-capitalized than their global peers and that unilaterally imposing stricter rules would put U.S. firms at a competitive disadvantage, these people said. The issue is currently the subject of intense cross-border debate among global regulators and policy makers. Some countries, such as Switzerland, support tougher capital standards for large firms. French, German and Japanese officials are among those resisting efforts to go beyond new, global capital requirements agreed to in September. U.S. officials say global consensus appears far off.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984408","date":"2010-10-22","texts":"The bailout of Fannie Mae and Freddie Mac is likely to cost taxpayers an additional 19 billion and may cost as much as 124 billion more if the economy starts shrinking again, according to a government projection released Thursday. The rescue of the mortgage giants, which has helped keep the housing market alive amid economic crisis and recession, already has a price tag of 135 billion. The money went to cover losses on defaulted home loans. The ballooning price of the Fannie and Freddie bailout comes as the Obama administration celebrates news of lower costs on other financial rescues. Administration officials are also preparing to release a plan for reforming the two companies in coming months. In its projection Thursday, the Federal Housing Finance Agency sought to indicate how much more money the companies may need in the next three years under different economic scenarios. In the most likely, as defined by the agency, which regulates the two companies, housing prices would decline slightly amid a modest economic recovery, and then inch upward. In this scenario, the total bailout of Fannie and Freddie would cost 19 billion more, or 154 billion.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614598","date":"2010-10-24","texts":"Henry Kaufman's criticism of six of the main premises and conclusions put forth in Federal Reserve Chairman Ben Bernanke's speech of October 15 could use a seventh element , op-ed, Oct. 20. In the fourth paragraph of the section of the speech entitled The Objectives of Monetary Policy see, Mr. Bernanke states, . . . whereas monetary policymakers clearly have the ability to determine the inflation rate in the long run, they have little or no control over the longer-run sustainable unemployment rate. While the latter clause of this assertion seems obvious, should it be accepted as a given that the policymakers can control inflation The dramatic price increases that plagued Diocletian's Rome, post-revolutionary France, or numerous nations in the 1970s, including the U.S., of course, would argue that inflation, while often originated and encouraged through central bank money creation, usually ends with mass fear of currency value, and the coincident price spiral. Mr. Bernanke's statement leads one to ask If the Fed has little or no control over the unemployment rate, why is our central bank charged with a dual mandate that includes fostering maximum employment John Sirianni Eau Claire, Wis.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616045","date":"2010-10-25","texts":"Author Scott Kilman The Agriculture Department is standing by its forecast for unusually tame food-price inflation this year but warned Monday that the broad rally in farm commodity prices since midsummer will take a bigger bite out of consumers' wallets next year. In its monthly food-price inflation forecast released Monday, the USDA stuck with the prediction it first made in late August that the government's widely followed consumer-price index for food will rise between 0.5 and 1.5 this year, which would be the smallest increase since 1992. The USDA also left unchanged its forecast for retail food prices to climb by a more typical rate of between 2 and 3 in 2011. But Ephraim Leibtag, the USDA economist responsible for the forecast, said surging prices of commodities such as corn and wheat are increasing the odds that the 2011 food-inflation rate will be at the high end of his forecast range.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616752","date":"2010-10-25","texts":"Author Emily Steel In the weeks before the New Hampshire primary last month, Linda Twombly of Nashua says she was peppered with online ads for Republican Senate hopeful Jim Bender. It was no accident. An online tracking company called RapLeaf Inc. had correctly identified her as a conservative who is interested in Republican politics, has an interest in the Bible and contributes to political and environmental causes. Mrs. Twombly's profile is part of RapLeaf's rich trove of data, garnered from a variety of sources and which both political parties have tapped. RapLeaf knows even more about Mrs. Twombly and millions of other Americans their real names and email addresses. This makes RapLeaf a rare breed. Rival tracking companies also gather minute detail on individual Americans They know a tremendous amount about what you do. But most trackers either can't or won't keep the ultimate piece of personal information--your name--in their databases. The industry often cites this layer of anonymity as a reason online tracking shouldn't be considered intrusive.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615044","date":"2010-10-26","texts":"Author Jenny Strasburg Waddell & Reed Financial Inc., the Kansas firm whose May 6 trading regulators have highlighted as a trigger of the flash crash, said its mutual-fund inflows declined last quarter as profit rose. But Waddell executives played down the impact of scrutiny it has received over its 4.1 billion sale of futures contracts May 6 tied to the Standard & Poor's 500-stock index. Regulators earlier this month said the trade, made using a computer algorithm, spooked an already-fragile market and helped trigger the day's stock selloff. At Waddell, business has continued more or less as usual under the spotlight, executives said on a third-quarter earnings call on Tuesday. The company managed 76 billion in assets at the end of September, its most ever at the end of a quarter, and it pulled in money when many mutual funds had outflows. There's little effect that has been seen, Thomas Butch, an executive vice president of the firm who oversees sales of Waddell's popular Ivy Asset Strategy Fund and other retail and wholesale funds, told analysts on a call Tuesday. Traders with the Asset Strategy fund were responsible for the futures trade in question, which they intended as a hedge, or protection against losses, amid market turbulence.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616449","date":"2010-10-28","texts":"Enough about John Maynard Keynes. We can be sure the 20th century British economic giant would advise more government spending to spur U.S. economic growth with consumers and businesses so hesitant and short-term interest rates at zero. What would Milton Friedman, the University of Chicago champion of monetary discipline, do now What would he say -- reversing the charges when he returned a reporter's call, as he always did -- if asked about Federal Reserve Chairman Ben Bernanke's imminent move to print hundreds of billions of dollars to buy more Treasury bonds to put more money into the economy We can't ask him. He died in 2006. Friedman, says one of his eminent students, Robert Lucas of the University of Chicago, was such an original thinker that one could never guess how he would react to a new question. Nevertheless, this seems a ripe moment to contemplate Friedman's views and those of his disciples. Friedman believed in the power of money the more money, the more income and, eventually, the more inflation. He didn't think the Fed could deliver full employment. He regarded interest rates as a misleading measure of whether the Fed was loose or tight. He didn't trust central bankers. He blamed the Bank of Japan for the deflation of the 1990s and the Fed for the Great Depression of the 1930s and the Great Inflation of the 1970s. He would, if his co-author Anna Schwartz is any clue, have condemned recent bank bailouts.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616580","date":"2010-10-28","texts":"Cotton prices posted the biggest drop in 15 years after Texas crop watchers reported that this year's harvest emerged relatively unscathed from a recent hailstorm. The price of the cotton futures contract for December delivery fell six cents, or 4.6, to 1.2359 a pound on ICE Futures U.S. It was the biggest decline in outright terms since 1995 and the biggest in percentage terms since August 2009. The fiber, a big part of clothing prices, had set record closes in five consecutive sessions through Tuesday. While cotton prices in nominal terms had been at a post-Reconstruction Era peak, they remain well below the inflation-adjusted high of 5.26 a pound set in 1918. The market is hypersensitive right now to any news that might impact supply, said Luis Rangel, vice president of commodities derivatives at ICAP Futures. When the bull stories don't pan out, you're going to see some violent moves on the downside. Thunderstorms moved through West Texas last week, dumping hail and heavy rain on the region's cotton fields. Prices jumped on worries the storm would damage crops and significantly cut into output. But early analyst estimates compiled by industry newsletter Cotlook put the losses at 50,000 to 150,000 bales. By comparison, the U.S. Department of Agriculture expects Texas to produce 8.9 million total bales of cotton. The U.S. is the world's biggest exporter of cotton, and Texas accounts for a bulk of output.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614751","date":"2010-10-30","texts":"Millions of jobs are the cost of doing business with China, according to dozens of members of Congress seeking re-election. Representatives from both major parties signed a letter last month asking the House leadership to pressure China to allow its currency to appreciate against the dollar. The letter cited a think tank study finding that trade with China reduces U.S. employment by 2.4 million jobs. But several economists say the estimate congressional members relied on vastly overstated trade's impact on employment. A major flaw, they say, was that the study assumed every dollar spent on Chinese goods displaces a dollar that would be spent on U.S.-made products, when in fact products made in other low-cost manufacturing nations might fill the void. Also, cheap imports might even help fuel the U.S. economy and spur employment. Other economists offer lower estimates for job losses, while some say that despite the heated rhetoric of the currency debate, it simply isn't possible to connect employment to trade deficits. The dispute has played out against the backdrop of the midterm elections, where many campaigns have blamed China for U.S. economic problems.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616666","date":"2010-10-30","texts":"For Gustavo Torres, head of an immigrant employment center near Washington, D.C., the uptick in the economy is measured by the surge in demand for his blue-collar workers, who hail mainly from Latin America and Africa. The recovery is working for our community, said Mr. Torres, executive director of Casa de Maryland, which boasts five job centers in the state. It's unbelievable how many jobs are becoming available. In the year that ended June 2010, Casa placed 19,000 immigrants in jobs, compared with 16,000 in the year-earlier period. A new study released Friday by the Pew Hispanic Center confirms that immigrants are benefiting before native-born workers from the slow-paced economic recovery. Foreigners gained 656,000 jobs in the first year following the official end of the recession in June 2009. Native-born workers lost 1.2 million jobs, according to an analysis of government data by Pew, a nonpartisan research group.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615002","date":"2010-11-01","texts":"Author Tess Stynes Alberto-Culver Co., which is about to be absorbed by Unilever PLC, said fiscal fourth-quarter earnings rose 31. The maker of hair-care and personal-care products saw improved sales. The company--whose brands include TRESemme, Alberto VO5, Nexxus and St. Ives--said revenue increased 12 to 431.9 million. On an organic basis, which excludes currency fluctuations, acquisitions and divestitures, sales rose 4.9. For the quarter ended Sept. 30, Alberto-Culver reported a profit of 41.3 million, or 41 cents a share, up from 31.7 million, or 32 cents a share, a year earlier. Excluding restructuring impacts, earnings from continuing operations climbed to 46 cents a share from 33 cents a share. Unilever previously agreed to pay 3.7 billion to buy Alberto-Culver in a deal that will vault the consumer-products giant to a more powerful position in the U.S. beauty industry. Most household products companies--fighting a consumer spending slump in the developed world--are trying to use their scale to give them an edge.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615858","date":"2010-11-01","texts":"The American Medical Association is proud to convene the Relative Value Scale Update Committee, or RUC, a group of volunteer physicians who provide expertise to Medicare, saving taxpayers millions Secrets of the System Physician Panel Prescribes the Fees Paid by Medicare, page one, Oct. 27. More than 300 attendees participated in the last RUC meeting, and information is publicly available. The RUC physicians work hard to forge consensus under the strict confines of Medicare's budgetary constraints where increases for one service result in across-the-board decreases for all services. This happened in 2007 when payments for the most common primary-care service were increased. The RUC is also taking the lead in identifying overvalued services, a task the government was unable to do on its own. While the RUC doesn't set fees and has nothing to do with the size of the Medicare payment pie, the reality is that spending on physician services rose only 2.7 in 2008, and other areas of Medicare spending are rising much faster than physician spending. In fact, inflation-adjusted physician payment fell 25 between 1996 and 2006. Without congressional action, Medicare will cut all physician payments about 30 by Jan. 1. Congress needs to act on Medicare payment reform before Dec. 1. Cecil B. Wilson, M.D.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616738","date":"2010-11-01","texts":"NEW YORK -- Nasdaq OMX Group Inc. on Monday will introduce new indexes from the creator of the VIX fear gauge that will track popular stocks' performance against the broader market. The stock exchange tapped a duo that includes Robert Whaley, who developed the CBOE Market Volatility Index, to design the new Alpha Indexes. With regulators' approval, Nasdaq will offer derivatives to bet on or guard against moves in the new measures -- something Mr. Whaley envisions letting investors screen out even a stock-market crash from the returns of popular holdings like Apple Inc. or Citigroup Inc. The idea is to isolate what I'm focused on and get rid of the market bet, said Mr. Whaley, who is a professor at Vanderbilt University's Owen Graduate School of Management. The indexes, which Mr. Whaley co-developed with university colleague Jacob Sagi, are to be presented this week at the Futures Industry Association's Futures & Options Expo in Chicago. Nasdaq hopes to launch the derivatives built around the indexes early next year. With the severe stock-market gyrations of the financial crisis and this year's flash crash, interest in vehicles to track volatility and trade it with complex derivatives have soared. Stock-market correlation also has shot up, pushing investments often used to hedge or diversify into lock-step with major markets. The new Nasdaq products are built for investors seeking to combat those problems by isolating the pure alpha of a stock, said Eric Noll, Nasdaq OMX Group's executive vice president of transaction services. Alpha is a stock's outperformance relative to a benchmark.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616185","date":"2010-11-02","texts":"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. Proponents say buying hundreds of billions of dollars more in Treasury bonds will provide only modest support for the economy. 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. 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. 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.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617435","date":"2010-11-03","texts":"Author Allan H. Meltzer Would the late Milton Friedman have endorsed the Federal Reserve's plan to make large-scale purchases of long-term Treasury bonds The idea here is to pump more money into and thus jump-start the economy, reducing unemployment. Some people, including this newspaper's David Wessel in a column last week, believe the great Nobel laureate would favor this inflationary program. I am certain he would not. Friedman's main message for central banks was to maintain a monetary rule that kept the growth of the money supply constant. In his Newsweek column, Inflation and Jobs Nov. 12, 1979, for example, Friedman emphasized that unemployment is . . . a side effect of the cure for inflation, so that if a central bank cured unemployment by inflating, it will have unemployment later. In other words, don't try it. Friedman's Newsweek column for July 28, 1980 Improving Monetary Policy came with the unemployment rate rising past 7. His proposals for improving policy made no mention of using monetary expansion to reduce unemployment. He proposed rules for stable growth to achieve target dollar levels of monetary aggregates. Friedman served on President Reagan's economic policy advisory board. His memos on monetary policy repeat the themes he made familiar to Newsweek readers and others all over the world. There is not a word suggesting that monetary policy should try to raise the inflation rate in order to reduce the unemployment rate.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830984957","date":"2010-11-03","texts":"BANGKOK - On Sunday, Burmese voters will go to the polls for the first time in 20 years, in accord with the ruling generals' long-held vision of discipline-flourishing democracy. But exactly what that means for one of Asia's poorest nations is a matter of controversy. Win Min, an exiled Burma scholar, says the generals have long used a balance of hope and terror to control the populace and dismisses this month's elections as purely a time-buying strategy. The constitution, which was largely written by the military leaders, is designed to ensure that they remain in control, he says. With a quarter of the seats in national and local assemblies to be filled by military appointees, the army will be able to suspend democracy almost at will and will retain a veto on any constitutional changes. The junta has also sought to limit voters' choices - 80 percent of the candidates up for election belong to parties broadly aligned with the government. In 153 constituencies, there are no opposition or independent candidates.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615618","date":"2010-11-04","texts":"Another day, another surge into uncharted territory. The Federal Reserve on Wednesday announced it will buy a further 600 billion of long-term Treasury securities. Coupled with existing purchases to keep its balance sheet from shrinking, it makes a total of 850-900 billion by the end of June. At about 110 billion a month, that is not that far off the huge monthly net issuance Uncle Sam is churning out to fund the deficit. Strangely, the Fed's bold decision follows a period in which U.S. economic data have shown some improvement. Manufacturing activity rebounded in October, retail sales have shown surprising strength and even private-sector hiring is gradually picking up steam. Plus, there are clear risks that the Fed's action will create economic and market distortions. Yet those received little acknowledgment in the Fed's statement. The central bank's justification for the move is that unemployment, at 9.7, remains too high, that core inflation is too low, and that lackluster gross domestic product growth is unlikely to change that soon. Also, having encouraged markets to factor in another bout of monetary experimentation, the Fed probably did not feel it had the option to disappoint. And Tuesday's electoral shifts made the chance of fiscal stimulus even less likely, leaving the Fed looking like the only institution with a lever to pull.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613816","date":"2010-11-05","texts":"Cooling Productivity Is the Heat Under Jobs U.S. workers are getting less productive. Right now, that actually may be good news for the labor market. Not that this will be immediately apparent from Friday's employment report. And it may be easy to overlook this release, coming at the end of a week dominated by midterm elections and the Federal Reserve's latest bout of bond buying. But the employment figures are as crucial as ever Given that unemployment barely has budged this year, upping the pace of job creation is precisely what events this week were about. Friday's report is expected to show unemployment holding steady for the third month in a row at 9.6 in October. Still, the report's details may offer encouragement.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617074","date":"2010-11-05","texts":"A bevy of household names rushed to sell cheap debt on Thursday after the Federal Reserve said it would pump at least 600 billion into the financial system in a bid to revive the economy by pushing down interest rates further. At least 12 billion in high-grade bonds came to market, making it one of the busiest days in nearly two months, according to data provider Dealogic, the most since companies sold 19.2 billion of investment-grade bonds on Sept. 8. Coca-Cola, Dow Chemical, General Electric General Electric Capital and Oglethorpe Power were all in the market. Coca-Cola's issue, at 4.5 billion, was the biggest of the day and the company's largest ever. Corporations have been issuing bonds in droves this year, taking advantage of unprecedented market conditions, in particular the historically low yields on the Treasury securities to which their bonds are benchmarked. The Fed's renewed effort to lower Treasury yields rekindled their appetite to stockpile cheap cash for rainy day funds, acquisitions or share buybacks.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614711","date":"2010-11-06","texts":"Corrections & Amplifications The current yield of the Pimco Corporate Opportunity fund is 7.86. In Saturday's Common Sense column, the yield was given as 11.63, which is the fund's 12-month trailing yield, a figure that included a special distribution paid in December 2009. WSJ November 11, 2010 The Federal Reserve and the voters have spoken The stock market should go higher. And so it did on Thursday. As investors digested the Fed's embrace of a 600 billion-plus quantitative-easing program and the voters' ouster of congressional Democrats, the Standard & Poor's 500-stock index jumped 23 points, or 1.9, to 1221, its highest close in more than two years. And it may have further to climb. The Fed's move and the new balance of power in Washington have created a near-perfect alignment of the political and monetary stars for stocks -- and other investment assets.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982147","date":"2010-11-08","texts":"The idea of rebalancing the world economy is simple. Before the financial crisis, some advanced countries led by the United States were overspending, and some poorer countries led by China were oversaving. The two offset each other. The big spenders ran large trade deficits, and the big savers ran large trade surpluses. Now, the financial crisis has dampened the overspending. If the big savers don't increase their spending, the world economy faces prolonged slow growth. Countries may battle each other for shares of that weak demand by managing exchange rates, subsidies or tariffs. This is a formula for economic strife, whether called currency wars, protectionism or economic nationalism. As wealthy countries wrestle with stubborn unemployment 9.6 percent in the United States, 10.1 percent in France, 20.5 percent in Spain, it will become harder to resist policies that favor local businesses and workers, especially if other countries are doing the same. Avoiding this future is the central issue facing leaders of the Group of 20 economies when they meet this week in Seoul. The world's second-largest economy has run blatantly mercantilist that is, discriminatory economic policies for years. The resulting huge trade surpluses boosted job growth and, while much of the world boomed, they were tolerated. In 2007, China's current account surplus mainly trade reached 11 percent of its economy gross domestic product. But as China has moved up the value chain - from toys to telecommunications equipment - and as the world economy weakened, its surpluses have become more threatening to more countries. Like Japan before it, China embraced an investment-led and export-led economic model, explains economist Eswar Prasad of Cornell University. Manufacturers receive subsidized land and energy the exchange rate of the renminbi is controlled and kept depressed, making Chinese exports more competitive on world markets and making imports into China more expensive. Bank lending rates, regulated by government, are also kept low so that companies can borrow cheaply. The result has been rapid, though lopsided, industrialization. Economic growth has averaged about 10 percent annually for several decades. In modernizing, China shut down or streamlined many inefficient state-owned enterprises the job loss was substantial, 43 million from 1997 to 2004, says the World Bank. One appeal of new export-oriented companies was to replace those jobs.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614127","date":"2010-11-10","texts":"Author David Wessel Four men now face strategic decisions that will shape the political economy of the U.S. for the next couple of years President Barack Obama, Republican congressional leaders John Boehner and Mitch McConnell, and Federal Reserve Chairman Ben Bernanke. For Mr. Bernanke, the question is what would prompt the Fed to buy even more U.S. Treasury bonds than now planned. Unable to cut short-term interest rates further, Mr. Bernanke figures that printing 600 billion more to buy bonds will push down long-term interest rates to spur a bit more borrowing, boost stock prices to make people wealthier so they spend more and depress the dollar to give U.S. exports a lift. Justifying last week's move, the Fed pointed to inflation below its 2 target and unemployment well above its maximum sustainable employment mandate. In part because key officials don't agree, the Fed didn't spell out under what circumstances it would keep buying beyond next June. If inflation remains too low and unemployment too high, does the Fed buy more Or does it only keep buying if its economic forecast worsens What if it succeeds in getting everyone to anticipate 2 inflation, but unemployment remains high, does it buy more If not, how does it explain that to American workers","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616721","date":"2010-11-11","texts":"Author Jonathan Weisman  Damian Paletta SEOUL--President Barack Obama headed toward the close of the Group of 20 summit, weakened by an anemic economic recovery and an election drubbing that have left world leaders questioning U.S. authority. In private meetings with Mr. Obama on Thursday, Chinese President Hu Jintao resisted his pressure on currency revaluation. Mr. Obama also failed to secure a free-trade agreement with South Korea by a deadline he set for Thursday, a blow to a president who has pledged to double U.S. exports over the next five years. The summit of the Group of 20 industrial and developing nations is expected to conclude with a communiqu that papers over differences on fiscal and monetary policy that had been exposed in the run-up to the gathering. That will leave it to the G-20's finance ministers to come up with some kind of mechanism to measure progress toward more balanced trade and flexible currency exchanges. Although the communiqu won't include numerical targets, a senior U.S. administration official acknowledged the world will have to come up with some in the future. You have to have numbers. This is economics, he said. And everybody recognizes that.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982252","date":"2010-11-13","texts":"On the day after Prince George's County Executive Jack B. Johnson was reelected in 2006 - the fourth time that residents had elected him to a countywide position - he wearily explained what accounted for his victory. Dogged for years by reports that state and federal authorities were investigating his relationships with developers and his hiring of friends for public office, Johnson will leave office next month a deeply polarizing figure. His detractors have long said his style of politics hurts the county's image and its efforts to spur business. For critics, that impression will be cemented by Johnson's arrest Friday, along with his wife, Leslie, just three weeks before his final term in office is to end. He was charged with destroying evidence and witness tampering. But for his supporters, he has remained a popular figure - an unfailing campaigner with an unparalleled ability to connect with voters. They were inspired by Johnson's life story - he grew up poor in rural and segregated South Carolina only to graduate from Howard Law School and get elected to lead the nation's wealthiest majority-African-American jurisdiction.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984597","date":"2010-11-13","texts":"Mortgage rates dropped to a record low this week, the first decline in a month, as the Federal Reserve began a program to buy Treasury bonds to support the economy. The rate for a 30-year fixed loan fell to 4.17 percent from 4.24 percent, Freddie Mac said. That was the lowest level in the company's records dating to 1971. The average 15-year rate declined to 3.57 percent from 3.63 percent last week. Rates on five-year adjustable-rate mortgages fell to their lowest level in at least five years. They averaged 3.25 percent, down from 3.39 percent a week earlier. It is the lowest rate on records dating back to January 2005. The rates do not include add-on fees, known as points. One point is equal to 1 percent of the total loan amount. The average fee for 30-year and 15-year fixed loans in Freddie Mac's survey was 0.8 point. It was 0.7 point for one-year and five-year mortgages. The Fed announced last week that it would buy 600 billion of Treasuries to keep interest rates low and boost economic growth, a method known as quantitative easing. Yields on government bonds serve as a benchmark for other debt, signaling home loan rates may fall further after seven months of declines.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830983660","date":"2010-11-14","texts":"The Federal Reserve's announcement on Nov. 3 that it will buy 600 billion worth of Treasury bonds to help boost the struggling U.S. economy reverberated around the world this past week, with condemnation from critics as varied as Sarah Palin and the president-elect of Brazil. Yet much of what the Fed and its chairman, Ben Bernanke, have done is shrouded in confusion and misperceptions.1The Nobel Prize-winning economist Milton Friedman issued a famous dictum nearly 50 years ago Inflation is always and everywhere a monetary phenomenon. His belief has become widespread over the years, to the point that even many non-economists assume that when the Fed prints money, higher prices inevitably result. But the link between money and inflation is weaker than people think. The Fed's current policy of quantitative easingessentially means it is printing money 600 billion to buy assets such as government bonds. The Fed isn't literally printing the 20 bills that end up in your wallet - it's doing the electronic equivalent. When it buys a 100 bond from a bank, it deposits 100 into the bank's account at the Fed. This electronic money is called reserves, and the Fed conjures it up out of thin air. However, this money can lead to inflation only if banks lend it and consumers and businesses spend it. Banks lend when they have strong balance sheets and when credit-worthy customers demand loans. People and businesses spend when their incomes are growing and they're confident about the future. None of this has been true lately. The Fed is trying to stimulate spending, but not by showering people with newly minted dollars. Rather, when the Fed buys bonds, it pushes their prices up and their yields down. Lower long-term interest rates will tempt some people to borrow. They will also make stocks more attractive. Higher stock prices will make consumers feel wealthier and spend more. If that spending outstrips the economy's productive capacity, inflation could result. But that's years away The economy today is awash in idle factories and unemployed workers. 2Since Chairman Ben Bernanke hinted in late August that the Fed might resume quantitative easing, the value of the dollar has fallen steadily, dropping 7 percent against the euro, 3 percent against the yen and 7 percent against the Korean won. Many foreign officials and analysts have accused the Fed of deliberately driving down the dollar to give U.S. exporters a competitive advantage abroad.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984807","date":"2010-11-14","texts":"When traveling abroad, I increasingly hear foreigners speculating that the United States is a country in decline, with a weakened political and economic system. That view of a blunted America is likely to grow after the midterm election results, unless politicians find a way to work together and make decisions. Consider the recent evidence of foreign disrespect for America China downgraded its credit rating for American debt last week South Korea refused U.S. pressure for a new trade deal European and Asian nations joined in protesting the Federal Reserve's plans to print more money to stimulate growth. What the world sees, I'm afraid, is a weak U.S. president who isn't solving domestic economic problems, let alone global ones. But that's more a symptom than a cause. What's happening at a deeper level is a breakdown of the U.S. political system's ability to find consensus and make decisions. Washington doesn't work, as critics from the Tea Party right to the progressive left keep insisting. The message of the past two elections is consistent, if you take a step back from the seeming left-right oscillation Voters are angry about a Washington process that they believe favors elites and ignores Main Street they've lost trust in government and they want change. The two parties try to bend this message to their own purposes, which only makes the partisan deadlock worse. It's a kind of political doomsday machine The more voters say they want to break with Washington's culture of insiders, the more powerful privately funded special interests become - with a corresponding freeze on Congress's ability to legislate. Take any of the issues that people say they care about - immigration, the deficit, tax reform, cutting military and other spending - and you will find evidence of this immobility.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616648","date":"2010-11-15","texts":"Robert Benmosche, chief executive of American International Group Inc., has seen his tenure marked by multiple challenges, the latest being his cancer diagnosis. The disease was discovered last month following a routine medical check-up. The news came as the government-controlled insurer had a spate of positive developments to report, including the sale of one foreign insurance unit, the successful public offering of another, and the announcement of a plan to move on from government ownership and repay taxpayers. Mr. Benmosche, who took the helm of the company in August 2009, recently sat for an interview on the 18th floor of AIG's New York headquarters. He talked about what AIG needs to accomplish before the year's end to prepare for the government's exit, the head winds facing its insurance businesses, and how he intends to deal with his illness, key details of which he hasn't divulged to AIG board members and government officials. Excerpts follow. WSJ AIG recently mapped out an exit-strategy plan to show investors and customers how the company intends to repay the government. Why do this and what has been the effect so far Mr. Benmosche If you're a customer, you want to know whether this company is going to make it or not. Many people were saying we're a ward of the state, that there's no way we could pay back the taxpayers. But if you do an analysis, this is at least a 70 billion company and we will have about 1.8 billion shares. Our recent quarterly earnings for core insurance operations show we can earn 8 billion to 9 billion pretax income annually if other charges and write-downs stop occurring.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617059","date":"2010-11-15","texts":"Author Dan Strumpf NEW YORK--Oil prices finished flat after data offered a mixed picture of the U.S. economic recovery. Light, sweet crude for December delivery settled down 2 cents at 84.86 a barrel on the New York Mercantile Exchange. The U.S. Commerce Department said retail sales rose 1.2 in October, a sign that consumers feel more bullish about their financial situation going into the holiday-shopping season. Economists surveyed by Dow Jones Newswires expected sales to rise 0.8. October's increase was the biggest gain in retail sales since March and the fourth improvement in a row. September sales rose 0.7, revised upward from a previously estimated increase of 0.6.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614189","date":"2010-11-16","texts":"Author Sharon Terlep,Randall Smith Aaron Lucchetti General Motors Co. said Wednesday that it will increase the size of its initial public offering by about 30 to 478 million shares, which could make it the largest global IPO in history. The move, which came despite broad stock market losses Tuesday, is a response to stronger-than-expected demand for shares in the auto maker, which is generating solid profits after last year's U.S. government-orchestrated bankruptcy. Earlier Tuesday, GM confirmed it would raise the expected price for shares sold in its IPO to a range of 32 to 33 from the previous 26 to 29. GM also plans to sell up to 4.6 billion of preferred stock, up from 3 billion previously planned. The IPO will be priced Wednesday after the U.S. stock markets close and the shares will start trading Thursday. The value of the offering, including the mandatory convertible preferred shares, could reach 22.8 billion, eclipsing the 22.1 billion IPO by Agriculture Bank of China in July 2010, according to Thomson Reuters.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613662","date":"2010-11-17","texts":"Author Conor Dougherty A key gauge of U.S. inflation has fallen to its lowest level since record-keeping began in 1957, underscoring the continued weakness in the economy. Consumer prices rose 0.2 in October compared with September, almost entirely because of higher energy costs, the Labor Department said Wednesday. When volatile food and energy are subtracted, prices were unchanged last month--the third straight month in which this so-called core measure of inflation was flat. Compared with a year ago, consumer prices other than food and energy have risen 0.6. The drop in the core measure bolsters the Federal Reserve's case that inflation is so low--below its informal target--that it should resume its purchases of U.S. Treasury bonds to boost the economy.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616499","date":"2010-11-17","texts":"Author Jonathan Cheng The Dow Jones Industrial Average fell for the fourth day in five after a day of choppy trading that saw the markets dragged down by financial stocks. The blue-chip index was able, however, to finish above the 11000 mark, helped by strong earnings by retailers. The Dow finished down 15.62 points, or 0.14, at 11007.88, while the Standard & Poor's 500-stock index rose 0.25 points to 1178.59 and the Nasdaq Composite gained 6.17 points to 2476.01. Financial stocks led the declines, after The Wall Street Journal reported that the Federal Reserve will require all 19 banks that underwent stress tests during the height of the financial crisis to undergo another review of their capital and their ability to absorb losses under an adverse economic scenario.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613985","date":"2010-11-18","texts":"Author Luca Di Leo Corey Boles Federal Reserve Chairman Ben Bernanke defended the central bank's plan to buy government bonds during a private gathering with U.S. senators, responding to several days of attacks from Republicans who say the Fed is causing inflation and weakening the dollar. The Fed chairman denied the U.S. was manipulating the currency through its plan to purchase 600 billion of U.S. Treasury bonds and pointed to research by the Federal Reserve Bank of Boston which estimated the program could create 700,000 to one million jobs over two years. Sen. Richard Shelby, an Alabama Republican, said he wasn't persuaded and noted that even some Fed officials have doubts about the central bank program. Republican lawmakers said in a letter to Mr. Bernanke released Wednesday that the Fed's move introduces significant uncertainty regarding the future strength of the dollar and could result...in hard-to-control, long-term inflation.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615098","date":"2010-11-18","texts":"Federal Reserve Chairman Ben Bernanke defended the central bank's plan to buy government bonds during a private gathering with U.S. senators, responding to several days of attacks from Republicans who say the Fed is causing inflation and weakening the dollar. The Fed chairman denied the U.S. was manipulating the currency through its plan to purchase 600 billion of U.S. Treasury bonds and pointed to research by the Federal Reserve Bank of Boston which estimated the program could create 700,000 to one million jobs over two years. Sen. Richard Shelby, an Alabama Republican, said he wasn't persuaded and noted that even some Fed officials have doubts about the central bank program. GOP lawmakers said in a letter to Mr. Bernanke released Wednesday that the Fed's move introduces significant uncertainty regarding the future strength of the dollar and could result. . .in hard-to-control, long-term inflation. In a sign of divisions within conservative political circles about the Fed, Tom Donohue, head of the U.S. Chamber of Commerce, a frequent ally of Republicans, came out in support of Mr. Bernanke. Mr. Donohue said Mr. Bernanke had acted in a very important way to help economic growth and warned lawmakers not to louse that up. Evan Bayh D., Ind. said the Fed chief told lawmakers the central bank was absolutely committed to stable inflation.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615663","date":"2010-11-18","texts":"Author Chester Yung Alex Frangos HONG KONG--The International Monetary Fund warned Thursday it sees increasing risks of a property bubble in Hong Kong due to continued liquidity inflows and rock-bottom interest rates coupled with tight housing supply, and it urged the city's government to take further measures to rein in the booming real-estate market if asset-price inflation continues. The IMF said in its annual review of the Hong Kong economy that while the city has returned to robust growth, it sees rising inflationary pressures fueled in large part by soaring property prices and a stronger Chinese yuan. These pricing pressures will become increasingly visible in the coming months with inflation expected to reach around 5 by end-2011, the IMF said in its review. The organization said it expects Hong Kong's gross domestic product to expand 6.75 this year, with growth moderating to 5-5.5 in 2011.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613648","date":"2010-11-20","texts":"Junk-bond issuers may have found the limit of investors' goodwill. After easily finding buyers for a flood of new debt sales to fund leveraged buyouts or dividend payments, private-equity firms and other junk issuers found the going tougher this past week. Golf-course operator ClubCorp. on Friday delayed its expected 415 million offering until this coming week. Manufacturer Nortek Inc. on Thursday shrank its offering to 250 million from 300 million and agreed to a higher interest rate. Burlington Coat Factory postponed a sale that would have handed Bain Capital a 325 million dividend. And in the stock market, TPG and Apollo Management canceled an initial public offering by Harrah's Entertainment on Thursday after investors balked at the terms, a sign that stock investors are also being picky. While this past week may well be a blip, the struggles of some deals do show how investors are becoming more demanding. It is likely to slow the flood of issuance into the junk-bond market and force private-equity firms to sweeten the terms of some deals. It's all more about pricing than anything else, John Cokinos, head of high-yield capital markets at Bank of America Merrill Lynch. Issuers are adjusting to the repricing that we've seen earlier this week for fear that it could get worse or that the market will stay volatile.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616912","date":"2010-11-20","texts":"State governments are borrowing heavily from the federal government to keep paying unemployment-insurance benefits and, even with the weak job market, most states are raising payroll taxes to pay off the loans. Thirty one states, their unemployment-insurance funds empty, have borrowed nearly 41 billion from the federal government. California alone has borrowed nearly 8.8 billion as of mid-November, according to the Labor Department. As states try to replenish the funds and begin to repay the loans, employers are facing increases in both state and federal payroll taxes, a potential barrier to new hiring. Employers were hit with these adjustments quite a bit last year, said Richard Hobbie, executive director for the National Association of State Workforce Agencies. A National Employment Law Project analysis found that 41 states increased unemployment-insurance payroll taxes this year by an average of nearly 33.9. The largest was a 168.5 boost from 2009 in Hawaii. Payroll taxes levied by states fund unemployment benefits for up to 26 weeks -- and longer in some states. The federal government requires states to pay benefits even if their unemployment funds run out of cash. As in past periods of high joblessness, the federal government has paid for extended unemployment benefits, this time for as long as 99 weeks.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616411","date":"2010-11-21","texts":"Author Ann Zimmerman Thanksgiving Day was long considered a commercial-free zone. By tradition, it was a time for counting blessings, enjoying family and friends and scouring newspaper circulars for the best predawn retail deals available the following day, known as Black Friday. It was very simple. Eat 'til you burst on Thursday shop 'til you drop on Friday. But an increasing number of stores are getting a jump on the Friday shopping hordes by opening on Thanksgiving. Some retailers say they are offering a convenience for shoppers who want to beat the madding crowds.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984822","date":"2010-11-21","texts":"SOMETIMES IT SEEMS as if nobody loves the Fed. At the moment, the hostility emanates mainly from Republicans, who charge that Chairman Ben S. Bernanke's plan to boost the economy through 600 billion in asset purchases will bring on inflation and currency debasement. Senior Republicans are talking seriously of amending the 1977 law that gave the Fed responsibility for maximizing employment as well as stabilizing prices. But only 10 months ago progressive Democrats, seeking scapegoats for Republican Scott Brown's win in Massachusetts, were threatening Mr. Bernanke's appointment to another four-year term. Moveon.org charged that after taking extreme measures to save the banks, Bernanke has shown no interest in helping regular folks who can't find jobs, even though ensuring 'full employment' is explicitly part of his mandate. A lot of this is just politics, of course. Perhaps New York Times columnist Paul Krugman is right that the GOP's real fear is not that Fed actions will be harmful, it is that they might succeed, thus boosting President Obama's reelection chances. But by that logic, Republicans would be entitled to accuse Mr. Bernanke of printing money to reward Mr. Obama for reappointing him or to appease his erstwhile critics on the left. We prefer to deal with everyone's arguments on the merits. The fact is that the current debate over the Federal Reserve's policies is inevitable and - at least potentially - healthy. Ever since the struggles over Alexander Hamilton's Bank of the United States, populists have feared federal control over the money supply as an instrument of corrupt collaboration between political and financial elites. Given that history, there was bound to be controversy when the Fed began its latest round of quantitative easing - after more than a trillion dollars' worth of previous asset purchases and lending to specific Wall Street firms.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616157","date":"2010-11-22","texts":"The draft recommendations of the president's commission on deficit reduction call for closing popular tax deductions, higher gas taxes and other revenue raisers to drive tax collections up to 21 of GDP from the historical norm of about 18.5. Another plan, proposed last week by commission member and former Congressional Budget Office director Alice Rivlin, would impose a 6.5 national sales tax on consumers. The claim here, echoed by endless purveyors of conventional wisdom in Washington, is that these added revenues -- potentially a half-trillion dollars a year -- will be used to reduce the 8 trillion to 10 trillion deficits in the coming decade. If history is any guide, however, that won't happen. Instead, Congress will simply spend the money. In the late 1980s, one of us, Richard Vedder, and Lowell Gallaway of Ohio University co-authored a often-cited research paper for the congressional Joint Economic Committee known as the 1.58 study that found that every new dollar of new taxes led to more than one dollar of new spending by Congress. Subsequent revisions of the study over the next decade found similar results. We've updated the research. Using standard statistical analyses that introduce variables to control for business-cycle fluctuations, wars and inflation, we found that over the entire post World War II era through 2009 each dollar of new tax revenue was associated with 1.17 of new spending. Politicians spend the money as fast as it comes in -- and a little bit more. We also looked at different time periods e.g., 1947-2009 vs. 1959-2009, different financial data fiscal year federal budget data, as well as calendar year National Income and Product Account data from the Bureau of Economic Analysis, different lag structures e.g., relating taxes one year to spending change the following year to allow for the time it takes bureaucracies to spend money, different control variables, etc. The alternative models produce different estimates of the tax-spend relationship -- between 1.05 and 1.81. But no matter how we configured the data and no matter what variables we examined, higher tax collections never resulted in less spending.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617318","date":"2010-11-23","texts":"Author Kelly Evans U.S. consumers are loosening their purse strings just in time for the holiday season. But any joy may prove short-lived. Consumer spending lately has been showing some resilience. Tuesday's revised report on gross domestic product showed spending rose at a 2.8 annualized rate in the third quarter, up from the 2.6 pace previously estimated. The fourth quarter is also off to a good start with October retail sales posting their biggest monthly gain in seven months On Wednesday, the Commerce Department is expected to say consumer spending overall rose 0.5 in October from the prior month, more than double the September gain. Yet incomes are expected to rise by 0.4. What gives Savings.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615449","date":"2010-11-24","texts":"Kevin Toney likes companies with a solid balance sheet, strong brands and a glaring problem. The manager of American Century Mid Cap Value Fund isn't looking for companies in the midst of a train wreck, just those with problems big enough to be noticed by investors but not so big that they are permanent and unsolvable. As value investors, when we're buying a company, there's usually a problem, Mr. Toney said. That's why it's cheap. The conservative investment philosophy of the Kansas City, Mo., fund has paid off over the long term, as it pursues what Mr. Toney calls a winning by not losing strategy that limits losses in economic downturns. Year-to-date through Monday, the 1 billion fund had returned about 11.4, outperforming the Standard & Poor's 500 stock index by two percentage points but underperforming its midcap-value category by about 3.2 points, according to Morningstar Inc.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616434","date":"2010-11-24","texts":"With unemployment at 9.6 and inflation below the Federal Reserve's working definition of price stability, this seems a strange moment for Congress to contemplate instructing the Fed to focus exclusively on fighting inflation. But Sen. Bob Corker R., Tenn. wants to revive that notion, which has lain dormant for more than a decade because there has been so little inflation. I am concerned about inflation down the road, he explains. The time is right for us to bring clarity to the Fed. In the House, Paul Ryan R., Wis. and Michael Pence R., Ind. agree. Mr. Pence argues that the Fed's quest to combat unemployment by buying 600 billion in U.S. Treasurys is a failure and threatens to monetize our debt and trigger inflation. The implication is that the Fed has lost its moorings. Has it really For more than 30 years, Congress has charged the Fed with aiming at maximum employment, stable prices and moderate long-term interest rates. That wording has long made some Fed officials and academic economists uneasy because it is rooted in a now-abandoned view that the government could dial up a little more inflation to get a little less unemployment and vice versa. The current consensus is that the Fed can -- and, indeed, is now attempting to -- reduce unemployment in a recession, but in the long run can deliver only price stability. What Fed Chairman Ben Bernanke calls the longer-run sustainable unemployment rate is determined by demographics, job-market rules and other factors beyond the Fed's control. In this view, if the Fed tried to push unemployment too low now, it could create too much inflation later, the mistake the Fed made in the late 1970s. But it is not the 1970s. Even though the Fed has been holding short-term interest rates near zero for nearly two years, prices rose at only a 1 annual rate in the third quarter, the Commerce Department said Tuesday. No measure of inflation expectations foresees anything like the 8-plus inflation of the '70s. And it's hard to find a single Greenspan or Bernanke decision that would have been different if they had an inflation-only mandate. So why all this now","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615065","date":"2010-11-26","texts":"Business is booming at the Bank of Mom and Dad. As banks have tightened lending standards, growing numbers of families are stepping into the breach. But while intrafamily loans can yield significant financial rewards for lenders and borrowers, families must carefully assess the risks. While many families handle the process in informal oral agreements, advisers urge clients to document such loans in written contracts, just as a bank would. This can also make it easier for families to comply with tax rules that require lenders to pay income tax on the interest they receive and allow borrowers with mortgages to deduct the interest payments they pay. Some families choose to go through websites like Prosper and Lending Club, which match lenders and borrowers online--though they also set minimum interest rates. For the borrowers--often adult children--the advantages of these loans may include access to below-market interest rates and easier repayment terms than a bank might offer.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615131","date":"2010-11-26","texts":"Even amoebas learn by trial and error, but some economists and politicians do not. The Obama administration's budget projections claim that raising taxes on the top 2 of taxpayers, those individuals earning more than 200,000 and couples earning 250,000 or more, will increase revenues to the U.S. Treasury. The empirical evidence suggests otherwise. None of the personal income tax or capital gains tax increases enacted in the post-World War II period has raised the projected tax revenues. Over the past six decades, tax revenues as a percentage of GDP have averaged just under 19 regardless of the top marginal personal income tax rate. The top marginal rate has been as high as 92 1952-53 and as low as 28 1988-90. This observation was first reported in an op-ed I wrote for this newspaper in March 1993. A wit later dubbed this Hauser's Law. Over this period there have been more than 30 major changes in the tax code including personal income tax rates, corporate tax rates, capital gains taxes, dividend taxes, investment tax credits, depreciation schedules, Social Security taxes, and the number of tax brackets among others. Yet during this period, federal government tax collections as a share of GDP have moved within a narrow band of just under 19 of GDP. Why Higher taxes discourage the animal spirits of entrepreneurship. When tax rates are raised, taxpayers are encouraged to shift, hide and underreport income. Taxpayers divert their effort from pro-growth productive investments to seeking tax shelters, tax havens and tax exempt investments. This behavior tends to dampen economic growth and job creation. Lower taxes increase the incentives to work, produce, save and invest, thereby encouraging capital formation and jobs. Taxpayers have less incentive to shelter and shift income. On average, GDP has grown at a faster pace in the several quarters after taxes are lowered than the several quarters before the tax reductions. In the six quarters prior to the May 2003 Bush tax cuts, GDP grew at an average annual quarterly rate of 1.8. In the six quarters following the tax cuts, GDP grew at an average annual quarterly rate of 3.8. Yet taxes as a share of GDP have remained within a relatively narrow range as a percent of GDP in the entire post-World War II period.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"830985361","date":"2010-11-28","texts":"That's the philosophy of retailers at the holiday season, judging by the predictably exuberant quality of their ads. Doorbuster deals Midnight madness Gobblepalooza Such hyperventilation has become par for the course on Black Friday, the day after Thanksgiving that traditionally kicks off the holiday shopping season. That one day accounted for nearly 11 billion in sales last year, according to research firm ShopperTrak. But as the country stumbles toward economic recovery, one short day is apparently no longer enough to win the hearts and minds - and wallets - of American consumers, particularly when retailers rely on holiday shopping to ring up as much as half of their annual sales. In recent years, the industry has filled the calendar with a slew of new landmark shopping days to keep consumers fired up right through Christmas. There is Small Business Saturday, started by American Express this year to send customers to those long-suffering mom-and-pop shops. Then comes Cyber Monday, created by a trade group, when we return to work after Thanksgiving and collectively slack off by shopping online. Free Shipping Day, the brainchild of a coupon site, comes next. And Super Saturday, a retail industry term, rounds out the season on the last weekend before Christmas. As the calendar has become more crowded, retailers have resorted to increasingly far-fetched ideas to stand out. Infomercials tried to muscle into the game with a short-lived Info-Mania Sunday in 2007. That was the same year Wal-Mart called for Friday to be stretched over two days - a 48-hour Black Friday to accommodate its deals. This year, social coupon site Groupon wins Most Creative with the introduction of Grouponicus, a holiday when deals last longer than the usual one day.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842614392","date":"2010-12-01","texts":"IRAN Nuclear Negotiator To Hold Talks With EU Iran will hold two days of talks with European Union officials in Geneva next week, the first top-level nuclear discussions since October 2009, officials said. Iran's nuclear negotiator, Saeed Jalili, will sit down for negotiations with EU foreign-affairs chief Catherine Ashton on Dec. 6-7, a spokesman for Ms. Ashton said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982628","date":"2010-12-01","texts":"The D.C. Council is preparing some of the nation's strictest regulations against bullying in public schools and public buildings. Readers gave a range of responses on PostLocal.com. savkobabe You only have to stand up for yourself one time and the bullying stops. lwilliamson1 It amazes me how people these days act as if bullying is some sort of a new phenomenon, when, in truth, it's been around for ages - it's just human nature. I think . . . at some point in our lives, we all have had to confront a bully. Traditionally, there has been only one way to resolve this traditional problem Kids have to stand up to a bully and fight back, because bullies, after all, thrive on cowardice and fold in the face of courage and strength. The District school system needs to overhaul its general discipline policies and practices. That's how you deal with bullying, not by passing a law that addresses only one form of behavioral problem. zcxnissan Parenting and teaching can control bullies from developing - not that this policy will have any effect on bullying, since it is human nature. Government should stay out of this.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613536","date":"2010-12-02","texts":"The Federal Reserve, forced by Congress to release details on trillions of dollars' worth of loans made during the financial crisis, disclosed the breadth of its lending to U.S. businesses desperate to raise cash and the surprising degree to which it supported struggling foreign banks in the worst days of 2008 and 2009. The lending, most of which has been paid back, represents the Fed's most aggressive intervention in the economy ever, and included loans to stalwart industrial companies such as General Electric Co. and Verizon Communications Inc. Though the Fed has been credited with helping prevent many banks and firms from collapsing as credit markets stopped functioning, critics also say the Fed overreached and the latest disclosures could open new fault lines. The scale of the Fed's lending was widely known. In all it funneled 3.3 trillion worth of credit to different parts of the economy and financial system through an array of different programs during the crisis. But the specifics of who got the money hadn't been known. Foreign banks received hundreds of billions of dollars in short-term loans from the Fed. Among the biggest loans from a Fed commercial-paper lending program was one to Swiss banking giant UBS AG, which tapped it for 37 billion in October 2008. Barclays PLC, the British bank that declined to rescue Lehman Brothers but later bought much of it from bankruptcy, tapped the Fed for roughly 10 billion in commercial-paper loans in October 2008. All the borrowings were repaid by the end of 2009, a Barclays spokesman said. A UBS representative said its borrowing was relatively modest, done to give it flexibility during the crisis and was fully repaid.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614199","date":"2010-12-07","texts":"Jeffrey Kindler, who stepped down as Pfizer Inc.'s chief executive on Sunday, citing burnout, is the rare CEO to say that the job wore him out. In fact, occupying the high-powered cocoon known as the corner office is more stressful than ever, thanks to a greater emphasis on globalization, stiffer competition, heightened government regulation and the weak economic recovery, say former CEOs, corporate directors and management experts. Compared with four years ago, pressures on CEOs are substantially different -- especially in certain industries, said Steve Reinemund, who retired in 2006 as PepsiCo Inc. CEO It's still pretty tough out there, adds Mr. Reinemund, dean of Wake Forest University's business school. As a result, many CEOs now look at the corporate throne as a position with a limited term of office, said Jeffrey Sonnenfeld, a senior associate dean at Yale University's School of Management. They rarely seek to stay a minute more than a dignified decade. To cope, a few CEOs cut short their tenure. The head of a mid-sized mutual insurance company intended to retire in early 2013 after serving since 1999. But during a board succession-planning session three years ago, this chief announced he felt frankly burned out and wanted to leave within a year, said Beverly Behan, a New York corporate-governance consultant. It was the most emotional board meeting I had ever been in, she added.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614521","date":"2010-12-07","texts":"NEW YORK -- Gold set a record and silver reached a 30-year high Monday as inflation concerns and a weakening euro gave precious metals extra shine. Front-month December gold futures settled up 9.90, or 0.7, at 1,415.30 a troy ounce on the Comex division of the New York Mercantile Exchange. December silver futures rose 46.40 cents, or 1.6, to 29.705 an ounce. Investors rushed into both markets following Federal Reserve Chairman Ben Bernake's comments to CBS's 60 Minutes Sunday, when he said the Fed might increase its 600 billion stimulus effort if necessary to prevent the economy from lapsing into a second recession. The program, announced in early November, caused the dollar's value to fall and sparked investor concern about inflation. Both factors helped gold prices rally to record highs, with silver following on the way up. Gold is often viewed as a store of value and an inflation hedge, as well as an alternative currency.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984812","date":"2010-12-07","texts":"Ben Bernanke may or may not succeed in saving the economy, but at least he has the courage to try - and the honesty to tell the truth. The same cannot be said of our elected officials. Congress is buried under a crushing surplus of cynicism, while the White House seems paralyzed by a deficit of courage. An expert on the Great Depression, Bernanke is determined not to be the Federal Reserve chairman who allows the nation to plummet into Great Depression II. Since our political leaders can't be bothered to do what urgently needs to be done - stimulate the fragile economy before it sputters out - Bernanke is using a rare bit of legerdemain called quantitative easing to pump 600 billion into the financial system. Fed chairmen are usually as silent as the Sphinx, except in official testimony. But Bernanke, facing criticism for his action, went on 60 Minutes to explain why he's prepared to do even more. He took the even more unusual step - for an economist - of using language that non-economists can understand. The unemployment rate is just not going down, he said in the interview, which aired Sunday night. Unemployment is just about the same as it was in mid-2009, when the economy started growing. . . . And it looks that at current rates, that it may take some years before the unemployment rate is down to more normal levels. The jobless rate is a devastating 9.8 percent. Bernanke calculates that unless the recovery is somehow accelerated, it will take four or five years for unemployment to come down to a more normal range below 6 percent.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842617390","date":"2010-12-08","texts":"European stocks soared to close at their highest level in more than two years, helped by an extension to U.S. income-tax cuts and the presentation of tough austerity measures for Ireland to help sort out its public finances. In Asia, Shanghai stocks recovered from initial losses suffered after a media report said China's central bank may raise rates around the weekend, while Australian shares advanced after the central bank there left interest rates unchanged and signaled a steady monetary policy. The Irish government was expected to successfully pass its austerity budget in order to qualify for financial aid from the European Union and the International Monetary Fund. The vote was expected after the close of European financial markets. The Stoxx Europe 600 index ended up 0.9 at 273.91, its highest close since Sept. 19, 2008. Germany's DAX also posted a record, closing 0.7 higher at 7001.91 and trading above the 7000 mark for the first time since June 2008. The U.K.'s FTSE 100 closed up 0.7 at 5808.45, France's CAC-40 closed 1.6 higher at 3810.50, and Ireland's ISEQ rose 1.7 to close at 2799.97.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614813","date":"2010-12-09","texts":"Author Min Zeng NEW YORK--Longer-dated Treasurys rose as the bond market showed some tentative signs of recovery after the biggest two-day selloff in two years. The key boost came from a strong 30-year bond auction. Higher yields also brought in fresh buyers, who snapped up cheapened bonds, betting that the recent selloff may have run its course. The gains came as a relief for many market participants after the violent rout in the previous two sessions. The benchmark 10-year note's yield, which moves inversely to its price, jumped on Wednesday to the highest level since June as President Barack Obama's tax-cut deal with Republicans in Congress boosted bets on higher economic growth and higher budget deficits, a double whammy for the Treasury market. The auction went really well, and I think the bond market is stabilizing, said Chris Sullivan, who oversees 1.65 billion as chief investment officer in New York at the United Nations Federal Credit Union. Bond yields have more room to fall back.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615070","date":"2010-12-09","texts":"Author Abhrajit Gangopadhyay NEW DELHI -- India's food inflation rate turned up a tad in the week ended Nov. 27, but stayed below double digits, easing immediate pressure on the central bank to tighten monetary policy further though rising global commodity prices are a concern. The food inflation rate, based on the wholesale price index, rose 8.69 from a year earlier, compared with 8.60 in the week through Nov. 20 as egg, meat, fish and onion became costlier, according to data issued Thursday by the Ministry of Commerce and Industry. Food inflation is the primary culprit driving up overall prices in Asia's third-largest economy, but as summer-sown crops enter the market, boosting staple supplies, the number is showing signs of easing. Last week, the food price inflation eased to the single digit for the first time since May 2009. However, that doesn't offer much peace to the central bank that is cautiously watching rising global commodity prices, which could be the next trigger to drive India's inflation.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615048","date":"2010-12-11","texts":"Author Dave Kansas Want to get an investment debate started Start talking about gold. The scrum surrounding the yellow metal ranges from those who deride it as an archaic investment a barbarous relic to those who believe it is the essential store of value through the ages goldbugs. Gold elicits passion in a way that 100 shares of Consolidated Edison never could. Today, with gold seemingly riding high -- it hit records again this past week -- it might surprise that the bull case still has a lot of merit. Late last year, I was among the deriders, warning people to steer clear of gold. That was way back at 1,000 an ounce. Today gold trades at around 1,400 an ounce, a sweet 40 gain. It closed last week at 1,384.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830982344","date":"2010-12-12","texts":"When Yahoo put out its top 10 searches in the financial category for 2010, there was no surprise to find, among the leaders, unemployment, foreclosures and the Dow Jones flash crash, the term coined for when the Dow dropped more than 600 points in one day in May. What makes Warren stand out is her assignment to set up the new Consumer Financial Protection Bureau. If I know Warren, the agency will fundamentally change a financial industry that has long taken advantage of consumers with only an occasional and not nearly hard enough smack on the knuckles. Warren, who is serving as assistant to President Obama and a special adviser to the secretary of the Treasury, sat down with me recently in her Treasury office for a discussion about the initial plans for the watchdog agency created to protect consumers from the abusive lending practices that contributed to the financial crisis. I wouldn't have guessed in a million years that I would be putting forth this agency . . . working to get it started and setting its first priorities, said Warren, who has taken a leave from teaching at Harvard Law School. There has been lots of opposition to Warren heading or setting up the bureau. Critics argue that the bureau would stymie the creation of credit products and that Warren would advocate imposing regulations so tough that it would make it more difficult for people to get credit.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984464","date":"2010-12-12","texts":"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 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. 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. 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. 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.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842616339","date":"2010-12-13","texts":"Author Deborah Lynn Blumberg NEW YORK--Treasurys rallied Monday, recouping some ground after a sharp selloff in the previous week, as recent selling turned government bonds into an enticing bargain for investors. Gains also came as the Federal Reserve completed its first purchase of Treasury securities for the week, buying nearly 8 billion in Treasurys. Traders said bond yields had reached levels that looked enticing to buyers after the prior week's sharp move up in yield, sparking purchasing by foreign central banks. Early Monday, the 10-year yield hit a 3.395 high, a level last seen in June, pulling buyers in. In afternoon trading, the 10-year was up 932 to 3.282. The two-year added 232 to 0.604 The five- and seven-year notes were outperforming, up 1332 to yield 1.900 and up 1732 to 2.630, respectively. The seven-year yield had risen by 1.00 percentage point since early November, a move that proved attractive.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617141","date":"2010-12-13","texts":"Your editorial Obamanomics Takes a Holiday Dec. 8 makes two important points in showing that the Obama-Republican tax compromise will not be a stimulative panacea. The two-year extension limit leaves in place the policy uncertainty that has burdened our economy to date -- i.e., nothing here has materially changed. Also, the essentials of the Bush income tax structure now existing will mostly remain in place, hardly reasons to celebrate a supply-side stimulative victory. Yet many economists and politicos who should know better are touting the compromise as a supply-side victory that will lift the economy and employment permanently toward prosperity, much as the Reagan tax cuts did in the 1980s. Those same politicos, I think, should think twice before they uncork the champagne. George Launey Lakeway, Texas ---","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830983343","date":"2010-12-16","texts":"Despite bluster from opposition parties, Irish lawmakers voted Wednesday to back the 90 billion international rescue for Ireland, an emergency measure designed to keep Europe's debt crisis from getting worse. Opposition leaders had complained about the high interest rates that other European Union partners were demanding from Ireland to help the country cope with its massive bank bailout. But Prime Minister Brian Cowen argued that Ireland had no choice but to take loans from the European Union and International Monetary Fund at interest rates averaging 5.8 percent because bond investors were demanding far, far higher rates. A motion endorsing the loan accord passed on an 81-75 vote, clearing the way for the IMF to ratify its 30 billion part of the aid package. Ireland faces a 2010 deficit of 32 percent of gross domestic product, a post-war European record that includes exceptional costs of bailing out five Dublin banks. The Irish government plans to plow the first 13.3 billion from the fund straight into the cash reserves of those banks, all of which have been nationalized or partly acquired by the state since 2008.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"830984768","date":"2010-12-17","texts":"The Federal Reserve proposed on Thursday lowering the fees that merchants must pay when shoppers use debit cards, a move that could reduce retail prices but result in higher banking fees for consumers. Under the recommended new rules, the interchange fee, or swipe fee, on debit cards would be capped at 12 cents - about 70 percent lower than the average fee of 44 cents per transaction last year, according to the Fed. The total amount banks received from debit card interchange fees was 16.2 billion. The move was applauded by retail industry groups and small businesses, which have long said the fees are excessive and they have little power to negotiate them down. Retailers have also said the cost of the fees is second only to labor and is growing faster than health-care expenses. On Thursday, they said the new rules would allow them to deliver significant savings to shoppers. This is not only good for businesses, but most importantly it's good for consumers, said Hank Armour, chief executive of National Association of Convenience Stores. There is an abundant amount of evidence cost savings will be passed through. Interchange rates are set by card processors such as Visa and MasterCard and paid to banks as an incentive to use their networks. In a statement, the American Bankers Association, a trade group, said the proposal would have a dramatic impact on the industry at a time when bank revenue has also been curtailed by strict new regulations on credit card interest rates and overdraft fees. The swipe fee ruling would reduce banks' ability to offer basic low-cost services, make loans and fight fraud, he said.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842613684","date":"2010-12-18","texts":"Author Sarah E. Needleman Two months after launching Brand Thunder, Patrick Murphy sensed that sales were sluggish because he was charging too high a fee for his sole product, a customized Web browser. So he temporarily slashed the price by more than 75 and gave the product new, income-generating features, including ads and a search tool, by forming partnerships with other businesses. The original fee was a leap for something that wasn't proven, says Mr. Murphy, who started the Dublin, Ohio, company in 2007 in anticipation of a pink slip from a large Internet company. We had to be nimble enough to make that change or this business would not be here today. It was live or die. Start-ups don't always evolve according to plan. Some end up targeting the wrong market, while others get sidelined by unforeseen competitors. To avoid failure, experts say it's critical for owners to quickly identify what's obstructing them and come up with a solution that sticks.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"830984436","date":"2010-12-18","texts":"Employees had taped paper snowflakes to the windows and hung a strand of white Christmas lights from the ceiling. Soft music played from an iPod, and a plastic penguin greeted guests arriving from their cubicles two floors below. The potluck offerings stretched across several tables - homemade blackberry cobbler and pineapple upside-down cake, gingerbread cookies and cans of Pabst Blue Ribbon. The gathering inside the seventh-floor conference room at 1801 L St. NW on Thursday night resembled many office parties this time of year in downtown Washington. But it was the first holiday celebration for the Consumer Financial Protection Bureau, created in July when President Obama signed into law a far-reaching financial overhaul bill. The bureau will have broad powers to write rules aimed at preventing abuses in mortgages, credit cards and other consumer loans. To some in the room, the gathering seemed a minor miracle. Over the past two years, as lawmakers wrestled with how to prevent a crisis like the one that crippled the economy in 2008, the bureau's existence often seemed in doubt. It had the Obama administration's support, but Republicans on Capitol Hill criticized the idea of a new agency as government overreach - another layer of bureaucracy that would increase costs on banks and small businesses and constrict access to credit for ordinary Americans. Financial industry lobbyists pushed hard to get clients exempted from the new regulator's reach. In the end, legislation squeaked through Congress, the consumer protection bureau became reality and now its fledgling staff - some detailed from agencies such as the Federal Reserve and Treasury Department, some in their early 20s, some gray-haired veterans, almost all impeccably dressed - was sipping wine and commiserating about long hours spent assembling a federal bureau from scratch.","wsj":0,"wapo":1,"economy":0,"noneconomy":1}
{"id":"842615268","date":"2010-12-21","texts":"NEW YORK -- Stocks traded in a narrow range as a tumble in American Express dragged down the Dow Jones Industrial Average. The blue-chip measure closed down 13.78 points, or 0.12, at 11478.13. The Nasdaq Composite added 6.59 points, or 0.25 to 2649.56, while the Standard & Poor's 500-stock index rose 3.17 points, or 0.25 to 1247.08. Accounting for nearly all of the Dow's drop, American Express fell 1.51, or 3.4, to 42.50 after analysts at Stifel Nicolaus said the company is more exposed following last week's Federal Reserve proposals on debit-card interchange fees. Last week Visa and MasterCard tumbled after the Fed's proposals, but it took most investors until Monday to start worrying about the implications for American Express. Over the weekend, the analysts figured out it'll hurt them as much, if not more, said Alan Lancz, president of Alan B. Lancz & Associates.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616370","date":"2010-12-21","texts":"Author Joan E. Solsman Nike Inc.'s fiscal second-quarter earnings rose a better-than-expected 22, as the athletic-shoe maker continues to see strong interest in future orders. But shares were down 4, at 88.62 after hours, retreating from the stock's highest level ever, which it hit during the regular session Tuesday. Worldwide future orders, an indicator of growth based on estimates of product orders, were up 11--accelerating a little sequentially from the 10 climb in prior quarter--at 7.7 billion. Chief Executive Mark Parker said the company posted growth in almost every brand, category and geography during the most recent period.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614492","date":"2010-12-22","texts":"NEW YORK -- Treasurys tried to rally again Tuesday as the Federal Reserve bought bonds, but prices ended up little changed in thin trading before the holiday. As was the case Monday, Treasury prices started off on a strong note, only to weaken as Fed bond buying got under way. The Fed bought Treasurys twice Tuesday, as it did Monday. Market participants zeroed in on the purchases with no top-tier economic data on tap until later in the week. Buying is part of the Fed's 600 billion program designed to help keep the U.S. economic recovery on track. The market continues on its choppy, low-volume path to year end, even more so in this shortened holiday week, said George Goncalves, managing director and head of U.S. interest rates strategy in the Americas in New York. Late afternoon, the 10-year was up 732, with its yield falling to 3.322, some 0.20 percentage point off its peak from last week. The 30-year was up 1532, its yield falling to 4.428. The two-year off 132, its yield rising to 0.613. Yields move inversely to prices. The next hurdle for the 10-year is to close below 3.27, said Jim Vogel of FTN Financial, a level first reached on Dec. 8 and seen only once since then. Key is whether the 10-year can stay below 3.45 going into the long weekend, he said. Mr. Vogel said two-years near 0.65 would be a buy and threes at 1.03. Fair value for fives is at about 1.85.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616308","date":"2010-12-23","texts":"Federal Reserve Chairman Ben Bernanke is under attack for doing too much to reduce unemployment and lift inflation. His Japanese counterpart, Masaaki Shirakawa of the Bank of Japan, is under attack for doing too little. Japan is a puzzle -- and not only to foreign visitors who wonder how a stagnant economy can feel so prosperous. Academics wonder how Japan avoided the deflationary spiral their theories predicted and, instead, suffered only a decade of low-grade deflation. Foreign central bankers and market analysts wonder why the Bank of Japan won't do more. Japanese politicians wonder if they can force the central bank to be more aggressive. The ruling party has an Anti-Deflation League, and a band of parliamentarians want to give the BoJ a target for inflation to press it to create some. Since 1997, the price level in Japan has fallen more than 3. Had the BoJ achieved 1 inflation each year, prices would have risen 14. After accounting for price changes, the Japanese economy has grown at a rate of only 0.9 over the past two decades. And, as the Bank of Japan said this week, The recovery seems to be pausing. Still, it predicted hopefully that Japan will return to a moderate recovery path as emerging economies and commodity producers propel global growth. In Japan, a little inflation would be welcome. It would make inflation-adjusted interest rates lower. If interest rates are 1, and deflation 2, then real, or inflation-adjusted, interest rates are 3. But if inflation is at 2, then real interest rates are minus 1, which makes borrowing much more attractive. It would make paying Japan's huge debts easier. It would tend to cheapen the yen, aiding exports.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615190","date":"2010-12-24","texts":"Six months after China pledged to increase the flexibility of the yuan exchange rate versus the dollar, there are fresh signs that Beijng is gradually loosening its grip on the currency. The yuan rose to its highest level against the dollar in a month on Thursday after the People's Bank of China adjusted its daily target exchange rate upward. Traders took that as a signal that China would allow a faster rate of appreciation in coming weeks as President Hu Jintao prepares for a visit to Washington in mid-January. The yuan has risen 2.8 against the dollar since June 19, when China ended its rigid peg to the dollar. However, U.S. producers complain that the yuan remains far undervalued and that by actively intervening to prevent it from rising, China gives its manufacturers an unfair advantage. The Treasury has voiced its concerns to Beijing about its policy, but for the most part takes a hands-off approach. Supporters of China's approach say that the yuan's current rate of appreciation is more or less in line with that which occurred in the three years before it was fixed during the 2008 crisis, when it gained 20 against the dollar.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614164","date":"2010-12-28","texts":"Increases in unemployment lead to a decrease in fruit and vegetable consumption, with potentially long-term effects on workers' health, new economic research suggests. Among people predicted to be at the highest risk of unemployment, based on socioeconomic characteristics, a one-percentage-point increase in the unemployment rate is associated with a 2 to 4 reduction in the frequency of fruit and vegetable consumption and an 8 reduction in the consumption of salad, economists Dhaval Dave of Bentley University in Waltham, Mass., and Inas Rashad Kelly of Queens College in Flushing, N.Y, found. In the paper, circulated by the National Bureau of Economic Research, the researchers couldn't pinpoint the reasons for this. They did note, however, that respondents to surveys who reported mental-health issues or psychological distress tended to report eating fewer fruits and vegetables. The research relies on the Behavioral Risk Factor Surveillance System, a telephone survey in which 350,000 Americans are interviewed each year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615075","date":"2010-12-28","texts":"Corrections & Amplifications The expiration of Tesla Motors Inc.'s lock-up period on Monday allowed those who invested in the company prior to its initial public offering to sell their shares. Tuesday's Options Report incorrectly implied that the lock-up applied to the company's IPO investors. WSJ December 31, 2010 NEW YORK -- On a sleepy day for the stock market, traders were in high gear on Monday buying options for Tesla Motors Inc. at a key time for its investors. An East Coast snowstorm and holiday vacations conspired to keep Wall Street trading light on Monday, but there seemed to be an unusual amount of activity in Tesla Motors Inc. options. Investors appeared to be buying January 25 and January 26 puts for the electric car maker's stock. It isn't a huge leap to think shares of Tesla, which closed down 15 at 25.55, could move up or down slightly by the Jan. 21 expiration date.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616017","date":"2010-12-28","texts":"Author Stephen Miller The economist Alfred Kahn was considered the father of airline deregulation. He was also a notorious Washington wag, who once responded to White House criticisms for warning of a depression by changing depression to banana. As chairman of the Civil Aeronautics Board, or CAB, under President Jimmy Carter, Mr. Kahn eliminated restrictions on prices and allowed airlines to choose their own routes. The move has been credited with lowering airfares--estimates of annual savings range up to 20 billion--and dramatically expanding flying. It also caused industry turmoil, as old airlines went bankrupt and new discount carriers, like Jet Blue and Southwest, emerged. Mr. Kahn, who died Monday at age 93, was a happy warrior. At New York's Public Service Commission, he introduced off-peak discounts on electricity and let consumers plug their own phones into AT&T's system. In Washington, he once called a news conference to criticize the president for overriding him on a CAB matter. He set the bureaucratic tone for CAB with a memo advising staff to read their memos to their children, adding, If they do not drive you out of the room with their derisive laughter, disown them. Confirmed by Congress in 1977, Mr. Kahn introduced the biggest changes in airline regulation since CAB was established in 1940. By fiat, he eliminated restrictions on offering discounts and on establishing new routes and opened up smaller airports, including Chicago's Midway, to commercial traffic. In one case, two airlines flying between Los Angeles and Miami in 1978 slashed prices by a third and eliminated the Saturday stay-over rule. I open my mouth and a fare goes down, he told the Washington Post in 1978.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614078","date":"2010-12-30","texts":"Author Zahid Hussain ISLAMABAD, Pakistan--The International Monetary Fund issued a stern warning to Pakistan to take measures to cut its spiraling budget deficit, according to a senior Pakistani government official. In an official letter to the government of President Asif Ali Zardari, the IMF warned that the state of the nation's economy is far worse than previously realized and urged immediate fiscal belt-tightening measures, said the official, who has seen the missive. A spokesman for the IMF declined to comment on the letter. The IMF withheld 3.5 billion in 2010 from its total 11.3 billion loan package for Pakistan in a bid to pressure the country to take action.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615249","date":"2010-12-30","texts":"Author Peter D. Schiff Most economists concede that a lasting general recovery is unlikely without a recovery in the housing market. A marked increase in defaults and foreclosures from today's already elevated levels could produce losses that overwhelm banks and trigger another, deeper financial crisis. Study after study has shown that defaults go up when falling prices put mortgage holders underwater. As a result, the trajectory of home prices has tremendous economic significance. Earlier this year market observers breathed easier when national prices stabilized. But the robo-signing-induced slowdown in the foreclosure market, the recent upward spike in home mortgage rates, and third quarter 2010 declines in the Standard & Poor's Case-Shiller home-price index--including very bad October numbers reported this week--have sparked concerns that a double dip in home prices is probable. A longer-term view of home price trends should sharply magnify this fear. Even those economists worried about renewed price dips would be unlikely to believe that the vicious contractions of 2007 and 2008 where prices fell about 30 nationally in just two years could return. But they underestimate how distorted the market had become and how little it has since normalized. By all accounts, the home price boom that began in January 1998, when the previous 1989 peak was finally surpassed, and topped out in June 2006 was extraordinary. The 173 gain in the Case-Shiller 10-City Index the only monthly data metric that predates the year 2000 in those nine years averaged an eye-popping 19.2 per year. As we know now, those gains had very little to do with market fundamentals, and everything to do with distortionary government policies that set off a national mania for real-estate wealth and a torrent of temporarily easy credit.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615507","date":"2010-12-30","texts":"Europe Fiscal discipline will be a cornerstone of Hungary's European Union presidency, the country's Minister of State for EU Affairs said in an interview. Budapest takes over the six-month rotating presidency of the EU in January, with stringent economic and fiscal policies and a pro-economic growth approach as its main target areas.  U.S. In Texas, a polygamist sect leader remained mute during an arraignment on bigamy and child sex abuse charges, forcing the court to enter not guilty pleas on his behalf. Warren Jeffs, the 55-year-old ecclesiastical head of the Fundamentalist Church of Jesus Christ of Latter Day Saints said nothing as prosecutors read a sexual assault charge accusing him of having sex with a girl younger than 17.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616285","date":"2011-01-02","texts":"Author Jeannette Neumann The typically placid municipal-bond market was thrown into tumult in the final months of 2010, pushing yields to their highest levels since early 2009 while investors pulled record amounts from muni-bond mutual funds. And the outlook for 2011 is mixed. Two of the main factors roiling the muni market were a surge in supply amid uncertainty about a popular bond-subsidy program and rising Treasury rates--which long-term munis tend to track--triggered by the Federal Reserve's bond-buying program, analysts say. The yield on 30-year triple-A-rated municipal bonds peaked at 4.85 on Dec. 15, according to a widely watched scale published by Thomson Reuters Municipal Market Data. Those levels on yields were last seen on March 27, 2009. The yield on 10-year triple-A munis also peaked that day at 3.27, the highest since June 24, 2009, according to MMD. The 30-year closed 2010 at 4.68, while the 10-year finished at 3.16. Perhaps the biggest overhang on the muni market this past year was the fate of the Build America Bonds program, where state and local governments issued federally subsidized taxable bonds as part of the Obama administration's efforts to reinvigorate a weak economy.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616423","date":"2011-01-05","texts":"GE Capital, the lending arm of General Electric Co., sold a 6 billion four-part bond, leading a wave of investment-grade deals totaling nearly 18 billion from almost a dozen companies. The predicted flood of New Year new issue is arriving on schedule, said Jim Vogel, a financial analyst at FTN Financial Capital Markets in Memphis, Tenn. He said the calendar will include some catch-up deals from late November. In addition to GE Capital, Enterprise Products Operating, Metropolitan Life Global Funding, Deutsche Bank AG, and Rabobank Nederland brought billion-dollar deals to market. Allegheny Technologies, ERAC USA Finance, Health Care Services, Royal Bank of Scotland Group and several others also lined up to sell debt on Tuesday. The brisk pace of issuance wasn't limited to the U.S. BNP Paribas of France, ING Groep of the Netherlands and Banco Bilbao Vizcaya Argentaria of Spain all sold debt in Europe. We'll see a short burst followed by a little silence as earnings season begins followed by yet another round of reasonably heavy issuance, said Guy LeBas, chief fixed-income strategist at Janney Capital Markets.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616795","date":"2011-01-05","texts":"Author Robbie Whelan Some of the nation's largest home builders might be forced to buy hundreds of acres of desert 10 miles from the Las Vegas Strip at boom-era prices as part of a legal battle with a group of banks led by J.P. Morgan Chase & Co. If a judge rules in favor of the banks over builders such as KB Home and Toll Brothers Inc., it could cast a shadow over a popular but controversial form of off-balance-sheet accounting used when buying land. The strategy is used by builders to insulate themselves from debt and other obligations. The development, called Inspirada, is another housing-crisis casualty in Nevada, one of the hardest-hit U.S. states. Just 635 homes out of the planned 14,500 were sold before financial problems and fighting erupted. When a venture formed by the home builders bought the land in 2004, the companies thought their liability was limited to 370 million, in return for 2,000 acres where they envisioned a sprawling 1.5 billion planned community.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616802","date":"2011-01-08","texts":"Friday's official report on the U.S. labor market was a contrast with other data suggesting stronger improvement last month. What's behind the disparities Much of the difference comes down to how the employment surveys are conducted and the problems that stem from producing estimates so quickly after the month ends. The Labor Department's report is drawn from two separate surveys, one looking at workers in households to determine the unemployment rate, among other measures and the other looking at payrolls for businesses to provide figures on job creation. They don't always match up because they are based on different samples, but in the long run they tend to line up fairly closely. The December payroll survey released Friday showed a modest gain of 103,000 jobs. But the prior two months were revised up by 70,000 jobs. The surprisingly weak November figure moved from a gain of 39,000 jobs, as reported last month, to a gain of 71,000 jobs. Why such a large jump in the revision The estimates for job creation are drawn from a fairly large sample size. The Bureau of Labor Statistics, a unit of the Labor Department, samples about 140,000 businesses and government agencies representing roughly 410,000 work sites. But all the surveys don't come back in time for the government to release its initial estimate, usually on the first Friday of the next month. As more results come in, the estimates become more reliable. Labor updates data for the prior two months before considering it final. It also does annual revisions of those figures to account for the creation of new businesses -- a development that is hard to measure during turning points in the economy as companies are shutting down or starting up.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615233","date":"2011-01-12","texts":"Author Serena Ng, Randall Smith Joann S. Lublin American International Group Inc. said it expects to close an agreement with the U.S. government on Friday, paving the way for share sales that could eventually enable the insurer to end its status as a ward of the state. Preparations for what could be the biggest stock offering in U.S. history officially get under way Thursday, as AIG and government officials audition Wall Street banks for a lead role in what insiders are calling the re-IPO of AIG. Top executives of multiple banks, including Bank of America Corp. chief Brian Moynihan, J.P. Morgan Chase & Co. vice chairman and deal maker James B. Lee Jr. and Morgan Stanley chief James Gorman are among those scheduled to attend a series of meetings in New York at the midtown law offices of Davis Polk & Wardwell LLP, according to people familiar with the matter. AIG said Wednesday it plans to pay down and terminate a 21 billion credit facility from the Federal Reserve Bank of New York on Friday, issue warrants to private shareholders, and exchange the Treasury's preferred shares into common stock representing a 92.1 stake in the company. That majority stake has an implied value of over 75 billion. Treasury plans to carve it up into pieces that can be sold through several offerings.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614552","date":"2011-01-14","texts":"Author Jeff Bater Ian Talley Core inflation remained subdued in December, though overall prices moved up on more expensive oil, while U.S. industrial production posted solid gains. Labor Department data showed tame consumer price inflation. While gasoline prices shot higher, prices consumers paid in the U.S. last month for goods and services not related to food or energy inched up a mere 0.1. The Labor Department report on consumer prices showed the 0.5 gain in retail inflation last month compared with November was the biggest increase since June 2009. The increase was in line with expectations, as was the 0.1 gain in prices excluding food and energy, known as the core number. Although higher commodities prices are a concern, inflation has been under wraps, subdued by the weakness of an economy trying to regain its footing against a 9.4 unemployment rate.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616664","date":"2011-01-14","texts":"Author Sudeep Reddy 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. 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. 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. 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 inflationunemployment outcome. Monetary policy is broad and has broad effects.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614302","date":"2011-01-15","texts":"The North American International Auto Show, in residence at Cobo Hall in downtown Detroit until Jan. 23, provides a teachable moment. It turns out, lazy and overfed car companies can lose weight and come out fighting hello, General Motors. Conversely, a stable of the smartest executives on the planet is no guarantee your company won't stumble into a clearly marked minefield VW, I'm looking at you. Other takeaways It was naive of naysayers to judge an emergent technology such as electric mobility by its previous limitations. They will dine on crows in the coming years. And it's perfectly permissible for national governments to save giant employers in a moment of crisis, because flesh and blood is more important than ideological purity. Just don't make it a habit. Interested Antagonized Then read on. Here are my lessons from the Detroit auto show. Automotive engineers have the most beautiful minds Porsche returned to the show this year after a three-year absence and brought with it the devastating Porsche 918 RSR hybrid race car, which won the annual EyesOn Design award for Best Concept. A competition version of the 918 Spyder seen last year, the mid-engine, carbon-chassis 918 RSR marries a fire-spitting 563-hp V8 with two traction motors on the front wheels, providing up to 204 hp of temporary, corner-exiting electric boost. The key component is the car's flywheel accumulator, a washer drum-sized device sitting in the cockpit that stores electrical energy mechanically, in a toroid-shaped mass spinning at up to 38,000 rpm. When required, this rotational momentum is converted back into electricity in an elegant display of the first law of thermodynamics. It would be achievement enough to build such a car, a synthesis of horsepower and computational muscle, a car that dares the limits of physics and mechanical engineering. But to make such a car beautiful These guys are poets with wrenches.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615214","date":"2011-01-15","texts":"Author Brett Arends It's hard to stay cool in a hot market. Wall Street's been booming lately. The Dow Jones Industrial Average has risen 22 since last summer, and the Nasdaq Composite 30. Market spirits are up. The optimists are out in force. And after an impressive 2010, stock-market strategists are forecasting good gains again for 2011. At times like this, a lot of investors may feel an urge to throw caution to the wind and jump in head first. After all, everyone says the market's going higher, right You wouldn't want to miss out on the action Maybe you should get in while you still can It's enough to test the resolve of the most disciplined investor.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614939","date":"2011-01-17","texts":"Masaru Onishi President, Japan Airlines Mr Onishi said the carrier and AMR Corp.'s American Airlines expect their new joint operations to generate an annual operating profit of 156 million. V. Balakrishnan Chief Financial Officer, Infosys","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613756","date":"2011-01-18","texts":"Author Owen Fletcher BEIJING--China's Commerce Ministry urged the U.S. to open up to Chinese investments. Ministry spokesman Yao Jian said he hopes that U.S. laws on investment by foreign firms--largely to protect national-security considerations--can become more transparent. The remarks came ahead of a state visit to the U.S. by Chinese President Hu Jintao that starts Tuesday. China is improving its own investment environment and legal system for investments, and we hope the relevant countries further open up their markets and investment areas, Mr. Yao said at a briefing Tuesday.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614168","date":"2011-01-18","texts":"Author Brett Philbin TD Ameritrade Holding Corp.'s fiscal first-quarter profit rose 6.5 as an increase in asset-based revenue offset a slight drop in trading activity. The Omaha, Neb., online brokerage reported average client trades per day, or DARTs, of roughly 372,000, down 2 from about 379,000 a year earlier, although the figure rebounded 17 from a weak fourth quarter as clients came back to the market following a summer trading slowdown. During the quarter, online brokerages posted higher November trading volumes across the board as activity was at the strongest level since May, the month of the stock market's flash crash. But trading volumes, as expected, fell in December as many investors took vacations during the holiday season. During a conference call with analysts, TD Ameritrade Chief Executive Fred Tomczyk said the company continues to see further improved retail engagement and market sentiment in January, adding that things are looking much better than they did just 90 days ago.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614449","date":"2011-01-19","texts":"Few people appreciate the rise in commercial real-estate values over the past year more than Jay Sugarman, the embattled chief executive of iStar Financial Inc. For the past two years, Mr. Sugarman has been struggling to steer the commercial-property lender and owner clear of bankruptcy protection. For much of that time, Wall Street was betting against the company as a number of its borrowers defaulted and iStar grappled with its own debt obligations. But now, as real-estate values rise in many parts of the country, there are signs Mr. Sugarman might pull it off. The company's success at selling assets at higher-than-expected prices has helped it reduce its debt level by about 3.7 billion, to about 7 billion, in the last 12 months. The company's shares, which traded below 1 in February 2009, hit a 52-week intraday high of 8.30 this month, and iStar was the second-best-performing real-estate investment trust in 2010 behind Glimcher Realty Trust. Tuesday, iStar's shares fell six cents, or 0.7, to 8.20, in 4 p.m. New York Stock Exchange composite trading. We've been able to generate a significant amount of cash from our portfolio, Mr. Sugarman said in an interview last week. To be sure, there still is a big hurdle ahead. To avoid bankruptcy, the company has to refinance 2.2 billion in debt due in June, including 1.7 billion in notes issued as part of a 2009 restructuring with bank lenders.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616117","date":"2011-01-21","texts":"BEIJING -- From the ads on Times Square to saturation coverage in China's official media, everything about President Hu Jintao's U.S. visit has been designed to show that China has arrived as a major world power and its leader deserves to be treated as an equal. China's state-controlled media was dominated Thursday by images of Mr. Hu and President Barack Obama, side by side. The official Xinhua news agency characterized China and the U.S. as two heavyweight players on the international stage that have seen their national interests increasingly interwoven. The rest of the world has been paying close attention to every word and gesture, the China Daily added, given the importance of the two countries to the global economic and political landscape. But even as many in the U.S. appear convinced China is set to overtake it economically or militarily, China's state media called for deeper relations based on mutual respect. The bi-weekly World News Journal said the U.S. should adjust its mentality of deep suspicion about China. Other publications called for the end of a zero-sum game mentality. Some Chinese appeared uncomfortable with their country's newly feted status or were nonplussed by the coverage. Several online comments expressed skepticism about China's portrayal as an emerging superpower. Looking at those high-profile reports on Hu's visit by major media, and with TV all about how harmonious and wonderful this China-U.S. relationship is, it's just way too phoney, wrote user Mahua-apsaras on the Sina micro-blogging service.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614558","date":"2011-01-22","texts":"Financial Analysis and Commentary Imagine a wave of inflation that sends retailers scrambling to pass on expenses to consumers. What if a retailer tied itself down to constant sales prices Investors could soon find out, as Dollar Tree begins to cope with rising commodity and labor costs. In the past the company, which charges one dollar for everything, benefited from lower costs by offering bigger sizes or higher quality. To protect margins, Dollar Tree may now need to try the reverse. In one sense, the company's prices look good enough to withstand some downsizing. Its prices for a group of 50 items such as aspirin are 28 cheaper than Wal-Mart Stores, says Wells Fargo's Matt Nemer. Unfortunately, that isn't enough to keep all consumers happy. For items that come in standard sizes like eggs, consumers may not want to buy odd amounts. J.P. Morgan's Charles Grom notes that in a recent inflation cycle the company reduced the size of a string of Christmas lights when they became more expensive, and ultimately stopped selling the product. It also is possible to use lower-quality replacements, but consumers are savvy enough to notice shabby merchandise.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615175","date":"2011-01-27","texts":"NEW YORK -- The dollar weakened on the euro after the Federal Reserve's policy statement diminished the greenback's appeal to yield-seeking investors. The Fed kept interest rates unchanged at near zero and said it will see its 600 billion bond-purchasing plan through to completion in June. That stance, while not unexpected, did telegraph to market participants that U.S. interest rates wouldn't be increasing any time soon, weighing on the dollar. The euro broached 1.3700 following the statement -- and came within striking distance of two-month highs reached overnight -- from 1.3663 shortly before the announcement. Dollar now has weakened in seven sessions in a row, and it closed at the low for the year. This statement definitely keeps a lid on the dollar, said Phil Streible, senior market strategist at Lind-Waldock in Chicago. I thought there was a chance the Fed could at least mention the chance that we might eventually tighten policy, but we didn't see anything remotely like that from them.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615609","date":"2011-01-27","texts":"Author Paul Ziobro Higher commodity costs will dent Procter & Gamble Co. earnings by 1 billion in current fiscal year, double what it expected earlier. P&G's sobering assessment of rising world-wide commodity costs came after the world's largest consumer-products company saw gross margins fall to 51.8 in its second-quarter from 53.7 a year earlier. P&G's spot prices for production materials and energy are up more than 20 from last year, Chief Financial Officer Jon Moeller said Thursday. The higher costs come as P&G still grapples with weak demand for products in developed markets like the U.S. and Western Europe, where the economic recovery has lagged growth in emerging markets. P&G plans to offset the higher costs by raising prices in some markets and trying to sell more higher priced items. In terms of ability to pass through, we're really in a good position on that regard, P&G Chief Executive Bob McDonald said on an investor call.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613551","date":"2011-01-31","texts":"Author Robert A. Guth NEW YORK--Philanthropist Bill Gates Monday called for governments to continue investing in foreign aid, saying that failure to do so would destabilize the world. In an he has written the beginning of each of the last three years, Mr. Gates promoted the key initiatives he is pursuing as co-chair of the Bill & Melinda Gates Foundation, the world's largest private philanthropy. Woven throughout his letter was Mr. Gates's concern that the global financial crisis is crimping foreign-aid budgets. I believe it is in the world's enlightened self-interest to continue investing in foreign aid, Mr. Gates wrote in his letter. If societies can't provide for their people's education and basic health, then their populations and problems will grow and the world will be a less stable place, he wrote.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616920","date":"2011-01-31","texts":"Author Kristina Peterson NEW YORK Dow Jones--U.S. stocks are likely to extend their Friday tumble when the market opens on Monday, while Treasurys and the U.S. Dollar are expected to rise, as continuing violence in Egypt over the weekend spurs investors to seek safe haven assets. The events in Egypt have already prompted a rise in Treasury prices, a move that also benefited the dollar. Meanwhile, stock prices have fallen amid concern the violence in Egypt could spread to other countries in the Middle East or shut down the Suez Canal, potentially wreaking havoc on oil prices. On Friday, the Dow Jones Industrial Average fell 166.13 points, or 1.4, to 11823.70, its largest one-day drop in more than two months. The Standard & Poor's 500-stock index sank 23.20, or 1.8, to 1276.34, its biggest one-day drop since Aug. 11, 2010. Market volatility skyrocketed on Friday, sending the CBOE Volatility Index up 24 amid investor anxiety. The VIX is at levels unseen since Dec. 2. Investors nervous about instability gripping Egypt drove Middle Eastern stocks down sharply Sunday as markets reopened following a weekend of violent protests. The losses, led by a drop of more than 4 in regional business hub Dubai, reflect concerns the unrest that has roiled the Arab world's most populous country and nearby Tunisia could spread, jeopardizing an economic recovery across the region. Investor reaction will be further put to the test when Asian markets open this evening when Asian markets open and U.S. stock futures begin to trade.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615828","date":"2011-02-02","texts":"Author Robert Guy Matthews The impact of escalating steel prices in the U.S. is starting to filter through supply chains, with companies that buy and process steel raising their own prices, stockpiling in advance of possible more increases and boosting volume to offset rising costs. Steelmakers have increased prices six times, for a total increase of 20 to 30, since November on basic flat-rolled steel, used in everything from cars to toasters, to offset higher input costs of raw materials, such as iron ore and coal. Higher costs for steel, which are expected to continue well into this year, are hitting bottom lines of companies and prompting additional price increases. Caterpillar Inc., the world's biggest maker of construction and mining equipment, expects higher sales volumes and possible price increases on its own product to offset higher steel costs which represent less than 20 of its material cost. It also buys materials in advance when it expects prices to rise. We are always looking ahead, said Chief Financial Officer Edward Rapp. Emerson Electric has been increasing prices to its customers, redesigning some products and evaluating production processes to counter higher material expenses, which cost the company twice as much as anticipated and contributed to lower-than-expected profit from the quarter ended Dec. 31. Appliance makers like Whirlpool Corp., too, are feeling the pinch and have announced price rises of 8 to 10, although those full increases may be hard to pass on without losing market share to foreign rivals.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615604","date":"2011-02-03","texts":"Author Kristina Peterson Brendan Conway NEW YORK--Stocks advanced modestly as encouraging readings on retail sales outweighed worries over Egypt one session before Friday's monthly jobs report. The Dow Jones Industrial Average rose 20.29 points, or 0.2, to 12062.26, the highest close since the middle of June 2008. The advance was kept in check by Merck, which led decliners as it fell 92 cents, or 2.7, to 32.90, after swinging to a fourth-quarter loss. Earnings and revenue topped Wall Street's expectations, but the drug maker's forecast for full-year adjusted earnings fell below analysts' predictions. The Nasdaq Composite edged up 4.32, or 0.1, to 2753.88, the seventh advance in the past nine sessions. The Standard & Poor's 500-stock index added 3.07, or 0.2, to 1307.10, led by consumer discretionary stocks. The backdrop is the U.S. economy is still in an improving state, and the majority of the economic data support that, whether we're talking about retail sales or the GDP report, said Jason Pride, director of investment strategy at Glenmede Investment & Wealth Management.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615719","date":"2011-02-04","texts":"Author Allan H. Meltzer In the 1970s, despite rising inflation, members of the Federal Reserve's policy committee repeatedly chose to lower interest rates to reduce unemployment. Their Phillips Curve models, which charted an inverse relationship between unemployment and inflation, told them that inflation could wait and be addressed at a more opportune time. They were flummoxed when inflation and unemployment rose together throughout the decade. In 1979, shortly after becoming Fed chairman, Paul Volcker told a Sunday talk-show audience that reducing inflation was the best way to reduce unemployment. He abandoned the faulty Phillips Curve thinking that unemployment was the enemy of inflation. And he told the Fed's staff that while he thought highly of their work, he did not find their inflation forecasts useful. Instead of focusing on near-term output and employment, he changed the Fed's policy to put more emphasis on the longer-term reduction of inflation. That required a persistent policy that President Reagan supported even in the severe 1982 recession. We know the result Inflation came down and stayed down. The Volcker disinflation ushered in two decades of low inflation and relatively steady growth, punctuated by a few short, mild recessions. And as Mr. Volcker predicted, the unemployment rate fell after the inflation rate fell. The dollar strengthened. That was not unprecedented. The Phillips Curve often fails to forecast correctly. Spanish inflation has increased in the last year while the unemployment rate rose above 20. Britain also has rising inflation and rising unemployment. Brazil lowered inflation and unemployment together. There are many other examples if only the Fed would look at them.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617147","date":"2011-02-04","texts":"NEW YORK -- The dollar gained sharply against the euro Thursday after European Central Bank President Jean-Claude Trichet threw cold water on the idea the central bank would soon embark on the path of increasing key rates. The greenback got an extra boost against its rivals on Federal Reserve Chairman Ben Bernanke's slightly more optimistic tone on the pace of the U.S. recovery, with the Fed chief issuing what investors interpreted as a more rosy assessment of the labor market. Stronger-than-expected economic data, along with a flight to safety as tensions in Egypt flared, also added to the dollar's banner day, in which the ICE Dollar Index, which tracks the greenback against a trade-weighted basket of its peers, gained nearly 1. The sea change from Trichet remains the most interesting thing to markets today, said Brian Dolan, chief currency strategist at Forex.com in Bedminster, N.J. Investors had interpreted recent talk from the euro zone's chief central banker to mean the ECB could soon act to strangle rising inflation. Instead, Trichet issued a steady-on statement. The euro fell swiftly against the dollar and yen as Mr. Trichet said current interest rates remain appropriate and the current policy stance is accommodative.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615749","date":"2011-02-07","texts":"YAHOO Software Being Developed For Mobile Content YahooInc., seeking to improve its presence on mobile devices, is developing software that would help mobile applications deliver so-called personalized content, such as news and entertainment articles, that differs based on each user's interests, according to people familiar with the matter. The initiative, which could be announced as early as the Mobile World Congress in event Barcelona, Spain, later this month, could be used to boost mobile apps created by Yahoo as well as those developed by third-party content publishers on smartphones and tablets, these people said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614554","date":"2011-02-08","texts":"Author Jonathan Weisman Damian Paletta WASHINGTON--President Barack Obama's budget proposal is expected to give states a way to collect more payroll taxes from businesses, in an effort to replenish the unemployment-insurance program. The plan could cause controversy at a time when the administration is seeking to mend fences with corporate America. The proposal would aim to restock strained state unemployment-insurance trust funds by raising the amount of wages on which companies must pay unemployment taxes to 15,000, more than double the 7,000 in place since 1983. The plan, which would take effect in 2014, could increase payroll taxes by as much as 100 billion over a decade, according to a person involved in its construction. By proposing to enlarge the pool of wages subject to unemployment taxes, the White House appears to be offering states a more politically palatable way to raise revenues than to boost tax rates. States could keep the tax rates they have, or even lower them somewhat, and still raise considerably more revenue than they are raising now.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615512","date":"2011-02-08","texts":"Author Brad Schiller The latest employment reports have not been encouraging. At the rate of 36,000 new jobs a month--the number gained in January--we will never get back to full employment. Even if we keep adding jobs at the December rate of 121,000 new jobs, we wouldn't achieve full employment in this millennium. President Obama has urged us to be patient with this jobless recovery. But it's worth asking how long it will take to get back to the employment levels we experienced before the recession of 2008-09. How patient will we need to be Consider the math of full employment. We now have a labor force of 153 million people, of whom 14 million are officially counted as unemployed, defined as not working and actively seeking a job. Were we fully employed defined as 5 unemployment there would be 7.7 million unemployed workers. So our excess unemployment currently hovers around 6.3 million workers. That number is our initial target for job creation. The trouble is that it's a moving target.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614627","date":"2011-02-09","texts":"Author Neil Shah NEW YORK--The euro drifted higher against the dollar after sliding sharply in European trading, as the currency surmounted worries about the European Central Bank's inflation-fighting acumen and the region's debt woes. German central bank chief Axel Weber's decision to no longer seek the presidency of the European Central Bank sparked fears that the ECB's next leader may lack a strong stance against rising price pressures. Central banks raise key interest rates to cool off inflation, and higher rates can push a currency's value higher. But traders shrugged off their fears, along with comments by Federal Reserve Chairman Ben Bernanke acknowledging the U.S. central bank might end its 600 billion bond-buying program before its expected end in June. Mr. Bernanke's comments briefly boosted the dollar against the euro. After dipping to 1.3610, the euro climbed to a high of 1.3745 before easing off. Interest rates on U.S. Treasury bonds dipped after a strong sale of U.S. government debt, pushing the euro higher against the dollar. Investors, meanwhile, are still hoping that European leaders will map out a strategy for financing struggling euro-zone nations.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616006","date":"2011-02-09","texts":"Republicans on Capitol Hill responded with hostility Tuesday to a White House proposal to allow cash-strapped states to raise unemployment-insurance taxes. But in some states struggling with rising debt and empty coffers, officials said the plan should be considered. Administration officials say the proposal, to be included in President Barack Obama's budget plan for the next fiscal year, is intended to help states that so far have borrowed 42.4 billion from the federal government to keep benefits flowing after exhausting the reserves used to pay unemployment benefits. Some of those 31 states have borrowed so heavily, and repaid the loans so slowly, that they triggered automatic tax increases designed to reimburse the federal government. Already, employers in three states -- Michigan, Indiana and South Carolina -- are paying higher federal unemployment taxes because of state debts to Washington. More than half the states could be hit by the end of the year. It is unclear whether trade groups and state GOP leaders will favor the deal and pressure congressional Republicans at least to negotiate over the plan, especially as employers in more states incur penalty taxes. An Obama administration economist said those rising taxes would feel like a gun to the head of employers in those states.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616335","date":"2011-02-09","texts":"NEW YORK -- The consumer sector led U.S. stocks to fresh 2frac12-year highs after McDonald's reported strong January sales. The Dow Jones Industrial Average added 71.52 points, or 0.6, to 12233.15, the highest close since June 16, 2008. It was the seventh increase in a row, the longest win streak since one that ended in July 2010. McDonald's jumped 1.91, or 2.6, to 75.36, after the fast-food chain said sales at stores open more than a year rose 5.3 in January from a year earlier, topping the 3.1 rise expected. It cited the diversity of its menu and the addition of oatmeal to it. The Nasdaq Composite Index rose 13.06, or 0.5, to 2797.05, the highest close since Nov. 6, 2007. The Standard & Poor's 500-stock index added 5.52, or 0.4, to 1324.57, the highest close since June 19, 2008. The consumer sector was the best-performing category in the S&P 500, with McDonald's giving a boost and Urban Outfitters also strong. Shares of the teen retailer leapt 1.95, or 5.6, to 37.06, after Citigroup raised its stock rating to hold from sell, noting inventory and sales growth are getting more in sync.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614969","date":"2011-02-10","texts":"MetLife Inc.'s fourth-quarter profit slumped 74, mostly because of wider losses tied to its financial-hedging program, but the big life insurer posted a stronger-than-expected gain in operating earnings. Rival Prudential Financial Inc. also posted a steep quarter-over-quarter decline in net income and higher-than-expected operating profit, with sales of its retirement-income annuities continuing at a heady pace. MetLife's U.S. operating earnings, which exclude capital gains and losses, fell about 5 as premiums, fees and other revenue declined about 8. But in international markets, premiums surged 75 because of growth in MetLife's businesses and its purchase of Alico, a major life-insurance unit, from American International Group Inc. In November, MetLife significantly expanded its footprint in Asia, Europe and Latin America as it closed the 16.2 billion deal. MetLife posted a profit of 82 million, or five cents a share, compared with 320 million, or 35 cents a share, a year earlier. Operating earnings, which exclude capital gains and losses, rose to 1.14 a share from 96 cents a share. Operating revenue rose 6.7 to 14.21 billion. Analysts surveyed by Thomson Reuters predicted operating earnings of 1.10 a share and operating revenue of 13.5 billion.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615094","date":"2011-02-10","texts":"The euro's gyrations this year have taken hedge funds by surprise, saddling some of the biggest names in the currency markets with losses. FX Concepts, an 8 billion currency-focused hedge fund in New York, struggled with losses as Europe's shared currency unexpectedly surged last month. Other hedge funds in the U.S. and Europe, including Bridgewater Associates Inc. and Moore Capital Management, also have stumbled recently, several investors and bankers say. For months, Wall Street banks have recommended that investors sell the euro while buying higher-yielding currencies, such as those of emerging-market economies. So far, these bets haven't panned out. Sentiment on the euro changed suddenly and sharply in the middle of January as European leaders moved closer to working out details of a beefed-up fund to help finance struggling nations, and the European Central Bank even indicated it may raise interest rates sooner than expected. That would attract investors to euro-denominated assets. Money managers scrambled to buy euros to close out their bearish bets, sending the shared currency higher.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615391","date":"2011-02-10","texts":"Author Kana Inagaki TOKYO--The dollar could fall to a record low against the yen this year if a gradual economic recovery in the U.S. runs out of steam or inflation concerns spread from emerging economies to still-fragile regions such as Europe, a fund manager at a unit of Asia's second-largest hedge fund said Thursday. The main scenario remains that the U.S. economy will further expand ahead of next year's presidential election, Fumihito Akiyama, a fund manager at the asset-management unit of Sparx Group Co., a Japanese hedge fund with 8.1 billion in assets, said in an interview. But Mr. Akiyama said investors must acknowledge the risk of a sharp fall in the dollar in the event of a surprise deterioration in U.S. macroeconomic data or a third round of quantitative easing by the Federal Reserve--possibilities ruled out by many in the market. He added that safe-haven flows into the yen could push the dollar below its record low of 79.75 yen against the Japanese currency in 2011 if inflation fears spread from rapidly growing emerging countries to other parts of the global economy.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615103","date":"2011-02-11","texts":"Author Mary Anastasia O'Grady Philadelphia Federal Reserve Chairman Ben Bernanke was on Capitol Hill this week to answer critical questions about monetary policy, amid rising bond yields and sharply higher commodity prices. Mr. Bernanke showed no self-doubt, and Friday's resignation of Fed Governor Kevin Warsh, one of the board's inflation watchdogs, means that Mr. Bernanke's easy-money inclinations will have even fewer internal checks. Enter Charles Plosser, the president of Philadelphia's Federal Reserve bank. A former dean of the William E. Simon School of Business at Rochester University, Mr. Plosser is widely known as an inflation hawk. And this year he has a vote on the Federal Open Market Committee FOMC, which sets monetary policy. He's now a man to watch. One of the most perplexing questions for the Fed these days concerns the continuation of QE2, its second round of quantitative easing, which will dump 600 billion in new money into our banking system over the first half of this year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613849","date":"2011-02-15","texts":"Author Stephen L. Bernard NEW YORK--The dollar rose to the strongest point in nearly two months against the yen as traders remained upbeat about U.S. economic growth despite a disappointing report on retail sales. The U.K. pound was among the best-performing currencies after the latest inflation reading bolstered expectations for an interest-rate increase in the coming months. The euro traded in a volatile but tight range after news that gross domestic product in the bloc of euro-using nations rose 0.3 in the fourth quarter from the third quarter. That matched the pace in the third quarter. Traders largely brushed aside news that U.S. retail sales rose by 0.3 in January, only half of what economists expected. Major snowstorms across much of the country last month likely kept shoppers at home. Fundamentals for expansion in the U.S. economy remain in place despite the temporary slowdown in retail sales growth, analysts said.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617329","date":"2011-02-15","texts":"Author John D. McKinnon Proposed tax increases for businesses and high earners that play a big role in the president's budget outline have a slender chance of passing Congress this year. But some business and anti-tax groups worry the measures could re-emerge as presidential bargaining chips in an eventual budget deal with Republicans. President Barack Obama's budget largely restates proposals he has pushed since taking office that have troubled many in the business community. The plan comes after several months of administration efforts to mend relations with business and the president's call last month for a corporate-tax overhaul. Rather than offer a tax-overhaul plan, the budget includes numerous measures that, on net, would raise taxes on businesses and high-income individuals by about 327 billion during the next decade.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614346","date":"2011-02-17","texts":"SHANGHAI -- China said it will allow yuan foreign-exchange options to be traded domestically starting in April, a long-awaited move to give companies more hedging ability -- part of Beijing's broader push to build a more sophisticated currency regime. Chinese authorities have rolled out a raft of changes in recent months to give businesses more tools to guard against a possible rise in the value of the yuan. The government also is expanding the use of the currency outside China for both trade and investment, steps toward its goal of eventually transforming the yuan -- long traded only inside China -- into a major global currency. Ultimately, the recent changes could make it easier for the government to allow faster appreciation of the yuan, which has strengthened 3.6 against the dollar since Beijing unpegged it from the dollar in June -- a far slower rise than the U.S. and other foreign governments want. The move comes as the debate between the U.S. and China heats up over whether Beijing's slow policy response on foreign exchange is exacerbating inflation. Treasury Secretary Timothy Geithner said at a Senate hearing on Wednesday he thinks China's policy makers have decided to allow the yuan to rise. He said that, when inflation is factored in, the yuan was strengthening quickly against the dollar. Because their inflation rates are so much higher than ours, it's actually appreciating in real terms against the United States at a rate -- if continued -- roughly 10 a year or more, Mr. Geithner said. If that were sustained, that would bring about a major shift in the competitive balance in our favor over time, which is necessary and important not just to us but for all of China's trading partners.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614474","date":"2011-02-22","texts":"From Wal-Mart Stores Inc. to Kohl's Corp. and Gap Inc., almost every major retailer reports fiscal fourth-quarter earnings this week, and the results will be the final word on whether holiday shoppers were naughty or nice to the country's chain stores. Despite cold, snowy weather that walloped major swaths of the country in January, and uneven sales throughout the sector in December, the early consensus is that retailers for the most part posted solid earnings growth for the quarter. That's due in part to a robust November that lured shoppers with discounts galore as well as the retailers' ability to keep inventories and expenses in line after having tough lessons learned during the recession. That's the good news. With mounting prices on everything from fuel and food to cotton, retailers still are expected to offer muted full-year earnings guidance for 2011. Broad inflation hasn't beset clothing makers and sellers in almost two decades and rising costs will pose a quandary for stores Do they pass those higher costs onto still-strapped consumers, who may in turn buy less Or do they absorb some of the cost and take a hit to their gross profit margins The first half of the year poses additional challenges, particularly for department stores and discounter Target Corp. They will be lapping their toughest sales comparisons from a year ago. Most companies will provide conservative, cautiously optimistic guidance due to increasingly tough comparisons, erratic consumer spending trends with a growing divide between wealthy and poor and perhaps most importantly, apparel inflation, Bill Dreher, retail analyst at Deutsche Bank, wrote in a recent report.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614844","date":"2011-02-24","texts":"Author Dhanya Ann Thoppil BANGALORE - Infosys Technologies Ltd. is looking to spend up to 200 million to acquire companies in the U.S. in its bid to secure large government contracts, its chief financial officer said, as the Indian technology firm looks to boost its presence in the world's largest outsourcing market. We have started operations of a new subsidiary in the U.S. Probably we can look at a small acquisition to kick-start it, Chief Financial Officer V. Balakrishnan said in an interview Wednesday at the company's headquarters. Unlike its peers, Infosys Technologies, India's second-largest outsourcing firm by revenue after Tata Consultancy Services Ltd., has been maintaining a cautious stance on the global economic recovery. Despite worries over high unemployment in the U.S. and the debt crisis spreading across Europe, the company believes the U.S. market continues to grow and represents opportunities for Indian outsourcing firms. Research firm Forrester Research Inc. expects U.S. business and government purchases of information and technology outsourcing and consulting services to total 389 billion this year. The Nasdaq and Mumbai-listed company set up a U.S. unit called Infosys Public Services Inc. last year in a bid to tap into the U.S. government's multi-billion-dollar healthcare and defense markets. Infosys is looking to buy a company which has a license to engage with the federal government, especially in defense projects, it said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615948","date":"2011-02-24","texts":"Author Justin Lahart A sustained and significant rise in oil prices could derail the U.S. economic recovery by stirring inflation and putting the brakes on spending. Oil futures touched 100 a barrel at the New York Mercantile Exchange Wednesday--the highest since before the financial crisis hit in late 2008--before pulling back. Pricier oil drives up the costs of everything from gas at the pump to the raw materials used to make nylon and food packaging. That could mean higher inflation and prompt consumers, who lately have shown more willingness to spend, to cut back their purchases. Oil prices have risen 7.35 since the beginning of the year, while gasoline futures have risen 10.67. The question now is whether turmoil in the Middle East and Northern Africa could lead to a sustained cutback in production or delivery disruptions that could drive those prices much higher and push the U.S. as well as other countries back into recession. Supply-driven oil shocks, like the ones that came with the 1973 oil embargo and the 1979 Iranian revolution, were factors in past recessions.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614507","date":"2011-02-27","texts":"Author Andrew J. Johnson NEW YORK--A hawkish tone from European Central Bank President Jean-Claude Trichet at the central bank's policy meeting this coming week could push the euro toward 1.40, analysts expect, but the impact of Middle East upheaval on currencies remains a wild card. The dollar will likely remain under pressure as market participants mull whether the U.S. Federal Reserve could extend its quantitative-easing measures, after some weaker-than-expected U.S. growth data. The Federal Reserve is also likely to keep interest rates low for an extended period, a view that may be underscored by Fed Chairman Ben Bernanke's testimony for lawmakers scheduled for Tuesday and Wednesday. The end of the week brings the all-important monthly U.S. employment report. St. Louis Federal Reserve President James Bullard, a nonvoting Fed member this year, said Thursday that a third Fed bond-buying effort isn't off the table, given tensions in the Middle East and rising oil prices as well as ongoing concerns about the financial health of some euro-zone governments, all of which could weigh on global economic growth.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614178","date":"2011-02-28","texts":"Asian markets were mostly lower early Monday as a surge in oil prices amid continued worries over the turmoil in the Middle East, and news China is targeting lower growth over the next five years, dampened sentiment. Japan's Nikkei Stock Average was off 0.6, Australia's S&PASX 200 was down 0.3 and South Korea's Kospi Composite was off 1.3. New Zealand's NZX-50 was up 0.3. In Hong Kong, the Hang Seng Index was down 0.5. The Shanghai Composite Index was down 0.4 and the Shenzhen Composite Index was 0.5 lower. Comments on Sunday from China's premier Wen Jiabao that the government wants slower economic growth to avoid inflation and to restructure the economy hurt the growth-sensitive Australian dollar and depressed the Tokyo stock market. The comments suggest further, multipronged monetary tightening, more curbs on the real estate market, and a stronger yuan, Credit Agricole said in a note to clients.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616099","date":"2011-03-02","texts":"Emerging-market currencies have paid off for many investors lately. But analysts warn that investors shouldn't be lulled into thinking the good times will necessarily last. On the upside, rapid economic expansion in developing countries should continue to bolster their currencies -- good news for investors in stocks and bonds from those countries. Many countries, though, are fighting the appreciation of their currencies, mainly because it makes their exports less competitive and encourages imports that compete with domestic products. Some have imposed restrictions on capital flows, and others have sold their own currencies in the foreign-exchange markets. How serious developing countries are in those efforts will go a long way toward determining how their currencies fare over the long run. Even with the capital controls, I don't think you are going to be able to stem the overall appreciation trend, says New York-based Joyce Chang, J.P. Morgan & Co.'s global head of credit and emerging-markets research. But we're not expecting the same kinds of returns that were achieved in 2010, she says.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616089","date":"2011-03-03","texts":"Ho Chi Minh City, Vietnam -- The TV screen in a hotel room in Singapore a fortnight ago poured out awful images from New Zealand's Christchurch earthquake. A week later, in Saigon, the earthquake had given way in the news to images of fighting in the streets of Libya. So this, too, is the global village, the whole world watching the same disasters and dramas over dinner. But a Libya isn't quite the same story in Vietnam as in the U.S. America's great-power status obliges that the center of concern is the U.S. response. In emergent Vietnam, whose 89 million people make it the world's 13th largest nation, the bigger concern is whether its rapidly inflating currency, the dong, at about 20,000 dong to the dollar, will slow this nation's march to economic power. Don't count on it. No one in Vietnam is marching to the future. There's nowhere to walk here, explained a waitress in a Saigon restaurant. The sidewalks are covered with motorbikes. Saigon has been described as a city of nine million people and 30 million motorbikes. That's an understatement. It is an infinity of motorbikes. Imagine an entire city population riding atop a 100cc Honda or Yamaha. It's impossible to imagine unless you see it. One is engulfed by motorbikes seconds away from Ho Chi Minh City airport HCMC is the city's official name, and though busts and portraits of Uncle Ho abound in public buildings, I never heard anyone in Saigon call it Ho Chi Minh City. Saigon sprawls, like Los Angeles, and virtually every street, from end to end, from morning into the night, is filled with someone on a bike, often with baby sitting in front, holding the handlebars, faces wrapped in large pollution masks, going somewhere, at 35 mph. There are cars and trucks, but they look like whales surrounded by schools of fast fish. Welcome to Vietnam, the motorbike economy -- adept, efficient, always in forward gear.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616887","date":"2011-03-03","texts":"Author V. Phani Kumar in Hong KongAnd Shri Navaratnam Puja Rajeev in Singapore Please see Correction . Most Asian markets advanced Thursday, with South Korean equities staging a strong rebound as foreigners turned buyers and snapped up beaten-down stocks, while Chinese banks helped lift Hong Kong shares on an upbeat earnings outlook. Japan's Nikkei Stock Average added 0.9, Hong Kong's Hang Seng Index climbed 0.3, South Korea's Kospi jumped 2.2, Australia's S&PASX 200 inched up 0.1 and Taiwan's Taiex finished 1.4 higher. Regional sentiment was underpinned by Wednesday's modest rise on Wall Street, an increase in U.S. index futures, the Federal Reserve's Beige Book report of an improving U.S. economy and accelerating European manufacturing activity.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617170","date":"2011-03-03","texts":"Author Andrea Tryphonides Polya Lesova LONDON--European stocks finished in the black as upbeat U.S. economic data offset a statement by the head of the European Central Bank that an interest-rate increase next month is possible. On Thursday, the central bank left interest rates on hold at 1, but the euro spiked versus the dollar after ECB President Jean-Claude Trichet made clear his willingness to raise rates to counter inflation. The ECB is ready to take a first pre-emptive strike against inflation and possible second-round effects next month, said Carsten Brzeski, economist at ING Bank. Only a new banking crisis or further surging oil prices could probably throw a monkey wrench in the ECB's plans. The ECB's hawkishness of recent weeks was no bluff. Barking dogs will bite. The Stoxx Europe 600 index ended up 0.3 at 283.58, off its high for the day of 285.80.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614318","date":"2011-03-04","texts":"Mortgage rates eased again last week, with long-term rates continuing their decline from a high for 2011 set three weeks ago, according to Freddie Mac's weekly survey. Rates had been on the rise early this year, last month hitting the highest point since April after slumping most of last year in tandem with Treasurys, which fell on the uncertain economic backdrop. Mortgage rates generally track Treasury yields, which move inversely to prices. Freddie chief economist Frank Nothaft cautioned that housing demand still remains weak. Mr. Nothaft noted that new-home sales in January neared the lowest point since at least 1964, when data collection began, according to the Census Bureau.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614976","date":"2011-03-04","texts":"Stock-market bulls barreled through fears of 100 oil, seizing instead on encouraging U.S. economic reports to push the Dow industrials to 12258.20, up 191.40 points, or 1.6. Investors sold off gold for the first session in four and Treasurys fell, lifting yields to a two-week high. --- The U.S. and Mexico unveiled an agreement that seeks to end a nearly 20-year ban on Mexican trucks crossing the U.S. border. --- The ECB's Trichet signaled that the central bank could raise euro-zone interest rates next month, in what would be the first increase since 2008.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615593","date":"2011-03-04","texts":"Author Tomi Kilgore The government's February payrolls report looks like it might finally be the game-changer that Wall Street has been waiting for. Investors have been skittish in recent weeks as Mideast turmoil and fluctuations in oil prices assaulted hopes that the U.S. economy is on the cusp of self-sustained growth. Major stock indexes responded by falling hard last week and powering back in recent days, indicating the market appears to have reached a crossroads. The current pattern is a tug-of-war between the bull trend of the past three months and the possibility of a correction, said RBC Wealth Management technical analyst Bob Dickey. The highly anticipated data from the Department of Labor, scheduled to be released at 830 a.m. New York time today, could give bulls and bears alike the cues they have been waiting for. Investors rallied ahead of the report with Thursday's near-200-point jump in the Dow Jones Industrial Average, with some betting the report might beat projections after a string of disappointing monthly reports.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616412","date":"2011-03-04","texts":"Stock-market bulls barreled through fears of 100 oil, seizing instead on encouraging employment and service-sector numbers to push the market to its biggest one-day gain in three months. The Dow Jones Industrial Average gained 191.40 points, or 1.59, to 12258.20. Investors sold off gold for the first session in four, and Treasurys fell, lifting yields to a two-week high. Yields rise when prices fall. The stock gains helped the Dow recover some of the losses incurred last week, when the blue-chip index dropped more than 260 points, its worst week since August. That drop was driven by worries that tensions in Libya, Saudi Arabia and the rest of the Arab world would push oil prices higher, fueling inflation and squelching the U.S. economic recovery. It also coincided with a consensus among investors that the market was due for a pullback after the powerful stock rally since late August. But many investors are starting to believe the U.S. economic recovery is resilient enough to withstand triple-digit oil prices, especially with the Federal Reserve still propping up the economy. Crude oil edged 0.3 lower to 101.91 a barrel in New York Mercantile Exchange trading on Thursday, after jumping from less than 90 just two weeks ago.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615248","date":"2011-03-05","texts":"Author Jared A. Favole WASHINGTON--President Barack Obama on Saturday said he is willing to make further spending cuts as his administration hashes out differences with Republicans to keep the government funded for the remainder of the year. Mr. Obama, in his weekly radio address to the nation, said Republicans and Democrats need to find a solution because the U.S. can't do business two weeks at a time. It's not responsible, and it threatens the progress our economy has been making. The president this week signed into law a budget that will fund the government for the next two weeks. He ordered Vice President Joe Biden and other administration officials to broker a deal with Congressional leaders to fund the government through 2011. Republicans have proposed about 62 billion in current spending cuts, while the White House and Democrats have proposed about 50 billion in cuts. The majority of the cuts from Democrats, and the White House, are compared to Mr. Obama's fiscal 2011 budget request. Congress never passed that request.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613477","date":"2011-03-06","texts":"Venture capitalists never know for sure which energy innovations will succeed, but they've learned a lot about what it takes to give them a chance. The Wall Street Journal's Kimberley A. Strassel discussed the makings of a successful venture with Ray Lane, managing partner at Kleiner Perkins Caufield & Byers, and Matthew Rogers, a McKinsey & Co. director and former senior adviser to the secretary of energy for Recovery Act implementation. Here are edited excerpts of their conversation. MS. STRASSEL People have come to understand over the past year or two that sometimes energy projects are incredibly capital-intensive, a billion dollars sometimes to create a plant, and sometimes it's going to take seven or eight or years to build one of those. How does a venture-capital market evaluate the risk of that, and do they have the patience and time to do those kinds of investments MR. ROGERS You're going to have to think through how you deal with existing infrastructure, because you're going to try and displace it in a finite market. You're going to have to understand where all the capital is going to come from during the life cycle, because otherwise it doesn't make sense for a venture capitalist. The idea is to take a lot of risk in an early stage and hope you have enough ownership and liquidity to get a 10X return, because you're going to have a lot of losers in the portfolio. MS. STRASSEL Can venture capital do this alone, though","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616218","date":"2011-03-06","texts":"Author Dennis K. Berman NEW YORK--The head of Government of Singapore Investment Corp., one of the world's most active sovereign-wealth funds, said Americans are being too hard on themselves and have failed to recognize the resilience of the U.S. economy. In an interview with The Wall Street Journal, GIC Executive Director Tony Tan Keng Yam said negative sentiment is a problem when I talk to Americans. They don't see the potential in their own economy, which is one of the most innovative, open economies in the world. Foreigners seem more optimistic. Dr. Tan, trained as a physicist and mathematician, said he expected that the U.S. economy would grow above trend at a rate of between 4 and 4.5. That would outpace the 3.3 forecast for 2011 by economists surveyed by The Wall Street Journal. GIC has invested more than 100 billion of government reserves into a portfolio of stocks, commodities, bonds and private-equity stakes. More than one-third of the sovereign-wealth fund's total holdings are in the U.S., Dr. Tan said, adding that GIC would continue to invest here.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616806","date":"2011-03-06","texts":"Author Javier E. David NEW YORK--The Federal Reserve's bias for loose monetary policy is likely to keep the dollar trapped in a downdraft this week, just as hawkishness on inflation and looming interest-rate increases in Europe enhance the euro's luster. Low U.S. interest rates and the possibility of an oil-driven jump in inflation have deprived the dollar of safe-haven investment flows that usually benefit the currency during times of global unrest. Risk-aversion will likely continue to benefit the Swiss franc and Japanese yen, for now. Investors are searching for currencies that offer both stability and higher yields, which makes the euro a comparatively attractive bet. Meanwhile, the dollar is on the defensive because of the Fed's controversial bond-purchase program, known as quantitative easing or QE2, which is keeping yields low on dollar-denominated assets.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615000","date":"2011-03-07","texts":"Author Donna Kardos Yesalavich Kristina Peterson Stocks fell Monday as investors continued to fret over the potential impact of rising oil prices amid more turmoil in Libya, while the technology sector was also hurt by an analyst downgrade. The Dow Jones Industrial Average dropped 79.85 points, or 0.7, to 12090.03. Chip giant Intel was among the measure's weakest components, off 1.6, after Wells Fargo cut its view of the semiconductor sector to market weight from overweight for the first time in more than two years. Still, the bank called the move more an indication of a more moderate though still optimistic view of the sector rather than any active concern about the chip stocks as a group. Boeing also weighed with a 1.3 drop after its rival, European aircraft manufacturer Airbus, said it is confident about maintaining its share of global sales of commercial aircraft and expects a continued expansion in demand in the Asia-Pacific region. The Standard & Poor's 500-stock index shed 11.02, or 0.8, to 1310.13, with its technology and materials sectors leading the drop. The technology-heavy Nasdaq Composite got hit even harder, down 39.04, or 1.4, to 2745.63.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616597","date":"2011-03-10","texts":"Author Serena Ng American International Group Inc., once hobbled by its bets on the mortgage market, is trying to buy back a large portfolio of subprime mortgage bonds from the Federal Reserve Bank of New York, which acquired the securities as part of the insurer's massive bailout in 2008. AIG on Thursday offered to pay 15.7 billion for all the securities in a company called Maiden Lane II LLC, the insurer said in a regulatory filing. The company is hoping to use cash from its insurance businesses, mainly its life-insurance units, to buy the mortgage bonds, which are yielding relatively attractive returns in today's low-interest-rate environment. It is unclear if the central bank will accept the offer. Any decision on a possible disposition of these assets will be made in a way that maximizes the proceeds to the taxpayer and that is consistent with the goal of fostering financial stability, the Federal Reserve said in a statement released Friday morning. The Fed noted it has been aware of AIG's interest in the Maiden Lane II assets for some time. The New York Fed set up Maiden Lane II in late 2008 to purchase from AIG roughly 800 securities backed by mostly subprime home loans the move stemmed the insurer's cash bleed from a business known as securities lending.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616400","date":"2011-03-15","texts":"Author Ian Talley Tom Barkley WASHINGTON--China appeared to be a net seller of U.S. Treasurys for the third month in a row during January, but remained the largest foreign holder, the Treasury Department said. Meanwhile, Japan continued its net buying of Treasurys, hitting another record. Overall, foreigners were net buyers of long-term U.S. financial assets in January, according to the monthly Treasury International Capital report, known as TIC. TIC data showed China slimmed its net holdings by 5.4 billion to 1.155 trillion in January, following net selling of 4.0 billion in December and 11 billion in November. The biggest owner of U.S. debt hit a record 1.175 trillion of holdings of U.S. Treasury securities in October. But China likely uses proxies in the U.K. and elsewhere to purchase Treasurys, making monthly TIC data an unreliable indicator of China's demand, many observers believe. The Treasury Department last month revised China's holdings of Treasurys upward by hundreds of billions of dollars, or nearly 30, and cut the U.K.'s holdings by a similar amount. Japan remained the second-largest foreign holder of Treasurys, boosting its holdings to 885.9 billion from 882.3 billion in December. Some in the market are concerned that, following a series of disasters beginning with Friday's earthquake, Japanese insurance companies will need to sell Treasurys to pay claims in the months ahead and that Japan's government will have less appetite for buying Treasurys. But Treasurys haven't been affected so far, and the ultimate impact of the disaster on U.S. government bonds is unclear.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617414","date":"2011-03-15","texts":"Author Lynn Cowan The U.S. IPO market is likely to grind to a standstill until broader market indexes settle down amid continuing crises in the Middle East and Japan, with the delayed launch of private-equity firm Apollo Global Management LLC one early example of sputtering deal flow. Unrest in Libya and an escalating nuclear-plant malfunctions in Japan following that country's earthquake last week have weighed on the markets, with global exchanges tumbling Tuesday, including major U.S. indexes. That isn't a welcoming environment for initial public offerings, which are considered a higher-risk security class, say investment bankers and analysts. These deals require a lot of stability, said Ben Holmes, president of IPO research firm Morningnotes.com. Apollo Global Management, which had been expected to set its IPO terms such as a price range on Tuesday, instead decided to wait to see if broader markets settle down, according to people close to the deal. IPO terms are usually set a few weeks ahead of a deal's launch, so Apollo was likely aiming to go public in early April.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614169","date":"2011-03-16","texts":"BOISE, Idaho -- Before the recession hit, Idaho, Nevada and Utah had some of the lowest rates of food stamp use in the nation. It was a boom time in a region that has always prided itself on self-reliance and a disdain for government handouts. But since the recession began, these three states have the fastest growth rates in the nation of participation in the federal program, recently released figures show. Utah saw a nearly 34 jump in food-stamp participation in December from the same month a year earlier, according to the U.S. Department of Agriculture. Nevada had the second fastest growth rate at 25, followed by Idaho at 24. For the fiscal year ended Sept. 30, those three states plus Wyoming ranked among the top 10 in food-stamp growth, with Idaho leading with a 42 jump from 2009, according to USDA figures. It's a striking shift for the area, reflecting a post-boom fallout that has been compounded by the many new residents drawn to the region by a hot economy who lacked a support network when jobs disappeared. This is a pick-you-up-by-the-bootstraps type of state, which is why the food-stamp participation has historically been low, said Rose Andueza, program manager of Idaho's Division of Welfare. But I think now people have just run out of options.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615578","date":"2011-03-19","texts":"Sacramento -- California has led the nation in so many ways, so it seems fitting that it is now showing the rest of us what the collapse of an overburdened welfare state looks like. In January, Democrat Jerry Brown returned to the governor's office he left 28 years ago. He assured voters that as a seasoned government hand he wouldn't repeat the mistakes made by his novice predecessor, Republican Arnold Schwarzenegger. Mr. Brown had shown a pragmatic, pro-business streak during the two terms he served as mayor of Oakland from 1999 to 2007. Many Californians hoped that at age 72 Mr. Brown would be the first Golden State governor since before Ronald Reagan without his eye on the presidency -- and thus could make tough decisions despite the opposition of entrenched special interests. The state certainly needs bold action It faces an immediate 26.6 billion deficit. David Crane, a financial expert who worked for Mr. Schwarzenegger, estimates that the state's public- pension obligations could be as high as half a trillion dollars. California's credit rating is the worst in the country, and it's unlikely to return to pre-recession employment levels until the end of this decade. Mr. Brown has, at best, a mixed record so far. He won points for keeping a campaign promise and refusing to push for tax increases without having them approved by voters. But his plan to close this year's deficit -- with a combination of spending restraint and extensions of temporary tax hikes on income, sales and vehicles -- has faltered. It looks as if the special election to pass this plan, currently scheduled for June 7, will either be delayed or not held at all due to inaction by the Democratic legislature. To get his plan on the ballot, Mr. Brown needs the votes of two Republicans in both the state Assembly and the Senate to satisfy the two-thirds requirement for tax increases. He's unlikely to get official cooperation from the GOP unless he gives on something significant, like pension and regulatory reform. Otherwise, he'll have to target individual Republicans with inducements.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615816","date":"2011-03-20","texts":"Author Mark Gongloff Just when markets seemed headed back to normal, the risk onrisk off trade has come roaring back. Across financial markets, trading patterns more commonly seen in 2010 are returning. Stocks and the dollar are consistently moving in opposite directions, as are stocks and Treasury securities. It is a trading pattern that was common for much of 2010 as investors swung in and out of markets en masse-buying risk on investments like stocks when they felt brave, and risk off assets such as Treasurys and the dollar when they wanted safety. That pattern broke down earlier this year, in what some had seen as a return to normalcy. But the tensions in the Middle East and nuclear crisis in Japan have seen it return, frustrating investors who are seeking to trade on fundamental factors instead of headlines. The U.S. and coalition military strikes in Libya that began this weekend could become yet another flashpoint for worry.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616667","date":"2011-03-20","texts":"Author Kelly Evans Not all real estate is in the dumps. Housing data due this week aren't likely to be encouraging. Figures Monday are expected to show sales of existing homes fell nearly 4 in February from January. On Tuesday, the government's index of home prices is forecast to register its seventh drop in eight months. And on Wednesday, economists anticipate new home sales in February will post a monthly increase of about 2 monthly increase, which will do little to dent January's nearly 13 decline. Partly because of this, the rental market is heating up. Average U.S. apartment vacancy rates dropped to 6.6 last year from 8, according to property-research firm Reis, while rents rose 2.3. This has developers salivating over the potential for a multiyear rental boom. After all, the glut of foreclosed, single-family homes so far isn't proving much competition. Occupied apartments rose by about 58,000 in the fourth quarter, the biggest increase for that period in 10 years, according to Reis. It is very good to be in the apartment business today, David Neithercut, chief executive of Equity Residential, the biggest public U.S. real-estate investment trust, remarked at a recent conference. Population growth, a gradual firming of the labor market and a drop in the U.S. homeownership rate to 65 from its near-70 peak could generate about 4.5 million new renter households over the next five years, according to Greenstreet Advisors.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617293","date":"2011-03-21","texts":"Author Alan Zibel Jeff Bater Sales of previously occupied homes in the U.S. sank by 9.6 in February and prices fell to the lowest level in nearly nine years, indications that the market remains depressed. Existing-home sales decreased from a month earlier to a seasonally adjusted annual rate of 4.88 million, the lowest level since November, the National Association of Realtors said Monday. The results were worse than forecast. Economists surveyed by Dow Jones Newswires had expected home sales to decline by 3.9 to an annual rate of 5.15 million. The results called into question whether the U.S. housing market is recovering or falling further.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617302","date":"2011-03-21","texts":"Author Leslie Scism MetLife Inc. said its chief investment officer, widely credited with helping the giant insurer come through the financial crisis with minimal damage, will become its next president and chief executive. Steven A. Kandarian, 59 years old, will succeed C. Robert Henrikson, who in 2012 will reach the company's executive-management mandatory-retirement age of 65. Mr. Kandarian will assume the posts on May 1 of this year and will also be nominated for election to MetLife's board at the company's annual shareholder meeting in April. Mr. Henrikson, 63, will continue to serve as chairman during a transition period through the end of 2011. While Mr. Henrikson's is a classic insurance-industry success story--he started as a MetLife agent selling policies over kitchen tables and rose through the ranks--Mr. Kandarian is one of a number of leaders in the industry with investment backgrounds.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614278","date":"2011-03-22","texts":"Financial Analysis and Commentary Higher oil prices and a stronger-than-expected U.S. recovery have raised fears about the persistence of China's inflation. But given the government has tightened more than many recognize, the real question is how long before Beijing swings policy back to neutral. Three increases have raised the benchmark one-year rate by 0.75 percentage point since October. But banks can charge customers what the market will bear. PBOC figures show at the end of 2010, 43 of borrowers were paying above the benchmark, compared with 33 at the beginning. Anecdotal evidence also suggests China's corporate sector faces tighter credit. Reports from the black market for credit in Wenzhou, a source of informal finance to entrepreneurs, suggest rates are higher than they were in summer 2008. With credit taps tightening, growth is slowing -- highlighted by purchasing managers' index data for January and February. But there also are forces pulling in the other direction. Recovering overseas economies mean stronger exports. That will cut into spare capacity in the economy and push prices higher -- as will rising commodity prices.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615346","date":"2011-03-24","texts":"The word on inflation according to the Federal Reserve before the Middle East blew up and Japan was shaken up Relax. With so many people out of work and so many factories, offices and malls empty, few workers can get big wage increases and few companies can make price increases stick. Yes, food prices are up, but nothing we do will make the sun shine or the rains come at the right time to grow more crops. Yes, commodity prices are rising, but that's because demand from emerging markets is strong. Yes, we are still pumping billions into credit markets, but we'll drain that money before it fuels inflation. And, please, don't blame us for inflation in China or India -- or the U.K. Fighting inflation there is a job for their fiscal, monetary and exchange-rate policies, not us. So, as long as all of you believe that we at the Fed won't let inflation climb much, and act accordingly, it won't. Then came Tunisia, Egypt and Libya. The Brent benchmark price of oil went from 90 a barrel in December to 115.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616750","date":"2011-03-26","texts":"Stocks rose in the lowest-volume trading all year, boosted by corporate earnings and data showing a pickup in U.S. economic growth at the end of 2010. The Dow Jones Industrial Average posted its sixth gain in seven sessions as it finished up 50.03 points, or 0.4, at 12220.59. The index advanced 3.1 on the week, its biggest weekly percentage gain since July. Leading the measure were International Business Machines, which rose 2.14, or 1.3, to 162.18, and Chevron, adding 1.40, or 1.3, to 106.78. The Standard & Poor's 500-stock index closed 4.14 points higher, or 0.3, at 1313.80, with energy stocks in the lead. The Nasdaq Composite added 6.64 points, or 0.2, to 2743.06. At week's end, all three measures' gains outpaced the losses they posted the previous week amid Japan's nuclear crisis. In addition, all three measures snapped two-week losing streaks.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615017","date":"2011-03-28","texts":"Author Daisy Maxey NEW YORK--With inflation fears on the rise, investors may want to make sure their target-date funds' inflation-fighting strategies match their own. Managers of these funds, typically funds of funds that are a popular tool for retirement planning, adopt varying strategies for protecting investors from inflation and differ on just how much protection is required. A lot of these firms are still sort of struggling with how to do it, says Josh Charlson, a senior mutual-fund analyst at Morningstar Inc. More are adding some slice of TIPS, he says, referring to Treasury inflation-protected securities, a government bond designed to provide a return indexed to inflation. Target-date funds automatically shift toward more-conservative investments as an investor ages. That gradual shift is known as the glide path. Some use inflation-fighting components only in longer-dated funds. Others use them across the glide path, he said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613961","date":"2011-03-29","texts":"NEW YORK -- With inflation fears on the rise, investors may want to make sure their target-date funds' inflation-fighting strategies match their own. Managers of these funds, typically funds of funds that are a popular tool for retirement planning, adopt varying strategies for protecting investors from inflation and differ on just how much protection is required. A lot of these firms are still sort of struggling with how to do it, says Josh Charlson, a senior mutual-fund analyst at Morningstar Inc. More are adding some slice of TIPS, he says, referring to Treasury inflation-protected securities, a government bond designed to provide a return indexed to inflation. Target-date funds automatically move toward more-conservative investments as an investor ages, known as the glide path. Some use inflation-fighting components only in longer-dated funds. Since long-term inflation risk is low for younger investors, many longer-dated target-date funds hold significant stock positions and diversify globally, Mr. Charlson said. Inflation becomes more of a concern for investors nearing retirement, so short-dated funds often add TIPS -- usually not more than 10 of assets.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614447","date":"2011-03-30","texts":"Author Tatyana Shumsky NEW YORK--Gold prices settled modestly higher as a weaker dollar ameliorated a midmorning dip on record-high U.S. crude-oil inventories. The contract for April delivery settled 7.60, or 0.5, higher at 1,423.80 a troy ounce on the Comex division of the New York Mercantile Exchange. The most actively traded contract, for June delivery, ended up 7.40, or 0.5, at 1,424.90 per troy ounce. Gold prices started the day slightly higher as the market sought direction. At mid-morning, the U.S. Department of Energy said crude-oil inventories hit a record 41.9 million barrels last week, sending oil prices lower. Gold prices fell about 10 over 45 minutes.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615386","date":"2011-03-31","texts":"Author Luca Di Leo Maya Jackson Randall Some banking experts predict that the Federal Reserve's disclosure of the financial institutions that tapped an emergency-lending tool could make banks more reluctant to borrow from the central bank. I have concerns that it will make banks more reluctant to borrow and reduce the efficacy of a critical central-bank function in a crisis, said Donald Kohn, the former Fed vice chairman who retired in September after 40 years at the central bank. The treasurer of a regional bank that didn't borrow from the Fed during the crisis said that the perception is that if you need to borrow money from the Fed, you are in a position of weakness. He said his bank went to the Fed for emergency lending only once on Sept. 11, 2001. I remember thinking this is the biggest deal in the world, said the executive.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617116","date":"2011-04-01","texts":"FRANKFURT -- Euro-zone inflation unexpectedly accelerated well above the European Central Bank's target in March, while German unemployment fell, fueling expectations that the ECB will have to embark on multiple interest-rate increases beginning next week to prevent overheating in much of the region. The euro surged past 1.42 to the dollar on the report, because expectations of higher interest rates tend to increase a currency's value. The U.S. Federal Reserve isn't expected to begin raising interest rates for many months. Annual euro-zone inflation rose to 2.6 in March from 2.4 the previous month, European Union statistics agency Eurostat said, surprising many economists who had expected no change from February. Eurostat didn't provide a country or product breakdown, but analysts say energy prices are to blame. Of particular concern to economists is that the March figure, already the highest since October 2008, could have been even worse if it weren't for some technical factors holding price growth down.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614106","date":"2011-04-02","texts":"NEW YORK -- The Dow Jones Industrial Average kicked off the second quarter by touching the highest point since the summer of 2008, as investors were heartened by signs of stronger job creation in the U.S. and the lowest jobless rate in two years. The Dow industrials rose for a second week in a row and finished Friday with an advance of 56.99 points, or 0.5, at 12376.72. The intraday high of 12419.71 was the highest point since June 6, 2008. The measure was led by Caterpillar, which rose 1.77, or 1.6, to 113.12, and General Electric, which leapt 29 cents, or 1.5, to 20.34. The Standard & Poor's 500-stock index rose 6.58, or 0.5, to 1332.41, led by industrial and financial stocks. The Nasdaq Composite Index rose 8.53, or 0.3, to 2789.60. Each also posted a second consecutive weekly win. The unemployment rate and payroll numbers were key barometers to assess the recovery, said Wasif Latif, vice president of equity investments at USAA Investment Management Co. It's another key data point that confirms that the economic recovery is underway. Federal Reserve policy got more attention after Philadelphia Fed President Charles Plosser said the central bank may have to tighten soon, and aggressively, though New York Fed President William Dudley, one of the main advocates of easy monetary policy to support the economy, warned against premature tightening.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615748","date":"2011-04-03","texts":"Author Gary S. Becker, George P. Shultz  John B. Taylor Wanted A strategy for economic growth, full employment, and deficit reduction--all without inflation. Experience shows how to get there. Credible actions that reduce the rapid growth of federal spending and debt will raise economic growth and lower the unemployment rate. Higher private investment, not more government purchases, is the surest way to increase prosperity. When private investment is high, unemployment is low. In 2006, investment--business fixed investment plus residential investment--as a share of GDP was high, at 17, and unemployment was low, at 5. By 2010 private investment as a share of GDP was down to 12, and unemployment was up to more than 9. In the year 2000, investment as a share of GDP was 17 while unemployment averaged around 4. This is a regular pattern. In contrast, higher government spending is not associated with lower unemployment. For example, when government purchases of goods and services came down as a share of GDP in the 1990s, unemployment didn't rise. In fact it fell, and the higher level of government purchases as a share of GDP since 2000 has clearly not been associated with lower unemployment. To the extent that government spending crowds out job-creating private investment, it can actually worsen unemployment. Indeed, extensive government efforts to stimulate the economy and reduce joblessness by spending more have failed to reduce joblessness.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615797","date":"2011-04-04","texts":"Author Nicholas Winning LONDON--Factory gate prices in the euro zone posted their sharpest annual gain for nearly two-and-a-half years in February, putting further pressure on the European Central Bank to raise interest rates later this week, official data showed Monday. Industrial producer prices rose 0.8 from January and were 6.6 higher than in February last year, the strongest annual increase since September 2008, the European Union's Eurostat agency said. The data are likely to cement expectations that the ECB, which aims to keep inflation just below 2 over the medium term, could raise interest rates several times this year, starting with the first rise in almost three years after its policy meeting Thursday. The ECB left its main interest rate at a record low of 1 at its last policy meeting on March 3, but ECB President Jean-Claude Trichet said risks to price stability were on the upside and a rate rise in April was possible though not certain.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614387","date":"2011-04-05","texts":"It's not my opinion, as I'm sure it isn't Stephen Moore's , op-ed, April 1, that anyone who works for the government isn't doing a good job or is overpaid. It's simply that the rest of us cannot afford their cost. While one could point to numerous inefficiencies and inequities that a burdensome infrastructure imposes, the area that troubles me the most is the intrusion, frustration and waste inflicted by our regulators. The problem is that they think they have to do something to justify their existence by imposing their will or bias, or exhibiting a them versus us mentality. Marshall Sterman Swampscott, Mass. Mr. Moore asserts that winning the future requires growing the part of the economy that makes things. Yet he acknowledges that falling employment in the making sectors of the economy is due in considerable measure to hugely beneficial productivity improvements in such traditional industries as farming, manufacturing, financial services and telecommunications. How are we supposed to grow the part of the economy that makes things when it is shrinking because of its own success","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617255","date":"2011-04-05","texts":"Author Holman W. Jenkins, Jr. You can hardly turn over an investing advice newsletter without finding a recommendation to buy TIPS, or Treasury inflation-protected securities, to preserve the purchasing power of your dollar-denominated savings. Economists and investment pros look out three years and can't believe we aren't due for a powerful flush of inflation. The usefulness of their favorite hedging advice, however, depends on the U.S. government actually carrying out the promise embodied in TIPS, honestly to apply an inflation adjustment to protect holders from loss of purchasing power due to the government's own mismanagement of the currency. Will the spirit and letter of this guarantee be observed The question has to be asked because Washington has shown no hesitancy to delegitimize legitimate claims by vilifying those asserting them--GM and Chrysler debt holders being the most recent examples. By the time the TIPS question comes up, moreover, the slope will likely have been greased by states and municipalities reneging on promises made to government retirees and bond investors. It will have been greased by governments around the world setting example after example of the many flavors of default. The justice or lack thereof in each such case is not the question. What matters is to recognize that government promises are not written in stone. Take Japan It has debt in the hands of its citizens amounting to an improbable 225 of its non-growing GDP, at a time when an aging citizenry will be wanting to cash out its savings to support its retirement, including workers and business owners now prematurely retired by the recent earthquake and tsunami. Already policy makers at the Bank of Japan are openly talking about using the central bank's printing press to finance rebuilding, incidentally setting course to inflate away some of the government's existing obligations.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613805","date":"2011-04-06","texts":"Author Rhiannon Hoyle The price of gold is back at record levels. But whether it can hit 1,500 in the next few months could depend on whether the U.S. Federal Reserve sticks with an ultraeasy monetary policy that is pushing down the dollar. Right now, the Fed appears divided over the outlook for its quantitative easing program, known to the market at QE2 and scheduled to end on June 30, and the possibility of higher interest rates later this year, even if U.S. unemployment remains high. Any fresh signs that the Fed remains concerned about the U.S. economy would boost gold, which is seen as an alternative currency and often attracts strong interest in times of economic uncertainty and unusually low or negative interest rates after adjusting for inflation, as is the case now. An even stronger signal for gold could come from an extension of the Fed's program beyond June, which for now, at least, seems likely. But any move by the Fed to exit quantitative easing or raise interest rates faster than analysts expect would be detrimental for gold prices, which has come to rely on the U.S.'s super-loose policy. Prices may also come under pressure as investors adjust to life after QE2 and react to any signs that the U.S. economic recovery is gaining traction.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616564","date":"2011-04-11","texts":"The gloves have come off in the battle for the New York Stock Exchange. In one corner, a scrappy New Yorker with a savvy southerner at his side. In the other, a heavily favored European powerhouse first stunned by the fury of a rival attack, now starting to punch back. Nasdaq OMX Group and IntercontinentalExchange Inc. of Atlanta are battling Deutsche Boerse AG for NYSE Euronext, the product of a 2007 merger that owns the world's most-recognized stock market and a profitable European derivatives arm. On Sunday, NYSE Euronext's board landed a blow to the Nasdaq-ICE bid. The board rejected its rival's offer, calling it strategically unattractive because it would break up NYSE Euronext, burden the new company with high levels of debt, and destroy its invaluable human capital. That doesn't mean Nasdaq-ICE is down for the count. The companies may take their proposal directly to NYSE Euronext shareholders. With the stakes high between NasdaqICE and Deutsche Boerse, verbal blows are flying. Each side is calling the other's arguments laughable, delusional, disingenuous, and worse. Who is right","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616141","date":"2011-04-13","texts":"Author Alan Reynolds President Obama's response to congressional efforts to curb runaway federal spending is to emphasize, once again, his resolve to greatly increase tax rates on married couples whose joint incomes are above 250,000. This insistent desire to raise taxes--which he repeated in a speech yesterday while complaining about trillions of dollars in . . . tax cuts that went to every millionaire and billionaire in the country--is a distraction. It won't solve our nation's fiscal problem. Preliminary estimates from the Congressional Budget Office CBO project that federal spending under the president's 2012 budget plan would average 23.3 over the coming decade--up from 19.7 in 2007 and 18.2 in 2001. Even if the president could persuade Congress to enact all of his proposed tax increases, in addition to surtaxes already included in ObamaCare, the CBO finds we would still face endless budget deficits averaging 4.8 of GDP. Federal debt held by the public would double under the President's budget, says the CBO, growing from 10.4 trillion 69 of GDP at the end of 2011 to 20.8 trillion 87 of GDP at the end of 2021, adding 9.5 trillion to the nation's debt from 2012 to 2021.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616076","date":"2011-04-22","texts":"Toting Up Cost Of Buffett's Aura --- GE Got 3 Billion, Vote Of Confidence in Crisis","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613525","date":"2011-04-25","texts":"Author Matt Whittaker NEW YORK--Silver prices soared toward 50 an ounce, though they pulled back sharply toward the end of the day, sparking some speculation that the metal's stunning three-month rally may be nearing an end. At one point during the day, silver futures were up 8.2 at 49.82 an ounce. They closed at 47.1510, still the highest in 31 years. Prices have jumped 52 this year, and the intraday high exceeded the nominal closing record of 48.70 set back in 1980. The failure to reach 50 an ounce is one sign that the rally may be losing steam. The way we've come off, there's a possibility we've seen a high for the near term, said Frank Lesh, a broker and futures analyst with FuturePath Trading. Silver is riding on the coattails of gold, as investors have flocked to precious metals due to their safe-haven status amid a weakening dollar. Silver's gains have recently outpaced those of gold futures, which on Monday settled 0.4 higher at a new record of 1,508.60 an ounce on the Comex division of the New York Mercantile Exchange. Gold is up 6 year-to-date.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614395","date":"2011-04-25","texts":"Author Kenan Machado MUMBAI - Tata Consultancy Services Ltd. expects its operating margin to narrow to about 27-28 this fiscal year through March 2012 from last year's 28.9, as higher cost of salaries could dent the profitability of India's largest technology outsourcing company. Chief Financial Officer S. Mahalingam said the pace of growth in business volume also won't exceed that of last year because of a higher comparison base. But, volumes will be good, he said in an interview Monday. TCS, part of the salt-to-software Tata group, posted a 29.7 rise in its volume of outsourcing work in the last fiscal year as global businesses, shrugging off the effects of the economic slowdown, continued to invest in technology services. It also beat market expectations last week with a 23 jump in its fourth-quarter net profit, driven by higher non-operating income and increased demand for outsourced technology services.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613557","date":"2011-04-28","texts":"For three long years, the U.S. has been undertaking an experiment in economic policy. Could record levels of government spending, waves of new regulation and political credit allocation, and unprecedented monetary stimulus re-ignite growth The results have been rolling in, and they represent what increasingly looks like an historic mistake that deserves to be called the Keynesian growth discount.  The latest evidence is yesterday's disappointing report of 1.8 in first quarter GDP. At this stage of recovery after a deep recession, the economy is typically growing by 4 or more as consumer confidence returns and businesses accelerate investment as their profits revive. Yet in this recovery consumers are still cautious and business investment remains weak. Some of the first quarter's growth slump is due to seasonal factors such as bad weather and weaker defense spending. In the silver lining department, the private economy grew faster than the overall GDP figure because government spending declined. But even maintaining the 2.9 growth rate of 2010 would mark an historic underachievement for a recovery after a recession that was as deep as the one from late 2007 to mid-2009. The most recent recession of comparable depth and job loss was in 1981-1982, when unemployment hit 10.8. Huge chunks of industrial America shut down and never re-opened. Yet once the recovery began in earnest in the first quarter of 1983, the economy boomed. As the nearby table shows, growth exceeded 7.1 for five consecutive quarters, and it kept growing at nearly a 4 pace for another two years. Growth didn't dip below 2 in any quarter until the second three months of 1986. This was the Reagan boom.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614022","date":"2011-04-28","texts":"Author Isabel Ordonez HOUSTON--Exxon Mobil Corp. said Thursday its first-quarter earnings surged 69 as it benefited from high oil prices, stronger refining margins and a jump in natural-gas production. Other oil companies also reported soaring profits. The results for Exxon, the world's largest publicly traded oil company, reflected a continued recovery from the recession for the broader energy sector, which appears poised for a return toward the boom that preceded the 2008 financial collapse. But the robust earnings also coincide with sharp increases in gasoline prices, which have triggered concern among consumers and elected officials. Exxon's earnings jumped to 10.65 billion, or 2.14 a share, from 6.3 billion, or 1.33 a share, beating analysts expectations of 2.06 a share. The results were 4 billion shy of the record 14.8 billion it generated in the third quarter of 2008. Revenue rose 26 to 114 billion. Meanwhile, Los Angeles-based Occidental Petroleum Corp. said profit jumped 46 to 1.55 billion, and Anglo-Dutch giant Royal Dutch Shell PLC posted profit of 6.29 billion, up 30.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614148","date":"2011-04-29","texts":"Author Dhanya Ann Thoppil BANGALORE -- India's HCL Technologies Ltd. expects the improving economic climate in the U.S. and recently won large orders to spur revenue growth in its largest outsourcing market in April-June, after a blip in sales growth from the region in the just-ended quarter. The overall economic environment in the U.S. is looking positive and that should be reflected accordingly in the ongoing quarter's revenue, HCL America Inc. President Shami Khorana said in a recent interview. HCL Technologies is India's fourth-largest software exporter by sales and gets more than half its revenue from the U.S. But even as the U.S. grapples with a bloated fiscal deficit and political discord on tackling the mounting debt, Mr. Khorana expects clients' technology spending to gather pace, taking cues from positive economic data such as the rising stock market and climbing pending home sales.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615448","date":"2011-05-01","texts":"Author Brett Arends Turmoil in the stock market. Paltry interest rates at the bank. What are the newly retired to do Many are taking a look at buying a fixed annuity instead. These products let you swap a lump sum for a fixed income for life. They're sold by insurance companies, and have long been considered a safe way to ensure a steady income in retirement. They have a fair amount to commend them -- especially in theory. They eliminate the risk that you'll outlive your savings. And they let you squeeze out extra income while you're alive, at the cost of leaving nothing for your heirs.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615698","date":"2011-05-01","texts":"Author Al Lewis As the portfolios of ordinary shareholders imploded in the second stock-market crash of the 21st century, CEOs looked up from the smoke and ashes and breathed a collective sigh of, Hey, you know what It's a buying opportunity. Only CEOs don't have to buy. They get their crony boards to award them stock options. More than 90 of the CEOs of companies in the Standard & Poor's 500-stock index loaded up with stocks or options in the grim, uncertain months between October 2008 and September 2009. And the value of this largely free equity has since grown by more than 3 billion, according to an analysis of S&P data published by The Wall Street Journal last week. The crash allowed our fearless corporate leaders to bet on a scary market at an extremely low price with no risk to themselves. And since the market had crashed so hard, and stock was so cheap, they were able to bag larger numbers of options and shares as well.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617365","date":"2011-05-01","texts":"Author Michael A. Pollock As rising prices of oil and other commodities fan fears about inflation, many investors have been stocking up on U.S. Treasury inflation-protected securities or shares of mutual funds that invest in those securities. The principal value and interest payments of TIPS rise along with any increase in the consumer-price index. And, of course, Treasury debt of all kinds is considered to be among the safest of investments, an advantage over alternative ways of buffering a portfolio against inflation. But some investment managers argue that TIPS alone aren't the ideal solution in an environment, like the current one, in which interest rates could be poised to rise significantly as inflation accelerates. That's because sharply higher interest rates would eat into the value of TIPS in an investor's portfolio. A better approach, they say, is to mix TIPS with other assets that also have inflation-protection benefits but won't be as sensitive to interest-rate movements. These may include such things as riskier bonds that offer yields far above the current inflation rate, and natural-resources stocks and real-estate securities, which may appreciate further as economic growth heats up.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616940","date":"2011-05-02","texts":"Managers of some red-hot small-company stock funds are cautioning investors that returns could start to cool off. For the past three years, small-cap funds have been the top performers among diversified funds, according to Morningstar Inc. The biggest winners small-company funds focusing on growth stocks. So far in 2011, small-growth funds are up an average of 13, Morningstar says. That follows an average 27 return in 2010 and 35 in 2009. Many funds have completely recovered losses from the bear market of 2007-09, when the average small-growth fund lost nearly 42. In contrast, large-cap stocks, as measured by the Standard & Poor's 500-stock index, are up 8.4 about 9 including dividends so far this year, and plenty of large-cap stock funds are still in the red from the bear market. This has some fund managers turning a bit cautious. We're still positively biased . . . but we feel we have had the bulk of the returns we expected for 2011, says Mark Burns, a portfolio manager on Loomis Sayles Small Cap Growth, up 17 so far this year and 37 over the past year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617383","date":"2011-05-02","texts":"Target-date funds, which suffered a black eye in the market crash, are looking better these days. During the bear market of 2007-09, target-date funds designed for investors retiring in 2010 lost about 37 on average, according to Morningstar Inc., blindsiding some soon-to-be-retirees. These funds were taken to task by government officials, lawmakers and investors for what some said were overly aggressive allocations to stocks and for failing to clearly explain their strategies and risks. Some investors didn't realize they could lose money, says Robyn Credico, a senior consultant at employee-benefit consulting firm Towers Watson. The stock market's rebound from its early-2009 low has propelled most of these funds back into positive territory, even for some investors who bought at the market's 2007 high, prompting some in the industry to say concerns about the funds' asset allocations were overdone. Despite the improved performance and the fact that some fund providers have taken steps to reduce volatility in their portfolios, some industry watchers say target-date products may still be too risky for those in or near retirement.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613886","date":"2011-05-05","texts":"When stocks collapsed in a free fall last May, the fear was that the market had been taken over by high-speed computers that had run amok. A year after the flash crash, which saw the Dow Jones Industrial Average plunge 600 points in less than 10 minutes, the stock market is a much quieter place. Companies that use fast-trading, computer-driven strategies, which were painted by some as culprits of the collapse, have curtailed trading. So, too, have many long-term investors, for whom the trauma of that May 6 afternoon was the final straw after a decade of stock-market turmoil. In their absence, trading volume and volatility have plunged, further deterring high-frequency traders. High-frequency strategies have less to work with, so they don't participate, which creates less volume, said Will Mechem, a managing partner at high-frequency trading firm Pan Alpha Trading. This would seem to be a vicious cycle. In the first four months of this year, average daily trading volume of stocks listed on the New York Stock Exchange and Nasdaq Stock Market is down 15 from 2010's pace, running at an average rate of 6.3 billion shares a day. Volume has been edging lower throughout the year, with April's daily average of 5.8 billion shares marking the slowest month since May 2008.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616425","date":"2011-05-06","texts":"UP AND DOWN Traders worked the crude oil options pit at the New York Mercantile Exchange Friday in New York. Oil prices recovered after the U.S. government said the economy added 244,000 jobs in April. Crude futures ended Friday down 2.6 at 97.18 a barrel. HERE PENGUIN, PENGUIN, PENGUIN German Chancellor Angela Merkel fed a penguin during a visit to Ozeaneum aquarium in Stralsund, Germany, Friday. Ms. Merkel took on a sponsorship for a penguin during her visit. NO EXPRESSION An Iraqi demonstrator wore a mask in the shape of a hand with the Arabic word Government written on it over his mouth during the weekly protest against corruption, unemployment and poor public services at Baghdad's Tahrir Square Friday. CLOSE TO HIS HEART An Egyptian protester held a picture of al-Qaeda leader Osama bin Laden up to his chest during a protest against the killing of bin Laden held by Islamist groups in front of the U.S. embassy in Cairo Friday. IN HOT WATER Policemen tried to block Roberto Cercelletta, known as D'Artagnan, from protesting over being stopped from removing coins from the Trevi Fountain in Rome Friday. Six plainclothes agents climbed on the monument and grabbed Mr. Cercelletta while members of the fire brigade set up a ladder leading down from the fountain.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614171","date":"2011-05-11","texts":"Author Veronique de Rugy From Reason Magazine In February, the Goldman Sachs economist Alec Phillips predicted on ABCNews.com that a Republican proposal in the House of Representatives to cut 61 billion from the federal budget in fiscal year 2011, would, if enacted, shave two full percentage points off America's gross domestic product in the second and third quarters of this year. A few days later, The Washington Post described a new study by Mark Zandi, the chief economist at Moody's Analytics and an architect of the 2009 stimulus package, a.k.a. the American Recovery and Reinvestment Act. Zandi's amazing verdict The spending cuts would destroy 700,000 jobs by the end of 2012. After every newspaper had published the gloomy predictions, Goldman Sachs issued a clarification of Phillips' analysis. Phillips now says he was misunderstood by journalists eager to spread a doom-and-gloom message and predicts the impact of spending cuts probably will be mild and temporary. Perhaps he was influenced by Federal Reserve Chairman Ben Bernanke, who testified in March at the Senate Banking and Urban Affairs Committee that Goldman's numbers were incorrect. Yet even this correction implicitly assumes that government spending is the source of all recovery. The logic, as with Bernanke's and Zandi's analyses, is that government spending cuts reduce overall demand in the economy, which affects growth and then employment. This argument ignores the fact that the government has to take its money out of the economy by raising taxes, borrowing from investors, or printing dollars. Each of these options can shrink the economy.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614163","date":"2011-05-16","texts":"NEW YORK -- Plunging commodity prices and renewed anxiety about the financial health of some euro-zone nations sent the euro and other risk-related currencies into a funk against the dollar last week. That has left traders wondering whether to continue focusing on interest-rate differentials or to switch to concerns about the outlook for global economic growth and the risk of more turmoil in European debt markets. Right now we are all on tenterhooks because we don't know which direction we are going to go, said David Watt, senior currency strategist in Toronto at RBC Capital Markets The U.S. currency has gotten a lift from the notion that Chinese-led global growth could be slowing more than once thought, a scenario that points to a further unwinding of bets on emerging-market and commodity-sensitive currencies. On Monday and Tuesday, as the focus turns to talks among European Union finance ministers over the bailout programs for the debt-ridden governments of Greece and Portugal, the dollar could get another boost if discussions leave investors disappointed and fearful of another breakdown in euro debt markets. It was revealing, said Vassili Serebriakov, foreign-exchange strategist at Wells Fargo in New York, that the euro fell 1 against the dollar and the yen Friday even as euro-zone gross-domestic-product data were stronger than expected.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617275","date":"2011-05-16","texts":"With the U.S. government reaching its legal borrowing limit on Monday, here are some answers to commonly asked questions Q What is the immediate impact of reaching the debt ceiling A For now, government services will largely continue uninterrupted. However the Treasury Department has started undertaking some technical, emergency steps to conserve cash so it can pay its bills and make payroll. It has stopped issuing certain debt for state and local governments. Among other things, it can stop payments into the Civil Service Retirement system, redeem existing investment, and stop reinvestment in the exchange stabilization fund, which buys and sells foreign currencies. Q Is this a default A No. A default would occur after the emergency measures are exhausted and it runs out of cash to pay its bills. Treasury officials say that would occur Aug. 2, if Congress does not raise the debt ceiling before then. They say that could mean stopping or limiting not only interest payments to debt holders, but also Social Security and Medicare payments, unemployment benefits, tax refunds and money owed to government contractors.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615320","date":"2011-05-17","texts":"NEW DELHI--The U.S. ambassador to New Delhi said Tuesday that India needs to consider whether it is delivering on its side of the new close alliance with the U.S. and do more to tackle graft and encourage foreign investment or the nation's economic expansion risks losing steam. India needs to be asking itself Is it delivering on the global partnership Timothy Roemer said in an interview with The Wall Street Journal as he prepares to leave the post next month and return to the U.S. The international business community that was pouring money and investment potential into India last year and the year before is now pausing and saying 'Where is India heading in terms of investment opportunities, the corruption challenge and inflation' If this perception doesn't change, he added, India could see downward revisions of as much as two percentage points to estimates for growth this year, considering the impact of higher oil prices and high inflation. Earlier this month, C. Rangarajan, chairman of the Prime Minister's Economic Advisory Council, forecast Gross Domestic Product growth in the year ending March 31, 2012, of 8.5, below the government's forecast of 9, as a series of interest rate rises to combat high inflation crimps growth. A spokesman for the Prime Minister's Office had no immediate comment. Foreign direct investment in India, after rising steadily for years, totaled 18.4 billion from April 2010 to February, down 25 from a year earlier, according to Indian government data, amid a series of corruption scandals that have paralyzed the government and a lack of progress on economic reforms that would make the market more attractive for foreign firms. Mr. Roemer's warning comes after two years - his tenure in New Delhi -- in which the U.S. and India have, in many respects, dramatically expanded their cooperation and partnership on issues ranging from counter-terrorism to environmentally-friendly technology to coordination over regional policy in Afghanistan.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614603","date":"2011-05-18","texts":"Federal Reserve officials laid out a broad blueprint for very gradually tightening financial conditions when the economy is healthy enough to bear it. Minutes of the Fed's April 26-27 meeting, released Wednesday with the normal three-week lag, showed Fed officials had an extensive discussion about what is known as their exit strategy from an era of easy credit. But the Federal Open Market Committee minutes noted the discussion didn't mean that any moves would necessarily begin soon. Many analysts believe it could take months or even years for the Fed to start raising interest rates. In normal times this wouldn't require much debate. The Fed would simply raise its benchmark short-term interest rate, known as the federal funds rate, to tighten credit, slow growth and pull back inflation. Because of the unusual steps it took during and after the financial crisis, its exit from easy-money policies this time around will be more complicated. It must substantially reduce a 2.4 trillion portfolio of mortgage and Treasury securities. The first step, as Fed chairman Ben Bernanke indicated in a first-ever news conference following the April meeting, will be a decision to allow the mortgage portfolio to start shrinking on its own--by allowing the securities to mature without reinvesting the proceeds in Treasurys, as it has been doing. At the same time or shortly thereafter it will do the same thing with some of its long-term Treasury bonds. At some point, the Fed will slowly and steadily sell its mortgage holdings. Officials were inclined to hold off on active securities sales until after they had taken other steps, including raising the short-term fed funds rate, the minutes showed.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616467","date":"2011-05-19","texts":"Some states may issue municipal bonds to shore up their underfunded unemployment-benefits programs, gaining flexibility but not necessarily a long-term answer to keeping the programs solvent. Unemployment-insurance programs are jointly funded through federal and state employer-payroll taxes, but many states borrowed federal cash to replenish their funds as jobless claims rose during the recession. The economic-stimulus bill of 2009 temporarily waived interest payments on those federal loans. But the waiver expired at the end of 2010, and the states that owe money--32 states and the Virgin Islands, according to analysis service Federal Funds Information for States--are weighing their options. Nevada, Idaho and South Carolina are among states looking at refinancing in the bond market before the first interest payment on the federal loans is due in September. Some state officials are looking to refinance because they want to avoid paying interest through one of several unappealing options charging a special assessment on businesses struggling to recover from the recession or finding the money in already-squeezed general funds. The bonds are attractive because interest rates in the municipal-bond market are now lower than the 4.41 rate the federal government began charging in January on money borrowed for the trust funds.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614396","date":"2011-05-20","texts":"NEW YORK -- Poor U.S. economic data continued to argue for an ultraloose U.S. monetary policy Thursday, weighing the dollar down against currencies with more appealing interest-rate outlooks. We believe the continued negative data that we are witnessing will push out Fed exit action well into 2012 and possibly 2013, said Douglas Borthwick, managing director of Faros Trading in Stamford, Conn. The sour data even caused the dollar to give up all of its gains to the yen -- on the same day Japan released much worse-than-expected gross-domestic-product data stemming from the March earthquake and tsunami. The divergence in currencies' interest-rate scenarios were illustrated in the comments of two central bankers. Federal Reserve Bank of Chicago President Charles Evans confirmed a loose monetary environment in the U.S. when he said higher food and energy prices aren't expected to translate into sustained inflationary pressure and that the bank should retain substantial monetary accommodation for some time. Meanwhile, European Central Bank Executive Board member Gertrude Tumpel-Gugerell said the ECB must unwind its nonstandard monetary-policy measures as financial conditions improve, a signal for interest-rate increases down the road.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616223","date":"2011-05-20","texts":"NEW YORK -- The Federal Reserve Bank of New York on Thursday sold all 29 subprime mortgage bonds on offer in its latest sale from a portfolio of securities acquired from American International Group. The securities, held in a legal entity called Maiden Lane II, sold for what the Fed had estimated their fair current value to be, 878.6 million. The debt was part of a clutch of so-called toxic bonds the central bank acquired when it rescued the failing insurer in 2008. Market participants said the small number and size of assets on offer helped the Fed to sell out its entire list. To be sure, a lower-dollar list presents a less-challenging hurdle for both buyers and sellers, Walter Schmidt, a senior vice president for FTN Financial Capital Markets in Chicago, wrote in a note to clients. Still, it was good for the market to see that the entire . . . list traded after such a low hit rate on the previous list. The Fed had been selling bonds with a face value of about 1.5 billion almost each week since April 6, and some market participants have said the process is too drawn out and is depressing prices on all subprime residential mortgage bonds.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615704","date":"2011-05-21","texts":"In America's courtrooms, ObamaCare is on trial. A majority of states have filed lawsuits arguing that its mandate requiring individuals to purchase health insurance is unconstitutional. But in Vermont, ObamaCare is about to get a trial of a different sort--a clinical one. This coming Thursday, Gov. Peter Shumlin will sign a bill doing what President Obama and his allies have hoped to do all along sell a public insurance option alongside competing private insurance as a first step toward a single-payer, government-run system. Unlike the president, Mr. Shumlin has been up-front in his support for single-payer care, even on the campaign trail last fall. At least he can say he has a mandate from voters to do what he's doing. The last time Vermont's health system gained national attention was in 2004, when Howard Dean, then governor of the state, ran for president. As governor, Mr. Dean expanded public insurance eligibility, struggling to get as close to single-payer health care as he legally could. New regulations pushed out private insurers, reducing competition. Vermont imposed a guaranteed-issue mandate, which requires insurers to sell to any applicant, and forced insurers to use community rating, which requires them to offer the same price to everyone, regardless of age and health. Both measures also appeared in the final ObamaCare law. The result The number of uninsured Vermonters barely budged. But costs sure moved--in the wrong direction. From 1991 to 2004, according to the Kaiser Foundation, Vermont's health costs grew by 7.6 annually. Across the U.S. comparable costs grew only 5.5 on average. From 2005 to 2008, in data cited by Dr. William Hsaio, a Harvard consultant studying this for the state, growth in Vermont's health costs grew 8.2, against a national average of 5.7. The current governor says his plan is all about containing costs, echoing Mr. Obama's absurd claim that increased health spending would mean lower deficits. Mr. Shumlin can talk about government health care and savings in the same breath because millions of Americans still believe the myth that socialized health-care models are immune from cost inflation.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615036","date":"2011-05-23","texts":"Conservative economists have been raising alarms for months about the Federal Reserve's second quantitative-easing program, QE2. They argue it has lowered the dollar's value, leading to higher oil and commodity prices--a precursor to broader, more damaging inflation. Yet the man many of them regard as their monetary guru--supply-side economics pioneer and Nobel Laureate Robert Mundell--says dollar weakness is not his main concern. Instead, he fears a return to recession later this year when QE2 ends and the dollar begins its inevitable rise. Deflation, not inflation, should be the greater concern. Avoiding the recession is simplicity itself Just have the U.S. Treasury fix the exchange rate between the dollar and the euro. Mr. Mundell's surprising statement came at a March 22 conference in New York sponsored by the Manhattan Institute, The Wall Street Journal and the Ronald Reagan Presidential Foundation. His economic predictions carry great weight because, unlike most economists of his generation, he is often right. His analysis of international economics has revolutionized the field, making him the euro's intellectual father and a primary adviser to China's economic policy makers. Nevertheless, with gold around 1,500 and oil above 100 a barrel, supply-siders are scratching their heads How can he possibly see deflation ahead How can dollar weakness not be the problem The key to Mr. Mundell's view is that exchange rates transmit inflation or deflation into economies by raising or lowering prices for imported items and commodities. For example, when the dollar declines significantly against the world's second-leading currency, the euro, commodity prices rise. This creates U.S. inflationary pressure. Conversely, when the dollar appreciates significantly against the euro, commodity prices fall, which leads to deflationary pressure.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616043","date":"2011-05-25","texts":"The Federal Reserve continues to work on the plumbing that will eventually drain the flood of cash it has pumped into the financial system. On Tuesday, the Federal Reserve Bank of New York announced it was further broadening the pool of those eligible to take part in reverse-repurchase agreements, expected to be a key tool the Fed will use to exit from the accommodative policy stance it has been in since the financial crisis hit in 2008. The criteria set forth Tuesday would allow U.S. government-sponsored enterprises like Fannie Mae and Freddie Mac to apply to participate in reverse-repurchase agreements, in which the central bank sells securities from its portfolio to counterparties with an agreement to buy them back later. Under the arrangement, the buyers essentially lend cash to the Fed, removing reserves from the system. They're sharpening their tools here. I don't think it means that they're going to make any move to tighten policy sooner, said Raymond Stone, economist at Stone & McCarthy Research Associates, an economic and bond-market research firm. They just want to make sure when the time comes they have tools to do it.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616562","date":"2011-05-25","texts":"In  Americas, May 16, Mary Anastasia O'Grady states that the El Dorado mine met or exceeded the environmental standards in El Salvador. That's an understatement. The design for the El Dorado underground mine, which we submitted to the government in 2005, would have set new precedents for environmental protection in all of the Americas, including the U.S. Water protection is critical to the design. After numerous community consultations, we designed a mine that makes use of a reservoir to collect water in the rainy season for use in the dry season. The water to be collected in the reservoir is contaminated with defoliates, fertilizers, pesticides, detergents and E. coli bacteria. Water discharged from the reservoir will be cleaner than the water that arrived because it passes through a water-treatment plant. El Dorado and the vast majority of gold-bearing systems in El Salvador are of a deposit type that is the single cleanest type of primary metal deposit on the planet low-sulfidation epithermal. There is no potential for acid mine drainage and no potential for metal contamination. The rocks containing the gold are actually cleaner than the most common rock type in El Salvador, having less mercury, arsenic and most other metals. Local community support for the mine exceeds 80. At the national level only one in four Salvadorans is opposed. This is not a case of not in my backyard.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614235","date":"2011-05-28","texts":"WASHINGTON -Vice President Joe Biden touted the Obama administration's bailouts of U.S. auto makers in the White House radio address Saturday, saying they succeeded in turning around the auto industry and helped the economic recovery. Because of what we did, the auto industry is rising again. Manufacturing is coming back, Mr. Biden said. And our economy is recovering and it's gaining traction. Mr. Biden noted the announcement this week by Chrysler that the company will begin repaying loans from the U.S. government years ahead of schedule. He also said General Motors Corp., another recipient of government bailout money, had announced that its Detroit Hamtramck plant was ramping up production. Many people thought the president should just let G.M. and Chrysler go under, Mr. Biden said. They didn't think the automobile industry was essential to America's future. The president disagreed. Mr. Biden acknowledged near the end of the address that, despite signs the U.S. economy is improving, there are still problems with the economy. He said people's paychecks weren't keeping pace with rising gas prices and the cost of health care and college tuition. He said the Obama administration is focused on making sure that if you work hard, play by the rules, you'll be able to get ahead, put your kids through college, retire with dignity and security.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615312","date":"2011-05-28","texts":"One of the signature loans of the housing boom--the adjustable-rate mortgage--is looking more attractive than it has in years. For some buyers, it may be an even better deal than a fixed-rate mortgage. ARMs typically offer buyers a lower rate for a set period of years, after which rates rise or drop each year, depending on prevailing interest rates. The loans lost favor during the financial crisis, when their rates weren't much better than those for fixed-rate mortgages. But now, as interest rates hover near historic lows, the spread between the rates on the most popular adjustable and fixed-rate loans is on pace to be the widest it has been in eight years, according to HSH Associates, which tracks mortgage rates. For an ARM to make sense, a borrower has to be comfortable taking a gamble that interest rates won't rise, or that he can sell the house before they do. It is a dicey bet now Rates have been mostly on a downward slide for the past three years, mirroring the recent plunge in 10-year Treasury rates, and seem to be about as low as they are going to get. Many economists are predicting rates will rise in coming years. That is why ARMs make sense mostly for borrowers who expect to be in a home for a short time. If the household is truly intending to stay only for five years, they should take the five-year ARM, says Stuart Gabriel, director of the Ziman Center for Real Estate at the University of California, Los Angeles.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616081","date":"2011-05-31","texts":"Chinese stocks fell for an eighth consecutive session on Monday on concerns high inflation will drive Beijing to policies that could slow economic growth, while Japanese shares were pressed by a stronger yen. In Europe, stocks edged lower, with volume thinned by the Memorial Day holiday in the U.S. The Shanghai Composite index finished down 0.1, at 2706.36, an eight-month low. Japan's Nikkei Stock Average dropped 0.2, to 9504.97, South Korea's Kospi fell 0.3, to 2093.79, Australia's S&PASX 200 gave up 0.4, to 4667.5, and India's Sensex fell 0.2 to 18232.06. Hong Kong's Hang Seng Index rose 0.3, to 23184.32, the fifth consecutive climb, and Taiwan's Taiex rose 0.2, to 8823.68. In SHANGHAI, property shares fell on the prospect of slowing economic growth and concerns that tight power supplies will cut cement production and drive up prices. Poly Real Estate Group declined 3.3 and Gemdale gave up 2 in Shanghai, while China Vanke fell 1.3 in Shenzhen.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613721","date":"2011-06-02","texts":"A week of troubling economic data helped push fixed mortgage interest rates to a new low for the year, representing the seventh consecutive weekly decline, according to the latest survey from Freddie Mac. Surveys of national consumer confidence and manufacturing activity in the past month have suggested the economy may be slowing, said Freddie Mac Chief Economist Frank Nothaft. The S&P Case-Shiller National Home Price Index, meanwhile, showed first-quarter home prices fell by the steepest annual rate since the third quarter of 2009. Fixed mortgage rates followed U.S. Treasury yields lower this week amid financial market concerns that the current lull in the economy is continuing, Mr. Nothaft said. The 30-year fixed-rate mortgage averaged 4.55 in the week ended Thursday, down from 4.60 the prior week and 4.79 a year earlier. Rates on 15-year fixed-rate mortgages fell to 3.74 from 3.78 the previous week and 4.20 a year earlier. Five-year Treasury-indexed hybrid adjustable-rate mortgages held steady from last week at 3.41, but are down from 3.94 a year earlier. One-year Treasury-indexed ARM rates rose to 3.13 from 3.11 the prior week but are down from 3.95 a year earlier.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616741","date":"2011-06-03","texts":"Italian auto maker Fiat SpA has an agreement to buy the U.S. Treasury's remaining 6 stake in Chrysler Group LLC, a move that would bring an end to the U.S. government's involvement in the Auburn Hills, Mich., auto maker. Fiat will pay the Treasury 500 million for its 98,461 shares of Chrysler and another 75 million for the right to purchase all of the 45.7 stake owned by the United Auto Workers union's health-care trust fund. The Treasury will retain 80 of the 75 million purchase right and share the remaining 20 with the Canadian government. In all, the Treasury will walk away with a total of 560 million in the deal, which is expected to close within the next 30 to 60 days following antitrust reviews. President Barack Obama is expected to announce the deal during a planned visit Friday to a Chrysler automobile assembly plant in Toledo, Ohio. As Treasury exits its investment in Chrysler, it's clear that President Obama's decision to stand behind and restructure this company was the right one, Treasury Secretary Tim Geithner said in a statement Thursday. Today, America's automakers are mounting one of the most improbable turnarounds in recent history--creating new jobs and making new investments in communities across our country.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617079","date":"2011-06-05","texts":"With summer around the bend, investors are fretting about the return of something much more unpleasant the bear market. Suddenly, there are reasons for worry that stocks could be entering a difficulty period, including suddenly poor economic data, troubling signs from housing and a rush of companies selling shares. The Dow Jones Industrial Average fell 2.3 last week, its fifth down week in a row. The Dow is now down 5.2 from its post-crash high, set in May. Other stock indexes also are suffering. The Nasdaq Composite fell 2.3 and is now down 46 from its high. The Standard & Poor's 500-stock index was also off 2.3 for the week. Highlighting the ugly week The Dow tumbled nearly 280 points on Wednesday, its worst single day since August 2010, on fears that the U.S. economy is in the midst of a new slide -- one that may be hard to halt because the government and Federal Reserve already have done so much to try to juice the economy. Despite the gloom and doom, it's important to remember the market is still sitting on respectable gains in 2011. So far this year, the Dow is up 5, the Nasdaq has gained 3, while the S&P 500 is up 3.4.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617182","date":"2011-06-07","texts":"A dreary jobs report released last week has driven home what most political insiders already thought The presidential election of 2012 will be largely about the economy, particularly how high the unemployment rate is on Election Day. Yet joblessness is an incomplete and inadequate measure of a broader economic malaise that forms the real backdrop for the coming campaign. The deeper problem -- the one that feeds a sense of economic dissatisfaction and anxiety in the land -- is what Republican presidential hopeful Jon Huntsman referred to last week as a lost decade of growth. In other words, the issue isn't just the recession that began in December 2007, or President Barack Obama's obvious difficulty in pulling the nation out of it. It's the fact that the American economy hasn't been a robust producer of growth and jobs for a long time, beginning well before the recession. Americans sense this, which is why polls show they fear for their future and that of their kids. The party that creates some confidence that it can fix this underlying growth problem is the one that will have the real advantage.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616696","date":"2011-06-09","texts":"Citigroup Inc. plans to send replacement credit cards to about 100,000 North American customers after its systems were breached by a hacking attack affecting about 200,000 accounts. Citi said on Thursday that the hacked accounts amounted to about 1 of its 21 million North American card customers and that it has referred the incident to law enforcement. The bank said it is contacting affected customers and has implemented procedures to prevent a recurrence. The cyberintruders were able to access information including holders' names, account numbers and email addresses, Citi said. But the breach, which was discovered in early May and is the latest in a series of hacking attacks against companies, didn't compromise additional personal information such as Social Security numbers, dates of birth, or card security codes or expiration dates. The bank didn't rule out that fraudulent activity might have taken place following the attack but said Citi's debit cards weren't affected. Citi didn't say when the attacks occurred. Experts estimate the cost of replacing credit cards is as high as 20 apiece. Citigroup's action in reporting the problem within weeks and replacing most of the customer cards appears to be an aggressive response. In an episode earlier this year at Michaels Stores Inc., thieves tampered with card processing equipment as early as February, but more than a hundred customers didn't find out until three months later that their accounts were being looted. Once Michaels learned of the situation in May, the crafts store made a public disclosure.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615954","date":"2011-06-14","texts":"President Barack Obama is considering how strongly to push for extending a payroll-tax break for workers and creating a new tax break for employers to jump-start the economy, reflecting White House concerns about joblessness but also complicating efforts to rein in the federal deficit. White House officials brought up the idea during closed-door debt talks Tuesday with a bipartisan group of lawmakers, people familiar with the meeting said. They told the lawmakers that the White House would be open to payroll tax breaks for employers and employees, sending a clear signal that fresh concerns over slowing job growth have spilled into discussions about how to reduce the deficit. Supporters of such tax breaks believe they spur job growth, which could improve the country's fiscal footing over time. But the provisions could make the budget deficit--projected to rise to 1.5 trillion this year--worse in the short term. White House press secretary Jay Carney said Tuesday the tax breaks were certainly worth looking at. Vice President Joe Biden said the group had made real progress Tuesday in its efforts to craft a budget deficit reduction plan by July 1, which would clear the way for lawmakers to raise the government's 14.29 trillion borrowing limit. Mr. Biden said, We're down to the real tough stuff now and everybody's still in the room. We're going to meet all week. However, the payroll tax idea received a lukewarm response on Capitol Hill, where efforts are concentrated on deficit reduction. House Majority Leader Eric Cantor R,. Va., a member of the Biden panel, said on Monday that we have been very focused on trying to see where we can reduce federal spending.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617173","date":"2011-06-15","texts":"NEW YORK--Gold inched higher, as a rally in the dollar, a competing safe-haven asset, counterbalanced investors' flight to safety on a selloff in equities and commodities. The dollar soared to a three-week high against the euro as European officials remain at an impasse on another rescue of Greece, forging fresh worries of a default. Investors shed the single European currency and riskier assets like stocks and commodities, seeking out safer bets like gold. It's a tossup between people fleeing from equities and putting their money into gold, and people fleeing from gold because of the dollar rally, said Jimmy Tintle, market analyst at Transworld Futures. Gold is considered a store of value and benefits from greater investment demand when other asset classes, like equities and commodities, are doing poorly. However, demand for dollar-denominated gold eases when the dollar rallies, as it appears more expensive for holders of foreign currencies. The contract for June delivery settled 1.80, or 0.1, higher at 1,525.60 a troy ounce on the Comex division of the New York Mercantile Exchange.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614365","date":"2011-06-17","texts":"Some small-business owners, rejected by banks or fed up with bad lending terms, are turning to Internet sites that match borrowers with giant pools of lenders when they need funds. That has driven growth and increased the public profile of a sector that was briefly shut down by regulators during the financial crisis. In the past year, Prosper Marketplace Inc. and Lending Club Corp., which run the nation's two biggest peer-to-peer lending sites, have reported a sharp upturn in personal loans used to fund small businesses. The sites work like eBay-style marketplaces, matching prequalified borrowers to lenders. Together, the sites have generated more than 500 million in personal loans in the past five years. And while most of the loans are used to pay off credit cards, the proportion of the funds used to finance small businesses is rising. In November, Nansee Kim-Parker raised 20,000 on LendingClub.com in less than two weeks to open TokyoMoto, a San Francisco motorcycle-repair shop. After clearing a prescreening process, she posted details of her background and her business idea and attracted hundreds of small lenders from around the country. Her loan has a three-year fixed interest rate of 9.85. It's like a village, gathering support here and there, says Ms. Kim-Parker, who calls traditional bank credit unaffordable for small businesses.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613520","date":"2011-06-18","texts":"U.S. AARP, the powerful lobbying group for older Americans, is dropping its longstanding opposition to cutting Social Security benefits. Given the group's immense clout, the shift could dramatically affect the debate over the future of the federal safety net, from pensions to health care. Separately, a House subcommittee that oversees Social Security called for an investigation into how judges approve disability benefits. Over at Biden's bipartisan debt-reduction talks, officials familiar with the talks said they expected Medicaid to be the biggest source of cuts in federal entitlement programs in whatever compromise emerges. And White House officials this week told lawmakers in the Biden group that Obama would be open to payroll tax breaks for employers and employees, as fresh concerns over slowing job growth spill into the talks. The potential for a persistent slowdown in hiring is the biggest threat to the U.S. recovery, according to economists in a Wall Street Journal survey who now expect the economy to add about 2.2 million jobs over the next 12 months, down from last month's forecast of 2.5 million jobs. Good employees are still prized Many U.S. companies that cut 401k matching contributions during the recession are starting to restore them, or a slimmed-down version of them, to reward and retain staff amid the decline of traditional pension plans and mounting concern over the long-term viability of Social Security. The head of the ATF is expected to be ousted over the anti-gun-trafficking operation that has grown into the agency's biggest scandal in decades. Only 35 of fourth-graders knew the purpose of the Declaration of Independence in taking the latest national history test.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613530","date":"2011-06-20","texts":"Your June 13 editorial The EPA's War on Jobs claims that the EPA's proposed rule to reduce the level of toxic emissions from coal-fired power plants is a destructive weapon. You disregard the serious, documented, long- and short-term health effects of exposure to mercury, particulate matter and other air pollutants emitted by burning coal. EPA's proposed rule is a welcome step in safeguarding the public's health from these dangerous air pollutants that can worsen asthma and other respiratory diseases cause heart attacks, cancers and stroke and exact an enormous economic toll in terms of health-related costs and lost productivity. The EPA should be congratulated for following the clear evidence in cleaning up these toxins from the air we breathe and protecting the health of the American people. After all, unhealthy people cannot work. Georges Benjamin, M.D. Executive Director American Public Health Association","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615752","date":"2011-06-20","texts":"Please see Corrections and Amplifications below. European finance ministers meeting Sunday in Luxembourg moved toward approving a fresh quarterly installment of Greece's euro110 billion 157 billion bailout loan, but they remained divided over the details of a far harder task--extending Greece a giant new package that would support it for years to come. Meanwhile, finance ministers and central bankers from the Group of Seven industrialized countries held a conference call late Sunday to discuss the crisis, according to people familiar with the matter. Natalie Wyeth, a spokeswoman for the U.S. Treasury Department, confirmed a G-7 conference call was held but declined to provide any details. A senior euro-zone official said the U.S. urged a fast resolution of the Greek issue. In Athens, Prime Minister George Papandreou said his country was negotiating a new deal of roughly the same size as the one granted just last year--about another euro100 billion--and urged his parliament to back him in a vote of confidence scheduled for Tuesday. The Greek premier, fresh from a cabinet reshuffle meant to lift his political fortunes, will travel to Brussels on Monday for talks with European Union leaders. Europe thought it had put Greece's troubles to rest last spring with a mammoth bailout that rewrote the contract among the euro's member countries. Now, Greece needs more help, and there's fatigue all around.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617378","date":"2011-06-22","texts":"The story goes that Milton Friedman was once taken to see a massive government project somewhere in Asia. Thousands of workers using shovels were building a canal. Friedman was puzzled. Why weren't there any excavators or any mechanized earth-moving equipment A government official explained that using shovels created more jobs. Friedman's response Then why not use spoons instead of shovels That story came to mind last week when President Obama linked technology to job losses. There are some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers, he said. You see it when you go to a bank and you use an ATM, you don't go to a bank teller, or you go to the airport and you're using a kiosk instead of checking in at the gate. The president calls this a structural issue--we usually call it progress. And it isn't exactly a new phenomenon. It's been going on for centuries, and its pace has accelerated over the past 50 years. Businesses relentlessly look for ways to replace workers with machines. The machines get better and smarter. We go from spoons to shovels to excavators, not the other way around. Telephone switchboard operators lose jobs to automated switching. Toll collectors get replaced by E-ZPass. Auto workers get replaced by robots. The magnitudes are stunning. As the Washington Post reported in 2007","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613516","date":"2011-06-24","texts":"When a new Bloomberg poll finds that 44 of Americans feel that the economy is worse than when Obama was inaugurated versus only 34 who say it is better, you know the economic recovery is pretty anemic. Now the Joint Economic Committee has chronicled how weak it is compared to others since World War II. In a report entitled Unchartered Depths, the Committee finds that employment is now 5.0 below what it was at the start of the recession, 38 months ago. This compares to an average rise in employment of 3.7 over the same period in prior post-WWII recessions. On economic growth, real GDP has risen 0.8 over the 13 quarters since the recession began, compared to an average increase of 9.9 in past recoveries. From the beginning of the recession to April 2011, real personal income has grown just .9 compared to 9.4 for the same period in previous post 1960 recessions. The standard response from Obama apologists is that recession of 2008 and 2009 was different because, as former Clinton administration economist Robert Shapiro puts it, this was a financial crisis, and these take longer to recover from. In fact, in most cases, the deeper the recession, the stronger the recovery to make up for lost ground. That was what Ronald Reagan's critics said when the U.S. economy soared during 1983 and 1984 with quarterly growth numbers exceeding 7. At the time, liberal Keynesians yawned and declared the good times nothing more than a normal snapback from the deep recession.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614997","date":"2011-06-29","texts":"Housing markets haven't found a bottom so much as a temporary foothold. The S&PCase-Shiller gauge of home prices in 20 major cities, released Tuesday, showed a monthly gain in April--its first such increase since July 2010. A pair of reports due Wednesday may build on that, creating a rare stretch of decent news for the beleaguered market. Pending sales of previously owned homes--a leading gauge of closings--are expected to rebound by at least 10 in May after falling 11.6 in April. Meanwhile, home builder KB Home, the nation's fifth-largest by 2010 sales, will be out with fiscal second-quarter results that may show some signs of stabilization after a nasty first quarter. When it comes to U.S. housing, though, good news is relative. On a yearly basis, the Case-Shiller index is down about 4. Capital Economics reckons prices won't start rising consistently until 2014. Despite rock-bottom interest rates, mortgage applications remain tepid. Moreover, the glut of roughly 4.5 million homes in some stage of delinquency or foreclosure will continue to stalk the market.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615137","date":"2011-06-30","texts":"Small businesses expected 2011 to be the moment a years-long credit freeze would finally begin to thaw. But borrowing has only gotten worse. Loans outstanding to small businesses totaled 609 billion at the end of March, an 8.6 drop from a year earlier, according to the most recent data from the Federal Deposit Insurance Corporation, which analyzes loans of less than 1 million. Another lending analysis, by the Federal Reserve Bank of Kansas City, shows that big banks' outstanding loans to small businesses dropped 14 between March 2010 and March 2011, while loans by smaller lenders fell 3. Business owners rank access to capital as the most important issue facing privately held companies, according to a poll of 1,221 entrepreneurs released this month by Pepperdine University. In the past six months, only 17 of loan-seeking businesses with less than 5 million in annual revenue landed bank financing, the study found. This area of the economy is in such crisis, says John K. Paglia, a finance professor and senior researcher for Pepperdine's report. The lack of credit is improperly penalizing companies that will be very successful down the road.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616473","date":"2011-07-01","texts":"The Federal Reserve Bank of New York suspended plans to auction off a large portfolio of mortgage bonds following weeks of turmoil in the credit markets, even as it rebuffed a fresh overture from American International Group Inc. to buy all the battered bonds. Prices of bonds backed by subprime mortgages have plunged as much as 25 since the New York Fed and investment manager BlackRock Solutions began in April selling off assets in a vehicle known as Maiden Lane II. In a conference call with Wall Street dealers and in a statement Thursday, the New York Fed said that, in light of prevailing market conditions, it doesn't expect more sales until it believes it can fetch good value. It said there wouldn't be a fixed time frame for selling the rest of the portfolio. The New York Fed had moved to sell the crisis-era portfolio piecemeal after rejecting a 15.7 billion offer from AIG in March to buy all the assets. At the time, Maiden Lane II held securities with a face value of about 30 billion. The assets were moved onto the Fed's balance sheet during the financial crisis as part of its bailout of AIG. AIG is 77 owned by U.S. taxpayers. From April to June, the Fed sold 10 billion of bonds to Wall Street banks and investors in a series of auctions that went well initially, but by June saw lackluster demand.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613887","date":"2011-07-02","texts":"U.S. stocks notched their biggest weekly jump in two years, as investors pounced on fresh data suggesting the economy could be slogging its way out of its recent malaise. The Dow Jones Industrial Average ended up up 168.43 points, or 1.4, to 12582.77 on Friday, for a 5.4 gain for the week, its best performance on a percentage basis since July 2009. By points--the Dow tacked on 648.19 in five days--the Dow had its best week since November 2008. Driving the gains was an easing in anxiety over the U.S. economy and Europe's debt troubles. On Friday, an update on the U.S. manufacturing sector showed brisk expansion in June, representing one of the month's first prominent readings on the economy. The report was especially well-taken a day after a regional manufacturing survey of Chicago-area purchasing managers for June that also handily beat economists' expectations. This is a great indication that the manufacturing sector is turning around, said Peter Cardillo, chief market economist at Avalon Partners. I expect manufacturing will take us out of the soft patch and lead economic growth in the second half of the year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615323","date":"2011-07-08","texts":"The White House and congressional leaders begin a crucial weekend of negotiations on a deficit-reduction deal under a cloud of dour economic news and mounting political pressures on both sides, casting doubt on how significant an agreement they can achieve. President Barack Obama and House Speaker John Boehner R., Ohio are battling opposition from within their own parties to their decision to strive for a plan that would reduce the deficit by 4 trillion over 10 years, in part by curbing entitlement spending and rewriting the tax code to boost revenue. The two men surprised many in Washington this week by aiming for such an ambitious bargain, rather than a smaller package of roughly 2 trillion the White House and Congress had pursued for weeks. Although many Republicans and Democrats say they applaud the goal in theory, they also express doubts about reaching it given the major compromises it would require from both parties heading into an election year. Mr. Obama and eight congressional leaders, including Mr. Boehner, are scheduled to meet at the White House on Sunday night to determine how big a deal they can achieve. News that the unemployment rate rose to 9.2 in June, its highest level this year, pushed members of both parties further into their rhetorical corners Friday.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617314","date":"2011-07-11","texts":"Corrections & Amplifications Dollar Tree Inc. met its earnings targets for its fiscal first quarter. A Marketplace article on Monday incorrectly said that Dollar Tree was among the deep-discount retailers that had missed their earnings projections. WSJ July 13, 2011 Sales and profit growth have started to slump at the deep-discount retailers called dollar stores, after a robust performance during the recession, a sign that even fairly cheap toys and other small indulgences now are a stretch for some consumers. In the past several weeks, Dollar General Corp., Family Dollar Stores Inc. and Dollar Tree Inc., the country's three largest chains that sell sharply discounted food, household staples and other items in modest-size stores, all have missed their quarterly earnings targets.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614232","date":"2011-07-12","texts":"A sergeant in Texas's National Guard has sued Citigroup Inc., alleging the bank foreclosed on and auctioned his home while he was in training to deploy to Iraq, a possible violation of a law meant to protect military borrowers. The New York bank previously hadn't been implicated, as some of its peers had been, in possibly violating the Servicemembers Civil Relief Act, a law that forbids foreclosing on active-duty military members and caps interest rates on their loans. The suit seeks class-action status, alleging the bank failed regularly to check on the active-duty status of borrowers when it foreclosed on thousands of homes during the financial crisis. A Citi spokesman said he is looking into the matter but didn't have immediate comment. Sgt. Jorge Rodriguez alleges in the suit, filed in federal court in Manhattan, that Citi told a judge while filing to foreclose on his home in Del Valle, Texas, that Sgt. Rodriguez wasn't on active duty.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616557","date":"2011-07-12","texts":"The White House and congressional leaders made no progress Monday toward reaching a deficit-reduction deal that would clear the way for raising the federal borrowing limit in less than three weeks. President Barack Obama pressed congressional leaders Monday to forge a 4 trillion, 10-year deal. But after another contentious meeting at the White House, the odds that Democrats and Republicans can bridge their differences over taxes and social programs to reach such a sweeping plan ahead of an Aug. 2 debt-limit deadline appeared to diminish. Republican leaders in the negotiations presented Mr. Obama with a list of spending cuts that had won tentative support from members of both parties in talks last month led by Vice President Joe Biden. But Mr. Obama said the proposal fell short of reaching the smaller deficit reduction agreement GOP leaders are advocating -- one closer to 2 trillion over 10 years. Mr. Obama urged Republicans, as he did in a morning news conference, to think big. If not now, when he said. Democratic officials familiar with the meetings said there was no movement toward a deal in the 90-minute session. Democrats continued to demand Republicans include tax increases in a final package, and Republicans continued to resist, according to sources familiar with the discussions. Today you saw more real disagreement coming out, a Democratic official said.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616408","date":"2011-07-13","texts":"It is three years before most of the new health-care law kicks in, but already some of America's largest employers are peppering the Internal Revenue Service with concerns that making the changes will be far more complex than they anticipated. At issue is one of the law's central requirements employers with 50 or more full-time workers must offer affordable insurance or pay a penalty. It sounds simple enough. But in crafting the rules, the IRS and two other federal agencies are now tackling basic yet messy questions, such as who counts as a full-time worker and how do companies measure whether insurance is affordable. In one of more than 200 submissions made recently to the IRS, Wal-Mart Stores Inc., Gap Inc., United Parcel Service Inc., Hilton Worldwide Inc. and others have pushed for a lengthy grace period that could stave off penalties for a year or more after certain workers are hired. The result could undermine some of the law's intent to insure those who can't afford coverage.Large employers also have met with White House officials to press their case. Retailers, restaurants and other companies that rely on seasonal, temporary and other workers with flexible schedules, say it's hard to figure out who is a full-time worker. That could cause the employer to enroll and drop them from coverage, potentially churning them through new state-run insurance exchanges or the Medicaid federal-state program for the poor, as their hours fluctuated. Moreover, companies are worried about another standard that requires they offer care that is affordable, or roughly 9.5 of an employee's household income. The employers say they can't calculate that without asking employees how much their spouses or dependents earn--a potential privacy violation that may not be verifiable, either.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615088","date":"2011-07-14","texts":"Robert Bridges says that house prices increased on average 3.6 per year between 1980 and 2010. An owner with 20 down has only that 20 as his invested equity , op-ed, July 11. Precisely because it is only 20 with the balance of 80 borrowed, the increase in equity over the period is five times 3.6, or 18 per year, a far greater return than the stock market. The vital issue of leverage is fundamental to the consideration of investment yield and cannot be ignored if we wish to obtain meaningful results. For the stock market to beat real estate for the average investor, as Mr. Bridges suggests, it would be necessary to borrow on margin, which few retail investors successfully do, or successfully pick individual stocks which beat the Dow Jones Industrial Average for 30 years, which still fewer investors manage to do. Richard Bailey Real Estate Broker Claremont, Calif.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614099","date":"2011-07-16","texts":"U.S. inflation fell in June as gasoline prices retreated from early summer highs, but rising costs for a host of items including clothes and rent are keeping pressure on households and could complicate any efforts by policy makers to boost the economy. Consumer prices fell a seasonally adjusted 0.2 in June from a month earlier, the first drop in a year and a reversal of the 0.2 increase the prior month, the government said Friday. A measure of underlying or core inflation--watched closely by economists and the Federal Reserve because it strips out volatile energy and food prices--climbed by a monthly 0.3 in June, the same as the month earlier. Behind the dip were falling prices for gasoline and other fuels The energy index declined 4.4 in June, the biggest drop since December 2008. The gasoline index tumbled 6.8. Food prices rose 0.2 in June, the smallest rise so far this year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616767","date":"2011-07-16","texts":"On Feb. 10, 2009, Treasury Secretary Timothy Geithner outlined the new administration's plan to subject 19 large U.S. banks to government-administered stress tests to see how much more capital they would need to fill the hole in the event of another severe recession or collapse of housing prices. The speech flopped. The Dow Jones Industrial Average lost nearly 400 points while he was speaking. The very phrase stress test, though common in financial circles, conjured up images of Citigroup Inc. collapsing on a treadmill. The left derided stress tests as a poor substitute for nationalizing banks, the right as a precursor to nationalization, financial pundits as a whitewash or worse. Yet by most retrospective accounts, the stress tests worked better than hoped. Despite sniping that the worst-case scenario used wasn't bad enough, the tests were credible enough to help markets distinguish between weak and strong U.S. banks and to bolster investor confidence in the stability of the U.S. banking system. The U.S. stress tests were a key driver of the recovery from the financial crisis both because they made bank balance sheets more transparent but also because they forced banks to recapitalize, with some government help, says Frederic Mishkin, a Columbia Graduate School of Business economist and former Federal Reserve governor. The stress tests alleviated fears in the markets that things were worse than they were and increased the capacity of banks to lend. When results were disclosed in May 2009, after much speculation and back and forth between banks and regulators, 10 banks were told to raise 75 billion in new capital. The U.S. government had said taxpayers would provide capital from the Troubled Asset Relief Program unless banks could raise money from markets all but one raised the money privately.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614415","date":"2011-07-19","texts":"One benefit of the squeeze on state and local budgets is that politicians are finally having to confront their sweetheart deals with labor unions. The latest reform movement is moving against project labor agreements, or PLAs, that limit bids on construction projects to contractors that agree to union representation. Only about 13 of construction workers belong to unions, and PLAs are a union invention to use their political muscle to organize more companies. Proponents argue that PLAs ensure the speed and quality of construction plans. But PLAs are one of the reasons that Boston's Big Dig was estimated at 2.8 billion but eventually cost 22 billion. Studies show that projects under PLA contracts on average cost 12 to 18 more than projects awarded by open, competitive bidding. Taxpayers pick up much of this tab. The case of New York City is instructive. In 2009, the city's construction union and the association of builders agreed to an Economic Recovery Project Labor Agreement in the name of lowering costs and unfreezing construction halted during the recession. Some projects such as Frank Gehry's 76-story Beekman Tower did start, only to see costs skyrocket. According to the New York State Comptroller, wages have risen 12 city-wide, more than three times inflation. Contractors say strict union job classifications mean they have to employ superfluous workers. Many projects have frozen again, as PLA contracts expire and builders balk at new ones. In response to this evidence, states have been pulling away from PLAs. Louisiana passed a law this month that prohibits state entities from mandating the use of PLAs. Tennessee, Arizona and Idaho passed similar legislation earlier this year, and Iowa's Governor Terry Branstad, in one of his first acts after inauguration, signed an executive order ending a state PLA requirement. Legislatures in Maine and Michigan recently passed bills along these lines that governors are expected to sign. These states are joining Utah, Montana, Missouri and Arkansas, which enacted bans in recent years. The new wave of Republican state officials is leading this reform, but the public seems to support the effort even in Democratic-leaning areas. Seven localities in California have passed ballot initiatives to end mandated PLAs in the last decade, including five since 2009. This includes places like Chula Vista, where President Obama received 61 of the vote. As Andy Conlin of Associated Business and Contractors notes, wherever PLAs are subject to popular referendum, they're rejected.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614035","date":"2011-07-20","texts":"Trust banks Bank of New York Mellon Corp. and State Street Corp. reported solid second-quarter earnings amid higher fee revenue, beating Wall Street estimates. Such banks act as custodians and servicers for corporations and Wall Street, with results tied heavily to market actions. The Securities and Exchange Commission and other law-enforcement agencies are investigating allegations of improper foreign-exchange trading at State Street and BNY Mellon. The banks have denied the allegations and said they intend to defend themselves. BNY Mellon The New York-based bank's second-quarter earnings rose 12 as the company saw increased fee and net interest revenue.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614502","date":"2011-07-22","texts":"More than one in three of the unemployed workers in several of the largest U.S. states have been out of a job for more than a full year. Across the country, long periods of unemployment have been more prevalent recently than during previous recoveries going back to the 1940s. During 2010, long-term unemployment was disproportionately a problem in New Jersey, Georgia, Michigan, South Carolina, North Carolina, Illinois and Florida, according to Labor Department data expected to be released later this month. Nationally, 30 of the unemployed, or 4.4 million job seekers, were out of work for more than a year in June 2011, up from 29 of the unemployed in June 2010. I don't want us to say this is the new normal and move on, said Betsey Stevenson, the Labor Department's chief economist. It really is going to take a concentrated effort of employers to give people a chance who haven't worked in a while.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613487","date":"2011-07-23","texts":"WASHINGTON--The breakdown in deficit-reduction talks between the White House and Speaker of the House John Boehner R., Ohio could immediately increase the risk that Standard & Poor's takes the unprecedented step of lowering its top-notch rating of U.S. government debt. The credit-rating firm has warned repeatedly that it could move to downgrade U.S. debt if it believes any deficit-reduction deal isn't robust enough to change the country's trajectory of future debt growth. A downgrade could come even if officials agree to raise the federal debt ceiling by Aug. 2. Treasury Department officials have set that as the deadline because after that date, without more borrowing authority, the government could run out of cash to pay all its bills. Messrs. Obama and Boehner had been trying to package a deal that would reduce future federal deficits by 4 trillion over 10 years, a level S&P officials had suggested would be sufficient to avoid a downgrade. A lower credit rating would raise borrowing costs not just for the government, but also for consumers and businesses, which could slow U.S. economic growth. It also could lower the value of Treasury securities held as assets by banks, pension funds, mutual funds, hedge funds, and other investors around the world, potentially shaking financial markets. Now that the large-scale talks have broken down, policy makers will likely pursue a smaller-scale deal that falls short of S&P's targets. Mr. Obama alluded to this possibility Friday evening. If we can't come up with a serious plan for actual deficit and debt reduction, and all we're doing is extending the debt ceiling for another six, seven, eight months, then the probabilities of downgrading U.S. credit are increased, and that will be an additional cloud over the economy and make it more difficult for us and more difficult for businesses to create jobs that the American people so desperately need, Mr. Obama said Friday evening.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613610","date":"2011-07-25","texts":"The former head trader at a hedge-fund giant settled regulatory allegations that he systematically attempted to manipulate prices of platinum and palladium, a sign that commodities regulators are intensifying efforts to crack down on manipulation in the futures markets. Christopher Pia--former head trader at hedge fund Moore Capital and a major player at the fund for 18 years--agreed to pay 1 million to settle civil allegations by the Commodity Futures Trading Commission, the regulator said in a release Monday. The CFTC alleged that he tried to artificially move futures prices near the very end of daily trading in a maneuver called banging the close, which involves inundating the market with trading orders. The 1 million penalty is one of the largest ever levied by the CFTC against an individual. The settlement comes amid a boom in which the prices of metals and other commodities have skyrocketed, raising concerns at the CFTC about possible manipulation and abusive practices. One way investors bet on commodities is through the futures market, where they enter into contracts to buy or sell raw materials at a set price on a specified date. The CFTC now has a broader mandate and new tools to attack violations in the commodities markets. Under the CFTC settlement, the 45-year-old Mr. Pia, once one of the most powerful traders on Wall Street, also agreed to a permanent ban in trading CFTC-regulated products in platinum and palladium, such as futures contracts. He also is banned from trading instruments regulated by the CFTC during the closing period, the final few minutes of trading when settlement prices are determined. Mr. Pia hasn't traded in the contracts involved in the settlement since May 2008, according to a person close to the situation. A lawyer for Mr. Pia declined to comment. A spokesman for Mr. Pia said Mr. Pia is pleased to have settled with the CFTC in order to put this matter behind him. Pia Capital, his current firm, is committed to abiding by the CFTC Order and to maintaining the highest level of compliance. He settled without admitting or denying wrongdoing.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613968","date":"2011-07-25","texts":"While the U.S. economy is struggling, U.S. corporations aren't. A third of the way through the second-quarter reporting season, earnings at companies in the Standard & Poor's 500-stock index are the highest in four years, according to S&P analyst Howard Silverblatt, who predicts the second half will be even stronger. Yet there is little indication that the strong results will jump-start the U.S. economy and get the millions of Americans idled by the recession back to work. About three-quarters of the companies that have reported so far have done better than analysts expected. Many of them -- ranging from manufacturers Honeywell International Inc. and Caterpillar Inc. to drug maker Abbott Laboratories -- raised their earnings forecasts for later in the year. Corporate profits -- one of the few areas of strength in the limp U.S. recovery -- appear to be weathering the economy's soft patch. But the gains in many cases have come from international operations, particularly in emerging markets. We aren't creating jobs, said Paul Huck, chief financial officer of Air Products & Chemicals Inc., on a conference call Friday.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615138","date":"2011-07-26","texts":"QUEENS JFK Terminal Is Evacuated After Abandoned-Bag Scare Airport authorities shut down a terminal at John F. Kennedy International Airport for about 80 minutes on Monday morning after a police dog indicated that a bag found abandoned in an airport lounge may have contained a bomb. The soft briefcase-like bag, however, turned out to contain papers.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617159","date":"2011-07-27","texts":"Foreign investment by businesses will reach its precrisis peak no earlier than 2013, and probably later if there were to be a widespread government-debt crisis, a United Nations agency said on Tuesday. The U.N. Conference on Trade and Development said businesses invested 1.24 trillion outside their home countries last year, up 5 from 2009. Based on figures for the first five months of this year, it expects that to rise to between 1.4 trillion and 1.6 trillion this year, 1.7 trillion in 2012 and 1.9 trillion in 2013. But Unctad said that rise in foreign direct investment will only happen if a daunting array of pitfalls are sidestepped. Risk factors, such as the unpredictability of global economic governance, a possible widespread sovereign debt crisis, and fiscal and financial sector imbalances in some developed countries, as well as rising inflation and signs of overheating in major emerging market economies, may yet derail the FDI recovery, Unctad said. Unctad said that in 2010, the U.S remained the main recipient of foreign direct investment, which rose 49 from 2009, to 228 billion. By contrast, inflows into Europe were down 19 from 2009, with the U.K. suffering a 35 drop to 45.9 billion from 71.1 billion. Overall, flows of investment to developed economies fell slightly, to 602 billion from 603 billion in 2009.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615918","date":"2011-07-28","texts":"The top executive of CME Group Inc. said Thursday that investors are showing signs of embracing futures trading in place of more complex swap products as stricter rules for such off-exchange derivatives loom on the horizon. A second-quarter surge in interest-rate-futures trading at CME got a lift from anticipated regulations that will bring higher capital requirements for banks and evolving accounting standards, making the swaps market more futures-like, CME Chief Executive Craig Donohue said. Mr. Donohue described a convergence in accounting practices that will likely see swaps treated more like simpler futures contracts, leading more investors to shift trade toward CME. Those things are beginning to blur, he said on a conference call discussing CME's second-quarter results. Debt-market turbulence in the second quarter drove CME's profit to 293.7 million, or 4.38 a share, 8.5 above year-earlier levels. The festering European fiscal crisis and the end of the Federal Reserve's quantitative easing effort pressed traders to hedge risk with CME's Treasury and Eurodollar futures contracts, lifting quarterly revenues 3 to 838.3 million. Analysts polled by Thomson Reuters expected a per-share profit of 4.17 on revenue of 821 million.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615809","date":"2011-07-29","texts":"The economic recovery is grinding to a halt, raising the risk that the U.S. could fall back into recession and tightening the screws on Washington to resolve a debt-ceiling debate that threatens to inflict further damage on a fragile economy. Gross domestic product--the sum of goods and services produced in the U.S. and the broadest tally of economic growth--increased at a paltry 1.3 annual rate in the second quarter, the Commerce Department said Friday. First-quarter revisions--down to 0.4 from 1.9--reflected an economy at a near-standstill early in the year. That minimal growth, coming after a recession that new data show was deeper than previously thought, raises doubts about the economy's trajectory for the rest of the year and helps explain the unusually feeble pace of job growth for a recovery entering its third year. Economists generally say a pace of 3 or higher is needed to create jobs. This puts a double dip back on the table, said Justin Wolfers, an economist at the University of Pennsylvania's Wharton School. Markets fell on the news, although stocks recovered much of their early losses after President Barack Obama stepped up pressure on Congress to compromise on raising the nation's debt ceiling. The Dow Jones Industrial Average fell 96.87 points Friday, closing at 12143.24.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616627","date":"2011-08-01","texts":"If the economy were roaring ahead, you can bet that White House economic officials would be taking credit. So it's worth noting the explanations they are offering for the miserable economic growth numbers released on Friday. They blame acts of nature and Republicans. Gene Sperling, who must have drawn the short White House straw, was asked on Fox News yesterday about the less than 1 GDP growth in the first half of 2011. The head of the White House National Economic Council blamed things outside of our control, adding that We have had headwinds that have hurt this economy--higher oil prices, supply chain-disruptions from the historic earthquake in Japan. We'll concede the earthquake point, though that should only be a temporary hit and should contribute to faster growth for the rest of the year. As for high oil prices, they are not an act of God. The oil and general commodity boom is in part a result of the expansionary Federal Reserve monetary policy that the Obama Administration has fully supported. Then came the real hoot. The big problem, Mr. Sperling said, is the cloud of uncertainty that comes from the American public thinking that we are on the verge of default. And that has hurt confidence and hurt our economy over the last few months. No question. Brett Baier of Fox interjected Wait a second. So you're tying all of this negative to the debt-ceiling debate Mr. Sperling replied No, I'm not tying all of it, whereupon he took another spin around earthquakes and oil prices before reiterating that When we allow the uncertainty created by whether our country is going to go to default, to create uncertainty for investors, for job creators, that's a self-inflicted wound.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614953","date":"2011-08-02","texts":"BRUSSELS--European markets enjoyed letting the U.S. debt-ceiling circus steal the spotlight. It didn't last long. Markets across the Continent slumped Monday, a reminder that the euro zone's own debt woes remain far from resolved. Stocks in Italy, the currency union's second-most indebted country after Greece, were particularly hit hard. The Milan bourse slumped 3.9, and bank shares were among the biggest losers. Banco Popolare SC and Intesa Sanpaolo SpA both closed down almost 8. Italy's government bonds also weakened the yield on the 10-year bond rose 0.12 percentage point, to 5.987, compared with 2.469 for 10-year German bunds. European trading began Monday on a relatively optimistic note after news that a debt-ceiling deal was at hand in the U.S. But investors soured over the course of the day, and stocks accelerated their fall near the end of trading when the Institute for Supply Management released weak manufacturing figures in the U.S. The U.K.'s FTSE 100 lost 0.7, the German DAX dropped 2.9 and France's CAC-40 shed 2.3. Besides Italy, Spain--another worrying spot in the euro zone--also had a rough day the Madrid stock market closed down 3.2. Some of the nervousness in Europe relates to fears about the health of the U.S. economy, but significant concern remains that policy makers' recent efforts to bolster Greece and implement measures to backstop the rest of the euro zone aren't convincing.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616131","date":"2011-08-02","texts":"Worries about the U.S. economy pushed stocks to the longest losing streak in nearly three years, sending the Standard & Poor's 500-stock index to a 2011 closing low. The Dow Jones Industrial Average tumbled 265.87 points, or 2.2, to 11866.62, on Tuesday. The blue-chip index's eighth consecutive decline marks its longest losing streak since October 2008. It has lost 6.7 during the skid, dating back to July 22. This is only the sixth time the Dow has dropped eight straight days in more than 30 years. Tuesday's selloff steepened just before the closing bell. The Dow dropped more than 100 points in the final hour of trading. All 30 Dow components finished in the red. The S&P 500 shed 32.89 points, or 2.6, to 1254.05, marking its seventh straight loss. The index suffered its biggest percentage drop in a year and registered the lowest close since December. All 10 sectors in the index finished in negative territory, led lower by consumer-discretionary and industrial stocks.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615367","date":"2011-08-05","texts":"During the debt-ceiling debate, President Obama characterized his push for higher taxes and less aggressive budget cuts as being helpful to the middle class. The claim was that failing to raise taxes on high-income earners would place a disproportionate share of the pain on the rest. But it is our record-high government spending, not the failure to raise taxes on the rich, that is the typical American's largest long-term problem. Workers do well only when the economy grows at a healthy and consistent pace. The biggest threat to long-term economic growth is government growth of the magnitude that characterized the past two years and that is forecast for our future. Our current problems are not a result of acts of nature. They stem from policy choices that dramatically increased the size of the government. In the past two years, the federal budget has grown by a whopping 16. Importantly, growth in agency budgets other than Defense exceeded that in Defense, despite the surge in Afghanistan. The budget for Health and Human Services, for example, home to Medicare and Medicaid, rose a hefty 22, as compared with 12 for Defense. The sum of 11 other agencies, such as the Departments of Agriculture, Education and Labor, which combined account for more annual spending than Defense, experienced an increase of more than 50 over the two-year period. Some of the budget increases, like those associated with unemployment insurance, should disappear when the economy rebounds, but much of the addition is permanent and is reflected in the president's projected future budget numbers. What has the increase bought us The president would have us believe that but for the stimulus, the economy would have sunk into the next Great Depression. The numbers tell a different story. Estimates of the effect of the stimulus on gross domestic product GDP range from zero to three percentage points of GDP. The current recession set GDP back by nine percentage points relative to where it would have been had times been normal.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616672","date":"2011-08-05","texts":"NEW YORK--Oil futures finished slightly higher, after signs of progress in Europe's debt crisis vaulted markets into positive territory late in the day. The higher close capped a day of volatile trading. Oil prices spent much of the day lower, gripped by fears about the weak global economic recovery, but an afternoon rally in the equities market was enough for crude futures to eke out gains. Some market participants said it was among the most turbulent trading days in recent memory. It's been very brutal, said Tony Rosado, a broker at GA Global Markets in New York. You have to have extremely deep pockets to trade this market. Light, sweet crude for September delivery rose 25 cents, or 0.3, to settle at 86.88 a barrel on the New York Mercantile Exchange. The contract sank to an intraday low of 82.87 a barrel, its lowest since Nov. 26, before ending the day higher.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613689","date":"2011-08-08","texts":"BANGALORE - India's technology sector is bracing for a potential slowdown in growth after the historic U.S. credit downgrade over the weekend, which heightened fears of a double-dip recession in the largest outsourcing market and sparked a sell-off in IT stocks Monday. Indian technology companies earn more than 80 of their revenue from the U.S. and Europe. Coupled with a full-blown debt crisis looming over Europe, the Standard & Poor's downgrade of the U.S. debt rating is raising concerns of a return to the recessionary times of 2008, when the local software industry bore the brunt of lower spending by cash-strapped clients. The Bombay Stock Exchange technology index closed 4.3 lower Monday, leading the 1.8 downfall in the broader Sensex. The downgrade may lead to a slowdown in business in the immediate term, Shami Khorana, president of the Americas division of HCL Technologies Ltd., said late Sunday. Clients in the U.S. might feel cost pressures immediately and go slow in their spending decisions, Mr. Khorana added. Shares of HCL, the fourth largest India-listed software exporter by sales, closed down 5.8 at 419.00 rupees 9.40 after touching their lowest level since December.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613570","date":"2011-08-09","texts":"JAKARTA--Investors and companies should look to Southeast Asia as they seek shelter from the world-wide markets meltdown, said the secretary general of the 10-member Association of Southeast Asian Nations. Surin Pitsuwan noted that Southeast Asia is growing, it is nestled between India and China and it dealt with its own scary debt problems over a decade ago, making it an attractive alternative amid the global volatility triggered by concerns about how the U.S. and Europe will deal with their debt, as well as whether the U.S. economy will slide into recession again. If they are looking for a safer haven, this is it, he told The Wall Street Journal in an interview. The Chinese and the Japanese that are worried will want to look around for better prospects for their investments and this is one of the hopeful regions. Foreign direct investment into the region jumped 38 to 75.8 billion last year, he said, much of it into the service sector as international corporations are rushing into the region to target its growing middle class. Asean's economic ministers are meeting this week in Indonesia in a scheduled summit to discuss further economic integration of the 10 members Singapore, Indonesia, Myanmar, Cambodia, Malaysia, Laos, The Philippines, Thailand, Vietnam and Brunei.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615394","date":"2011-08-09","texts":"Global demand worries pummeled oil prices in early Asia trading on Tuesday, with light, sweet crude for September delivery falling nearly 5 to a 11-month low of 76.56 a barrel, 33 off its April 29 high, on the New York Mercantile Exchange. This followed a drop of 5.57, or 6.4, to 81.31 a barrel in New York on Monday, a reaction to Standard & Poor's downgrade of U.S. debt on Friday. Brent crude on the ICE futures exchange on Monday settled down 5.63, or 5.2, to 103.74. The declines mark a steep drop from levels reached earlier this year. Benchmark crude in the U.S. shot to nearly 115 a barrel in May. At the time, the U.S. economic recovery appeared more stable, while the civil conflict in Libya spurred fears of widespread supply disruptions among major oil exporters.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615986","date":"2011-08-09","texts":"BANGALORE - Satyam Computer Services Ltd., which is recovering from India's biggest corporate scandal, Tuesday swung to a first-quarter consolidated net profit from a heavy loss the previous quarter, and then later unexpectedly announced plans to exit the U.S. stock market. The company, which is listed in the U.S. and India, was plunged into turmoil in 2009 after its then chairman Ramalinga Raju confessed to an accounting fraud. Tuesday, Satyam said it would unwind its American Depository Receipts as it couldn't restate earnings for some previous years due to a lack of required information. Satyam is current with its filings under Indian accounting standards, having reported regular results from the quarter that started in April 2010, but it hasn't done so under U.S. standards. The Hyderabad-based company, which is in the process of restating all its earnings from 2002 to 2008, was forced to delist from the New York Stock Exchange in late 2010 due to a failure to file results on time. It is now traded on the over-the-counter market in the U.S. It had been in talks with U.S. regulators to reduce the period it needed to restate its earnings under U.S. accounting standards for it to be eligible to relist on the NYSE. We were at an impasse, the company's chairman Vineet Nayyar told reporters.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614615","date":"2011-08-10","texts":"Government Spending Holds Key to Growth As goes government spending, so goes the U.S. economy. This is the unpleasant reality a weak recovery and already stretched Federal Reserve have bequeathed. Absent a sudden pick-up in private-sector activity, economic growth in the months ahead will largely take its cue from Congress and the White House. No wonder markets are jittery. For one, the hit from spending cuts across all levels of government has already been a major drag on growth. Indeed, these declines shaved 0.7 percentage point on average from gross domestic product growth in the first two quarters of 2011. Typically, that would be no disaster. Trouble is, this recovery has been unusually weak. So the government cutbacks effectively halved real GDP growth in the first half of 2011, leaving it at just 0.8 annualized. The pace of underlying growth is expected to pick up a bit in coming months. But so, too, is the pace of government spending cuts. A glimpse of this will come Wednesday with the release of July federal budget figures. These are expected to show a third month in a row of year-on-year declines in spending, or outlays, according to a preliminary analysis from the Congressional Budget Office. Their estimates show spending is down nearly 12 on average since May from a year earlier.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615452","date":"2011-08-10","texts":"A day after a scary plunge, financial markets got a boost Tuesday from the Federal Reserve's pledge to keep interest rates low. But the much-needed rally, coming in another wild, skittish session that sent the Dow Jones Industrial Average seesawing, did little to erase investors' underlying fear Can policy makers manage the significant headwinds buffeting European and American economies A promise by the Fed to keep rates exceptionally low until 2013 and some new, but vague, language about the tools at the central bank's disposal to stimulate the economy was enough to spark a 430-point gain in the Dow Jones Industrial Average -- a partial recovery after the benchmark index had dropped more than 1,000 points in the previous three trading days. The spark also ignited a rally in Asia, where shares rose broadly midday Wednesday but were off their morning highs. While the Fed's move may have stanched the bleeding in the stock markets and soothed frayed nerves, investors questioned its impact on the real economy, with interest rates already having been at rock bottom for nearly three years.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614424","date":"2011-08-12","texts":"'What is tax reform That's the Jeopardy-like question matching the answer The best step the government could take now to promote growth and employment. The Obama administration has been responding with What are higher marginal tax rates and more stimulus But fundamental tax reform offers three key benefits. First, reducing marginal tax rates on saving and investment and on work and entrepreneurship will increase capital formation and productivity, raising wages and output. Broadening the tax base and sharply lowering marginal tax rates can raise gross-domestic-product growth by a half to a full percentage point per year over a decade, according to an analysis of U.S. tax policy by economists Alan Auerbach and Kevin Hassett. A sustained economic expansion will reduce America's high rate of joblessness. Second, tax reform is part of the structural reform the economy needs. Our economic woes trace in part to an economy overly dependent on consumption and government. Removing these imbalances requires a reorientation toward investment and exports. Tax reform, by reducing or eliminating the double taxation of corporate equity and offering incentives for new business investment, will accelerate the economy's needed turn to investment. And lower business tax burdens increase U.S. competitiveness in exports and trade. Third, tax reform is a necessary precondition for any serious national discussion of long-term deficit reduction. President Obama's repeated calls to raise marginal tax rates on upper-income Americans call to mind the image of a dog chasing a car, then stopping to wonder what to do with it when he catches it. The near-term price of a presidential victory here would be lower growth and employment. Over the longer term, the president could not hope to raise sufficient revenue from the present tax system to fund his proposed federal spending share of GDP of 25 or more. I raise this observation not to advocate raising taxes, but to note that we cannot have a serious conversation about taxes versus spending -- with an eye toward a larger state -- without tax reform.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614288","date":"2011-08-13","texts":"JC Penney Co. on Friday echoed other midrange department stores in noting the heightened cautiousness of shoppers and posting mixed second-quarter results. The retailers serve as a window on how U.S. consumers--already chastened by high gasoline prices, a woeful housing market and high unemployment rates--are reacting to the recent stock-market turbulence fueled in part by the Standard & Poor's Corp. downgrade of U.S. debt. The consumer climate is clearly uncertain and the tumultuous last 10 days or so hasn't given our core customers, the middle-income family, any reason to be more confident, JC Penney Chief Executive Myron Mike Ullman said during a conference call to discuss the retailer's results. For the second quarter, JC Penney posted flat earnings on lower sales. Mr. Ullman added that a drive for value on the part of consumers could end up playing in JC Penney's favor because it caters to such buying habits.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614469","date":"2011-08-13","texts":"One of the 130 luxe motorcars and motorcycles heading to the auction block next week is a rare Rolls-Royce Silver Ghost -- one with an American pedigree. The 1920 car is a relic of Rolls's decade-long venture into production in Springfield, Mass. Seymour Knox Jr., an heir to the Woolworth fortune, got it from his mother for his 23rd birthday. The first American-finished Silver Ghost roadster, it's expected to sell for 450,000-600,000 at the Bonhams flagship motors auction Thursday and Friday in Carmel, Calif. The London-based auction house is expecting a strong sale, stock-market downturn or not. The antique luxury car market's steady upward slope since the mid-1990s wasn't dented by the last recession, says Rupert Banner, vice president of business development in the International Motoring Department at Bonhams. Supply of the cars is starting to dry up, he adds. Silver Ghosts so named for their speed and their silence achieved fame before World War I. During the war some were turned into mini tanks and armored cars. T.E. Lawrence, Lawrence of Arabia, adored his version A Rolls in the desert is above rubies, he once said. After the war, Rolls expected lighter demand in Europe, so in 1920 the company acquired a former motorcycle factory in Springfield, partly to introduce Silver Ghosts to Americans. Roger Morrison, president of the Silver Ghost Association, estimates the cost of the Knox Ghost at about 13,000. Mr. Knox's car still had a U.K.-built chassis full production began in Springfield by 1921.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615547","date":"2011-08-15","texts":"European stocks closed modestly higher Monday, as investors took the opportunity to snap up some bargains following last week's volatility and after a smaller-than-expected contraction in the Japanese economy provided support to the main equity markets along with surprise M&A news out of the U.S. Asian and European stock markets posted solid gains after data showed that Japan's gross domestic product contracted 1.3 in the second quarter, a much smaller drop than the 2.7 expected by economists who were concerned about the effects of the Japanese earthquake and tsunami in March 2011. The Stoxx Europe 600 index ended up 0.2 at 237.85. Last week, the index dropped to a two-year low of 217.37, while other European indexes jumped between losses and gains of around 3 on a daily basis. The U.K.'s FTSE 100 closed 0.6 higher at 5350.58. Germany's DAX ended up 0.4 at 6022.24 and France's CAC-40 increased 0.8 to 3239.06. The main Asian indexes also ended higher with Japan's Nikkei Stock Average closing up 1.4. By the close of European equity markets, the Dow Jones Industrial Average was up 1.0 and the S&P 500 was 1.1 higher. Deal news was a fillip here, after Motorola Mobility announced it is to be acquired by Google for 12.5 billion. In Europe, this provided a boost to Nokia, which closed up 9.1. In our view, further near-term performance is likely to be driven by speculation about a bid from another smart-phone industry player, said S&P Equity Research analyst James Crawshaw, commenting on the deal.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614852","date":"2011-08-18","texts":"MUMBAI -- ICICI Bank Ltd., India's largest private sector lender by assets, Thursday said it will launch two new home loan products with interest rates fixed for one and two years--a reminder of the teaser loan schemes which became a banking sector trend in 2009-2010. Fixed interest rates will shield customers from frequent changes in home loan interest rates, the bank said. Most lenders, after the 2008 Lehman crisis, had come out with loans at cheaper fixed rates to stimulate consumer demand as global conditions slowed growth in Asia's third-largest economy. But, as growth picked up pace and interest rates moved higher, the central bank raised provisioning rules on such loans, leading the lenders to discontinue these schemes. ICICI Bank will offer loans at interest rates of 10.50-11.50 for a fixed one-year tenure.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617161","date":"2011-08-19","texts":"As both the U.S. and European Union struggle to conjure the right combination of fiscal and monetary tools to rein in deficits while boosting economic growth, they risk overlooking trade policy. If the two powers want a noninflationary way to inject more dynamism into their economies, there is one quick step they could take agree to eliminate all tariffs in trans-Atlantic trade. While tariffs are already low between the U.S. and the EU, the enormous size of their economic relationship -- 600 billion in trade and 2 trillion invested by companies in each other's markets every year -- means that even small steps could yield significant gains in prosperity. According to a report by the Brussels-based European Center for International Political Economy, a trans-Atlantic zero-tariffs initiative would increase combined U.S.-EU gross domestic product by 180 billion within five years. That's more added growth than either would receive from the completion of the Doha Round of multilateral trade talks. And while Doha is facing serious obstacles to its completion, a Trans-Atlantic Zero deal could be signed quickly. The issues that have held up bilateral trade pacts in the past -- social, labor and environmental standards -- should not matter between the U.S. and EU, which share roughly similar ways of organizing their societies. Since one-third of trans-Atlantic trade occurs between branches of the same firm, eliminating tariffs on that trade would cut costs for both American and European companies and make them more competitive in global markets. That could help trans-Atlantic firms respond to the rise of Chinese, Indian, Brazilian and other emerging-market firms without resorting to protectionist measures. Whatever other policies emerge from Brussels and Washington, trade liberalization can only add to the economic potential of America and Europe. So why have we heard so little about it in the debates on either side of the Atlantic, even from leaders who have championed freer trade in the past","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617423","date":"2011-08-19","texts":"Money-market mutual funds, those havens of safety for investors during tumultuous times, are facing their own pressures as interest rates continue to decline. The funds, which historically aimed to provide higher yields than bank deposits without risk of losses, are waiving fees and consolidating -- or closing their doors altogether. The drop Thursday in the yield on the 10-year Treasury to below 2 in intraday trading provided fresh bad news for the funds. Money-market funds once were profit machines, collecting 13 billion in fees at their peak in 2008. But they have seen their revenues shrivel by 65 over the past three years as short-term interest rates have fallen to near zero. The Federal Reserve's announcement last week that it would likely leave rates untouched for the next two years erased hopes for improvement anytime soon, say analysts.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614231","date":"2011-08-21","texts":"Federal Reserve Chairman Ben Bernanke has put the financial world on notice Brace for two more years of rock-bottom interest rates. That is great news for borrowers, but it promises rough going for anyone seeking returns from fixed-income investments--from retirees to giant pension funds to companies sitting on record amounts of cash. It has been almost three years since the Fed cut its key rate to almost zero, and on Aug. 9, the central bank said rates are likely to remain there until at least mid-2013. Rates for everything from Treasury bills to money-market funds are near zero. The yield on the 10-year note briefly slid below 2 last week, a level last seen in April 1950. Central banks traditionally use low rates to prompt more borrowing and nudge investors to seek higher returns in riskier assets like stocks, thereby boosting the broader economy. But the benefits may not flow so easily. Consumers are showing few signs of wanting to borrow, bank and insurer profits are likely to suffer, and, with the stock market sliding, pension and other investment funds face years of low returns.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616537","date":"2011-08-23","texts":"NEW DELHI -- India's main software trade body Tuesday reiterated its estimate of the industry recording 16-18 growth in export revenue this fiscal year, despite fears of economic troubles in the main outsourcing markets. The National Association of Software and Services Companies, or Nasscom, had in February forecast the industry's export revenue at 68 billion-70 billion in the fiscal year that started April 1. We don't see any reasons to do it revise outlook, Som Mittal, president of the association, told reporters on the sidelines of an industry event. We had factored in a little bit of uncertainty when we gave the 16-18 growth outlook. Though Mr. Mittal said there was no reason to get worried about the current volatile economic environment, he added that there is a need to be cautious. Mr. Mittal's comments come after Infosys Ltd., India's second-largest software exporter by sales, Sunday warned about clients holding back their technology budgets if delays in taking spending decision persist in a weak economic environment.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614500","date":"2011-08-24","texts":"MUMBAI --Satyam Computer Services Ltd. has received an 18-month technology consulting contract worth about 5 million from U.S.-based EMC Corp., two people familiar with the matter said, indicating improving customer confidence in the Indian company emerging from the effects of a 2009 accounting fraud. The recently signed deal is one of the first consulting contracts since the information-technology company's founder and former Chairman B. Ramalinga Raju confessed in January 2009 to overstating profits and cash balances. Several clients had left the company following the fraud. A government-appointed board sold a controlling stake in Satyam to Tech Mahindra Ltd. in April 2009 through an auction and the company is on a recovery path since. The EMC contract requires Satyam to offer ways for the cloud-computing and security-services provider to integrate different services running on multiple devices on a single software platform, one of the people said recently. The consulting contract may pave the way for a wider technology services deal in future, the person added.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615662","date":"2011-08-24","texts":"U.S. stocks jumped on Tuesday as many investors sent a plea to Federal Reserve Chairman Ben Bernanke Come to the rescue of the stalling economy and battered financial markets. The Dow Jones Industrial Average jumped 322.11 points, or 3, to 11176.76 as a new round of bleak economy data helped buoy investor hopes that Mr. Bernanke will step in with some sort of monetary stimulus. That optimism comes despite all signs to the contrary. Federal Reserve officials are saying nothing to encourage market speculation that Mr. Bernanke will use a speech in Jackson Hole, Wyo., Friday to unveil further Fed action to boost U.S. economic growth. There's definitely a tint of optimism that he'll pull a rabbit out of his hat, said Michael Church, president of Addison Capital, who added he thought it unlikely. New data about the U.S. economy have been bleak. On Tuesday, the Federal Reserve Bank of Richmond, Va., said its latest survey of local manufacturers points to a downshift in activity. Last week, the Philadelphia Fed's survey of mid-Atlantic manufacturers and the New York Fed's Empire State survey also pointed down.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616417","date":"2011-08-24","texts":"It's not the price of gold that's going up. It's the price of fear. And fear has just passed 1,900 an ounce. Gold prices have already risen 46 since the start of the year and a whopping 19 this month alone. Behind these gains lies an intensifying fear that the monetary and fiscal authorities can get nothing right and everything wrong in their attempts to fix the fiscal problems in the world's ailing economies. The fear component of gold buying is driven by the negative real interest rates, the excessive government debt, and the rising fear of a collapse of the system, reckoned Austrian-based Erste Group's Ronald-Peter Stoferle. Gold remains an excellent hedge against worst-case scenarios, he added. There's nothing new here. Ancient kings got buried with their gold because they feared the afterlife and thought bringing some gold could help them with scenarios far worse than the inflation feared by modern-day fund managers. The question is when does the fear stop and the price of gold start going into reverse","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616472","date":"2011-08-25","texts":"Gold's glittering rise came to an abrupt halt on Wednesday as investors piled out of the metal, driving prices down 5.6. The decline lopped 104.20 off the price of a troy ounce, pushing it down to 1,754.10. It marked a dramatic reversal after weeks of gains. The slump began in early trading and selling accelerated quickly as volume spiked. Ominously, in some people's opinions, the move came amid little obviously negative news. That underscored for many analysts and investors how quickly sentiment can turn and how rapidly money can be siphoned out of the market. Gold's decade-long rally picked up steam in recent months, driving the metal from record to record, in nominal terms. In less than two months, it rose 27 and appeared to be headed to 2,000 an ounce. Just one year ago, gold was at 1,200. An exponential move like that is unsustainable, said Pratik Sharma, managing director of Atyant Capital, a firm in Boca Raton, Fla., that has a gold fund. Exuberance has to be washed out.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614081","date":"2011-08-26","texts":"More Liquidity Only Douses Growth Sparks Today's ultralow interest rates have helped boost profits, but not economic growth. This is plainly evident in recent figures. Since the recession ended in mid-2009, U.S. corporate profits have jumped by about 43 to a record 1.45 trillion as of the first quarter, after taxes, inventory and accounting adjustments, according to the Commerce Department. What hasn't recovered, however, is economic growth. Indeed, in real terms, gross domestic product hasn't even returned to its prerecession peak. On Friday, Commerce data is likely to show GDP losing further ground. Second-quarter growth, originally reported at a measly 1.3, is expected to be revised down to 1 in part because exports proved weaker than first thought. That follows GDP growth of just 0.4 in the first quarter, on a seasonally adjusted annualized basis.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617148","date":"2011-08-26","texts":"JACKSON HOLE, Wyo.--Federal Reserve Chairman Ben Bernanke Friday said the central bank stands ready to provide further support to a persistently weak economy, but didn't indicate any move was imminent despite fresh signs of feeble growth. In a much-anticipated speech to global monetary policymakers gathered in Wyoming, Mr. Bernanke didn't elaborate on the central bank's remaining tools to boost the economy, which could have been a sign that the Fed was leaning toward action. Instead, he said the Fed would extend its mid-September meeting to two days to discuss options the central bank could pursue. The Committee will continue to assess the economic outlook in light of incoming information and is prepared to employ its tools as appropriate to promote a stronger economic recovery in a context of price stability, Mr. Bernanke said. The Dow Jones Industrial Average opened lower and fell as much as 221 points right after Mr. Bernanke's comments. But stocks pared losses as some market participants applauded the Fed's measured approach. The Dow rose 134.72 points to close at 11284.54. Bond investors, however, bought safe-harbor Treasury bonds amid rising fears that the U.S. economy is headed into a recession, sending prices on the benchmark 10-year note higher.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617250","date":"2011-08-26","texts":"August stock-trading volume, usually thin as institutional traders and individual investors alike take summer vacation, has been inordinately heavy during the market gyrations this month -- forebodingly so on certain days. Market volume has been heaviest on down days and has been thinner when stocks have risen, underscoring a trend that isn't giving investors much hope during this turbulent trading environment. Stock-chart watchers say volume can be interpreted as a leading indicator for the market's moves. If volume leads on the downside, it could portend more selling heading into the autumn. By contrast, heavier trading when stocks are rising can signal more bullish times are on the horizon. On days that stocks have dropped this month, investors have traded about 6.26 billion shares in New York Stock Exchange composite volume, according to WSJ Market Data Group. By contrast, average NYSE composite volume on days when the market has risen is 5.81 billion. Fear is generating more volume on down days than skeptical optimism is generating on the up days, said John Schlitz, chief market technician at Instinet.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616443","date":"2011-08-27","texts":"Facing ballooning debt, the U.S. is conducting a real-time experiment in tightening government budgets in a fragile economy. There is widespread agreement the U.S. needs to tighten its belt in the long run, but debate is heating up over whether it is wise to cut budgets with the economy growing so slowly. Liberals say the turn toward austerity -- at the federal, state and local level -- is creating what economists call fiscal drag, slowing an already slow economy. Conservatives counter that the size of the current and future deficits is creating so much uncertainty -- and such deep fears of long-term tax increases -- that it is dragging down the economy even in the short run. The dilemma was captured by Federal Reserve Chairman Ben Bernanke Friday, when he called for putting debt on a sustainable path while warning against the creation of fiscal headwinds for the current recovery. Conventional macroeconomic analyses, built on the foundation laid by John Maynard Keynes and his followers, suggest austerity measures are hurting.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617323","date":"2011-08-29","texts":"New York-area financial exchanges and some of the city's large banking firms said they planned to open Monday, after Manhattan emerged from the storm largely unscathed. But few expected a quick return to normal life. While officials said New York's subway would be largely operational, many trains from the suburbs won't run and many surrounding bedroom communities remained hampered by fallen trees and flooded roads. The ability to conduct any business would prove welcome. The rare threat of a hurricane had New York City braced for the worst. After officials shut down subways and buses for safety reasons, retailers, museums, Broadway theaters, restaurants and even nail salons followed suit, bringing the city to a standstill. Concern focused in part on the fate of the Financial District downtown, considered one of Manhattan's more vulnerable areas. But after a rainy night Saturday, the storm moved northward on Sunday having done little damage in Manhattan. In most of Manhattan, including downtown, power was largely intact and there was minimal flooding. In Battery Park City, an area along the mouth of Hudson River that the mayor's office had ordered evacuated, residents were biking and jogging by lunchtime Sunday.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616613","date":"2011-09-01","texts":"Long-term mutual funds had estimated outflows of 2.04 billion in the latest week as investors pulled more money from U.S. and foreign funds than they put into bond and hybrid funds, according to the Investment Company Institute. The funds tracked by ICI have posted outflows for the last six weeks in a row, as volatility in the stock market related to the U.S. debt-ceiling debate and concerns about stagnant domestic growth and the European debt crisis has rattled investors. For the week ended Aug. 24, equity funds had outflows of 3.21 billion, compared with inflows of 1.69 billion in the prior week. Investors pulled 2.6 billion from U.S. equities and withdrew 610 million from foreign funds. Meanwhile, ICI reported bond funds had inflows of 295 million, compared to week-earlier outflows of 3.12 billion. Investors put 287 million into taxable funds, while inflows to municipal funds totaled 8 million. Investors also added 871 million to hybrid funds after prior-week inflows of 874 million. Such funds can invest in both stocks and fixed-income assets.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616815","date":"2011-09-01","texts":"Osama bin Laden vowed to bleed America to the point of bankruptcy, Allah willing. He failed. The Sept. 11, 2001, terror attacks were enormously costly to the U.S., though not in the ways expected initially. Sept. 11 did not, as feared, trigger a wrenching recession the bursting of the housing bubble was worse. And despite lines at airport security, Sept. 11 did not dent the efficiency of the U.S. economy productivity kept growing. But Sept. 11 did cost a lot in other ways. The attacks led to Afghanistan and Iraq, wars that already have cost nearly twice what Vietnam did, adjusted for inflation. Putting a price tag on the human toll from 911 is impossible. Nearly 3,000 were killed in the attacks. More than 6,200 U.S. troops have been killed in Afghanistan and Iraq. Measuring the impact of 911 on the American psyche and its sense of security and freedom is difficult. But one can, with the hindsight of a decade, begin to tally the quantifiable economic costs.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616908","date":"2011-09-01","texts":"The number of people claiming new jobless benefits dropped last week, but the still-elevated level reflects a continued weakness in the U.S. labor market. Separately, U.S. labor costs rose last spring even more than first thought as worker productivity fell, threatening to hurt corporate profits and job growth amid the economy's fight to recover. Initial jobless claims fell by 12,000 to a seasonally adjusted 409,000 in the week ended Aug. 27, the Labor Department said Thursday. Claims filed in the previous week were revised to 421,000 from an originally reported 417,000. Economists had forecast claims would drop by less than they did. A Dow Jones Newswires survey put the expected decline at 7,000. However, the level remains too high economists generally think the economy is adding more jobs than it is shedding when claims drop below 400,000. The four-week moving average of new claims, a more reliable indicator of the labor market's recent performance because it smooths out volatile weekly data, rose by 1,750 to 410,250.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615402","date":"2011-09-02","texts":"A top official at the Federal Reserve called for more aggressive action to help the housing market by allowing more homeowners to refinance and by converting some foreclosures into rental housing. Home sales have been disappointing this year, with tight credit and weak demand making it harder for markets to absorb a steady stream of foreclosed properties. Clearly the market is not functioning as it should, said Federal Reserve Governor Elizabeth Duke in a speech Thursday in Washington. Though mortgage rates are hovering near the lowest levels in decades and the Fed pledged last month to keep interest rates close to zero for another two years, many Americans haven't been able to refinance their home loans because they don't have enough equity or they can't qualify under rigid standards. Ms. Duke said that policy makers should consider enhancing an existing White House program designed to facilitate more refinancing of loans guaranteed by government-supported mortgage firms Fannie Mae and Freddie Mac. Allowing more homeowners to take advantage of low interest rates to reduce their monthly payments could both lower the risk of future defaults and boost the weak U.S. economic recovery.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616064","date":"2011-09-08","texts":"NEW YORK--Crude futures were nearly flat as traders waited for more clues on how policy makers will act to spur the economy. Light, sweet crude for October delivery was up 16 cents, or 0.2, at 89.50 a barrel in early trade on the New York Mercantile Exchange. Brent crude on the ICE futures exchange edged 0.2 higher at 115.97 a barrel. After rising to one-month highs Wednesday, oil futures are holding steady ahead of speeches by Federal Reserve Chairman Ben Bernanke and President Barack Obama. The U.S. officials are expected to provide some indications of how the government will tackle stalled economic growth. The fate of the broader economy has become the main driver of crude prices in recent weeks. Traders are concerned that Europe's debt crisis could push major economies back into recession, hurting oil demand. Oil futures have followed the stock market as a proxy for economic growth expectations.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616200","date":"2011-09-08","texts":"Long-term mutual funds had estimated inflows of 902 million in the latest week on an increase to hybrid funds that more than offset declines from the bond and equity categories, according to the Investment Company Institute. The funds tracked by ICI have posted outflows in six of the last seven weeks, as volatility in the stock market related to the U.S. debt ceiling and concerns about stagnant domestic economic growth and the European sovereign-debt crisis has rattled investors. For the week ended Aug. 31, equity funds had outflows of 131 million, compared with outflows of 3.2 billion in the prior week. Investors withdrew 748 million from U.S. equities but added 617 million to foreign funds. Meanwhile, ICI reported bond funds had outflows of 76 million, compared with week-earlier outflows of 20 million. Investors pulled 303 million from taxable funds, while inflows to municipal funds totaled 227 million. Investors also added 1.11 billion to hybrid funds after prior-week inflows of 871 million. Such funds can invest in both stocks and fixed-income assets.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615397","date":"2011-09-09","texts":"Financial Analysis and Commentary Faced with a slowing economy, stubbornly high unemployment, volatile markets and a split on the monetary-policy committee, Ben Bernanke still has time for humor. Asked after his speech to the Economic Club of Minnesota about disagreements over what the Federal Reserve should do next, Chairman Bernanke joked When two people always agree, one is redundant. And, while markets fell on disappointment that he offered no new commitments to easing, Mr. Bernanke took full advantage of the final soft-ball question from Steve Sanger, former CEO of General Mills. It avoided addressing the economy and the Fed's response at all. Instead, Mr Bernanke was asked what he thought of actor Paul Giamatti's portrayal of him in the HBO movie Too Big to Fail. He said he had never seen it I saw the original. ---","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616656","date":"2011-09-10","texts":"Economists gave a range of reviews to President Barack Obama's jobs plan, from predictions that it would have no impact on the U.S. economy to estimates that the proposal could add as much as two percentage points to annual growth. Mr. Obama's 447 billion proposal, a combination of tax cuts and spending programs worth about 3 of gross domestic product, is intended to spur expansion as the economic recovery is at risk of stalling. Many analysts and policy makers, including White House officials, expect Congress to back only parts of the plan, which would diminish the economic benefits. On the low end of expectations, Tom Porcelli, an RBC Capital Markets analyst, said he expected the overall plan to have little economic impact, in part because he expects consumers will use some of the tax savings not to shop but to pay down debt. Meanwhile, forecasting firm Macroeconomic Advisers predicted the plan would add 1.3 percentage points to the economy's growth rate by the end of 2012 and another 0.2 of a point in 2013. The proposal would add 1.3 million jobs next year and another 800,000 in 2013, the firm estimated.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617023","date":"2011-09-12","texts":"Despite being on track to offer some of the lowest yields in history, this week's auctions of 66 billion in Treasury securities are likely to get strong demand because investors expect new Federal Reserve stimulus that will keep yields under pressure. These auctions are going to go very well, said Eric Green, chief U.S. rates strategist at TD Securities. The path of least resistance is lower yields, and there is every reason to believe that perception of the Fed doing something will persist up to the Fed's September meeting. Mr. Green said it wouldn't be surprising to see the benchmark 10-year Treasury note's yield fall toward 1.5 this year. It ended at a record low 1.917 late Friday, down from 1.986 Thursday and 2.000 a week earlier. Yields move inversely to prices. The Treasury is scheduled to sell 32 billion in three-year notes Monday, 21 billion in 10-year notes Tuesday and 13 billion in 30-year bonds Wednesday. Also, the euro zone's deteriorating sovereign-debt crisis is expected to help keep demand high for U.S. government debt.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614683","date":"2011-09-14","texts":"Xerox Corp.'s reinvention of itself as a business-services outsourcer after a century focused on selling printers and copiers has shown signs of promise, but some investors remain unpersuaded about the company's growth prospects. Xeroxing a document has become synonymous with photocopying it -- an increasingly irrelevant concept in today's digital-document age for the iconic Norwalk, Conn., company that has become a leader in the digital-imaging industry. To boost its competitiveness, Xerox built a business that offers services to companies. That business now accounts for about half of the company's total revenue. This includes managing New Jersey's E-ZPass toll collection system and administering Procter & Gamble Co.'s employee benefits. The cornerstone of Xerox's services strategy was its 6.4 billion acquisition last year of outsourcer Affiliated Computer Services, which more than doubled Xerox's headcount and has helped boost revenue in recent quarters. ACS handles business processes and information technology for companies and government agencies to help them cut costs and focus on their core operations. Xerox has forecast revenue will rise 4 to 6 next year, as it expects both itself and ACS will win contracts that neither business could have competed for individually. Xerox also said the ACS deal would improve margins and bring in recurring revenue streams that generate a lot of cash for potential share buybacks.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616777","date":"2011-09-16","texts":"NEW DELHI -- State-run Oil & Natural Gas Corp. Friday deferred India's sixth-largest-ever public share sale because of what analysts said was a pricing disagreement between the government and the planned offering's managers. The more than 2 billion secondary share sale was seen as being crucial to testing investor appetite in one of the world's worst-performing stock markets this year. The sale is vital also for the federal government's aim to raise 400 billion rupees 8.42 billion for social projects through the sale of state assets in the current financial year through March. So far, the government has managed to raise only 11.5 billion rupees, or only 2.9 of the full-year's aim, and there was talk in late August that the target may be cut to 250 billion rupees because of market volatility. Friday, ONGC didn't give a reason for the deferment, which comes just four days ahead of its planned opening on Sept. 20. And it didn't give revised dates as well, saying only that it will evaluate its decision in relation to the offer in due course.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615250","date":"2011-09-17","texts":"Growing numbers of investing experts have been declaring that gold is a bubble an insanely overvalued asset whose price is bound to burst. There is no basis for that opinion. And understanding why can help point an investor toward clearer thinking about frenzied markets. Sure, gold seems expensive. At its recent price of 1,813 an ounce, gold is off only slightly from the record high of 1,912 touched on Sept. 6 unadjusted for inflation. Gold is up more than 40 over the past year, largely on fears that paper currencies like the dollar won't retain their value. But that doesn't mean it is overvalued. Unlike bonds, which provide interest income, and stocks, which produce dividends and earnings growth, gold generates no cash flows. As John C. Bogle, founder of the Vanguard funds, told me two weeks ago, gold has no internal rate of return. As a result, there isn't any reliable way to tell what it is worth. So the people who say gold is in a bubble might well be right. But the people who think gold is heading for 2,500, 5,000 or 10,000 also might be right.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614648","date":"2011-09-20","texts":"Italian fashion house Prada SpA on Monday posted a 74 rise in first-half net profit, driven by strong demand in Asia--in particular China--and said it is confident of good full-year results. Sales in Asia rose more than 35 to euro368 million. The company said that leather goods performed particularly well, with sales up 35.3. Leather goods now represent more than 55 of total sales. Deputy Chairman Carlo Mazzi said he is quite confident Prada will deliver good results in the future, and dismissed any concerns that the company may be affected by the economic crisis in Europe and the U.S. Mr. Mazzi said the company had seen no signs of decreasing orders or negative signs from consumers, according to data at the end of June, and noted that Chief Executive Patrizio Bertelli was positive about the future growth of the group. However, he declined to comment on whether the Milan-based luxury-apparel maker will continue to pay a dividend in 2011. Mr. Mazzi said Prada will continue to manufacture its products around the world so it can benefit from lower costs and high quality. He cited India as an example of a country where handmade totes can be produced maintaining the same quality level as the ones produced in Italy, but at a cheaper cost.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615194","date":"2011-09-21","texts":"VIENNA -- The euro zone will avoid a double-dip recession despite signs of weakening in Germany's economy, a top European Central Bank official said, suggesting the hurdle for interest-rate cuts or other stimulus remains high. In an interview, Austrian central bank Gov. Ewald Nowotny struck back at recent criticisms from the U.S. over Europe's handling of the Greek debt crisis, saying Europeans can handle their own affairs. He also expressed frustration at the increasing demands being placed on the ECB to contain the debt crisis, and signaled there is little more the central bank can do to spur growth. I do not think there are many possibilities for further specific actions, Mr. Nowotny said in the interview Monday in Vienna. The ECB at its Sept. 8 meeting downgraded its outlook for the rest of this year and 2012, a surprising reversal for a central bank that raised interest rates two months earlier. Many economists took that as a signal that the ECB might lower its main policy rate, currently 1.5, if needed to protect the recovery. Other major central banks, such as the Federal Reserve and Bank of England, have policy rates closer to zero, leaving the ECB as the only major developed-country central bank with any firepower on rates. Yet Mr. Nowotny's remarks suggest officials would need to see much more weakness to spur a rethink on interest-rate levels.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616140","date":"2011-09-21","texts":"The title says it all Eclipse Living in the Shadow of China's Economic Dominance. Arvind Subramanian's new book is a good example of a more aggressive line of argument regarding China--that it's a matter of whether, not when, China will take over economic leadership of the world. But China's road to real financial influence promises to be far longer and rockier than the GDP numbers would suggest. The argument for dominance has two prongs. The first is that China's economy will very soon be larger than either the U.S. or the EU. And second, as this happens the yuan will also naturally replace the dollar as the global reserve currency, with profound consequences for international markets. On the first issue, there is little debate. China already has a 7 trillion economy, roughly half the size of the U.S. or the EU. If it can continue to grow even at 6 to 7 a year, not even at 10 or 11 as it did through much of the 2000s, then in five years the Chinese economy could easily pass the 15 trillion mark, where the U.S. is today. By the end of this decade, China should already be larger than the U.S. and equal to Europe. The future of China's financial role is murkier. Within 10 years the yuan will probably play only a marginally more important global role than it does today. It won't replace the U.S. dollar as the world's reserve currency, and it may not even challenge the Japanese yen or the pound sterling. Why It's one thing to hold the yuan for trade invoicing, but if you're going to hold it as a liquid safe haven portfolio investment choice, you need free and unfettered access to deep domestic fixed-income markets. This is what the dollar and euro offer, and essentially so do the yen and other G-10 major currencies.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616216","date":"2011-09-22","texts":"Businesses that have been improperly labeling their employees as independent contractors got a surprise break Wednesday A new Internal Revenue Service program will allow those businesses to reclassify workers and make only a small payment to cover past payroll taxes. The downside for such companies Regulators say they are going to be more vigilant about misclassification of workers in the future. At issue is whether a worker is deemed an employee or an independent contractor. The proper classification depends on factors including how much control or direction an employer wields over workers. Employees are entitled to benefits and legal protections, and their wages are subject to payroll taxes. Companies aren't required to withhold income taxes from independent contractors or pay Social Security or Medicare taxes for them. Independent contractors also aren't covered by many labor protections, including minimum-wage and overtime laws, and unemployment or workers' compensation insurance. The trouble for businesses, however, is that the distinction between the two categories is vague. The current law is based on a common-law standard involving some 20 factors.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616698","date":"2011-09-22","texts":"Despite a decade of technological advances that make it possible to work almost anywhere, many of the nation's most educated people continue to cluster in a handful of dominant metropolitan areas such as Boston, New York and California's Silicon Valley, according to census data released Thursday. The upshot is that regions with the most skilled and highly paid workers continue to widen their advantages over less well-endowed locales. In a knowledge economy, success breeds success, said Alan Berube, a senior fellow at the Brookings Institution in Washington, D.C. Of the largest 100 metropolitan areas, those with the highest percentage of college graduates in 2000 outpaced in education gains areas with lower percentages of college grads. For instance, the 10 cities with the highest share of their population holding a bachelor's degree or higher saw that share jump by an average of 4.6 percentage points over the decade, while the bottom 10 saw their share grow 3.1 percentage points. Those higher-educated areas also tend to be the highest-earning. In the San Francisco metro area, where 43 of adult residents have a college degree or higher, the median household income stands at 73,027. Nationwide, 28.2 of people aged 25 and older have a college degree, and the median household income is 50,046.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617065","date":"2011-09-24","texts":"NEW YORK--After a relentless two-day rally, the bull run in Treasurys hit the skids Friday with benchmark yields rising from the lowest level since the 1940s. But the selloff only put a dent in the sharp run-up in bond prices this week. The 30-year bond was the biggest winner and its yield, which moves inversely to its bond price, tumbled about 0.47 percentage point for the week. That was the biggest weekly decline since December 2008 when Treasury prices soared on the financial crisis. The benchmark 10-year note was 2732 lower to yield 1.810. The 30-year bond was 1 2832 lower to yield 2.872. The two-year note was 132 lower to yield 0.214. Some traders were quick to claim that it was a sign that a correction is due for the ferocious strength over the past seven months. The benchmark 10-year yield has tumbled from this year's peak of 3.77 in February and earlier Friday touched a fresh historic low of 1.672. Demand for safe-haven Treasurys had intensified this month due to rising fears about the global economy and the euro-zone's debt crisis. The Federal Reserve's announcement earlier this week to sell 400 billion short-dated bonds to buy longer-dated Treasurys triggered more flight into the 10-year and 30-year Treasurys. Investors are heartened that the Fed's buying binge in coming months could help boost the value of the bonds.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616413","date":"2011-09-25","texts":"After seesawing through the summer between gut-wrenching triple-digit selloffs and euphoric triple-digit rallies, the stock market last week appeared to have finally made up its mind. And it wasn't pretty. Yet another wave of concern over European debt and fresh fears that the U.S. is sliding back into recession whacked investments across the board, from emerging markets to gold futures, small caps to blue chips. The Dow Jones Industrial Average of 30 big stocks tumbled 6.4, the Dow's worst week since Oct. 10, 2008. The broader Standard & Poor's 500-stock index finished down 6.5, while the tech-dominiated Nasdaq Composite dropped 5.3. Asian and European indexes logged similar declines. Oil prices fell 9.2. Silver fell 26. And even gold, the market darling of the past year, dropped 9.6.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615322","date":"2011-09-26","texts":"New-home sales fell for the fourth-straight month in August to the lowest level in a half year as the bursting of the housing bubble continues to plague the U.S. economy. Sales fell by 2.3 on a monthly basis to a seasonally adjusted annual rate of 295,000, the Commerce Department said Monday. It was the weakest pace in six months and the seventh-worst month on records dating to 1963. The results, however, were in line with forecasts, and July's results were revised upward slightly to a rate of 302,000. Compared with a year earlier, when new-home sales hit a record-low pace of 278,000, new-home sales were up 6.1. August was an especially weak month for the new-homes market for several reasons. Turmoil in financial markets after Standard & Poor's unprecedented downgrade of U.S. debt, fears of a renewed recession and Hurricane Irene all combined to keep buyers away. Given all those negative factors, we are moderately relieved at this number, wrote Ian Shepherdson, chief U.S. economist at High Frequency Economics. Still, the market is dead, and even record-low mortgage rates are not doing anything to help.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617402","date":"2011-09-26","texts":"HONG KONG--A surprise profit warning by a meat processor and news of market-misconduct proceedings against a vegetable producer have put listed Chinese companies once again under the corporate-governance spotlight. China Yurun Food Group Ltd.'s warning Monday that its third-quarter net profit will be down--in part due to negative publicity involving tainted pork--sent the company's shares tumbling 31 to 7.51 Hong Kong dollars 96 U.S. cents, the lowest close in nearly three years. Also Monday, the Hong Kong government confirmed proceedings against Chaoda Modern Agriculture Holdings Ltd. in the Market Misconduct Tribunal, sending its shares down 27 to HK1.10 before a midafternoon trading suspension. Chaoda Modern, which grows and processes fruits and vegetables in China, said trading was suspended ahead of the release of price-sensitive information from the company. It didn't elaborate, and declined comment Monday. The charges against Chaoda Modern weren't specified. The tribunal handles civil cases on matters such as insider trading, false trading, price rigging and stock-market manipulation against companies and directors regulated under Hong Kong securities laws. Since June, a number of overseas-listed Chinese businesses have faced intense media and investor scrutiny over accounting practices and allegations of impropriety, with trading in several stocks listed in the U.S., Canada and Hong Kong still suspended. Shares in many other listed Chinese companies fell sharply as investors dumped what they considered increasingly risky investments.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615865","date":"2011-09-27","texts":"NEW YORK--Major government bonds markets in the U.S., Germany and the U.K. suffered broad selloff as hopes of solution to the euro-zone's debt crisis generated a strong rally in stocks and commodities. The selling over the last three sessions has boosted benchmark yields significantly from their historic lows made last week. The quick reversal of the flight-to-quality trade suggested that as yields tumbled to rock-bottom levels, any corrective selling would likely be relatively sharp. While the situation in the euro zone remains fluid, optimism has swirled over the past two sessions that under pressure from other world leaders, policy makers from the euro zone may need to be more aggressive in preventing the debt crisis from deteriorating. A blowout of the crisis in the euro zone will not only undermine the region's banking system and its economy but a spillover to other regions could fuel another global financial crisis. Treasurys continue to sell off as risk is being put back on, said Sean Simko, who manages a 7 billion fixed-income portfolio at SEI. Investors are now sensing that the European government is acknowledging the severity of the current situation attempting to take decisive action. For now, the optimism on the euro zone has pushed up Treasury yields noticeably from their recent lows. The benchmark 10-year yield, which moves inversely to its price, has risen about 0.30 percentage point from 1.67 set on Friday, which is the lowest level since 1940s. The 30-year yield has jumped more than 0.30 percentage point from last week's trough of 2.738.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614783","date":"2011-09-29","texts":"Fixed mortgage rates in the U.S. sank to record lows over the past week following the Federal Reserve's decision to lengthen the average maturity of its massive balance sheet, according to Freddie Mac's weekly survey of mortgage rates. Freddie Mac Chief Economist Frank Nothaft noted that interest rates for adjustable-rate mortgages were nearly unchanged due to Fed plans to sell 400 billion in short-term Treasury securities, which serve as benchmarks for many ARMs. The 30-year fixed-rate mortgage averaged 4.01 for the week ended Thursday, down from 4.09 the previous week and 4.32 last year. Rates on 15-year fixed-rate mortgages averaged 3.28, down from 3.29 last week and 3.75 a year earlier. Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 3.02, unchanged from last week and down from 3.52 a year ago. One-year Treasury-indexed ARM rates averaged 2.83, up slightly from 2.82 in the prior week but below the 3.48 average seen last year. To obtain the rates, 30-year and 15-year fixed-rate mortgages required an average payment of 0.7 point.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615589","date":"2011-09-29","texts":"U.S. stocks snapped a three-day winning streak, sinking as a drop in commodities prices added to concerns about policy makers' abilities to contain Europe's debt crisis. The Dow Jones Industrial Average fell 179.79 points, or 1.61, to 11010.90. The Standard & Poor's 500-stock index lost 24.32 points, or 2.07, at 1151.06, while the Nasdaq Composite shed 55.25 points, or 2.17, to 2491.58. The decline comes after a three-day run that added 4.3 to the Dow. On Wednesday, the Dow shot up more than 125 points in early trading before turning negative. Near the end of the day, the blue-chip index lurched lower, falling by about 160 points during the final hour as copper prices slid, dragging down materials stocks. The moves came on a day when Finland voted to approve changes to the euro-zone bailout fund. Germany votes on the changes Thursday. Whenever the stock market is driven more by emotions and hope than fundamentals, you're likely to see sentiment change quickly, said Kate Warne, investment strategist for retail-investor brokerage firm Edward Jones in St. Louis.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615678","date":"2011-09-29","texts":"European stocks shook off early weakness to end higher Thursday, and the euro rose, as upbeat U.S. data and Germany's approval of the European Financial Stability Facility extension propped up confidence--for now, at least. The Stoxx Europe 600 index closed up 0.7 at 228.90. France's CAC-40 index ended up 1.1 at 3027.65 and Germany's DAX added 1.1 to 5639.58. However, the U.K. market significantly underperformed its European peers. Weakness in key metals prices weighed on the FTSE 100's heavily weighted mining sector, pushing the index down 0.4 to 5196.84, as investors worried about the possibility of a hard landing in China. Stocks edged cautiously higher ahead of Germany's crucial vote on the extension of the European Financial Stability Facility, which turned out to be favorable. Later in the session, some encouraging U.S. data in the form of better-than-expected initial jobless claims and GDP numbers also helped to underpin sentiment. The U.S. economy expanded more than previously thought in the second quarter, providing a glimmer of hope. Gross domestic product grew at an inflation-adjusted rate of 1.3 from April to June, compared with a previous estimate of 1.0. Meanwhile, data showed the number of workers filing initial jobless claims fell by 37,000 last week, versus expectations of a 3,000 drop.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613980","date":"2011-09-30","texts":"NEW YORK--Reflecting its growing concerns about the global economic outlook, Pacific Investment Management Co., which runs the world's biggest bond fund, is dialing back exposure to riskier assets and moving to relatively high-quality investments. In the company's latest quarterly outlook, Saumil Parikh, a senior portfolio manager at Pimco and a member of the company's Investment Committee, said Pimco has been focused on cutting exposure to bonds sold by financial institutions in Europe, staying underweight in stocks in developed markets and reducing exposure to the foreign-exchange markets that have been whacked by heightened volatility this month. A main strategy over the next six to 12 months is to favor high-quality assets. Mr. Parikh said the company favors strong emerging-market debt, both corporates and sovereigns, as well as U.S. municipal bonds and U.S. agency and nonagency mortgages. Given our outlook for slow growth globally and recession in Europe, we are focusing on protecting portfolios against downside risk, Mr. Parikh said. Pimco investment professionals from around the world gather every quarter in Newport Beach, Calif., at the firm's headquarters to discuss the outlook for the global economy and financial markets. A copy of Mr. Parikh's comments was reviewed by Dow Jones Newswires.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615762","date":"2011-10-01","texts":"Stock markets ended a turbulent quarter on a sour note on Friday, with shares falling sharply amid investors' growing despair about political efforts to deal with the monumental challenges facing the world economy. The Dow Jones Industrial Average dropped 2.16 on Friday, ending the quarter down 12--its worst percentage decline since the first quarter of 2009. Stocks in Europe and Asia also fell. The selloff capped a dismal quarter marked by anxiety about the European sovereign-debt crisis, a U.S. economy flirting with a double-dip recession, and signs that hitherto fast-growing economies such as China are slowing down. Even some famed safe havens failed to perform--gold tumbled toward the end of the quarter, and the Swiss franc also dropped. I'd like to forget all about it, said Randy Frederick, director of trading and derivatives at Charles Schwab in Austin, Texas. It was an ugly quarter, and it started right after the quarter began. There was a whole string of things. When the market might have wanted to go higher, something always seemed to come along to squash it. The onslaught of bad news, coupled with periodic flashes of optimism, led to one of the most volatile periods ever for stocks. On Friday, the Dow plunged 240.60 points to 10913.38, after big gains earlier in the week. That was the 18th time the Dow moved by more than 200 points in the quarter. In August, it swung by more than 400 points in four consecutive days.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615270","date":"2011-10-03","texts":"After weeks of market anticipation, the Federal Reserve on Monday began implementing Operation Twist, the plan to shift its Treasury holdings into longer-term U.S. debt. The central bank bought 2.5 billion in Treasury bonds with maturation dates of between 25 years and 30 years from its network of 20 primary dealers, which trade directly with the Fed. Dealers submitted offers to sell bonds with a face value of roughly 7.5 billion. The Fed decided which offers to buy based on its models of fair prices. But some market observers said relatively few bondholders lined up to sell their Treasurys, a sign than many may believe prices have room to rally. The offer of only 7.5 billion dollars into the Fed bid demonstrates that people aren't ready to take their profits yet from the big run-up in September, said Jim Vogel, interest-rate strategist at FTN Financial In recent months, Treasury prices have risen on expectations that the Fed would undertake another round of bond buying. During the third-quarter, the benchmark 10-year note's yield, which moves in the opposite direction of price, tumbled 1.23 percentage points. Yields on the 30-year Treasury note fell even further, dropping 1.46 percentage points.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613919","date":"2011-10-06","texts":"The once-dizzying rise in the value of privately owned Facebook Inc. has slowed, a sign the social network hasn't been immune to broader market volatility or the weakness in the global economy. Despite the cooling, Facebook next year still is expected to make one of the largest U.S. initial public offerings ever. For now, its stock is traded on secondary marketplaces where wealthy investors and institutions can purchase shares offered mostly by former employees. Facebook share prices surged 70 to 34 in March from December, as reported in auctions by SharesPost Inc., a trading platform for stocks of privately owned companies. The growth since has leveled off, with shares trading at 35 or below. Facebook's price has fallen 8 since July, to 32.10 in a SharesPost auction held last week, valuing the entire company at roughly 77 billion. Facebook isn't alone, or even the worst hit of its bretheren. Hot technology companies that have gone public in recent years also took hits in the market-wide downturn. The Standard & Poor's 500-stock index has dropped 16 from its April peak, during which time the Nasdaq Stock Market Internet index has slid 21. Investors and analysts say the price of Facebook's stock, owned mostly by employees and outside investors, can't easily be pinned down because trades take place in a variety of venues, some of which don't disclose the prices. Also, valuations based on just a few buyers and sellers might not reflect how a company would be valued if millions of its shares were traded publicly.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616486","date":"2011-10-06","texts":"WASHINGTON--New claims for unemployment benefits ticked up last week after the previous week's steep drop hinted at hope for the U.S. jobs market. Initial jobless claims rose by 6,000 to a seasonally adjusted 401,000 for the week ended Oct. 1, the Labor Department said Thursday. Claims filed in the previous week had dropped by 33,000, the sharpest decline in more than four months. The four-week moving average of new claims, a more reliable indicator of the labor market's performance because it smooths out volatile weekly figures, fell by 4,000 to 414,000. The figures suggest the labor market is stabilizing after the bad claim numbers between mid-August and mid-September. They indicate that at summer's end, the U.S. economy hit a soft patch but didn't return to recession. Most companies seem to be in wait-and-see mode, reluctant to ramp up hiring, but loath to make big layoffs. The unemployment rate may be stubbornly high at 9.1, but it could be worse, it could be rising which would mean we really were in a recession, Chris Rupkey, economist at Bank of Tokyo-Mitsubishi UFJ in New York, wrote in a note.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617267","date":"2011-10-06","texts":"An unexpected group of defensive stocks is emerging from the chaos of the stock market credit-card companies. Stocks of MasterCard Inc. and Visa Inc., which run the processing networks for credit-card transactions, are charging ahead, climbing 40 and 21, respectively, this year. They have far outpaced typical defensive sectors such as utilities, up 4.2, and consumer staples, up 0.5. Credit-card companies typically aren't considered defensive plays due to the cyclical nature of the financial sector. The gains contrast with a 15 drop as of Wednesday in the Standard & Poor's Consumer Finance Index this year. Even though the economy is barely expanding, shoppers still are swiping cards at an increasing rate. This is a point of attraction for investors seeking exposure to a segment of the financial-services industry that isn't being ravaged by worries about euro-zone debt or the outlook for global growth. If you have to have exposure to financial services, then credit-card companies seem to be a lower-risk vehicle without exposing yourself to sovereign-debt worries or mortgage problems, said Phil Orlando, equity strategist at Federated Investors.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616432","date":"2011-10-13","texts":"An estimated 10.95 billion was pulled from long-term mutual funds in the latest week, according to the Investment Company Institute. The outflows came on declines in bond, hybrid and domestic-equities funds, offsetting gains in foreign-equities and municipal funds, the ICI said. Despite some recent inflows of cash, the funds haven't yet come close to recovering from a six-week streak of steeper outflows, when investors retreated from a volatile stock market amid concerns about an uncertain economic outlook and worries about the debt load in the U.S. and Europe. For the week ended Oct. 5, equity funds had outflows of 3.79 billion, compared with outflows of 6.59 billion in the prior week. Investors pulled 4.29 billion from U.S. equities and added 498 million to foreign funds. Meanwhile, ICI reported bond funds had outflows of 5.8 billion, compared with prior-week inflows of 3.48 billion. Investors withdrew 6.24 billion from taxable funds, while flows into municipal funds totaled 444 million.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616860","date":"2011-10-14","texts":"In the matter of Occupy Wall Street, the allegedly anticapitalist movement that's been camped out in lower Manhattan for the past few weeks and has inspired copycat protests from Boston to Los Angeles, we have some sympathy. Really Well, yeah. OK, not for the half-naked demonstrators, the ranting anti-Semites, Kanye West or anyone else who has helped make Occupy Wall Street a target for easy ridicule. But to the extent that the mainly young demonstrators have a valid complaint, it's that they are trying to bust their way into an economy where there is one job for every five job-seekers, and where youth unemployment runs north of 18. That is a cause for frustration, if not outrage. The question is, outrage at whom On Wednesday, Occupy Wall Street marched on J.P. Morgan Chase's headquarters, after having protested outside CEO Jamie Dimon's home the previous day. That's odd, seeing that J.P. Morgan didn't take on excessive mortgage risk and didn't need although it was forced to take TARP money. The demonstrators also picketed the home of hedge fund mogul John Paulson, who made much of his recent fortune betting against the housing bubble, not helping to inflate it. As for Wall Street itself, on Tuesday New York state Comptroller Thomas DiNapoli issued a report predicting that the financial industry will likely lose 10,000 jobs by the end of next year. That's on top of the 4,100 jobs lost since April, and the 22,000 since the beginning of 2008. Overall New York-area employment in finance and insurance has declined by 8.9 since late 2006. Even Goldman Sachs is planning layoffs. So much for the cliche of Wall Street versus Main Street, the greedy 1 versus the hard-done-by 99. That may be the core conviction of Occupy Wall Street and its fellow-travelers, and it may be a slogan in nearly every Democratic campaign next year, including President Obama's. Whether or not that's smart Democratic politics, the voters will decide.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616963","date":"2011-10-14","texts":"SINGAPORE--Singapore's central bank Friday eased monetary policy for the first time in two years, as a worsening global economic outlook threatens to derail the island nation's export-dependant economy. The Monetary Authority of Singapore will continue to guide the local currency higher but at a slower pace, effectively putting less emphasis on containing inflation and more on supporting the economy, which is facing stiffer head winds from weakening demand in the U.S. and Europe and a slowdown in China. The move came as the government reported the economy posted only meager growth in the third quarter, narrowly avoiding a technical recession. The economy grew at annualized pace of 1.3 in the third quarter from the second--better than the 0.7 forecast by economists but a weak bounce from a contraction of 6.3 in the second quarter. The MAS is clearly dovish on growth and it is also slightly dovish on inflation. We barely escaped recession in the third quarter as most of the growth came from the highly volatile biotech sector. The underlying trend is still for softer growth, said Edward Lee, an economist at Standard Chartered Bank. Though Friday's data showed more growth than expected in the third quarter, most economists don't plan to revise their full-year estimates. A post-data poll of 10 found the economy is expected to expand 5.1 in 2011. And nine said it's too early to predict what the central bank might do in the next six months as that would depend on events in the U.S. and Europe. One declined to comment.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617454","date":"2011-10-14","texts":"Volatility isn't just a Wall Street phenomenon. It is hitting Main Street, too. So far, incoming September economic reports have been surprisingly firm. Auto sales rebounded to their highest level since April. Chain-store sales posted year-on-year growth of 5.5. The economy added 103,000 jobs, and manufacturing sentiment improved a bit. On Friday, Commerce Department figures are expected to show a strong 0.8 monthly increase in retail and food-service sales, while consumer sentiment may show some brightening of attitudes as well. What If this feels like a 180-degree turn from August, it basically is. It would be one thing if this were a special case, or a broad turning point. But these jerky swings have become the norm. Consider what has happened so far this year Real gross domestic product shrank in January and February, according to tracking firm Macroeconomic Advisers. Then it surged more than 1 in March. It contracted again in May and June -- only to jump more than 1 again in July. This isn't typical. Since 1992, monthly GDP has fallen about a third of the time when the economy hasn't been in recession. This year, even assuming a small gain in August, monthly GDP has fallen about half the time. It is even less common to see GDP growth above 1 in any given month that usually happens only about once a year. In the first half of 2011 alone, it happened twice. No surprise, then, that stocks have been swinging wildly. After sinking to just shy of bear-market territory, the S&P 500 jumped nearly 8 in the eight trading sessions through Thursday. That rally is predicated in part on figures showing the U.S. is likely to avoid recession for the rest of the year. At least, in traditional terms. But RBC Capital Markets economist Tom Porcelli cautions the economy remains vulnerable to growth scares he calls flash recessions.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614335","date":"2011-10-18","texts":"LONDON--U.K. inflation hit a greater-than-expected 5.2 in September, propelled by rising gas and electricity bills and leaving hard-pressed Britons suffering bigger price increases than peers in the U.S. and Europe. Economists expect inflation to now fall, thanks to easing oil prices and other factors. But the stakes are high as rising costs erode spending power in a consumer-dominated economy and stoke anger at the government. The Office for National Statistics said the consumer-price index rose 5.2 in the 12 months to the end of September, above the 4.9 expected by economists, and up from 4.5 in August. That matches a record high reached in 2008 and is more than double the Bank of England's 2 target. The ONS said the increased was largely the result of a 13 rise in gas prices and a 7.5 rise in electricity prices. The U.K.'s six biggest energy firms have all pushed up domestic tariffs in response to earlier rises in wholesale gas prices. It's very important right now, because inflation is eroding household income in a country where the consumer accounts for two thirds of GDP, said Alan Clarke, an economist at Scotia Capital. Many of the energy bills will be landing with a thump onto doormats in January, not great given the important New Year sales, he said. The rise in costs has outpaced wage gains which, excluding bonuses, climbed by just 1.8 in the three month to August.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616021","date":"2011-10-19","texts":"In the slow economic recovery, even banks that grow receive scrutiny. Of the four large regional banks that reported earnings on Wednesday, results were muddled by recent acquisitions at two banks and the other two reported clear progress in profitability and robust loan growth. Investor reaction was mixed. Comerica Inc. and M&T Bank Corp. reported fewer new loans than expected and higher costs amid acquisitions, sending shares of the banks near their 52-week lows. In contrast, their larger rivals--U.S. Bancorp and PNC Financial Services Group Inc.--reported strong demand from commercial borrowers and managed to keep their profit margin in the lending business from deteriorating amid low interest rates. Their shares were flat to lower, but still a way off their 52-week lows. Banks improved capital and reported fewer losses from bad loans in recent quarters, factors that lifted bank stocks. But now that loan demand has picked up and the economy is slowly improving, investors have come to expect more. The four lenders reporting quarterly results Wednesday have survived the financial crisis better than others and offered some signs of growth.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615649","date":"2011-10-20","texts":"Want a free trip to Paris Just sign up. Hard-core collectors of frequent-flier miles are turning credit card sign-up bonus offers into vast stashes of miles, points and expensive trips by opening new card accounts by the dozen. Some practitioners call it travel hacking, and at a time when travelers are frustrated by declining service and growing airline fees and fares, it represents a rare travel bonanza. Card sign-up bonuses rocketed onto the free-perk scene a couple of years ago, then waned. Now they've come back strong, with some companies advertising bonuses of up to 50,000 miles for people with good credit. Others are offering even more miles directly to high spenders in unadvertised deals. In March, Capital One Financial Corp. gave away one billion miles by offering bonuses matching customers' airline frequent-flier account balances of up to 100,000 miles.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613794","date":"2011-10-24","texts":"BANGALORE -- Infosys Technologies China Co. Ltd. Monday said it has signed a pact with the government of the Dalian high-technology industrial area to set up a branch company that will focus on software development and outsourcing business in the region. The new facility in the Dalian High-Tech Zone has the capacity to seat 700 employees and will focus on delivering consulting, technology and business process outsourcing services to clients from the U.S., Europe, Japan and neighboring regions, the China unit of India's Infosys Ltd. said in a statement. The agreement also provides a framework under which the region's administrative committee will help Infosys launch programs with local universities for training and recruitment, it said. Infosys China, which was incorporated in 2004 and employs more than 3,300 people in China, had revenues of 79 million in the last fiscal year through March. Write to Dhanya Ann Thoppil at dhanya.thoppildowjones.com","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615273","date":"2011-10-26","texts":"Sobered by store closings and the rise of online shopping, owners of U.S. shopping centers are filling space and drawing visitors by turning to unusual tenants like gun ranges and go-cart tracks. Mall giant Simon Property Group Inc. opened an aquarium in July at its Grapevine Mills mall near Dallas. Real-estate brokerage Jones Lang LaSalle Inc. put a fencing academy in a former Old Navy store in Florida's Tallahassee Mall, and a community theater on the lower level of a former Boscov's store in Harrisburg, Pa. Aqua Tots Holdings LLC, a business that teaches youngsters to swim, has expanded to 14 locations in Arizona, Texas and Georgia and has 10 more on the way, nearly all in former retail shops. Jumpstreet, an indoor trampoline facility, is buying or leasing former grocery stores, filling them wall-to-wall with trampolines and charging patrons for hourly access. Perhaps the most unusual use of a former big-box store is William James's Arms Room gun shop and shooting range, which opened last year in a former Circuit City store south of Houston. Mr. James spent nearly 5 million to buy the 20,000-square-foot space and convert it into a shooting range, a price he considered a bargain compared with building from scratch. The Arms Room offers handgun training courses in addition to traditional shooting practice, all in a popular shopping center anchored by Target Corp. and Home Depot Inc. stores. It was sort of providential, Mr. James said in his Arms Room office, surrounded by antique swords and modern firearms. I never dreamed of a place like this.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613832","date":"2011-10-29","texts":"NEW YORK--Executives at MetLife Inc. said profits would continue to grow in coming years even if interest rates remain near historic lows, though earnings at its U.S. operations would be roughly flat. The life insurer said Friday that if U.S. Treasury rates remain flat for five years, unemployment levels are unchanged and economic growth doesn't pick up, operating results would be reduced by 21 cents a share next year and 42 cents in 2013. Despite that hit, MetLife Chief Financial Officer Bill Wheeler said the company expects to continue to grow--though at a slower rate. The company said its annual growth rate could be about 4 under that scenario, instead of 8 in a normalized environment. It would have an impact on our financial performance, Mr. Wheeler said. But it definitely would not weaken the company or put us in a perilous financial position. MetLife's analysis is some of the most explicit so far available to insurance-industry analysts and investors, who have expressed concern about the mounting impact of low rates. Life insurers are sensitive to interest rates because premiums that pour in from policyholders are mostly invested in bonds whose returns help the company meet its obligations. The lower the rates, the lower their investment returns.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616023","date":"2011-10-31","texts":"LONDON--Record unemployment levels and stubbornly high inflation put the European Central Bank's dilemma into sharp relief Monday, days before the ECB Governing Council meets to set interest rates for the first time under its new president, Mario Draghi. The number of unemployed people in the euro zone hit a new record in September after the biggest month-to-month rise in unemployment in two years, statistics agency Eurostat said. There were 16.2 million unemployed people in September, the highest total for the 17 nations that now use the euro since records began in January 1998, Eurostat said. Some 188,000 more people were laid off between August and September alone, the fastest monthly rise since the same two months in 2009. The grim reading adds to surveys showing that a slowdown in euro-zone growth in the first half has continued in the subsequent months, raising the threat of a renewed recession. A poll of purchasing managers this month showed business activity shrinking for the second-straight month in October. A recession would make life that much harder for countries seeking to avoid getting sucked into the sovereign-debt crisis. Falling output dents governments' tax revenues and boosts their welfare spending.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615252","date":"2011-11-01","texts":"Continuing jitters about Europe ensured that Monday was a down day for financial markets. But perhaps the bigger news is that it was not a disastrous day, even as a significant broker-dealer filed for bankruptcy. The Chapter 11 filing by MF Global was in part reassuring news that failure is still allowed on Wall Street. With 41 billion in assets, MF is much smaller than Lehman Brothers but still among the largest bankruptcies of the last decade. Yesterday also offered a chance for market participants and taxpayers to reflect on their good luck that MF Global Chairman and CEO Jon Corzine was not running a bigger firm -- or the U.S. Treasury. While the collapse of his company was big enough to cause major headaches in the futures market where MF provided clearing services for a long client list, almost nobody considered it too big to fail. Similarly, although MF Global this year became one of the 22 primary dealers for the Federal Reserve Bank of New York to buy and sell Treasury debt, bond markets shrugged off the bankruptcy filing. These facts allow policy makers who are paying attention to glean some relatively painless lessons from the firm's demise. For example As ever, regulation by the Securities and Exchange Commission and the Commodity Futures Trading Commission does not prevent reckless risk-taking and financial trauma. In a document related to its bankruptcy filing, MF Global said its regulators expressed their grave concerns after a series of negative headlines about the company last week, including news of a large quarterly loss and a credit downgrade.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617157","date":"2011-11-02","texts":"Half a century ago, Sy Syms helped pioneer the sale of name-brand apparel and other goods at discount prices. Now, the company he founded is taking its own cue from his strategy If you can't sell it, liquidate. Syms Corp. and its subsidiary, Filene's Basement LLC, filed for Chapter 11 bankruptcy protection Wednesday. The retailer, which put itself up for sale in May but found no buyers, said it will sell its inventory and real estate and shut down, rather than try to stay in business. The Secaucus, N.J., company, which has 2,500 employees and operates 46 stores under its Syms and Filene's Basement banners, said in its filing that the chains posted significant operating losses for the past two years as creditors toughened their payment terms, competitors proliferated and big apparel brands did a better job of managing their inventories. That left fewer overruns for Syms and other discounters to sell. Syms, which was founded in 1959, compounded those pressures by snapping up Filene's Basement for more than 65 million in a bankruptcy-court auction two years ago, expecting to reap cost savings that never materialized. In its most recent quarter, which ended Aug. 27, Syms had a loss of 11.5 million, compared with a year-earlier loss of 10.9 million. Its decision to start winding up its business ahead of the crucial holiday sales season, and at a time when the sputtering economy has sent waves of new consumers to fellow discounters like TJX Cos. and Ross Stores Inc., underscores the company's precarious financial position.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615041","date":"2011-11-04","texts":"New claims for unemployment benefits were down last week, showing some improvement for the still-weak labor market. Separately, U.S. workers' productivity rose in the third quarter for the first time this year as the economy picked up some speed and labor costs declined. Meanwhile, factory orders rose for the third consecutive month in September, an unexpected gain for a key sector of the economy. Initial jobless claims fell by 9,000 to a seasonally adjusted 397,000 the week ended Oct. 29, the Labor Department said Thursday. In the prior week, jobless claims were revised up to 406,000 from an originally reported 402,000, according to the newly released figures. The four-week moving average of new claims, a more reliable indicator of the labor market's performance because it smooths out volatile weekly figures, dropped by 2,000 to 404,500 last week. It was the first time weekly jobless claims fell below 400,000 since the week ended Sep. 24. Most economists believe jobless claims must fall below that mark for the economy to add more jobs than it is shedding. Economists surveyed by Dow Jones Newswires had forecast claims for last week would fall by 2,000 to 400,000.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616652","date":"2011-11-07","texts":"BEIJING--Chinese officials on Monday criticized the items on the U.S.'s agenda for the Asia-Pacific Economic Cooperation summit, including proposals on environmental policy and a U.S.-led free trade initiative. Wu Hailong, assistant minister of China's Ministry of Foreign Affairs, said at a news briefing that some U.S. goals for the summit are too ambitious. Specifically, he said the U.S. has proposed lowering tariffs on so-called environmental goods to 5 or less by the end of 2012, and also that countries cut their energy intensity, or energy consumption per unit of gross domestic product, to 50 of 2005 levels by 2035. Speaking at the same briefing, Yu Jianhua, China's assistant minister of commerce, said U.S. tariffs on a range of environmental goods average 1.4, while the average in China is a tad under 7. So the problem is, if we set the 5 target, the U.S. wouldn't have to do anything, he said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614101","date":"2011-11-08","texts":"Yelp Inc., the online review website, has picked Goldman Sachs Group Inc. and Citigroup Inc. to lead an initial public offering that could value the company at up to 2 billion, according to people familiar with the plans. Yelp intends to file its IPO plans publicly within the next few weeks, said one person familiar with the matter. It's aiming to complete the sale in the first quarter, though timing may change with market conditions, the person said. Like Groupon Inc., which went public last week and is currently valued at about 16 billion, Yelp also rebuffed an earlier offer from Google Inc. Initially, Yelp raised 56 million in early-stage funding from investors beginning with Max Levchin, a co-founder of PayPal. Two years ago, Yelp rejected a bid from Google for about 500 million, people familiar with the matter said. Yelp received an investment of 25 million in January 2010 from Elevation Partners, a private-equity firm, people familiar with the matter said. Elevation also spent 75 million acquiring additional Yelp stock from both employees and earlier investors. That investment valued the company at about 500 million, the people said. The funds from Elevation gave Yelp the time to decide when to pursue an IPO, one of the people said. Elevation has also invested 270 million in Facebook Inc. at an average valuation of 16 billion. The reviews site makes money in much the same way as rival Google, by selling ads to local businesses that appear near search results and also by selling premium ads to big brand advertisers. But compared with some other popular ad-based Internet services, Yelp has been slow to capitalize on its popularity with users, in part because its business model requires a large sales force. Facebook, in contrast, was also founded in 2004, but in the first half of this year had revenue of 1.6 billion, mostly from ads, according to people familiar with the matter.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615369","date":"2011-11-10","texts":"Asia-Pacific authorities braced for financial turbulence out of crisis-stricken Europe, with Indonesia's central bank slashing interest rates and New Zealand putting off plans to tighten bank capital rules as stock markets and currencies in the region fell sharply. Officials from Australia warned about the potential damage from Europe's debt crisis, which intensified as Italy's bond yields soared to levels that have pushed other euro-zone countries to accept bailouts. The deepening crisis and continued sluggishness in the U.S. economy pose a major threat to the still-robust Asia-Pacific region, where exporters depend heavily on demand from more-developed economies. There's not an economy here that hasn't felt the chill wind of events in Europe and the U.S., said Australia's Deputy Prime Minister Wayne Swan at a meeting of the Asia-Pacific Economic Cooperation forum in Hawaii. Bank Indonesia surprised markets by cutting its key rate half a percentage point, moving aggressively to shield Southeast Asia's biggest economy from the increasingly hostile external environment. The rate, now at 6, is the lowest since it was introduced in 2005, underscoring the central bank's focus on supporting economic growth while taming inflation.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613942","date":"2011-11-11","texts":"FRANKFURT--Allianz SE said it will increase its dividend-payout ratio for this year so that shareholders aren't penalized for an expected decline in net profit that the insurer said doesn't adequately reflect its performance. Chief Financial Officer Oliver Bte told reporters and analysts the ratio will be higher than the usual 40 of net profit, as the company's operating earnings are stable, even though the company now expects 2011 net profit to be well below last year's figure of euro5.05 billion 6.87 billion. Mr. Bte said net profit is vulnerable to negative non-operating losses from volatile markets. He declined to be more specific. Allianz paid a dividend of euro4.50 a share for 2010. The company, Europe's largest primary insurer by market capitalization, said it nonetheless remains on track to reach its targeted full-year operating profit of between euro7.5 billion and euro8.5 billion. The company considers operating profit to a more effective measure of its performance than net profit, and third-quarter operating profit fell less than analysts had expected. Allianz shares climbed 5.6, or euro4.05, to euro76.25, as investors focused on that part of its earnings.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613995","date":"2011-11-12","texts":"Call it Wall Street's other geopolitical driver, one played out not in Athens or Rome, but close to home in Washington. As stock-market investors fret over sovereign-debt contagion in Europe, a Nov. 23 deadline for the U.S. Congress's so-called budget supercommittee is fast approaching. The committee is assigned to devise at least 1.2 trillion in deficit-reduction measures over 10 years, or else automatic cuts ordained by Washington's summer debt-ceiling agreement are triggered. Friday's market action gave little hint that investors remain perturbed over Europe's debt situation, much less any happenings in Washington, as the Dow Jones Industrial Average surged by triple digits. But the gains came on the kind of light volume that usually suggests a lack of participation. The outcome in Washington is a large unknown for the stock market, which is a creature vastly more wary of mystery than bad news. Bad news can at least can be analyzed and quantified. A large political unknown, by contrast, is all but sure to be a source of market volatility. The underlying fear is that lawmakers' cuts are too small to persuade credit-rating firms to maintain their current ratings on U.S. government debt. If that happens, stocks could engage in a replay of their plunge in August, which followed Standard & Poor's downgrade of the U.S. credit rating. That action coincided with a surge of fears over Europe's sovereign-debt crisis.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615525","date":"2011-11-17","texts":"The U.S. labor market is edging forward, with fresh data suggesting October's modest job gains are continuing into November, amid a tenuous economic recovery that faces significant risks. The number of Americans filing for new jobless claims slipped by 5,000 last week to 388,000, the third consecutive week of declines, the Labor Department said Thursday. The report doesn't say whether companies are stepping up hiring, but it indicates that they are at least slowing the pace of layoffs. That is an important development that could help chip away at the unemployment rate, which ticked down to 9 in this month's report from 9.1 a month earlier. Business executives still express uncertainty about the scope and pace of the recovery and say they will hold off on hiring or hire selectively until they see faster growth. But the labor market's recent gains hint at improved confidence. Some companies are hiring to respond to increased demand from consumers, who have stepped up spending in recent months in part by dipping into savings.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616321","date":"2011-11-17","texts":"Until his retirement last month, Thomas Hoenig was a consistent thorn in Ben Bernanke's side, voting against the Federal Reserve chairman's easy-money policies at each of the central bank's eight policy-making meetings in 2010. Now, Mr. Hoenig, the former Kansas City Fed president, is likely to become a thorn for the nation's biggest banks. In a rare display of bipartisanship, the Senate appears likely to easily confirm Mr. Hoenig to a six-year term as the vice chairman of the Federal Deposit Insurance Corp., an agency that gained significant powers over the nation's biggest banks under last year's Dodd-Frank financial overhaul. Mr. Hoenig breezed through his confirmation hearing Thursday, lauded by senators from both parties. The choice has rattled Wall Street executives. Mr. Hoenig believes some banks are so big that they are a risk to the financial system, and that taxpayers might need to bail them out in the future, just as they rescued big financial firms in the 2008 crisis. Mr. Hoenig believes there is only one way to end this phenomenon of too big to fail. We must break up the largest banks, he said in a February speech, arguing that regulators could do so by restricting the activities of government-backed banks and significantly narrowing the scope of institutions that are now more powerful and more of a threat to our capitalistic system than prior to the crisis.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615562","date":"2011-11-21","texts":"When it comes to political debate, the federal deficit is the 14 trillion gorilla. Republicans and Democrats are butting heads about the best way to deal with it -- which also means wrangling over ballooning programs like Medicare. The Wall Street Journal's Gerald Seib spoke with Rep. Paul Ryan, a Wisconsin Republican who heads the House Budget Committee, about the prospects for an agreement and what shape it might take. Here are edited excerpts of the discussion. GERALD SEIB Let me first dispose of the deficit question of the day What's Congress going to do in the next week In the next month Is the supercommittee going to have a deal, or are we headed for another disaster PAUL RYAN I don't know. How's that for your answer","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613673","date":"2011-11-22","texts":"A series of disappointments--arrests, marital separation and unemployment--beset Jose Pimentel's life before he turned to a radical strain of Islam and, authorities say, began planning a pipe-bombing plot targeting government workers. He was arrested twice in two years--once at the age of 19 in New York City on charges of selling marijuana in 2004 and then again in 2005 on charges of using stolen credit-card information to buy a computer, according to court records. In 2010, Mr. Pimentel, a Dominican Republic-born U.S. citizen, and his wife separated, said his mother. They have a 4-year-old son. And though Mr. Pimentel found work doing odd jobs, he was mostly unemployed for the past several years, said his mother, Carmen Sosa. After moving back in with his mother in 2010, Mr. Pimentel spent most of his time in his bedroom, where authorities say he maintained a website that advocated violence against Americans and followed the teachings of the now-dead al Qaeda propagandist Anwar al-Awlaki. When I talk to him about what you're doing, he said, 'It's not your business,' Ms. Sosa, 56, said in a televised interview.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616566","date":"2011-11-22","texts":"MANCHESTER, N.H. -- Presidential candidate Newt Gingrich said on Monday that younger workers should be allowed to divert a portion of their Social Security taxes to private investment accounts, leaving Mitt Romney as the only leading GOP contender not to advocate fundamental changes to the federal retirement program. Younger workers also could opt to remain in the current Social Security system under Mr. Gingrich's plan. The goal of private-account plans is to allow market returns to replace taxpayer-funded benefits, saving the government money. Mr. Gingrich's proposal, which he outlined in a speech here, is similar to an unsuccessful effort by former President George W. Bush to revamp the popular retirement program for seniors. But Mr. Gingrich said his proposal would guarantee that anyone who invested in personal savings accounts would receive as much as traditional Social Security pays out. Some conservative supporters of private accounts for Social Security dismissed such guarantees as impractical, saying it meant the government would retain market risk. It doesn't make any sense to do that . . . Guarantees don't work, said Thomas Saving, a conservative economist at Texas A&M University who helped design Mr. Bush's plan as a member of his Social Security commission.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616596","date":"2011-11-22","texts":"LONDON--Consumers in the 17 countries that use the euro became more downbeat about their prospects in November as the currency bloc's fiscal crisis deepened, weakening the outlook for the economy and the jobs market. The European Commission Tuesday said that according to preliminary results from its monthly sentiment survey, the headline measure of consumer confidence fell to minus 20.4 from minus 19.9 in October, reaching its lowest level since August 2009 and well below its average going back to 1990 of minus 12.5. It was the fifth straight month in which the measure declined, indicating that consumer spending will weaken, and increasing the risk that the currency area's economy will slip back into recession. The further drop in consumer confidence in November fuels concern that the euro zone is in serious danger of seeing economic contraction in the fourth quarter and falling back into recession, said Howard Archer, an economist at IHS Global Insight. The decline in confidence came as yields on Italian and Spanish government bonds surged to levels that make it more difficult to meet budget targets, while a number of other members that have so far been immune to investor concerns have also seen their cost of borrowing rise.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613460","date":"2011-11-23","texts":"Stocks declined, as investors weighed slower-than-expected domestic economic growth and continued euro-zone concerns against signs the Federal Reserve may take new steps to bolster the economy. The Dow Jones Industrial Average fell 53.59 points, or 0.5, to 11493.72, its lowest close since Oct. 17. Weighing on the downside were Alcoa, which dropped 21 cents, or 2.2, to 9.26, and Bank of America, which fell 12 cents, or 2.2, to 5.37. Hewlett-Packard dropped 21 cents, or 0.8, to 26.65, after the technology company issued a downbeat earnings outlook for the current quarter and the next fiscal year. The S&P 500-stock index fell 4.94 points, or 0.4, to 1188.04. The Nasdaq Composite lost 1.86 points, or 0.1, to 2521.28.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613511","date":"2011-11-23","texts":"MUMBAI - The Indian rupee fell against the U.S. dollar for the eighth consecutive session Wednesday as local stocks slipped deep into the red and fresh concerns emerged over a worsening sovereign-debt crisis in Europe. The dollar was at 52.36 rupees late Wednesday, up from 52.30 rupees Tuesday. The dollar slipped to an intraday low of 51.80 rupees in early trade on heavy sales by a large oil firm and an engineering company on expectations that the central bank may announce measures to ease dollar liquidity in the system. Dealers estimated the companies likely sold about 400 million in the market. The rupee, however, soon reversed its gains, as Indian shares slumped to their lowest level in more than two years. The Bombay Stock Exchange's Sensitive Index fell 2.3 to 15699.97. The dollar index is in a bullish mode despite weak U.S. fundamentals. This is mainly on a buildup of economic, monetary and fiscal pressures on the euro zone with no signs of a rollout of concrete rescue packages, said Moses Harding, head of economic and market research at IndusInd Bank. The dollar may move in a 51.00 rupee-54.00 rupee range in the near term, he said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617076","date":"2011-11-25","texts":"Decked out for the holidays with glittering tree ornaments, Santa-shaped teapots and beaded-poinsettia pillows, Pier 1 Imports Inc.'s stores are a riot of color these days. Gone are the muted palette and urban loft aesthetic the company adopted several years ago in an effort to compete with such rivals as Target Corp., a push that almost sank the 50-year-old home-furnishings retailer. Pier 1's return to an eclectic mix of bright, decorative items, analysts and shoppers agree, has helped the company stage a strong turnaround, despite the recession that killed off competitors such as Bombay Co. and Linens 'n Things. Michelle West, a 38-year-old Dallas ad-agency employee, said she likes going to Pier 1 again, because it carries a wide variety of items within the price range I shop in. Now, as Pier 1's 1,200 stores in the U.S. and Canada barrel into their busiest season, it is optimistic it will notch strong sales gains at stores open at least a year--as it has for the past two holiday periods, with fourth-quarter sales climbing 8.9 and 6.5, respectively.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613532","date":"2011-11-27","texts":"In 1973, Richard Nixon, in the teeth of the Arab oil embargo, pledged that the U.S. would achieve energy independence within seven years. Like his presidency, that didn't quite work out. Net imports provided 35 of U.S. oil in 1973. Seven years later, they supplied 37, and by 2005, 60. Now, that trend is reversing fast. In the 12 months ended in August, net imports met just 46 of oil demand. Similarly, net imports of natural gas climbed from 4 of consumption in 1973 to a peak of more than 16 in 2007, but were back under 9 in the year ended in August. This isn't energy independence. But just as America's growing energy-import dependence in the 1970s had implications of global proportions, so will this reversal four decades later. In natural gas, the opening of shale resources has caused excess supply and cratered prices. Despite calls to use more natural gas, demand hasn't caught up. That is why the likes of Cheniere Energy now want to liquefy and export natural gas to cash in on the spread between low U.S. prices and much higher European and Asian ones. Capturing the benefit of this price difference will be a central battle in the natural-gas market over the next decade. Exports of natural gas would tighten domestic supply, raising prices. That is risky politically. Michael Levi at the Council on Foreign Relations reckons those benefiting from the natural-gas glut--mainly utilities, petrochemical companies and heating consumers--are more organized politically than natural-gas producers and exporters. The argument that gas should be exported not in its raw form but as an input to American-made goods will be tough to ignore.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613726","date":"2011-12-01","texts":"FRANKFURT--European Central Bank President Mario Draghi opened the door to an escalation in the central bank's efforts to battle the debt crisis, hinting that the bank would be willing, under certain conditions, to intervene more forcefully in financial markets. Mr. Draghi stopped short of promising unlimited purchases of euro-zone bonds, as a number of European policy makers have recently demanded, but his comments nevertheless signal that the ECB is willing to do more. In his first appearance before the European Parliament since taking the ECB helm last month, Mr. Draghi offered a road map for policy makers and investors as Europe's debt crisis reaches a critical phase next week, when the ECB has its monthly meeting and European leaders hold another crisis summit. His call to politicians Enact tough new rules to punish fiscal rule-breakers and follow through on pledges to pursue deficit-cutting measures. Mr. Draghi signaled the ECB is willing to help, if governments deliver. He ruled out a swift type of approach, but at least he has told the markets if these two things are being done by governments, then he won't let market confidence deteriorate too much. I thought it was quite well done, said Daniel Gros, director of the Centre for European Policy Studies.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615850","date":"2011-12-01","texts":"The number of U.S. workers filing new applications for unemployment benefits unexpectedly rose last week, an indication that the jobs market remains shaky amid a slow recovery. Separately, spending on construction projects in the U.S. climbed a third straight time in October, yet remained below year-ago levels as the persistently weak economy weighs down builders. Initial jobless claims climbed by 6,000 to a seasonally adjusted 402,000 in the week ended Nov. 26, the highest level in more than a month, the Labor Department said Thursday. Economists surveyed by Dow Jones Newswires had forecast claims would fall by 3,000 to 390,000. For the week ended Nov. 19, claims were revised to 396,000 from an originally reported 393,000. Claims are now up two weeks in a row.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617236","date":"2011-12-01","texts":"Long-term mutual funds had estimated inflows of 1.4 billion in the latest week, as investors added more money to bond funds than they withdrew from equities and hybrid funds, according to the Investment Company Institute. The latest week marks the sixth consecutive week of inflows reported by ICI. The funds saw steep outflows over the summer when investors retreated from a volatile stock market amid concerns about an uncertain economic outlook and the debt load in the U.S. and Europe, though investors have continued to consistently pull money from U.S. equities since August. Bonds and hybrid funds have seen mostly inflows so far this year. For the week ended Nov. 22, equity funds had outflows of 3.74 billion, compared with outflows of 1.26 billion in the prior week. Investors withdrew 3.72 billion from U.S. equities and pulled 23 million to foreign funds. Meanwhile, ICI said bond funds had inflows of 6.57 billion, compared with prior week inflows of 6.47 billion. Investors added 6.24 billion to taxable funds, while inflows to municipal funds totaled 333 million. Investors pulled 1.42 billion from hybrid funds after prior-week outflows of 4.59 billion. Such funds can invest in both stocks and fixed-income assets.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614529","date":"2011-12-09","texts":"Del Monte Foods Co.'s fiscal second-quarter earnings fell 79 on expenses tied to its takeover and weakness in its consumer products segment, though revenue grew. The company makes pet foods and food pantry staples for the U.S. retail market, with brands including Meow Mix and Kibbles 'n Bits for pets, and Del Monte and Contadina brands in the food market. While the macro environment remained challenging and input cost inflation was high, we delivered strong top-line results, Chief Executive Dave West said, adding the lag between price realization and input cost inflation hurt the bottom line. In March, the company was acquired by an investor group led by funds affiliated with Kohlberg Kravis Roberts & Co. LP, Vestar Capital Partners and Centerview Capital LP. For the quarter ended Oct. 30, Del Monte Foods reported a profit of 17.2 million, down from 81.1 million a year earlier. Sales rose 5.7 to 994.3 million. The latest period included 32.2 million in expenses tied to the takeover.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615177","date":"2011-12-09","texts":"U.S. stock futures pared their premarket gains but remained higher, as investors scrutinized an agreement among most European Union members to tighten fiscal coordination and eyed some disappointing U.S. corporate outlooks. Less than an hour before Friday's opening bell, Dow Jones Industrial Average futures had risen 43 points, or 0.4, to 11987. Standard & Poor's 500-stock index futures climbed five points, or 0.4, to 1235 and Nasdaq 100 futures advanced six points, or 0.2, to 2287. Changes in stock futures don't always accurately predict stock moves after the opening bell. The Dow is on pace to finish the week with meager gains. On Thursday, the blue-chip index suffered its biggest point drop in two weeks, falling 199 points to below 12000 for the first time since Nov. 29. On Friday, investors grew optimistic after 23 of 27 European Union countries agreed to tougher fiscal rules, which led German Chancellor Angela Merkel and French President Nicolas Sarkozy to push for a separate intergovernmental treaty.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614191","date":"2011-12-14","texts":"Crude-oil futures fell below 96 a barrel Wednesday after members of the Organization of the Petroleum Exporting Countries agreed to maintain their total production level and warned about lower economic growth next year. Gasoline futures also fell sharply, as a U.S. government report showed that supplies last week climbed more than expected, pulling prices for the fuel down by 4. In recent trade, crude-oil futures for January delivery dropped 4.55, or 4.5, to 95.59 a barrel on the New York Mercantile Exchange after tapping a low of 95.39. At a meeting in Vienna on Wednesday, OPEC said members will maintain their current total production of 30 million barrels per day, including production from Libya, which has been ramping up to pre-civil-war levels. The group noted that downside risks facing the global economy continue to include the sovereign debt crisis in the euro zone, persistently high unemployment in the advanced economies and inflation risk in the emerging economies.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614516","date":"2011-12-14","texts":"NEW DELHI--India's central bank should intervene in the foreign-exchange market to stabilize the rupee, two senior advisers to the prime minister said Wednesday, as the local unit tumbled to a fresh record low against the U.S. dollar for a third straight session. The comments from C. Rangarajan, chairman of the prime minister's Economic Advisory Council, and panel member M. Govinda Rao come as the rupee continues its fall because of global risk aversion due to the euro-zone crisis and worries over India's high inflation and slowing economic growth. The recent slump of the rupee, Asia's worst-performing currency this year, has increased calls for strong action from authorities, but the Reserve Bank of India has maintained it would intervene in the currency markets only to manage volatility. The dollar quoted at 53.70 rupees late Wednesday in Asia, after trading as high as 53.88 rupees, compared with its previous peak of 53.515 rupees, reached Tuesday. Mr. Rangarajan blamed the rupee's recent weakness on the temporary mismatch between capital inflows and a yawning current-account gap.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615561","date":"2011-12-15","texts":"Long-term mutual funds had estimated net outflows of 3.34 billion in the latest week as investors continued to pull money from equities, offsetting increases in bonds and hybrid funds, according to the Investment Company Institute. The funds experienced steep outflows over the summer when investors retreated from a volatile stock market due to concerns about an uncertain economic outlook and the debt load in the U.S. and Europe. Investors have continued to consistently pull money from U.S. equities since August, while bonds and hybrid funds have seen mostly inflows so far this year. For the week ended Dec. 7, equity funds had net outflows of 7.97 billion, compared with prior-week outflows of 9.62 billion. Investors withdrew 5.76 billion from U.S. equities and pulled 2.21 billion from foreign funds. Meanwhile, ICI reported bond funds had inflows of 3.55 billion, compared with prior-week inflows of 1.15 billion. Investors added 2.09 billion to taxable funds, while inflows to municipal funds totaled 1.46 billion. Investors added 1.09 billion to hybrid funds after prior-week outflows of 778 million. Such funds can invest in both stocks and fixed-income assets.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615182","date":"2011-12-20","texts":"NEW YORK--The options market was alive with put sellers Monday, as traders bet shares of Home Depot Inc. and Norfolk Southern Corp. can each hold strong 2011 gains into early next year. Options sellers drove unusually heavy activity in both stocks Monday. In each case, large, single trades accounted for the bulk of the session's volume. In Home Depot's options, a trader sold a large batch of January 39 put options to establish a new position. At the same time, the trader unwound an equal number of January 30 puts, ratcheting up the wager. The trader, who sold January 39 puts for 53 cents apiece, collected about 1.1 million from the transaction. That money can be kept should Home Depot's shares maintain their recent gains and close above 39 when the options expire in the middle of January. Home Depot's stock fell 22 cents, or 0.5, to close Monday at 40.20. Puts convey the right to sell the underlying stock for a set price by a fixed expiration. Buyers of puts generally profit from stock declines. Put sellers, on the other hand, pocket premiums should the stock expire above the strike price. At the same time, put sellers could be on the hook to purchase stock if the price declines below the exercise price. Basically, the trader is making a bet on the overall economy, said TD Ameritrade chief derivatives strategist Joe Kinahan. Mr. Kinahan noted this week is full of November housing data that could provide some short-term fuel for Home Depot's stock. November readings on U.S. housing starts and building permits are due Tuesday, while existing-home sales data are scheduled for a Wednesday release.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613519","date":"2011-12-22","texts":"HANOVER, N.H.--An increasingly confident Mitt Romney is looking beyond his Republican rivals and again focusing his attacks on President Barack Obama, using a three-day swing through New Hampshire to frame his candidacy as a choice between the president's entitlement society and the merit society Mr. Romney envisions. In an interview late Wednesday, Mr. Romney reflected a new tone--a more biting version of his earlier rhetoric against the president--predicting Mr. Obama will resort to a politics of envy and divisiveness and demonizing of business and business people that will shock voters. A campaign of envy and class warfare, I think, will ultimately be unsuccessful, whether in the primary or in the general election, he said. I can surely tell you that Republicans will not warm to a campaign that is attacking success. In what amounts to his closing argument before voters decide early next month in Iowa and New Hampshire, the former Massachusetts governor is hoping to transcend the recent squabbles of the primary race and train his sights on a general election that he and his aides now believe is within reach. Many Republicans remain ambivalent about Mr. Romney, and polls still show a tight national race. But Mr. Romney's position has improved in recent days as former House Speaker Newt Gingrich has seen his support weaken in the early-voting states of Iowa and New Hampshire.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615442","date":"2011-12-23","texts":"Cody Preston was laid off again Thursday. In November, Mr. Preston, 25, was featured in an article in The Wall Street Journal about high unemployment among young workers. He was in the midst of a divorce and had moved in with his parents, repairing his finances with a rent vacation and an 11-an-hour job at recreational vehicle maker Roadmaster Inc. But the job ended Thursday. The saying is 'It's amazing what you can get used to,' Mr. Preston said late Thursday, after collecting his final, 340 check. It's sad that I'm used to it. I shouldn't be. But at the same time what else are you going to do Laugh or cry Pick one. Mr. Preston, who still lives with his parents in Milwaukie, Ore., belongs to a group that has been hard hit by the recession Young men who didn't attend college but haven't had time to build up significant skills and work experience. Males between 25 and 34 years old who have a high-school diploma but no college degree had a 10.9 unemployment rate in November. The picture is even bleaker for slightly younger men High-school graduates 20 to 24 years old had an unemployment rate of 18.9. Those numbers aren't adjusted for seasonality, but are still well above the 8.6 seasonally adjusted national unemployment rate.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615746","date":"2012-01-06","texts":"The Iowa caucuses presented the full range of views of the Republican hopefuls. When it came to fiscal strategy, however, there was almost no daylight among them. Each candidate decried the rise of government spending and wants to cut taxes. Again and again they noted that spending under President Obama rose to 25 of the economy in 2009, the highest in decades and well over the 20-21 norm of the last 30 years. To hear the GOP candidates tell it, this fact explains the deficit, explains America's long-run fiscal problem, and explains why new taxes cannot be tolerated. Congressional Republicans have the same outlook. The deficit is up thanks to government spending, so we must cut spending right now in every form. Yet the long-run fiscal problem facing the country--which is real--has almost nothing to do with the reasons that the deficit is currently large or that spending is abnormally high. They are high for the same reason taxes are abnormally low because of the economic downturn. We should debate the real issues, not try to pretend the recession never happened. The Congressional Budget Office forecast a 1.2 trillion deficit before the Obama administration even came into office. The stimulus added only around 250 billion a year, and more than one-third of that came from tax cuts, especially the tax credit in the stimulus bill's Making Work Pay provision.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614909","date":"2012-01-08","texts":"Chances are you have a 401k plan at work. And the chances are you're not making nearly enough of it. A new year means a new leaf This is as good a time as any to start turning that around. If you're letting your 401k languish, a report released over the holiday season shows that you're not alone. According to the latest study by the Employee Benefits Research Institute, a think tank in Washington, most of us continue to neglect our 401k plan. The median account contains a balance of just 18,000, says EBRI. Good luck with that. Here's a five-step plan to fix your 401k. 1 Take control.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617243","date":"2012-01-13","texts":"BANGALORE - Software exporter Infosys Ltd. expects the Indian rupee to resume its downtrend against the U.S. dollar and is therefore sticking to its policy of keeping currency hedges light. The company continues to hedge part of its expected revenue for two quarters ahead, its chief financial officer V. Balakrishnan said Thursday. We are not going beyond that because in a volatile environment, it's better to take a short-term view. The comments from India's second-largest software exporter by revenue underscore the cautious approach of companies in the sector toward hedging after the greenback surged to an all-time high of 54.295 against the rupee on Dec. 15. The rupee fell nearly 16 against the dollar in 2011, but has already recovered about 3.0 since Jan. 1 as authorities have supported the local unit through measures to curb currency speculation and increase dollar flows. The central bank has also intervened directly in the market. A weaker local currency swells sales in rupee terms for companies like Infosys, who get most of their revenue by providing software and related services to customers in the U.S. and Europe. The rupee was a major factor in Infosys Thursday reporting a 31 rise in its October-December quarter revenue to 92.98 billion rupees.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616873","date":"2012-01-16","texts":"As members of Congress return to Washington this week, they face immediate pressure to agree on how to fund a payroll-tax cut, but their task is complicated by lingering hostilities over the issue that are likely to be sharpened by the onset of a hard-fought election year. Republicans are frustrated by the outcome of December's fight over the payroll tax, when lawmakers unable to agree on a long-term plan simply extended the break until the end of February. House Republicans complained the move created uncertainty, but were forced to give in on the extension after Democrats depicted them as blocking a tax cut. The House returns Tuesday and the Senate next week, and lawmakers will immediately plunge back into the fight over the payroll tax. Congress faces a Feb. 29 deadline to extend the popular tax break, which reduces workers' payroll taxes to 4.2 from 6.2, as well as a program to prolong unemployment benefits. To fund the extension, Democrats had proposed a surtax on millionaires, while Republicans wanted to cut the federal work force by attrition. The battle lines have hardened Democrats believe they have the political advantage and see little reason to compromise. Meanwhile, House Republicans are furious at the latest outcome and are determined not to back down.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613527","date":"2012-01-18","texts":"ROSWELL, Ga. -- The waiting list for subsidized housing here, just 40 families long a year ago, is up to 500. The number of children eligible for free or reduced lunch is up 50. A little more than a year ago, the Methodist church began seminars for marriages strained by job losses. Roswell is a pre-Civil War cotton mill town that grew into a wealthy bedroom community of Atlanta as the metro area prospered. More than half the city's 88,000 residents have four-year college degrees. But Roswell sits in a region with an unusually severe case of long-term unemployment About 40 of the unemployed in the Atlanta metro area in 2010, the most recent local data available, were out of work for a year or more versus the national average of 29. One of them is Marcy Bronner, 57 years old. When she lost her job at Pennzoil back in 2000, it took her seven months to find a new one at Quintiles, a bio- and pharmaceutical-services company. She eventually became senior director of human resources at a salary in the low six figures. In November 2010, she was laid off again. More than a year later, she is still looking for work. It's harder now, she says, compared to the 2000s. There's a lot more people out there. While the job market is improving -- the national unemployment rate fell to 8.5 in December -- long-term unemployment continues to be particularly pronounced, and there is little indication that it is falling quickly. The government said that in December 3.9 million nationwide had been out of work for at least a year and were still looking. Federal Reserve Chairman Ben Bernanke has called this a national crisis.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615886","date":"2012-01-20","texts":"DILLON, S.C.--Republican candidates have talked a lot about job creation ahead of Saturday's South Carolina primary, a welcome theme in a state whose 9.9 unemployment rate ranks among the nation's highest. Yet none of the GOP hopefuls--nor any prominent Democrats, whose presidential primary is the same day--have spent much time courting votes in South Carolina's most job-starved region, including this town on the I-95 corridor. Unemployment is 13.3 in Dillon, and 17.3--the highest in the state--in Marion County due south. If you took out the 17 counties along I-95, the state's unemployment rate would be consistent with the rest of the nation's, as would indicators for everything from per capita income to the incidence of diabetes, according to an analysis by state Sen. John Matthews, whose district includes parts of five of the counties. With a quarter of the state's 4.6 million people, the region's population is 43 African-American, compared with 28 statewide, according to the Research Triangle Institute think tank in Raleigh, N.C., and is one of South Carolina's few Democratic strongholds. Dillon, hometown of Federal Reserve Chairman Ben Bernanke, is typical of the towns in the region. Part of the onetime Cotton Belt running 200 miles along the state's coastal plain, Dillon was left out of the manufacturing, technology and tourism booms that benefited other parts of South Carolina. Half a dozen major employers, such as Mohawk Industries and Unifi Inc., have closed plants in recent years. An industrial park off Interstate 95 at the Ben Bernanke Interchange is for now just 2,000 green acres of farmland.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617034","date":"2012-01-20","texts":"The stock market has treated investors well recently. But taking a longer view, it has been downright abusive. Even with a gain of 4 since the start of the year, the Standard & Poor's 500-stock index has, with dividends reinvested, lost 8 since reaching its peak in October 2007. Adjust the index for inflation, and the news is worse--it has lost 18 since August 2000. Anybody who put money into an S&P 500 index fund between late 1998 and early 2001 remains in the red. When was the last time that so much time elapsed and the U.S. stock market still remained below its inflation-adjusted peak Never, according to the monthly price and return data from Yale University economist Robert Shiller's reconstruction of the S&P 500 back to 1871. Even investors who bought on the eve of the 1929 crash were briefly above water, in inflation-adjusted terms, in 1937. Of course, since this owes to the deflation experienced during the Great Depression, strictly speaking the mattress was still a better place to put your money. But while the stock market has been faring poorly, stocks have been doing better. The equal-weighted S&P 500 index, which puts all stocks on the same footing rather than weighting them by market capitalization, has beaten the regular index hands down. Since August 2000, it has returned an inflation-adjusted 52. A big reason the equal-weighted S&P has outperformed is that it's a sneaky way of value investing. In the late 1990s, retail investors who bought a vanilla S&P 500 fund, along with investment managers who benchmarked the sector weightings in their portfolios to the index, were loading up on expensive technology stocks. In the mid 2000s, they were buying heavily into the shares of housing and finance-related companies.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614023","date":"2012-01-25","texts":"Long-term mutual funds had estimated net inflows of 6.34 billion in the latest week as money that was added to hybrid and bond funds more than offset withdrawals from U.S. equities, according to the Investment Company Institute. In 2011, investors pulled money from equities for most of the year, but bond and hybrid funds mostly had inflows. Equity funds suffered some of their steepest outflows during the summer, when investors retreated from a volatile stock market due to concerns about an uncertain economic outlook and U.S. and European debt. For the week ended Jan. 18, equity funds had net outflows of 484 million, compared with prior-week inflows of 1.42 billion. Investors pulled 804 million from U.S. equities and added 320 million to foreign funds. Meanwhile, the ICI reported bond funds had inflows of 5.56 billion, compared with prior-week inflows of 7.87 billion. Investors added 3.81 billion to taxable funds, while inflows to municipal funds totaled 1.74 billion. Investors also poured 1.27 billion into hybrid funds after prior-week inflows of 1.95 billion. Such funds can invest in both stocks and fixed-income assets. Separately, assets in money-market funds fell 2.54 billion in the latest week as investors pulled money from taxable government funds and tax-free funds, according to iMoneyNet.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615608","date":"2012-01-25","texts":"Financial Analysis and Commentary Doubtless America would be better off if Europe got its house in order. Last year, the euro-zone sovereign-debt crisis hammered confidence, particularly on Wall Street. But there are ways that Europe's woes actually are providing a boost to the U.S. First, Europe's weakening growth -- alongside a Chinese slowdown -- has sapped global demand for commodities. Lower raw-material prices are helping cut company costs and cap inflation. That oil prices have been moving sideways despite Iran threatening to close the Strait of Hormuz is a minor miracle. Americans can take a moment to thank their friends in Europe when gassing up the SUV. Meanwhile, the 10-year Treasury yield is hovering doggedly around 2. Lately, that seems less to do with the Federal Reserve's pledge to keep rates ultralow through next year than it does with nervous foreign investors rushing into dollar-denominated debt as they seek a safe haven. Low U.S. interest rates have helped bolster the availability of credit, supporting demand for everything from capital equipment to cars to washing machines to -- wait for it -- even houses.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614368","date":"2012-01-26","texts":"South Korea faces a triple whammy of slowing economic growth, falling exports and weakening consumer demand. But it's still too early for Seoul to hit the panic button. Thursday's economic data were weak--seasonally adjusted gross domestic product in the fourth quarter was up just 0.4 from the previous period, the slowest rate of growth since 2009 and below market expectations. More data due soon will also likely disappoint--the country may run its first trade deficit in two years in January. With parliamentary and presidential elections later this year, the temptation to act swiftly will loom large. But knee-jerk policy steps would be foolish. There is room for the Bank of Korea to cut interest rates if there is a sharp economic decline. Most analysts believe the central bank will deliver. The BOK considers its policy rate to be accommodative at 3.25. Still, a cut of 0.25 percentage point could come as early as the first quarter of 2012. That should bolster consumer sentiment. But any gains could be offset if the won falls, stoking higher prices for important imports of energy and food. Beyond that, further stimulus would be mistaken. The government has already front-loaded its 2012 budget to bring spending forward. Back in 2009, it also introduced a supplementary budget to boost the economy. Repeating that step now could also lead to inflationary pressures that would only crimp domestic spending.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616090","date":"2012-01-27","texts":"NEW YORK -- Gold futures locked in their second day of gains Thursday, spurred on by a weaker dollar and investors cheering the Federal Reserve's expectations of a protracted period of low interest rates. The most actively traded contract, for February delivery, gained 26.60, or 1.6, to settle at 1,726.70 a troy ounce on the Comex division of the New York Mercantile Exchange. It was the highest settlement price in seven weeks. Front-month January-delivery gold ended 26.50, or 1.6, higher at 1,726.30 a troy ounce, its first settlement above 1,700 since Dec. 9. Fed officials said in a statement Wednesday they expected short-term interest rates to remain near zero until late 2014, citing a slow recovery in the labor market and moderating inflation. Even though this was well-anticipated by a large quarter of the market, it still had quite a notable impact on gold, said James Steel, precious-metals analyst with HSBC.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616584","date":"2012-01-29","texts":"In his six years as chairman of the Federal Reserve, Ben Bernanke has stretched the central bank in once-unthinkable ways--pushing short-term interest rates to near zero and keeping them there for years, more than tripling the size of its securities and loan portfolio, rescuing financial firms that the Fed doesn't even regulate. Lost in the glare of these radical actions is how much he has changed the institution itself. Under his leadership, the Fed has become more open about its plans for the economy and its own sometimes-divisive internal debates. Mr. Bernanke also has made the institution more consensus-oriented even as he assertively pushed the Fed into uncomfortable places. Last week's moves by the Fed were vintage Bernanke in all of these respects and will have long-lasting effects on how the central bank operates. The Fed took two steps. First, it published detailed interest-rate projections of each of the 17 officials who participate in policy meetings, without identifying the officials by name. Second, it spelled out its goals for inflation and unemployment more explicitly than it has before. The first step--publicizing the wide-ranging views inside the Fed of where people believe interest rates should go--effectively gives voice to the larger committee in which the Fed chairman operates. It was another example of the chairman trying to show he leads by consensus. Mr. Bernanke is a believer in research by Alan Blinder, a Princeton professor and former Fed vice chairman, which has shown that groups are often more effective at decision making than individuals. Mr. Bernanke's predecessors--Alan Greenspan, Paul Volcker and Arthur Burns--ruled more by individual force. Mr. Bernanke took over the Fed in 2006 wanting to change that.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616595","date":"2012-01-31","texts":"One irony of the Pelosi Congress's rush to punish banks and other financial institutions is that it has raised the price of credit for everyone, especially the poor. Now Democrats may hurt those same low-income earners again by limiting one of their few remaining sources of credit payday lending. Payday shops lend between 100 and 500 for short periods in advance of a customer's next paycheck, and President Obama added them to his list of financial villains in his State of His Re-Election address last week. Lest you doubt this was a calculated hit, the new Consumer Financial Protection Bureau sent a note earlier this month to its email subscribers warning that payday lenders can lead consumers into a cycle of debt. The bureau's new, recess-appointed chief Richard Cordray has since added race to the indictment, telling an audience in Birmingham, Alabama that surveys indicate that payday borrowers are disproportionately people of color. All of this seems to be forecasting new punitive regulation. Payday lenders charge around 15 for a two-week 100 loan to their typically high-risk borrowers, which equates to a 390 annual interest rate. Consumer groups like the liberal Center for Responsible Lending call this predatory, but the terms are reasonable compared to an average credit-card fee, which can exceed 900, or a bounced check fee, which can top 1,500. Payday lenders have around 20,000 storefronts across the country and also operate on the Internet. The industry lent 40 billion in 2010, employing more than 50,000 people and serving 19 million households, according to Stephens Inc. A 2009 Federal Reserve study concluded that nearly all payday loan customers were aware of the finance charge of payday loans and were satisfied or somewhat satisfied with the product.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616843","date":"2012-01-31","texts":"Wendy's Co. is focused on investing in long-term brand-building efforts--like its new breakfast menu, restaurant designs and marketing strategy--after posting strong sales for the fourth quarter. But the restaurant operator might be biting off more than it can chew. On Monday, Wendy's shares fell 3.8 to 5.01 on the Nasdaq Stock Market, following the company's investor day, when analysts questioned the sustainability of Wendy's recent growth trends, given continued commodities head winds, general economic uncertainty and the high cost of carrying out all of its turnaround efforts. Wendy's said it hopes to spur long-term growth by investing this year in menu innovation, continuing tests of its new breakfast menu and even-newer Black Label premium burgers. Its other major long-term sales driver is its portfolio of four new restaurant-design prototypes that are more modern and entice diners to eat inside, where they typically spend more money. McDonald's is investing billions into its facilities. Ours are looking dated, old and run down, said Chief Operating Officer Steve Farrar. We are clearly not the cool place to go to these days. The new remodels bring in flat-screen TVs, Wi-Fi, a clear view of the kitchen and other elements that Wendy's says have given its competitors an advantage with consumers in recent years.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617431","date":"2012-02-01","texts":"Facebook Inc. filed for an initial public offering, putting the eight-year old social network on track to be one of the biggest Web stock market debut of all time. Facebook's public debut is one of the most hotly anticipated IPOs in recent years and would put it ahead of Google Inc.'s 2004 offering, which has held the record for the largest U.S. Internet IPO by raising 1.9 billion and valuing the company at 23 billion. Facebook's offering is also viewed as a defining moment for the latest Web investing boom. The social network, which was started by Chief Executive Mark Zuckerberg in 2004 out of his Harvard University dorm room, has reshaped how people share information and interact with others on the Web. In the process, Facebook has spawned new verbs such as to friend and a popular Hollywood movie The Social Network that detailed the company's origins. Overall, Facebook now counts 800 million users, with 500 million users logging into the site daily. The company's IPO would cap a recent wave of Web IPOs, some of which have struggled amid growing Wall Street scrutiny of the new crop of Internet companies. In early 2011, professional social network LinkedIn Corp. went public with a bang, more than doubling on its first day of trading. Zillow Inc. and other Web companies followed with strong IPOs. But in the latter half of 2011, daily deals site Groupon Inc. and social games maker Zynga Inc. went public at valuations that were below expectations and their stock performance has since been choppy.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616036","date":"2012-02-07","texts":"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. 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. 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. 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. 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.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613701","date":"2012-02-09","texts":"Chrysler Group LLC's U.S. dealers swung into action on Wednesday to rebut complaints that the auto maker's emotional Super Bowl ad provided support to President Obama's re-election campaign. We have no doubt that this ad had no political agenda of any kind but rather was a statement of fact and hope for the future for all of us and America, the company's National Dealer Council said following an emergency meeting. The single airing of the auto maker's Halftime in America two-minute commercial on Sunday during the Super Bowl sparked debate from living rooms to dealerships across the country. The controversy boosted viewership with more than five million people viewing the ad on YouTube. Oliver Francois, Chrysler's chief marketing officer and architect of the ad, said he finds the controversy perplexing. It was designed to deliver emotions and I don't think emotions have a party. There was zero political message. It was meant more of a rally cry to get together and what makes us strong is our collective power and not our individual disagreements. At issue is whether the ad's intent was to sell cars or to help President Barack Obama in this fall's presidential campaign. His administration provided bailout funding and ushered Chrysler and rival General Motors Co. through a quick bankruptcy protection process in 2009.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614096","date":"2012-02-09","texts":"Barneys New York Inc., the swanky retailer known as a magnet for fashionistas, is headed for talks with lenders to get a handle on a debt load that stems from its 2007 takeover by Dubai investors. In the past couple of weeks, Barneys has tapped bankruptcy and restructuring lawyers at Kirkland & Ellis, said people familiar with the matter, as the chain aims to rework its finances and keep a nascent turnaround on track. Barneys, a niche company dwarfed by competitors Neiman Marcus Group Inc. and Saks Inc., needs to refinance a 200 million credit line that comes due in September. To do so, Barneys may need to reduce other debt mostly held by hedge-fund manager Richard Perry and supermarket magnate Ron Burkle. The debt load is mostly the result of a private-equity takeover of the company five years ago that burdened it with an additional 500 million in debt. Istithmar World, the investment arm of state-owned Dubai World, paid 942.3 million for Barneys in a buyout at the top of the market in 2007. Istithmar in early 2010 invested another 20 million to boost Barneys' coffers as it struggled in the wake of the recession.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614685","date":"2012-02-13","texts":"Financial Analysis and Commentary After three years of profit-margin expansion, U.S. companies have begun to see rising costs eat into the bottom line. And for now, there is little they can do about it. After the 2008 financial crisis, companies cleared the decks. With demand falling sharply and credit availability uncertain, they shed millions of workers and cut deeply into their spending on capital equipment. When the economy clawed its way back, they were slow to hire and slow to spend. The result Profits swelled. Last year, sales generated by S&P 500 companies were about 14 higher than they were in 2007, according to S&P Capital IQ's latest estimates. Operating earnings were up 21. But in the fourth quarter, there appears to have been a shift, with earnings growing a bit slower than sales. And analysts' estimates suggest that is something that will continue in the quarters to come.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615181","date":"2012-02-13","texts":"Forty years ago this week, leaders from the United States and China broke decades of estrangement and ushered in a new era of relations between the two countries. That act of enormous courage and wisdom changed the world forever. Now, on the eve of the 40th anniversary of Nixon's historic visit to China, and as Vice President Xi Jinping embarks on an important visit to the U.S., never before has there been such urgency to move the relationship forward to solve the many common challenges we face. Today, whether the subject is nonproliferation of nuclear weapons, energy security, climate change, global economic recovery or financial stability, China and the U.S. have a common interest in working together on these and other transnational challenges. Yet barriers on both sides prevent the relationship from fully developing. In China, many citizens and leaders question America's commitment to China. In America, nearly 60 of its people say they feel threatened by China's economic progress, according to a recent CBS NewsNew York Times poll. In reality, these concerns overlook the substantial benefits both countries have received as a result of increased economic and trade cooperation.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613500","date":"2012-02-14","texts":"NEW DELHI--A fund-management giant in its U.S. home market, T. Rowe Price Group Inc. is finding India tough to crack. Two years ago, T. Rowe joined a long line of Western financial firms hoping to tap into India's growing wealth and bought a large stake in the country's oldest mutual-fund company. But the investment in Mumbai-based UTI Asset Management Co. has been dogged by discord with the Indian partners, slackening in India's mutual-fund industry and slippage of UTI's market share. T. Rowe's woes also underscore the difficulties facing some foreign money managers in the country. Though Indian laws allow foreign companies to fully own mutual-fund companies, T. Rowe, like some other foreign rivals, entered India through a joint venture, hoping to eventually increase its ownership. The Baltimore-based company in 2010 teamed up with four government-owned financial groups, which sold T. Rowe an equal portion of their UTI equity for a total of 140 million. The deal made T. Rowe the single-largest holder in UTI, with 26. But that didn't help when UTI's chairman and managing director, U.K. Sinha, left last February to head India's capital markets regulator.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614263","date":"2012-02-18","texts":"What's so sublime about being on a tropical beach where you know nobody is, you can wear your unattractive, black, one-piece YMCA bathing suit with abandon. You don't have to suck your stomach in, walk backward or wear a sarong to cover those parts of yourself you're too scared to have surgically corrected. I learned that after my birthday last year. It was not a milestone birthday, but a birthday nonetheless, and my husband wanted to plan a small soiree. I said, No thank you. He offered to purchase a sweater I had been coveting. I replied, Not necessary. What, then What could he assemble to commemorate the day I was born on a gurney in a blizzard in Washington, D.C. I finally confessed that I wanted to escape. To travel somewhere that didn't resemble midtown Manhattan in January. I knew my husband had work and my children had school, so this would only come to fruition if I went solo. And with this knowledge came the realization that I yearned to be alone. For the first time in 10 years. I was barking like a seal. I left New York City for Turks and Caicos on a rather rainy and tempestuous morning, jostling my way down the JetBlue aisle in my down parka with a hefty duffel on one shoulder. On the other was a straw Calypso bag stuffed with magazines like the Economist and Newsweek OK, US Weekly and People. I was fuming that the TSA had confiscated my sunscreen. Three hours, two crossword puzzles and half a novel about a juicy divorce later, we hovered over a paradise of crisp white sand and sparkling turquoise water. When I walked off the plane I was hit with such a mighty gust of humidity that it caused me to tear off my jacket, sweater and scarf like they were covered in fire ants. I was ushered through customs with my hair matted to my damp, pasty face.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613736","date":"2012-02-19","texts":"Break out the poodle skirts and crank up the Perry Como. It's often said that investors these days are navigating uncharted territory. The world's major economies are swamped by massive amounts of debt, the Federal Reserve has essentially locked interest rates at zero and the outlook for corporate profits is increasingly cloudy. Many investors are paralyzed by this environment, which is unlike anything they have seen in their adult lives. As a result, they're hunkering down in cash and super-safe government bonds. However, as is often the case, investors can look to the past and find potential guideposts for building a portfolio for today's markets. In this case, history suggests that stocks with higher dividends could be in for a long period of healthy returns. Looking at the broad stock market, history suggests stocks in general could struggle compared with government bonds as long as rates are capped by the Fed, which is contrary to the conventional wisdom today. But for the longer term, stocks are a better bet than bonds. For their history lesson, investors should set their wayback machines to the period beginning in the late 1940s. It was a time when bond-market interest rates didn't float freely as they usually do, but instead were capped by the government at low levels to help the country manage the enormous debts accumulated during World War II.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616697","date":"2012-02-20","texts":"NEW YORK--The U.S.'s enormous debt load has been overshadowed recently by other global financial problems, but, as those start dissipating, bond investors are wondering how long the U.S. government will keep getting a free pass. Treasury yields are still at historic lows after last summer's remarkable rally, when investors were bracing for a messy fallout from the European debt crisis. At the time, the U.S. economy also seemed to be sputtering to a halt, raising fears that it might slip back into recession. But the landscape has turned distinctly brighter over the past couple of months. Greece expects its bailout money to be approved this week, and the euro zone's central banks are reportedly ready to exchange their existing Greek bonds for newer debt, paving the way for private-sector creditors to do the same. There has also been a string of upbeat U.S. economic releases that indicate the recovery is gathering steam. Before these two turnarounds, the U.S. Federal Reserve had flooded the economy with cheap money by buying bonds, while the euro-zone crisis fueled a flight-to-safety demand for Treasurys from around the world. Now that the situations are stabilizing, there are worries about what will happen when foreign demand wanes and the Fed starts removing itself as a buyer. The growing fear is that this would drive down Treasury prices and force the U.S. government to pay higher costs to finance its debt, as bond prices and yields move inversely. The Fed is currently buying longer-dated Treasurys under its so-called Operation Twist stimulus plan, using the proceeds from sales of shorter-dated debt. That program is slated to end in the middle of the year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616161","date":"2012-02-24","texts":"Julie Barth's prayers were answered when a doctor in Crystal Lake, Ill., told her in vitro fertilization might get her pregnant. But he didn't stop there, referring her to a fertility finance company that lent her 5,000 at an interest rate of 7.99 to help cover the 24,000 procedure. Her daughter, Olivia, was born about a year later. You can't put a price on a smile like that, says Ms. Barth, 32 years old. She hopes to pay off her loan from Springstone Financial LLC, based in Southborough, Mass., by her daughter's third birthday in 2014. At a time when many traditional lenders are struggling, companies that join forces with doctors to make loans for in vitro fertilization, egg harvesting and other fertility treatments say their business is thriving. One reason Fertility-finance companies are getting a boost from the banking industry's retrenchment. For example, credit has become tight for home-equity loans and credit cards, two ways couples often have paid for fertility treatments that often top 20,000. Mike Gilroy, Springstone's president, says business is robust because if the time is right to have a baby, people want loans even in a sluggish economy.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616993","date":"2012-02-28","texts":"TORONTO--Bank of Montreal said first-quarter earnings rose 34, helped by much lower loan-loss provisions and the recent acquisition of U.S. bank Marshall & Ilsley Corp. The Toronto-based lender, Canada's fourth-largest bank by assets, said it earned C1.11 billion 1.11 billion, or C1.63 a share, in its fiscal first quarter ended Jan. 31, up from C825 million, or C1.34, a year earlier. Adjusted earnings, which exclude certain items such as costs related to its Marshall & Ilsley acquisition and a capital markets-related restructuring charge, rose 19 to C972 million, or C1.42 a share, beating the Thomson Reuters mean estimate of C1.38. The bank bolstered earnings by chopping provisions for bad debt despite growing concerns about high Canadian consumer debt levels and a hot housing market. Loan-loss provisions were less than half of last year's level, falling to C141 million from C323 million. Still, BMO remains optimistic in its outlook for the North American economy, and while superlow interest rates and competition in its Canadian franchise are thinning profit margins, Canadian retail trends weren't quite as dire on a sequential basis as predicted, analysts said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617422","date":"2012-02-29","texts":"U.S. banks posted their biggest quarterly increase in lending in four years, offering reason for optimism that the economic rebound is picking up steam. The lending expansion -- detailed in the industry's latest report card from a top regulator -- is good news for the U.S. economy at a time when the unemployment rate is 8.3 and investors remain anxious about the prospect of an economic downturn or market shock spurred by Europe's debt crisis. Increased credit availability stands to help U.S. businesses that have been looking to finance new growth. The lending pickup is a bright spot in a period of intense questioning about banks' earnings power. U.S. financial firms have been under pressure in the markets as weak economic growth, tighter regulation and a decline in trading and deal making crimp their earnings outlooks. The report, released Tuesday by the Federal Deposit Insurance Corp., also showed that the banking industry posted a 119 billion profit for 2011. That is up 40 from a year earlier and the banks' biggest profit since 2006, when the housing boom was in full swing. The profit surge came as loan losses fell to their lowest level since early 2008, in the latest sign that the industry is healing from the bad lending decisions that laid it low during the financial crisis.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615907","date":"2012-03-04","texts":"On March 9, 2009, the stock market hit its postcrash bottom. Today, after a three-year rally that's seen the Dow Jones Industrial Average rise 98, from 6547 points to 12978, investors are trying to understand how to explain the good fortune, and whether it will continue. In March 2009, the stock market was priced for another Depression, says James Paulsen, chief investment strategist at Wells Capital Management. What we have come to realize is that the economy was probably never that close to depression and is now in recovery consequently, valuations are being reversed. Adds John Brynjolfsson, who runs hedge fund Armored Wolf We've been to the depths of Hades and back. One of the biggest factors behind the three-year burst for stocks easy money. The Federal Reserve cut interest rates and took other steps to send interest rates plummeting.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615625","date":"2012-03-05","texts":"Not since Herbert Hoover has a party out of power had such an opportunity to run against everything that troubles the American family--prices, interest rates, unemployment, taxes, or the fear for the future of their old age or the future of their children--than is now presented to the Republican Party. The Republicans, however, haven't figured this out. This is their basic problem. They have no strategy for defeating an Obama administration that is highly vulnerable on both domestic and foreign policy. That's the conventional wisdom in a nutshell, isn't it It will come as no surprise that these words appeared in a Feb. 29 column in the New York Times. They are reproduced here exactly as written, save for one small adjustment. The president whose failings they describe is Jimmy Carter, not Barack Obama. The lines were written in 1980, not 2012. The author was the then-dean of conventional wisdom, James Scotty Reston. The headline was Jimmy Carter's Luck, a reference to Reagan's victory in the New Hampshire primary three days earlier.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614478","date":"2012-03-06","texts":"Not since Herbert Hoover has a party out of power had such an opportunity to run against everything that troubles the American family -- prices, interest rates, unemployment, taxes, or the fear for the future of their old age or the future of their children -- than is now presented to the Republican Party. The Republicans, however, haven't figured this out. This is their basic problem. They have no strategy for defeating an Obama administration that is highly vulnerable on both domestic and foreign policy. That's the conventional wisdom in a nutshell, isn't it It will come as no surprise that these words appeared in a Feb. 29 column in the New York Times. They are reproduced here exactly as written, save for one small adjustment. The president whose failings they describe is Jimmy Carter, not Barack Obama. The lines were written in 1980, not 2012. The author was the then-dean of conventional wisdom, James Scotty Reston. The headline was Jimmy Carter's Luck, a reference to Reagan's victory in the New Hampshire primary three days earlier.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614546","date":"2012-03-06","texts":"Not since Herbert Hoover has a party out of power had such an opportunity to run against everything that troubles the American family--prices, interest rates, unemployment, taxes, or the fear for the future of their old age or the future of their children--than is now presented to the Republican Party. The Republicans, however, haven't figured this out. This is their basic problem. They have no strategy for defeating an Obama administration that is highly vulnerable on both domestic and foreign policy. That's the conventional wisdom in a nutshell, isn't it It will come as no surprise that these words appeared in a Feb. 29 column in the New York Times. They are reproduced here exactly as written, save for one small adjustment. The president whose failings they describe is Jimmy Carter, not Barack Obama. The lines were written in 1980, not 2012. The author was the then-dean of conventional wisdom, James Scotty Reston. The headline was Jimmy Carter's Luck, a reference to Reagan's victory in the New Hampshire primary three days earlier.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615784","date":"2012-03-09","texts":"BEIJING--A raft of economic data released on Friday showed continued slowing of China's economy, suggesting officials will loosen monetary policy further in the months ahead to support growth. Industrial-production growth slowed to its lowest level since July 2009 in the first two months of the year, while property sales continued a steep decline that dates from late last year. New loan volumes were down from the first two months of last year. Inflation slowed sharply in February, according to the country's National Bureau of Statistics, potentially giving policy makers confidence that they can stimulate the economy somewhat without setting off prices. Today's whole slew of inflation and industrial production data were lower than our expectations, and we think the central government will surely step up policy-loosening to boost economic growth, said Standard Chartered economist Li Wei eds Mr. Li. The government may take measures like increasing investment and government expenditure, as well as stepping up lending. China has cut banks' reserve requirements twice since late last year, freeing up funds for lending--but has not cut interest rates, which could risk reigniting inflation or reinflating property prices.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616442","date":"2012-03-10","texts":"BEIJING -- A raft of economic data released on Friday showed continued slowing of China's economy, suggesting officials will loosen monetary policy further in the months ahead to support growth. Industrial-production growth slowed to its lowest level since July 2009 in the first two months of the year, while property sales continued a steep decline that dates from late last year. New loan volumes were down from the first two months of 2011. Inflation slowed sharply in February, according to the country's National Bureau of Statistics, potentially giving policy makers confidence that they can stimulate the economy somewhat without setting off prices. Today's whole slew of inflation and industrial production data were lower than our expectations, and we think the central government will surely step up policy-loosening to boost economic growth, said Standard Chartered economist Li Wei. The government may take measures like increasing investment and government expenditure, as well as stepping up lending. China has cut banks' reserve requirements twice since late last year, freeing up funds for lending, but hasn't cut interest rates, which could risk reigniting inflation or reinflating property prices.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615432","date":"2012-03-12","texts":"NEW YORK--The Dow industrials rose for the fourth consecutive session in relatively listless trading, even as trade data from China raised concern about growth in the world's second-largest economy. Monday's advance follows increases last week fueled by positive news about the U.S. labor market and progress toward resolving Greece's financial problems. Stocks opened flat and drifted in low trading volume after China posted a surprisingly large trade deficit last month. The Dow Jones Industrial Average rose 37.69 points, or 0.29, to 12959.71. The Standard & Poor's 500-stock index also extended its streak of gains to four trading days, ticking up 0.22 point, or less than 0.1, to 1371.09. The Nasdaq Composite fell 4.68 points, or 0.16, to 2983.66, declining for the first time in four sessions. Daily trading volume on the New York Stock Exchange and the Nasdaq was the lightest of the year. It seems as though the big question marks were solved in quick succession, and now a lot of that is reflected in prices, said David Joy, chief market strategist at Ameriprise Financial.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614654","date":"2012-03-13","texts":"One of Wall Street's most important profit engines is revving back up. Rising appetites for borrowing and investing are fueling a bond market revival, lifting revenue at Wall Street firms that took a beating last year. For the first time in a year, traders and bankers are optimistic following a dark second half of 2011. Layoffs, pay cuts and public outrage against the financial industry undermined morale at banks and securities firms, while economic malaise throttled banking and trading businesses. But with investors and companies putting more money to work, the mood is brightening. Gains in the financial firms' fixed-income businesses, which can account for as much as half of revenue, are putting companies including Goldman Sachs Group Inc., Morgan Stanley and the J.P. Morgan unit of J.P. Morgan Chase & Co. on track to report their strongest numbers since the first quarter of 2011, said bankers and analysts. The clouds over the industry have only partly cleared. Businesses such as deal making remain depressed. Many traders and bankers still worry about Europe's debt woes and regulatory risks in the U.S. With three weeks left in the first quarter, overall revenue at many securities firms is expected to be lower than a year ago.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615363","date":"2012-03-17","texts":"U.S. gasoline prices jumped 6 in February, and market experts predict they will climb higher because critical refining operations in the Northeast are shutting down. From New York to Philadelphia, refineries that turn oil into gasoline have been idled or shut permanently because their owners are losing money on them. Sunoco Inc. is expected to close the region's largest refinery in July, taking another 335,000 barrels per day in production capacity off the market. The East Coast refineries are getting squeezed by the soaring cost of crude oil, the major component in gasoline. The cost of oil has jumped in the past year due to global economic growth and rising tensions between Western nations and Iran, a major producer. Refineries haven't been able to increase their own prices enough to compensate. The government said Friday that the increase in gas prices had contributed to a 0.4 overall increase in consumer prices in February. Prices at the pump averaged 3.831 a gallon on Friday, according to the AAA, formerly known as the American Automobile Association. Rising gas prices pose a risk to the economic recovery, which is showing signs of gaining steam after faltering last year.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616237","date":"2012-03-19","texts":"Is the bond bear market here Last week's sudden selloff in U.S. Treasurys, which dragged U.K. gilts and German bunds in its wake, has jolted the market. The driving force is a belief the U.S. and global recovery may be becoming self-sustaining. Some are recalling the events of 1994, when an unexpected U.S. rate increase caused bond-market carnage. But so far, a rerun looks unlikely given that a sharp rise in rates would in itself put pressure on the nascent recovery. That should reassure investors in risky assets like stocks and junk bonds. Ten-year Treasury yields have risen 0.36 percentage point in a week to 2.38--in bond-market terms, a big move. That came after healthy U.S. employment growth, the majority of U.S. banks passing a severe stress test and the market dialing back expectations for more quantitative easing by the Federal Reserve. The crucial question is how far yields might rise. That depends in large part on U.S. economic data. Further evidence that the U.S. recovery is gaining traction--in particular corporate spending, further job creation and rising household incomes--is bound to push yields higher. By one measure, they could rise sharply Ten-year Treasurys were well above 4 the last time the S&P 500 was at its current level in mid-2008. That steep a rise would rival 1994's selloff--when 10-year yields rose to 8 from 5.9--and could threaten the recovery in housing and the economy. But many investors, disappointed by false dawns in recent years, may be slow to unload bonds. The euro zone and Middle East in particular still pose risks to the global economy. Interest rates are at zero, anchoring short-dated yields. Policy makers have expended much effort driving down long-term yields, and may yet seek to contain them. That may mean 10-year Treasury yields are just moving from panic levels to a new range between 2.10 and 2.60 for now. German bunds, meanwhile, look more insulated because of the lingering euro-zone crisis. Even after rising to 2.03, 10-year bund yields remain well within their recent trading range. So investors could bet bunds outperform Treasurys.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617098","date":"2012-03-19","texts":"NEW YORK--Gold futures edged higher Monday while platinum again outpaced gold's gains as precious metals drew strength from a weaker dollar in a quiet trading day. The most active gold contract, for April delivery, rose 11.50, or 0.7, to settle at 1,667.30 a troy ounce on the Comex division of the New York Mercantile Exchange. A weaker dollar, which slipped versus the euro in late morning trade, fanned demand for dollar-denominated gold. Gold is priced in dollars and tends to attract more foreign buyers when the greenback falters, as the metal appears less expensive to these buyers in their home currency terms. Gold prices also caught a boost as some investors, who had made bets on lower prices, re-entered the market as buyers in order to cover those previous sell orders, known as shorts. There were a lot of 'short-term shorts'--latecomers to the short party. It looked like the market might break down technically and didn't, and that's bringing out some modest demand, said Bill O'Neill, a principal with Logic Advisors.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615354","date":"2012-03-20","texts":"CHICAGO -- An improving job market is prompting Mitt Romney to scrap his emphasis on the unemployment rate and to focus on rising gas prices and government regulation as evidence that President Barack Obama has mismanaged the economy. With the economy looking like it's getting a little better on the employment front, gasoline's getting a lot worse, Mr. Romney told a crowd at a town-hall meeting Sunday in Vernon Hills, Ill. At the University of Chicago on Monday, Mr. Romney argued that government regulation under Mr. Obama threatens to strangle ground-breaking ideas and would have stopped the work of Thomas Edison and the Wright brothers. Mr. Romney has built his campaign on the premise he is better-equipped than Mr. Obama or any of the other Republicans seeking the presidential nomination to reinvigorate the economy. The new approach in Mr. Romney's attacks came on the cusp of a primary election on Tuesday in Illinois that has the potential to boost his lead over other GOP candidates in the delegate count. The few polls conducted recently show Mr. Romney leading his closest rival, former Pennsylvania Sen. Rick Santorum, by between four and 15 percentage points. Former House Speaker Newt Gingrich and Texas Rep. Ron Paul have campaigned little in the state and trail in opinion surveys.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616842","date":"2012-03-23","texts":"Sales of new homes in the U.S. fell for the second consecutive month in February, an indication that the housing market remains shaky in the aftermath of a severe bust. New-home sales decreased by 1.6 to a seasonally adjusted annual rate of 313,000 from January, the Commerce Department said Friday. It was the second-straight monthly decline and the lowest reading since October 2011. The results were worse than expected. Economists surveyed by Dow Jones Newswires had forecast sales last month would climb by 1.2 to an annual rate of 325,000. In addition, January's sales were revised downward to 318,000 from an initially reported 321,000. That was a decline of 5.4 from December. However, new-home sales were up 11.4 compared with February 2011. And prices have stabilized The median price of a new home was 233,700 last month, up 6.2 from February 2011.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615819","date":"2012-03-28","texts":"A small bipartisan group of House lawmakers, bucking their Democratic and Republican leaders, is advancing a plan to reduce the federal budget deficit by more than 4 trillion over 10 years through a combination of spending cuts and tax increases. A vote on the measure could come as soon as Wednesday. It is widely expected to fail, but the degree of support for the plan could prove a bellwether of whether Congress decides to pursue a broad bipartisan budget deal this election year. The proposal pushed by Reps. Steve LaTourette R., Ohio and Jim Cooper D., Tenn., largely reflects the outline offered in 2010 by the White House's deficit-reduction commission chaired by Republican former Sen. Alan Simpson and Democrat Erskine Bowles. The new plan comes amid a number of budget proposals in recent weeks, including from the White House and Republican leaders. But the new House proposal is the first to be pushed in Congress this year with any level of bipartisan support and is already attracting support from top executives who are eager to see Congress tackle the deficit. The LaTourette-Cooper proposal would lower tax rates but also eliminate or dramatically limit tax breaks, accounting for close to 1 trillion in deficit reduction over 10 years. It would also set a new limit on the long-term growth of federal health-care spending. It would instruct congressional panels to find 300 billion in spending cuts in federal programs, such as agriculture and federal retirement benefits.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614186","date":"2012-04-01","texts":"Burton G. Malkiel's assessment that 10-year Treasuries are a sure loser is an understatement at best  op-ed, March 23. Not only will the inflation-adjusted return likely be negative, but Treasury investors are also enabling continued irresponsible government spending that will eventually reduce future growth and lower investment returns while inflating tax rates out of necessity rather than choice. Now, there's an intelligent investment strategy. Maybe we need a grass-roots movement from the investment community that tells the government we will no longer buy this junk until you resolve the debt and deficit debacle. More importantly, the real question is What does the prudent investor do now to protect himself from his own government Scott Campbell Rhinelander, Wis. Mr. Malkiel doesn't address the level of debt in the economy or the likely permanent changes in consumer behavior as it relates to debt, yet cites emerging markets as having better fiscal balances.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617380","date":"2012-04-03","texts":"Stocks fell from multiyear highs as the Federal Reserve's most recent policy meeting offered no signals that monetary stimulus is on the way. The Dow Jones Industrial Average broke a three-session streak of gains, declining 64.94 points, or 0.5, to 13199.55, one day after notching its highest close in more than four years. The Standard & Poor's 500-stock index lost 5.66 points, or 0.4, to 1413.38, and the Nasdaq Composite declined 6.13 points, or 0.2, to 3113.57. Stocks opened flat and drifted lower. After the Fed statement, the Dow dropped as much as 133 points, but later pared losses. The Fed minutes of its March 13 policy-setting committee meeting showed agreement that the U.S. economic recovery had strengthened moderately, but left investors to question the Fed's appetite for launching additional bond buying, or other programs, to shore up growth and whether the rally can continue without a prime driver. One of the things underpinning the rally has been Fed's easy-money policy, and this could be seen as the Fed moving to close off the liquidity spigot to some extent, said Etai Friedman, head of equity derivatives trading MKM Partners. While Fed officials said they are prepared to buy or sell assets as appropriate to promote a stronger economic recovery, the minutes didn't show widespread agreement for doing so anytime in the immediate future.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615966","date":"2012-04-04","texts":"The Fed is in no hurry to launch new measures to boost economic growth, minutes from the central bank's most recent meeting showed, disappointing investors eager for more stimulus. Among the hints dropped in minutes of the Fed's March 13 policy gathering, Federal Reserve staff concluded that the U.S. economy is a little more susceptible to inflation than previously thought. That and other signals suggested that another round of bond buying by the Fed to push down long-term interest rates isn't imminent. The news disappointed financial markets. The Dow Jones Industrial Average fell by as much as 1 before recovering slightly to finish down 64.94 points at 13199.55. Treasurys also fell, sending yields higher. The minutes, released Tuesday afternoon, with the customary three-week lag following the meeting, noted that a couple of officials said additional stimulus could become necessary if the economy lost momentum or inflation receded. But that sounded a bit more timid than a January meeting, when the Fed said a few officials thought bond buying could be needed before long.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615383","date":"2012-04-05","texts":"Fears that the central banks of Europe and the U.S. may soon end efforts to support financial markets and fresh concerns about the health of Europe's weakest countries drove down stock markets around the world Wednesday. European Central Bank President Mario Draghi indicated he would be hesitant to undertake more monetary easing, citing concerns about inflation. That surprised investors who had been relying on the ECB to help support the region's economy and financial markets. Adding to concerns, an auction Wednesday of Spanish government bonds was met with surprisingly lackluster demand. The disappointing sale was a reminder to investors that Europe's problems are far from over, and prices of European sovereign bonds fell, sending yields higher. The euro also dropped against the dollar. Stock indexes from New York to Frankfurt to Tokyo fell sharply. The Dow Jones Industrial Average fell 124.80 points to 13074.75, its worst day since March 6. In Germany, the DAX index dropped 2.8, its biggest one-day fall in a month. Japan's Nikkei Stock Average tumbled 2.3, its worst day since Nov. 10. The slide began in the U.S. Tuesday after signs from the Federal Reserve that it won't immediately embark on a new round of bond buying. That dashed hopes of investors who had anticipated a new program would further juice financial markets and the economy.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615516","date":"2012-04-06","texts":"Long-term-care insurance It can make the difference between living out your life the way you want and becoming a burden to your family or a ward of the state. But it is becoming significantly more expensive, more complicated and harder to get with each passing year. Average premiums on new policies--which help pay for nursing-home, assisted-living and home care--have risen some 6 to 17 in the past year alone, according to the American Association for Long-Term Care Insurance, a trade group. Some insurers have even doubled their premiums on existing policies. The increases come as the industry grapples with low interest rates and policyholders who are living a lot longer than the actuaries said they would. At the same time, big companies like Prudential Financial and MetLife have stopped selling new policies in the individual market, continuing a trend that began several years ago. Ten of the top 20 writers of individual coverage five years ago have announced their exit, according to Limra International, an industry-funded research firm. Ken Kacenga, a 65-year-old doctor in Sierra Vista, Ariz., who plans to retire later this year, got hit with a 23 premium increase recently on the long-term-care insurance he and his wife bought several years ago. The couple struggled with whether to drop the coverage, he says, before finally deciding to keep it for another year while shopping around for other options.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617397","date":"2012-04-11","texts":"WASHINGTON--The federal budget deficit appears to be narrowing slowly, with the biggest improvement since the financial crisis, as corporate and individual income taxes rise thanks to the rebounding economy. The Treasury Department reported Wednesday that it collected 171 billion in taxes and other revenue last month, the highest March tally since 2008, when Bear Stearns was acquired at a government-run fire sale by J.P. Morgan Chase & Co. Individual income-tax revenue from October through March, the first half of the government's 2012 fiscal year, hit 484.1 billion, up from 475.6 billion in the year-earlier period. Corporate income taxes rose to 84.5 billion from 55.1 billion a year earlier. The higher tax revenue helped shrink the six-month deficit to 778.8 billion this year, 50 billion lower than the year before. Tax revenue has been slow to recover since the financial crisis, and its sluggishness has been one driver of wide deficits in recent years. Monthly government tax and spending data can fluctuate widely, and the deficit could swell again if the recovery falters. The April data will prove a key indicator of the government's fiscal health since many Americans wait until the last minute to file their tax returns.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613760","date":"2012-04-13","texts":"BrightSource Energy Inc.'s decision to cancel a planned IPO may have been a logical response to stock-market conditions, but the move adds to recent disappointments for the clean-technology industry. The Oakland, Calif., solar power company on Thursday withdrew its registration with the Securities and Exchange Commission, after announcing late Wednesday night that it was canceling its IPO. We made this decision from a position of strength, BrightSource Chief Executive John Woolard said Thursday. We're in a strong financial position, we have a great foundation of investors and our business continues as planned. NRG Energy Inc., which is the lead investor in a 392-megawatt solar-power plant called Ivanpah that BrightSource is building in the California desert, said construction of the project was going well and that BrightSource is a strong, resourceful company. Nevertheless, BrightSource's decision to sidestep an IPO is a sign that alternative-energy firms may not be welcome in the stock markets.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615444","date":"2012-04-13","texts":"NEW YORK--At least six Wall Street dealers are preparing bids for more than 7 billion in complex commercial-mortgage securities, which are part of assets tied to the Federal Reserve Bank of New York's bailout of American International Group Inc., according to investors briefed by dealers. Deutsche Bank, Bank of America Corp., Morgan Stanley, Credit Suisse, Goldman Sachs Group Inc. and Barclays are preparing bids for the debt securities, the investors said. The dealers are focused on so-called commercial-real-estate collateralized-debt-obligations, which are a corner of the 47 billion face amount of debt held by the New York Fed portfolio known as Maiden Lane III. They are primarily focused on dismantling the so-called CRE CDOs because the underlying commercial mortgage-backed securities are worth more as individual pieces and could likely generate more trading revenue, the investors said. But the liquidation rests on the elimination of an interest-rate swap with Barclays, the counterparty in the derivative transaction. As the swap was put on when interest rates were higher, the contract has risen in value and would require a payment of more than 1 billion to Barclays if the CDO was to be unwound, two of the investors said. Spokesmen for Deutsche Bank, Bank of America, Morgan Stanley, Credit Suisse, Barclays, Goldman Sachs and the New York Fed declined to comment.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615944","date":"2012-04-14","texts":"NEW YORK -- At least six Wall Street banks are preparing bids for more than 7 billion in complex commercial-mortgage securities tied to the Federal Reserve Bank of New York's 2008 bailout of American International Group Inc., according to investors briefed by dealers. Deutsche Bank, Bank of America Corp., Morgan Stanley, Credit Suisse, Goldman Sachs Group Inc. and Barclays PLC are preparing bids for the debt securities, the investors said. The dealers are focused on so-called commercial-real-estate collateralized-debt obligations, which are part of the 47 billion of debt held by the New York Fed portfolio known as Maiden Lane III. The dealers are primarily focused on dismantling the instruments because the underlying commercial mortgage-backed securities are worth more as individual pieces and could likely generate more trading revenue, the investors said. The liquidation rests on the elimination of an interest-rate swap with Barclays, the counterparty in the derivative transaction. As the swap was arranged when interest rates were higher, the contract has risen in value and would require a payment of more than 1 billion to Barclays if the CDO was unwound, two of the investors said. Spokesmen for Deutsche Bank, Bank of America, Morgan Stanley, Credit Suisse, Barclays, Goldman Sachs and the New York Fed declined to comment.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617421","date":"2012-04-18","texts":"Like Pavlov's dog, which would salivate at the sound of a bell, U.S. stock market investors will these days launch into a buying frenzy at the faintest hint of more monetary stimulus. But if Federal Reserve officials' assurances of continued support for the U.S. recovery have released feel-good endorphins among wishful thinkers on Wall Street, their subtle admissions that a third round of quantitative easing, or QE3, isn't off the table may equally have sent emerging market central bankers into a cold sweat. Financial authorities in developing countries fear their economies will be in the line of fire if U.S. economic conditions deteriorate so much that the Fed again starts buying bonds to anchor U.S. interest rates. They know from experience that many of the dollars the Fed injects into the financial system would flow offshore and into their currencies, whose higher yields are more attractive to investors. This hot money would push up their exchange rates to the detriment of their exporters and leave their capital markets vulnerable to volatile turns in sentiment. If these policy makers were to respond to QE3 as many did to QE2--by buying dollars in the foreign exchange market, cutting interest rates or otherwise quelling exchange rate appreciation--they would revive what Brazilian Finance Minister Guido Mantega alarmingly described in 2010 as a currency war. With their export leaders complaining of a loss of competitiveness, central bankers would come under immense political pressure to protect vital industries and to go soft on inflation, often a byproduct of a weaker currency. And this time, global conditions are such that their actions could set off a self-perpetuating cycle of competing devaluations that does considerable damage to the world trading system. Unlike in 2010, China's economy is now slowing. Meanwhile, Europe is in an austerity-led recession and the modestly improved U.S. economy faces a major test when steep fiscal cuts take effect at year-end. QE3 could easily land in a world of weakening global demand, which means exporters from places like South Korea, Turkey, Brazil and South Africa would be fighting over a shrinking pie. The temptation to fight lost competitiveness with market intervention rather than by curtailing domestic costs would be great.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613889","date":"2012-04-19","texts":"Stocks fell after a trio of disappointing economic readings overshadowed better-than-expected earnings reports from Travelers and other companies. The Dow Jones Industrial Average declined 68.65 points, or 0.53, to 12964.10. The Standard Poor's 500-stock index shed 8.22 points, or 0.59, to 1376.92, and the Nasdaq Composite fell 23.89 points, or 0.79 to 3007.56. The information-technology and industrials sectors led the S&P 500 lower amid downbeat labor, housing and manufacturing readings. Just three of the Dow's 30 components advanced. Travelers gained 2.23, or 3.7, to 61.70 and Verizon Communications rose 49 cents, or 1.3, to 38.15 after both reported first-quarter results that beat analysts' projections. General Electric gained four cents, or 0.2, to 19.14 ahead of its results Friday. This whole market ran out of steam halfway through the day, said Jonathan Corpina, senior managing partner of New York Stock Exchange floor broker Meridian Equity Partners. It just seems to be getting worse and worse as the day goes on. All the European headlines are really catching up right now.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614377","date":"2012-04-19","texts":"WASHINGTON--The Federal Reserve said Thursday that banks will have a full two years to bring their activities in line with the so-called Volcker rule before regulators start enforcing it, a formal statement aimed at calming bank fears that they would be forced to act before a July deadline. The Fed and other banking regulators said banks will have until July 21, 2014, to conform all of their activities and investments to the Volcker rule, which restricts U.S. banks from trading with their own money. During the conformance period, banking entities should engage in good-faith planning efforts to make sure they are in line with the restrictions no later than that date, the Fed said. At issue is a legal worry raised by the fact that regulators are unlikely to have their final regulation implementing the Volcker rule by the July deadline set out in the 2010 Dodd-Frank financial law. The provision is set to take effect on July 21, whether or not regulators have the details hammered out by then. That raised a concern among some banks and their lawyers that banks might need to change some activities ahead of the final rule in order to not violate the law. The Fed clarified that banks will have a full two years from the July deadline before regulators will enforce any aspect of the rule. Under the law, the Fed can decide to extend that period for up to three years.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614735","date":"2012-04-20","texts":"Barack Obama is asking Americans to gamble that the U.S. economy can be taxed into prosperity. That's the message of his campaign for the Buffett Rule, which raises income-tax rates on millionaires to a minimum of 30, and for the expiration of the Bush tax cuts. He wants to raise the highest income tax rate by 20, double the rate on capital gains, add a new 3.8 tax on all capital earnings, and nearly triple the dividend tax rate. All this will enhance economic efficiency, insists a White House economic report. As for those who disagree, says President Obama, they're just pushing the same version of trickle-down economics tried for much of the last century. . . . But prosperity sure didn't trickle down. Mr. Obama needs a refresher course on the 1920s, 1960s, 1980s and even the 1990s, when government spending and taxes fell and employment and incomes grew rapidly. But if the president wants to see fresher evidence of how taxes matter, he can look to what's happening in the 50 states. In our new report Rich States, Poor States, prepared for the American Legislative Exchange Council, we compare the economic performance of states with no income tax to that of states with high rates. It's like comparing Hong Kong with Greece or King Kong with fleas. Every year for the past 40, the states without income taxes had faster output growth measured on a decadal basis than the states with the highest income taxes. In 1980, for example, there were 10 zero-income-tax states. Over the decade leading up to 1980, those states grew 32.3 percentage points faster than the 10 states with the highest tax rates. Job growth was also much higher in the zero-tax states. The states with the nine highest income tax rates had no net job growth at all, and seven of those nine managed to lose jobs.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613888","date":"2012-04-21","texts":"Barack Obama is asking Americans to gamble that the U.S. economy can be taxed into prosperity. That's the message of his campaign for the Buffett Rule, which raises income-tax rates on millionaires to a minimum of 30, and for the expiration of the Bush tax cuts. He wants to raise the highest income tax rate by 20, double the rate on capital gains, add a new 3.8 tax on all capital earnings, and nearly triple the dividend tax rate. All this will enhance economic efficiency, insists a White House economic report. As for those who disagree, says President Obama, they're just pushing the same version of trickle-down economics tried for much of the last century. . . . But prosperity sure didn't trickle down. Mr. Obama needs a refresher course on the 1920s, 1960s, 1980s and even the 1990s, when government spending and taxes fell and employment and incomes grew rapidly. But if the president wants to see fresher evidence of how taxes matter, he can look to what's happening in the 50 states. In our new report Rich States, Poor States, prepared for the American Legislative Exchange Council, we compare the economic performance of states with no income tax to that of states with high rates. It's like comparing Hong Kong with Greece or King Kong with fleas. Every year for the past 40, the states without income taxes had faster output growth measured on a decadal basis than the states with the highest income taxes. In 1980, for example, there were 10 zero-income-tax states. Over the decade leading up to 1980, those states grew 32.3 percentage points faster than the 10 states with the highest tax rates. Job growth was also much higher in the zero-tax states. The states with the nine highest income tax rates had no net job growth at all, and seven of those nine managed to lose jobs.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615366","date":"2012-04-23","texts":"NEW YORK Dow Jones--There is a real danger U.S. authorities won't take the necessary steps to fix the country's debt and deficit problems between the elections and the end of this year, former Federal Reserve Board Vice Chairman Donald Kohn said Monday. What's required to put the fiscal deficit on a sustainable path are some difficult decisions having to do with entitlement spending and taxes in the United States, Kohn said at the Europlace forum. There's a high degree of uncertainty ... there's a huge risk that they won't. Kohn added the U.S. political system has become soap opera-ized with such a huge gulf between the country's political parties there is a real risk debt and deficit will continue to grow past the end of this year. He said governments worldwide must not rely on central bankers to get them off the hook for uncomfortable choices. You cannot count on central bank purchases to bail out governments whatever the inflationary consequences, Kohn said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614207","date":"2012-04-26","texts":"WASHINGTON Dow Jones--New applications for unemployment benefits stayed nearly unchanged from last week, showing that the labor market's recent improvement may be slowing. Initial jobless claims decreased by 1,000 to a seasonally adjusted 388,000 in the week ended April 21, the Labor Department said Thursday. Economists surveyed by Dow Jones Newswires predicted that 376,000 new claims would be filed last week. It was the third straight week the level topped 385,000 -- claims haven't stayed that consistently high since November. The prior week's level of claims was revised up to 389,000 from a previously reported 386,000. The four-week moving average of claims, which smoothes out week-to-week volatility, increased by 6,250 to 381,750, the highest reading since the first week of the year.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615443","date":"2012-04-27","texts":"Republican and Democratic lawmakers agreed this week to approve new subsidies for college students but clashed on how to offset the 6 billion cost of the measure so it doesn't add to the federal deficit, setting up a potential election-year showdown over budget policy. House Republicans plan to vote as early as Friday to freeze the interest rates on certain federal student loans at 3.4 for the year that starts July 1. The lawmakers plan to make up the unrealized revenue by tapping money that was directed by the 2010 health-care overhaul to fund investment in illness-detection procedures. Without congressional action, the rate on the loans would double on July 1 to the 6.8 level that applies to the most commonly used type of federal student loan. Loans issued before July 1wouldn't be affected. House Democrats are proposing to find the 6 billion by removing tax breaks for oil and natural-gas companies. Senate Democrats will suggest raising the money by ending a tax provision benefiting small-business owners, aides said. With three different proposals and no clear path to consensus, the debate could continue until the June 30 deadline for congressional action. President Barack Obama, seeking to energize young voters, called on Congress this week to renew the measure, which enables college students who demonstrate financial need to borrow up to 5,500 a year at an interest rate of 3.4 -- much lower than typical private loans.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614989","date":"2012-04-28","texts":"Top of the Rock By Warren Littlefield Doubleday, 326 pages, 27.95 If history is written by the victors, then the executives presiding over NBC's dismal prime-time performance in recent years are unlikely ever to publish a chronicle of television in the era of American Idol, NCIS and other hits the network doesn't air. But there was a time when NBC ruled the ratings, and Warren Littlefield -- the former president of NBC Entertainment who oversaw Seinfeld, Friends, ER and a raft of other moneymaking shows -- doesn't want anyone to forget it. He also surely knows that in the television arts and sciences, people who also write books, or at least have their name on the cover, are practically authors. Mr. Littlefield's entry in the shelf-esteem sweepstakes, Top of the Rock, is an oral history of mostly 1990s television, with interview snippets from on- and off-screen talent and fellow executives. Mr. Littlefield is just one among many speakers, but he gets the biggest entries and wrote the swaggering, cigar-chomping introduction. The book proceeds more or less chronologically, from Cheers, which ended in the early 1990s, to the launch of Will & Grace in the late '90s. With plenty of lessons about branding and managing up the book is about television, after all, Littlefield & Co. give their versions of events, applying the golden rule of television -- essentially, you've got to spin it to win it -- but also settling scores along the way.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616146","date":"2012-04-28","texts":"Treasury bonds wrapped up a sixth straight weekly price gain, extending the run to the longest winning streak since June 2011. Prices strengthened as the latest data showed the U.S. economy hit a soft patch during the first quarter. The sixth weekly decline in the 10-year yield, which moves inversely to its price, underscores how optimism over the U.S. economy earlier this year has shifted to anxiety about the strength of the recovery. The 10-year yield, a benchmark for long-term U.S. consumer and corporate borrowing rates, has tumbled from 2.399 in March and now trades less than 0.30 percentage point from a historic low set in September. Technicals are slightly bearish for Treasurys because of low yields but the economic data are waning and the situation in Europe is deteriorating further, said Ian Lyngen, senior government-bond strategist at CRT Capital Group LLC. Late Friday in New York, the 10-year note rose 832 point, to 100 2032, to yield 1.931, compared with 1.959 late Thursday. The yield has edged down from 1.966 at the end of last week and has dropped 0.37 percentage point over the past six weeks. The 30-year bond gained 1332 point, to 100 632, to yield 3.116.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616699","date":"2012-05-02","texts":"Manufacturing activity gained steam on several fronts in April, easing concerns that a key engine of the economy was beginning to falter. The Institute for Supply Management's index of manufacturing activity, based on surveys of purchasing managers across the U.S., rose to 54.8 from 53.4 in March -- the 33rd consecutive month of growth and the fastest pace since June 2011. The expansion was broad-based, with 16 of 18 industries reporting gains, according to the report Tuesday. Gauges of production, exports and employment all increased while the new-orders index -- a barometer of future activity -- rose 3.7 points to 58.2. Readings above 50 indicate growth. Markets cheered the news, sending the Dow to a four-year high. The Dow Jones Industrial Average rose 65.69 points, or 0.5, to 13279.32, its best close since Dec. 28, 2007. The report surprised many economists who had forecast slower manufacturing growth in the face of downturns overseas, as well as signs of less appetite at home for capital equipment. That view was reinforced by weaker regional manufacturing data in recent weeks, as well as Friday's report on first-quarter gross domestic product. The GDP report showed that in the first three months of 2012, equipment and software spending expanded at the slowest pace since the recovery began in the summer of 2009.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614617","date":"2012-05-04","texts":"February and March payrolls were revised up by a combined 53,000 Unemployment rate falls to its lowest level in more than three years Labor force participation rate slips to lowest level in more than 30 years WASHINGTON Dow Jones--U.S. job growth slowed again in April and more Americans dropped out of the work force, a fresh sign that the economy could be settling into a sluggish spring. Nonfarm payrolls grew by 115,000 last month, the Labor Department said Friday. The unemployment rate, obtained by a separate survey of U.S. households, ticked down a tenth of percentage point to 8.1.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617217","date":"2012-05-04","texts":"NEW YORK--The Federal Reserve Bank of New York said it invited nine Wall Street dealers to bid for residential-mortgage bonds with a face value of 2.5 billion as it unwinds a portfolio created during the 2008 bailout of American International Group Inc. The New York Fed said the bid process was launched after it received several strong inquiries to buy the structured debt known as collateralized debt obligations, or CDOs. The two Triaxx CDOs on offer were packaged in 2006 with residential-mortgage-backed securities containing jumbo and Alt-A loans, which are larger than those that fit into government programs or had limited documention. Such CDOs were at the heart of the credit crisis, fueling more risky lending and later causing steep losses to investors and banks that had counted on their high credit ratings. The proposed sale would be the second from the Maiden Lane III portfolio in less than a month, after eight dealers recently formed unusual alliances to boost their chances of winning an auction for 7.5 billion of commercial-mortgage-backed security CDOs. Deutsche Bank AG and Barclays PLC won the auction and had commitments from investors to purchase the majority of the CMBS from them. Similar demand could develop for the residential mortgage assets as many investors, including Two Harbors Investment Corp., have been adding the underlying RMBS in recent months. The CDO structure adds a layer of complexity that limits buyers, but some investors may relish the chances of buying such debt that likely has extra yield over the underlying securities that have already rallied up to 10 this year, analysts said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615202","date":"2012-05-05","texts":"If you're thinking of buying a second home in the next five years, this might be your best opportunity. After being battered during the housing bust, the vacation-home market is showing signs of life. Reports of bidding wars are trickling out of some of the locales that bore the brunt of the housing bust, and brokers in other markets, while not sounding the all clear, at least say conditions aren't getting much worse. Near-record-low mortgage rates, bargain prices and dwindling home inventories are bringing some once-untouchable markets within reach for the first time in a decade, say housing-market experts. Those factors are creating a sense of urgency, says Pam O'Connor, president of Leading Real Estate Companies of the World, a broker network. People feel like they might miss this window. Salt Lake City resident Donna Peeters says that is one of the reasons she wants to step up her search for a second home in Santa Barbara, Calif. She and her husband started thinking about buying a vacation home a couple of years ago, she says, and have seen prices fall as they waited. They are looking for a place close to the beach, and expect to spend about 2 million cash.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613903","date":"2012-05-07","texts":"JOLIET, Ill. -- The most obvious question for workers striking at a Caterpillar Inc. plant here is Are you crazy The giant maker of construction and mining equipment is known for crushing union opposition. In February, after workers at Caterpillar's locomotive plant in London, Ontario, refused a pay cut, the company closed the factory and eliminated their jobs. In the 1990s, Caterpillar used white-collar staff and temporary workers to operate plants during strikes by the United Auto Workers, who eventually capitulated. Now, even though more than 500 members of the International Association of Machinists and Aerospace Workers, or IAM, will enter the second week of a strike Tuesday, Caterpillar insists it will maintain production at the Joliet plant, which makes hydraulic parts. The strikers are protesting Caterpillar's six-year contract proposal that could freeze pay for many workers, reduce benefits and change work schedules. Many workers across the nation, including union members and civil servants, have been swallowing hard and accepting reduced benefits, flat or declining wages and higher health-care costs as companies and state and local governments search for savings. States with lower wages and restrictions on unions are attracting new plants. Union power is declining.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614159","date":"2012-05-09","texts":"FRANKFURT--Germany's Commerzbank AG won't reach its targeted net profit of euro1.2 billion in the first half of the year, it said Wednesday, after first-quarter net profit shrank by almost two-thirds Net profit for the period was euro369 million 480 million, down 63 from euro985 million, and operating profit fell by about 50 to euro584 million, hit by a charge on its own debt as well as lower interest and commission income. However, the bank added that it had already surpassed European capital requirements. Despite challenging markets, we have made a solid start to 2012. We have again made good progress with our strategic goal of consistently de-leveraging the balance sheet and strengthening the capital base, Chief Executive Martin Blessing said. Analysts welcomed the news on Commerzbank's equity capital situation, which offset a weaker operating performance, according to J.P. Morgan analysts.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614630","date":"2012-05-11","texts":"WASHINGTON--Top business executives, many of whom sat on their hands during last year's frantic debate about raising the federal debt ceiling, have begun mobilizing and plan to be more vocal in urging Congress to reach a bipartisan deficit-reduction deal by the end of the year. Executives have been meeting privately with lawmakers, urging them to start laying the groundwork now so they can reach an agreement after the November elections to avoid the large tax increases and heavy spending cuts scheduled to take effect in January. They worry those measures could tip the economy back into recession and create turmoil in financial markets, according to people who have attended some of the meetings. J.P. Morgan Chase & Co. chief executive James Dimon hosted a lunch for several dozen chief executives and two U.S. senators late last month, one of the latest in a series of private meetings aimed at drumming up support for a political agreement. Several executives left the J.P. Morgan lunch, held at the company's headquarters in New York, resolved to speak more forcefully in favor of a deal. Many believe both Democrats and Republicans will have to compromise on a deal that includes both tax increases and spending cuts, and several have pointed to the 2010 Simpson-Bowles deficit-reduction plan as a model Congress should begin working on immediately. Mr. Dimon, in public remarks last week, called for Republicans and Democrats to come together to enact such a plan. We've got to get it done, Mr. Dimon said. Our problem is we don't have the will. We can't seem to get our act together. In separate initiatives, chief executives such as Laurence Fink of BlackRock, Terry Lundgren of Macy's Inc. and Mark Bertolini of Aetna Inc. have told lawmakers over meetings and dinners they should start discussing a deal soon, people attending the meetings said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613904","date":"2012-05-14","texts":"HOUSTON--Chesapeake Energy Corp. Chief Executive Aubrey McClendon said Monday that a 3 billion unsecured loan from Goldman Sachs Group Inc. and Jefferies Group Inc. would enable the gas driller to complete the asset sales it needs for survival from a position of strength. He also said the company is delaying a 1 billion deal tied to the Eagle Ford oil shale in Texas but that other major asset sales are on track. The new loan, which the embattled company disclosed late Friday, would help Chesapeake repay borrowings from a revolving credit line that could be tightened by the effect of low natural-gas prices on the company's reserves. That tightening, which the company described as a risk in a filing Friday, could restrict sales of energy assets, which lenders could require to be pledged as increased collateral amid lower gas prices. The new loan would be repaid with the proceeds of asset sales that Chesapeake plans to execute in the third quarter--deals that Mr. McClendon said are on track. Low natural-gas prices have forced Oklahoma City-based Chesapeake, the second-largest producer of the commodity in the U.S., into a major transition. The company now seeks to focus on more profitable oil instead, but to do so it must engage in massive spending--on top of the large debt it has already accumulated increasing its natural-gas reserves. To raise the money, Chesapeake is engaging in different types of deals, including selling down stakes in positions it has aggressively built during the last decade. He said the company chose to take the loan from Goldman and Jefferies to assure investors that it is well positioned to evolve from being primarily a natural-gas producer to one more focused on oil.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615956","date":"2012-05-14","texts":"It's the rare and brave stock analyst who tells clients to sell their shares of a company's stock. With stocks down last year in all 10 of the markets covered in The Wall Street Journal survey of Asia's Best Analysts, those are the analysts who made money for their clients. The other winners in the second annual survey found the stocks that bucked the trends and rose last year. And sectors that had languished during rising markets suddenly became popular with investors, putting the long-ignored analysts in the spotlight. The Asia's Best Analysts survey is based on a quantitative analysis of stock picks by more than 1,500 analysts at 129 firms in Asia, looking at the performance of their buys, holds and sells and comparing them with one another and with the market overall. The findings produce three top analysts each for 10 countries and territories and 21 market sectors to give investors a guide to which analysts had the most success picking winning stocks among the companies they cover. Among the firms in the survey, some big names did well. Bank of AmericaMerrill Lynch came out on top among the 42 winning firms with nine top-three finishers, while Credit Suisse had seven. The survey also highlights analysts at small firms such as South Korea's KTB Investment & Securities. Winners were selected based on data assembled by FactSet, a U.S. company that tracks analysts' recommendations and earnings estimates. To be eligible, analysts generally had to have followed at least five stocks in an industry group, or country or territory during the year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616994","date":"2012-05-14","texts":"Financial Analysis and Commentary Get ready to have a whale of a time. On Tuesday, J.P. Morgan Chase holds its annual shareholders meeting, only days after news of its 2 billion trading stumble and Friday's loss of about 14 billion in stock-market value. Some shareholders may be galled by the prospect of blessing chief James Dimon's 23 million pay packet for 2011 and a 15.5 million 2011 payout for Ina Drew, the bank's chief investment officer. Ms. Drew oversaw the office behind the trades that led to the bank's trading debacle. She is expected to leave the bank and her departure may be announced before Tuesday's meeting. Even so, the losses and big pay packages are likely to again thrust the issue of outsize Wall Street compensation, as well as the question of pay for performance, into the spotlight. Depending on the terms of her separation, for example, Ms. Drew may be in line to receive 14.65 million of accelerated equity awards, according to securities filings.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617234","date":"2012-05-14","texts":"It's been a scary few years for the housing market. But at some point, the nightmare has to end please. Is now the time Should first-time home buyers consider jumping into the market After all, home prices have fallen 34 from their 2006 peak and mortgage rates are hovering at or near record lows. On one side are those who argue that homes are more affordable than they have been in decades, based on how much monthly income a mortgage consumes and whether owning is less costly than renting. An uptick in home buying by investors already is under way, they say -- an indication that those who wait may miss out on a good buying opportunity. On the other side, pessimists insist that the housing slump is far from over, and that prices will continue falling -- perhaps as much as 20 or more.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614065","date":"2012-05-15","texts":"Chesapeake Energy Corp.'s effort to reassure investors worried about its cash shortage backfired with bond investors who were rattled by the harsh terms of the 3 billion short-term loan the company detailed Monday. The price of the company's junk-rated bonds dropped sharply in heavy trading, as bondholders digested the steep interest rates on the new loan and the large funding gap that led Chesapeake to agree to it. Chesapeake's most-traded bond, due in 2020, fell 6 to 91.64 cents on the dollar, according to pricing service Benchmark Solutions. About 971 million of the oil-and-gas driller's debt changed hands, accounting for 26 of all high-yield bonds traded, according to MarketAxess. Concerns about the possibility of default rose -- the cost of insuring 10 million of Chesapeake bonds for one year against a potential default jumped by 36 to 727,000, according to Benchmark Solutions. Ratings agencies have assigned the company's debt double-B ratings, below investment grade, and last week Moody's Investors Service lowered the outlook to negative. The drop in bond prices contrasted sharply with a relief rally in the embattled Oklahoma City-based company's stock, which rose 4.7 to 15.50 as equity investors welcomed word of the new liquidity.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615716","date":"2012-05-15","texts":"Facebook Inc.'s coming initial public offering has set off a frenzy of anticipation among Main Street and Wall Street investors desperate to get their hands on the stock. Late Monday, the social network raised the price range for its IPO to 34 to 38 a share, from 28 to 35 a share, in a sign of investor appetite for the offering. The Menlo Park, Calif., company's initial price range put Facebook's valuation at 77 billion to 96 billion, but that rises to 93 billion to 104 billion under the new price range as investor interest ramps up. Those numbers have created high hopes for both individual and professional investors. The excitement has drawn in fledgling stock buyers such as 11-year-old Jade Supple of Rockville Centre, N.Y., whose father plans to bet money saved to put his daughter through college on Facebook shares, although he has doubts about the price. In Berwyn, Pa., hedge-fund manager and mutual-fund manager Chris Baggini of Turner Investment Partners says he tracked Facebook closely and repeatedly called executives at Morgan Stanley or Goldman Sachs, which are helping to lead the IPO, to snag a spot in the social network's roadshow stop in Philadelphia last Wednesday. Across the nation in El Cajon, Calif., technology teacher and investment-club supervisor Todd Benrud is trying to get his club at Grossmont High School into Facebook stock. They use Facebook every day, Mr. Benrud said. Some students think it is guaranteed to make money.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615875","date":"2012-05-15","texts":"In the early 1950s, when I was a young college graduate and a new employee of the Frost Bank, my great-Uncle Joe Frost, then CEO, told me that the very first goal we had was to return the deposits we received from customers. Our obligation was to take care of the community's liquid assets and manage them safely so others could use them via loans to grow. Frost Bank was not big enough to be saved by the government, Uncle Joe told me at the time, so we would always need to maintain strong liquidity, safe assets and adequate capital. I was impressed that making money was not high on his list of priorities, but he implied that profits would come if we observed sound banking principles. When we look at banking in the United States today, Uncle Joe's values seem so long ago and far away. The industry is now dominated by a few large banks. In 1970, according to data from the Federal Reserve Bank of Dallas, the five largest U.S. institutions owned 17 of banking industry assets in 2010 that share was 52. Their business has expanded well beyond the role as steward of the community's assets into riskier endeavors that chase supersized returns. As the financial crisis of 2008 showed, the very diversification, structure and size of most of our largest banks put the community's assets at tremendous risk. They had become too big to fail, and the government--really the American taxpayers--had no choice but to keep their colossal mistakes from bringing down the economy.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614524","date":"2012-05-16","texts":"NEW YORK--Long-dated U.S. Treasurys pushed into their fourth-straight winning session after details from the Federal Reserve's latest policy meeting showed more monetary support is ready in the wings should the economic recovery falter. Minutes from the April Federal Open Market Committee meeting revealed several members acknowledging that more stimulus could be necessary if the recovery loses momentum. While recent remarks by individual Fed officials show a pullback in views that further action will be needed, market participants seemed to take comfort in the fact that the Fed stands ready to act if the recovery slows. The burden of proof remains on the recovery to prove the need for less stimulus, said TD Securities economist Millan Mulraine. Treasury prices on longer-dated notes and bonds jumped into positive territory after the minutes, pushing 10-year yields to a new 2012 low of 1.748 at one point. In late-afternoon trading, the 10-year note gained 532 in price to yield 1.760. The 30-year bond rose 1932 to yield 2.901, while two-year notes were flat to yield 0.286. Bond prices move inversely to their yields.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616186","date":"2012-05-17","texts":"Anticipation was strong for Facebook Inc.'s initial public offering as the Nasdaq Stock Market indicated shares would start trading under the stock symbol FB around 11 a.m. EDT Friday. Facebook's IPO could be a nice shot in the arm for brokerages, said Sean Kelly, a managing director with brokerage Knight Capital Group. We're expecting a big day for volume, he said, adding he hoped the deal would spark enthusiasm for stocks among individual investors. On Thursday afternoon, financial advisers at Morgan Stanley Smith Barney learned their allocation of Facebook shares for clients would be 5,000 per account, according to people familiar with the matter. The nearly 17,200 brokers at the retail brokerage joint venture were notified of the number Thursday afternoon, these people said. The new amount though, is flexible as clients with more than one account could receive more than 5,000 shares, one of the people said. Traders at T3 Trading Group LLC were set to huddle in their Lower Manhattan office before the opening bell to discuss trading strategies for Facebook. The firm says it has been honing its tactics this year as other social-media companies made their trading debuts.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615529","date":"2012-05-22","texts":"European Union officials reacted cautiously to Sunday's election of a populist president in Serbia, urging the Balkan nation's new leader not to deviate from the path of reconciliation and transformation required to eventually join the regional bloc. Serbian voters, angry with high unemployment and flagging economic growth, ousted pro-Western leader Boris Tadic and instead chose Tomislav Nikolic, a former opponent of EU membership who now says belonging to the group is the only acceptable solution for Serbia. Some Serbians, as well as EU and U.S. officials, however, question whether Mr. Nikolic, who until 2008 belonged to the ultranationalist Serbian Radical Party, will be as willing as his predecessor to make the compromises necessary to win admission to the 27-nation club. The chief of the EU's executive arm, Jose Manuel Barroso, and the president of the European Council, Herman Van Rompuy, said Monday in a joint statement that Belgrade should move quickly on European integration, in part by improving relations with the breakaway province of Kosovo. Brussels and Washington have come to see the integration of Serbia and other Balkan states into the EU as the best way to secure the Continent's southeastern flank and defuse lingering tensions from the interethnic warfare that accompanied the breakup of the former Yugoslavia. Serbia was granted official candidate status in March, while nearby Croatia is set to become a full member in 2013.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616451","date":"2012-05-22","texts":"President Obama, in speech after speech, proudly makes the following point Although we inherited the worst recession since the Great Depression, we have generated net new jobs every month, and while we need to do more, we are going in the right direction. Of course, recoveries always go in the right direction--that is, things get better over time. But merely going in the right direction is an incredibly low performance standard. Moreover, since deep recessions are generally followed by more robust recoveries, this should have been one of the strongest recoveries ever. So what went wrong All the available Keynesian levers for achieving economic growth have been pulled, yet the recovery is one of the weakest since World War II. The problem lies with the way the stimulus was carried out, the uncertainty of looming higher taxes, and the antibusiness rhetoric and regulatory strong-arming of this administration. First, exactly how weak has this recovery been The Federal Reserve Bank of Minneapolis tracks economic performance for each recovery and compares gross-domestic-product growth and job growth, the two most important indicators of economic performance. Over the past 60 years, there have been 11 recessions and 11 recoveries. Sadly, this recovery is near the bottom of all 11. Cumulative nonfarm job growth is just 1.9 34 months into recovery, the ninth-worst performance and well below the average job growth of 6.5. Cumulative GDP growth is just 6.8 11 quarters into this recovery, less than half the average 15.2 and the worst of all 11.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613660","date":"2012-05-23","texts":"A senior Nasdaq Stock Market executive told customers that the exchange would have put the brakes on Facebook Inc.'s initial public offering had it known the extent of the technical problems that would plague its systems and disrupt the eagerly anticipated listing. Nasdaq's comments came as regulators moved to review the exchange's handling of the listing. They also are examining underwriters Morgan Stanley and Goldman Sachs Group Inc. over reductions in Facebook's earnings estimates during the IPO roadshow. On a conference call with brokers after Tuesday's close, Eric Noll, Nasdaq OMX Group Inc.'s head of transaction services, said the exchange by no means would have gone forward with a print had Nasdaq believed there would be problems in continuous trading. A print is industry parlance for the share price that results from the match-up of orders before trading starts, and is the price at which shares start trading on the open market. Mr. Noll suggested Nasdaq had underestimated the technical problems. He said the exchange's early interpretation of problems that delayed trading in Facebook shares by 30 minutes was incorrect. We thought we had a fix, he said on the call. In comments to The Wall Street Journal following the call, Mr. Noll said, If we had known that our solution was inadequate, we would have fixed the issue with the right solution before going forward.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613946","date":"2012-05-23","texts":"Builder Toll Brothers Inc. swung to a bigger-than-expected profit in the fiscal second quarter, boosted by increased sales and fewer cancellations. The results continue a strong selling season that is leading many industry watchers to declare that the hard-hit market has finally struck bottom. Builders nationwide are reporting increased sales and orders from a year ago, and existing-home sales are also up. Sales of new homes climbed 3.3 in April from March to a seasonally adjusted annual rate of 343,000, the Commerce Department reported Wednesday. Sales were up 9.9 from a year ago. Tuesday, the National Association of Realtors reported that existing-home sales climbed 3.4 from March, and prices increased about 10 from the prior year to 177,400, the strongest year-over-year gain since January of 2006. Toll, which caters largely to affluent move-up buyers in the Northeast and mid-Atlantic, is seeing improvement along Florida's east coast and around Phoenix, markets that were hit hard by the housing-market crash. The housing market has moved into a new and stronger phase of recovery as we have experienced broad-based improvement across most of our regions over the past six months, said Chief Executive Douglas C. Yearley Jr. in the premarket statement. The spring selling season has been the most robust and sustained since the downturn began.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615279","date":"2012-05-30","texts":"When it comes to high-tech jobs, San Jose is still the hub of Silicon Valley--but San Francisco is shrinking the gap. While San Francisco's technology sector is much smaller, it is growing faster. Since the economic recovery began in the region in late 2009, data from California's Employment Development Department have showed tech employment in the San Francisco area rising more quickly than in San Jose's. In recent months, that trend has accelerated. As of April, 94,100 people in the counties of Marin, San Francisco and San Mateo--which constitute the San Francisco metropolitan area--worked in the employment categories that typically include tech jobs, according to data from California's Employment Development Department. That was up 10 from 85,400 a year ago. The same employment categories in the San Jose metropolitan area--covering the counties of Santa Clara and San Benito--consisted of 211,000 people, up 3 from 205,000 a year ago. San Francisco is catching up and may overtake San Jose, says Janice Shriver, a labor-market consultant at the Employment Development Department. San Jose had been in the lead for information jobs and software publishing and all that kind of activity for so long.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615902","date":"2012-05-31","texts":"Kayak Software Corp. slowed its march to the stock market in one of the clearest examples yet of the fallout from Facebook Inc.'s tumultuous initial public offering. Kayak, which runs a travel-listings website, didn't launch its roadshow to pitch the stock to large investors, an event that had been expected to begin around Memorial Day, people familiar with the matter said. Morgan Stanley, the lead bank on the Facebook deal, also is leading the Kayak deal. With Facebook proving a disappointment for many investors, timing for the Kayak deal is uncertain now, the people said, adding that the company is assessing investors' current appetite for Internet stock deals. We're waiting for market conditions to meet our requirements for an IPO, said Kayak spokeswoman Jessica Casano-Antonellis on Wednesday. She said the IPO hasn't been delayed because the company never set a time frame for its offering. As the first significant Internet IPO expected after Facebook's debut nearly two weeks ago, Kayak was shaping up as a big test both of the IPO market and of Morgan Stanley, which has endured criticism that it overestimated demand for Facebook shares. On Wednesday, the shares fell another 2.25 to 28.19, leaving them down more than 25 from their IPO price of 38.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616039","date":"2012-05-31","texts":"Fiat Industrial has lost faith in the Italian stock market, if not--yet--in Italy itself. The truck maker's plans to merge with its 88-owned subsidiary CNH, which makes tractors in the U.S. under the Case and New Holland brands, will also bring its listing to New York from Milan. Italians fear Fiat Industrial's stock-market relocation might mean it starts shifting actual operations out of Italy, too. The company firmly denies that--though its divergent results must make the idea tempting. The valuation logic is clear. CNH trades at a significant discount to its U.S. peers like Caterpillar and Deere, reflecting its small, 12 free float. The Fiat Industrial group has been a victim of the Italian stock market's decline, which is trading more cheaply than other European bourses bar Greece and Austria. At 4.3 times expected earnings before interest, taxes, depreciation and amortization, Fiat Industrial trades at a 12-33 discount to peers Volvo, MAN and Scania. A full U.S. listing should give it a valuation closer to U.S. multiples. The merger should also lower Fiat Industrial's exposure to expensive Italian debt, potentially halving its annual euro400 million about 495 million net interest cost, Sanford C. Bernstein estimates. And if Fiat Industrial ever needs to raise new equity, that should be easier in New York's deeper-pocketed markets than in struggling Italy. Still, this sensible restructuring shouldn't necessarily herald a broader move out of Italy for Fiat Industrial. That it has provoked such fears says much about Italian insecurity about the country's loss of competitiveness. In practice, Fiat Industrial would find it costly to move from Italy, where it has nearly a quarter of its plants and employees in the last five years it has invested euro3 billion in the country.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616746","date":"2012-05-31","texts":"Americans are borrowing more to pay for college while reducing other debt as a weak job market prompts more people to go to school and tuition keeps climbing, new Federal Reserve Bank of New York data show. Americans owed 904 billion in student loans at the end of March, nearly 8 more than a year ago, the New York Fed said Thursday in a quarterly report on consumer credit. That compares with the 679 billion they owed on credit cards at the end of the first quarter. Between the fourth quarter of 2008, when credit-card debt peaked, and the first quarter of 2012, this borrowing fell by 187 billion, or 21.6, the Fed said. Over the same period, student-loan debt rose by 41.4, or 264 billion. Americans are reducing their overall debt burden, a process known as deleveraging that began with the financial crisis. Total household debt--including mortgage, student, credit-card and auto loans--has fallen by roughly 10 since borrowing peaked in mid-2008. It stood at 11.44 trillion as of March 31, the New York Fed said. Mortgage borrowing is down significantly, the consequence of foreclosures, falling home values, tighter lending standards and weak home sales.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617312","date":"2012-05-31","texts":"Incredible. Amazing. While other Asian countries describe themselves with superlatives, the Philippines national ad campaign promises only more fun. Filipinos have reasons to smile. Asia's perennial underachiever is outperforming. This week saw more successes Moody's upped its outlook on the country's credit rating to positive, citing prudent fiscal management. An anti-graft drive notched a win with a guilty verdict in the impeachment trial of a former chief justice. And first-quarter gross domestic product growth of 6.4, announced Thursday, defied most forecasts as well as the mood in the global economy. But to build on the promise, the Philippines must deliver on three main growth drivers. Business-process outsourcing is already booming due to strong English skills, cheap rent and low wages. A fondness for basketball and Hollywood movies is an advantage, too, when it comes to staffing call centers with workers who can make a cultural connection with U.S. customers. Starting from scratch a decade ago, the sector generated revenue of 11.25 billion last year. CLSA says that could double by 2015. Government officials say tourism is a low-hanging fruit. They aim to triple arrivals to 10 million by 2016. A 5 billion gambling hub under construction will help. So too a surge in new planned hotel rooms and a rising tide of Chinese visitors, whose numbers were up almost 30 last year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613633","date":"2012-06-02","texts":"SAN JOSE, Calif. -- Firefighter Brian Endicott got an early taste of the pension battle brewing here when a man at the grocery store angrily pointed to the steaks in his cart. Who do you think you are, wasting taxpayers' money on a meal like this the man yelled at 46-year-old Mr. Endicott, who was shopping for dinner with three other firefighters from San Jose Fire Station No. 1. After the 2001 terrorist attacks, sympathetic residents of this affluent city gathered at the firehouse to offer flowers, cakes and pies. Today, public sentiment toward the men and women in uniform has widely shifted, as many locals are up in arms over escalating pension costs for public-safety workers. In the current fiscal year ending June 30, San Jose's retirement obligations soared to 245 million, up from 73 million a decade ago, according to the city. For police officers and firefighters who have retired since 2007, the average pension is 95,336, making them among the most generously compensated in the state. Since the recession, dozens of state legislatures and city councils across the U.S. have scaled back benefits and jobs in an attempt to plug gaping budget holes. Safety workers like police and firefighters -- who generally earn more than librarians and garbage haulers -- have often been spared from some of the most drastic cuts.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615456","date":"2012-06-04","texts":"Monday, June 4 Figures on April factory orders are released. Tuesday, June 5 The Institute of Supply Management issues its service-sector index for May. ---","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614067","date":"2012-06-06","texts":"Given last week's grim jobs report, it's now clearer than ever that the November election will be a referendum on the economy. Has the president's program worked Does Mitt Romney have a better program to promote job creation and prosperity Fortunately, Americans have evidence that will allow them not only to judge President Obama's economic performance, but also to compare that performance with Mr. Romney's proposed alternative. Twice in postwar America, deep recessions have driven the unemployment rate to 10. In the 1981-82 recession, the unemployment rate soared to 10.8. In the 2007-09 recession, it peaked at 10. Both downturns were rooted in financial convulsions. The 1981-82 recession was induced by restrictive monetary policy aimed at breaking the back of double-digit inflation and interest rates, which generated a housing and savings-and-loan crisis. The more recent recession resulted from excessive government intervention to increase homeownership by expanding subprime housing loans, on which substantial leverage was built. The resulting wave of defaults damaged the base of the banking system. Fifty-three months after the start of the 1981-82 recession, total employment in the U.S. was up 7.5 million, or almost 7.5 higher than when the recession began. The labor-force participation rate rose to 65 from 63.8, as optimism about the future pulled potential workers into the job market. Real per capita gross domestic product increased by 2,870 and was 11 higher than when the recession started. Fifty-three months after the start of the 2007-09 recession, however, total employment in the U.S. is still down four million jobs, or 2.7 lower than when the recession began. The labor-force participation rate has dropped to 63.8 from 66, as discouraged workers have exited the labor market. Real per capita GDP has declined by 964 and is 2.2 lower today than when the recession began.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616625","date":"2012-06-06","texts":"Disappointing U.S. economic data, new strains in financial markets and deepening worries about Europe's fiscal crisis have prompted a shift at the Federal Reserve, putting back on the table the possibility of action to spur the recovery. Such action seemed highly unlikely at the central bank's April meeting, when forecasts for growth and employment were brightening. At their policy meeting this month, Fed officials will weigh whether the U.S. economic outlook is deteriorating enough to justify new measures to boost growth, according to interviews and Fed speeches. The Fed's next meeting, June 19 and 20, could be too soon for conclusive decisions. Fed policy makers have many unanswered questions and have had trouble forming consensus in the past. Top Fed officials have said that they would support new measures if they became convinced the U.S. wasn't making progress on bringing down unemployment. Recent disappointing employment reports have raised this possibility, but the data might be a temporary blip. Moreover, the Fed's options for more easing are sure to stir internal resistance at the central bank if they are considered. Their options include doing nothing and continuing to assess the economic outlook--or more strongly signaling a willingness to act later if the outlook more clearly worsens. Fed policy makers could take a small precautionary measure, like extending for a short period its Operation Twist program, in which the Fed is selling short-term securities and using the proceeds to buy long-term securities. Or, policy makers could take bolder action such as launching another large round of bond purchases if they become convinced of a significant slowdown. The landscape for the Fed is complicated by the presidential election. Mindful of his own legacy and the Fed's independence, Chairman Ben Bernanke seems unlikely to allow the political calendar to sway his decisions. He appears especially immune from politics now, with just 18 months left in his term as chairman and little indication that he wants another. Still, some investors speculate the Fed has an incentive to decide quickly to avoid shifting policies close to the November vote.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616683","date":"2012-06-06","texts":"This week a new television ad from President Obama's re-election campaign says that as Governor of Massachusetts Mitt Romney had one of the worst economic records in the country. It's hard to dispute that characterization when you consider the long-term impact of Mr. Romney's health-care reform and the federal legislation it inspired. But it's easier to dispute when you examine Massachusetts employment during the Romney era. RomneyCare has driven up health costs in the Bay State, and ObamaCare will do likewise for the nation. But what about the job creation records Fortunately for undecided voters, good data exist to make an informed comparison. Several weeks ago Mr. Obama focused his jobs argument on the company that Mr. Romney founded, Bain Capital. Employment growth is usually a byproduct of a firm's successful pursuit of profit. But it's become clear that even by the most conservative estimates, Bain has helped create more than 100,000 jobs by making companies grow. This is especially embarrassing for the White House because, according to the seasonally adjusted jobs numbers from the Bureau of Labor Statistics in its household survey, 100,000 is the total net increase in U.S. jobs since January 2009 when Mr. Obama took office. To appreciate how anemic this figure is, remember that there are more than 313 million Americans, and the U.S. population grows by more than two million people every year. So according to one government measure of job growth, the entire U.S. economy during the Obama Administration has not matched the business founded by Mitt Romney even three years after the recession ended.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617449","date":"2012-06-09","texts":"The bond vigilantes who once imposed law and order on financial markets are being run out of town. That means investors thirsting for a quick return to normal interest rates might stay parched for a long time to come. Throughout most of the bull market in bonds over the past 30 years, big investors dumped Treasury securities whenever the U.S. flirted with fiscal recklessness. By sending a stinging signal to Washington that they wouldn't tolerate irresponsible policies, the vigilantes imposed discipline and kept rates stable at yields investors could live on. But the bond vigilantes are on the run, warns Todd Petzel, chief investment officer at Offit Capital, a New York firm that manages 6 billion for wealthy clients. In recent years, Mr. Petzel says, the Treasury market has changed in profound ways. Historically, the bulk of U.S. Treasury debt was held by private investors -- including the big institutions that used their enormous market power, vigilante-style, to keep interest rates in line. Now, Mr. Petzel points out, much of the demand for U.S. debt comes from uneconomic buyers who scoop it up -- and hold on to it -- at any price. Only 23 of Treasurys are held by individual and institutional investors -- down from 55 in 1982 and 31 a decade ago.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616312","date":"2012-06-13","texts":"U.S. retail sales slipped in May for the second consecutive month, reflecting lower gasoline prices and cautious spending elsewhere. Separately, U.S. wholesale prices fell by the most in nearly three years due to a big drop in energy costs. Retail and food service sales decreased 0.2 last month to a seasonally adjusted 404.60 billion, the Commerce Department reported Wednesday. Sales were up 5.3 year over year. Economists surveyed by Dow Jones Newswires had forecast a 0.3 decline. Retail sales in April fell a downwardly revised 0.2, compared with a previously reported 0.1 gain.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614745","date":"2012-06-14","texts":"The Federal Reserve Bank of New York said it has fully recouped more than 70 billion in loans it made to support the 2008 bailouts of Bear Stearns Cos. and American International Group Inc., closing a contentious chapter in the central bank's history. On Thursday, the regional Federal Reserve bank said it has been repaid, with interest, on 53.1 billion in loans it made to two crisis-era vehicles that held complex subprime mortgage bonds, home loans, commercial-property loans and other unwanted assets from Bear and AIG. The New York Fed earlier recouped a separate 19.5 billion loan that financed the purchase of mortgage-backed securities from AIG. The loan repayments, which followed sales of the formerly toxic assets, end a messy episode in the government's crisis-era rescue programs, which saw the New York Fed take many souring loans and bonds onto its balance sheet when financial markets were in free fall. The moves were criticized for exposing taxpayers to undue risks when many of the assets fell in value for months after they were acquired by the Fed. Fed officials defended their crisis lending at the time, saying the central bank makes loans only when it expects to be fully repaid. Officials said they had to take steps to save the financial system from a collapse that threatened the economy's health. On Thursday, New York Fed President William Dudley called the loan repayments a major milestone for the bank and the public. During the financial crisis, the Fed's balance sheet more than doubled in size to over 2 trillion as it made loans to help stabilize many parts of the nation's debt markets, including those for short-term commercial-paper markets and securities backed by auto loans, credit-card debt and small-business loans. The troubled assets from the Bear and AIG bailouts, held in vehicles called Maiden Lane, were the New York Fed's riskiest holdings.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617269","date":"2012-06-14","texts":"Smithfield Food Inc.'s fiscal-fourth-quarter earnings fell 19 as greater pork supplies and weaker-than-expected U.S. consumer demand shrank fresh-pork margins. Smithfield, the world's largest pork producer by volume, said the U.S. pork market remained sluggish at the start of the current quarter but that demand from export markets such as China continued to be robust. Smithfield shares were down about 7 Thursday morning at 18.11 and are off about 25 so far this year. Retail-sales volumes for pork in the U.S. have softened because grocery chains have kept prices relatively high, even as Smithfield and other companies processed more hogs and wholesale prices fell, said Smithfield Chief Executive C. Larry Pope in a conference call. We expected retail prices to come down, but they did not...so that impacted our results, Mr. Pope said. Retailers decided to capture higher margins for pork to help offset declines in beef sales, he said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614363","date":"2012-06-17","texts":"Somebody is always pontificating about economic growth. Sometimes they'll observe economic growth is slowing. Sometimes they'll be forced to concede that economic growth is anemic. In rare periods, after recessions have been officially recorded, they'll admit that, yes, economic growth did turn negative, but it was only for a short while, and now we're back to positive economic growth. Nobody ever says economic shrinkage. America must always deliver economic growth. We have a Federal Reserve that is supposed to perpetuate this growth bias, propping up banks, private corporations and even the stock market with ever-lower interest rates. We have leaders in Washington who rack up trillions of dollars in debt each year, trying to accomplish the same thing. Economic shrinkage remains the unspoken fact of life anyway. If you put tepid economic growth on one side of the ledger and trillions of dollars of debt on the other, what else can you expect","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617191","date":"2012-06-18","texts":"Paul Dunahoo went on a business trip to San Francisco last week, where he attended technical sessions at Apple Inc.'s developer conference, networked with other programmers and received feedback from Apple engineers on his six productivity apps. Then, Mr. Dunahoo, chief executive of Bread and Butter Software LLC, returned to Connecticut to get ready for the eighth grade. It's a very rare opportunity to be at Apple's conference, said Mr. Dunahoo, who is 13 years old and wears red braces. Mr. Dunahoo is one of a growing number of teens joining the app-making frenzy. Apple, the app industry's ringleader, is encouraging the trend. This year, Apple opened up its developers event for the first time to 13- to 17-year-olds. The Cupertino, Calif., company supplied 150 teens with scholarships to cover the event's 1,599 entrance fee, arranged a student lounge with beanbag chairs and Skittles, and invited their parents to chaperone. The teens, or their parents, still had to sign Apple's customary nondisclosure agreements.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616608","date":"2012-06-19","texts":"NEW YORK--U.S. crude oil futures prices rose Tuesday along with the euro and global stock markets as investors look to the Federal Reserve rate-setting meeting for further stimulus measures. Light, sweet crude for July delivery recently rose gained 0.76 per barrel, or 0.91 to 84.03. Oil prices were boosted early in the trading session by gains in the euro, which recently traded at 1.2689 from 1.2575 Monday. Investors are holding on to slim hopes that the U.S. central bank will enact a new round of monetary stimulus as it begins its two-day meeting Tuesday. A few market participants are still waiting and hoping for the U.S. Fed to trigger a new round of something that can boost global markets, said Olivier Jakob, an energy analyst at Petromatrix. Any action by the Fed would likely put pressure on the U.S. dollar, which boosts crude oil by making it cheaper for buyers in other currencies.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613691","date":"2012-06-20","texts":"Corrections & Amplifications Pope Julius II paid Michelangelo to paint a Vatican ceiling. Due to an editing error, some Web and print versions of Todd G. Buchholz's June 19 op-ed Washington Should Lock In Low Rates said the work had been done on a tomb. WSJ June 25, 2012 America has long been the land of the game show. And at some point just about all of us have screamed at a contestant Don't be stupid -- take the money That's what American citizens should be screaming at the United States Treasury today. The government has racked up 5 trillion of debt since President Obama moved into the White House. We don't know how we're going to pay it back. Yet the world is willing to lend us 10-year money at rates substantially below 2.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613769","date":"2012-06-20","texts":"Federal Reserve policy makers, meeting amid growing concerns about the U.S. recovery and the European debt crisis, have an array of options if they decide the economy needs an added boost. Fed officials, concluding a two-day policy meeting Wednesday, could extend a program known as Operation Twist, in which the central bank sells short-term Treasury bills and notes and plows the proceeds into longer-term securities. They also could decide to shift the proceeds into mortgage- backed securities rather than long-term Treasury bonds. Among other choices launching a new round of bond-buying, known to some as quantitative easing, to expand the central bank's portfolio of assets. Or they could alter the way they describe their plans for interest rates with an assurance that short-term interest rates will stay near zero beyond 2014. Policy makers also could stand pat but offer assurance that they stand ready to act if the economy gets weaker. With the exception of standing pat, all these moves would be aimed at bringing down long-term interest rates and reducing credit costs more broadly to spur spending and investment.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615599","date":"2012-06-21","texts":"BEIJING--A preliminary gauge of China's manufacturing activity showed more weakness in June, which appeared to strengthen the case for more stimulus measures to spur growth. The HSBC initial, or flash, measure of manufacturing also foreshadowed weakness in the months ahead as its barometer of new manufacturing orders, particularly export orders, showed further declines amid a lingering global economic slowdown. China has already turned to an array of measures to boost growth, speeding up approvals on big projects, offering tax breaks and extending subsidies to promote consumer spending. A big unanswered question is whether the plethora of actions in the past month or so will be sufficient to boost growth during the second half of the year. If so, it could help strengthen global demand at a time when Europe is in recession and the U.S. is growing slowly. The HSBC China Manufacturing Purchasing Managers' Index fell to 48.1 in June compared with a final reading of 48.4 in May. It was the eighth straight month of a reading below 50, which indicates contraction, though Qu Hongbin, HSBC chief economist for China, noted that the pace of slowdown had eased slightly. The drop was mainly driven by a further deterioration in new export orders, which fell by 2.6 points to 45.9 in June--the lowest reading since March 2009. Total new orders also slid to a seven-month low of 46.8 in June compared with 47.9 in May. China's economy slowed to 8.1 in the first quarter of 2012 compared with a year earlier, the slowest pace since the spring of 2009, and a number of analysts are expecting a further decline in the second quarter to roughly 7.5 year-over-year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617362","date":"2012-06-21","texts":"It's time to move beyond ObamaCare. Whether it is struck down by the Supreme Court, defunded by Congress, or simply collapses from its unsustainable costs and the impossibly complicated bureaucracy it seeks to impose, ObamaCare won't work. It will depress the economy, increase the national debt, discourage medical innovation, and erode the quality of health care. The fundamental mistake of ObamaCare's architects is that they refused to recognize the systemic failure of government-provided health-care. Medicare and Medicaid had begun malfunctioning long before Nancy Pelosi bribed and bullied Congress into approving President Obama's health-care bill. Now we need to begin assembling the components of a replacement plan that works better than ObamaCare and more efficiently than the current system. To that end, I am introducing the Choice in Healthcare Act, which will create a voluntary, 10-year pilot program for a new health-care delivery system, beginning in June 2013. Geared toward low-income individuals and seniors, this simple plan will replace participants' Medicare and Medicaid benefits with roughly equivalent funds put on a debit-style Medi-choice card. Participants can then use their card to buy the health insurance of their choice on the open market and to pay for out-of-pocket expenses such as co-payments and deductibles. In succeeding years the card's funding level will be adjusted for inflation, and any unused funds will roll over to the next year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614557","date":"2012-06-22","texts":"The Federal Reserve Bank of New York said Thursday it named Simon Potter, an economist at the bank, to become the new leader of its markets group, a critical arm responsible for implementing the central bank's monetary policies. The bank said Mr. Potter, currently co-head of the bank's research and statistics group, will take on the new job June 30, succeeding Brian Sack. Mr. Potter, a naturalized U.S. citizen originally from the U.K., is 51 years old. He has been at the bank for 14 years. Mr. Potter holds bachelor's and master's degrees from Oxford University and a doctorate in economics from the University of Wisconsin. He has contributed to the New York Fed's efforts to present economics to a broader audience on its website economics blog. Recent writings tackled the prospects for the labor market and how the economics community failed to see the last recession coming. In a news release, the New York Fed said Mr. Potter has contributed to the bank's monetary and economic-forecasting activities. He also played a prominent role in financial-stability issues, including the design of 2009 bank stress tests. That controversial exercise was considered by many central bankers as a turning point that helped restore confidence in the financial system. Write to Michael S. Derby at","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613948","date":"2012-06-24","texts":"The unconventional measures introduced by many central banks in response to financial turmoil could create other problems if carried out for too long, the general manager of the Bank for International Settlements said Sunday. Central banks currently find themselves caught in the middle, Jaime Caruana said, forced to be the policy makers of last resort. They are providing monetary stimulus on a massive scale, supplying liquidity to banks unable to fund themselves in markets and easing government financing burdens by keeping interest rates low, said Mr. Caruana, speaking in Basel, Switzerland, at the annual general meeting of the BIS, a consortium of the world's central banks. These emergency measures could have undesirable side effects if continued for too long, he said. A worry is that monetary policy would be pressured to do still more because not enough action has been taken in other areas. Mr. Caruana's comments come as central bankers from Beijing to Frankfurt to Washington come under renewed pressure to step up efforts to resuscitate the slowing global economy. Some economists and politicians--and some central bankers in the U.S. and the U.K.--argue that central banks are too hesitant, condemning their economies to slower growth and higher unemployment than necessary in the wake of the financial crisis.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615802","date":"2012-06-27","texts":"The Good and Bad Of Job Satisfaction The good news Despite roiling economic times, more workers feel satisfied on the job. The bad news Those who are more satisfied are still in the minority. The results are according to a 1,890-respondent study to be released Wednesday by the Conference Board, the business research and membership group.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617168","date":"2012-06-28","texts":"The article Fed Wrestles With How Best to Bridge U.S. Credit Divide page one, June 19 seems to indicate that a bank not lending to people with bad credit is somehow a bad thing and that the key to reducing unemployment and expanding the economy lies with the Federal Reserve. It is as if the free market has absolutely nothing to do with it, as if small businesses aren't the most important engine for economic growth in this country and never have been. The credit gap has very little to do with why our economy isn't recovering. To focus so heavily on this as the cause of our economic troubles is to admit to not knowing what is going on at all. Steven Jones Oakland, Tenn. ---","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615010","date":"2012-07-04","texts":"The auction for a potential sale of Getty Images Inc. has progressed to the second round, with several private-equity firms putting in initial bids of around 4 billion, people familiar with the matter said. KKR & Co. and TPG are among at least five bidders that remain interested in closely held Getty, the people said. The Seattle-based photo agency distributes stock photographs, video footage and digital images to media and other organizations around the world. Getty's owners and bankers are making management presentations to potential buyers, ahead of the second round of bids, the deadline for which hasn't been set, the people said. Some private-equity firms that initially looked at Getty aren't expected to continue to pursue the business. The buyout firm Hellman & Friedman took Getty private in 2008 in a leveraged buyout that valued the company at 2.4 billion. A group of investors including Getty's co-founder and chairman, Mark Getty, owns a minority stake in the company. The group is expected to roll over its investment and strike a new agreement with the next private-equity owner, the people familiar with the matter said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615777","date":"2012-07-09","texts":"Giving Back Gains In the latest quarter, U.S.-stock funds gave back part, but not all, of the gains they rang up in the first three months of 2012. The average diversified U.S.-stock fund posted a negative 4.6 return for the three months through June, as investors fretted about the strength of the U.S. recovery and about the debt crisis in Europe. That left the funds up an average of 7 so far this year, after a 12.3 advance in the first quarter, according to Thomson Reuters Corp.'s Lipper unit. Dividend-focused equity-income funds had some of the smallest losses, returning an average of negative 2.2. Many investors have turned to income-oriented stock funds as a relatively conservative stock-market play and, in some cases, as an alternative to bond funds in an era of ultralow interest rates. Diversified international-stock funds fell harder than U.S.-focused funds, returning a negative 7.1 in the second quarter, according to Lipper. That leaves them with an average gain of 3.8 for the first six months of 2012. Emerging-markets funds fell 8.5, leaving them up 4.3 for the year to date.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617232","date":"2012-07-10","texts":"FRANKFURT -- The European Central Bank is willing to do more if needed to support the euro bloc's struggling economy and banks, ECB President Mario Draghi signaled on Monday, days after officials lowered interest rates to record lows. The ECB will keep the liquidity lines open to all solvent banks, Mr. Draghi said in testimony to the European Parliament. The central bank retains full capacity to act in a firm and timely manner to ensure price stability, he said. Mr. Draghi emphasized that this means guarding against both excess inflation and inflation rates that are too low. Last week, the ECB lowered its benchmark lending rate by one-quarter point to a record-low 0.75. Whether we were going to do more than that . . . we have to look at what the situation is, then we'll make up our minds, Mr. Draghi said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616314","date":"2012-07-15","texts":"America's Great Plains and Midwest regions are rebounding from the recession faster than other parts of the country, but economists say their recoveries aren't enough to lift the rest of the economy out of the doldrums. Private-sector workers in the Great Plains and Midwest have seen the sharpest rise in income since the end of the recession in mid-2009, Commerce Department data show. Plains states such as North Dakota, Texas and Nebraska are reaping the benefits of growing demand for oil and food commodities in expanding economies like China. Turnarounds by the U.S. auto sector and other manufacturers, meanwhile, have reinvigorated America's industrial strongholds of Michigan, Ohio and Indiana. Yet despite this success, the two regions that make up the nation's midsection contribute much less to the broader economy than do California and New York. Some Great Plains states are sparsely populated. That means that locals whose fortunes have improved thanks to oil and soaring crop prices can't be counted on to boost national consumer spending, which fuels two-thirds of the economy. North Dakota, Wyoming, Montana and Nebraska, for example, contribute only about 1.4 of the country's gross domestic product--roughly equal to Connecticut's share. The recovery of the U.S. manufacturing and auto sectors, meanwhile, doesn't fully offset their collapse during the global economic crisis. Job cutbacks have kept Michigan's unemployment rate at 8.5 in May, well above the 6.9 rate the state saw in May 2007. Ohio's jobless rate, 7.3 in May, was 5.6 five years ago. It's not enough to have pockets of industrial rebirth, said Jim Diffley, chief regional economist at IHS Global Insight. States like Michigan and Ohio are not going to be pulling everyone else along, though it's great that they're gaining. We still need to have consumers and banks complete the process of whittling away bad debts in order to start spending and lending more, he said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617299","date":"2012-07-15","texts":"Quoted If there's an outsourcer-in-chief, it's the president of the United States, not the guy who's running to replace him. Mitt Romney, July 10 The companies Romney's firm owned were 'pioneers' in the outsourcing of American jobs to places like China and India. Barack Obama, June 22 The Reality The Democrats and the Republicans are accusing each other of the nefarious practice of shipping American jobs overseas. Both parties have good arguments that their opponent has helped outsource jobs, but both sides have also exaggerated their evidence in a way that misleads voters.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615823","date":"2012-07-17","texts":"The Federal Reserve Bank of New York released a trove of documents on the Libor scandal Friday, and the official Fed spin is that they show that regulators were highlighting problems with Libor in 2007-2008, and pressing for reform. Well, let's see. In June 2008, Timothy Geithner, then head of the New York Fed, sent Bank of England Governor Mervyn King two pages of recommendations for Enhancing the Credibility of LIBOR and wrote that he would be grateful if you would give us some sense of what changes are possible. This is not exactly the language of a regulator who has just uncovered what we're now told is the financial crime of the century.  In the wake of Barclays's 450 million settlement with U.S. and U.K. regulators over attempted Libor-fixing, the political and media worlds are aflame with indignation that some banks misreported their borrowing costs during the financial panic of 2008. The U.S. Department of Justice let it out over the weekend that it is preparing criminal cases against individuals and banks in connection with the scandal. However, the evidence and testimony coming from regulators show they were well aware of price-fixing behavior at the time, but were not all that alarmed by it.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616282","date":"2012-07-17","texts":"Did Mitt Romney and Bain Capital help office-supply retailer Staples create 88,000 jobs 43,000 252 Actually, Staples probably destroyed 100,000 jobs while creating millions of new ones. Since 1986, Staples has opened 2,000 stores, eliminating the jobs of distributors and brokers who charged nasty markups for paper and office supplies. But it enabled hundreds of thousands of small and not so small businesses to stock themselves cheaply and conveniently and expand their operations. It's the same story elsewhere. Apple employs just 47,000 people, and Google under 25,000. Like Staples, they have destroyed many old jobs, like making paper maps and pink While You Were Out notepads. But by lowering the cost of doing business they've enabled innumerable entrepreneurs to start new businesses and employ hundreds of thousands, even millions, of workers world-wide -- all while capital gets redeployed more effectively. This process happens during every business cycle and always, always creates jobs. Yet is ignored by policy mavens. It is now four years after the wheels fell off our financial system. The government has tried every gimmick to revive the economy fiscal stimulus, monetary easing, loan write-downs, foreclosure modifications -- all duds. It seems like no one remembers how an economy creates jobs anymore. The right answer, in fact the only answer, for jobs and better living standards, is productivity.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613841","date":"2012-07-18","texts":"The Indian rupee dipped to its lowest level in a week against the U.S. dollar Wednesday, mainly because of a slide in the euro, with a late recovery in local stocks lending little support. The dollar was at 55.48 rupees late Wednesday, compared with 55.94 on July 12 and 55.11 rupees late Tuesday in Asia. The Bombay Stock Exchange's benchmark Sensex finished 0.5 higher. The rupee opened on a positive note, mirroring strength in the euro. But the greenback gained after Federal Reserve Chairman Ben Bernanke gave few clues to point toward a more near-term economic stimulus while speaking before a Senate committee. Still, Mr. Bernanke's bleak assessment of the U.S. economy led investors to hope that the central bank might be forced to take monetary easing steps.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617384","date":"2012-07-18","texts":"NEW YORK--Investors pushed stocks sharply higher, erasing all of July's losses, as investors reacted to strong corporate earnings and continued hopes for central-bank intervention. The Dow Jones Industrial Average rose 103.16 points, or 0.81, to 12908.70, while the Standard & Poor's 500-stock index tacked on 9.11 points, or 0.67, to 1372.78--bringing that index to within a hair of a fresh two-month high. The Nasdaq Composite outpaced the other two measures as technology stocks soared, adding 32.56 points, or 1.12, to 2942.60. With Wednesday's gains, all three major indexes are now in positive territory for July. Intel led the gains among Dow components, rising after the blue-chip semiconductor maker topped earnings expectations, though it also lowered its full-year revenue-growth outlook, citing a more challenging macroeconomic environment. Strong earnings from VMWare and EMC also supported the sector. The top five gainers on the Dow were all tech names, led by Intel, Cisco Systems, Microsoft, International Business Machines and Hewlett-Packard. Industrial stocks were also strong, after Honeywell International reported second-quarter earnings that were above estimates and raised the lower end of the range of its full-year earnings outlook. Honeywell rose, while fellow industrial giants United Technologies and Boeing also increased.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616255","date":"2012-07-20","texts":"Chinese companies appear to be more pessimistic about the prospects for the world's second-largest economy and its currency, local derivatives markets suggest. Companies hoarding dollars earned overseas, instead of selling them to the central bank, are depressing onshore dollar interest rates, and purchases of forward contracts for the U.S. currency paint an increasingly gloomy picture for the weakening yuan. This heightened corporate appetite for the dollar, after years of sharp yuan rises, may also serve as a reality check for economists, who mostly predict the Chinese economy will rebound in the second half of the year, thanks to the government's stimulus measures, buoying the yuan. China's economic growth slowed to 7.6 on year in the second quarter from 8.1 in the first quarter, its lowest level since early 2009. The old custom was to sell the dollar in advance and buy it back as late as you can to pay for needed imports, said a Shanghai trader at a foreign bank. But that's not the case anymore. In the spot market, the yuan has fallen 1.3 against the dollar so far this year, but that understates the picture as the People's Bank of China has recently had to fight the market to keep the tightly controlled currency stable. The dollar climbed by its 1 daily limit Friday, for the first time since the widened the trading range in April, to hit CNY6.4743.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616890","date":"2012-07-20","texts":"Real-estate investment trusts have racked up handsome gains, leaving the sector looking pricier than usual. That isn't necessarily a reason to exit the REIT market, but investors should favor the pockets that still look affordable. Think warehouses, not apartment buildings. REITs buy mostly income-producing property and avoid paying taxes on the income so long as they pass the bulk of it to shareholders as dividends. With REITs, investing in a diversified pool of real estate is as easy as buying shares of stock. This column made a case for REITs last year   Oct. 1. Financing rates for property buyers are low, and in many markets, demand from tenants is strong and supply is growing only modestly.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615226","date":"2012-07-24","texts":"TORONTO--The Canadian dollar weakened Tuesday following unexpectedly soft regional manufacturing data from the U.S. The Canadian dollar had edged higher in early trading on some solid domestic retail-sales data for May, but the weak U.S. data prompted it to surrender those early gains. The U.S. dollar was at C1.0208 late Tuesday, from C1.0188 late Monday, according to data provider CQG. The Canadian currency and its risk-sensitive fellow travellers, the Australian and New Zealand dollars, all lost ground Tuesday after the Richmond Federal Reserve Bank's reading on central-Atlantic manufacturing in July showed a sharp contraction. Clearly we are in a stressed environment that is, of course, linked to the headline Richmond Fed manufacturing index, as well as the components looking fairly dreadful, said Sebastian Galy, senior currency strategist at Societe Generale in New York.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616743","date":"2012-07-24","texts":"MUMBAI -- Hindustan Unilever Ltd., India's largest consumer goods maker by sales, lived up to its reputation of being a defensive stock by defending India's benchmark stock index Tuesday. Hindustan Unilever -- one of the 30 shares in the Bombay Stock Exchange's Sensitive Index -- gained 7.5 to single-handedly boost the benchmark. The rise was driven by the company's higher-than-expected profit of 13.31 billion rupees 237 million for the April-June quarter, announced late Monday. Part of the profit came from the sale of some of the company's properties. The news from Hindustan Unilever was a shot of energy in a market which was otherwise depressed over concerns about Spain's deteriorating economic prospects. Other major Asian markets closed lower Tuesday. Japan's Nikkei fell 0.24 to 8,488.09 while Hong Kong's Hang Seng index lost 0.79 to close at 18,903.20 India's Sensex finished the day higher, albeit marginally, by 0.24 at 16,918.1.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613976","date":"2012-07-25","texts":"The chief executive of Nasdaq OMX Group Inc. said a revamped compensation plan for firms hit by glitches in the stock-market debut of Facebook Inc. represented the exchange company's definitive response to the debacle. Robert Greifeld, Nasdaq OMX's CEO, reiterated Wednesday that the market operator has substantial legal and factual defenses against any litigation that may be brought by market makers and brokers that suffered losses due to Nasdaq OMX's problems bringing Facebook's stock to market May 18. Nasdaq OMX late Friday unveiled an expanded 62 million, all-cash plan to pay back such firms for some of their losses after an initial proposal of 40 million, much of it in discounted trading fees, sparked an uproar in June from firms and rival exchanges. We believe this proposal reflects the hard work that went into it, Mr. Greifeld told analysts on a conference call to discuss the exchange operator's second-quarter results. That's our definitive word on the topic. Mr. Greifeld said that by formally submitting the payback plan to regulators, Nasdaq OMX, which prides itself on its technology, aimed to move forward from the embarrassment of the Facebook episode.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614359","date":"2012-07-25","texts":"Highflier Is Prone to Economic Air Pockets Ladies and gentlemen, markets have turned on the fasten-seatbelt sign for Boeing Co. Stock-market turmoil in Europe and ultralow government bond yields point to economic weakness ahead for the world economy. Because aerospace sales portend long-term economic trends, Boeing's stock has been one of the most sensitive blue chips when the economy turns down. Over the past seven U.S. recessions, for example, the shares have dropped by an annualized 23 on average. By contrast, the S&P 500 fell by just 1.8 during the same periods. But unless Boeing Co.'s management changes its basically upbeat outlook or reports slippage in its delivery schedule, Wednesday's second-quarter results won't send investors into a brace position yet.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615419","date":"2012-07-25","texts":"MOLALLA, Ore.--This town of 8,000 residents has found a way to trim its troubled budget outsource city-hall jobs to a nearby county government. In 2008, Molalla spent 507,973 on employee salaries and other expenses to handle its building permits, inspections and other construction red tape. In the fiscal year ended June 2012, it spent less than 150,000 for that work. Molalla did it by finding a subcontractor, much as some corporations contract out to specialists the task of making their products. The town is paying Clackamas County to take care of the construction-related work. So far, town residents aren't complaining. Molalla, 30 miles south of Portland, is part of a trend spreading across Oregon among towns and cities facing fiscal crises and seeking to cut spending. The towns of Lowell and Westfir, populations 1,045 and 300, say they outsourced their traffic patrols and criminal complaints to nearby Oak Ridge, population 3,200. Oak Ridge, in turn, closed its 911 dispatch service--which had been costing nearly 400,000 a year--by paying the Lane County Sheriff's Department 93,000 to take its calls. Earlier this year, the city of Eugene contracted with Lane County to take over some legal work.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617367","date":"2012-07-28","texts":"President Obama didn't comment on Friday's report of declining growth in the second quarter, and that's no surprise. The economic story of his Presidency is by now familiar a plodding recovery that has taken its third dip in three years and is barely raising incomes for most Americans. We're still in a position where we are pulling ourselves out of the very deep hole caused by the Great Recession, and there is still -- of course -- a great deal of anxiety in the country about the economy, said White House press secretary Jay Carney. He's right about the anxiety, but if only we were pulling ourselves out. The reality is that the Great Recession ended three long years ago. In this Less Than Great Recovery, the economy shows promise for one good quarter then slows back down. As the nearby chart shows, this is the third straight year of sputtering recovery. Growth of 4.1 in the fourth quarter declined to 2 in the first and now 1.5 in the second. The stock market rose as investors bet that the lousy growth will inspire more Federal Reserve easing. The sliver of good news is that private growth, which is what really matters, was up a slightly less anemic 1.8, and government spending fell by a minus-1.4 from the first quarter. Housing is also now less of a drag on GDP. But this makes the paltry 1.5 growth more disconcerting, because it means that other parts of the economy are growing less rapidly than they ought to be. Consumption ticked up only 1.5, for example, down from 2.4 in the first quarter. This may reflect that wages and salaries are barely keeping pace with inflation. Another negative is that business inventories climbed unexpectedly in the second quarter, which often presages a decline in business spending in the next quarter to clear the shelves.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616836","date":"2012-07-29","texts":"Payday loans are meant as a stopgap for the fiscally pinched. But in many cases, these short-term loans create a costly cycle of escalating debt. A payday loan is like a cash advance on your paycheck. Marketed as a temporary solution to a short-term setback like car repair or emergency medical issues, these loans are typically expected to be paid back in two weeks, the usual pay cycle. But what happens, a recent study by the Pew Charitable Trusts found, is that most borrowers--some 69 of first-time borrowers--need the money not for a crisis but for everyday necessities. That leads to repeat loans. Payday loans are legalized loan sharking designed to get people into debt, says Kathleen Day, a spokeswoman for the Washington, D.C.-based Center for Responsible Lending. Why would lending to someone in financial straits at outrageous interest rates be considered a good thing Amy Cantu, a spokeswoman for the Community Financial Services Association of America, the industry's Alexandria, Va.-based trade group, responds that consumers need a variety of credit options. Of the payday loan, she says We never said it was the right option for every consumer in every situation, but it definitely has a place.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614944","date":"2012-07-30","texts":"Bid adieu to growing profits. Slowing economies from the U.S. to China, increasingly wary shoppers, recession in much of Europe and a stronger dollar could bring to an end at least 10 continuous quarters of profit growth for America's biggest companies. Until Friday, the outlook had been for further growth in earnings. But forecasts are now turning negative amid a number of profit warnings from companies like Starbucks Corp. and Illinois Tool Works Inc. In the third quarter, earnings by companies in the S&P 500 are expected to shrink for the first time since just after the recession ended, according to Thomson Reuters, which surveys Wall Street analysts. And with that, one of the few bright spots of the struggling U.S. recovery gets dimmer. Strong earnings had been fueling corporate investment in technology and machinery, if not much hiring. Now, however, the pressure on profit is prompting firms including United Technologies Corp. and Dow Chemical to cut more costs. Coffee chain Starbucks last week warned that customer traffic in U.S. cafes began slowing in June. The softness continued in July, so the company cut its earnings guidance for the third quarter. This is not a Starbucks issue, said Howard Schultz, chief executive. This is a macro problem of weak consumer confidence.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614974","date":"2012-08-01","texts":"U.S. Treasury prices declined after the Federal Reserve stopped short of delivering a new stimulus program to bolster the economy, instead reiterating its willingness to act if necessary. In late-afternoon trade, the 30-year bond sank 3132 in price to yield 2.594, while benchmark 10-year notes lost 1632 to yield 1.522. The two-year note was down 132 to yield 0.235. Bond yields rise when prices fall. The losses came after a brief pop in long-end prices as disappointed investors scurried out of riskier stocks and into safe-haven Treasurys. Some investors, particularly within the equity markets, had been hopeful that the central bank would step in given the recent downturn in economic signals. Bond analysts had been a bit more reserved, skeptical that the Fed would act before seeing another two months of employment data. At most, they had believed the Fed would push out its rate guidance to 2015. But the policy makers didn't even do that, keeping the Fed's guidance through late 2014.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616165","date":"2012-08-01","texts":"We are currently in the most anemic economic recovery in the memory of most Americans. Declining consumer sentiment and business concerns over policy uncertainty weigh on the minds of all of us. We must fix our economy's growth and jobs machine. We can do this. The U.S. economy has the talent, ideas, energy and capital for the robust economic growth that has characterized much of America's experience in our lifetimes. Our standard of living and the nation's standing as a world power depend on restoring that growth. But to do so we must have vastly different policies aimed at stopping runaway federal spending and debt, reforming our tax code and entitlement programs, and scaling back costly regulations. Those policies cannot be found in the president's proposals. They are, however, the core of Gov. Mitt Romney's plan for economic recovery and renewal. In response to the recession, the Obama administration chose to emphasize costly, short-term fixes--ineffective stimulus programs, myriad housing programs that went nowhere, and a rush to invest in green companies. As a consequence, uncertainty over policy--particularly over tax and regulatory policy--slowed the recovery and limited job creation. One recent study by Scott Baker and Nicholas Bloom of Stanford University and Steven Davis of the University of Chicago found that this uncertainty reduced GDP by 1.4 in 2011 alone, and that returning to pre-crisis levels of uncertainty would add about 2.3 million jobs in just 18 months.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616206","date":"2012-08-01","texts":"Americans are earning more money -- but socking it away and not spending, undermining hopes for a consumer-driven rebound. The personal saving rate, which measures savings as a percentage of disposable income, jumped to 4.4 in June from 4 a month earlier and a recent low of 3.2 in November, the government said Tuesday, as consumers squirreled away cash amid the weak economy. Spending on everything from vacations to clothes was largely flat in June. Spending fell less than 0.1, after easing 0.1 in May, even though Americans' income after taxes rose 0.4, the most since March. Consumer spending is the biggest single driver of the U.S. economy, accounting for roughly two-thirds of demand. The pickup in saving is a two-edged sword for the economy. In the long run, saving helps Americans establish a cushion against financial setbacks and build up wealth that can fuel spending. It also helps them cope with rising gasoline and food prices. But penny-pinching sucks life out of the economy, which relies heavily on consumer spending and faces a dimming outlook as other drivers of growth lose steam. This is good news for the future, but it provides little help to the U.S. economy, said Eugenio Aleman, senior economist at Wells Fargo Securities. Individuals are hoarding cash to continue to build a protective layer in case the economy and their personal situation turns negative.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615122","date":"2012-08-02","texts":"Under pressure to squeeze out costs, some of the U.S.'s biggest health insurers are quietly erecting more hurdles for patients seeking medical care. The companies are in many cases reaching back to the 1990s and boosting the use of techniques that antagonized patients and doctors alike. Today's approaches are tweaked, but may feel familiar to many Insurers are rolling out plans with more restricted choices of doctors and hospitals, and weighing new requirements for referrals before patients can see specialists. UnitedHealth Group Inc., Cigna Corp. and others are increasingly requiring doctors to get prior authorization before patients can get certain care such as spinal surgeries. Earlier versions of these practices were closely identified with the managed-care era of the 90s. They later receded in many parts of the country, as employers switched away from restrictive health-maintenance organizations, and insurers backed off some limits.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616424","date":"2012-08-02","texts":"U.S. Treasurys gained Thursday as investors sought financial safety after the European Central Bank disappointed those looking for officials to deliver a program to address the region's funding tensions and stalling growth. Hopes were raised late last week after ECB President Mario Draghi called the euro irreversible and hinted at potential bond-buying efforts. More investors came to expect the central bank would back up these remarks with official action at the ECB's policy meeting Thursday. But the central bank kept its policy rate unchanged and Mr. Draghi merely reiterated his stance, quickly deflating hopes and sending investors back into Treasurys. Central banks are zero for three as policy measures remained unchanged, said Sean Simko, senior fixed-income portfolio manager at SEI Investments, referring to the Bank of England and Federal Reserve, which also met this week. Until there is further clarification, Treasurys will remain the choice asset class. Treasury prices swung into gains, with benchmark 10-year notes up 2332 to yield 1.462 in midday trading. The 30-year bond rose 1 3132 to yield 2.523, while two-year notes rose 132 to yield 0.223. Bond yields fall when prices rise.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616790","date":"2012-08-09","texts":"It has been five years since the onset of the global financial crisis. The first cracks in financial markets appeared in August 2007. That is so long ago, it's easy to overlook just how unusual these times are. Here's one signpost Investors are so skittish that instead of demanding interest when they lend to governments, they are actually paying to put money into the coffers of the financially sturdiest governments. We have blown past zero interest rates. Investors lend 100 euros or Danish kroner or Swiss francs and get back 99 and change. Wow. The European Financial Stability Facility, backed by the stronger governments of Europe, this week borrowed 1.43 billion euros 1.77 billion for three months at a yield of minus 0.0217. Denmark recently raised 420 million kroner 70 million at minus 0.59. Even more remarkable, Germany borrowed 4.17 billion euros for two years at an average yield of minus 0.06. Markets have pushed two-year yields on Swiss government debt below zero regularly, and Belgium, Finland and the Netherlands occasionally. Interest rates below zero used to be more economists' fantasy than reality. Few thought central banks would ever need, let alone be able, to cut rates below zero. When the U.S. was struggling in 2009, Harvard University's Greg Mankiw observed that minus 3 rates would help. You could borrow and spend 100 and repay 97 next year, he wrote. That would give spending a boost. The problem, he added, is nobody would lend on those terms. . . . It would be better to stick the cash in your mattress.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614589","date":"2012-08-14","texts":"LAVALLETTE, N.J. Study Finds Barnegat Bay In Danger From Pollution A marine scientist said Barnegat Bay -- one of New Jersey's most used recreational waterways and the source of 3 billion in annual tourist dollars -- is in danger of dying from unchecked pollution. Michael Kennish of the Institute of Marine and Coastal Sciences at Rutgers told lawmakers Monday that the pollution sources include broken stormwater basins and too much fertilizer flowing into the bay. The pollution decreases oxygen levels in the water and causes algae blooms.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615186","date":"2012-08-15","texts":"WASHINGTON--U.S. consumer prices remained flat in July, the fourth consecutive month that costs didn't increase, showing that inflation pressures are contained. The index of consumer prices, which measures how much Americans pay for everything from groceries to cars, was unchanged in July from the prior month, the Labor Department said Wednesday. Prices grew 1.4 from a year earlier, the smallest annual gain since November 2010. A 1.3 decline in electricity costs helped offset small increases to gasoline and food prices last month. When removing volatile food and energy costs, consumer prices rose 0.1 last month from June and grew 2.1 year over year. Economists surveyed by Dow Jones Newswires forecast that both overall and core prices would rise 0.2 in July.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614300","date":"2012-08-16","texts":"Thanks to several years of fiscal restraint during the 1990s, the burden of federal spending dropped to 18.2 of gross domestic product by the time Bill Clinton left office. The federal budget today consumes more than 24 of economic output, a one-third increase since 2001 in the share of the U.S. economy allocated by politics rather than market forces. That makes the Republican House budget, which would reverse this trend, extremely important for the economic health of the country. Both political parties deserve blame for the spending spree that's put America in a fiscal ditch. President George W. Bush was a big spender and President Obama has compounded the damage with his stimulus spending and other programs. But the era of bipartisan big government may have come to an end. Largely thanks to Rep. Paul Ryan and the fiscal blueprint he prepared as chairman of the House Budget Committee earlier this year, the GOP has begun climbing back on the wagon of fiscal sobriety and has shown at least some willingness to restrain the growth of government. The Ryan budget has generated considerable controversy in Washington, and it will become even more of an issue now that Mr. Ryan is Mitt Romney's running mate. So it's an appropriate time to analyze the plan and consider what it would mean for America. The most important headline about the Ryan budget is that it limits the growth rate of federal spending, with outlays increasing by an average of 3.1 annually over the next 10 years. If spending is left on autopilot, by contrast, it would grow by 4.3 or nearly 39 faster. If President Obama is re-elected, the burden of spending presumably will climb more rapidly.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613537","date":"2012-08-17","texts":"Asian markets were mixed early Friday as supportive comments from German Chancellor Angela Merkel helped sentiment. Ms. Merkel said Germany is committed do everything we can in order to maintain the common currency. Her comments were seen as supporting European Central Bank President Mario Draghi's vow to save the euro. The euro was at 1.2355, stabilizing after climbing 0.6 overnight--the single currency's first climb in three sessions. The yen was also in focus. It was at 79.27 to the dollar early Friday. The dollar strengthened against the Japanese currency overnight, at one point hitting a five-week high of Y79.40 as the positive sentiment weakened the desire to move into Asia's safe-haven currency and some investors became less confident that the U.S. Federal Reserve will launch another round of monetary stimulus. The weaker yen remained a support for Japan's Nikkei, which was up 0.4 early Friday with steelmakers and brokerages leading the gains.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613620","date":"2012-08-17","texts":"Investors hoping that index funds will give Facebook Inc.'s battered shares a lift could be in for a long wait. When the Nasdaq Stock Market decided in April to shorten the seasoning period for any stock to three months from as little as a year, it made the social-networking company, which went public in May, eligible for inclusion in its Nasdaq-100 index as soon as Sept. 1. Changes to indexes, known as rebalancing, are closely followed by traders, as additions mean that mutual funds and exchange-traded funds that explicitly replicate them are forced to buy the stock, regardless of its performance. Many funds that are benchmarked against an index buy as well. But any uplift from joining the Nasdaq-100, which includes Internet and technology giants such as Apple Inc., Google Inc. and Baidu Inc., is likely to be months away. Although Facebook's stock-market value, at 52 billion, should easily qualify it as one of the 100 largest Nasdaq-listed companies, the index is only reranked each December. Surprise additions do happen--but it is only when a company leaves the index because it falls below listings requirements, seeks bankruptcy protection or is acquired, that unscheduled changes are made.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614427","date":"2012-08-17","texts":"TORONTO--The Canadian dollar fell modestly down Friday, shifting lower after weaker-than-expected domestic inflation figures, but then paring some of its losses toward the end of the day in quiet trading. The U.S. dollar was recently at C0.9892, from C0.9880 at 800 a.m. EDT Friday and C0.9866 late Thursday, according to data provider CQG. Canada's consumer prices for July rose by 0.1 in the core and the headline figures, while growing at an annualized pace of 1.3 and 1.7, respectively. The figures missed expectations of a 0.2 monthly gain for both the core and headline rates, with the annual core rate also staying firmly under the Bank of Canada's target of 2 inflation. After the initial inflation data which was softer than expected, the Canadian dollar only moved about 10 points after running into very thick corporate offers around the 0.99 figure, said Dave Bradley, director of foreign exchange at Scotiabank Global Banking and Markets in Toronto.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616552","date":"2012-08-18","texts":"Corrections & Amplifications The surname of Amy Lubas, technology strategist at Ned Davis Research Inc., was incorrectly given as Sohn in a Business & Finance article on Saturday about Facebook. WSJ Aug. 21, 2012 Subscribe to WSJ Investors hoping that index funds will give Facebook Inc.'s battered shares a lift could be in for a long wait.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615631","date":"2012-08-19","texts":"Wall Street professionals earn a lot of their oversized paychecks playing the roles of modern-day clairvoyants, peering into the future and telling investors where the economy is heading. As the presidential election drones on, you could be forgiven for thinking that the country is headed over a cliff. After all, that's what the one guy keeps saying about the other guy. Here's a news flash Whoever wins, the country probably isn't collapsing. But that doesn't mean there isn't a lot of uncertainty about the economy--and lots of reasons to be cautious. We asked some of the savviest fortune tellers on Wall Street to look beyond the election rhetoric and give a sense of what to expect in the next six to 12 months.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614593","date":"2012-08-23","texts":"Most emerging-market currencies slipped Thursday as markets reassessed the chances of the Federal Reserve announcing measures in coming weeks to stimulate the U.S. economy. Higher-yielding assets had gotten a boost the previous session after minutes from the latest Fed rate-setting meeting revealed growing support for monetary stimulus. But analysts noted that the U.S. has seen a string of positive data since that meeting concluded Aug. 1, which could lessen the chances of another round of Fed bond-buying, known as quantitative easing. The big driver really was quantitative easing expectations yesterday which seem to be embedded in risk markets, said Dan Dorrow, head of research at Faros Trading. The market is probably coming around to the view that they reacted too much on Wednesday. In addition, weak Chinese economic data damped cheerier markets and renewed fears that the world's second-largest economy is slowing more than expected. The preliminary HSBC China Manufacturing Purchasing Managers Index came in at 47.8 in August, down from 49.3 in July and signaling further contraction. Meanwhile purchasing managers' index readings from the euro zone also disappointed. Currencies seen as proxies for emerging markets, like the South African rand and Mexican peso, were among the biggest decliners. The rand slid nearly 1 against the dollar, which bought ZAR8.3152, according to CQG.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615725","date":"2012-08-23","texts":"The Federal Reserve Bank of New York on Thursday sold the last toxic assets it acquired from the bailout of American International Group Inc., closing the book on its most controversial intervention during the financial crisis with a large gain to taxpayers. The regional Fed bank said it reaped 6.6 billion in profits from selling complex mortgage securities that it took on in late 2008 to stem AIG's cash bleed. The securities, known as collateralized debt obligations, were chiefly responsible for the New York-based insurer's near-collapse and government bailout after their market values plunged during the financial crisis. The sales end one of the most contentious elements of the government's efforts to stabilize the financial system as markets were seizing up and banks and other financial institutions were collapsing. The rescue of AIG and the New York Fed's purchases of mortgage securities that AIG previously owned or insured saw tens of billions of taxpayer aid flow from the insurer to banks in the U.S. and overseas. The Fed's moves were criticized from some quarters as a backdoor bailout for banks that exposed U.S. taxpayers to undue risks. But from the outset, Fed officials including Chairman Ben Bernanke said they were acting to protect the country from financial meltdown and expected to be fully repaid on loans provided to support AIG. It's a happy ending with the Fed making a handsome profit--but the purpose of the purchases was to stabilize the financial system and not to make money, said Sung-Won Sohn, an economics professor at California State University, Channel Islands.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616541","date":"2012-08-23","texts":"You can lead the Securities and Exchange Commission to a clear flaw in financial markets, but you can't make it regulate. At least that is the case with money-market funds. Despite urging from a host of other regulators, such as Federal Reserve Chairman Ben Bernanke, to limit the systemic risk posed by these funds, the commission has opted to do nothing. Or more aptly, three of its five members have. Any changes were killed by Luis Aguilar, a former mutual-fund executive and swing vote on this issue, opposing plans championed by Chairman Mary Schapiro. That forced Ms. Schapiro to abandon next week's vote on proposals that would have required money funds to either abandon the illusion of their fixed, 1-a-share value or create capital buffers to absorb potential losses. The question now is what the Financial Stability Oversight Council, the body created after the crisis to identify and deal with broad risks to the financial system, can or will do about the threat posed by money funds. Standing pat will leave the financial system and taxpayers at continued risk. Ms. Schapiro and other regulators had looked to act on money funds, which manage nearly 2.6 trillion, because they remain open to potentially destabilizing runs. Indeed, money funds in the fall of 2008 experienced a run that required the government to backstop the industry.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617420","date":"2012-08-23","texts":"SAN JOSE -- A voter initiative to raise this city's minimum wage, set for the November ballot, has spurred a fight with small-business owners who say it could drive up costs and force layoffs. The proposition, created by a group of San Jose State University students, would raise the city's hourly minimum wage to 10 from the current 8 state requirement, and include yearly inflation adjustments. It is modeled on San Francisco's 2003 minimum-wage ordinance, which is tied to the Consumer Price Index that since 2003 has raised the minimum wage by 3.49 to 10.24 an hour. San Jose business leaders say the increase would drive businesses from the city. I don't think the measure's proponents understand the economic impact this will have on small and medium-sized businesses, says Matt Mahood, president of the San Jose Chamber of Commerce. Most of these guys are already struggling with the down economy and now this will compound their problems. Mr. Mahood says business owners won't only have to pay more to their workers but also will see a 15 to 17 increase in their payroll taxes, since they are tied to the wage rate.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615957","date":"2012-08-26","texts":"Federal Reserve Chairman Ben Bernanke delivers what could be his closing argument in deliberations about launching a new bond-buying program when he speaks Friday at the central bank's Jackson Hole, Wyo., conference. The argument comes down to weighing costs and benefits. The Fed already has bought more than 2 trillion of Treasury and mortgage bonds to stimulate the economy. The Fed believes this drives down long-term interest rates, elevates stock and real-estate values and softens the dollar. This, Mr. Bernanke has argued, lowers financing costs, increases U.S. companies' global competitiveness and bolsters household wealth. Most research has focused on calculating purported benefits. Critics warn about costs, but little attention has been focused on measuring them. Here is a closer look at the other side of the ledger","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615093","date":"2012-08-27","texts":"U.S. securities regulators are reviewing whether to ease limits on what companies can say ahead of initial public offerings, after lawmakers complained small investors were kept in the dark during this year's botched stock sale by Facebook Inc. Mary Schapiro, chairman of the Securities and Exchange Commission, has asked her staff to review the quiet period rules barring remarks about a firm's prospects around the time of a share sale, according to a letter she recently sent to Rep. Darrell Issa R., Calif.. We should review our communications rules and the application of the quiet period in light of changes in technology and the stock market in recent years, she said in the Aug. 23 letter, which was a response to one Mr. Issa sent in June. The SEC's stance could open the door to more changes for IPOs, even as the agency has yet to complete rules to implement modifications set out in this year's Jumpstart our Business Startups, or JOBS, Act. The law was designed to facilitate capital-raising for some companies. The JOBS Act, and Facebook's flubbed debut in May, have made IPOs one of the most controversial issues in markets this year. Facebook's share price fell sharply from its 38 debut, exposing what Mr. Issa called substantial flaws in the process.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615977","date":"2012-08-27","texts":"The battle for Elpida Memory is shaping up as a test case for how Japan treats troubled companies. The failed chip maker's restructuring could have broad implications for the country's other debt-laden firms. Elpida sought court protection in February after falling DRAM chip prices and the strong yen left it unable to pay its hefty debts. The company agreed in July to be taken over by Micron Technology of the U.S. for 760 million and the promise of 1.8 billion later out of Elpida's cash flow. This could mean banks and other secured creditors would receive 70 of what they are owed, while unsecured creditors like bondholders would get just 20-30. Some bondholders are livid, saying the Micron offer is too low, vague and confusing. They value the company at 3.8 billion and have filed a rival plan with the Tokyo court that would see a yet-unnamed sponsor take over. The battle probably wouldn't have happened in Japan's recent past. Previously, investors mostly rolled over while a restructuring was forced upon them. Often, the government would force a shotgun takeover of a collapsed firm by one if its peers. The failed company would be a drag on the rescuer, bad loans would fester, employees would remain in make-work jobs, and the resulting bloated company would weigh on the broader economy. But Japan Inc. probably isn't in the bailout business anymore. The government no longer seems to have the stomach for forced mergers, and with public debt more than double gross domestic product, Tokyo can't stump up more taxpayer cash for moribund firms. No wonder Elpida looked to the U.S. for a white knight. Also Sharp, faced with a 16 billion debt load and rapidly falling earnings, also has sought a rescue overseas, from Taiwan's Hon Hai Precision Industry.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613983","date":"2012-08-28","texts":"Housing Prices Have a New Cliff to Climb Don't forget housing. Markets are intensely focused on what Federal Reserve Chairman Ben Bernanke will say about the possibility of more central-bank bond buying when he speaks Friday in Jackson Hole, Wyo. Also interesting, though, will be the emphasis he places on housing. During last year's speech, Mr. Bernanke highlighted how housing was holding back the economic recovery. Underscoring this, the central bank in January sent to Congress a housing white paper outlining possible ways to stimulate activity. Housing has improved considerably since then. The question is how durable the recovery will prove.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613705","date":"2012-08-30","texts":"NEW YORK--U.S. crude futures fell as workers began to return to oil platforms in the Gulf of Mexico and investors awaited remarks Friday from Federal Reserve Chairman Ben Bernanke. Light, sweet crude for October delivery settled 87 cents, or 0.9, lower at 94.62 a barrel on the New York Mercantile Exchange, the lowest settlement in two weeks. Brent crude on the ICE futures exchange for October delivery traded 29 cents higher at 112.83 a barrel. Oil prices took their cues from the stock market and a rising U.S. dollar Thursday as traders' focus turned from oil-production outages due to Hurricane Isaac and toward the broader economy. Higher crude-oil needs a strong stock market and a weak U.S. dollar and you have the reverse today, said Walter Zimmermann, an analyst at brokerage United-ICAP. The Dow Jones Industrial Average was down 0.6 at 13029 in late-afternoon trade.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615174","date":"2012-08-30","texts":"The U.S. economy inched ahead in July and early August, as the jobs picture improved slightly in some areas and the housing market continued to mend, the Federal Reserve said in a report Wednesday. The economy expanded modestly in more than half the central bank's 12 districts, but some areas saw slower or mixed growth, the Fed said in its latest beige book report, which is based on anecdotes from business contacts and economists across the nation. The economic snapshot was prepared by the Federal Reserve Bank of Boston based on information gathered on or before Aug. 20 and will be used for discussions at the Fed's next policy meeting, Sept. 12 and 13. A separate report Wednesday showed U.S. gross domestic product grew at a 1.7 annual rate in the second quarter, a sluggish pace but better than the previous estimate of 1.5. The faster pace was largely the result of upward revisions to consumer spending and export growth over the quarter. The beige book showed a mixed picture of the U.S. economy, at a time when Fed officials have cited unusual levels of uncertainty about the recovery's progress. Tourism and a pickup in retail spending were bright spots noted by districts, along with an improvement in credit conditions. The real-estate sector also improved, both in residential and commercial markets.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616323","date":"2012-08-30","texts":"SAO PAULO--Brazil's currency gained slightly against the dollar Thursday, as banks jostled ahead of month-end swaps expiry and investors mulled the possibility of more intervention by central banks in Europe and the U.S. Late Thursday, the real traded at BRL2.0444 to the dollar, according to Tullett Prebon via Factset, fractionally stronger than BRL2.0472 late Wednesday. The market was focused on the regular month-end battle among the banks over the Ptax rate, which is used to settle futures contracts. Some 4.1 billion in dollar-swap contracts sold in late June will mature Sept. 3, with the expiration of an additional 1.8 billion on Oct. 1, according to data on the central bank's website. There has been speculation the central bank might roll over currency swaps that expire Thursday, although through the session on Thursday, those expectations declined. The currency market was also wary of activity in the U.S., with Federal Reserve Chairman Ben Bernanke set to speak Friday at the Federal Reserve Bank of Kansas City's annual economic symposium. The market is looking for hints from Mr. Bernanke that the Fed may launch a new round of quantitative easing--although that hope was fading Thursday afternoon.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614709","date":"2012-08-31","texts":"Momentous changes are under way in what central banks are and what they do. We are used to thinking that central banks' main task is to guide the economy by setting interest rates. Central banks' main tools used to be open-market operations, i.e. purchasing short-term Treasury debt, and short-term lending to banks. Since the 2008 financial crisis, however, the Federal Reserve has intervened in a wide variety of markets, including commercial paper, mortgages and long-term Treasury debt. At the height of the crisis, the Fed lent directly to teetering nonbank institutions, such as insurance giant AIG, and participated in several shotgun marriages, most notably between Bank of America and Merrill Lynch. These nontraditional interventions are not going away anytime soon. Many Fed officials, including Fed Chairman Ben Bernanke, see credit constraints and segmented markets throughout the economy, which the Fed's standard tools don't address. Moreover, interest rates near zero have rendered those tools nearly powerless, so the Fed will naturally search for bigger guns. In his speech Friday in Jackson Hole, Wyo., Mr. Bernanke made it clear that we should not rule out the further use of such nontraditional policies if economic conditions warrant. But the Fed has crossed a bright line. Open-market operations do not have direct fiscal consequences, or directly allocate credit. That was the price of the Fed's independence, allowing it to do one thing--conduct monetary policy--without short-term political pressure. But an agency that allocates credit to specific markets and institutions, or buys assets that expose taxpayers to risks, cannot stay independent of elected, and accountable, officials. In addition, the Fed is now a gargantuan financial regulator. Its inspectors examine too-big-to-fail banks, come up with creative stress tests for them to pass, and haggle over thousands of pages of regulation. When we think of the Fed 10 years from now, on current trends, we're likely to think of it as financial czar first, with monetary policy the boring backwater.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614963","date":"2012-08-31","texts":"MUMBAI - Indian shares fell Friday, ending four weeks of gains, led by declines in blue chips Reliance Industries and Hindustan Unilever even as official data showed domestic economic growth accelerated slightly in the April-June period. The Bombay Stock Exchange's Sensitive Index fell 112.08 points, or 0.6, to 17429.56 points, ahead of U.S. Federal Reserve Chairman Ben Bernanke's much-awaited speech at Jackson Hole. The National Stock Exchange's 50-share Nifty fell 56.55 points, or 1.1, to 5258.50 points. For the month, the Sensex gained about 1.1, while the Nifty added 0.6. This was in line with other markets in Asia, as earlier expectations for action from central bankers kept most markets buoyant, although a gloomy outlook on China's economy held back Chinese indexes.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615318","date":"2012-08-31","texts":"JACKSON HOLE, Wyo.--Fed Chairman Ben Bernanke wasn't expecting he would have to make another speech like the one he will deliver here Friday. A few months ago the Federal Reserve seemed to be on cruise control as the economy healed. Many officials at the central bank hoped they were done with launching complicated programs to spur a sluggish economy. But Mr. Bernanke and his colleagues, once again disappointed by slow growth and small employment gains this year, are formulating another new dose of monetary stimulus to be considered at their next policy meeting in mid-September. So when the chairman speaks Friday morning at the central bank's annual retreat here, he must once again address whether there is more the Fed can do to get the economy going and whether it is worth taking chances on controversial new programs. All along he has argued these efforts are worth it and appears likely to stick to that line in his speech. Beyond big issues of the moment--such as whether the Fed will launch a new bond-buying program--a broader question looms in Jackson Hole about Mr. Bernanke's legacy. Long after his term as chairman ends in 17 months, will he be remembered as the Fed chief who did too little to combat high unemployment or the one who did too much and unleashed inflation and financial instability with the actions he took Critics make both arguments. How Mr. Bernanke acts now depends in part on which he sees as the stronger critique. As an academic before joining the Fed, Mr. Bernanke often criticized central bankers for dealing too passively with financial crises and economic malaise. As Fed chief, he has confronted many limitations to the policies he controls.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616438","date":"2012-08-31","texts":"PITTSBURGH -- The United Steelworkers union says it is close to a new four-year labor pact with U.S. Steel Corp. but that talks with ArcelorMittal have stalled, prompting both sides to prepare for a strike if a resolution or extension isn't reached. The stakes are high for both companies and their collective 26,000 U.S. workers, as well as the domestic steel industry and its customers. The companies, trying to control costs and compete with each other in the tight-margin steel business, consider the last labor deals -- negotiated in 2008, just before the financial crisis erupted -- a heavy burden. Meanwhile, steelworkers are trying to cling to gains and jobs amid stagnant wages and stubbornly high unemployment, and are concerned with ArcelorMittal's insistence on a two-tiered wage scale, which would be a first among major unionized domestic steel producers. Negotiations with ArcelorMittal are at a dead end, say union bargainers. As the clock continues to tick, ArcelorMittal continues to signal that it wants a confrontation, USW leaders wrote to members on Wednesday, in an internal memo reviewed by The Wall Street Journal. USW, which has a 210 million strike fund, also outlined what would happen in case of a strike but noted that its leaders have not yet voted to authorize a strike. That's a strategic decision and we're not going to paint ourselves into a corner, said spokesman Tony Montana, who declined to comment on the odds of a strike. ArcelorMittal, which wants to cut wages and benefits for all workers by more than 28 an hour, or 36 from an average 77.40 an hour in 2011, has started preparing its blast furnaces and other facilities for a strike as a precautionary measure and consistent with measures taken during past labor negotiations, according to spokesman Bill Steers. However, he said the company is in continuous dialogue with the United Steelworkers and remains optimistic about reaching a fair and equitable contract with the USW without a work stoppage. ArcelorMittal, which has the capacity in Europe and Canada to replace lost production in the U.S. in the event of a strike, is pushing hard for a two-tier wage scale -- with new workers being paid a lower wage and receiving no company pension. It also wants the right to suspend health-care benefits if the Affordable Care Act is put into effect and workers can buy health care on exchanges, the union says.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617313","date":"2012-08-31","texts":"JACKSON HOLE, Wyo. -- Federal Reserve Chairman Ben Bernanke wasn't expecting he would have to make another speech like the one he will deliver here Friday. A few months ago, the Fed seemed to be on cruise control as the economy healed. Many officials at the central bank hoped they were done with launching complicated programs to spur a sluggish economy. But Mr. Bernanke and his colleagues, once again disappointed by slow growth and small employment gains this year, are formulating another dose of monetary stimulus to be considered at their next policy meeting in mid-September. So when the chairman speaks Friday morning at the central bank's annual retreat here, he must once again address whether there is more the Fed can do to get the economy going and whether it is worth taking chances on controversial new programs. All along he has argued these efforts are worth it and appears likely to stick to that line in his speech. Beyond big issues of the moment -- such as whether the Fed will launch a new bond-buying program -- a broader question looms in Jackson Hole about Mr. Bernanke's legacy. Long after his term as chairman ends in 17 months, will he be remembered as the Fed chief who did too little to combat high unemployment or the one who did too much and unleashed inflation and financial instability with the actions he took Critics make both arguments. How Mr. Bernanke acts now depends in part on which he sees as the stronger critique. As an academic before joining the Fed, Mr. Bernanke often criticized central bankers for dealing too passively with financial crises and economic malaise. As Fed chief, he has confronted many limitations to the policies he controls.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613543","date":"2012-09-01","texts":"Momentous changes are under way in what central banks are and what they do. We are used to thinking that central banks' main task is to guide the economy by setting interest rates. Central banks' main tools used to be open-market operations, i.e. purchasing short-term Treasury debt, and short-term lending to banks. Since the 2008 financial crisis, however, the Federal Reserve has intervened in a wide variety of markets, including commercial paper, mortgages and long-term Treasury debt. At the height of the crisis, the Fed lent directly to teetering nonbank institutions, such as insurance giant AIG, and participated in several shotgun marriages, most notably between Bank of America and Merrill Lynch. These nontraditional interventions are not going away anytime soon. Many Fed officials, including Fed Chairman Ben Bernanke, see credit constraints and segmented markets throughout the economy, which the Fed's standard tools don't address. Moreover, interest rates near zero have rendered those tools nearly powerless, so the Fed will naturally search for bigger guns. In his speech Friday in Jackson Hole, Wyo., Mr. Bernanke made it clear that we should not rule out the further use of such nontraditional policies if economic conditions warrant. But the Fed has crossed a bright line. Open-market operations do not have direct fiscal consequences, or directly allocate credit. That was the price of the Fed's independence, allowing it to do one thing -- conduct monetary policy -- without short-term political pressure. But an agency that allocates credit to specific markets and institutions, or buys assets that expose taxpayers to risks, cannot stay independent of elected, and accountable, officials. In addition, the Fed is now a gargantuan financial regulator. Its inspectors examine too-big-to-fail banks, come up with creative stress tests for them to pass, and haggle over thousands of pages of regulation. When we think of the Fed 10 years from now, on current trends, we're likely to think of it as financial czar first, with monetary policy the boring backwater.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613533","date":"2012-09-02","texts":"JACKSON HOLE, Wyo.--Ben Bernanke encountered a heavy dose of skepticism and doubt here this weekend. In a highly anticipated speech on monetary policy Friday, the Federal Reserve chairman argued that the Fed's easy-money policies were helping the weak economy and laid the groundwork for more action. But economists and central bankers wondered more openly than usual if the Fed had the tools to fix the problems of the day and expressed frustration that four years of super low interest rates and extraordinary money-pumping by the Fed hadn't done more to spur the slow-moving economy. Why is it that we've had such incredibly accommodative monetary policy for so long and we've had so little growth Donald Kohn, a Brookings Institution scholar, asked from the audience after a panel discussion here Saturday. It was a striking question because Mr. Kohn is a former vice chairman of the Fed and was Mr. Bernanke's right-hand man during the financial crisis. The headwinds that the Fed often cites--Europe, household debt-reduction, the housing bust--he said were unsatisfying answers. There is a lot we don't understand, he said.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615425","date":"2012-09-03","texts":"The unemployment rate has exceeded 8 for more than three years. This has lead some commentators and policy makers to speculate that there has been a fundamental change in the labor market. The view is that today's economy cannot support unemployment rates below 5--like the levels that prevailed before the recession and in the late 1990s. Those in government may take some comfort in this view. It lowers expectations and provides a rationale for the dismal labor market. Excuses aside, this issue is also important for central banks. The Federal Reserve and other central banks have some policy choices to make if the high rates of unemployment reflect cyclic phenomena. But if the problem is structural--perhaps reflecting a mismatch between skills needed by business and skills possessed by the unemployed--there is little the Fed can do. Research I've done with James Spletzer of the U.S. Census Bureau shows that the problems in the labor market are not structural. They reflect slow economic growth, and the cure is a decent recovery. In 2007, the unemployment rate was 4.4. Two years later, it reached 10. The structure of a modern economy does not change that quickly. The demographic composition of the labor force, its educational breakdown and even the industrial mix did not differ much between 2007 and 2009. More specifically, from 2007 to 2009 unemployment grew dramatically in a few industries, and these changes contributed to the rise in overall unemployment. But the changes were similar to those experienced in prior recessions. As unemployment rates declined somewhat after 2009, the pattern played out in reverse. Industries that saw the largest increases in unemployment were the ones with the largest decreases as overall unemployment fell.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615259","date":"2012-09-11","texts":"For some investors, bad news is good news. The U.S. economy added 96,000 jobs last month, the government said on Friday. That is fewer than Wall Street analysts were expecting and the latest sign of a sluggish recovery, some economists said. Yet the prices of everything from stocks and gold to Treasury and mortgage debt rose. The rallies reflect near certainty among investors that the Fed will announce additional monetary easing as soon as Thursday, when a scheduled two-day policy meeting ends. The reaction shows how markets have come to depend on central bank stimulus since the financial crisis, and underscores the high stakes for the Fed and its chairman, Ben Bernanke. Some analysts and investors say the Fed must announce a big stimulus plan quickly or risk disappointing the market, potentially setting the stage for a broad selloff. The European Central Bank last week spurred a sharp stock-market rally by announcing a bond-buying program that will make it easier for troubled countries to issue new bonds.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616639","date":"2012-09-11","texts":"BANGALORE--Indian outsourcing company Satyam Computer Services Ltd. Tuesday said that it will triple its workforce in China to 1,500 people by 2015 as part of efforts to better serve its global clients which have operations in the country. Satyam and majority shareholder Tech Mahindra Ltd. together have software facilities in Shanghai and Nanjing, the Indian software company said. Hyderabad-based Satyam said it will focus on clients in the engineering, manufacturing and telecommunications industries in China. It will also explore strategic partnerships with Chinese companies to boost growth in the local market as well as to support clients in Japan. India's outsourcing companies traditionally earn most of their revenue from the U.S. and Europe. However, the recent economic turmoil in these two markets have led to many outsourcers looking to other markets such as China and Japan. Top outsourcing companies Tata Consultancy Services Ltd. and Infosys Ltd. have already expanded their presence in China to serve global clients as well as to tap into the local market.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616489","date":"2012-09-12","texts":"Uncle Sam Has an Inflation Deal for You Talk about money for nothing. Late last month, the U.S. Treasury issued debt at a record-low yield to maturity of negative 1.286 over nearly five years. Of course, there was a catch The government also is obligated to compensate the holder of the instrument, a Treasury inflation-protected security, for any change in the consumer-price index between now and when it matures. The buyers of the TIPS were betting on inflation of at least 2 to earn the break-even return -- the amount that would at least equal the 0.71 they could have received on an ordinary five-year Treasury the same day. That is well above the 1.4 year-on-year gain in the consumer-price index reported for July, or the 1.5 gain for August expected on Friday. And the amount that investors have been willing to pay has risen noticeably. Ever since talk heated up that the Federal Reserve will engage in a third round of bond buying, implied bets on inflation have, too. The 10-year break-even rate has risen to 2.376 currently from 2 in late July.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613528","date":"2012-09-13","texts":"HANOI--Vietnam's leaders are stepping up their campaign against critical blogs, ordering government investigators to arrest the operators of three websites at a time when global Internet companies are growing more worried about doing business in the tightly policed country. A government statement issued late Wednesday named three blogs that allegedly posted articles accusing the government of corruption and human-rights abuses, describing the blogs as being part of a wicked plot of the hostile forces--a term often used to describe advocates of democratic reforms. Two of the three sites vowed to continue. One, Danlambao, or The People's Journalism Blog, said in a fresh posting Thursday that its anonymous operators are prepared to be repressed and imprisoned rather than leading the life of a dumb dog that dares not to bark, paving the way for a deepening confrontation between Vietnam's authoritarian leaders and its increasingly vibrant online community as the country's once-booming economy slumps. The Web has taken off here faster than in many other up-and-coming nations. Around 34 of Vietnam's 90 million people are online, a larger proportion than in more established neighbors such as Thailand and Indonesia, driven in part by the rapid spread of high-speed cellphone networks and a desire among younger Vietnamese to connect with the rest of the world separately from the nation's state-run media. Growing numbers of Vietnamese have launched their own blogs in recent months, where they discuss everything from traditional folk songs and where to buy secondhand iPhones to the corruption that has accompanied a decadelong economic expansion here. One prominent blogger, 60-year-old retired soldier Ng Thuong Thuy, writes forcefully under his own name about injustices in Vietnam's legal systems, especially the explosive issue of land rights which government-controlled media rarely cover.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613563","date":"2012-09-13","texts":"Chicago Mayor Rahm Emanuel insists that the city's teacher strike was entirely avoidable. Maybe so, but he probably would have needed some help from the state. Last year Mr. Emanuel importuned state lawmakers to give him the authority to impose a longer school day and year. His wish was their command, but maybe he should have been more careful about what he wished for. The power was useless since he couldn't compel teachers to accept new contracts that didn't pay them commensurately for the extra time. Nor could he implement reforms to teacher tenure, seniority or evaluations without the unions' consent. By contrast, Wisconsin Gov. Scott Walker last year restricted collective bargaining to wages and limited annual raises to the increase in the consumer price index. Had Illinois lawmakers passed similar reforms, Mr. Emanuel wouldn't be in this fix. While unions might still be demanding a 29 raise over the next two years, the mayor wouldn't have to accede to more than 2 annually he's offered them 4. He could also require that teachers be evaluated in part on student performance and empower principals to lay off bad teachers and pay exemplary ones more. Mr. Emanuel hasn't asked state lawmakers to give him the whip hand presumably because he doesn't want to be attacked for violating teachers' collective bargaining rights. Last year he assured Chicagoans that he'd totally reject the approach the governor of Wisconsin has taken to limit collective bargaining because it was part of a political agenda. Funny, the unions are saying the same thing about his school reforms. The mayor should be getting a first-class education in how public sector collective bargaining works in practice or rather doesn't work. Politicians are expected to roll over and accept whatever demands the unions make. And if the elected officials dare to ask for shared sacrifices--to borrow one of the left's favorite phrases--unions raise hell.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615465","date":"2012-09-13","texts":"Economists are skeptical about the economic benefits of another round of bond buying by the Federal Reserve, though most expect the central bank to embark on that course when its latest policy meeting concludes Thursday, according to The Wall Street Journal's latest forecasting survey. Thirty-four of 47 respondents to the survey said they expected the Fed to announce another round of large-scale asset purchases, known as quantitative easing, or QE, at the meeting. Another seven expect a move later this year, while five said they don't believe the bank will take action in 2012. The Fed has sent multiple signals in recent months strongly suggesting it is moving toward a new program in an attempt to bolster economic growth. Most recently, Chairman Ben Bernanke said at a Fed conference in Jackson Hole, Wyo., that the weak job market was a grave problem and that more bond buying could help lower unemployment. Fed officials believe the programs -- which in the past have involved the purchases of assets including Treasurys or mortgage-backed securities -- push down long-term interest rates, push up stock prices and soften the dollar, which in turn they believe helps to stimulate spending, investment and exports. While the economists believe the Fed will act, they raised doubts about Mr. Bernanke's arguments. Of those who answered the survey of 51 forecasters, 28 said more QE this year would be a mistake, while 17 said it would be the right thing to do. Those surveyed are a mix of Wall Street, business-sector and academic economists. Not all economists answered every question.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613720","date":"2012-09-14","texts":"The same fundamentally flawed system of financial rules that failed in 2008 lives on, but with more complexity in the latest proposals from regulators. That was the blunt message on Friday from Federal Deposit Insurance Corporation Director Thomas Hoenig. He was talking about the pending implementation of international bank capital standards known as Basel III. And thank goodness Mr. Hoenig is not the only voice of sanity in the regulatory wilderness. On we told you about the Bank of England's Andrew Haldane, who has shown that in many cases Basel's expensive, complicated regulations do actual harm by obscuring the true condition of big banks. Mr. Haldane's call for simplicity struck a chord with readers. A few of their appear nearby. Not that Journal readers ever expected a convention of global bureaucrats in a Swiss village to protect U.S. taxpayers. But Mr. Hoenig did a public service at an American Banker symposium by reviewing the relevant history from 2008 It turns out that the Basel capital rules protected no one not the banks, not the public, and certainly not the FDIC that bore the cost of the failures or the taxpayers who funded the bailouts. The complex Basel rules hurt, rather than helped the process of measurement and clarity of information. Observing a Basel system that only grows more complicated as U.S. regulators prepare to implement the latest version, the former president of the Federal Reserve Bank of Kansas City also pointed out that the biggest winners from such regulatory regimes are never the little guys. Mr. Hoenig explained that the most brazen and connected banks with the smartest experts will game the system. In private discussions, I find a good deal of uneasiness about Basel III's ability to be more effective than previous Basel efforts however, there is a sense that we cannot go back.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615938","date":"2012-09-15","texts":"The same fundamentally flawed system of financial rules that failed in 2008 lives on, but with more complexity in the latest proposals from regulators. That was the blunt message on Friday from Federal Deposit Insurance Corporation Director Thomas Hoenig. He was talking about the pending implementation of international bank capital standards known as Basel III. And thank goodness Mr. Hoenig is not the only voice of sanity in the regulatory wilderness. On Wednesday we told you about the Bank of England's Andrew Haldane, who has shown that in many cases Basel's expensive, complicated regulations do actual harm by obscuring the true condition of big banks. Mr. Haldane's call for simplicity struck a chord with readers. Not that Journal readers ever expected a convention of global bureaucrats in a Swiss village to protect U.S. taxpayers. But Mr. Hoenig did a public service at an American Banker symposium by reviewing the relevant history from 2008 It turns out that the Basel capital rules protected no one not the banks, not the public, and certainly not the FDIC that bore the cost of the failures or the taxpayers who funded the bailouts. The complex Basel rules hurt, rather than helped the process of measurement and clarity of information. Observing a Basel system that only grows more complicated as U.S. regulators prepare to implement the latest version, the former president of the Federal Reserve Bank of Kansas City also pointed out that the biggest winners from such regulatory regimes are never the little guys. Mr. Hoenig explained that the most brazen and connected banks with the smartest experts will game the system. In private discussions, I find a good deal of uneasiness about Basel III's ability to be more effective than previous Basel efforts however, there is a sense that we cannot go back.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614370","date":"2012-09-16","texts":"Albert Einstein reportedly called compound interest the most powerful force in the universe. He didn't live long enough to experience Ben Bernanke. Last week the Federal Reserve chairman told the world that U.S. savers should expect the new normal of near-zero interest rates to last through mid-2015. So compound interest is a concept with which today's early to mid 20-somethings will remain essentially unfamiliar. For those of us who are slightly older, it seems as if Mr. Bernanke is on a mission to convince us that everything our grandparents told us about household economics was wrong. My grandmother and grandfather were children of the Depression who built a successful dry-cleaning business with inspiration from--no kidding--a Wall Street Journal article. Then they built an insurance brokerage, and after much saving and hard work retired as the proverbial millionaires next door. They spent money on a house and a boat. But clothes always came from the secondhand shop, and Grandma remained an avid coupon clipper until she and Papa went into an assisted-living facility a few years back. On family vacations to see them in the Seattle area, I always heard the lecture about the importance of saving, or making your money work for you. Once on a coupon shopping run, someone asked Grandma why she didn't buy in bulk. My father answered for her You wouldn't want your money all tied up in toilet paper.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614967","date":"2012-09-17","texts":"Waypoint Real Estate Group LLC, a major investor in U.S. foreclosed homes, has secured a 65 million loan from Citigroup Inc. to help add to its portfolio of properties, according to people familiar with the matter. Bankers and investors said the debt-financing deal is a milestone for the burgeoning business of renting out houses that were previously in foreclosure. Waypoint, an Oakland, Calif., investment firm, is working with Citigroup on a bigger, longer-term financing deal that is expected to close in the coming weeks, the people said. Investors have spent billions of dollars in recent months snapping up foreclosed homes, betting they will profit from the rental income the properties produce. The strategy gained momentum earlier this year, after the Federal Reserve expressed support for the strategy as a way to clear the backlog of foreclosures that has slowed the U.S. housing market's recovery.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616589","date":"2012-09-17","texts":"Sometimes a few facts tell important stories. The American economy now is full of facts that tell stories that you really don't want, but need, to hear. Where are we now Did you know that annual spending by the federal government now exceeds the 2007 level by about 1 trillion With a slow economy, revenues are little changed. The result is an unprecedented string of federal budget deficits, 1.4 trillion in 2009, 1.3 trillion in 2010, 1.3 trillion in 2011, and another 1.2 trillion on the way this year. The four-year increase in borrowing amounts to 55,000 per U.S. household. The amount of debt is one thing. The burden of interest payments is another. The Treasury now has a preponderance of its debt issued in very short-term durations, to take advantage of low short-term interest rates. It must frequently refinance this debt which, when added to the current deficit, means Treasury must raise 4 trillion this year alone. So the debt burden will explode when interest rates go up. The government has to get the money to finance its spending by taxing or borrowing. While it might be tempting to conclude that we can just tax upper-income people, did you know that the U.S. income tax system is already very progressive The top 1 pay 37 of all income taxes and 50 pay none.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614539","date":"2012-09-19","texts":"The market for initial public offerings by real-estate companies has been grim this year, but that might be about to change. Some companies are moving to capitalize on the hottest real-estate sectors, as well as the early signs that the housing market, at long last, may be poised for a rebound. On Wednesday, Spirit Realty Finance Inc., a company that leases property to retail chains like Shopko Stores, AMC Theatres and Applebee's, hopes to raise as much as 487 million in an IPO. It would be the largest IPO of a real-estate investment trust, or REIT, since May 2011, according to Dealogic. Other companies are waiting in the wings. The parent of Realogy Corp., which owns Century 21, Coldwell Banker and other leading residential brands, wants to raise as much as 1 billion in an IPO and could launch its deal over the next few weeks, according to people familiar with its plans. Meanwhile, in what would be one of the largest real-estate IPOs, Lehman Brothers Holdings Inc. has filed with regulators to take apartment giant Archstone public. Apartment buildings have been one of the hottest property types in the past two years thanks to strong demand for rentals.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614846","date":"2012-09-19","texts":"No jobs No wonder, given what passes for economic thought these days. In his acceptance speech at the Democratic convention in Charlotte, N.C., this month, President Obama said, We believe that when a CEO pays his auto workers enough to buy the cars that they build, the whole company does better. And last month in Leesburg, Va., the president said, When we've got new teachers doing great work with our kids, then you know what, they go to a restaurant and spend that money. And so suddenly businesses are doing well, the economy is doing well, and we get into a virtuous cycle. And we go up. This myth -- that you can just give money to the middle class and good things happen -- is widely shared and is at the basis of a lot of government policy. And it is why the recovery is stuck between lack and luster. Let's go back. Henry Ford is popularly credited with inventing the middle class by doubling his workers' salaries to 5 per day in 1914. A multiplier for the economy, right Wrong.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614983","date":"2012-09-20","texts":"Average fixed mortgage rates in the U.S. declined over the past week, with the 30-year fixed rate revisiting a record low and the 15-year fixed rate hitting a new record low, according to mortgage-finance company Freddie Mac. Following the Federal Reserve's announcement of a new bond purchase plan, yields on mortgage-backed securities fell bringing average fixed mortgage rates to their all-time record lows which should aid in the ongoing housing recovery, Freddie Mac Chief Economist Frank Nothaft said. For the week ended Thursday, the 30-year fixed-rate mortgage averaged 3.49, compared with 3.55 the previous week and 4.09 a year earlier. Rates on 15-year fixed-rate mortgages averaged 2.77, versus 2.85 a week earlier and 3.29 a year ago. Five-year Treasury-indexed hybrid adjustable-rate mortgages, or ARMs, averaged 2.76, compared with 2.72 the previous week and the 3.02 rate set a year earlier. One-year Treasury-indexed ARM rates averaged 2.61, unchanged from a week earlier and compared with 2.82 a year earlier. Write to Tess Stynes at","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616243","date":"2012-09-20","texts":"The income of the typical U.S. family fell or was flat in almost every state last year, with the drop particularly steep in places where the economy has been hit hard by the housing bust. The median annual household income -- the point on the income scale at which half earn more and half earn less -- fell in 18 states in 2011 from a year earlier after adjusting for inflation, according to a Census Bureau report to be released Thursday. The sharpest drop occurred in Nevada, where median income fell by 6. The median fell by 3.8 in California and by 2.9 in Arizona and Florida. Those four states are among those that have seen the biggest falls in home values and housing construction since the financial crisis, and where Americans are still struggling with the resulting heavy debt and high unemployment. Nationally, the median income dropped by 1.3 to 50,502 in 2011. A separate report last week reported a slightly different median income level, but either way, the number is at a level last seen in the mid-1990s, continuing a long period of stagnant or falling wages since an all-time peak in 1999. Last week's report focused on the national picture of income and poverty, while Thursday's data provide detail on the health of the recovery at the state and local level. It shows that despite 2011's marking the second full year of the recovery, poverty continued to rise in many regions. An estimated 335,760 people fell into poverty in California alone last year, pushing up the state's poverty rate to 16.6. Poverty is defined as an annual income of 23,021 or lower for a family of four.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614280","date":"2012-09-21","texts":"Stocks struggled to eke out gains, as weak economic data put the global rally on hold. The Dow Jones Industrial Average advanced 18.97 points, or 0.1, to 13596.93, posting its third consecutive rise. The blue chips have climbed 4.2 over the past two weeks, as the Federal Reserve, European Central Bank and Bank of Japan have announced stimulus measures. The Standard & Poor's 500-stock index fell 0.79 point, or 0.05, to 1460.26, and the Nasdaq Composite gave up 6.66 points, or 0.2, to 3175.96. Stocks fell in early Thursday trading, as China posted weak economic data and U.S. jobless claims were higher than expected. But indexes reclaimed most of the lost ground. The Dow industrials turned positive after statements supporting recent U.S. central-bank action from three regional Fed bank presidents, a better-than-expected business activity reading from the Federal Reserve Bank of Philadelphia and a successful Spanish bond auction. In corporate news, Norfolk Southern slumped 6.58, or 9.1, to 66.11, after the railroad company cut its third-quarter outlook.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616969","date":"2012-09-21","texts":"Deciding whether to take a pension in a lump sum or monthly payment can be a combination of self-analysis How much risk can I stand and prognostication When will I die. But there are clues in one's own behavior that can help make the choice easier. The question received a burst of attention earlier this year, when more than 140,000 salaried retirees at General Motors and Ford Motor were told they could trade in their lifetime of monthly checks in exchange for a one-time payment. In the past, companies offered lump sums to older workers to entice them to retire early, and because in some situations, the payouts don't have to include the full value of the pension. Today, many companies are offering lump sums because they can calculate the payout using a higher interest rate than they have in the past, which reduces the size of the payouts. Though lump-sum payouts transfer all the risk--investment, inflation, interest rate and longevity--to the retirees, many nonetheless find the prospect of receiving a large sum of money seductive, and are tempted to forfeit what is essentially a guaranteed monthly paycheck they and their spouse can't outlive.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614670","date":"2012-09-22","texts":"Long-term-care insurance is the financial equivalent of gum surgery something that is often seemingly necessary, but just as often avoided at all costs. Now, to add to its unpopularity, soaring prices are prompting consumers to rethink how much coverage they need and to experiment with other types of policies. Long-term-care policies help pay for nursing-home, assisted-living and home care costs. In just the past year, premiums have risen by as much as 17, according to the American Association for Long-Term Care Insurance, a trade organization for insurance agents. In one recently publicized case, an Illinois couple, Bob and Cheryl Levy, saw their combined bill jump by 90 -- to more than 7,000 annually. Given the spiraling costs, Mr. Levy decided to keep the policy, but cut back on some of the coverage to hold the premium to the same amount. I was not about to double my payment, he says of the increase he and wife faced.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616943","date":"2012-09-27","texts":"Bob Schieffer The fact is, unemployment is up. It is higher than when President Obama came to office, the economy is still in the dump. Some people say that is reason enough to make a change. Bill Clinton It is if you believe that we could have been fully healed in four years. I don't know a single serious economist who believes that as much damage as we had could have been healed. CBS's Face the Nation, September 23, 2012 Well, let's see. We can think of several serious people who said we could heal the economy in four years. There's Joe Biden, Nancy Pelosi, Harry Reid, Christina Romer, Jared Bernstein, Mark Zandi, and, most importantly, President Obama himself. Mr. Obama told Americans in 2009 that if he did not turn around the economy in three years his Presidency would be a one-term proposition. Joe Biden said three years ago that the 830 billion economic stimulus was working beyond his wildest dreams and he famously promised several months after the Obama stimulus was enacted that Americans would enjoy a summer of recovery. That was more than three years ago.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615771","date":"2012-09-28","texts":"Data released this week by the Commerce Department waved bright red recession flags--orders for durable goods fell 13.2 in August and inflation-adjusted personal income fell 0.3. President Obama is asking for more time to allow the lackluster recovery to pick up steam. His plan is to move the economy forward by keeping the current policy framework in place and adding higher tax rates on income and capital gains. But the new Commerce Department numbers, combined with his stay-the-course approach, point to recession in 2013. This administration's economic policy is built on deficit spending, government control over the economy and dependence on the Federal Reserve to buy the government's excess debt. These policies aren't working. They discourage private investment and jobs, and the policies have resulted in high unemployment, weak business confidence and rapidly declining median incomes. The signature of our times is the fever for investing in government bonds and 1,700-an-ounce gold rather than in job creation and small businesses. That is the market's response to Obama administration efforts to reverse core American principles of growth and prosperity. These principles include a sound dollar to provide price stability and to attract capital a commitment to limited government as a prerequisite for higher living standards a preference for low tax rates to encourage investment and hiring and a belief that markets can set prices and allocate capital better than governments. The administration will have spent more than 14 trillion in just four years and added 6 trillion to the national debt. The Federal Reserve has dramatically expanded its role in the economy and markets, practically creating a new branch of government. Its near-zero interest-rate policy favors government, the world's biggest borrower, at the expense of private-sector savers. The Fed's heavily leveraged purchases of government bonds work against the market-based allocation of capital that is a key driver of economic growth. The Fed has now promised to make unlimited future purchases of government debt if job growth remains weak, an affront to the principle of limited government.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615767","date":"2012-09-30","texts":"The Federal Reserve's quantitative-easing program is unpopular across most emerging markets, but the latest round should prove far less contentious than earlier ones. Looking beyond the Fed-bashing rhetoric that has become a habit as much in Brasilia and Beijing as in some corners of Washington, today's global economic fundamentals suggest there will be a different outcome from the U.S. bond-buying program, known as QE3. When the Fed launched an earlier bond-buying program in 2010, many of these emerging markets were preoccupied with controlling inflation and felt threatened by Fed efforts to spur growth. With these emerging markets now suffering their own growth ills, Fed stimulus has the potential to help, not hurt. That isn't stopping complaints that the Fed's actions will flood the world with too much capital. The rise in global liquidity could lead to rapid capital inflows into emerging markets including South Korea and China and push up global raw-material prices, said Bank of Korea governor Kim Choong-soo last week. Therefore, Korea and China need to make concerted efforts to minimize the negative spillover effect arising from the monetary policies of advanced nations.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617224","date":"2012-09-30","texts":"In mid-September, home builder D.R. Horton Inc. sold 350 million of bonds at a yield of 4.375, the lowest rate ever for a U.S. 10-year high-yield bond, according to Dealogic. This is what unintended consequences look like. Rock-bottom interest rates resulting from the Federal Reserve's monetary policy are pushing investors of all sorts into riskier assets, creating an insatiable demand for investment-grade and high-yield, or junk-rated, corporate bonds. Government-bond investors from the U.S. and Europe are buying more investment-grade corporate bonds even as traditionally cautious investment-grade investors and insurers jump into high-yield debt. Despite record new corporate-bond sales of 355 billion in the third quarter, demand still outstripped supply, allowing corporations and private-equity firms to borrow at all-time-low interest rates. In July, Texas Instruments Inc. and Unilever PLC both sold three-year bonds at a rate of 0.45, the lowest ever for a corporate borrower, according to Standard & Poor's LCD. You don't usually see nontraditional investors come into credit when yields are at historic lows, but that's what's happening, said Andy O'Brien, co-head of global debt capital markets at J.P. Morgan Chase & Co. The result New bond sales are turning into scrums as portfolio managers look to fill orders.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616882","date":"2012-10-03","texts":"Plain-vanilla bonds aren't enough these days. In an era of painfully low interest rates, financial pros are advising income-hungry investors to include diverse assets such as dividend-paying stocks, emerging-markets stocks, real-estate investment trusts and high-yield corporate bonds in their conservative portfolios. Some advisers see these areas as havens compared with broad stock-market indexes. However, these assets have become riskier now that yield-seeking investors have been moving into them and have bid up prices. Moreover, investments that seem above the fray can fall hard. There have been periods in the past when some of them tanked the average real-estate mutual fund, for example, shed 48 between September and November 2008 -- the category's worst three-month loss of the past 20 years. Here's a look at why investment pros are recommending these four areas to conservative investors -- but also what could go wrong.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615761","date":"2012-10-04","texts":"Gordon Crovitz's call for more high-tech immigrants repeats an argument we frequently see on the pages of the Journal  Information Age, Oct. 1. Yet engineering work is shifting from developed countries to developing countries for a reason. Engineering, when done properly, follows international standards in proceduralizing the work. When engineering work is proceduralized, it can be outsourced, just as assembly work is procedural work that is more cost effectively done in low-wage developing countries. Importing millions of engineers from developing countries isn't going to change the macroeconomic laws that compel this outsourcing. It will worsen our economic plight because it works against our comparative advantage of integrating microeconomic behaviors into efficient macroeconomic function. Most promising developing countries cannot grow past low GDP per capita levels because their microeconomic behavior tends toward collectivism, cronyism, mistrust of others, safety nets, corruption, dishonesty and envious slamming of those who are richer or more powerful. To improve our GDP, we need people who believe in individualism, merit, trust in financial transactionsinvesting, honesty, hard work and grit. Those microeconomic behaviors are the only means of boosting our economic function beyond the high GDP per capita barrier that is unreachable for almost all countries. Tom Fix Bellevue, Wash. I am not opposed to letting skilled immigrants get a green card for working in the U.S. However, as the president of a high-tech company six Ph.D.s among 17 employees, there is the risk of hiring too many of any one group, which will create a company within the company. It happened to my company. At one point I had eight Chinese employees working for us. It wasn't manageable--there were the Chinese and the others and no communication between the groups. Fortunately, most of them left on their own.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615825","date":"2012-10-08","texts":"Even as we tremble at the edge of a fiscal cliff, the culture war insists on our attention. Abortion, contraception, gay and women's rights, and welfare have all returned to shake up an election season that was supposed to be a simple economy slugfest. Robert O. Self's All in the Family could help explain why. Mr. Self, a professor of history at Brown University, has heroically researched the history of the culture wars from the early 1960s to the present. He offers a provocative analysis that accounts for today's alliance between small-government and social conservatives, on the one hand, and welfare-state and social liberals, on the other. Mr. Self begins his history by describing breadwinner liberalism as the status quo of the early and mid-1960s. The architects of the Great Society assumed the primacy of male-earner and female-homemaker families. Labor unions fought for a family wage for their predominantly male membership, the Moynihan Report 1965 raised alarms about black male unemployment, and the first efforts at affirmative action took the form of quotas in municipal contracts for male construction workers. In all these cases women were largely an afterthought, Mr. Self writes. Breadwinner liberalism, he argues, was based on a model of masculine individualism hardworking, striving, self-reliant. By the late 1960s, male breadwinners were beset from all sides. Their antiwar sons grew their hair long and scoffed at verities about masculine honor. Gays, going public early in the decade as self-defined homophiles, challenged presumptions about masculine sexuality. Traditional men watched anxiously as their wives brought home paychecks and as women generally demanded relief from sexual harassment, low pay and pink-collar ghettos. Men soon saw their daughters demonstrating for abortion rights. Between the Equal Employment Opportunity Commission and various court decisions, it seemed as if the government, the courts and their own families all agreed The traditional male-headed family was an anachronism. But, the author concludes, breadwinning men weren't disappearing they and their female supporters were just changing political parties. For many lower-middle-class women serving coffee to bosses and stocking grocery shelves, full-time motherhood wasn't the concentration camp described by feminists. They found a voice in antifeminists like Phyllis Schlafly, who almost single-handedly stopped the Equal Rights Amendment in the late 1970s. Catholic women and men organized groups to oppose abortion and were soon joined by evangelicals. Other grass-root groups emerged, some in support of Vietnam veterans and others celebrating what came to be known as family values. What was taking shape was the profound class and cultural divide that vexes our politics to this day. In a vivid chapter, Mr. Self describes the 1972 Democratic National Convention, a pivotal moment in the reshaping of political alignments. AFL-CIO President George Meany railed that, in the party platform, there were no steelworkers, no pipe fitters, and worst of all, no plumbers. Instead there were feminists, radical blacks, Chicanos and gays--co-conspirators in a left-wing attack on breadwinner liberalism. In reaction, a constellation of religious, white, ethnic and anti-feminist objectors joined forces to create breadwinner conservatism. By 1980, with the help of a vigorous evangelical revival, these one-time Democrats helped elect Ronald Reagan president.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615187","date":"2012-10-09","texts":"German exports rose sharply in August and industrial output fell only modestly, bolstering hopes that Europe's largest economy will expand again in the third quarter even as much of the euro zone remains in recession. Exports increased 2.4 on the month in August, in adjusted terms, and jumped 5.8 on the year as orders from outside the European Union surged, according to data published Monday by the federal statistics office. The surge in German orders outside the euro zone has been driven in recent months by trade with the U.S., Russia and China. Exports to the U.S. rose 20 in January to July from the previous year, those to Russia rose 16, and those to China were up 9, according to data from the statistics office. The message from today's data is that the German economy has shown unexpected resilience to the global economic downturn in the third quarter, said Chris Williamson, an economist at Markit in London. German industrial output fell 0.5 on the month in adjusted terms, after rising by a downwardly revised 1.2 in July, the economics ministry said. The trend for industrial production remains stable, it said, even if lagging demand . . . signals a more subdued development in the months ahead.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617208","date":"2012-10-10","texts":"TOKYO--The head of the Philippine central bank said he sees room to cut interest rates further as inflation is mild, while expressing concern over falling exports and potentially destabilizing capital inflows. His concerns mirror those of other export-oriented economies in Asia, which face weakening demand in Europe and the U.S. as well as inflows of speculative investment driven by easy monetary policy in major economies. Right now if you look at the inflation picture, the forecast is quite benign, Bangko Sentral ng Philipinas Gov. Amando Tetangco said in an interview. The average for this year is likely going to fall closer to the low end of the inflation target. Mr. Tetangco, speaking on the sidelines of the International Monetary Fund annual fall meetings in Tokyo, said he sees the same trend for next year. Philippine on-year consumer-price inflation slowed to 3.6 in September from 3.8 in August. The central bank's full-year target is between 3 and 5.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616871","date":"2012-10-11","texts":"Long-term mutual funds climbed by 2.05 billion in the latest week on gains to bond and hybrid funds, though equity funds recorded their steepest outflows so far this year, according to the Investment Company Institute. ICI has reported fund inflows for most of the year as investors have continued to pour money into bond and hybrid funds. However, U.S. equities have experienced mostly outflows as investors look to retreat from a volatile stock market. For the week ended Oct. 3, equity funds had outflows of 11.08 billion, compared with prior-week outflows of 7.55 billion. U.S. equity funds fell by 10.6 billion while foreign equity funds slipped by 483 million. Bond funds had inflows of 10.87 billion, up from prior-week gains of 8.32 billion. Taxable funds rose by 8.06 billion and municipal funds drew in 2.82 billion. Hybrid funds, which can invest in both stocks and fixed-income assets, had inflows of 2.26 billion, compared with prior-week outflows of 386 million. Meanwhile, assets in money-market funds decreased by 2.51 billion in the latest week as investors pulled more money from government funds than they added to prime and tax-free funds, according to iMoneyNet.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614296","date":"2012-10-16","texts":"Vikram Pandit spoke to reporters on Dec. 11, 2007, after Citigroup named him chief executive officer. Mr. Pandit abruptly stepped down Tuesday following a clash with the company's board over the bank's strategy and performance. Then-Morgan Stanley CEO John Mack, left, and Mr. Pandit left a meeting at the Treasury Department on Oct. 13, 2008. News of Mr. Pandit's departure after five years atop the company came as a shock to Citigroup employees, including senior executives. Mr. Pandit, right, answered a question during testimony before the House Financial Services Committee in Washington, D.C., on Feb. 11, 2009. From left, Bank of New York's Robert Kelly, Bank of America's Ken Lewis, State Street's Ronald Logue, Morgan Stanley's John Mack, and Mr. Pandit. Mr. Pandit left the White House following a meeting with President Obama on March 27, 2009.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616704","date":"2012-10-16","texts":"Federal Reserve officials have been criticized by many outsiders in recent years for pursuing easy-money policies too aggressively and risking inflation. A senior Fed official on Monday said the Fed has made mistakes in recent years--but he said the big mistake was the opposite of the common critique. The Fed erred, he said, in not doing enough. Monetary policy, while highly accommodative by historic standards, may still not have been sufficiently accommodative given the economic circumstances, William Dudley, president of the Federal Reserve Bank of New York, said in a speech in New York. Many U.S. academics--including Ben Bernanke before he became Fed chairman--criticized the Bank of Japan in the 1990s and early 2000s for responding to its financial crisis and subsequent recession too timidly. Mr. Dudley's comments suggested the Fed might have made the same mistake. The Fed pushed short-term interest rates to near zero in late 2008 and has said it is likely to keep them there until at least mid-2015. Moreover, it has pumped trillions of dollars into the financial system while purchasing long-term U.S. Treasury debt and mortgage backed securities. The policies are meant to push down long-term interest rates to encourage spending, investment and growth. My conclusion is that the easing of financial conditions resulting from non-traditional policy actions has had a material effect on both nominal and real growth and has demonstrably reduced the risk of particularly adverse outcomes, Mr. Dudley said. Nevertheless, I also conclude that, with the benefit of hindsight, monetary policy needed to be still more aggressive.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617012","date":"2012-10-16","texts":"Americans boosted their spending in September on everything from iPhones to restaurant meals in the latest sign that the consumer economy is gaining strength even as other sectors are weakening. Retail and restaurant sales rose a seasonally adjusted 1.1 in September from August, and the Commerce Department boosted its estimate for sales over the summer. Sales have now climbed for three consecutive months after flagging during the spring. The stronger retail numbers provide some of the first evidence rising consumer confidence is translating into actual spending. On Friday, a University of Michigan survey showed consumer sentiment hitting its highest level since before the recession. Retail-sales figures can be volatile, especially during periods of rapidly changing energy prices or unstable economic conditions. But in this case, the three-month moving average, which smooths out month-to-month volatility, tells much the same story as the monthly data. The three-month average rose 1 in September, the second consecutive monthly increase. Over the past year, the three-month average is up 4.8 compared with 5.4 for the unaveraged data. The stronger spending and confidence numbers, along with falling unemployment and rising home sales, mark real improvement in the consumer economy, said Paul Dales, an economist at forecasting firm Capital Economics. But Mr. Dales is more skeptical that the growth can continue amid weakness abroad and uncertainty at home.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614000","date":"2012-10-19","texts":"The housing market is in recovery mode, but one type of mortgage investment has gotten hammered lately. Experts say investors should wait awhile longer before wading back in. Mortgage real-estate investment trusts are companies that buy mortgage-backed securities and pay most of the returns to investors as dividends. The group plunged 5.9 in the five days through Oct. 15, the largest such drop since October 2011. The selloff might have some investors considering picking up the REITs on the cheap. In 2010 and 2011, similar drops have presented opportunities for people with the patience--and nerves--to jump back in. This time, however, investors should resist the urge, experts say. Past selloffs were driven mainly by fears about the sustainability of the financial system. The current plunge has more to do with concerns about the sustainability of the sector's dividends, spurred by the Federal Reserve's decision to start buying mortgage-backed securities, and experts say the worries are unlikely to be assuaged soon. There's more room to go, says Andy Kapyrin, director of research at RegentAtlantic Capital in Morristown, N.J.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614639","date":"2012-10-24","texts":"In just a few days, American corporations have doused months of euphoria for stock investors. Companies from Google Inc. and Caterpillar Inc. to DuPont Co. and United Parcel Service Inc. have disappointed investors with lackluster earnings or forecasts, fueling fears the global economic recovery isn't as robust as once thought. The Dow Jones Industrial Average tumbled 243.36 points, or 1.8, to 13102.53. The Dow is now almost 4 below its five-year high reached just before third-quarter earnings season began this month. With Tuesday's declines, some 500 billion has been wiped from the value of U.S. stocks in three days, according to the Wilshire 5000 Total Market Index. The sudden slump marks a shift in sentiment for investors, who just two weeks ago were debating how soon the Dow would hit a record. Now the question is how much farther it could fall. Stocks had been on a seemingly endless upward march since the beginning of the summer, thanks in large part to renewed stimulus from the Federal Reserve.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613654","date":"2012-10-25","texts":"NEW YORK--Stocks ended the day higher after seesawing between gains and losses, as investors tried to decipher middling readings on companies and the U.S. economy. The Dow Jones Industrial Average rose 26 points, or 0.2, to 13104. Disappointing earnings reports had contributed to selloffs of more than 200 points in the average in two of the previous four sessions. The Standard & Poor's 500-stock index gained four points, or 0.3, to 1413 and the Nasdaq Composite rose four points, or 0.1, to 2986. Earnings and economic reports were mixed, lending little guidance to investors. At the morning's highs, the Dow industrials had advanced nearly 85 points. Major indexes turned down midday--the blue chips were down as many as 40 points on the day before rebounding. The inconsistency in the market reflects the inconsistency of the data flow, said Stephen Wood, chief market strategist with Russell Investments, which oversees more than 150 billion in assets. You're really getting a mixed data environment that's not clearly negative or positive.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613820","date":"2012-10-25","texts":"Barry Sternlicht's Starwood Capital Group has agreed to buy LNR Property LLC, a large player in the distressed-commercial-property market, for more than 1 billion, according to two people knowledgeable of the deal. Miami-based LNR is the country's largest so-called special servicer, which oversees workouts of commercial mortgages when they fall into trouble and takes in fees to sell or modify the loans. Should the deal be completed, it would give Starwood a clear window into troubled commercial properties around the U.S. A spokesman for the Greenwich, Conn., private equity firm declined to comment. LNR, which was spun off by home builder Lennar Corp. in 1997 and currently is owned by a group that includes Cerberus Capital Management, Vornado Realty Trust and iStar Financial Inc. It has other businesses including debt investment and development. But the bulk of its business comes from special servicing, which has grown as owners have defaulted on tens of billions of dollars in debt since the recession. LNR and other special servicers represent investors who hold bonds backed by pools of loans, known as commercial-mortgage-backed securities. As of the end of 2011, the company was overseeing 25.4 billion of loans that had run into trouble, according to a June report on LNR from Fitch Ratings.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616213","date":"2012-10-25","texts":"STOCKHOLM--Sweden's central bank Thursday left its most important interest rate unchanged but lowered its forecast for the coming months, prompting the krona to weaken against the euro on the prospect of lower rates. The Riksbank said its six-member executive board voted at a policy meeting Wednesday by four to two to leave the repurchase rate, or repo rate, at 1.25, in an effort to balance concerns over the level of household debt with consistently below-target inflation and slowing economic growth. The move was expected by nine out of 10 economists polled by Dow Jones Newswires. But the forecast move makes a rate cut at the next policy meeting in December more likely than previously thought. The prospect of lower interest rates weighed on the Swedish currency during Thursday morning trading local time. The krona weakened against the euro from 8.66 kronor to 8.68 kronor. Exporting companies have called for a lower repo rate to sap the recent strength of the Swedish krona, which hit a 12-year high against the euro over the summer. They worry that companies with costs denominated in kronor are losing competitiveness compared with their euro-zone rivals.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614435","date":"2012-10-27","texts":"Some prominent investors say danger is lurking in the decades-old method used to build bond portfolios. If they are right, small investors might want to rethink their strategies. The crux The traditional method of weighting government bonds by market capitalization -- the value of a country's bonds in the market -- is leading to risky allocations to highly indebted countries, experts say. Instead, some money managers are switching to other measures, such as gross domestic product, that reflect countries' capacity to pay off their debts. In March, the managers of Norway's 600 billion sovereign-wealth fund said they would reallocate its government-bond portfolio to reflect the size of countries' GDPs instead of their market caps. That came soon after Citigroup and Research Affiliates launched bond indexes that weight countries by GDP and other measures. And in May, Fidelity Investments launched a handful of bond funds with benchmarks that track GDP-weighted bond indexes.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613549","date":"2012-10-29","texts":"Monday, Oct. 29 The Commerce Department is scheduled to report on personal income and spending for September. Tuesday, Oct. 30 The S&PCase-Shiller homeprice index for August is due. ---","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613804","date":"2012-10-30","texts":"NEW YORK--As investors assessed the damage from Hurricane Sandy, stock futures indicated a slight rise from where stocks traded Friday after a positive reading on U.S. housing data and encouraging economic news in Europe. Stock markets are closed for a second day Tuesday, and the bond markets are also closed, in the aftermath of Hurricane Sandy. Trading in stock futures ended at 915 a.m. EDT, as scheduled. Millions in the eastern U.S. were left without power, with a Consolidated Edison official saying it could take up to a week to restore power to the bulk of Manhattan. Estimates for the financial impact of the storm are running into the billions of dollars. At the close of morning futures trading, Dow Jones Industrial Average futures had gained eight points from Friday's level, or 0.1, to 13062. Dow futures had been down as much as 1 in overnight trading. Futures on the Standard & Poor's 500-stock index rose about 3.5 points, or 0.3, to 1411.10. Nasdaq 100 futures lost 3.75 points, or 0.1, to 2655.25.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613470","date":"2012-11-01","texts":"According to Kevin A. Hassett and Aparna Mathur'sop-ed, Oct. 25, analyses showing growing inequality in the U.S. err by focusing largely on pretax incomes while ignoring the transfer payments and spending from unemployment insurance, food stamps, Medicaid and other safety-net programs. The authors tell us that in measuring inequality, we should look to consumption rather than pretax cash income. This, allegedly, is because consumption will be set by consumers with an eye on their lifetime incomes. Oh, really How about single parents, pensioners or enlisted military personnel who resort to payday loans Their consumption is set with an eye on their immediate, pressing needs, not their lifetime incomes. The authors seem to think that inequality can be measured by the quantity of washing machines or microwaves in poor homes. They don't consider debt levels. They seem unacquainted with foreclosures. They show no interest in future prospects. Most remarkable of all, the authors would undo the very basis of the equality, such as it is, that they perceive in America. The safety net Trash it, or at least reshape it. So I guess what Mr. Hassett and Ms. Mathur really believe is that if the extent of inequality isn't so bad after all--how silly of we liberals to think otherwise. We should change that right away.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615567","date":"2012-11-01","texts":"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. 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. 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. 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. 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.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616031","date":"2012-11-10","texts":"The rush is on to give away assets to family members before the 5.12 million gift-tax exemption reverts to 1 million at year-end. But investors need to take care that their tax-saving strategies don't backfire. The timing is appealing for taking advantage of what many experts consider a shrinking tax break. Last year, the federal gift-tax exemption climbed to 5 million for individuals and 10 million for married couples filing joint tax returns, from 1 million and 2 million, respectively, while the top tax rate fell to 35 from 45. For 2012, the inflation-indexed limits climbed to 5.12 million and 10.24 million. Estate-tax limits were changed as well, to the same amounts. Congress could well tackle the issue now that the election is over, but few experts expect the gift-tax exemption will be kept at its current level.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617075","date":"2012-11-12","texts":"Financial Analysis and Commentary As the world watches Washington try to come to an agreement to avoid the fiscal cliff, one thing seems certain In any deal, the economy will have to fight through a heavier fiscal drag. That could put some companies in a pinch. If President Barack Obama and Democrats in Congress had their druthers, income-tax rates for earners in the top 2 would go higher next year. Republicans would like to leave the tax rates for everyone unchanged. But any compromise that is reached will likely see the well-off sending a greater share of their income to the government. That will have an economic consequence. The Congressional Budget Office estimates that if the Bush tax cuts for top earners expired at the end of the year, with the cuts for the bottom 98 extended, it would shave about two tenths of a percentage point from gross domestic product next year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614728","date":"2012-11-13","texts":"BRASILIA--Brazil's real slid against the dollar to end well weaker Tuesday as nervousness over the outlook abroad, perceptions of thinning liquidity and market talk of a shift in the government's preferred trading band locally weighed in against the currency. The real exited from regular trading at BRL2.0691 to the dollar after ending at BRL2.0505 to the dollar Monday, according to Tullett Prebon via Factset. Traders noted investors bought dollars as insurance ahead of a local holiday later this week as uncertainties lingered abroad about resolution of a nagging debt crisis in Greece and negotiations to avoid a fiscal cliff threatened by debt caps in the U.S. at the outset of 2013. There's been some stress in the market in recent sessions in reaction to developments in the U.S. and Europe, noted Alfredo Barbutti, analyst at the BCG Liquidez brokerage in Sao Paulo. Alongside nervousness brought by uncertainties abroad, market participants said talk emerged Tuesday that the government could weigh a weaker trading range for the real as part of its efforts to reinforce the local economy. The real has been trading in a range of around BRL2.00 to BRL2.10 since the middle of the year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617376","date":"2012-11-16","texts":"Land prices in the Farm Belt continued to surge in the third quarter, even as a severe drought battered crops and slashed some farmers' incomes. Farmland values in the heart of corn-growing country, including Illinois and Iowa, jumped 13 in the three months through Sept. 30 compared with a year earlier, according to a report Thursday by the Federal Reserve Bank of Chicago. Meanwhile, prices of nonirrigated farmland in a seven-state stretch of the Great Plains soared 24 from a year ago, a separate report from the Federal Reserve Bank of Kansas City said. Although the increases in prices slipped slightly from the year-over-year growth seen in the second quarter, the reports confirmed anecdotal evidence that demand for farmland has scarcely been dented by the worst U.S. drought in decades. High prices for crops, including corn and soybeans, have mitigated the drought's financial impact on farmers. Also, many growers are protected against losses in production by crop insurance. Net U.S. farm income is expected to rise to 122.2 billion this year, up from 117.9 billion last year, according to the U.S. Department of Agriculture.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616603","date":"2012-11-17","texts":"Is more of a good thing really better By all accounts, company programs that automatically enroll new employees into 401k retirement plans have drastically increased the number of workers socking away money for the future. Unfortunately, most employees never change their contribution from the original level -- often 3 of their paycheck -- meaning many workers will never save enough to build a secure nest egg. Now, 401k plan providers like Fidelity Investments and J.P. Morgan Asset Management and plan providers like Aon Hewitt are urging companies to increase the initial automatic contribution to 6 of pay, or at least automatically raise the contribution every year. A higher level would benefit those companies, of course. But as with all one-size-fits-all solutions, it isn't the right call for every employee, in part because it might cause some to save less than they would otherwise.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615307","date":"2012-11-18","texts":"Stock markets around the world tumbled sharply again last week on growing fears over about 600 billion in federal tax hikes and spending cuts due to take place on Jan. 1. The Congressional Budget Office earlier this month warned that without a deal, the so-called fiscal cliff of sharp tax increases and spending cuts could send the U.S. economy back into recession and send unemployment higher again. Since touching a 52-week high of 13610 on Oct. 5, the Dow Jones Industrial Average has now tumbled more than 1,000 points, or 7.5. The Dow fell four out of five days last week, before eking out a gain on Friday. Bellwether Apple has plunged by nearly 25. Investors have stampeded into the havens of Treasury bonds and tax-free municipal bonds, while gold has perked up since the election. People are freaking out, says Larry Glazer, portfolio manager at Mayflower Advisors in Boston.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614523","date":"2012-11-21","texts":"The Federal Reserve isn't near a limit on how many Treasury or mortgage-backed securities it can purchase, Federal Reserve President John Williams said in an interview with The Wall Street Journal. Some Fed officials have been concerned that if the central bank buys too many bonds in these markets it could become such a big player that these markets become illiquid and stop functioning properly. Mr. Williams said the Fed isn't close to causing those kinds of problems. He said he wants to keep buying 85 billiong per month of long-term securities in 2013. He is in a camp of policy activists at the Fed who want the central bank to keep buying mortgage and Treasury bonds next year to push down long-term interest rates in hopes of boosting the economy. The Fed next meets Dec. 11-12. It is widely expected to continue its 40 billion-per-month mortgage-bond-buying program. It must decide what to do about its Treasury purchase program, known as Operation Twist. Under the program, which expires at year-end, the Fed is buying 45 billion per month of long-term Treasurys. Mr. Williams said he wanted to keep buying both classes of securities at the present pace. Stopping or scaling back, he said, would be counterproductive for the economy.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617371","date":"2012-11-21","texts":"A drop in Hewlett-Packard was enough to drag the Dow industrials into the red, while other indexes squeaked out a third straight session of gains. The Dow Jones Industrial Average lost 7.45 points, or 0.1, to 12788.51. The Standard & Poor's 500-stock index gained 0.92 point, or 0.1, to 1387.81, and the Nasdaq Composite Index gained 0.61 point, to 2916.68. Hewlett-Packard contributed a 12.21-point drag on the blue-chip index. Shares plunged 1.59, or 12, to a 10-year low of 11.71, after the technology company was hit by an 8.8 billion write-down tied to the acquisition of software developer Autonomy last year. H-P alleged there were serious accounting improprieties, disclosure failures and outright misrepresentations at Autonomy before its acquisition. Mike Lynch, Autonomy's CEO at the time, denied any irregularities. This report isn't just disappointing, they're saying they were fleeced, said Mark Lehmann, president of JMP Securities. They have some issues outside of this they need to work on, so this doesn't help. Meanwhile, remarks by Federal Reserve Chairman Ben Bernanke pushed stocks to session lows after he warned about the economic consequences that would occur if Congress fails to reach a budget deal. He said the central bank doesn't have infinite ability to ameliorate a recession if the cuts are too sharp. Stocks later largely recovered from the midafternoon declines.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614155","date":"2012-11-23","texts":"Washington 'No one is caving, Grover Norquist says emphatically and repeatedly when we meet this week in his office in the nation's capital. By no one he means congressional Republicans, and by caving he means surrendering to Barack Obama's call for tax increases. Republicans are facing an avalanche of pressure from the White House, the media and even many on Wall Street to abandon their antitax principles to avoid a fiscal cliff. Mr. Norquist, who runs the influential advocacy group Americans for Tax Reform, finds himself smack in the middle of the political fight in Washington over whether taxes will rise on investors and businesses next year, a move he believes would cripple the Republican Party and could plunge the economy into another recession. He rattles off a list of reasons Republicans won't give in. If taxes rise on everyone next year because of a stalemate, he says, who are you going to believe wants taxes to go up Obama doesn't have credibility on keeping your taxes down Republicans do. And don't forget Nothing has changed on the chess board since Barack Obama agreed to extend all the Bush tax cuts two years ago. Exactly the same players. Republicans still control the House and Democrats still control the White House and the Senate. Then he delivers the clincher For 20 years Democrats have tried over and over to trick Republicans into breaking the pledge. It hasn't happened. This isn't my first rodeo.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615072","date":"2012-11-23","texts":"Black Friday didn't wait on the calendar this year as retailers invaded Thanksgiving with their much-hyped deep discounts and hopeful shoppers joined long lines a day early. Despite an outcry from traditionalists and some employees, national chains including Wal-Mart Stores Inc., Target Corp., Sears Holdings Corp. and Toys R Us were opening their doors on Thursday. Others, like Best Buy Co., were waiting until midnight. The move was aimed at keeping up with online retailers, which last year took aim at the quintessentially bricks-and-mortar holiday by offering Thanksgiving Day deals. Retailers are racing to claim a bigger share of consumers' wallets. The long weekend can account for 15 or more of a chain store's holiday sales. While consumer confidence has improved, shoppers remain cautious, and the industry expects to be fighting over a slower-growing pie this year. Retail sales over the holidays are expected to expand just 4.1 to 586 billion, the lowest growth rate since the U.S. was coming out of a recession in 2009, according to the National Retail Federation. Last year, seasonal sales rose 5.6.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616097","date":"2012-11-26","texts":"With Congress returning from a Thanksgiving break this week, negotiations on avoiding the fiscal cliff in the U.S. will be on the minds of currency investors. But an array of reports on housing and consumer spending also will command the attention of market participants. The tone of U.S. data has been very good and we would expect that the dollar will see some strengthening if this continues, said Alessio de Longis, a portfolio manager at Oppenheimer Funds in New York. Further adding to the landscape in the coming week are a series of speeches from Federal Reserve officials, who could signal the latest likelihood of further bond buying from the central bank, known as quantitative easing. Federal Reserve Bank of Chicago President Charles Evans and Federal Reserve Bank of Dallas President Richard Fisher are set to speak Tuesday. If the odds of quantitative easing go up, the dollar will sell off, regardless of the fiscal-cliff talks, said Greg Anderson, a foreign-exchange strategist at Citigroup.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613706","date":"2012-11-29","texts":"Another monetary-policy domino fell Tuesday when Seoul introduced a new round of capital controls. South Korea's financial regulators will reduce the amount of foreign-exchange forwards that banks can carry on their balance sheets. These are commitments to buy and sell Korean won or dollars at a future date, and the decision will constrain the ability of banks to serve as counterparties for rapid capital inflows. See what Ben Bernanke hath wrought Although Seoul has a history of competitive devaluations, this week's move should be seen in a different light. The announcement steered clear of any direct reference to the Korean won's value, homing in instead on volatility. And no wonder. The won has risen some 9 against the greenback since May. The country's economy is relatively strong, and despite recent interest-rate cuts, returns on capital invested in won remain well above America's super-low rates. This encourages more capital inflows, which in the extreme could destabilize the financial system. That isn't to say that Seoul's move is good policy in theory or will prove effective in practice. Capital controls mainly distort flows of capital, leading to inefficiencies and often other economic distortions. One reason the won has been a volatile currency is Seoul's history of capital controls Investors pile in when times are good, then rush back out at the first hint that regulators might impose controls. Seoul hasn't helped with its promises this week to continue monitoring currency volatility--a reference to the possibility of future controls that could in turn spark a capital outflow. But in this case Korean leaders--and central bankers around Asia--deserve some commiseration as they struggle to control a tsunami not of their making. Washington traditionally discourages capital controls, but this is a harder case to make when Mr. Bernanke and the U.S. Federal Reserve flood foreign economies, many of them developing and with unsophisticated financial systems, with dollars.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616252","date":"2012-11-29","texts":"TORONTO--The Canadian dollar was little moved Thursday, as investors grappled for clarity on the status of negotiations to avert the so-called U.S. fiscal cliff. U.S. lawmakers were offering distinctly different views how budget talks were going. House Speaker John Boehner R., Ohio said no substantive progress had been made, while Democrats said a deal could be reached before Christmas. The U.S. dollar was at C0.9930 late Thursday, from C0.9921 late Wednesday, according to data provider CQG. Investors worry that Congress won't be able to reach a budget deal to avoid the U.S. fiscal cliff, and that the series of tax increases and spending cuts slated to take effect on Jan. 1 will send the U.S. economy back into recession. In economic data, the U.S. economy expanded at its fastest pace in nearly three years in the third quarter, but analysts voiced concerns about the details of that report. U.S. pending home sales were much stronger than expected, and the weekly number of new jobless claims decreased slightly more than expected.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616433","date":"2012-11-29","texts":"Financial Analysis and Commentary When it comes to buying and selling their companies' stocks, there are two kinds of corporate insiders Those who trade on a fixed schedule and those who don't. Investors should be careful to distinguish between the two. Microsoft Chairman Bill Gates falls into the former camp, selling 20 million shares of the company he founded every three months. Those sales are made under a 10b5-1 plan, the Securities and Exchange Commission rule that allows executives to set up stock transactions in advance and thus not run afoul of insider-trading restrictions. But Mr. Gates's sales are so regular that the fact that they are made under a 10b5-1 plan is besides the point. If one were to strip out such routine trades -- whether made under a 10b5-1 plan or not -- what would the performance of insider trades look like Economists Lauren Cohen and Christopher Malloy of Harvard Business School and Lukasz Pomorski of the University of Toronto did just that. Their findings, recently published in the Journal of Finance, showed just how serendipitous the timing of the remaining insiders' trading turned out to be. In a similar analysis, The Wall Street Journal examined trades by corporate executives in the week before company news was announced. The results showed trades executed by opportunistic executives were far more likely to score big returns or avoid large losses than those by insiders who traded at the same time each year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614314","date":"2012-11-30","texts":"When President Obama needed a business executive to come to his campaign defense, Jim Sinegal was there. The Costco co-founder, director and former CEO even made a prime-time speech at the Democratic Party convention in Charlotte. So what a surprise this week to see that Mr. Sinegal and the rest of the Costco board voted to give themselves a special dividend to avoid Mr. Obama's looming tax increase. Is this what the President means by tax fairness Specifically, the giant retailer announced Wednesday that the company will pay a special dividend of 7 a share this month. That's a 3 billion Christmas gift for shareholders that will let them be taxed at the current dividend rate of 15, rather than next year's rate of up to 43.4 -- an increase to 39.6 as the Bush-era rates expire plus another 3.8 from the new ObamaCare surcharge. More striking is that Costco also announced that it will borrow 3.5 billion to finance the special payout. Dividends are typically paid out of earnings, either current or accumulated. But so eager are the Costco executives to get out ahead of the tax man that they're taking on debt to do so. Shareholders were happy as they bid up shares by more than 5 in two days. But the rating agencies were less thrilled, as Fitch downgraded Costco's credit to A from AA-. Standard & Poor's had been watching the company for a potential upgrade but pulled the watch on the borrowing news. We think companies can do what they want with their cash, but it's certainly rare to see a public corporation weaken its balance sheet not for investment in the future but to make a one-time equity payout. It's a good illustration of the way that Federal Reserve Chairman Ben Bernanke's near-zero interest rates are combining with federal tax policy to distort business decisions.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613711","date":"2012-12-02","texts":"As the U.S. economy inches toward the fiscal cliff, the country's small banks are approaching a cliff of their own, in a development that could pinch short-term lending rates. On Jan. 1, a program that insures an unlimited amount of money in non-interest-bearing accounts will expire unless Washington moves to extend it. Without the Transaction Account Guarantee program, or TAG, an insurance cap resets to 250,000, affecting about 1.6 trillion in deposits. And without insurance protection, depositors may be compelled to move amounts above 250,000 to other venues deemed safer, leaving the banks with less business. J.P. Morgan estimates that, of that total, 579 billion could be on the move. Big financial firms would be on the receiving end of these flows, where cash would either be moved into the perceived safer hands of larger banks or earn a sliver of interest at a conservative money fund. Safety is a big concern for investors as the federal government faces the potential fiscal cliff, a set of tax increases and spending cuts that kick in on Jan. 1 if lawmakers can't reach a compromise plan, and which could send the economy into recession.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614071","date":"2012-12-03","texts":"Plenty of dark clouds loom over the U.S. job market -- particularly the potential double-punch of tax increases and spending cuts known as the fiscal cliff. But if the U.S. can avert that Washington-made crisis, the outlook for workers finding jobs is actually looking pretty good for next year. For one thing, the damage of superstorm Sandy will have to be repaired, meaning jobs in construction and retail. Businesses, meanwhile, which have held off investing and hiring because of uncertainty over the fiscal outlook, might finally open their wallets. That means more jobs, too. Employers have stepped up their hiring recently, adding 171,000 jobs in October and an average of 157,000 a month so far this year. That's a better pace than last year and the strongest job growth since 2006, Labor Department data show. Of course, the recovery of the job market has been, and probably will remain, incremental. Job growth needs to be much stronger to actually make a big dent in unemployment, which remains high at 7.9, though down from 10 three years ago. The government's next snapshot of the job market, due Friday, will be distorted by Sandy, which devastated the Northeast in late October, leaving many jobless. Economists say Sandy could temporarily knock anywhere from 100,000 to 150,000 off of the government's jobs tally for November, resulting in job growth of under 100,000 or even much less.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614193","date":"2012-12-03","texts":"NEW YORK--Treasurys started December with a slight decline as details of Greece's bond buyback plan encouraged investors to seek better returns through riskier assets. Less than a week after its international creditors finalized terms to fresh financial aid, Greece set in motion one leg of the broader debt-reduction requirements with plans to buy back about half of its debt owned by private creditors. Greece will spend about euro10 billion 13 billion to buy back debt, offering a maximum price of between 32.2 and 40.1 of the face value of the debt--more than what most expected. Goldman Sachs expects the indicated pricing to draw enough participants to make the buyback successful. The program's success is vital as it is estimated to contribute about 11 percentage points of the debt reduction as a proportion of gross domestic product. Greek and other peripheral European bonds rallied, sapping demand for the perceived safety of U.S. and German debt. But the selling in U.S. Treasurys was relatively measured. While investors say specifics to the buyback are encouraging, Greece's long-term growth picture remains dim. We're going to be talking about Greece again this time next year, said Oliver Pursche, co-portfolio manager of the GMG Defensive Beta Fund. It's a Band-Aid to avoid disaster in the next few months, then they'll need to cover it with another Band-Aid.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614527","date":"2012-12-03","texts":"Breaking the Glass for Automobile Sales Call it the parable of the broken windshield. Besides housing and infrastructure, one of the biggest artificial boosts to gross domestic product from superstorm Sandy will come from the auto industry. When November figures are reported this week, the devastation may translate into the best month for light-vehicle sales since the financial crisis. Though the storm only affected the end of October, Edmunds.com notes that 30 of sales typically occur during those days. It estimates some 30,000 sales were deferred, equivalent to 400,000 at a seasonally adjusted annualized rate. Then there is the effect of destroyed or damaged vehicles. The National Crime Insurance Bureau estimates 230,000 cars were damaged by Sandy, with 83 in New York or New Jersey. Estimates for November's seasonally adjusted annual rate of light-vehicle sales are as high as 15.27 million, nearly one million higher than in October. That would have been nothing special before the crisis, when they averaged nearly 17 million, but it now makes the U.S. look like one of the hottest car markets world-wide.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614655","date":"2012-12-03","texts":"SINGAPORE -- Asia's manufacturing sector appears to be on the mend while inflation remains tame, giving policy makers room to take action to stimulate their economies if global conditions deteriorate. Data released Monday showed China's manufacturing and services sectors both picked up in November, providing a positive driver for regional and global growth. But analysts warn of the risks posed by the U.S. fiscal cliff -- a package of tax increases and spending cuts due to take effect in January absent action by U.S. lawmakers, which could push the U.S. economy into recession. Frederic Neumann, co-head of Asian economics research at HSBC, said that scenario would hit growth in Asia -- particularly in trade-dependent economies such as South Korea, Taiwan, Singapore, Thailand and Hong Kong. While Asian governments, particularly China's, likely would respond with fresh stimulus, this would take time to gain traction and thus be too late to prevent a shakeout among the region's smaller economies in the first quarter, Mr. Neumann said. Even a sea of liquidity is no firewall against faltering demand and shattered confidence.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614984","date":"2012-12-06","texts":"Regarding Kimberley Strassel's This Unserious White House Potomac Watch, Nov. 30 A White House that is deadly serious about transforming America and a president who openly admits a willingness to sacrifice growth for fairness need not be too serious about averting a fiscal cliff. If primary objectives are to expand the welfare state and redistribute as much income as possible in the process, the fiscal cliff and a possible recession are not so alarming, particularly since the media are teed up to blame obstinate Republicans for an impasse. The Journal's same-day news headline Obama's Cliff Offer Spurned generally leads a skim-reader to sympathize with the one being spurned, not the one doing the spurning. For historical perspective on the Obama era, the 1930s are most instructive. In the mid-1930s President Franklin Roosevelt's second term was dedicated to preserving New Deal entitlements and programs and building federal government power. Economic growth was an afterthought. Unemployment was about 15 when his second term began and about 15 when it ended and higher in between. The stock market sank. Washington grew much faster than the private sector. FDR's legacy, had he not served a third term after 1940, would be He saved capitalism from itself after Republicans and Wall Street mucked it up he created massive new benefit plans and vastly increased the state's reach and resources and he browbeat the rich into submission while redistributing income with a vengeance. He did not, however, engineer a sustained economic recovery. Instead, he transformed the nation in eight years and for that he most likely would be ranked as a top-10 president regardless of his poor economic results and without his World War II leadership. The economy has its ups and downs, and President Obama has been immunized from responsibility for the downs -- as was FDR. Widespread tax increases, drastic cuts in defense spending, no substantive reform of entitlements and little White House accountability for economic pain may be a perfectly acceptable, if not desirable, outcome. It actually may be harder for President Obama to leapfrog FDR on the transformation and top-five presidential ranking scale if the economy is humming along and people need less help from Washington. The fiscal cliff is as rare an opportunity as was the Great Depression to permanently alter the balance of power between public and private sectors. What would FDR do Jim Moore Falls Church, Va.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614062","date":"2012-12-07","texts":"The job market recovery continues, sort of, though what it gives with one hand it takes away with the other. In Friday's Labor Department report for November, the U.S. unemployment rate fell to 7.7 from 7.9 in October, but mainly because another 350,000 workers disappeared during the month. Call it the case of the missing workers. In the last year, employers have added an average of about 150,000 workers a month. In November they added 146,000, less 49,000 in downward revisions for the previous two months. Hiring grew at a healthy pace in professional services, leisure and hospitality, while falling slightly in construction and manufacturing. Yet even as payrolls are rising, albeit slowly, the overall labor participation rate has continued to fall. In November, the share of the available labor force that is working fell to 63.6, which is down from 65.7 when the recession ended in June 2009. Mull that one over Three years into an economic expansion, the labor participation rate has fallen two full percentage points and three times this year including November it has reached the lowest level since 1981. This means that about three million more workers were working or looking for work in 2009 than in November. In the last year alone, the number of working age nonworkers grew to 89.2 million from 86.8 million. So why are more Americans sitting on the labor market sidelines even as job opportunities expand One popular suspect last month is Hurricane Sandy, yet the Bureau of Labor Statistics concluded that the storm did not substantially impact the national employment and unemployment estimates for November.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615274","date":"2012-12-09","texts":"Ready, fire, aim. According to critics of the Federal Reserve's unorthodox stimulus, that has been its ethos since the onset of the financial crisis. To be fair, monetary policy is a crude weapon at the best of times, with lots of potential for collateral damage. But when the central bank adds trillions of dollars in quantitative easing atop a zero-interest-rate policy, the results become even less predictable. Statements by some voting members of the Federal Open Market Committee in favor of an economic target for ending extraordinary stimulus won't transform those monetary cluster munitions into sniper rifles. But at least they would give the market a better idea of when the all-clear may sound.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616313","date":"2012-12-10","texts":"Republican leaders are pushing what looks like a relatively painless method of slowing federal spending, one that alters how the government calculates annual cost-of-living increases for an array of programs. Senate Minority Leader Mitch McConnell R., Ky. recently highlighted the idea, which is known as chained CPI, as an example of the kind of changes needed to avert spending cuts and tax increases set to begin in January. House Speaker John Boehner R., Ohio included it in his recent deficit-reduction proposal. President Barack Obama has in the past signaled openness to switching inflation measures to shore up Social Security. And several centrist Democrats have endorsed the idea, too. But as with much of the fiscal cliff negotiations, nothing is as simple it appears. Even this seemingly technical change has become caught in the ideological gaps between the two sides. Under the Republicans' proposal, the government would stop pegging benefits to versions of the consumer price index that measure the change in prices for a hypothetical fixed basket of goods, the standard measure of inflation. Instead, the government would use the chain-weighted CPI, which tends to rise slower because it recognizes that consumers will buy less of goods whose prices are rising rapidly. For example, if the price of chicken rises more than the price of beef, families might buy less chicken and more beef.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613989","date":"2012-12-11","texts":"NEW DELHI--India's government said Tuesday it will launch a stimulus package to boost trade after data showed exports in November fell from a year earlier--the seventh consecutive month of on-year decline. The country's trade deficit narrowed to 19.3 billion in November from 21.0 billion in October, but it was up from the 15.8 billion reported a year earlier, and the government said it could fall short of its full-year export target. Exports for the month fell 4.17 from a year earlier to 22.3 billion, while imports rose 6.35 to 41.5 billion. Weak exports are worsening the slowdown in India, where the government faces intense domestic political pressure due to high inflation, a ballooning fiscal deficit and tight monetary policy. The economy grew 6.5 last fiscal year--the slowest pace in nearly a decade--and the rupee has weakened about 2.6 against the U.S. dollar so far in 2012, after a 16 fall in 2011. Trade Secretary S.R. Rao said the government will announce by the end of this week a package to stimulate merchandise exports, which would help boost exports in the January-March quarter. He didn't give details of the package.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614247","date":"2012-12-12","texts":"Right-to-work laws don't appear to have a significant impact on wages, though data are hard to come by. In October, the most recent month for which state-level data are available, the average unemployment rate in right-to-work states was 6.9. For the other 27 states the average unemployment rate was 7.6. Thirteen of the 23 right-to-work states had unemployment rates below the national rate of 7.9 in October. Wages are generally lower in right-to-work states. Private-sector employees in right-to-work states earned 737.81 a week on average over the past 12 months, nearly 10 less than in states without such laws. But cause and effect are unclear, in part because most states with right-to-work laws passed the legislation decades ago, making it difficult to determine how the policies affect wages. Some economists say when differences in costs of living are taken into account, wages are roughly the same, or even higher in right-to-work states. A study by the National Institute for Labor Relations Research, an antiunion research group, found that employees in right-to-work states earned an average of 675 a week, compared with 660 in non-right-to-work states. But many studies showing higher wages in right-to-work states ignore relevant factors, such as how business-friendly a state is, that may be the real driver of wages, economists said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614563","date":"2012-12-12","texts":"Plans by home builder Taylor Morrison to sell stock in an initial public offering could be the first in a wave of private builders going public, a trend that could alter the ranks of the nation's top builders. Taylor Morrison, based in Scottsdale, Ariz., and which builds mainly higher-end homes in states from Florida to California, was a unit of British conglomerate Taylor Wimpey PLC until early 2011, when it was sold for nearly 1 billion to a group of U.S. private-equity funds. Last week, those funds filed a prospectus to sell 250 million of shares to the public. Alex Barron, an independent analyst with the Housing Research Center in El Paso, Texas, said now is an ideal time for a company like Taylor Morrison to consider going public, because investor appetite for builder stocks is strong and new-home sales and prices are on the rise. The Dow Jones U.S. Home Construction Index, which tracks seven publicly traded builders, is up 70 so far this year, although it has given back some of its gains in the past month. Sales of new homes hit a four-year high in September, and the 237,700 median sales price of a new home in October was 7 higher than in 2010, according to the Census Bureau. If Taylor Morrison's IPO is completed, the company would be the sixth-largest publicly traded home builder in the U.S. based on 2011 revenue, ahead of KB Home and behind Toll Brothers Inc. It also would be the first home builder to go public in more than 15 years.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614917","date":"2012-12-12","texts":"WASHINGTON -- In one of her last acts as Securities and Exchange Commission chairman, Mary Schapiro is helping resolve conflicts among U.S. financial regulators over the contentious and oft-delayed Volcker rule. But her departure also could ensure this work won't see the light of day for months. Ms. Schapiro has met directly with U.S. banking regulators to resolve differences over the rule, according to people familiar with the matter. The rule bans banks from trading with their own money and limits investments in risky funds. Her direct involvement, previously undisclosed, has been instrumental in helping bridge disagreements over what constitutes an investment that banks can make, and distinguishing between risky trading and the buying and selling on behalf of clients, the people said. Her involvement is speeding the writing of the rule, which some officials said could be finished as early as January, sooner than previously expected. Yet when Ms. Schapiro leaves her job as scheduled on Friday, the commission will be divided evenly along party lines between two Republicans and two Democrats. The Republican commissioners, Troy Paredes and Dan Gallagher, have repeatedly voiced concerns about the Volcker rule, echoing the protests of banks. That means it might not be able to pass its version of the rule until a new commissioner is approved by the Senate, which could take months.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616009","date":"2012-12-16","texts":"NEW YORK--U.S. stock exchanges are set to repeat as global leaders in IPO capital-raising this year. But bankers might find little cheer in the tally, as global offerings fell sharply, and the U.S. market only narrowly topped last year's totals. The value of initial public offerings on the New York Stock Exchange and the Nasdaq Stock Market stood at 47.1 billion through Friday, the highest annual amount since 2007, according to Dealogic. But the number of deals is virtually flat from last year--144 compared with 146--and little if anything is left on this year's calendar. Still, even without the 16 billion IPO from Facebook Inc.--fully one-third of U.S. IPO proceeds--the U.S. market would have raised more than double that of second-place China, which raised 14 billion this year. China was in a dead heat with the U.S. last year, and led all countries in 2010 in funds raised. Japan joins the top three for the first time since 2004, raising 12.5 million, following Japan Airlines Co.'s 8.4 billion September IPO, the second-largest deal of the year globally. Hong Kong, which has ranked in the top three positions since 2001, raised 6.7 billion, sliding to the No. 5 slot for the year, even including People's Insurance Co. Group of China Ltd.'s 3.1 billion deal late last month. Amid headline risk and numerous very real issues, including the election, that tend to cause volatility, the U.S. market was generally constructive throughout the year, enabling a relatively broad range of types and sizes of companies to go public, said Matthew Sperling, head of equity advisory for North America at Rothschild, an investment bank and advisory firm.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617230","date":"2012-12-17","texts":"As 2012 comes to a close, the U.S. economy is also turning a page The recovery is over. It looks like 2013 will be the start of a more normal, though hardly robust, period of growth. For Americans struggling in the still-slow economy, that is both good news and bad. The risk of another recession is diminishing, at least if leaders in Washington can steer clear of the fiscal cliff. But so are the prospects for a period of rapid growth that brings down the unemployment rate and helps the economy make up the ground lost in the recession. Technically, the recovery ended in late 2011 when economic output, adjusted for inflation, returned to its prerecession peak. But on a per-capita basis, gross domestic product still hasn't rebounded to its 2007 high, and by most other measures the economy has remained mired in its postrecession doldrums. For more than three years after the recession ended in June 2009, unemployment remained high, the housing market was depressed, and every economic speed bump brought renewed fears of another recession. That is poised to change in 2013. Home prices are finally rising again in much of the country, and construction activity is slowly picking up. Job growth has stabilized at about 150,000 jobs per month, and unemployment, though still elevated, dropped below 8 in September and has continued to fall. If current trends continue, per capita output will surpass its prior peak sometime next year. The economy is far from fully healed. The combined net worth of U.S. households remains 12 below its pre-recession peak, after adjusting for inflation.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614295","date":"2012-12-21","texts":"WASHINGTON--House and Senate leaders called for a return to negotiations to resolve the fiscal cliff before the year ends, but they continued to blame each other for the lingering impasse. The posturing came a day after House Speaker John Boehner R., Ohio saw his Plan B alternative to avoid tax increases collapse in the House due to opposition in his own party. Instead of making hard choices or compromising, as President Barack Obama has been willing to do, Speaker Boehner retreated to his corner and resorted to political stunts, Senate Majority Leader Harry Reid D., Nev. said in a Senate floor speech. Mr. Boehner, meanwhile, at a press briefing earlier Friday said while he was ready to continue negotiations it was up to Mr. Obama and the Senate to come up with a plan. Republicans don't want taxes to go up, Mr. Boehner said. But we only run the House. Democrats continue to run Washington. Senate Minority Leader Mitch McConnell R., Ky. likewise pointed to Mr. Obama, also speaking from the Senate floor. Look, it's the president's job to find a solution that can pass Congress. He's the only one who can do it, Mr. McConnell said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617279","date":"2012-12-21","texts":"When Cherie and Brian Lowe of suburban Indianapolis threw a party last spring, 150 well-wishers came bearing casseroles. This was no birthday or anniversary bash. Mr. Lowe, a lawyer, and Ms. Lowe, a stay-at-home mom, both 36 years old, were celebrating an accomplishment paying off 127,482.30 in debt, mainly student loans. Partygoers came from as far as 200 miles away. Some had never met the Lowes but followed their quest through a blog called Queen of Free. Guests won prizes such as personal-finance books, museum passes and homemade cleaning supplies. One friend sang Sallie Mae Is Not My Lender to the tune of Michael Jackson's Billie Jean. Americans are struggling with student loans like never before. Outstanding student-loan debt hit a record-high 956 billion in the third quarter, and 11 of student-loan balances were at least 90 days behind on payments, according to the Federal Reserve Bank of New York. Some borrowers are fighting back, using a combination of extreme frugality and extra part-time jobs. And a few who win the battle by retiring their bills early are marking the triumph in style.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615102","date":"2012-12-24","texts":"Federal agencies are examining allegations that Regions Financial Corp. improperly classified loans that went bad during the financial crisis, according to depositions filed as part of a civil lawsuit against the large southeastern U.S. bank. The new government inquiries about Regions Financial include subpoenas from the Securities and Exchange Commission, Regions Chief Financial Officer David Turner said in a July 20 deposition. Another former executive testified on Sept. 17 that the Federal Reserve had deposed him about the bank's practices, and he answered additional questions from the Federal Bureau of Investigation, the Alabama Banking Commission and the Special Inspector General for the Troubled Asset Relief Program, or SigTarp, the federal watchdog created to oversee the government's investments in troubled financial companies. Regions Financial, SEC, the Federal Reserve, FBI, SigTarp and the Alabama Banking Commission declined to comment. Mr. Turner declined to comment through a Regions spokeswoman. The depositions -- unsealed by a federal judge in the company's headquarters city of Birmingham, Ala., earlier this month -- indicate widening U.S. scrutiny of the lender as regulators and federal investigators step up their surveillance of the methods banks use to classify loans or reserve for losses. Two transcripts filed earlier this month in a separate civil lawsuit against Bank of America Corp.'s Countrywide Financial unit show the SEC asked employees about the repurchase of defective loans Countrywide sold to investors before the housing bust. Both Bank of America and the SEC declined to comment.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616179","date":"2012-12-24","texts":"The Federal Reserve's intensified campaign to push mortgage rates lower has hit a wall, in part because a shift in the lending landscape has made some banks unable, or unwilling, to pass along cheaper credit. Since the Fed began buying mortgage-backed securities to lower interest rates four years ago, rates on 30-year fixed-rate mortgages have fallen nearly three percentage points and averaged 3.37 last week, according to Freddie Mac. While current rates are the lowest in generations, some economists argue that they should be even lower -- perhaps 2.8 based on the historical relationship between mortgage rates and yields on mortgage-backed securities. The economists posit that banks are keeping the rates artificially high, boosting profits and depriving the economy of the full benefit of the Federal Reserve's efforts. No bank-by-bank survey on the matter has been conducted. But some lenders say they are simply making a fair rate of return on a business that has much higher fixed costs than it used to. We have a different cost structure now, said Stewart Larsen, who runs the mortgage banking division of Bank of the West. Lenders profit on the gap, or spread, between their cost of obtaining money and the rate they charge when lending it out. Before the financial crisis, this spread averaged around 0.5 percentage point and widened to about 1 percentage point in the years after 2008. In October, after the Fed embarked on a new round of mortgage bond purchases, the spread leapt to 1.6 points and currently is hovering around 1.3 points.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613674","date":"2012-12-28","texts":"For home buyers, 2012 was the year of the jumbo, jumbo mortgage. Private jumbo loans start after 417,000 in most parts of the country-- or exceed 625,500 in pricey metro areas like New York and San Francisco. But lenders say they've been doling out loans that far exceed these amounts. We see quite a bit of volume over 1 million . . . which did increase this year, says Brad Blackwell, portfolio business manager for Wells Fargo's home-mortgage unit. Overall, lenders distributed 148 billion of private jumbos over the first nine months of the year, up 23.3 from the same period a year ago, according to data compiled by Inside Mortgage Finance, a trade publication. Originations for the year are on pace to be the highest since 2007. The jumbo surge overlaps with a spike in luxury real-estate sales. For much of the year, sales of existing single-family homes priced at 1 million or more have been on the rise. In November, sales volume increased 52 from a year prior, according to the latest data by the National Association of Realtors.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614136","date":"2012-12-28","texts":"Unusual explicitness from Japan's new leaders has helped convince the market they are serious about weakening the yen to revive the nation's embattled exporters, but such moves threaten to complicate Tokyo's relations with the U.S. and other major trading partners. Many central banks, including others in Asia as well as in Latin America, have been trying to keep their currencies from becoming too strong after the Federal Reserve and European Central Bank adopted super-loose monetary policies that have suppressed their currencies. Confronted by weakening domestic growth, nations around the world are trying to support their economies by boosting exports. Weaker currencies make a country's exports cheaper. Japan's latest signals mark a bid to help its exporters as the yen faces upward pressure from investors fleeing trouble spots. Senior Japanese officials, led by Prime Minister Shinzo Abe, have signaled they are determined to keep the dollar above 85 yen through further monetary easing and other bold measures. The dollar broke above 86 yen after Asian markets closed Thursday, hitting a 28-month high of 86.16 yen. The yen has since regained some ground, capitalizing on its status as a haven, after Senate Majority Leader Harry Reid D., Nev. warned the U.S. may go over the fiscal cliff. At Thursday's peak, the dollar had climbed about 11 this quarter.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616013","date":"2012-12-28","texts":"WASHINGTON--First Tennessee Bank, a unit of First Horizon National Corp., was the biggest borrower of short-term funds from the Federal Reserve during the fourth quarter of 2010, following a technology glitch, according to data released Friday. Based in Memphis, Tenn., the bank borrowed 1.017 billion on Nov. 24, 2010, the largest single loan during the period and bigger than any other bank's total borrowing. First Tennessee tapped the central bank's discount window once because of a technology glitch that halted the wire-transfer service between the bank and its regional Federal Reserve bank on the day before Thanksgiving in 2010. The technology problem disrupted the ability of the bank's bond broker-dealer to settle securities on the eve of a holiday, said the bank's corporate treasurer, Tommy Adams. In total, the banks borrowed 3.686 billion from the discount window from October 2010 through December 2010. That included many banks that borrowed money and rolled it over several days in succession. Many loans were for a single day. Although most of the discount-window borrowers were U.S.-based banks, some of the Fed loans were made to local branches of foreign banks. The New York unit of Spain's second largest bank, Banco Bilbao Vizcaya Argentaria SA, borrowed 200 million in the quarter, making it the third largest discount-window lender in the period. A spokeswoman couldn't immediately comment.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614908","date":"2012-12-31","texts":"Senate negotiations to craft a bipartisan budget deal proceeded in chaotic fits and starts Sunday, raising new questions about whether Congress would be able to steer the country away from the fiscal cliff. The center of gravity had shifted by day's end after talks between Senate Majority Leader Harry Reid D., Nev. and Senate Minority Leader Mitch McConnell R., Ky. reached an impasse. Mr. McConnell instead struck up talks with Vice President Joe Biden, a former Senate colleague with whom he has worked on bipartisan budget deals in the past. The two men planned to talk by phone into the night, a McConnell aide said. No details of their discussions were immediately available. The Senate had set itself a goal of hatching a deal by midafternoon Sunday, a deadline that slipped by as both sides instead bickered in public and tried to apportion blame for the continuing impasse. Mr. Reid recessed the Senate until Monday at 11 a.m. There is significant distance between the two sides, he said. There is still time left to reach an agreement and we intend to continue negotiations.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617153","date":"2012-12-31","texts":"New Year's Eve dawned with no solution to Washington's budget impasse, setting up a 24-hour scramble to determine whether lawmakers could do what they've promised for months engineer an alternative to the so-called fiscal cliff. What happens Monday could go some way to determining the short-term fate of the U.S. economy and the reputation of the government, both of which have been dinged by the spectacle of endless seemingly circular negotiations. Carrying the baton late into Sunday evening were Senate Minority Leader Mitch McConnell R., Ky. and Vice President Joe Biden. A spokesman for Mr. McConnell said Monday morning that the two men will continue to work toward a solution. In the past two weeks, at least three different sets of negotiation teams have sought a way out. On taxes, one of the thorniest issues on the table, the two sides appeared to be converging. U.S. President Barack Obama has called for raising individual income-tax rates on family income above 250,000. In the latest round of Senate talks, Republicans proposed a 550,000 threshold, which Democrats moved to 450,000, according to Sen. Dick Durbin D., Ill.. On the estate tax, Democrats are no longer insisting on an increased rate and instead have agreed to put the matter to a separate vote, which suggests current rates will likely continue. That's a concession to the GOP and a number of farm-state Democrats in the Senate. Absent action, rates on estates will jump and the threshold at which they would hit is set to fall.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613870","date":"2013-02-26","texts":"TORONTO--The Canadian dollar was slightly lower against its U.S. counterpart late Tuesday, after Federal Reserve Chairman Ben Bernanke signaled his support for continuing the Fed's easy money policies. The U.S. dollar was at C1.0263 late Tuesday, from C1.0260 late Monday, according to data provider CQG. Earlier Tuesday, the U.S. dollar traded at a new seven-month high against the Canadian dollar, as Mr. Bernanke reiterated his commitment to the Fed's bond-buying program, arguing that the benefits of stimulus still outweigh the risks. But the greenback's gains proved short-lived. Such bond-buying programs, quantitative easing as they are known, are generally seen as corrosive to a currency, because they are viewed in the market as printing money. Mr. Bernanke, delivering day one of his two-day testimony on monetary policy to Congress, defended the Fed's open-ended bond-buying program, saying the associated risks don't outweigh the benefit of promoting a stronger economic recovery and more-rapid job creation.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615652","date":"2013-02-28","texts":"The South African rand was the top decliner among emerging-market currencies Wednesday, hit by concerns about the government's budget forecasts and broader worries about political uncertainty in Italy and the U.S. On Wednesday, South Africa's government released budget figures that reaffirmed some of the biggest problems plaguing Africa's biggest economy, especially its budget deficit. The finance ministry revised its forecast for the budget deficit for fiscal year 2012-2013 to 5.2 of gross domestic product from 4.8, but some analysts said the deficit could surprise and come in even worse than that. There was also an upward revision in expected government revenues for this fiscal year, which might be too optimistic, analysts said. The fact is that the economy is running below potential. It's not a rosy background, said Guillaume Tresca, emerging market currency strategist at Credit Agricole. The rand slid 0.3 against the dollar, which traded at ZAR8.8472 Wednesday, according to CQG.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617087","date":"2013-03-05","texts":"New-Orders Index Is the Signal to Watch Lead, follow or get out of the way. That saying, oft-repeated by modern management blowhards, has some relevance for economic data. This month alone, there will be at least 80 indicators focused on just the U.S., most of which will be mined by investors for clues to the future. In reality, most of these are lagging indicators that follow. Few are legitimate leading indicators. The surveys published by the Institute for Supply Management fall firmly into the latter camp, especially if one looks beyond the headline figure. Tuesday's ISM nonmanufacturing report may provide an important all-clear for the U.S. economy. The headline index is seen barely changed at 55. It has been hovering right around that level since September -- clearly in expansion territory above 50.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616676","date":"2013-03-07","texts":"SAN ANTONIO--Federal Reserve Bank of Dallas President Richard Fisher on Wednesday blamed both major U.S. political parties for a horrid political climate in Washington, and said monetary policy alone can't drive the economy. We provided the fuel for economic recovery, Mr. Fisher said of the central bank, describing the Fed's stimulus as very high-octane, dirt-cheap gasoline. But he said that neither Republican nor Democratic politicians in Washington have done their part by putting policies in place that spur the private sector to take the cheap fuel that we have provided and step on the accelerator. He made the comments during a speech at an event in San Antonio, to honor Dick Evans, chairman and chief executive of CullenFrost Bankers Inc. Mr. Fisher, who isn't a voting member of the Federal Open Market Committee, has been an outspoken opponent of the Fed's easy-money stance, a fact he noted during his remarks Wednesday. He also reiterated his view that promotion of maximum sustainable job growth--one of the Federal Reserve's legal mandates--isn't possible using monetary stimulus alone.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616016","date":"2013-03-08","texts":"Every year, Amazon.com earns billions of dollars in revenue from its personalization technologies, such as product recommendations and computer-generated emails, that are estimated to account for as much as one-third of all sales. The amount of data needed to feed these tools is mammoth. But its value on Amazon's ledger Zero. Similar stories repeat across the economy. Google can answer search requests in three-tenths of a second because it indexes and stores multiple copies of the entire World Wide Web on its servers. Its search system can predict a query before it is fully typed based on aggregating the billions of searches it gets each day. And yet, though Google puts a value on its hardware, software, patents and research expenses, there is no good way to calculate the value of its data, even as it is central to the company's success. Big data -- the vast quantity of information now available thanks to the Internet, and which can be manipulated in ways never before possible -- is becoming a backbone of corporate performance and economic growth. Yet its value isn't well understood. One reason is accounting rules, which have trouble handling intangibles. Ephemeral things such as brands are usually counted as an asset when one is purchased, since there has been a market transaction to give it a monetary worth. They cannot easily be recorded on the books when a company develops them internally. This is usually the case with data, too. The stock market can capture some, but not all, of this sort of value. What is Facebook's 67 billion market capitalization, after all, if not a bet on the commercial usefulness of the information it holds on one-seventh of humanity But this presumes that investors in the aggregate are savvy enough to price into the shares the economic potential of the data's future earnings.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617337","date":"2013-03-19","texts":"Chesapeake Energy Corp. is seeking to sell 2.3 billion of senior notes and use the proceeds to retire more expensive debt. The natural-gas company said Monday it plans to issue the new notes to help redeem about 2.2 billion in outstanding debt, some of which was issued at relatively high interest rates when the Oklahoma City company had liquidity problems. The refinancing effort comes amid a push to trim spending and pare debt at Chesapeake, the nation's second-biggest natural-gas producer, after Exxon Mobil Corp. Chesapeake, which has a stock-market value of about 14.5 billion, was carrying 12.3 billion in debt at the end of last year. The company's debt increased to 16 billion last year as Chesapeake borrowed to stave off a liquidity crisis brought on by sinking natural-gas prices and the company's heavy spending. Chesapeake plans to spend about 4 billion more than its projected cash flow this year, a gap the company aims to plug with funds from asset sales, which might also help trim debt. But demand for natural-gas properties is soft, so a material reduction in debt may be hard to achieve, investment bank Tudor, Pickering, Holt & Co. said in a research note Monday.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613960","date":"2013-03-20","texts":"Workers across the country are seeing the length of their jobless benefits pared back, a shakeout that is playing out unevenly and pinching people in states still struggling with unemployment above the national average. The changes in benefits are partly the result of an improving job market but are also due to budget pressures at the state and federal level. In Michigan, one of the states hardest-hit by the economic downturn and where unemployment remains close to 9, job seekers will soon receive less than a year of benefits for the first time since the recession hit in 2007. Michigan, which like many states offered 99 weeks of state and federally funded benefits at the peak of its jobs crisis, will become the 19th state to offer less than a year of payments to new claimants for jobless benefits. Nine other states offer more than a year but less than 60 weeks. More changes are coming North Carolina recently passed a law that will cut benefits to 20 weeks starting in July. John Rowloff, a single father of two teenagers in Monroe, Mich., got the last of his unemployment checks earlier this year but says he has seen little improvement in the local labor market even as the state's official jobless rate has fallen to 8.9 from as high as 14.2 in 2009.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615943","date":"2013-03-23","texts":"Junk continues to beat quality on Wall Street. Nearly four years after the end of the recession of 2007-09, it should be the other way around. The Federal Reserve's monetary stimulus is a big reason for this unexpected outcome. Because the Fed's easy-money policies won't continue indefinitely, however, investors might want to begin reducing their holdings of low-quality stocks -- which will be among the biggest casualties when the Fed turns off the spigot. The Fed policies have distorted the markets because they encourage risk-taking. Through its quantitative-easing programs of injecting money directly into the economy, and by keeping short-term interest rates close to zero, the Fed has discouraged investors from keeping their money in conservative savings accounts and created powerful incentives for them to put more money into stocks. So-called junk stocks -- the ones that have been the biggest beneficiaries of the Fed's policies -- are those of companies that otherwise would run the greatest risk of going bankrupt. They tend to be loaded with debt and have poor balance sheets. Even worse, they also tend to have inconsistent and unpredictable earnings.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616291","date":"2013-03-28","texts":"The Canadian dollar was mostly unchanged against the U.S. dollar after a mixed round of economic data in the U.S. and Canada. The U.S. dollar was at C1.0154 Thursday morning, from C1.0159 right before the data and C1.0161 late Wednesday, according to data provider CQG. Canada's economy grew at a 0.2 rate in January, slightly ahead of expectations of a tepid 0.1 pace. The U.S. economy, meanwhile, advanced at a 0.4 annual rate between October and December, revised upward from last month's reading of 0.1 growth. The Canadian dollar, which initially edged higher right after the release of the data, returned swiftly to its previous levels shortly afterward. The loonie's brief gains were tempered by a weaker reading of U.S. jobless claims which increased by 16,000 to a seasonally adjusted 357,000 in the week ended March 23. It was the second week in a row that saw an increase in jobless claims, a possible sign that the U.S.'s labor market may have lost a bit of momentum. The Canadian dollar was largely flat in overnight trading, despite a 2.8 fall in China's equity market, a soft German unemployment report and the re-opening of banks in Cyprus, albeit with substantial capital controls in place.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614290","date":"2013-03-29","texts":"City Council Speaker Christine Quinn agreed Thursday to back a deal on long-stalled legislation that would require New York City businesses with 20 or more employees to provide five paid sick days beginning next year. Throughout these negotiations I have always said that I was willing to listen and engage all sides, Ms. Quinn said Thursday evening. We now have a piece of legis lation that balances the interests of workers, small-business owners and local mom-and-pop proprietors across this city. Ms. Quinn's decision to sign onto the legislation comes amid escalating pressure on the front-runner in the Democratic mayoral primary. The liberal wing of her party largely backed the legislation and criticized her unwillingness to put forward the measure for a vote. The legislation would mandate that businesses with 20 employees or more provide five paid sick days beginning on April 1, 2014. Those with fewer workers would be required to offer at least five unpaid sick days with job protection. Beginning Oct. 1, 2015, the law would expand to require five days of paid sick leave at businesses with 15 or more employees.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617317","date":"2013-04-01","texts":"The idea that American manufacturing is on the cusp of a renaissance is everywhere these days -- except in the hard numbers. It's true that industrial production has grown twice as fast as the economy as a whole in this recovery, and manufacturers are adding jobs again. But economists see those gains as too small relative to what was lost in previous years to suggest a full-blown revival. Factories fell so hard, the logic goes, some gains are a given. There's simply no statistical evidence of a broader renaissance at this point, says Daniel Meckstroth, chief economist with the Manufacturers Alliance for Productivity and Innovation, an Arlington, Va., group that represents mostly large U.S. producers. Mr. Meckstroth says measures that look deeper inside the sector continue to flash warning signs. Take factory closings. For the past 13 years, the rate factories have been closing has been declining. That's good. The trouble is the rate of openings has been falling even faster. Simply put, America's factories are dying faster than they're being born. To be sure, many U.S. manufacturers are doing better than they have in some time. That's visible in hiring. Manufacturers have added more than 500,000 jobs since early 2010, and Monday's report from the Institute for Supply Management is expected to show manufacturers continued expanding in March. But those gains pale compared with the deep hole created during the recession and just before it U.S. factories lost nearly 5.7 million jobs from 2000 to 2010.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616453","date":"2013-04-02","texts":"Treasury bond prices pulled back, ending a seven-session winning streak, as a government report signaled that the U.S. economic recovery remained on track. The Commerce Department on Tuesday reported that U.S. orders for machinery and other factory goods rose 3 in February, a showing that was slightly better than expected. The government also revised up the January reading for factory orders and indicated that business confidence was stronger than expected. Bond investors also took their cues from strength in global stock markets. U.S. investors pushed the major benchmarks to new highs, buoyed by strong gains in European markets. In Asia, the Japanese stock market recouped most of its early losses and Hong Kong closed on a higher note. The 10-year Treasury note was 632 lower in price in late-afternoon trading, yielding 1.861. The yield was up from Monday's close at 1.842, a two-month low. The 30-year bond was down 1132 in price, yielding 3.102. Bond prices and yields move in opposite directions. This showed a global sentiment that, while we will have some hiccups along the way, the overall trajectory for the global recovery remains for higher growth, said Millan Mulraine, director of U.S. rate strategy at TD Securities.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615889","date":"2013-04-05","texts":"The FX Global Call covers the main news events affecting foreign-exchange markets in Asian and European trading hours, as selected by DJ FX Trader editors in New York, London and Singapore, as well as other hot spots when warranted. 1. The fallout from the Bank of Japan meeting continues. The yen traded above 97 to the dollar, its weakest in three years. The prospect of massive central bank bond-buying has sent Japanese Government Bond yields to all-time lows. Investors appear to be rotating out of Japanese debt and into Europe, Neelabh Chaturvedi reports. The yield on the benchmark 10-year French government bond fell 0.09 percentage point from Thursday's close to a record low of 1.79 while the corresponding Italian bond yield eased 0.09 percentage point to 4.48, the lowest level since Feb. 25, according to Tradeweb. 2. The yen may have another dramatic move in it today if monthly U.S. payroll data surprises the market. Economists have an average forecast for 200,000 jobs added in March, with the unemployment rate expected to hold steady at 7.7. If the numbers are good, it will further raise the odds of the Federal Reserve winding down its easing program, just as Japan is stepping on the gas. 3. The Korean won and Malaysian ringgit continued their recent trends, with the won at its weakest in seven months against the dollar and the ringgit at its strongest in two months. Investors are selling the won as North Korean tensions rise, while the ringgit's strength is tied to the government's improving chances of surviving elections likely to be held at the end of April. 4. Coming up in the U.S. Friday","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615057","date":"2013-04-16","texts":"Treasury prices were lower as a slew of economic reports suggested the country's economy fared better in March than expected, bolstering investor appetite for riskier assets. Construction of new homes rose 7 in March to a seasonally adjusted annual rate of 1.04 million, the Commerce Department said Tuesday, which was the highest level since June 2008. Economists surveyed by Dow Jones Newswires had forecast housing starts would rise 1.7 to a rate of 933,000. February's figures were revised sharply higher to a rate of 968,000. The housing market report is important, because housing remains one of the key pillars of strength for the recovery, said Millan Mulraine, director of U.S. Rate Strategy at TD Securities. To the extent that housing continues to chug along despite the weakness around, it is encouraging. Yields for Treasurys drifted lower from Monday late afternoon, when blasts in Boston triggered a flight to safety and drove prices higher. The benchmark 10-year Treasury note was down 532 to yield 1.717 at 3 p.m. EDT, according to Tradeweb. The 30-year-bond lost 1432 to yield 2.901. Bond prices move inversely to yields. In addition, U.S. industrial output increased 0.4 last month, beating the consensus of a 0.2 gain, according to a Federal Reserve report. The better-than-expected figures were entirely due to robust utility production, thanks to the cold weather.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613845","date":"2013-04-24","texts":"Nasdaq OMX Group Inc. plans to set aside 10 million in anticipation of settling a regulatory investigation into its handling of Facebook Inc.'s stock-market debut, according to people familiar with Nasdaq internal discussions. The move follows months of back-and-forth between the exchange operator and the Securities and Exchange Commission over technical errors that plagued Facebook's public offering on the Nasdaq Stock Market almost a year ago. A penalty near 10 million would be the biggest imposed by the SEC on a stock exchange and just the second time the regulator has fined a bourse. Nasdaq executives had been angling for a settlement closer to 5 million, according to people involved in the discussions. As talks with the SEC advanced and the regulator focused on a higher amount, Nasdaq executives, including Chief Executive Robert Greifeld, showed a willingness to pay up to move on, according to people involved in the discussions.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616067","date":"2013-04-26","texts":"What with the low bar that analysts typically set for them, it shouldn't be a shocker that companies' first-quarter earnings are clearing estimates. But the margin that they're clearing them by is pretty impressive. With results from about 271 of companies in the index already in, first-quarter earnings for companies in the S&P 500 are now on track for a gain of 3.6 versus a year ago, according to S&P Capital IQ. That isn't very strong, but it is much better than the 0.5 that analysts were looking for at the start of this month. And given that about half the companies in the index have yet to report, and that they, too, will likely top estimates, actual earnings growth will likely be higher still. Sales-growth figures, on the other hand, have been going the other way. As of Friday, S&P 500 revenue was on track for a gain of 1.4 versus a year ago. At the beginning of the month, that gain was pegged at 4. Another sign of the divide between what's happening to the top and bottom lines Only 43 of companies have topped revenue estimates thus far, compared with 70 for earnings. The decline in revenue-growth expectations isn't as bad as it seems at first blush, however. Much of it is concentrated in the energy and basic materials sectors, and reflects a decline in commodity prices that is helping drive down costs to other companies, as well as consumers. And once again, the overall weakness in revenue seems concentrated in companies' foreign, rather than domestic, operations. Some evidence for that Friday's gross domestic product report for the U.S. showed that final sales to domestic purchasers were up 3 in the first quarter. Since large public companies, if anything, tend to generate better sales growth than the overall economy is experiencing, it is pretty clear that overseas sales are the real weak spot.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616684","date":"2013-04-27","texts":"Last Sunday, in response to the budget sequester, the Federal Aviation Administration began a forced-furlough policy for its air-traffic controllers. Now, to a roster of delayed flights, unexpected fees, farcical movie selections, disintegrating earphones, confiscated honey jars in the shape of cute little bears and cracked elbows caused by injudiciously manipulated beverage carts, the airline industry has added delayed or canceled flights triggered by the federal deficit. Almost unimaginably, the unfriendly skies have managed to get even less friendly. What would it be like if other businesses operated on the same principles as airlines Size 11 shoes would shrink to size 10, then to size 9, and ultimately all the way to size 4. Only first-class pedestrians would be sold shoes that fit them everyone else would have to squeeze into fraying bootees. Intractable demands by the cobblers' union would be tabbed as the culprit. Cardiologists would commandeer the public-address system to announce that they had overbooked open-heart procedures. They would offer a free quadruple bypass operation, valid for one year, to anyone willing to cede his place in line to the next customer. If they got no takers, they would offer two bypasses and a 50 discount on the patient's next four stents. Dentists would announce that until further notice all wisdom-tooth extractions would be conducted without anesthesia, owing to furloughed dental assistants. Psychiatrists would begin offering frequent psychotic-episode plans that they would then refuse to honor due to mysterious restrictions concealed in the fine print of the agreement.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616926","date":"2013-04-27","texts":"It's an article of faith among many investors that they should only buy mutual funds sporting the best long-term performance. Yet one of the best methods for picking mutual funds ignores the longer term altogether. Among the dozens of stock mutual-fund advisory services tracked by the Hulbert Financial Digest over the past two decades, the best performer is one that focuses only on returns over the previous 12 months -- and it places special emphasis on returns over the trailing one, three and six months. This service -- entitled No Load FundX and edited by Janet Brown -- has produced an 11 annualized return over those two decades, versus 8.6 for the overall stock market. The somewhat surprising investment implication It pays to avoid mutual funds whose recent performance has begun to slip, no matter how good their performance might have been in previous years. Similarly, it pays to favor funds with stellar recent returns, even if their longer-term performance is dismal. Consider a study of more than 300 funds that focus on the broad stock market as opposed to individual sectors, conducted by FundX Investment Group, a mutual-fund company affiliated with Ms. Brown's service. The funds were picked because they have existed for at least a couple of decades, but Ms. Brown says the strategy could also work with exchange-traded funds.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614172","date":"2013-04-30","texts":"LONDON--Anheuser-Busch InBev NV lost momentum in its major markets, though price increases for its top lagers helped support profit in the first three months of 2013 for the world No. 1 brewer by sales. InBev's total volumes, excluding acquisitions and disposals, fell 4.1 in the three months to March 31, compared with 1.8 growth in the same period last year, hurt by poor weather, higher fuel prices and tax rises, the company said. Total demand in North America fell 5, from 1.2 growth last year--when falling unemployment among blue-collar U.S. workers helped U.S. beer sales rebound as the economy improved, growing for the first time since 2008. In North Latin America, including Brazil, volumes fell 5.8, compared with 4.8 growth a year earlier. The Leuven, Belgium-based maker of Budweiser generates three-quarters of its operating profit from the U.S. and Brazil. However, colder weather, higher gas prices and tax increases cut household spending and led to a drop in domestic U.S. beer shipments in the three months to Feb. 13, according to the Beer Institute, an industry body. InBev also warned in February of weaker trading in Brazil due to the earlier Carnival holiday period and the impact of price increases taken in the second half of last year, and last week rival Heineken NV warned of a slowdown in Brazil. Inbev will extend its Americas business with the 20.1 billion purchase of Mexico's Grupo Modelo SAB in a deal that adds Corona Extra, the No. 1 imported brand in the U.S., to InBev's stable of beers in a deal expected to complete in June. It also allows InBev to push Budweiser brands south of the border, underscoring the importance of Mexico as one of several high-growth markets for InBev. Net profit rose to 2.05 billion from 1.67 billion a year earlier, helped by hedging gains related to the Modelo deal. Revenue fell to 9.17 billion from 9.33 billion because of a weaker dollar even as InBev pushed through price increases. AB InBev's closely watched earnings before interest, taxes, amortization and depreciation fell to 3.43 billion from 3.56 billion.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617032","date":"2013-04-30","texts":"WASHINGTON--Loretta Fredy Bush, once an American success story in China, was sentenced Monday to one month in prison for a U.S. tax violation after her lawyer cited health problems in pleading for lenience. Ms. Bush, a founder and former chief executive of Chinese financial-information conglomerate Xinhua Finance, had sought to avoid prison time and appeared visibly upset when leaving the courtroom. Two associates were each sentenced Monday to nine months in prison. Prosecutors had been seeking sentences of between six and 12 months for each of the defendants. All three were fined 20,000 each. This kind of behavior is not who I am, Ms. Bush told U.S. District Judge Royce Lamberth. Judge Lamberth suggested that letting Ms. Bush and the others go without prison sentences would send the wrong public message about the consequences of violating U.S. tax laws. It's a serious problem, he said. Court submissions from Ms. Bush's defense team portray a woman who has largely withdrawn from the business world since mid-2010. At that time, Ms. Bush had a grandson born with daunting medical problems and she provides daily care for the child, lawyers said. They said Ms. Bush, who now lives in the San Francisco Bay Area, also had encountered serious vision problems that impaired her ability to read and travel.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614495","date":"2013-05-07","texts":"MUMBAI--Indian shares closed at their highest level in more than three months Tuesday, lifted by sustained buying by foreign funds in front-line stocks such as cigarette maker ITC and ICICI Bank. The Bombay Stock Exchange's S&P BSE Sensex index gained 215.31 points, or 1.1, to close at 19888.95 points -- its highest level since Jan. 31. The National Stock Exchange's Nifty index rose 72.50 points, or 1.2, to end at 6043.55. The gains in the stock market and strong dollar inflows, which dealers said were likely related to a corporate deal, lifted the local currency against the U.S. dollar. At 1120 GMT, the dollar was quoted at 54.12 rupees, compared with 54.18 rupees in Asia late Monday. Dealers said the dollar inflows were most likely related to Qatar Foundation Endowment's deal announced last week to buy a 5 stake in Indian telecommunications major Bharti Airtel for 1.26 billion. Global liquidity is chasing emerging-market stocks and India seems to be one of the top beneficiaries, said Nilesh Karani, assistant vice president for research at Magnum Equity Broking.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616019","date":"2013-05-10","texts":"The Federal Reserve recently announced that it will increase or decrease the size of its monthly bond-buying program in response to changing economic conditions. This amounts to a policy of fine-tuning its quantitative-easing program, a puzzling strategy since the evidence suggests that the program has done little to raise economic growth while saddling the Fed with an enormous balance sheet. Quantitative easing, or what the Fed prefers to call long-term asset purchases, is supposed to stimulate the economy by increasing share prices, leading to higher household wealth and therefore to increased consumer spending. Fed Chairman Ben Bernanke has described this as the portfolio-balance effect of the Fed's purchase of long-term government securities instead of the traditional open-market operations that were restricted to buying and selling short-term government obligations. Here's how it is supposed to work. When the Fed buys long-term government bonds and mortgage-backed securities, private investors are no longer able to buy those long-term assets. Investors who want long-term securities therefore have to buy equities. That drives up the price of equities, leading to more consumer spending. But despite the Fed's current purchases of 85 billion a month and an accumulation of more than 2 trillion of long-term assets, the economy is limping along with per capita gross domestic product rising at less than 1 a year. Although it is impossible to know what would happen without the central bank's asset purchases, the data imply that very little increase in GDP can be attributed to the so-called portfolio-balance effect of the Fed's actions. Even if all of the rise in the value of household equities since quantitative easing began could be attributed to the Fed policy, the implied increase in consumer spending would be quite small. According to the Federal Reserve's Flow of Funds data, the total value of household stocks and mutual funds rose by 3.6 trillion between the end of 2009 and the end of 2012. Since past experience implies that each dollar of increased wealth raises consumer spending by about four cents, the 3.6 trillion rise in the value of equities would raise the level of consumer spending by about 144 billion over three years, equivalent to an annual increase of 48 billion or 0.3 of nominal GDP.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614898","date":"2013-05-13","texts":"From hero to zero in just 10 days May's selloff has seen year-to-date gains for holders of U.S. Treasurys, German bunds and U.K. gilts wiped out and turned to losses. Some are asking if this is a definitive turning point for the bond market after its 30-year bull run. It isn't clear yet that global yields have hit bottom--but it is clear that bonds are becoming hypersensitive to the smallest twists and turns in the economy. The turn in mood has been sharp. On May 2, after the European Central Bank cut rates and hinted that it might yet push the rate on its deposit facility into negative territory, 10-year German yields hit a record low around 1.15 U.S. yields were at a low for the year of 1.63. But since then, a better-than-expected U.S. jobs report, some encouraging German industrial data and a brewing debate about how and when the U.S. Federal Reserve might wind down its bond-purchase program have pushed yields sharply higher, to 1.36 in Germany and 1.92 in the U.S. Gilt yields have broadly tracked Treasurys. But none of the data yet suggest an economy that is standing on firm ground U.S. payrolls growth of 165,000 in April was better than expected, but hardly stellar, albeit prior months were also revised upward. Better data for Germany is welcome, but is unlikely to pull the euro zone as a whole out of its extended slump. Other indicators continue to suggest a soft patch. Most significantly, key measures of inflation have been falling, which should be bond-friendly In the U.S., the core Personal Consumption Expenditure measure, the Fed's favored inflation gauge, has dropped to 1.1, while euro-zone inflation is estimated at 1.2 in April, down from 1.7 in March. And since the start of May, the ECB, the Danish central bank, the Reserve Bank of Australia, the Reserve Bank of India, the National Bank of Poland and the Bank of Korea have all cut rates--between them accounting for some 23 of world GDP, notes Deutsche Bank. Further falls in inflation may yet scotch talk of tapering bond purchases in the U.S. In the euro zone, the ECB may yet become more dovish. And the full effects of the Bank of Japan's new activism have yet to be seen--although Japanese net purchases of foreign bonds have now turned positive, another potential support for U.S. and European markets. Still, the violence of May's selloff suggests that with yields at such low levels, investors are very sensitive to any data that goes against expectations and are very quick to try to judge what that means for central-bank policy. That means more volatility lies ahead. Investors should watch out.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614118","date":"2013-05-16","texts":"A so-so first-quarter earnings season hasn't dented investors' enthusiasm for stocks. Profit at large U.S. companies modestly exceeded Wall Street analysts' expectations, while revenue was weak and many companies ratcheted down growth projections. But stock prices have been rising, with the Dow Jones Industrial Average up 16 for the year and 4.2 since earnings season began April 8 with a mixed report from aluminum company Alcoa Inc. The developments have added up to a rise in stock-market valuations. The priceearnings ratio on the Standard & Poor's 500-stock index now stands at 14.5, its highest level since 2010. Stock-rally skeptics said that spells trouble. They contend soft U.S. economic growth and expanding PE multiples can't coexist forever. Economists predict U.S. gross domestic product will expand at a slower rate in the second quarter than the first, when it increased at a 2.5 annual rate. Government spending cuts known as the sequester came into effect March 1. The Labor Department said Thursday that initial jobless claims increased by 32,000 to a seasonally adjusted 360,000 in the week ended May 11, the largest one-week gain since November.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616757","date":"2013-05-16","texts":"BANGKOK--Fifteen years ago, Thailand and other Asian countries let their currencies slide, using cheap exports to help lift them out of a devastating economic slump. Today, Thailand's currency is soaring, and some of its tycoons are going on a buying spree. As Japan has moved to drive down the yen to power up its own exports, billions of dollars in funds have flowed into Thailand and other emerging markets in search of higher yields. That is pushing up the value of local currencies against major global counterparts such as the U.S. dollar and Japanese yen. It also is giving businesses a new, and sometimes perplexing, opportunity purchasing power. The Thai baht has risen as much as 6 against the dollar since the beginning of the year and many economists predict further gains, leading some businessmen to reckon the best response is to borrow heavily in dollars to expand their businesses. Chief among them is Dhanin Chearavanont, who turned a seed business into Thailand's largest conglomerate, making himself the country's richest man in the process. Earlier this year, the 74-year-old Mr. Dhanin completed the purchase of Chinese insurance firm Ping An for 9.4 billion. His Charoen Pokphand Group is now bidding 6.6 billion for Thai discount wholesaler Siam Makro in what is shaping up as another Asian megadeal.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615352","date":"2013-05-23","texts":"Stocks in the U.S. fell, but they mostly shook off a global selloff sparked by worries over Federal Reserve action and weak growth in China. The Dow edged down 12.67 points, or 0.1, to 15294.50. The blue chips fell sharply immediately after the opening bell, but they drifted into positive territory for much of the afternoon. Hewlett-Packard led the nine gainers in the 30-stock average, rallying 17 after reporting core profits that beat Wall Street expectations after Wednesday's close. The Standard & Poor's 500-stock index shed 4.84 points, or 0.3, to 1650.51, and the Nasdaq Composite Index edged 3.88 points lower, or 0.1, to 3459.42. Global stock markets dove Thursday, following a whipsaw Wednesday session in the U.S. sparked by conflicting messages from the Federal Reserve on when it might roll back bond purchases. But U.S. shares were ultimately insulated from the worst of the losses. The S&P 500 dropped 1.1 over two days--its first string of declines since April 18--a fall overshadowed by Thursday's 7.3 selloff of Japanese stocks and 2.1 decline in European shares. The S&P has gained 3.3 this month.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613977","date":"2013-05-31","texts":"The FX Global Call covers the main news events affecting foreign-exchange markets in Asian and European trading hours, as selected by DJ FX Trader editors in New York, London and Singapore, as well as other hot spots when warranted. 1. Risk-off is the words of the day, with investors selling stocks, emerging-market currencies, Italian bonds and more. A familiar hierarchy of safe havens is returning to the market, with the euro, Australian dollar and U.K. pound falling against the dollar, while the dollar sinks against the yen and Swiss franc. The selling started in Asia, but weak economic data out of the euro zone didn't help lift the mood. 2. Emerging-market currencies are getting hit hardest, with the South African rand pushing further above 10 to the dollar and the Turkish lira sinking to 17-month lows. Investors have two reasons to sell today, as they worry that the U.S. recovery will lead to the Fed shutting down easing, and that slower growth elsewhere will weaken the finances of emerging economies. Steep losses in May could be just the beginning, with the plunging rand offering clues of what's to come, says Societe Generale's Kit Juckes. As Fed policy reaches the mildest of turning points, emerging market assets are vulnerable across the board, the rand being the first of what I suspect will be a series of dominoes to fall over, he said. 3. Even the yuan is falling, with many investors seeing reduced growth in China as the source of emerging markets' woes. While the government once again nudged its official exchange rate higher, investors are opting to push it lower. The yuan traded Friday at 6.1345 per dollar, from 6.1309 on Thursday, while the government fixed it at 6.1796, from 6.1820. 4. Coming up in the U.S.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613891","date":"2013-06-05","texts":"MUMBAI--Indian shares snapped three days of losses Wednesday on gains in energy and metals stocks, even as Asian and European stocks dropped on worries over tighter money supply. The Bombay Stock Exchange's S&P BSE Sensex index opened lower, but recovered in the afternoon session to end higher by 22.44 points, or 0.1, at 19568.22 points. The National Stock Exchange's Nifty index rose 4.40 points, or 0.1, to 5923.85. The movement in India's markets was in contrast to most Asian and European markets. Japanese stocks slumped after Prime Minister Shinzo Abe dodged tough decisions needed to fix the country's economy while outlining . Most markets in Asia, including in India, hit a one-month law this week, mainly on worries that the U.S. Federal Reserve may curb sooner than anticipated its 85 billion-a-month bond purchases. The U.S. stimulus has been a major source of funds for investment in emerging markets such as India. Shares of Indian companies are trading at 15 times their earnings per share for fiscal 2014, which is near their long-term average, said Dipen Shah, head of private client group research at Mumbai-based Kotak Securities.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616049","date":"2013-06-07","texts":"HYDERABAD, India--A weakening rupee doesn't necessarily mean Indian exports are becoming more competitive, the central bank governor said Friday, a day when the local currency fell to a nearly one-year low against the dollar. It is somewhat misleading to believe that we can get export competitiveness from our exchange rate, Duvvuri Subbarao said at an event in the southern Indian city of Hyderabad, referring to a sharp drop in the rupee's value against the dollar. The rupee is down nearly 6 against the dollar since the beginning of May. On Friday, the rupee tumbled to 57.12 against the dollar--its lowest level in nearly a year and close to the all-time low of 57.33 hit on June 22, 2012. The rupee and many other currencies are hit because of a global rush to buy dollars as the U.S. economy shows signs of a revival in growth. Concerns over India's gaping current-account deficit worsened the local unit's fall. Mr. Subbarao's comments debunk observations by some economists that the rupee's weakness has a silver lining as it makes Indian exports more competitive, while also discouraging nonessential imports because of higher cost.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615482","date":"2013-06-16","texts":"TORONTO--The Canadian dollar is ending modestly lower Friday after recouping earlier losses instigated by weaker-than-expected manufacturing data. The U.S. dollar is trading at C1.0175 Friday from C1.0156 late Thursday, according to data provider CQG. While trading was relatively volatile, with the U.S. dollar sinking to C1.0136, 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. We're kind of stuck here. We're closing the week almost where we started, said Camilla Sutton, chief currency strategist at Scotiabank. 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.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617363","date":"2013-06-17","texts":"MUMBAI--Indian shares were slightly lower in early trading Monday, with investors cautious ahead of the central bank's key rate-setting meeting later in the day. At 0504 GMT, the Bombay Stock Exchange's S&P BSE Sensex was 0.1 lower at 19169.88 points, while the National Stock Exchange's Nifty index was 0.2 lower at 5797.50. Asian stocks were mostly higher ahead of the U.S. Federal Reserve's monetary policy meeting later this week, which will provide more clarity on the U.S. central bank's plans for its bonds buyback program. The Reserve Bank of India will likely keep its key lending rate unchanged at 7.25 at a mid-quarter review of monetary policy later Monday, according to a majority of analysts polled by Dow Jones Newswires. Twelve out of 16 analysts polled expect the RBI to keep rates unchanged, primarily due to a sharp depreciation in the local currency against the U.S. dollar over the last few weeks and its potential adverse impact on inflation.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617035","date":"2013-06-18","texts":"WASHINGTON-- U.S. consumer prices ticked up in May as weak growth abroad and slow wage gains at home kept inflation pressures contained. rose a seasonally adjusted 0.1 last month, the Labor Department said Tuesday, driven by higher rents, airfares and energy costs. While the data suggest prices are stabilizing after two months of declines, even with May's small gain, consumer prices are up only 1.4 from a year earlier. The latest report showed that four years into the economic recovery, demand still remains too weak for firms to push prices higher and unemployment too high for workers to secure significantly higher wages. The economy is still running well below capacity and for that reason you're going to see inflation run on the soft side, said Michael Feroli, chief U.S. economist at J.P. Morgan Chase. The moderate inflation readings should give the Federal Reserve latitude to proceed cautiously in reining in its bond-buying program in the coming months. Fed officials started a two-day meeting Tuesday where they're expected to discuss how to adjust their 85 billion-a-month in bond purchases. The purchases, coupled with near-zero interest rates, are designed to spur economic growth and boost job creation.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616465","date":"2013-06-19","texts":"As immigration reform moves through Congress, one claim by opponents is that this time immigration is different because the country's latest arrivals aren't assimilating. On the contrary, however, the evidence overwhelmingly shows that today's immigrants are acculturating and moving up the economic ladder like previous generations. The media's tendency to report averages in educational attainment, English-language skills, income and other traditional measures of assimilation can make it difficult to determine whether immigrants are making gains. Since Latino immigration continues, averaging together the poverty rates or homeownership levels of large numbers of people who arrived recently with those who have been here for decades can provide a skewed view of progress. Measuring assimilation properly requires following the same immigrants over generations. And the good news is that longitudinal studies that take this approach show that Latino immigrants have made gains similar to other groups who preceded them. Consider the claim that Hispanic immigrants are rejecting English in favor of a separate Spanish-speaking culture. Census data from 2005 show that only one-third of immigrants in the country for less than a decade speak English well, but that number climbs to nearly three-quarters for those here for 30 years or more. A 2007 Pew study of 14,000 Latino adults showed that while just 23 of immigrants report being able to speak English very well, fully 88 of their U.S.-born adult children report that they speak English very well. Among later generations of Hispanic adults, the figure rises to 94.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616718","date":"2013-06-19","texts":"Rising mortgage rates are pushing up the cost of buying a home just as more local markets are seeing prices and sales climb, but economists say that unless rates move substantially higher the increase is unlikely to derail the U.S. housing recovery. Mortgage rates have jumped above 4 for the first time in about a year, hitting 4.15 in the first week of June, up from 3.59 five weeks earlier, according to the Mortgage Bankers Association. The rise represents a 15 increase in the cost of borrowing, or around 50 in the average monthly payment on a 192,800 home, the median price of a previously owned home in April. Buyers, while not exactly pleased, have so far taken the rising rates in stride. Sarah Milligan, a 35-year-old teacher from Glendale, Ariz., who has been hunting for a house in the 140,000 range, recently got a disappointing call from her mortgage broker Her prequalified mortgage rate is now over 4 from just below that level. Ms. Milligan, who currently rents a three-bedroom house, says the rate increase won't change her decision to buy, but she said it could move up her timing I should probably try to get one as soon as I can. While the rise in mortgage rates remains restrained for now, any prohibitive increase could hurt the housing market and the broader economy, which has been buoyed by the real-estate rebound. Already, the recent spike in mortgage rates has produced a sharp drop in refinancing activity, which is much more sensitive to rate increases.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614246","date":"2013-06-25","texts":"NEW YORK--Gold futures extended recent losses to set a 33-month low on Tuesday, as a string of stronger U.S. economic data bolstered equities and put a damper on interest in safe-haven assets, such as precious metals. The most actively traded contract, for August delivery, settled down 2, or 0.2, at 1,275.10 a troy ounce on the Comex division of the New York Mercantile Exchange. That was the lowest settlement since September 2010 and marked a 24 drop in prices so far this year. Investors have been selling out of gold amid expectations that the Federal Reserve would start paring back its bond-purchasing program before year end. Gold traders worry that interest rates will pull higher without the Fed's supportive measures, curtailing appetite for zero-yielding safe-haven assets.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614308","date":"2013-06-27","texts":"RIO DE JANEIRO--Brazil's real ended a four-session win streak against the dollar Thursday, weakening sharply at the end of the session in a movement that left traders scratching their heads. The real exited active trading at BRL2.1923 to the dollar, according to Tullett Prebon via FactSet, compared with BRL2.1823 per U.S. dollar shortly after the open and BRL2.1876 at Wednesday's close. Market participants said they were unaware of any news that might explain the currency's breach of the BRL2.19 threshold in the final half-hour of active trading. This looks like capital flows, but it's hard to know for sure, said Reginaldo Siaca, foreign-exchange manager at Sao Paulo's Advanced brokerage. Though the real has lost some 7 of its value against the dollar over the past month--a function of expectations for less monetary stimulus in the U.S. that could reduce liquidity in global markets--Mr. Siaca said the outlook is for the currency to make up some lost ground in coming weeks.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614313","date":"2013-06-29","texts":"It is time for investors to rethink safety. Until May 22, when Federal Reserve Chairman Ben Bernanke told Congress that the central bank might start scaling back its massive bond-buying program this year, investors could find shelter from market drops via bonds or stocks that pay high dividends and are less volatile. But since then, it is these same safe investments that are being punished the most. The beauty of assets traditionally perceived as safe -- or, more correctly, defensive -- was that, while they didn't gain as much as risky assets in boom periods, they offered investors some protection in times of turmoil. This past month's roller-coaster ride has offered a preview of how the next few years might be different. Since Mr. Bernanke's May statements, the yields of most kinds of bonds have shot up, sending prices off a cliff. The yield of the 10-year Treasury stood at 2.49 on Friday, up 1.1 percentage point since the 52-week low of 1.4 in July 2012, though down about 0.1 point from its June 25 high.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615751","date":"2013-06-29","texts":"For the first time in at least 30 years, inflation-adjusted government spending on people with intellectual and developmental disabilities fell in the U.S. Total spending reached 56.65 billion in the 2011 fiscal year -- the most recent total -- down 0.2 from the previous year, according to the 2013 State of the States in Developmental Disabilities, compiled by the University of Colorado. About three-fourths is paid by Medicaid. Most of the spending, 59, goes to smaller group homes of six or fewer people. About 11.5 is spent by state-operated institutions with 16 or more residents. Settings with seven to 15 people receive about 5 of the funding large privately run institutions receive 3. A little more than 20 is used to help people live with their families or on their own, or to help recipients find and keep jobs. David Braddock, lead author of the 2013 report, said the decline was the first noted since the university began its annual study in 1978. About 4.9 million people in the U.S. have intellectual or developmental disabilities 613,000 live in residential programs.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616302","date":"2013-07-01","texts":"The rate of unemployment across the 17 countries that share the euro rose to a record in May, and is likely to increase further despite signs that the currency area's longest postwar contraction may be coming to an end. High rates of unemployment, particularly , have become the main concern for euro-zone policy makers in recent months as more pressing threats to the continued existence of the currency area have appeared to abate. A number of governments have decided to take more time to cut their budget deficits, partly in order to limit the loss of jobs. And European leaders Friday agreed to set aside euro8 billion 10.41 billion annually in order to tackle high levels of youth unemployment, a figure many economists regarded as far too small. But even with an easing in the pace of austerity, and more direct interventions to create jobs, the rise in unemployment is unlikely to come to an end soon. A contracting economy and major fiscal consolidation across the region have been the main drivers of rising euro-zone unemployment, said Anna Zabrodzka, an economist at Moody's Analytics. Despite signs of improvement, this year will be challenging for euro zone's economy. Unemployment will continue to rise even further because the labor market follows the business cycle with a lag.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615845","date":"2013-07-02","texts":"Treasury bonds clawed back nearly all their early price losses Monday as mixed signals from a key U.S. manufacturing report heightened debate over the timing of the Federal Reserve's withdrawal of monetary stimulus. In late-afternoon trading, the benchmark 10-year Treasury note fell 132 in price, yielding 2.482, according to Tradeweb. Bond prices move inversely to their yields. The 30-year bond performed better. The bond's price rose 1232 after recouping all its earlier decline, yielding 3.477. The bond market stumbled earlier -- the 10-year yield rose to 2.551 during Monday's trading -- as upbeat manufacturing reports out of Europe and Japan sapped demand for safe assets. But buyers flocked back to the market as the overall strength of the manufacturing industry was overshadowed by a decline in the sector's employment.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613781","date":"2013-07-05","texts":"NEW YORK--Gold and silver futures fell as investors worried that an upbeat U.S. jobs report would pave the way for the Federal Reserve to taper off its stimulus efforts. Gold for August delivery, the most active contract, settled 39.20, or 3.1, lower at 1,212.70 an ounce on the Comex division of the New York Mercantile Exchange. Silver for September delivery fell 96.4 cents, or 4.9, to 18.736 an ounce. Both precious metals took heavy losses after Labor Department data showed U.S. nonfarm payrolls rose by 195,000 in June, surpassing forecasts for a 160,000 increase. The unemployment rate, compiled from a separate survey, held steady at 7.6. Gold traders worry that the stronger data will lead the Fed to pare back its 85-billion-a-month bond-purchasing program, which has kept interest rates low and lent support to the gold market.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614843","date":"2013-07-07","texts":"When it comes to balancing a portfolio, investors typically take a number of factors into account the valuations of various assets, their personal financial needs, their tolerance for risk, diversification. But here's one thing they often don't consider their job. They should. The risk of losing a job--and which investments can soften that blow or make it hurt even more--could have a major impact on what a portfolio looks like. In the simplest scenario, people with little job security shouldn't hold too many risky investments, the pros say. Entrepreneurs, for example, may want to own predominantly lower-risk investments. But the connection between your job and your portfolio isn't always that obvious. Sallie Krawcheck found this out the hard way. Ms. Krawcheck, a former senior executive at Citigroup Inc. and then at Bank of America Corp., said in a recent online article at LinkedIn.com, the business networking site, that she and her financial adviser stress tested her portfolio in 2007 to see how it would perform if the stock market slumped.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614556","date":"2013-07-08","texts":"The yen is back on the path toward weakness, as some old market forces reassert themselves. Prime Minister Shinzo Abe's economic plan launched in 2012---a combination of monetary and fiscal stimulus and long promised pro-growth economic reforms---sent the yen weaker and Japanese stocks soaring. Then in May, indications the Fed would scale back its bond-buying program, plus concerns about whether Mr. Abe would be able to follow through on the economic reforms, saw the yen regain strength. Abenomics was starting to look like previous failed attempts by Japan to shake off its 20-year slump. But chalk up the yen's reversal to a temporary market digestive process. As a rule of thumb, higher U.S. interest rates attract Japanese yield-hungry investors to the dollar, causing the yen to weaken. All things being equal, if the Fed is set to tighten policy, and the Bank of Japan is set to loosen, then the dollar should rise against the yen. But when investors dumped Treasurys last month, causing yields to rise in something close to a global bond panic, Japanese investors sold too, according to UBS foreign-exchange analyst Gareth Berry. The fall in prices overwhelmed any yield spread Japanese investors get from owning U.S. bonds. With more than 1 trillion in Treasurys, the second most after China, Japanese investors have a lot at stake. Meanwhile, Japanese yields stayed mostly firm, as the Bank of Japan ramped up its bond buying. The selloff has left the difference between Japanese government bonds and U.S. bonds well above average. The gap between 2-year bond yields is 0.26 percentage points, compared with an average of 0.16 the past year. That might not seem like a lot, but Japanese have been starved of a decent yield for years. For 10-year bonds, the difference is more pronounced, 1.8 percentage points, versus 1.1 on average the past year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615532","date":"2013-07-08","texts":"Growth prospects for major economies are divergent in the months ahead, according to a think tank's data, causing a headache for policy makers and volatility in financial markets. Economic growth in the U.S. and Japan is set to pick up, while Russia and Brazil appear set for slowdowns, according to the Organization for Economic Cooperation and Development's composite leading indicators for May. Released Monday, the indicators underlined the multispeed nature of the global economic recovery, with Germany expected to lead a modest revival in the euro zone, while growth in France is set to remain weak. Among large developing economies, China is set to grow at around its long-term trend rate, while the outlook for India is uncertain. Composite leading indicators...point to diverging growth patterns in major economies, the OECD said.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617430","date":"2013-07-08","texts":"Is your stock index fund leaving money on the table New research from Cass Business School in London suggests that the returns of traditional, market-capitalization-weighted indexes trail those of so-called alternative indexes by as much as two percentage points a year over time. We're not here to bury cap-weighted indexing as an approach, says John Belgrove, senior partner at consulting firm Aon Hewitt, the Aon PLC unit that sponsored the research. It has a lot of advantages, especially around transparency. But we want investors to be conscious that it's a choice, and there are other choices available. Indeed, a bevy of funds tracking alternative indexes have been launched in recent years. And their popularity is soaring 43 of inflows into U.S.-listed equity exchange-traded products in the first five months of 2013 went to products that aren't weighted by market capitalization, up from 20 for all of last year, according to asset manager BlackRock Inc. For decades, most indexes have been compiled by weighting stocks according to their total stock-market value, or market capitalization. But critics say there's a problem with that approach As a stock gets more expensive, its index weighting can grow significantly, leaving the index's overall value more vulnerable to reversals in a few big stocks that have registered significant gains.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613602","date":"2013-07-09","texts":"Stocks extended their winning streak to three sessions as investors appeared to become more confident that the market could withstand a scaling back of easing efforts by the Federal Reserve. The Dow Jones Industrial Average advanced 88.85 points, or 0.6, to 15224.69. On Friday, the Dow rose 147 points after a better-than-expected June jobs report. The Standard & Poor's 500-stock index rose 8.57 points, or 0.5, to 1640.46. Eight of the index's 10 sectors advanced. The technology-oriented Nasdaq Composite Index gained 5.45 points, or 0.2, to 3484.83. Monday's gains came in the wake of a stronger-than-expected employment report Friday, which many in the market believe makes it more likely that the Fed will scale back its easing efforts later this year. While stocks have struggled in recent weeks as investors wrestled with the possibility that the Fed might cut back on its support for the U.S. economy, the resilience of stocks following the jobs report suggests the market may have turned a corner, some said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613779","date":"2013-07-09","texts":"What is the best advice for investors worried about rising interest rates The Wall Street Journal put this question to The Experts, an exclusive group of industry, academic and other thought leaders who engage in in-depth online discussions of topics from the print Report. This question relates to a that discussed the best dividend strategy given the threat of rising interest rates and formed the basis of a discussion in The Experts stream on July 9. The Experts will discuss topics raised in this month's Investing in Funds & ETFs Report and other Wall Street Journal Reports. Find the finance Experts stream, watch recent interactive videos and explore a host of other exciting online content at Also investment adviser Tom Brakke  , blogger Mike Piper   and University of California, Berkeley, Professor Terrance Odean in an interactive video chat that aired on July 8 in which they discussed strategies for coping with market volatility. Tom Brakke It All Depends on Your Portfolio and Tolerance for Risk Given the complexity of the fixed-income market and the different kinds of instruments that are hurt by rising interest rates including investments in asset classes other than fixed income, it is difficult to come up with a blanket recommendation for how to proceed. It depends on your portfolio and your risk tolerance. The market behavior of recent weeks should have provided clues as to which of your investments are most at risk if market rates rise further.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617049","date":"2013-07-10","texts":"SAO PAULO--Brazilian stocks rose on Wednesday, while the currency weakened against the dollar, as investors digested the minutes from the latest U.S. Federal Open Market Committee meeting. The minutes showed Fed officials divided about the timing of a reduction in bond buying, with half of the Fed officials believing the central bank should end the stimulus program by the end of this year. That disappointed traders hoping for a clearer timetable, and sent the dollar lower against its rivals. In Brazil, the central bank had intervened before the release of the minutes to contain some of the earlier depreciation of the Brazilian currency versus the dollar. The central bank sold the equivalent of 1.48 billion in foreign-exchange swap contracts for two different dates, Dec. 2, 2013 and Jan. 2, 2014. Typically, such auctions help support the real against the U.S. dollar by offering investors the opportunity to exchange bonds linked to domestic interest rates for paper indexed directly to the dollar. The real exited active trading at BRL2.2685 per dollar, according to Tullett Prebon via Factset. The currency had traded as weak as BRL2.2787 before the auction was called.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613842","date":"2013-07-12","texts":"A sudden surge in U.S. interest rates has dimmed the luster of some of the bond world's brightest stars. Bill Gross, Dan Fuss, Jeffrey Gundlach and Michael Hasenstab were among portfolio managers whose funds posted losses during the second quarter. The tumble in Treasury prices led to the biggest-ever quarterly loss for Mr. Gross's 268 billion Pimco Total Return fund. Investors in the fund at Pacific Investment Management Co., a unit of Allianz SE of Germany, have lost more money than holders of the average bond fund this year, a rare setback for a manager who has consistently beaten the market over more than two decades. Of the four large bond funds, Pimco Total Return was the only one to trail its benchmark in the second quarter and full year. The culprit a rapid rise in Treasury yields that started in May amid fears the Federal Reserve would pull back its stimulus. The yield on the 10-year Treasury note has risen about a percentage point since early May. On Thursday, the yield fell to 2.576. Bond yields move inversely to prices. The reversal was particularly brutal for holders of emerging-market bonds and Treasury inflation-protected securities, or TIPS, which compensate investors for rising inflation. Neither bet panned out as funds rushed out of poorer-country markets and U.S. inflation softened. Mr. Gross allocated 18 in the two asset classes in the bond fund at the end of May, according to Pimco.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615056","date":"2013-07-12","texts":"Three years after President Obama signed Dodd-Frank, U.S. financial regulators have taken their first significant step toward protecting taxpayers from giant bank failures. Under a Tuesday proposal from the Federal Deposit Insurance Corporation, the eight largest U.S. financial houses would be required to hold more capital. This is a critical reform given that so many of the other rules that regulators have written place taxpayers in harm's way. The political pressure to bail out banks will exist in any financial panic, no matter which party is in power, so the best way to prevent bailouts is to make banks less vulnerable to panics. One of the better protections is a heavy capital cushion at each of the too-big-to-fail banks. This means that private investors voluntarily contribute more equity now, so there are more resources to absorb future losses. Come the next crisis, there will be more room for banker and regulator error before taxpayers are forced to make involuntary contributions as in 2008. Specifically, the FDIC and their regulatory colleagues at the Federal Reserve and Comptroller of the Currency proposed to increase the leverage ratio at giant bank holding companies to 5 from 3, and to 6 for the insured deposit-taking banks inside these holding companies. For either the parent companies or the FDIC-insured banks inside them, our preference would be to go north of 6. Why not approach the capital levels that small finance companies without government backing are required by markets to hold, which can run into the teens But the proposal is still a major step toward taxpayer protection and might require the giants to increase capital by close to 90 billion by 2018, or to shrink their balance sheets to operate more safely with the level of capital they hold today. It's no surprise that the banks are unhappy, and they are warning that holding more capital means they will be sending less money out the door as loans. But that doesn't have to be the case. Banks can maintain their current lending and their current balance sheet bulk if they rely more on equity financing along with debt. And that represents a healthy step toward allocating greater risk to the investors who should be expected to bear it.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616726","date":"2013-07-12","texts":"Just before the stock market closed March 4, an industry-research firm emailed a monthly report on commercial-truck orders to hedge funds and other subscribers that pay the group 1,700 a year for the exclusive service. The early peek was worth the expense. The next day, after the bullish truck numbers were reported in the media, shares in truck makers surged, generating a tidy profit for investors who traded on the report in the late moments of the previous session. Even as federal, state and congressional investigators examine the preferential release to investors of broad economic data--such as the University of Michigan consumer-sentiment survey--some investors tap numerous other more narrowly focused and less well-known industry indicators ahead of the rest of the investing public. The activity is widespread and legal. Federal securities law doesn't prevent investors from trading based on nonpublic information they have legally bought from other private entities. Investment firms can pay anywhere from a few hundred to many thousands of dollars a year for access to a variety of specialized reports, ranging from an index that tracks monthly billings by architecture firms to a weekly report on oil inventory.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614548","date":"2013-07-13","texts":"J.P. Morgan and Wells Fargo posted robust profits but warned of problems ahead as their mortgage machines slow amid a sharp increase in interest rates. --- A Boeing Dreamliner parked at Heathrow caught fire, reprising concern over the jet three months after it was cleared to fly again. --- Dark pools for trading will have to disclose activity on their platforms under a rule approved by Finra.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614150","date":"2013-07-16","texts":"Is it safe to go back in the bond-market water Global debt markets have been in a funk since U.S. Federal Reserve Chairman Ben Bernanke first hinted that the central bank's bond-purchase program could be wound down. But the rise in yields has created opportunities. In particular, European corporate debt looks interesting given the very different economic outlook and a dovish central bank. Corporate bonds were hit hard in the turmoil and haven't really bounced back. While the Standard & Poor's 500 and Dow Jones Industrial Average have vaulted to new record highs, corporate bonds have only retraced part of the selloff. U.S. high-yield bonds, for instance, now yield 6.2 according to Barclays indexes, versus 5.2 on May 22, when Mr. Bernanke first roiled markets with his comments. Euro-denominated investment-grade bonds yield 1.5 percentage points more than German bunds, up from 1.2 points European high-yield bonds yield 6.5, up from 5.7. U.S. bonds look vulnerable to a further selloff, particularly if the U.S. economy continues to recover. Corporate bonds have been an unhappy half-way house this year in the U.S. Investment-grade bonds have lost money, down 2.8, while the 2.9 gain chalked up by high-yield bonds is paltry compared with the 18 rise for the S&P 500. Europe is a different matter, however. The European Central Bank sounds increasingly dovish, saying this month that rates are set to remain at present or lower levels for an extended period. That has led U.S. and European government bonds to diverge 10-year German bunds now yield 1.55, nearly a full percentage point less than their U.S. peers. Euro-denominated investment-grade corporate bonds have held their head above water, up 0.9, while high-yield debt is up 3.3. True, bonds are underperforming stocks The Europe Stoxx 600 index is up 5.8 this year. But the economic outlook in Europe is far murkier than in the U.S., making stocks a riskier bet and boosting the allure of bonds. European companies are still in cautious, cash-hoarding mode--a boon for bond investors--in contrast to U.S. peers that have become far more shareholder-friendly.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616120","date":"2013-07-16","texts":"RIO DE JANEIRO--Brazil's real closed weaker against the dollar Tuesday, after a strong start to the week, as relief over China's second-quarter economic growth gave way to renewed fears about a possible withdrawal of monetary stimulus by the U.S. Federal Reserve. The real exited active trading near its intraday lows at BRL2.2536 to the dollar, according to Tullett Prebon via FactSet, compared with BRL2.21 shortly after the open and BRL2.2263 at Monday's close. The real's return to last week's levels contrasted with the broader trend in major currencies, which mostly gained against the greenback Tuesday. But market participants noted that the Brazilian currency had one of its best days of the year in the previous session, as investors breathed a collective sigh of relief after Chinese economic data came in line with expectations. Today it came back to where it had been, said Joao Medeiros, a partner at Sao Paulo's Pioneer brokerage. Triggering the real's losses early Tuesday were slightly higher-than-expected inflation numbers out of the U.S., which economists say tilt the scales in favor an earlier end to the Fed's bond-buying program. The so-called quantitative easing policy pumps 85 billion of liquidity into bond markets every month and is widely believed to have boosted assets such as currencies and stocks in recent years.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616288","date":"2013-07-16","texts":"In recent months, Americans have heard reports out of Washington and in the media that the economy is looking up -- that recovery from the Great Recession is gathering steam. If only it were true. The longest and worst recession since the end of World War II has been marked by the weakest recovery from any U.S. recession in that same period. The jobless nature of the recovery is particularly unsettling. In June, the government's Household Survey reported that since the start of the year, the number of people with jobs increased by 753,000 -- but there are jobs and then there are jobs. No fewer than 557,000 of these positions were only part-time. The survey also reported that in June full-time jobs declined by 240,000, while part-time jobs soared by 360,000 and have now reached an all-time high of 28,059,000 -- three million more part-time positions than when the recession began at the end of 2007. That's just for starters. The survey includes part-time workers who want full-time work but can't get it, as well as those who want to work but have stopped looking. That puts the real unemployment rate for June at 14.3, up from 13.8 in May. The 7.6 unemployment figure so common in headlines these days is utterly misleading. An estimated 22 million Americans are unemployed or underemployed they are virtually invisible and mostly excluded from unemployment calculations that garner headlines. At this stage of an expansion you would expect the number of part-time jobs to be declining, as companies would be doing more full-time hiring. Not this time. In the long misery of this post-recession period, we have an extraordinary situation Americans by the millions are in part-time work because there are no other employment opportunities as businesses increase their reliance on independent contractors and part-time, temporary and seasonal employees.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613941","date":"2013-07-17","texts":"WASHINGTON--Construction of new homes fell sharply in June, highlighting risks to the sector's recovery from rising mortgage rates and supply constraints. Housing starts declined 9.9 in June from a month earlier to a seasonally adjusted annual rate of 836,000 units, the Commerce Department said Wednesday. Building permits, a key measure of future construction activity, fell by 7.5. The readings were much worse than expected, with most economists forecasting modest gains in both categories. But the decline in housing starts was primarily driven by a 26 drop in multifamily housing, a category that has traditionally been volatile and has lately shown signs of overbuilding. Starts for single-family homes, which account for the largest share of activity, fell by 0.8. Single-family permits rose 0.1. The outlook for housing is still bright, said Moody's Analytics economist Celia Chen. She said the June data is more of a hiccup. The housing sector has been strengthening in recent months as low prices and steady employment gains have fueled stronger demand. The rebound has been providing key support to the U.S. economy, helping to offset public-sector budget cuts and a struggling manufacturing sector hit by weak overseas demand.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613992","date":"2013-07-17","texts":"Charles Schwab Corp.'s second-quarter earnings missed analysts' estimates as the discount brokerage's expenses climbed 8.7 from a year earlier amid higher compensation and technology costs. The San Francisco company posted net income of 256 million, or 18 cents a share, down from 275 million, or 20 cents a share, a year ago. The year-earlier period included a benefit of 70 million, or roughly two cents a share, related to the resolution of a vendor dispute. The results put pressure on Schwab's stock, which has rallied this year. The company's New York Stock Exchange-listed shares fell 3.3 to 21 in 4 p.m. trading Tuesday but remain up 46 so far in 2013. While Schwab's earnings excluding the earlier gain rose 11, investors focused on the per-share figure, which was a penny below Wall Street's average forecast of 19 cents. The shortfall came as Schwab missed its own forecast for curbing some quarterly expenses, such as employee pay. The company's expenses are still tracking above a new target it issued for such costs for 2013. In March, Schwab backed away from a planned spending push it outlined at the beginning of the year because trading volumes didn't rebound as the company had expected after the U.S. presidential election.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614891","date":"2013-07-18","texts":"AutoNation Inc. Chief Executive Mike Jackson said on Thursday there is more potential on the upside for U.S. vehicle demand as short term interest rates and gasoline prices remain stable even as intensified competition among car makers is putting pressure on new car profit margins. AutoNation reported second quarter net from continuing operations rose 11 from a year earlier to a record 73 cents a share, in line with most analysts' expectations. Revenue for the just-ended quarter rose 13 to 4.4 billion. New vehicle sales rose by 7 on a same store basis, the company said. Mr. Jackson said in an interview he expects U.S. light vehicle sales will finish 2013 in the mid-15 million range, and added there is more potential on the upside of that forecast. While new vehicle demand should remain strong, Mr. Jackson said competition, particularly in the high-volume midsize car segment, is putting pressure on dealer profit margins. New vehicle margins are under pressure, Mr. Jackson said. It's with the Japanese products. It's the mainstream, midsize sedans--Camry, Accord and Altima. Those high volume models from Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. are facing tougher challenges by new models from Detroit rivals Ford Motor Co., General Motors Co. and Chrysler Group LLC, and Korean brands Hyundai Motor Co. and Kia Motors Corp.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616187","date":"2013-07-18","texts":"Microsoft Corp. took a 900 million charge on its high-profile Surface RT tablet, contributing to fourth-quarter results that sharply missed revenue and profit expectations. The software giant also cited the effects of the soft personal-computer market in its quarterly report Thursday. Excluding the Surface write-down, it posted earnings of 66 cents a share, well below Wall Street estimates of 75 cents, while revenue came in at 19.9 billion, compared with analyst expectations of 20.7 billion. The company's shares tumbled 6.3 in after-hours trading to 33.22, off 2.22. The results showed how Microsoft, still a vastly profitable company, remains stymied in its efforts to adapt to a range of new computing platforms and approaches.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616369","date":"2013-07-18","texts":"The Brazilian real weakened against the dollar Thursday in early trade as the dollar firmed globally. The real was trading at 2.2399 real to the dollar at 843 a.m. EDT, compared with 2.2285 at Wednesday's close, according to Tullett Prebon via Factset. But the drop could be short lived, after Federal Reserve Chairman Ben Bernanke's Wednesday remarks indicated U.S. monetary policy won't change abruptly. Foreign capital flows into Brazil will continue, said Paulo Nepomuceno, a fixed-income strategist at Sao Paulo brokerage firm Coinvalores. Today's real weakness shouldn't go on for long, he said. Mr. Nepomuceno also said there are expectations that Brazilian corporations will make sizable bond issues in the next few days, helping to sustain the currency.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615621","date":"2013-07-23","texts":"The dollar edged lower against its rivals after weaker-than-expected regional manufacturing data. The Richmond Federal Reserve reported on Tuesday that manufacturing activity in the central Atlantic region dropped sharply this month, led by declines in shipments and new order volumes. While the data did not fundamentally alter any expectations for future Fed policy, traders used the opportunity to book profits on their bets in favor of the dollar. After soaring to a three-year high in early July, the greenback has steadily fallen over the past two weeks as investors wait for more signals about the direction of Fed policy. The Fed's policy-setting Open Market Committee meets again next Tuesday and Wednesday. The dollar had been boosted earlier this month by heightened expectations that the Fed could reduce its bond-buying program as soon as September, since Fed stimulus tends to hurt the greenback's value. Fed Chairman Ben Bernanke said last week that he expects to moderate the pace of asset purchases later this year. People are ... waiting to see the next pieces of evidence that either support or refute this theory of longer-term strengthening of the dollar, said Matthew Alexy, director of global foreign exchange at TD Securities.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615727","date":"2013-07-23","texts":"The White House is considering tapping Federal Reserve governor Sarah Bloom Raskin to be deputy Treasury secretary as the Obama administration continues to rebuild its economic team and renew its focus on shoring up the middle class, according to people familiar with administration deliberations. Ms. Raskin, 52 years old, would succeed Neal Wolin in the deputy post. The Treasury said this week that Mr. Wolin, 51, would step down next month after more than four years in the post. Separately, Byron Auguste, an economist and 20-year veteran of McKinsey & Co., this week will become deputy director of the National Economic Council, according to administration officials. He has worked with high-tech companies and, for six years, headed the McKinsey unit that works with private, public and nonprofit institutions seeking to improve living standards around the world. An opinion column co-written by Mr. Auguste last year called on the government to better prepare workers by improving the educational system, creating a national jobs database and streamlining regulations, among other steps. President Barack Obama is expected to sound similar themes in a speech at Knox College on Wednesday. Ms. Raskin is a Harvard-trained lawyer who was appointed to the Fed by Mr. Obama in 2010. She has kept a low profile on the Fed's monetary-policy decisions, but has been deeply involved in its behind-the-scenes work in writing rules to implement the Dodd-Frank financial-regulation law passed after the financial crisis.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615462","date":"2013-07-24","texts":"WASHINGTON--Sales of new homes surged in June despite higher mortgage rates, maintaining momentum for a key sector driving the economic recovery. New-home sales increased 8.3 last month to a seasonally adjusted rate of 497,000, the Commerce Department said Wednesday. That was the highest level since May 2008. Sales were up 38 from a year earlier. The sales jump comes amid a sharp escalation in mortgage rates, which began rising in late May. The average for a 30-year fixed-rate loan is now up about one percentage point from its recent low to 4.58, according to Mortgage Bankers Association data also released Wednesday. That's down from 4.68 a week earlier. The increase in mortgage rates over the past two months does not appear to have dented new-home sales, at least not yet, said Stuart Hoffman, chief economist at PNC Financial Services Group. He cited pent-up demand, a better labor market and stronger consumer confidence as factors behind the sales boost. Mortgage rates can hit new-home sales more quickly than sales of previously owned homes because the new-home figures are measured when a buyer signs a contract to purchase a new home. Existing-home sales figures reflect closings 30 to 60 days later, on average, after a contract is signed.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616319","date":"2013-07-25","texts":"TORONTO--The Canadian dollar continued to strengthen Thursday on the back of broad-based U.S. dollar weakness, after a Wall Street Journal report suggested the Federal Reserve will keep its 85 billion-a-month bond-buying program in place at its policy meeting next week. The U.S. dollar was at C1.0261 Thursday, from C1.0314 late Wednesday, according to data provider CQG. The greenback briefly touched a new monthly low after a report in the Wall Street Journal said the Fed is likely to keep its quantitative easing program steady when it meets next week, but officials may refine or revise its forward guidance in its policy statement. Everything is about the Fed right now, said Greg Moore, currency strategist at TD Securities in Toronto. Even if you see weak PMI in China or a strong GDP report in the U.K., the reaction is really fleeting, he said. There were no major Canadian data releases Thursday, leaving the loonie to move broadly on external headlines.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616322","date":"2013-07-26","texts":"WASHINGTON -- Senate Democrats are circulating a letter urging President Barack Obama to appoint Janet Yellen, the Federal Reserve Board of Governors vice chairman, to succeed Ben Bernanke as chairman of the central bank. The letter has been signed by roughly a third of the 54 Democratic and allied senators, Senate aides said. While the full list of signatories couldn't be learned, it appeared largely to represent the liberal wing of the Democratic caucus. The letter supports Ms. Yellen, said people who have seen it, and doesn't mention Lawrence Summers, a former Treasury secretary who is considered the other leading candidate for the Fed post. Some Democrats said they signed because of concerns about Mr. Summers's views on financial regulation, rather than on monetary policy. There's a lot of concern among a lot of Democrats about an appointment of Larry Summers to that long-term position as Fed chairman, said Sen. Tom Harkin D., Iowa, who signed the letter. He was one of the architects of getting rid of Glass-Steagall, of getting rid of other regulations. Glass-Steagall was the Depression-era law that required the separation of commercial and investment banks. It was repealed in 1999, when Mr. Summers was serving as President Bill Clinton's Treasury secretary, sparking significant consolidation in the banking industry. Some observers cite Glass-Steagall's repeal as a factor behind the financial crisis.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613750","date":"2013-07-29","texts":"Reassuring statements from the Federal Reserve have calmed financial-market anxieties. Stocks have recovered their June losses. But the Fed may not have solved the problem it may just have put it off. If so, markets could turn volatile as autumn approaches and investors once again begin wringing their hands over the likely timing and consequences of a cutback in Fed stimulus. Stock and bond prices fell in June because investors fear the day when the Fed starts cutting back on its 85 billion in monthly stimulus for financial markets. When Fed officials indicated that they could start trimming the stimulus in a matter of months, the selling began. The market slide ended after a succession of Fed officials made forceful statements that they won't do anything until the economy is strong enough. Lately, Fed Chairman Ben Bernanke has said he doesn't know when the Fed will begin to move It will depend on the data. In effect, he has pushed the problem into the future. Investors, somewhat mollified, have decided to worry about it later. They have begun buying again, riding a market that seemingly refuses to decline and sending the Dow Jones Industrial Average and other major stock indexes to record highs.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616173","date":"2013-07-29","texts":"Stocks slipped as investors awaited a flood of economic news slated for this week. The Dow Jones Industrial Average declined 36.86 points, or 0.2, to 15521.97. The S&P 500-stock index eased 6.32 points, or 0.4, to 1685.33, and the Nasdaq Composite Index slipped 14.02 points, or 0.4, to 3599.14. Even with Monday's losses, benchmarks held much of their July gains. The Dow industrials are up 4.1 for the month, and the S&P 500 has climbed 4.9. We're at a point where we're about halfway through earnings reports, and the market is up strong, and we're moving into August, which is a time when there's not a lot of corporate news, said Andrew Slimmon, managing director with Morgan Stanley Global Investment Solutions, which manages 2.4 billion. That means the market is in for a breather here. While Monday's economic calendar was relatively light, traders are readying for a flurry of economic data this week, including second-quarter gross domestic product and the Federal Reserve's policy-setting committee statement, both due on Wednesday, as well as the Labor Department's monthly jobs report on Friday.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614897","date":"2013-07-31","texts":"WASHINGTON--The House voted overwhelmingly Wednesday to clear a bill that links interest rates on federal student loans to a market-based rate, ending a monthslong debate and sending the bill to the White House. The House passed the bill by a vote of 392 to 31. The Senate passed the bill last week by an 81-18 vote. President Barack Obama, who lobbied for the legislation despite resistance from some liberal Democrats, is expected to sign it. The legislation would tie the interest rate on federal student loans to the government's borrowing costs--specifically, the yield on the 10-year Treasury note. Stafford loans for undergraduates--the government's most widely used student-loan program--would be set about two percentage points more than the Treasury yield. Student loans for graduate students and their parents would be set slightly higher than rates for undergraduates. Passage of the bill resolves an acrimonious dispute in Congress stemming from a measure that expired July 1, which allowed the rate on some new student loans to double to 6.8. Members from both parties had vowed to prevent the rate increase but disagreed over how to set rates over the long term.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615637","date":"2013-07-31","texts":"TORONTO--The Canadian dollar is ending higher Wednesday, reflecting both a general retreat in the U.S. dollar after the Federal Reserve expressed concern about the impact of low inflation on the economy, and gains made in prices for energy commodities. The Fed's remarks were seen by some market participants as indicating the Fed might not proceed as quickly as previously expected in reducing its stimulative bond-buying programs. The U.S. dollar is at C1.0272 late Wednesday, from C1.0304 late Tuesday, according to data provider CQG. The U.S. currency dipped to a low of C1.0246 after the statement before retracing some of its losses. The Fed's statement said it expects weak inflation to eventually rise back toward targets, but also says it recognizes that inflation persistently below its 2 objective could pose risks to economic performance.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615702","date":"2013-07-31","texts":"MUMBAI--India's ICICI Bank Ltd. Wednesday topped market estimates with a 25 jump in its fiscal-first-quarter stand-alone net profit, aided by strong demand for loans and income from trading. Net profit for the April-June period increased to 22.74 billion rupees from 18.15 billion rupees a year earlier, the country's second-largest bank by assets said in a filing with stock exchanges. The bank was expected to report a profit of 22.27 billion rupees, according to estimate of 28 analysts polled by FactSet, a financial data provider. ICICI Bank expects loans to grow 16-17 in the current financial year through March, mostly driven by demand from individual, or retail, customers, Chief Executive Chanda Kochhar told reporters on a conference call. There are no real loan applications for new projects from companies, she said. Increased focus on retail loans has helped nonstate lenders like ICICI Bank and HDFC Bank Ltd. post strong results. Demand for such loans to buy vehicles and homes is still strong despite an economic slowdown in India.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617174","date":"2013-07-31","texts":"Economy May Be Getting Its Wings Clipped Here is the stuff of nightmares You are piloting a plane that is losing altitude and not responding. As the Federal Reserve concludes a two-day meeting Wednesday, it may be presented with fresh data hinting at such a calamity for the U.S. economy. First-class passengers like Mr. Stock Market appear blithely unaware as they enjoy a complimentary beverage. Those crammed in coach are starting to feel some bumps. The economy isn't in a recession, but it will probably remain near what economists call stall speed following Wednesday's report on second-quarter gross domestic product. Economists polled by Dow Jones Newswires see annualized growth of just 0.9 -- tied for the second-lowest level of the expansion. That follows growth of 1.8 and 0.4 in the previous two quarters. Growth below 2 for multiple quarters is thought to heighten the risk of recession.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616768","date":"2013-08-03","texts":"Fewer American doctors are treating patients enrolled in the Medicare health program for seniors, reflecting frustration with its payment rates and pushback against mounting rules, according to health experts. The number of doctors who opted out of Medicare last year, while a small proportion of the nation's health professionals, nearly tripled from three years earlier, according to the Centers for Medicare and Medicaid Services, the agency that administers the program. Other doctors are limiting the number of Medicare patients they treat even if they don't formally opt out of the system. CMS said 9,539 physicians who had accepted Medicare opted out of the program in 2012, up from 3,700 in 2009. Some 685,000 doctors were enrolled as participating physicians last year, said CMS, which has never released annual opt-out figures before. Want to get into B-school Go for the easy A. Business-school applicants with a high undergraduate grade-point average--even from schools identified as practicing grade inflation--are more likely to be admitted than those who performed slightly less well amid tougher grading standards, according to a study in the journal PLOS ONE.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616970","date":"2013-08-05","texts":"For successful financial professionals, the toughest decision sometimes is when to quit. The bond-market outlook made the choice easier for Margaret Didi Weinblatt, who retired in 2012 after a dozen years as a bond-fund manager at San Antonio-based USAA Investments. Ms. Weinblatt fears that fixed-income investors generally now face a very difficult bear market in bonds as the Federal Reserve eventually pares back its economic stimulus. Your fund might do well relative to other funds, but when the bond market goes down, all funds could go down, she says. That can be very stressful for a fund manager. Ms. Weinblatt, who is 69, worked in funds management for nearly three decades. At USAA, she managed the 4 billion-plus USAA Income fund and the 500 million USAA Government Securities fund. The funds rank, respectively, in the top quarter and top third of their Morningstar Inc. categories for the past decade -- performances that she says resulted from being careful to not take on too much risk. The Income fund's only stumble during her tenure was a negative 5 return in 2008.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614376","date":"2013-08-06","texts":"A handful of private-equity investors who poured money into banks during the financial crisis are cashing out, reaping billions of dollars in profits--in some cases doubling their money--even as many small lenders continue to struggle. Their success stands in contrast to dozens of other big investors who scooped up failed institutions but are still stuck with far less profitable holdings. The different outcomes show that, during banking crises, the lowest price doesn't necessarily make for the best deal. The investors who do better are the ones who bought good franchises cheap, not distressed franchises very cheap, said Joshua Siegel, managing principal and chief executive of StoneCastle Partners LLC, a New York firm formed in 2003 to invest in banks. Private investors pumped billions of dollars into more than 60 financial institutions from 2008 to 2012, according to data provider Dealogic. Those figures account only for deals for which public data are available. Many bank deals during the period were private and details weren't disclosed. Regulators limit private-equity firms to a 24.9 stake in banks. Buyout firms lobbied to raise the limit during the financial crisis, but the Federal Reserve and Federal Deposit Insurance Corp., concerned the investors were interested in making a quick buck without regard for the bank's health, decided against changing the rule.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616928","date":"2013-08-06","texts":"Brookfield Asset Management is making a big bet on e-tailing. The company's 4.4 billion global real-estate fund has agreed to acquire Industrial Developments International Inc., an owner of 27 million square feet of warehouses, distribution centers and other industrial property. Much of that space is used to store products sold by online retailers and brick-and-mortar companies that are stepping up their Internet sales. Brookfield is paying 1.1 billion to Kajima, a real estate and engineering company. With this deal, Brookfield extends an industrial-property shopping spree, which includes the purchase of the real-estate investment trust Verde Realty and U.K.-based EZW Gazeley. It now owns 51 million square feet of industrial space, most of that in the U.S.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614587","date":"2013-08-07","texts":"President Obama is working hard to refocus attention on the middle class, and rightly so. While a decent society will provide opportunity and, when necessary, direct assistance to the poor, the long-term health of our economy and our democracy depends on a prosperous, self-confident middle class. That's not what we've had in recent years. Median incomes fell sharply during the Great Recession and have barely begun to recover. Despite recent signs of recovery, housing -- the principal source of wealth for middle-class households -- remains priced about 25 below its pre-recession peak. Many workers who lost middle-income jobs have found only part-time or low-wage replacements and doubt that they will ever regain their pre-recession standard of living. Not surprisingly, many middle-class parents now doubt that their children will enjoy comparable lives Concern about the middle class is not new. Compared with the quarter-century after World War II, recent decades -- though not disastrous -- were disappointing, even before the Great Recession. Many economists define the middle class as those adults whose annual household income is between two-thirds and twice the national median -- today, that means roughly 40,000 to 120,000. By this standard, according to the Pew Research Center, the middle class is significantly smaller than it once was. In 1971, it accounted for fully 61 of adults, compared with 14 for the upper class and 25 for the lower class. Four decades later, the middle class share had declined by 10 percentage points to just 51, while the upper class share increased by six points and the lower class by four. The U.S. income distribution is still a bell curve, but the left and right tails are fatter and the hump in the middle is lower. This means that the middle class is less economically and socially dominant than it once was. Relatively speaking, more Americans are enjoying affluent lives at the same time that more are just barely making it if at all. But that doesn't mean the middle class got poorer. During those 40 years, Pew calculates, the median income of middle-class households adjusted for inflation grew by 34. The median grew for the others as well -- by 43 for upper-income households and 29 for those with incomes below the middle class. This isn't surprising, because the median income for all U.S. households rose by 32 during that period, from 44,845 in 1970 to 59,127 in 2010. Indeed, 86 of middle-class Americans, and 84 of all Americans, enjoy higher incomes than their parents did.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613790","date":"2013-08-08","texts":"The usually reliable Edward P. Lazear gets it badly wrong The Stock Market Beats GDP as an Economic Bellwether, op-ed, July 31. Of course it does. Stock prices are based on expectations about the future. GDP only reports what has already happened. Of course stock prices are better than GDP. But stock prices are still not a very good predictor of future economic activity simply because there are many other factors that affect stock prices interest rates, corporate profits, and so on. I await Mr. Lazear's article discussing factors that are actual predictors of the economy. To paraphrase an old saying, the stock market has predicted four out of the past two economic recoveries. Prof. Tony Lima, Ph.D. Calif. State Univ., East Bay Hayward, Calif.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616650","date":"2013-08-08","texts":"BEIJING--China's economy is showing signs of stabilizing after a six-month slowdown, adding to better global economic prospects as the U.S. steadily improves and Europe edges out of recession. July trade data released on Thursday showed stronger-than-expected global demand for China's exports, good news for the key manufacturing sector. As important, a greater-than-expected increase in imports suggested strengthening demand in China's domestic economy. The data followed a survey of manufacturing companies released last week that showed modest expansion in Chinese factory activity in July. Taken together, the latest numbers indicate that China's growth may have bottomed out in the second quarter, raising expectations of steady growth in the remaining months of the year. That could help China's economy hit Beijing's 7.5 growth target for the year, following economists' concerns that it could post an embarrassing miss. Finally, some good news from China, said Qu Hongbin, an economist at HSBC Holdings PLC. Economists from Bank of America-Merrill Lynch said in a note July trade data are supportive of a better economic outlook for China.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617260","date":"2013-08-08","texts":"TORONTO--The Canadian dollar surged Thursday, making its biggest one-day gain in nearly a month, as traders took profits ahead of a domestic labor report on Friday. The U.S. dollar was at C1.0319 Thursday, from C1.0424 late Wednesday, according to data provider CQG. The greenback moved as low as C1.0304 during intraday trading, the lowest level in more than a week. The Canadian dollar was on solid footing early on Thursday after strong Chinese trade figures for July. Chinese exports were up 5.1 on the year, while imports rose 11, a sign that suggests both global and domestic Chinese demand may be picking up. Commodity currencies, including the Australian and Canadian dollars, reacted strongly to the Chinese data, which was surprising given the progressively more sour views on Chinese growth lately, said Greg Moore, currency strategist at TD Securities in Toronto. Mr. Moore said the current focus on foreign exchange markets remains on the U.S. dollar, and any other piece of information that could signal what the Federal Reserve's next move will be.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615592","date":"2013-08-12","texts":"Corn prices rose Monday after the U.S. Department of Agriculture cut its forecast for the size of this fall's crop, though the harvest would still be the nation's largest ever. Corn futures climbed 1.3 after the government said the corn crop will total 13.8 billion bushels. That is down 1.3 from the USDA's estimate last month but would easily break the record of 13.1 billion bushels set in 2009. The government trimmed its production estimate because it expects lower yields than it had projected last month. The USDA didn't explain why but noted that its yield estimate was the first of the season based on surveys of farmers and field inspections. It trimmed projected yields to 154.4 bushels an acre, from 156.5 last month. The report surprised analysts, who largely expected that favorable weather this summer would lead the USDA to increase its production forecast. Not many people were expecting the corn yield to be cut, said Jim Gerlach, president of AC Trading Co., a Fowler, Ind., commodities brokerage. Analysts on average were looking for a yield of about 157.7 bushels an acre.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616665","date":"2013-08-13","texts":"WASHINGTON -- Janet Yellen, a top contender to lead the Federal Reserve, has evolved -- in her own words -- from a slightly docile regional bank regulator into a proponent of hard and clear rules designed to make banks less risky. The change was prompted by her six years as president of the Federal Reserve Bank of San Francisco during a torrid period in financial history. As part of that job, which she held through 2010, Ms. Yellen oversaw scores of banks, some of which failed as the housing market collapsed. An examination of her record suggests she pre-emptively warned colleagues about problems in the real-estate market but didn't take aggressive action to address them. While some bankers overseen by Ms. Yellen describe her as a determined regulator, critics note that she had a front-row seat for some of the turbulence that sent the economy into a tailspin and could have done more to prevent rampant real-estate speculation. The San Francisco Fed district, which includes Nevada and Arizona, was ground zero for the housing crisis, said Mark Calabria, director of financial regulation studies at the libertarian Cato Institute. If Ms. Yellen is nominated to be Fed chairman, I think she at least has to answer that. Ms. Yellen's views on monetary policy, a primary responsibility for any Fed chairman, are well known. She emphasizes the human and economic toll of high unemployment, and has been an architect of the policy under current Chairman Ben Bernanke of printing money to buy long-term bonds with the aim of reducing long-term interest rates.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614650","date":"2013-08-16","texts":"Builders started construction on single-family homes at the slowest pace in eight months, underscoring worries that higher mortgage rates could restrain the housing sector's upturn. Starts of single-family homes fell 2.2 in July from a month earlier to an annual rate of 591,000, the Commerce Department said Friday. That ended two months of gains and marked the lowest level of single-family starts since November. The latest pullback, while modest, came against expectations for an increase given strong sales and industry surveys showing a surge in home builders' confidence. Slipping activity could be a sign that the jump in mortgage rates since the spring is starting to spook potential buyers, or making builders reluctant to break ground on homes that might not sell. The average rate on a 30-year mortgage has risen nearly a point since April to 4.4, though it still remains low by historical standards. Today's report shows that the recent spike in mortgage rates is indeed slowing the housing market, analysts at BTIG LLC wrote in a note to clients. However, an optimistic take on recent data would suggest the hit being taken is not nearly as bad as some had feared, at least not yet.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616682","date":"2013-08-17","texts":"A sharp pullback in global stock and bond markets has highlighted investors' worries about economic-growth prospects as the Federal Reserve prepares to trim its stimulus spending. The selloff this past week evoked the market rout of May and June, when investors were similarly concerned about the Fed's next move. Now, many investors are bracing for the central bank to rein in its 85 billion-a-month bond-purchase program as early as next month, even as recent data paint a mixed picture for the health of the U.S. economy. There will likely be some pain in the short term for stock and bond investors if the Fed trims its bond buying, said Larry Milstein, head of government and agency trading at R.W. Pressprich & Co. in New York. The Dow Jones Industrial Average shed 344.04 points, or 2.2, for the week, and the 10-year Treasury yield shot to a two-year high as bond prices tumbled. On Friday, the Dow finished down 30.72 points, or 0.2, at 15081.47. The S&P 500 index logged its biggest weekly drop since June and has dropped three of the past four weeks.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617351","date":"2013-08-17","texts":"DETROIT -- More U.S. auto plants are cranking out cars around the clock like never before, a change that is driving robust profit increases at Detroit's Big Three. After years of layoffs, plant closures and corporate bankruptcies, U.S. auto makers and parts suppliers are pushing factories to the limits. At General Motors Co., Ford Motor Co. and Chrysler Group LLC, more flexible union agreements now allow the companies to build cars for 120 hours a week or more while paying less in overtime pay. Nearly 40 of car factories in North America now operate on work schedules that push production well past 80 hours a week, compared with 11 in 2008, said Ron Harbour, a senior partner with the Oliver Wyman Inc. management consulting firm. There has never been a time in the U.S. industry that we've had this high a level of capacity utilization, he said. The Detroit auto makers closed 27 factories following the financial crisis as GM and Chrysler went through government-led bankruptcies. But U.S. vehicle sales have roared back from the trough of 10.4 million in 2009.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615759","date":"2013-08-19","texts":"Water fights are simmering in small towns across the country this summer, as rate increases irk residents and spur local governments to try to take over privately owned water systems. Municipalities in Massachusetts, California and Texas have recently filed lawsuits or set ballot measures in a bid to gain control of their water systems. Private firms have defended their rate increases, saying they have had to spend money to improve the infrastructure and are entitled to make a profit. Residents of Ojai, a small town in Southern California, will vote later this month on whether to fund the purchase of the water system serving them. In Blue Mound, Texas, the mayor has vowed to appeal a July court ruling that prevented his town from operating its water system. Also last month, a trial concluded in Superior Court in Worcester, Mass., in a lawsuit filed by Oxford, Mass., over the sale of its water infrastructure. A judge's ruling is pending. In the 1980s and 1990s, private water companies pushed to buy or manage municipal systems at the same time the costs of maintaining these systems were rising because of age, which made sales attractive to cities, said Tony Arnold, a University of Louisville law professor who has studied water privatization. In order to make a profit and invest in upgrades to the system, the companies had to raise water rates substantially and quickly, he said. Joseph Zeneski, the town manager of Oxford, said he objects to residents having to pay a consolidated water rate that he said Aquarian Water Co. of Bridgeport, Conn., set for several towns. He thinks towns should pay varying rates because their water comes from different sources and that Oxford is unfairly subsidizing a water-treatment plant in another town. They don't want to give up the Oxford water system, he said of Aquarion.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613821","date":"2013-08-21","texts":"Federal Reserve officials reaffirmed their plan to try winding down an easy-money program that has charged up global markets but left investors on tenterhooks about when or how aggressively they would move. Minutes of the Fed's July 30-31 policy meeting, released Wednesday, suggested officials were on track to start winding down the 85 billion-a-month bond-buying program, possibly as early as September, if the economy strengthens as they expect. They were, however, a bit more uncertain than in June about whether economic growth would pick up as they forecast and about the gains they were seeing in the job market. Reflecting the cautiousness shown in the minutes and their own uncertainty about how the economy will perform in the months ahead, some Fed officials have begun talking about making a small move when they do start pulling back on bond buying. If you're very uncertain about how strong the improvement in the economy is, and how self-sustaining, then you should move in fairly small increments, Eric Rosengren, president of the Federal Reserve Bank of Boston, said in an interview Wednesday with The Wall Street Journal. Mr. Rosengren, a strong supporter of the easy-money policies, said he was still forming a judgment about whether the economy was improving as expected. This is a good time to be patient and very watchful, he said.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613955","date":"2013-08-21","texts":"Exploring New Areas When private-equity firm Ares Management acquired New York real-estate investor AREA Property Partners earlier this year, two of AREA's co-founders decided to go their separate ways. Now, William Mack and his son Richard Mack are launching a new company that will focus on longer-term investments and managing the family's money. We'd like to be able to do things that don't work so great in a fund structure, says Richard Mack, who will be the chief executive of Mack Real Estate Group. The company is starting by developing 4,500 multifamily units in New York, the Seattle area and southern California.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616345","date":"2013-08-23","texts":"A technical glitch knocked out trading in all Nasdaq Stock Market securities for three hours Thursday afternoon, an unprecedented meltdown for a U.S. exchange that paralyzed a broad swath of markets and highlighted the fragility of the financial world's electronic backbone. Nasdaq officials scrambled to figure out what happened and resume trading. They shared few of their findings with trading firms or the public during regular trading hours, sowing confusion across Wall Street and leaving many investors frustrated. The decision to reopen trading with about 35 minutes to go before the close came after exchange officials were sure that banks and brokers had enough time to prepare for securities to trade again, people familiar with the discussions said. Some hiccups persisted after Nasdaq reopened trading, though Nasdaq told traders that the markets closed normally Thursday. Our systems, and the industry's, have to get to a higher level of robustness, said Robert Greifeld, chief executive of Nasdaq parent Nasdaq OMX Group Inc., in an interview. Nasdaq said it plans to work with other exchanges to investigate Thursday's outage, which centered on a problem with the data feed supplying U.S. markets with trade information, and supports any necessary steps to enhance the platform.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616212","date":"2013-08-25","texts":"THIS WEEK March on Washington President Barack Obama, as well as former presidents Jimmy Carter and Bill Clinton, will participate in a ceremony Wednesday in observance of the 50th anniversary of the March on Washington. Economic Indicators Second-quarter gross domestic product numbers come out Thursday consumer spending for July is released Friday. Earnings Roundup Movado, Tiffany, TiVo, Wet Seal, 1-800-Flowers.com, Campbell Soup and Krispy Kreme Doughnuts report. LAST WEEK","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616246","date":"2013-08-27","texts":"'Taper' Doesn't Have to Stop House Party Home isn't where the Fed is. Thanks to its extraordinary efforts to boost the economy, namely by buying hundreds of billions of dollars of mortgage bonds and Treasury debt, the Federal Reserve has engineered a rebound in housing markets. With the central bank now set to scale back its measures -- possibly as soon as next month -- and interest rates already having risen in anticipation, the worry is the party may come to a premature end. Last week, numbers showed a surprise slide in new-home sales in July. This week could bring another bad signal should Wednesday's pending-home-sales data for July disappoint. Analysts expect that the index from the National Association of Realtors will slip less than 1 from the previous month, while remaining up more than 7 year over year. The fear A jump in interest rates will have sent far more home buyers to the sidelines. The average rate for a 30-year fixed mortgage has risen by a percentage point in little more than three months, to 4.58 as of last Thursday, according to Freddie Mac. There already has been a drop in mortgage applications.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615457","date":"2013-09-03","texts":"BEIJING -- China's factory sector showed signs of stronger growth Monday, while weak economic data from a number of other Asian nations underscored the effect of a selloff in emerging-market assets. The reversal of capital flows from emerging markets, as investors anticipate higher U.S. interest rates, has hammered the economies of nations such as India and Indonesia that rely heavily on foreign investment. China has fared better, in large part because of restrictions on capital flows that have protected its currency. The HSBC purchasing managers' index came in at 50.1 in August from 47.7 in July, above the crucial 50 mark that separates expansion from contraction. Meanwhile, Indonesia posted its largest trade deficit on record, widening to 2.31 billion in July from 847 million in June and larger than economists' expectations of 350 million.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613627","date":"2013-09-04","texts":"With short-term interest rates remaining locked near zero, yield-starved investors have been turning to ultrashort bond funds as a safe place to stash their cash. Attracted by yields on ultrashort funds ranging mostly between 0.2 and 1.3, investors shifted 9.6 billion into the group during the first seven months of 2013, according to Morningstar Inc. Fund companies, meanwhile, have been rolling out new offerings, including ultrashort exchange-traded bond funds. These funds, which invest in bonds typically maturing in less than one year, are likely to suffer smaller losses than other bond funds when interest rates rise. Yet investors need to remember that they can lose money they're not a money-market substitute. And within the group there's a range of strategies carrying different risks. Some investors with a long memory may recently have gotten a reminder of how ultrashort bond funds can fail to protect investor money Last month, Charles Schwab Corp.'s fund unit filed with regulators to offer a series of ultrashort ETFs. The Schwab YieldPlus mutual fund lost 35 during the financial crisis in 2008, resulting in the company agreeing to pay a 119 million fine to settle civil charges from the Securities and Exchange Commission that it had allegedly misled investors about the safety of the fund. Schwab didn't admit or deny guilt. It's unclear from the new filings how the ETFs will differ from the YieldPlus strategy. A Schwab spokeswoman says the strategies are different from other Schwab funds and ETFs currently or previously offered. But she declines to comment further, citing the quiet period around the fund filings.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616669","date":"2013-09-04","texts":"WASHINGTON--The U.S. economy expanded at a modest to moderate pace in recent months, led by consumer spending on cars and housing, according to the Federal Reserve's survey of regional economic conditions released Wednesday. The central bank's beige book report, a summary of conditions in its 12 districts from early July through late August, was largely positive. Eight districts reported moderate growth, while three said growth was modest. The remaining district, Chicago, said economic activity had improved. Back-to-school shopping helped boost overall consumer spending, particularly in Boston, Kansas City and Dallas. Sales were mixed in New York, and were more modest in the other districts. Activity in the travel and tourism sectors expanded in most areas. Demand rose in part from stronger car sales and housing-related goods such as furnishings or home-improvement items, the report said. Still, several regions said consumers remain cautious and highly price-sensitive. The economic snapshot was prepared by the Federal Reserve Bank of San Francisco and is based on anecdotal information from other regional banks gathered through Aug. 26. It comes two weeks before the Fed's Sept. 17-18 policy meeting, where the central bank will consider scaling back its large-scale bond purchases. Officials will likely consider this report, as well as Friday's employment data and other recent gauges, to determine whether the economy has improved enough for the Fed to begin withdrawing its extraordinary support.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613613","date":"2013-09-09","texts":"The divergent fortunes of global emerging markets can be told through Latin America's two biggest economies Mexico and Brazil. Think of it as a tortoise-and-hare story. For the past decade, Brazil has boomed by selling raw materials to China. Its expanding middle class gorged on a tide of cheap credit unleashed by central banks in advanced economies as they tried to energize their recoveries. Brazil's economy averaged 3.6 annual growth over the past decade, peaking at a 7.5 pace in 2010. Its currency surged in value. All the usual signs of excess were in evidence Brazilian shoppers cramming stores in New York and Miami news stories reporting 30 cheese pizzas and 35 martinis in Sao Paulo. By comparison, Mexico has seen lackluster growth, partly because it has been tied to a struggling U.S. economy. It has also suffered from deep problems of its own laws that banned foreign investment in energy, a dysfunctional tax code, a tattered education system and hidebound economy dominated by a handful of near-monopolies. And it suffered a surge in drug violence, deterring tourists and investors.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614446","date":"2013-09-09","texts":"Koch Industries Inc., known for concentrating on such unglamorous industries as oil refining, chemicals and fertilizer, has a new role supplying electronic parts to Apple Inc. The Wichita, Kan.-based conglomerate, owned by billionaire brothers Charles and David Koch, on Monday announced an agreement to pay 7.2 billion, or 38.50 a share, for Molex Inc. On the Nasdaq Stock Market, shares in Molex surged 32 to 38.63 at 4 p.m. Monday. Molex, based in Lisle, Ill., makes connectors, antennas and switches for cars, computers, cellphones and factory equipment, among other things. Sales to Apple accounted for about 14 of its 3.62 billion in revenue for the fiscal year ended June 30. Though demand from smartphone and tablet-computer makers has soared in recent years, the market is subject to sudden downdrafts as fads change, and suppliers such as Molex are under constant pressure to cut prices. Molex has set a goal of raising pretax margins to 14 but managed just 9.4 in the latest quarter. Koch's offering price is a pretty heady premium for a company that's generating a margin that is lower than its peers, said Shawn Harrison, an analyst at Longbow Research in Cleveland. The only way the transaction works is if the margins expand substantially. Mr. Harrison expects Molex's margin on earnings before interest and taxes to be 11.6 for 2014, compared with 15.4 and 20.1 respectively for larger rivals TE Connectivity Ltd. and Amphenol Corp.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617248","date":"2013-09-09","texts":"METUCHEN, N.J.--Republican Steve Lonegan and his Democratic opponent for an open U.S. Senate seat, Newark Mayor Cory Booker, took in a similar amount of household income last year, but the sources of their money and the taxes they paid contrasted sharply, documents made available Monday showed. The two are running in a special Oct. 16 election to fill the Senate seat held by Frank Lautenberg, who died in June. Mr. Lonegan has made Mr. Booker's financial transparency and earnings a campaign issue, and the Newark Democrat released 15 years of his returns Friday in response. Mr. Lonegan's campaign allowed reporters to view three years of his tax returns Monday. Mr. Booker's total income was 509,719 last year, and Mr. Lonegan and his wife's was 515,280, the documents showed. Mr. Booker, a nationally known Democrat, has supplemented his mayoral salary with hundreds of thousands of dollars from speaking fees across the country. He made 347,594 in speaking fees last year and brought in a total of more than 1.3 million since 1998. Mr. Lonegan's tax returns depicted a modest investor who has swung between profits and losses on a handful of rental properties and stock holdings.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614483","date":"2013-09-10","texts":"METUCHEN, N.J. -- Republican Steve Lonegan and his Democratic opponent for an open U.S. Senate seat, Newark Mayor Cory Booker, took in a similar amount of household income last year, but the sources of their money and the taxes they paid contrasted sharply, documents made available Monday showed. The two are running in a special Oct. 16 election to fill the Senate seat held by Frank Lautenberg, who died in June. Mr. Lonegan has made Mr. Booker's financial transparency and earnings a campaign issue, and the Newark Democrat released 15 years of his returns Friday in response. Mr. Lonegan's campaign allowed reporters to view three years of his tax returns Monday. Mr. Booker's total income was 509,719 last year, and Mr. Lonegan and his wife's was 515,280, the documents showed. Mr. Booker, a nationally known Democrat, has supplemented his mayoral salary with hundreds of thousands of dollars from speaking fees across the country. He made 347,594 in speaking fees last year and brought in a total of more than 1.3 million since 1998. Mr. Lonegan's tax returns depicted a modest investor who has swung between profits and losses on a handful of rental properties and stock holdings.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614403","date":"2013-09-12","texts":"After working since the credit crisis to push back the time at which their debt comes due, American corporations are now taking on more short-term risk. Concerns that the Federal Reserve will soon begin to dial back the flow of easy money has pushed up the cost of borrowing longer-term funds in recent months. But since the Fed hasn't actually moved to raise interest rates and isn't expected to for a while, short-term funds remain incredibly cheap. That gap has created opportunities for some companies to borrow more short-term cash to buy back stock, help fund acquisitions, or pay off longer-term debt. Other companies are entering into derivatives deals with banks to get more exposure to floating interest rates, or to profit from a widening gap between short and long-term rates. The bet is that rates will remain low enough and markets liquid enough that companies will be able to keep borrowing when their short-term loans come due. It is a pretty safe one, given that the Fed is expected to keep its benchmark interest rate close to zero for at least another year. Still, the moves highlight the distortions that have been created by the central bank's deep intervention into the markets. Before the downturn, companies typically funded a lot more of their needs with short-term borrowings. During the financial crisis, when banks were in trouble, short-term borrowing costs for many borrowers spiked and parts of the credit markets nearly came to a standstill. Some companies moved to reduce their reliance on commercial paper and short-term IOUs due to concerns that these avenues of funding could freeze up during times of market stress. And as the Fed pushed interest rates to rock-bottom lows and bond yields fell, companies issued more bonds and longer-term loans, locking in low rates for years.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614895","date":"2013-09-16","texts":"Federal Reserve officials will face at least three sources of economic uncertainty when they gather Tuesday and Wednesday rising U.S. interest rates, unsettling events abroad and another battle in Washington's long-running budget war. All three could restrain the U.S. economy in coming months. The Fed can influence only one of them directly. The Fed's assessment of the latest threats will shape its decision about scaling back an 85 billion-a-month bond-buying program that has buoyed markets and key parts of the U.S. economy. That makes the central bank's outlook particularly consequential as the four-year-old recovery again fails to meet the Fed's own projections. It's a very difficult decision for them to make, said BNP Paribas economist Julia Coronado. They've had a forecast for a pickup in growth. It's not materializing. For interest rates -- a factor partly within the Fed's control -- the early evidence could spur caution among policy makers.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616547","date":"2013-09-16","texts":"Financial Analysis and Commentary The Federal Reserve will debate this week whether it is time to scale back bond purchases. One argument against Inflation is far too low. Since January 2012, the Fed has set as its target a long-term inflation rate of 2. And since then, inflation has fallen increasingly short of that. As of July, the Commerce Department's price index for personal-consumption expenditures, excluding food and energy -- the Fed's preferred measure -- was running just 1.2 above its year-earlier level. To get to 2 by the end of 2013, the index would have had to increase at a 3 annual rate in the final five months of the year. It hasn't held that sort of pace since the early 1990s.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617201","date":"2013-09-17","texts":"The largest U.S. banks say they would be able to weather a severe economic crisis with higher capital levels than previously estimated, bolstering the notion that financial institutions have made headway in their quest to minimize risk and shore up their balance sheets. J.P. Morgan Chase & Co., Bank of America Corp., Citigroup Inc. and Goldman Sachs Group Inc. were among big banks that released results Monday of company-run reviews showing their minimum capital levels would remain well above regulatory requirements during several quarters of high unemployment, falling home prices and stock-market turmoil. The midyear stress tests are required under the Dodd-Frank Act, which called on large banks to perform regular analyses of whether they could remain adequately capitalized if another financial crisis were to occur. Financial institutions with large consumer- and commercial-lending businesses also projected their loan losses would be lower during a hypothetical downturn than previous estimates. Eugene Ludwig, a former comptroller of the currency and now chief executive officer of Promontory Financial Group, a consulting firm that advises banks on regulatory and financial matters, said the results weren't particularly surprising given the evolution of the economic cycle. Eighteen large banks released results from an initial round of the Dodd-Frank stress tests in March and were required to release the results of a midyear test between Sept. 15 and Sept. 30. The tests, based on banks' own internally developed scenarios, are separate from stress tests performed by the Federal Reserve each year, called the Comprehensive Capital Analysis and Review, or CCAR.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616051","date":"2013-09-18","texts":"FedEx Flies Under the Radar on Fed Day Investors seeking to take the global economy's temperature on Wednesday will be focusing intensely on the words and actions of the men and women at the Federal Reserve. They would do well to look at FedEx Corp. as well as the Fed. The term bellwether is sorely overused, but it certainly applies to the world's largest airfreight company by volume. Not only is trade a leading indicator of the global economy's health, but the high-value international airfreight that makes up much of FedEx's revenue is the leading tip of that leading indicator. Unfortunately for FedEx, the past year or so has been full of disappointing results and management guidance for that usually lucrative part of its business. Between last May and today, expectations for its adjusted earnings per share in the fiscal year through May 2014 went from a predicted 8.56 to 6.97. Wednesday's results for the first quarter of fiscal 2014 are seen at a reported 1.46 versus 1.45 a year ago.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617410","date":"2013-09-18","texts":"Corrections & Amplifications Chad and Erica Dryden have been late a couple of times on mortgage payments due to patchy income flows. A U.S. News article on Wednesday about the steadying of U.S. incomes incorrectly said the couple had missed mortgage payments. WSJ Septermber 19, 2013 American incomes are no longer free-falling -- but they're not rising, either. The income of the typical U.S. family stabilized last year for the first time since the recession, according to the Census Bureau's latest snapshot of U.S. living standards, released Tuesday. The levelling off follows four years of declines that pushed incomes to their lowest levels in nearly two decades.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614988","date":"2013-09-19","texts":"Federal Reserve officials created new uncertainty about how much farther they will push their easy-money policies--and new questions about how effective they are at communicating their thinking--with the decision to stand pat on the pace of their bond purchases for now. The Fed on Wednesday went beyond merely deciding to keep buying the 85 billion a month of mortgage-backed securities and U.S. Treasurys that it had been telegraphing for months it might start winding down. In the news conference after a two-day policy meeting, Fed Chairman Ben Bernanke also seemed to walk away from some of the guidance he had given in June on how the bond-buying program would play out over the next year, making it even less clear when the program will end. Mr. Bernanke said Wednesday that he thought the decision not to begin pulling back on bond purchases was right given a weaker economy than the Fed expected a few months ago and one facing new threats from a fiscal showdown in Washington. He also said the Fed might still proceed with a pullback in the months ahead if the economy cooperates. In his defense, Mr. Bernanke said that he has never said the Fed would start the pullback in September and that the decision always depended on the economy's vigor. I don't recall stating that we would do any particular thing in this meeting, Mr. Bernanke said at the news conference. Yet some investors and analysts said the Fed's action was the latest in a series of communications missteps, demonstrated by the fact that numerous surveys showed investors broadly expected the central bank to move in September.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616835","date":"2013-09-23","texts":"HANOI--When Vietnam's decadelong economic boom ended in 2009, Nguyen Huynh Diep lost about 50,000. A novice investor in the country's stock market, Mr. Diep said he saw the value of many of his holdings slump. Now, though, he is back on the trading floors of Hanoi's stock brokerages, picking up bargains when he can as Vietnam's economy begins to heat up again after a long and often painful thaw. The market's back up this year, the 40-year-old Mr. Diep said. And I keep buying more stock. Vietnam's main stock-market index is up 16 this year, according to FactSet, one of the best performers among emerging markets. In comparison, the MSCI Emerging Markets Index, which tracks 21 countries, is down 3.7 year to date. This strong showing has come amid worries over future growth rates in China and the expectation that the U.S. Federal Reserve eventually will end its bond-buying program--at its meeting last week, the Fed kept the asset purchases intact--with expectations that this would send interest rates higher, prompting investors to pull money out of emerging markets from Brazil to Indonesia and put that cash back to work in developed economies. Over the past several years, low interest rates and easy-monetary policies in the developed world sent investors on a hunt for higher-yielding assets in emerging markets. The difference between Vietnam and more troubled emerging markets is that Vietnam's boom ended in 2009. That has given the country more time to put in place overhauls to help strengthen its economy, while some of its peers faced pressure to put their houses in order only during this year's selloff.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614121","date":"2013-09-26","texts":"With technology glitches becoming more common, the country's two stock-exchange giants are pondering a scenario some might have considered unlikely teaming to protect one another in the event of breakdowns. Longtime rivals NYSE Euronext and Nasdaq OMX Group Inc. are discussing a plan with other exchanges in which each company would run a backup for the other's benchmark stock-pricing data, according to people involved in the discussions. If one exchange group's feed went down, traders could turn to its competitor for data while the problem was being fixed. The impetus is a run of recent breakdowns -- two for Nasdaq and one at NYSE. The Securities and Exchange Commission this month set a 60-day deadline for exchanges to strengthen their technology, and exchange executives have since brainstormed ways to build better backup systems. The potential cooperation between NYSE and Nasdaq grew out of those discussions, the people said. The discussions remain in the early stages but illustrate renewed efforts within the industry to tackle its technology problems. The talks follow a three-hour halt Aug. 22 in securities listed on the Nasdaq Stock Market, stemming from a software failure that knocked out a data feed required for brokers to ensure a stock trade executes at the best price available. The data feed, managed by Nasdaq and known as the Securities Information Processor, suffered another brief outage a week later.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613486","date":"2013-09-27","texts":"Consumers boosted their spending only modestly in August, the latest sign of the U.S. economy struggling to gain steam as worries about government policies cloud the outlook. Personal consumption, a broad measure of spending on everything from refrigerators to health care, rose 0.3 in August from a month earlier, the Commerce Department said Friday. Adjusted for inflation, spending climbed 0.2. The gains, while a slight pickup from July, showed consumers maintaining a relatively cautious stance as they moved into the fall. That could diminish hopes for a pickup in economic growth in the second half of the year. Many economists say household spending is likely to slow if Washington's budget battles spook consumers, businesses and investors. Consumer confidence already appears to have taken a hit after climbing into the summer The University of Michigan reported Friday that its latest gauge of consumer sentiment fell to a five-month low.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613621","date":"2013-09-28","texts":"Stocks fell as investors weighed the budget standoff against upbeat signs from companies and consumers. The Dow Jones Industrial Average shed 70.06 points Friday, or 0.5, to 15258.24. The Dow average logged its first weekly loss since the week ended Aug. 30, declining 1.25, and it has fallen in six of the past seven trading days. For the year to date, the 30-stock gauge is up more than 16. The prospect of a partial government shutdown next week as Congress and the White House wrangle over the budget helped keep buyers at bay, overshadowing encouraging economic data and corporate reports, including strong results from Nike, a new addition to the Dow average. The market is very narrowly focused on what's going on in Washington, said Paul Zemsky, chief investment officer of multiasset strategies at ING U.S. Investment Management. Mr. Zemsky said what is worrisome isn't so much that the government might shut down in the coming week, but the apparent political dysfunction shows how difficult it will be to raise the debt ceiling in a couple of weeks. While he isn't selling stocks in anticipation, he won't be adding to positions until the debt ceiling is raised.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613954","date":"2013-09-30","texts":"The Federal Reserve's Sept. 18 decision to stay the course on its asset purchases surprised and confused many market participants, who felt the central bank had sent contradictory signals about its intentions. In fact, the Fed has behaved in a way completely consistent with Chairman Ben Bernanke's public comments, at least since July. A careful look at the labor market numbers suggests that if the Fed sticks to the chairman's words, there will be no significant tapering any time soon. Before July, the Fed announced on a number of occasions that a 6.5 unemployment rate would indicate that it is time to start raising interest rates and winding down its easy-money policies. The unemployment rate has fallen significantly from its high of 10 in October 2009 to the mid-sevens. But the labor market is still sickly because, as I pointed out in these pages in June, the employment rate--the proportion of the working-age population that has jobs--has made little progress. The employment rate is the best single indicator of labor-market health, and it is still hovering at around 58.5, down significantly from its pre-recession levels of over 63. The economy is adding jobs, but just barely staying ahead of population growth. Rather than making up for ground lost during the recession, the economy is still treading water. Mr. Bernanke and other Fed governors are clearly aware of the distinction between the unemployment and employment rates. In his July 17 congressional testimony, Mr. Bernanke said that if a substantial part of the reductions in measured unemployment were judged to reflect cyclical declines in labor force participation rather than gains in employment my emphasis, the Federal Open Market Committee would be unlikely to view a decline in unemployment to 6.5 as a sufficient reason to raise its target for the federal funds rate. The jobs report for August showed the decline in labor-force participation and employment rates that the Fed feared. On Sept. 18--following the FOMC's vote to continue its current pace of bond-buying--Mr. Bernanke reinforced the message. The unemployment rate is not necessarily a great measure in all circumstances of the state of the labor market overall, he said. We are looking for overall improvement in the labor market.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614475","date":"2013-10-02","texts":"Economic data across Asia are showing how the region is benefiting from an upturn in demand from industrialized nations. After the U.S. entered its recession in 2007, export-focused nations in Asia, notably China, relied on massive domestic stimulus to boost local demand. Now, as the U.S. leads a global economic recovery, Asia's dynamic has changed, with manufacturing indexes from the region on Tuesday showing strong export orders. The latest pickup in Asian manufacturing activity reflects stronger demand from developed markets like the U.S. and Europe, as well as moderate growth in China, said Chetan Ahya, chief Asia economist at Morgan Stanley. Mr. Ahya expects demand from developed markets to strengthen over the rest of 2013 and to improve further next year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617054","date":"2013-10-03","texts":"WASHINGTON--Major Wall Street banks said they will sell business lines, let the government take over certain subsidiaries and enter into bankruptcy proceedings to avoid a taxpayer-funded bailout in the event of another financial crisis. The latest round of so-called living wills, released by regulators Thursday, showcased the disparate approaches banks plan to take to dismantle their firms in times of severe market stress. Goldman Sachs Group Inc. said its preferred strategy would be to avoid insolvency by recapitalizing its major U.S. and U.K. broker-dealers, as well as other key businesses. Citigroup Inc. would try to sell off its broker-dealer units first before letting the parent company fail under one scenario. Bank of America Corp. said the simplest approach to winding down its business would be through a Chapter 11 bankruptcy filing by its holding company, with its subsidiaries continuing to operate. If unable to recapitalize its business, J.P. Morgan Chase & Co. would sell or divest business lines or conduct a rapid and orderly wind down in proceedings through bankruptcy. The plans, only a small portion of which are released publicly by the Federal Reserve and Federal Deposit Insurance Corp., highlight the challenges banks and regulators face as they try to ensure that increasingly complex financial firms could be dismantled without government aid. Ernie Patrikis, a banking partner at law firm White & Case, expressed doubts about how useful the plans would be in times of crisis. It is difficult to anticipate where the next major problem will arise, he said. And you can't just sell or shut down companies overnight.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616403","date":"2013-10-04","texts":"Inflation might be tame, but it still is going to affect your taxes next year. The Internal Revenue Service won't release the official numbers for inflation adjustments to tax-code provisions affecting individuals in 2014 until later this year. But some experts have released their own projections. James Young, the Crowe Horwath professor of accountancy at Northern Illinois University, and specialists at tax publisher CCH, a unit of Wolters Kluwer, say the official inflation rate used to adjust the numbers will be about 1.6, lower than last year's 2.5 rate and 2011's 3.8 rate. Their estimates are based on data released by the U.S. Department of Labor. Most taxpayers will experience modest savings from inflation indexing, says Mark Luscombe, principal analyst at CCH. A married couple filing jointly who have 100,000 of taxable income, for example, will owe about 145 less for 2014 compared with 2013 because of tax-bracket indexing, and they also will realize small gains from changes to the personal exemption and the standard deduction. Congress added the adjustments to the tax code starting in the late 1980s in an effort to prevent taxpayers from owing more simply because inflation pushed them into higher brackets and eroded benefits. Many--but not all--provisions are adjusted annually.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617342","date":"2013-10-04","texts":"Twitter Inc. on Thursday revealed plans to raise up to 1 billion in a public offering, looking to cash in on a messaging service that has transformed public conversation but is still losing money and facing challenges attracting new users and advertisers. Potential buyers for the first time saw the financials behind one of the most anticipated stock-market debuts of the year, which showed the social network's revenue more than doubled to 254 million in the first six months of this year. But its net loss grew by 40 to 69 million as the company's expenses ballooned. Twitter's user growth is also slowing, and prices for advertisements, which make up the bulk of the company's revenue, are falling. They certainly have a lot of work ahead of them to get mainstream America to understand how Twitter works, said Brian Solis, an analyst at the Altimeter Group. Twitter had previously shielded the figures by filing its initial IPO documents confidentially in July, under a new federal law.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616714","date":"2013-10-07","texts":"The president of the Puerto Rico Senate said he expected an announcement soon from the White House about how to help the ailing island economy. Eduardo Bhatia told reporters at a gathering of municipal-bond analysts in New York on Monday that he expected the White House effort would likely focus on ways to improve the broader Puerto Rico economy, rather than bailing out the deficit-ridden island government. I think it will be more economic-development features, not necessarily money,'' Mr. Bhatia said in an interview. The Wall Street Journal reported Monday that officials at the White House, Treasury and Federal Reserve have been meeting recently to discuss the potential blowback of Puerto Rico's problems on the U.S. municipal-bond market. Mr. Bhatia said he expected that the President's Task Force on Puerto Rico's Status, an advisory group, would make its recommendations for the island in the next few months.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613649","date":"2013-10-08","texts":"The Federal Reserve's decision to continue one of the most audacious experiments in monetary history -- an 85 billion-a-month bond-buying program designed to boost growth -- followed six months of tense negotiations inside the central bank, and a stumbling effort to let the public know what was going on. A small group of Fed officials has been privately pushing Fed Chairman Ben Bernanke to plan an exit from his signature program, said several people familiar with the closed-door deliberations. But glimmers of a weakening economy prompted the Fed in September to keep the program going -- surprising markets primed by months of central-bank suggestions that a wind-down was nearing. The saga shows how hard it is for a central bank to communicate about plans that are complicated, evolving and conditional on the economy. Fed officials regard programs designed to sway long-term interest rates as essential to the fragile economy -- tools for stimulating consumer spending, investing and home buying. Mr. Bernanke has long argued that being more transparent will make such policies more effective. The Fed's efforts to telegraph its strategy left investors confused at key points about where it was heading, and some misread Mr. Bernanke's intentions about the bond-buying program and interest rates. That disconnect exacerbated a real-world problem rising rates that by August showed signs of denting a budding housing recovery. At present, the Fed has laid the groundwork to start reducing its bond purchases later this year or early next year. But that depends on how the economy weathers another recent soft patch, which has been complicated by feuding between Congress and the White House over fiscal policy. More clues will appear Wednesday when the Fed releases minutes of its Sept. 17-18 meeting.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615113","date":"2013-10-09","texts":"WASHINGTON--U.S. banks should work with borrowers at risk of missing loan payments because of the partial government shutdown, banking regulators said on Wednesday. The regulators said the effects of the shutdown should be temporary and cautioned bank examiners against faulting institutions that make prudent efforts to modify terms on existing loans in order to ensure borrowers can stay out of default. The shutdown, which has dragged on for more than a week, has resulted in the furlough of hundreds of thousands of U.S. government workers and has limited U.S. payments to contractors and other businesses. The regulators said borrowers affected by the shutdown should contact their lenders immediately should financial strain occur. Affected borrowers may face a temporary hardship in making payments on debts such as mortgages, student loans, car loans, credit cards, and other debt, said the regulators, including the Federal Reserve, the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corp., the National Credit Union Administration, and the Office of the Comptroller of the Currency. The agencies encourage financial institutions to consider prudent workout arrangements that increase the potential for creditworthy borrowers to meet their obligations. The regulators generally reserve such leniency requests for natural disasters, such as hurricanes.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616886","date":"2013-10-09","texts":"WASHINGTON--A premature exit by the U.S. Federal Reserve from its easy-money policies could cause 2.3 trillion in global bond portfolio losses, the International Monetary Fund warned Wednesday. Although the IMF assumes in its latest economic forecasts that the U.S. central bank will unravel its policies at a tempered pace, the fund said the market's volatile reaction to Fed exit comments earlier this year show there is still a risk of moving too fast. Engineering a smooth transition to monetary normalization will require a clear and well-timed communication strategy by the Federal Reserve to minimize interest rate volatility, said Jose Vinals, the IMF's top financial counselor. Containing longer-term interest rates and market volatility has already proven to be a substantial challenge, as shown by the sharp rise in bond yields and volatility since May, he said. Global stock, bond and currency markets took major hits earlier this year after Fed officials indicated they could soon begin withdrawing the bank's extraordinary stimulus, possibly before the end of this year. Markets have since calmed as the Fed tempered expectations for an earlier exit, but central-bank officials still aren't ruling out reducing their 85-billion-a-month bond purchases before the end of the year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617321","date":"2013-10-09","texts":"Financial Analysis and Commentary 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. 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. 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. 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.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614260","date":"2013-10-10","texts":"The Dow Jones Industrial Average soared more than 300 points as investors breathed a sigh of relief that lawmakers showed signs of breaking the political gridlock in Washington. Hints of an end to the political brinkmanship which led to a partial government shutdown raised hopes that a deal to lift the federal debt ceiling could be reached in time to avoid the U.S. Treasury defaulting on debt payments. The Dow climbed 323.09 points, or 2.2, to 15126.07, closing near the session's highs. Thursday's advance was the biggest one-day point gain since Dec. 20, 2011 and the biggest on a percentage basis since Jan. 2, when the blue chips gained 2.3 after Congress reached a deal to avoid an earlier budget-disaster scenario, the so-called fiscal cliff. While the big rally served to break the gloom that has been building among investors since the government shutdown began, many investors said they remain wary of jumping into the market until it's clear that a deal really is at hand. Should progress toward resolving the impasse falter, stocks could easily fall back, they said. We're getting signs of a thaw it does make me feel better, said Chris Bertelsen, chief investment officer at Global Financial Private Capital, which manages 2.3 billion. But I tend to be skeptical until there's an actual agreement.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614053","date":"2013-10-15","texts":"Stocks finished higher after top lawmakers said they were nearing a deal to raise the federal debt ceiling and end the government shutdown. The Dow Jones Industrial Average rose 64.15 points, or 0.4, to 15301.26, its highest finish since Sept. 26. The benchmark recovered from a loss of as many as 101 points earlier in the session, and has gained 525 points over the past four sessions on expectations of an agreement. The S&P 500 index rose 6.94 points, or 0.4, to 1710.14. The index is up 1.7 since Sept. 30, the eve of the government shutdown. The Nasdaq Composite Index gained 23.4 points, or 0.6, to 3815.27. A meeting between President Barack Obama and Senate and House leaders Monday afternoon was postponed to allow lawmakers to work on a resolution that would raise the debt limit and reopen the government, the White House said in a statement. The wrangling comes just days away from a deadline set by the Treasury Department to raise the federal borrowing limit.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614482","date":"2013-10-15","texts":"In its proud and storied history, Hungary has produced a dozen winners of the Nobel Prize four for chemistry three for physics three for medicine one for economics and one for literature. Not bad for a little country of not quite 10 million people. But one curious fact All of Hungary's laureates ultimately left, or fled, the country. If you are brilliant, ambitious and Hungarian, better get out while you can. I've spent the past week reading up on the Nobels, mostly to relieve the gloom emanating from Congress, the White House, the State Department, the GOP caucus. It's paralysis time in D.C., and America-in-Decline time on the op-ed pages. Reflecting the global mood, Xinhua, the Chinese news agency, editorialized last week that, with a possible U.S. default on the horizon, it is perhaps a good time for the befuddled world to start considering building a de-Americanized world. But then there is the Nobel Prize, and the fact that Americans, both native-born and immigrants, took home nine of them this year alone. Note to Xinhua China, with 1.3 billion people, has produced a grand total of nine winners in its entire history. Of those nine, seven live abroad, including three in the U.S. Another, Liu Xiaobo, sits in a Chinese prison. How is national greatness best judged The typical view is that what matters is size Size of the economy, population, landmass, navy, nuclear arsenal. Hence the hysteria that China may overtake the U.S. in terms of GDP sometime in the next decade. Hence the treatment of middling powers such as Russia with a GDP roughly that of Italy's as great powers.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614408","date":"2013-10-17","texts":"The government shutdown might be over, but the long-running drama about when the Federal Reserve will start scaling back its 85 billion-a-month bond-buying program might now last longer. Just a few months ago, the Fed seemed to be on track to start pulling the program back by September in response to an improving economy. Now, it isn't clear when the first move will occur. The Fed is unlikely to start curtailing its bond buying at its next policy meeting Oct. 29-30. Fed officials have said the decision depends on how the economic data evolve, but the data won't be very illuminating into November because the partial government shutdown closed the agencies that collect them. For those who really look at the data, it is going to basically delay thought of changing course, Richard Fisher, president of the Federal Reserve Bank of Dallas, said Thursday in an interview. Mr. Fisher doesn't think the bond-buying program is working very well, so he is ready to end it. But he thinks the economic landscape will be too unsettled at the October meeting to make a judgment. I personally will not support any action at this next meeting because we have so much confusion about what just happened, he said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614973","date":"2013-10-17","texts":"WASHINGTON--Eight hours after President Barack Obama signed a bill to reopen the federal government, top congressional budget leaders from both parties gathered over breakfast to try to find common ground in coming weeks. But differences between the two sides remain stark, and a number of congressional aides said the chances of devising a budget that both parties can live with are low. The conference committee the lawmakers head faces a Dec. 13 deadline under the package Congress approved late Wednesday. Republicans are pushing for deep changes and cost reductions to Medicare and Medicaid, and a rollback of Pentagon cuts that are part of the so-called sequester. Democrats have demanded that tax increases and a reduction in other sequester cuts be part of any package. The breakfast session of four senior lawmakers, including House Budget Committee Chairman Paul Ryan R., Wis. and Senate Budget Committee Chairman Patty Murray D., Wash., came as hundreds of thousands of workers returned to the job at federal agencies, restarting government data analysis on unemployment and crop prices, reopening national parks and resuming scientific research. The lawmakers who met Thursday are part of a 29-person budget conference committee that will work to reconcile differing tax and spending goals approved by the House and Senate earlier this year. Mr. Ryan and Ms. Murray said they would try to move past the acrimony surrounding the 16-day government shutdown and find areas of agreement in coming weeks, but made no assurances of success and avoided setting goals.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613556","date":"2013-10-21","texts":"J.P. Morgan Chase & Co. reached a tentative deal this weekend to pay 13 billion to end a number of civil investigations into its sale of mortgage securities before the 2008 financial crisis, but a separate and potentially more serious criminal probe into the bank and its executives will continue. The Justice Department, convinced it has strong evidence related to the bank's conduct and eager to send a message to Wall Street, rebuffed repeated attempts by J.P. Morgan to settle the criminal investigation without admitting wrongdoing and agreed only to resolve the civil investigations. It also threatened last Thursday to file its civil case this coming Wednesday if the two sides can't reach a final deal, said people close to the talks. The proposed pact includes 4 billion to settle claims by the Federal Housing Finance Agency that J.P. Morgan misled Fannie Mae and Freddie Mac about the quality of the mortgage securities it sold them, another 4 billion in consumer relief, and 5 billion in penalties paid by the bank, according to people familiar with the deal. But the two sides remain apart on several issues related to the civil settlement, including whether the bank should have to admit that it didn't follow its own due-diligence standards in packaging the mortgages into securities it could sell, according to people familiar with the discussions. The talks come as the bank faces an uphill battle in Washington. Once a favorite in the capital, J.P. Morgan now is grappling with a bruised reputation and fractured relationship with regulators in the wake of the London whale trading fiasco out of the bank's U.K. headquarters. The trades, which lost the bank 6.5 billion, transformed J.P. Morgan from an institution that seemingly could do no wrong to one under heavy and unyielding scrutiny. When top bankers assembled at the White House in early October, J.P. Morgan's James Dimon found his name card on a seat in the corner, far from his usual perch across from President Barack Obama. Mr. Dimon, who in previous gatherings had been quick to share his opinions with the president, was reserved and said little during the meeting, according to people who attended. Other chief executives saw his placement as a symbolic shift.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617327","date":"2013-10-24","texts":"KKR & Co.'s third-quarter profit surged more than 60, buoyed by the increasing value of companies it owns and fees the buyout firm reaped from new deals it struck. KKR's third-quarter net income rose to 204.74 million, the buyout firm reported Thursday. So-called economic net income rose more than 20 to 613.75 million. Private-equity firms contend economic net income better reflects their performance because it gauges both realized and unrealized gains and losses from investments and factors in accounting quirks related to partnerships becoming public companies. The private-equity firm's economic net income after taxes amounted to 84 cents a adjusted unit, soundly beating Wall Street expectations. Analysts polled by Thomson Reuters expected 59 cents. In 4 p.m. trading on the New York Stock Exchange, the buyout firm's shares rose 45 cents, or 2, to 23.36. KKR's profits were largely the result of increases in the value of companies the firm bought and then partially sold in initial public offerings, including hospital operator HCA Holdings Inc. and NXP Semiconductors NV. The value of KKR's private-equity funds, which gather money from investors to buy companies, increased 5.9. New York-based KKR's most-high-profile deal of the quarter, the takeover of industrial-pumps manufacturer Gardner Denver Inc., was a key contributor to its results in the quarter, as the buyout firm benefited by selling chunks of its equity in the 3.7 billion deal to other investors. That, along with similar work on other deals, resulted in transaction fees rising more than 70 compared with the same period a year ago, to 129.13 million.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614942","date":"2013-10-25","texts":"Richard Parsons says the 13 billion penalty extracted from J.P. Morgan will make big banks reluctant in future crises to help government by absorbing smaller failures Sending a Bad Message to Big Banks, op-ed, Oct. 21. But isn't Dodd-Frank meant to keep a financial meltdown from ever happening again That's not the lesson to me. It's that socializing present small failures assures a larger future failure. Mr. Parsons notes that 30 of the top 50 banks in the 1980s banking crisis are now amalgamated into Bank of America, J.P. Morgan and Wells Fargo, and only one of these three giants might have survived 2008 if failure hadn't been further socialized by the Federal Reserve. Results The U.S. is now 90 trillion in debt for current and future obligations. From the point when government intervened in the S&L crisis, we've not since had sustainable normalized interest rates. Despite economic expansion under Presidents Reagan and Clinton, interest rates have been on the same downward trajectory. There is no lasting risk-free rate of return anymore. Officials at the Fed lament that in the 1980s the Fed could lower interest rates to spur economic activity, but today with rates near zero, they must use extraordinary measures. That's incorrect. By forcibly intervening in market failures, government has driven risk steadily higher and interest rates and purchasing power correspondingly lower. These aren't the seeds of growth but of its destruction. Now we've socialized failures spanning 50 years into the maw of the currency of the U.S. and onto the balance sheet of the Federal Reserve. Where now do we send our socialized failures To some other planet Our great economic thinkers have done the exact, wrong thing.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615313","date":"2013-10-27","texts":"Investors have shoveled almost 14 trillion into U.S. mutual funds, but a good chunk of that money is riding on mistaken assumptions. Example buying a fund based primarily on past performance, the most frequently cited factor in choosing funds by 47 of investors, according to a report from research and consulting firm Cerulli Associates. Apparently, the familiar refrain that past performance is no indicator of future results isn't top of mind when we decide where to invest our hard-earned money. You can't really blame investors. Historical returns are trumpeted in advertising and fund disclosures, and past results are a reasonable guide in our own day-to-day experiences. Indeed, when choosing a fund one of the few things you're given is past performance, says Shlomo Benartzi, a UCLA professor and chief behavioral economist at Allianz. And, after you experienced so many things in your life where past performance will tell you a lot about what will happen, we're now asking you to take the most salient available information you have and ignore that. The good news is that more investors appear to be cost-conscious. The cost of the fund was the second most commonly cited factor in choosing a fund 42 of investors, says the Cerulli report. The message is getting out there that we cannot control performance, but we can certainly control costs, says George Papadopoulos, a financial planner in Novi, Mich., a Detroit suburb.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614338","date":"2013-10-28","texts":"Social media users can debate whether Facebook or Twitter is a better place to post a picture of their kid or a snarky comment. Now, investors are having a similar conversation Which platform offers them a better value for their money Reuters Based on IPO price versus pre-IPO price, Twitter Inc. is taking a more conservative approach to pricing than Facebook Inc. did. But by some measures, Twitter is being pitched to investors at a price that may make it appear more expensive than Facebook stock is right now. The microblogging company has proposed an initial public offering price below where some investors already own the stock, and below where the company earlier this year pegged its own value.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616647","date":"2013-10-29","texts":"The widely tracked Nasdaq Composite Index froze for nearly an hour Tuesday after Nasdaq OMX Group Inc. experienced problems transmitting data for stock-market indexes, the latest in a series of technical problems besetting Nasdaq. Exchange officials blamed Tuesday's index outage on a human error rather than a computer glitch. Traders said the impact to the broader market was minimal, despite trading halts for some options contracts linked to the indexes. The episode, however, deepened questions around the stability of critical market systems after a succession of failures in data feeds - including two other breakdowns in Nasdaq-operated systems - repeatedly knocked out trading over the last two months. One time is a random event, the second time it may be a coincidence and the third time is proof of weakness, said Ophir Gottlieb, managing director with LiveVol Inc., which analyzes options markets. It appears Nasdaq has some serious issues with their technology and they may be unable to consistently deliver market data over a long period of time. The Securities and Exchange Commission has been in contact with market participants and is monitoring developments around Tuesday's issue, which is standard practice for the regulator, an SEC spokesman said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614971","date":"2013-10-30","texts":"The widely tracked Nasdaq Composite Index froze for the better part of an hour Tuesday after Nasdaq OMX Group Inc. experienced problems transmitting data for stock-market indexes, the latest in a series of technical problems befalling the exchange operator. Exchange officials blamed Tuesday's index outage on a human error rather than a computer glitch. Traders said the impact to the broader market was minimal, despite trading halts for some options contracts linked to the indexes. The episode, however, deepened questions around the stability of critical market systems after a succession of failures in data feeds -- including two other breakdowns in Nasdaq-operated systems -- repeatedly knocked out trading in the past two months. One time is a random event, the second time it may be a coincidence and the third time is proof of weakness, said Ophir Gottlieb, managing director with LiveVol Inc., which analyzes options markets. It appears Nasdaq has some serious issues with their technology and they may be unable to consistently deliver market data over a long period of time. A Securities and Exchange Commission spokesman said the SEC has been in contact with market participants and is monitoring developments around Tuesday's issue, which is the regulator's standard practice.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616658","date":"2013-11-01","texts":"A fire at an oil and gas well in Mexico could burn for weeks, said state oil monopoly Pemex. Sony's turnaround strategy was thrown into doubt after the electronics maker reported weak quarterly results and cut its profit forecast for the year by 40. AstraZeneca appointed a new CFO and disclosed two U.S. Justice Department investigations into its drugs as it said net profit fell 18 in the third quarter. Exxon posted an 18 fall in third-quarter earnings on its refining business, while Shell posted a 31 slide in quarterly profit on weak refining margins and a rise in exploration-and-production expenses. The world's largest commodities traders are bolstering their presence in the growing spot market for liquefied natural gas.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613488","date":"2013-11-04","texts":"Charlie Crist is the former governor of Florida. When he was governor he was a Republican. Now he's a Democrat and wants his old job back. Mr. Crist is expected to kick off his gubernatorial bid on Monday, thereby completing his political reinvention. He left the GOP after sliding more than 20 points in the 2010 Republican Senate primary ultimately won by Marco Rubio. After losing the Senate race as an independent, he cozied up to Democratic fundraisers and party officials. Democrats embraced him notwithstanding the rank opportunism. But then, Democrats may have their own cynical motives. Republican Gov. Rick Scott is one of their top targets in next year's midterm elections because of Florida's pivotal status as a presidential swing state. Mr. Scott, whose approval rating has consistently measured in the low 30s, also ranks as one of the country's most vulnerable governors. One reason the governor's abrasive political style has alienated independents, which make up nearly a quarter of the state's electorate. Meantime, polls going back more than a year have suggested that Mr. Crist would have a cake walk if he were to run for his old job as a Democrat. Public Policy Polling's survey last month showed Mr. Crist leading by 12 points with a 24-point advantage among independents. What's more, Democrats have no other standard-bearer with as much statewide name recognition, fundraising prowess or cachet among independents. But the race could be a lot closer than the polls suggest. For starters, Mr. Scott can run on the state's robust economic recovery. He can point to the 500,000 jobs that Florida has added during his tenure compared to the 632,000 lost over Mr. Crist's four years in office. Meanwhile, the jobless rate has fallen to 7.0 from 10.9 since he entered office.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615254","date":"2013-11-04","texts":"The current stock-market environment favors so-called active fund managers, who pick individual stocks in an attempt to beat broad market indexes, says Owen Murray, an investment adviser in Houston. Mr. Murray says actively managed funds generally struggled in 2011 and to some extent in 2012, as stocks tended to move in lock step with macroeconomic news. But the market as a whole is becoming desensitized to these macro risks, says Mr. Murray, director of investments at Horizon Advisors LLC. A case in point Markets reacted sharply in 2011 to fears that the U.S. debt ceiling wouldn't be raised, but when a similar possibility seemed evident recently, stocks barely moved. Also, stock valuations are getting pricier, he says, so as an investor you'd want to focus on companies that have more financial strength rather than owning the broad market. In this column, we feature model portfolios of mutual funds and exchange-traded funds. Horizon Advisors was founded in 1999 by the co-founders of Houston accounting firm Maddox Thomson & Associates. Horizon currently manages around 220 million, mainly for individuals.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615029","date":"2013-11-05","texts":"TAIPEI--Taiwan's inflation eased in October, in line with lower global energy and food prices, and economists say consumer-price growth will likely continue to slow in the long term--mostly on the back of a pullback in oil prices. The consumer-price index rose 0.64 from a year earlier in October, the government's Directorate General of Budget, Accounting and Statistics said Tuesday. The reading was lower than September's rise of 0.84 and the median 1.15 increase forecast by 10 economists surveyed by The Wall Street Journal. The inflation rate has fallen from an average of 1.8 in the first quarter and 1.93 in 2012. The government and economists attribute the decline mainly to lower crude-oil prices. Global oil prices have fallen steadily over the past couple months, with the U.S. and European benchmarks having slipped 16 and 9, respectively, since Aug. 28. Oil prices may fall further and will continue to push down the island's consumer prices, Standard Chartered economist Tony Phoo said. Taiwan imports almost all its energy needs, the price of which is reflected in transportation costs, which account for 12 of the CPI basket.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615145","date":"2013-11-08","texts":"Senators will press Janet Yellen on a number of issues next week during a confirmation hearing on her nomination to lead the Federal Reserve, but one likely topic is a matter over which she has no control the vacancy for a Fed vice chairman for supervision. It is up to President Barack Obama to nominate a candidate for the job, a new role within the seven-member Fed board created by the Dodd-Frank financial law more than three years ago. He has yet to do so, frustrating Republican critics and some Democratic supporters of the law. Sen. Jerry Moran R., Kan. raised the issue of the vacancy with Ms. Yellen during a recent meeting, he said. He said he reiterated the concerns he and Sen. Mike Johanns R., Neb. voiced in a letter to the White House last year. Both are members of the Senate Banking Committee, which will hold Ms. Yellen's confirmation hearing on Nov. 14. Ms. Yellen, vice chairwoman of the Fed board, has been nominated to succeed Fed Chairman Ben Bernanke after his second term ends in January. Among the Republicans' complaints is that the White House is denying the Senate its full oversight power over the position and its portfolio. Dodd-Frank dictates the vice chairman for supervision must be confirmed by the Senate and that the position reports to the Senate banking panel twice a year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617413","date":"2013-11-11","texts":"Q Are preferred shares a good investment in this market and are they closer to bonds or stocks A Preferred shares are complex investments that have similarities to both equities and debt. Preferred shares trade like stocks and are a claim on the assets and earnings of a company, just like common shares. But they hold a higher claim on the assets than common stock. That makes preferreds a somewhat safer investment. While preferred shares usually don't have voting rights, they pay a regular dividend that can be substantial, making them similar in some ways to bonds. Dividends paid by preferred shares usually must be paid out before common shareholders receive their dividends. Preferred shares are slightly more like bonds than stocks as their historical price volatility more closely matches that of bonds, says Andrew Zimmerman, chief investment strategist at DT Investment Partners LLC. Just like bonds, they can be called by the issuer in times of falling interest rates, he notes. Since preferred shares are sensitive to interest-rate movements, their prices fall when interest rates rise and vice versa, he says. However, since they offer such relatively high yields, the income component of preferred shares can help to offset the price decline in periods of small interest-rate spikes.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613935","date":"2013-11-12","texts":"The publication of Josef Joffe's The Myth of America's Decline marks the latest skirmish in the war of words over declinism that has raged off and on since the early 1970s. Unlike Great Britain at the end of the 19th century, Mr. Joffe argues, the United States is still leagues ahead of its major competitors. Besides, generations of skeptics have gone broke betting against us. But anti-declinism easily shades over into complacency, a sentiment we cannot afford. Especially now, as the basis of our society, and of stable and decent political communities generally--a thriving and self-confident middle class--is eroding. Worse, either we don't know what to do about it, or we don't care enough to try. Getty Images Robert Reich In 1971, according to the Pew Research Center, 61 of all adults lived in middle-income households. By 2011, the middle-income share had fallen to 51, while the lower- and upper-income sectors grew. Median household income in 2011 was not significantly higher than it had been in 1989. Because upper-income households fared much better during those four decades, their share of total household income increased by 17 percentage points--to 46 from 29--while the middle-income share fell by 17 points, to 45 from 62. No wonder Neiman-Marcus and Wal-Mart are doing well while J.C. Penney and Sears are nearing collapse. These economic trends have social consequences. A recent study by Cornell University researcher Kendra Bischoff and Stanford's Sean Reardon finds that the share of families living in middle-income neighborhoods declined to 42 from 65 between 1970 and 2009. At the same time, the shares of families living in affluent neighborhoods and in poor neighborhoods more than doubled. Segregation along lines of income grew in each of the past decades, with the fastest growth coming between 2000 and 2009. This trend is not restricted to white Americans. In fact, segregation by income among black families grew four times as much as for whites, and Latino income segregation also increased more sharply.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615129","date":"2013-11-13","texts":"When senators question Janet Yellen on Thursday during her confirmation hearing to be the next leader of the Federal Reserve, she will likely turn their attention to the central bank's dual mandate of maximum employment and stable prices. Ms. Yellen has made this mandate the centerpiece of her argument for the Fed's unconventional easy-money programs aimed at spurring a stronger economic recovery and lowering unemployment, a point her recent comments suggest she will seek to reinforce. While we have made progress, we have further to go, Ms. Yellen said of the Fed's role in helping the economy when President Barack Obama named her as his pick last month. The mandate of the Federal Reserve is to serve all the American people, and too many Americans still can't find a job and worry how they'll pay their bills, she said, adding that the Fed can also ensure inflation doesn't undermine the benefits of a growing economy. The Fed's dual mandate was established in 1977, when Congress wrote into the Federal Reserve Act that the central bank must pursue both maximum employment and stable prices. It is a controversial requirement in political circles because some Republicans think the employment component has taken the Fed's focus off the more important and achievable mission of low inflation. It is also unlike the mission of many other central banks, for which controlling inflation is the sole focus.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613806","date":"2013-11-14","texts":"The article How to Fix the Student-Loan System U.S. News, Nov. 7 doesn't tackle the real issue with student loans -- how these loans are really subsidizing increased tuition prices, which have risen significantly above inflation. These loans enable colleges to increase costs at an alarming rate with no true aim toward being cost conscious. Charles Mordy Oakland, Calif. --- Having student-loan payments deducted from paychecks forces employers to become the government's collection agents. If students are borrowing more than they can repay, the answer is simple Loan them less.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614299","date":"2013-11-14","texts":"WASHINGTON--More productive U.S. workers supported faster economic growth in the third quarter, but slower business investment might limit future gains. Labor productivity, or output per hours worked, increased at a 1.9 annual rate from July through September, the Labor Department said Thursday. Economists surveyed by Dow Jones Newswires had forecast a gain of 2.4. Second-quarter productivity growth was revised down to a 1.8 pace from a previous reading of 2.3. Productivity held flat from a year ago because the increase in output was matched by an increase in hours worked. Firms cannot count on productivity gains to meet gradually improving demand, PNC Chief Economist Stuart Hoffman said. Businesses will need to hire to keep up, and the labor market recovery will continue throughout 2014. Productivity improved rapidly in the early part of the recession but gains have eased in recent years. That roughly coincides with business-investment trends. Companies spent more on equipment and technology in 2010 and 2011, investments that helped improve workforce productivity. Such investments began to slow last year and spending on equipment shrank in the third quarter, according to Commerce Department data.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615385","date":"2013-11-14","texts":"The Dow industrials and S&P 500 clinched fresh all-time highs after the nominee to head the Federal Reserve defended the central bank's economic stimulus efforts, though weak earnings from Cisco Systems hurt technology stocks. The Dow Jones Industrial Average rose 54.59 points, or 0.3, to 15876.22, while the S&P 500 gained 8.62 points, or 0.5, to 1790.62. Both indexes ended at record levels for a second consecutive day. The Nasdaq Composite Index added 7.16 points, or 0.2, to 3972.74, its highest finish in more than 13 years. Investors focused on Fed Vice Chairwoman Janet Yellen, President Barack Obama's nominee to lead the central bank after Ben Bernanke steps down in January, for signals about Fed policy. Ms. Yellen said in a hearing on her nomination before the Senate Banking Committee that there are dangers to ending the central bank's 85 billion-a-month bond-buying program too soon, an assurance to investors that few big policy changes are on the way. The Fed's bond-buying program is widely credited for helping to enable the S&P 500's 26 gain in 2013. In her first test before the Senate she's come across clear and concise and saying what we expected, said Yousef Abbasi, New York-based market strategist at brokerage JonesTrading Institutional Services.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616673","date":"2013-11-14","texts":"Federal Reserve officials are debating whether to strengthen their commitment to keep short-term interest rates near zero as part of their effort to keep boosting the slow-growing economy. But they face many unresolved questions about whether to make such a move, and if so when, and several events in the coming days could shed light on their thinking. Fed Vice Chairwoman Janet Yellen testifies before the Senate Banking Committee on Thursday in a hearing on her nomination to lead the Fed when Chairman Ben Bernanke's term ends in January. Mr. Bernanke speaks at the National Economic Club next Tuesday. And the Fed on Wednesday releases minutes of its October meeting, at which the idea likely was discussed. The Fed's vow to keep interest rates low for a long time is one of its key tools to rev up the economy, given that it has cut short-term rates nearly to zero. The commitment is one of two pillars of the Fed's easy-money policy, the other one being an 85 billion monthly bond-buying program. Officials might start scaling back the bond-buying program in the coming months, possibly as early as December, but want to reassure the public and investors they won't raise interest rates for a long time after they end the program. The Fed has said for months it won't raise short-term interest rates from near zero until the unemployment rate, which was 7.3 in October, falls below 6.5, as long as inflation doesn't move above 2.5. Fed officials believe the promise, known as forward guidance, helps hold down long-term borrowing rates, which in turn encourages borrowing, investment and spending.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616027","date":"2013-11-16","texts":"At first, it sure looks like a bubble. Some hot stocks have more than doubled in price so far this year. The initial-public-offering market has been torrid. Small investors are buying stocks again. The bubble talk flared up even more after Twitter started trading on Nov. 7, when the social-media company's shares surged 73. They still are up 69. Electric-car company Tesla Motors has rocketed 300 higher in 2013, and online retailing giant Amazon.com has jumped 47. There are so many superlatives in the stock market that it is easy to forget the S&P 500 has set 36 records this year on the way to its 26 gain -- or that the federal debt-ceiling crisis threatened to disrupt the economy just a month ago.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616025","date":"2013-11-18","texts":"Smart analysts have been warning for years that the bottom could fall out of the surging bond market. They were wrong. Bond yields went to unprecedented lows, pushing bond prices to unprecedented highs, and they just kept going. The weak economy, little inflation and exceptional Federal Reserve policies took bonds to unnatural levels. But nothing lasts forever. At some point, the economy will become more normal and yields will rise to more natural levels. Existing bonds with their lower yields will fall in value. Bond-fund investors will lose money. Many bond-fund managers think the process has finally begun. The yield on the 10-year Treasury note has risen to 2.7 from about 1.6 in early May. Treasury-bond funds have fallen in value. Money managers have begun selling funds holding Treasurys and other high-grade bonds. The spark for this is the Fed's plan to start trimming its 85 billion in monthly bond-buying stimulus. Analysts expect that to begin between December and June.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617028","date":"2013-11-18","texts":"Financial Analysis and Commentary The holiday season is about to begin and people feel glum. That isn't a reason to think they won't be spending freely. Even before last month, the nation's mood wasn't looking so hot. The government shutdown and debt fight made it far worse. Gallup's daily measure of confidence in the economy in early October plumbed levels unseen since 2011. It has recovered some since then but is still below year-earlier levels. The preliminary November reading on the Thomson ReutersUniversity of Michigan index of consumer sentiment showed moods at their darkest in two years. A survey sponsored by the National Retail Federation showed the average holiday shopper plans to spend about 2 less this year. This backdrop has some reckoning the holidays might not be so cheerful for stores. Economists at IHS Global Insight say the drops in confidence represent potential setbacks for retailers. In a report advising investors to expect coal, Morgan Stanley predicts tepid spending growth will make 2013 the weakest holiday season since 2008.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614093","date":"2013-11-19","texts":"The Dow Jones Industrial Average pierced the 16000 mark but failed to finish above that level as investors paused to weigh the stock market's recent sharp gains. The blue-chip index closed up 14.32 points, or 0.1, at 15976.02, after rising as high as 16030.28 in intraday trading. The Dow still ended at a record and has risen in six of the last seven sessions. The S&P 500 index was off 6.65 points, or 0.4, at 1791.53, reversing an intraday gain that sent the index above 1802. The Nasdaq Composite Index declined 36.90 points, or 0.9, to 3949.07. Stocks spent the bulk of the session in positive territory before shedding much of their gains in the final hour of trading. Traders attributed the move to comments by billionaire investor Carl Icahn, who told a conference sponsored by Reuters that he was very cautious on the stock market and could see a big drop because earnings at many companies have been juiced by low borrowing costs rather than strong management, according to the news agency. Traders said the remarks were enough to shake investor sentiment on a day when trading volumes were thin and few other headlines were driving the market.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615218","date":"2013-11-22","texts":"WASHINGTON--Bank regulators are considering passing the 'Volcker rule' without the blessing of the Commodity Futures Trading Commission, which has been pushing for 11th-hour changes ahead of a year-end deadline to finalize the regulation, according to people familiar with the process. The option is one of many being weighed amid a flurry of new objections and complications as regulators from five separate agencies scramble to complete the long-delayed rule, which bans proprietary trading by banks. CFTC Chairman Gary Gensler, along with a Securities and Exchange Commissioner, and doesn't do enough to prevent them from making risky bets, these people said. Mr. Gensler in recent weeks has sent a number of proposed changes to a team of regulators hammering out language in the roughly 1,000-page rule, these people said. Treasury Secretary Jacob Lew has set a year-end deadline to complete the rule, a central plank of the 2010 Dodd-Frank financial law. It was supposed to have been finished well before the end of 2013. Mr. Gensler's objections, along with those raised by SEC Commissioner Kara Stein, have threatened to further delay implementation. Mr. Gensler's concerns have upset other regulators, who say Mr. Gensler chose to stay on the sidelines as the rule was being drafted, despite requests from top officials that he get involved. He has become fully engaged with the process only in the past two months, they say.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615737","date":"2013-11-22","texts":"Stock-market strategists, typically a bullish bunch, are taking a cautious approach to 2014. The S&P 500-stock index is heading into the final weeks of 2013 with a 27 gain despite a sluggish global economy, stalling corporate earnings growth and worries about a pullback by the Federal Reserve in its efforts to support the U.S. economy. But even as many strategists expect an improved backdrop next year, and for interest rates to stay low, they are expecting the stock rally to cool significantly. Forecasts center on gains in the mid-to-high single-digit percentages for the S&P 500 in 2014. In large part this caution reflects expectations that investor enthusiasm for stocks will be restrained in an environment in which structural challenges continue to hold back the U.S. economy. The result, many strategists said, is that stocks are unlikely to see a continued rise in valuations against earnings growth as they did in 2013. In addition, bullishness is being muted by a belief that the Fed will in coming months start to pare back the easy-money policies that many said have played a key role in driving stock prices higher this year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616389","date":"2013-11-22","texts":"The Dow industrials vaulted past another milestone as stocks closed above 16000 for the first time, extending a record run fueled by optimism for a recovering global economy and continuing low interest rates. The 30-stock Dow Jones Industrial Average has now set 40 all-time highs in 2013 and is up 22 for the year. The index rose 109.17 points, or 0.7, to a new high of 16009.99 on Thursday. The advance has been broad-based but strongest among those companies with consumer-focused businesses whose recent cost-cutting efforts are seen as giving them an edge on rivals. Airplane manufacturer Boeing Co. is up 76 this year, and apparel company Nike Inc., which was added to the index in September, is up 51. Only two Dow components are down this year. Caterpillar Inc. and International Business Machines Corp. have declined 8.4 and 3.9, respectively. Stocks' record run comes amid a steady U.S. economic recovery along with the extraordinary easy-money policies of the Federal Reserve. Many investors say the Fed's bond-buying actions are helping the economy by keeping interest rates low and making stocks look more attractive compared with bonds and other investments.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614282","date":"2013-11-23","texts":"Reading up on the financial crisis and its aftermath is unavoidable homework for anyone in business. Fortunately, Princeton economist Alan Blinder has composed the perfect crib sheet starting with three pages of acronyms and abbreviations in After the Music Stopped Penguin Press, 476 pages, 29.95. Here is everything you need to know to silence any dinner-party rantings on topics ranging from Lehman's collapse to quantitative easing to Simpson-Bowles, with short primers on technicalities such as the yield curve, nominal versus real interest rates, and moral hazard. Mr. Blinder writes with an Olympian cool, waspish, never rabid. Barack Obama is the eloquent young president, Larry Summers, his former chief economic adviser, acerbic, domineering and argumentative. Grimly, Mr. Blinder concludes, the forgetting has already begun. Unrepentant financiers, eager to return to the status quo ante, are whining about excessive regulation. Recalcitrant politicians are bemoaning big government and itching to return to laissez-faire. The public has turned its attention elsewhere. Before reading Neil Barofsky's Bailout Free Press, 270 pages, 26, it never occurred to me that Tim Geithner might be a screamer. He always seemed so mild-mannered. But according to Mr. Barofsky, the prosecutor hired as special inspector general of the Troubled Asset Relief Program, the former Treasury secretary was a borderline head case. The two men fought constantly over the government's bailout of Wall Street. In one episode, Mr. Barofsky writes, Geithner repeatedly reached a pitch of anger, regaling me with detailed, expletive-filled explanations that established my apparent idiocy. He would then calm himself down and give me a forced, almost demonic smile. As a federal prosecutor in Manhattan, Mr. Barofsky had once pursued Colombian drug cartels. His time in Washington made the pursuit of drug barons seem easy. As TARP opened the spigots for Wall Street, Mr. Barofsky accused the Obama administration of siding with the banks and hindering his efforts to make it a more transparent program. The author isn't always a sympathetic character, often coming across as betrayed and resentful. But his book is a raw, sincere account of the priorities and power-plays of modern Washington, which leaves you queasy about what financial disasters lie in store. I thought I knew too much about Sheryl Sandberg's Lean In Knopf, 228 pages, 24.95 to want to read it. I had seen the gruesome Time magazine cover of Ms. Sandberg with the headline, Don't Hate Her Because She's Successful. I had read the endless newspaper coverage, the rehashing of the old having it all debates. But enough smart friends, both men and women, urged me to pick it up. The worst thing about it is what it assumes about men -- that we're all just full of it, barreling around, oblivious to luck and the biases that favor us, regarding personal and professional fulfillment as our right. Maybe it seems like this if the men you work for are Larry Summers, Larry Page, Sergey Brin and Mark Zuckerberg. These aren't your average beleaguered 21st-century males. But the best thing about the book is its wit. Ms. Sandberg keeps it punchy, provocative and involving. Agree with it or not, Lean In is irresistibly modern and thoughtful. Ignore it and you'll be in an ever-shrinking minority. If you like your Wall Street scandals noisy and splashy, then Anita Raghavan's The Billionaire's Apprentice Business Plus, 493 pages, 29 isn't for you. Ms. Raghavan's tale is quiet, creepy and stuffed with riveting detail. The apprentice in the title is Rajat Gupta, an Indian immigrant who rose to be the managing director of the consulting firm McKinsey & Co. He comes over as pompous and persnickety, obsessed with things like leadership conferences and the size of his office. He retired with a gold-plated set of corporate directorships. But his post-McKinsey fortune of tens of millions wasn't enough. He yearned to compete with the hedge-fund and private-equity billionaires who surrounded him in New York. The piratical Raj Rajaratnam, the now-jailed founder of the Galleon Group hedge fund, promised Gupta such riches the price was inside information. As the judge in his insider-trading case put it, Gupta may have been a good man, but the history of this country and the history of this world, I'm afraid, is full of examples of good men who do bad things. Business is also full of clever consultants who can't bear that their clients are so much richer than they are. Gupta remains free while he appeals his conviction and sentence of two years in prison and a 5 million fine. One certainly feels bad for his wife and four daughters, but the real and deserving victim seems to have been his monstrous ego. Ms. Raghavan sets her tale within the broader context of the rise of Indian-Americans in business, but it's her characters that hold the attention.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616820","date":"2013-11-24","texts":"Regarding Holman Jenkins, Jr.'s insightful Nov. 20 Business World column How the GOP Should Fix ObamaCare His idea not only highlights a solution but also the GOP's biggest problem--to wit, Republicans do not know how to communicate effectively. Does anyone realize that there already is a bill in the House H.R. 3121 that allows for insurance to be sold across state lines and provides additional remedies to address our nation's health-care problems You do not solve such a big problem by simply introducing a bill that addresses the problem. You investigate how to let everyone in the country know that such a bill exists by giving it a catchy name I propose Organic Care, a grass-roots solution, a slogan, its own website with bullet points describing its main points, plus YouTube videos, jingles, songs, stand-up comedy routines, social-media exposure, etc. That requires getting creative. Republicans think that their philosophy, their message, is adequately promulgated by talk radio, Fox News and conservative think tanks. And that is why they are such experts at snatching defeat from the jaws of victory. Russell Dodds Belton, S.C. Mr. Jenkins proposes a market-based alternative to ObamaCare. But it won't cost taxpayers any less, and perhaps it may cost them more. Mr. Jenkins foresees that the government will still need to subsidize the costs of covering the poor and covering pre-existing conditions. So, in addition to paying for the care they want, those with taxable incomes will also be paying those extra costs.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615872","date":"2013-11-25","texts":"Indonesia's attempt to sell bonds to local investors fell flat Monday, stymieing the government's effort to reduce the volatility of its currency. The Ministry of Finance had been looking to raise 450 million through its first-ever offering of bonds denominated in U.S. dollars to local investors. But weak demand for the bonds, with a coupon rate of 3.5, meant the government was only able to raise 190 million--less than half its target. The bond sale comes as investors around the globe are waiting for the U.S. Federal Reserve to start cutting back on its massive stimulus effort. Indonesian markets have been among the hardest hit by expectations the Fed will soon pull back on its 85-billion-a-month bond-buying program, a move that is expected to send U.S. interest rates higher and make emerging markets less attractive. Countries with both a fiscal deficit and current-account deficit, like Indonesia, rely heavily on foreign investment and can see their currencies plunge if investors flee. The debt sale was part of an effort to stabilize Indonesia's currency, the rupiah, which has already fallen by more than 20 against the dollar this year. The sale of the bonds was designed to increase the pool of dollars in the country to help meet local demand for the U.S. currency. Having more dollars on hand can help lessen the currency shock when foreign investors depart. Already, Bank Indonesia has raised its benchmark interest rate by a percentage point since late August, to 7.5. Higher interest rates tend to draw overseas investors, and the move was widely seen as an effort to shield the economy from the turbulence that is expected when the Fed winds down its easy-money program.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617226","date":"2013-11-25","texts":"Treasurys posted modest gains after two indicators pointed to a sputtering economy, easing some investors' fears that the Federal Reserve will begin to cut back on its stimulus efforts as soon as next month. At 3 p.m. EST, the benchmark 10-year note added 432 in price, yielding 2.741 in a muted, preholiday trading. The 30-year bond climbed 432 in price to yield 3.833. Bond prices rise when yields fall. The Fed has said it will maintain its 85 billion-a-month bond-buying program until the economy has returned to sustainable growth and job creation. Monday's data suggested sagging growth relieved worries that the Fed would soon begin to taper such purchases, which have helped keep yields low. U.S. pending home sales fell 0.6 in October to 102.1, the lowest level in nearly a year, according to the National Association of Realtors. Economists had expected a 1.1 increase. The index has fallen for five months in a row due to higher housing prices and mortgage rates. Separately, the Federal Reserve Bank of Dallas reported its headline manufacturing index fell to 1.9 in November from October's 3.6. It was the lowest reading since March, suggesting a continued slowdown in the region's manufacturing activity. Economists had anticipated an improvement to 5.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615951","date":"2013-11-26","texts":"Nasdaq OMX Group Inc. senior executive Eric Noll, once considered a likely successor to the exchange operator's chief executive, quit to take the top position at a brokerage firm. Mr. Noll, 51 years old, said he would become chief executive of ConvergEx Group LLC, a broker for institutional traders and money managers. The move surprised many industry experts, most of whom had anticipated Mr. Noll would stay at Nasdaq until current Chief Executive Robert Greifeld retired. But Mr. Greifeld, 56, has shown no signs of leaving. His current contract, signed last year, lasts until 2017. Under direction from its board, Nasdaq had been working on an executive succession plan for two years, although no details have been made public. The company also has been considering outside candidates for the succession plan, according to a person familiar with discussions at Nasdaq.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617460","date":"2013-11-26","texts":"Federal forecasters increased their estimate for U.S. farm income this year by 9 to 131 billion, as bumper corn and soybean harvests help farmers offset lower prices for their crops. Net farm income will rise 15 from 113.8 billion last year to the highest level on an inflation-adjusted basis since 1973, the U.S. Department of Agriculture projected Tuesday. The income gains reflect a sharp increase in production of corn and soybeans in the U.S. Midwest just a year after a severe drought curtailed harvests. Profits also are expected to be higher because growers of crops such as hay, vegetables and nuts are enjoying higher prices, the USDA said. But economists warned the farm-income boom likely will soften next year because a steep drop in the prices of corn, soybeans and wheat will carry into 2014 and squeeze farmers' profits. The price of corn, for example, has fallen to about 4 a bushel from 8 a bushel during last year's drought. Next year's income is going to be a lot softer, said Michael Swanson, an agricultural economist with Wells Fargo & Co.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615526","date":"2013-12-02","texts":"With corporate-debt issuance racing toward a record, some large companies are rolling out unusual offerings in a bid to serve the bond market's every nook and cranny. Recent weeks have brought a 500 million green bond from Bank of America Corp., which has pledged to use the proceeds to finance renewable-energy and energy-efficiency projects, and a 1 billion Goldman Sachs Group Inc. bond that offers variable interest rates for 10 years, much longer than normal. The sales underscore the robust appetite for debt issued by well-known, highly rated issuers and come at a time when low interest rates have put a premium on income-generating assets and a roaring stock-market rally has prompted some more-conservative investors to diversify. Bonds continue to fly off the shelves even amid worries that interest rates may rise in the near future, as the Federal Reserve considers paring back monthly bond purchases. Companies have sold 1.052 trillion of highly rated bonds this year in the U.S., about 1.5 billion shy of last year's record, according to Dealogic figures dating to 1995. Recent months have seen gangbuster business for bond issuers, said Ron Quigley, head of fixed-income syndicate at brokerage and investment bank Mischler Financial Group. He pointed to diverse structures, voracious investor appetite and a wide variety of maturities.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614375","date":"2013-12-03","texts":"Treasury prices strengthened, snapping a three-day losing streak, as investors await an update on the U.S. labor market, a key factor in the Federal Reserve's decision on when to start reducing its quantitative easing program. At 3 p.m. EST, the benchmark 10-year note was up 832 in price, yielding 2.773, according to Tradeweb. The 30-year bond gained 1432 in price to yield 3.835. Bond prices rise when yields fall. It's nothing more than a retracement, said Millan Mulraine, director of U.S. Research & Strategy at TD Securities. The economic calendar was almost empty on Tuesday. A consumer-confidence index showed Americans were a little less gloomy heading into the holiday season. In a report, Investor's Business Daily and TechnoMetrica Institute of Policy and Politics TIPP said their Economic Optimism Index rose to 43.1 this month from November's reading of 41.4. A reading below 50 indicates pessimism and economists had expected a December reading of 43.2.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616147","date":"2013-12-04","texts":"For all of their mutual public admiration, Presidents Clinton and Obama react differently to political trouble. Bill moved to the middle, while Barack always moves left. So it's no surprise that Mr. Obama is responding to his ObamaCare rollout slump by doing his best Elizabeth Warren imitation. Mr. Obama returned to his favorite theme of rising income inequality on Wednesday, which he called the defining challenge of our time. He ought to know since few Presidents have done more to increase inequality than he has. Median household income has fallen since the economic recovery began, while the rich who own capital assets have done very well thanks to the Federal Reserve's focus on reflating stock and home prices. Mr. Obama is the Chief Economist of Nottingham posing as Robin Hood. The President's political purpose here is what the pros call rallying your base. Many Democrats are as dismayed as Republicans at ObamaCare's rollout, so the White House wants to change the subject and give MSNBC viewers something else to debate. Mr. Obama didn't have much new to offer that would help the economy or the middle class, so instead he's decided to escalate that hardy liberal perennial, the minimum wage. Earlier this year he proposed an increase to 9 an hour from the current 7.25. That has gone nowhere on Capitol Hill and Mr. Obama is less popular than he was, so the White House response is to raise the bidding to 10.10. If his popularity keeps falling, Mr. Obama will be demanding 15 by next November. One liberal highlight from last month's elections was when 60 of New Jersey voters approved a state minimum wage hike to 9.25 an hour. Unions now plan to put wage increases of 9 to 10 an hour on the 2014 ballot in at least five states--Alaska, Idaho, Massachusetts, Missouri and South Dakota. The President recently endorsed the bill by Iowa Senator Tom Harkin and Rep. George Miller of California to raise the wage floor to 10.10 by 2015 with automatic indexing for inflation thereafter. Look for Harry Reid to call it up for a Senate vote next week.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617404","date":"2013-12-08","texts":"When you're saving for retirement, it's fairly easy to measure your progress. You compare your actual return with your expected rate of return and look at the total value of the portfolio. If you aren't getting your expected rate of return--and if your portfolio's projected value falls short of your target--well, your plan is failing. But what happens when you're living in retirement How do you measure success or failure then There are, of course, several methods for doing so. But a recent survey by Russell Investments, a Seattle-based asset manager, shows that financial advisers don't agree on the best approach--and that some could be flying blind when assessing your nest egg. Here are a few techniques to consider It's a simple approach, says Rod Greenshields, a chartered financial analyst and consulting director for Russell. You're trying to preserve principal and only spend interest and dividends. So unless your plan calls for dipping into principal, having less money in your portfolio at year-end than you did on Jan. 1 suggests your plan isn't working. In Russell's survey, 34 of advisers--the largest group--favor this approach. But it has its shortcomings. For one, investors and advisers develop an unhealthy focus on chasing yield at all costs to get the income stream they need, Mr. Greenshields says. What's more, this method may not necessarily match an investor's actual spending needs very well, nor does it address the risk of possibly outliving your assets odds are high that you will have to spend down principal over the course of your retirement--especially if you live past your life expectancy.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615606","date":"2013-12-09","texts":"The stage could be set for stronger economic growth next year, as a surging stock market and run-up in home values have helped Americans recoup nearly all the wealth they lost in the recession. The net worth of U.S. households and nonprofit organizations--the values of homes, stocks and other assets minus debts and other liabilities--rose 2.6, or about 1.9 trillion, in the third quarter of 2013 to 77.3 trillion, the highest on record, according to the Federal Reserve. The Fed's figures aren't adjusted for inflation, but even after accounting for rising costs--using the Fed's preferred inflation gauge--Americans' net worth is at record levels. The figures also aren't adjusted for population growth, and the nation's wealth is roughly 1 short of its peak according to another commonly used gauge, the consumer-price index. Still, the report shows American households' finances are making up more of the ground lost during the recession, which ran from December 2007 through June 2009, and that fundamental economic improvements are reaching more people. After four years of slow growth, economists expect output to grow faster next year, partly because rebounding home prices and stocks are making more Americans feel wealthier--a trend that, in turn, could make them more inclined to borrow and spend, giving the economy a lift.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613727","date":"2013-12-11","texts":"Lawmakers left an extension of jobless benefits out of their budget agreement, fueling the debate over what happens to unemployed workers--and the economy--when the program expires. Many Democrats are upset that the extension wasn't included in the deal, and the White House estimates that roughly 1.3 million workers will stop receiving unemployment payments, which average 300 a week, when the program expires on Dec. 28. Republicans say the extended benefits have gone on long enough--more than five years--and argue that the checks create a disincentive for people to find work. Many economists believe such aid boosts the unemployment rate, perhaps by as much as 1 percentage point. But they differ on the reasons and on the size of the effect. Some of the unemployed might drop out of the labor force altogether without the aid others might be spurred to search harder for a job. Now the debate is about whether current economic circumstances warrant a longer extension. Democrats argue that they do and that the current labor market is too weak to allow benefits to expire. About 4.1 million workers in the U.S. have been jobless for at least six months. That is down from a peak of 6.7 million in April 2010, but still triple the pre-recession level. Although long-term unemployment has come down, it is still at an unusually high level by historical standards, said Rob Valletta, economist at the Federal Reserve Bank of San Francisco. That raises concern about the status of the long-term unemployed and policies that might be designed to support them.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616409","date":"2013-12-15","texts":"Nothing concentrates a man's mind quite like the prospect of being hanged in the morning, observed Samuel Johnson, the 18th century English writer. In a similar vein, two factors helped concentrate the minds of European governments in recent weeks as they thrashed out important details of the euro zone's proposed banking union. The first was the European Parliament elections scheduled for May next year. These are expected to result in large gains for euro-skeptic and extremist parties, which could make it much harder to agree on complex legislation involving a substantial pooling of sovereignty. The second is growing anxiety in the markets and among some policy makers that the euro zone is sliding into deflation. With interest rates already close to zero and no easy way to further loosen monetary policy, a credible banking union is the euro zone's best chance to reduce financial fragmentation and reduce borrowing costs in the periphery. The result is that euro-zone leaders are expected this week to agree upon a far more substantial banking union deal than had recently seemed possible. This deal will include a legally binding set of arrangements for the winding up of failed banks--the so-called Single Resolution Mechanism--to be headed by a Single Resolution Board with access to a Single Resolution Fund to help pay for the cost of clearing up bank failures. The speed with which the deal has fallen into place has surprised officials. Germany had previously ruled out any common euro-zone fund to help pay for winding up failed banks, insisting instead on a network of national funds.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613999","date":"2013-12-16","texts":"U.S. Treasury bonds pulled back after an early price gain, underscoring some uneasiness among traders and investors ahead of the Federal Reserve's next decision on its monetary stimulus for the economy. The Federal Open Market Committee is scheduled to start a two-day monetary policy meeting Tuesday with an interest-rate statement due at about 2 p.m. EST Wednesday. Market participants will zero in on whether the Fed will announce plans to dial back, or taper, its bond purchases. The central bank's 85 billion-a-month purchases in Treasurys and mortgage-backed securities have been a major factor holding Treasury yields near historic lows. Traders, investors and analysts believe an improving economy would allow the Fed to start winding down its monetary stimulus. The Fed could act this week or wait until early January to cut bond buying, they said, though they believe the central bank would wind down its monetary stimulus on a gradual basis, which is likely to prevent a sharp rise in bond yields. We do think the odds of a December taper have gone up, said Russ Koesterich, global chief investment strategist at BlackRock Inc. That said, the more likely time frame is early 2014, a view supported by the fact that inflation continues to remain low, allowing the Fed more latitude.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613848","date":"2013-12-17","texts":"NEW YORK--U.S. oil futures declined Tuesday as traders were reluctant to place big bets while Federal Reserve officials debated the future of the central bank's key economic stimulus program. Light, sweet crude for January delivery settled 26 cents, or 0.3, lower at 97.22 a barrel on the New York Mercantile Exchange. Nymex prices traded in a narrow range for most of the session as market participants chose to wait until Wednesday afternoon for potential clarity on the Fed's easy-money policies. It's a directionless trade, said John Kilduff, founding partner of Again Capital LLC, a New York hedge fund that focuses on energy, referring to the lack of significant price movement. He added, You can make a strong argument on both sides, and there's a lot of room for the Fed to surprise us either way. Many traders expect the Fed to begin scaling back its so-called quantitative-easing program, in which it buys 85 billion each month in mortgage-backed securities and longer-term Treasury bonds, in the near future. The program has boosted oil prices by weakening the dollar, making crude cheaper to buy with other currencies.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614158","date":"2013-12-18","texts":"Inflation is slowing across the developed world despite ultralow interest rates and unprecedented money-printing campaigns, posing a dilemma for the Federal Reserve and other major central banks as they plot their next policy moves. U.S. consumer prices rose just 1.2 in November from a year earlier, according to Labor Department data released Tuesday. The subdued price data came as the Fed opened a two-day policy meeting at which the fate of its 85 billion-a-month bond-buying program -- an effort to hold down long-term interest rates and drive up the value of homes, stocks and other assets -- is a central focus. Meanwhile, annual inflation in the euro zone was 0.9 in November, the European Union's statistics office said Tuesday. And central banks in Sweden and Hungary cut interest rates, the latest efforts elsewhere in Europe to boost struggling economies as inflation remains low. The downward pressure on prices presents a conundrum for policy makers across advanced economies Should they respond with even easier monetary policy or dismiss it as a temporary development Central bankers worry about inflation falling too low because it raises the risk of deflation, or generally falling prices, a phenomenon that is difficult to combat through monetary policy. Some economists believe weak or falling prices can lead consumers to delay major purchases, exacerbating an economic slowdown. Even without deflation, very low inflation can be a sign of weak demand that weighs on wages, corporate profits and growth.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615834","date":"2013-12-19","texts":"Your Dec. 13 editorial New York State of Tax is right on the mark, with one major exception. Gov. Andrew Cuomo's property-tax cap isn't, as your editorial claims filled with loopholes that many towns have exploited. The only significant exclusions from the cap are for a portion and only a portion of any extraordinary increase in pension bills, set at a level so high it will rarely be triggered, and for debt service on school-district capital projects approved by voters. An allowance is also made for added taxes generated in any given year by physical additions to the property-tax base. This clause is expressly intended to give municipalities an incentive to favor much-needed new development. Mr. Cuomo's tax-levy cap, modeled closely on the successful Prop. 2.5 cap in neighboring Massachusetts, is much tighter and more effective than, for instance, Gov. Chris Christie's tax cap in New Jersey. Two years after its enactment, the New York cap is clearly making a difference -- especially in school districts, where a cap override requires a supermajority vote of 60 of taxpayers. Because it is set at the lesser of 2 or inflation, the cap will range from 1.6 to 1.7 for most municipalities in 2014. Unfortunately, Mr. Cuomo so far has been unwilling to combine the tax cap with meaningful local-mandate relief, especially public-sector collective-bargaining reforms that would give county executives, mayors and school boards more tools to live within the cap. What New York needs now is lower local costs, not new state-subsidized giveback gimmicks in the name of property-tax relief. E.J. McMahon","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615848","date":"2013-12-19","texts":"Ben Bernanke gave the U.S. economy a nod of approval just a month before he leaves the Federal Reserve, moving the central bank to begin winding down a bond-buying program meant to boost growth with the recovery on firmer footing. The Fed has pulled back its stimulus efforts before, only to restart them when the economy disappointed, and new challenges loom, including a surprising slowdown in inflation. But Mr. Bernanke said in his final news conference as Fed chairman that the economy was getting to a point where it needs less help. Today's policy actions reflect the Fed's assessment that the economy is continuing to make progress, but that it also has much farther to travel before conditions can be judged normal, Mr. Bernanke said. After months of wringing their hands about the implications of less Fed stimulus, investors resoundingly approved of the latest action to begin paring the 85 billion-a-month program. They were cheered in part because the move came with new Fed assurances that short-term interest rates would stay low long after the bond-buying program ends. The Dow Jones Industrial Average finished the day up 292.71 points, or 1.84, at a record 16167.97. Yields on 10-year Treasury notes rose, as often happened with signs of improving growth, to 2.885. Asian stocks rose early Thursday.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614372","date":"2013-12-27","texts":"The 10-year U.S. Treasury note matched its highest yield in more than two years Thursday before pulling back, as investors grappled once again with the implications of a growing U.S. economy and less-stimulative central-bank policy. The yield hit 3 for the first time since September before closing at 2.990. Yields rise as prices fall. The 10-year Treasury hasn't closed above 3 since July 2011. The action underscores the investor consensus that the U.S. economy is strong enough to continue expanding even as the Federal Reserve prepares next month to reduce its bond purchases to a 75 billion monthly pace from the current 85 billion. While some economists have warned that rising bond yields could raise borrowing costs for consumers and companies and weigh on economic growth, many investors and analysts say the economy and markets can handle higher interest rates as long as any increase doesn't come along with a spike in volatility. The bond market will be fine if the rise in yields is orderly and slowly rising, with limited inflation, said Kevin Giddis, head of fixed income at Raymond James Financial in Memphis, Tenn.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614569","date":"2014-01-02","texts":"BERLIN -- The euro zone's recovery from crisis looks stuck in low gear, posing risks to its struggling members and weighing on fragile global growth. The world economy's most-troubled region in recent years is likely to grow at least a little in the coming year, extending a recovery that began last summer. But the slow pace could become a trap. Expected growth of about 1 is too little to bring down mass joblessness, which is testing social and political cohesion in weaker countries. Stubbornly low inflation of about 1 or less is also too low for comfort, because it's pushing weaker countries close to deflation and making it harder to bring down their debts. We do have a recovery, of that we can be confident, says Julian Callow, chief international economist at Barclays in London. But the task is to nurture it, because it's not strong enough to make a significant impact on unemployment, which is the primary source of the disinflation. The European Central Bank is the actor with the tools to do something about below-target inflation and falling bank lending. But the question, say economists, is whether the ECB is willing to experiment with unorthodox measures such as money-printing or negative interest rates, which would cause anger in Germany, the biggest member. Germans generally don't like central-bank activism and their relatively healthy economy doesn't need it.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616528","date":"2014-01-02","texts":"I arrived in the Washington bureau of The Wall Street Journal shortly after the stock-market crash of 1987. Except for a stint as Berlin bureau chief, I've been tracking the economy from that perch ever since. Looking back over that quarter century, four surprises stand out That the American middle class hasn't done better In a 1998 book, my colleague Bob Davis and I argued the U.S. was on the cusp of an era of broadly shared prosperity that would boost the middle class. We were wrong. We correctly saw the potential of information technology, but we expected the gap between winners and losers to narrow. It didn't. Output of goods and services per person has grown by about 45 since 1987. That's substantial, but the percentage increase is only half the 90 increase of the preceding 26 years 1961-1987.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616395","date":"2014-01-03","texts":"'I want to come back as the bond market. You can intimidate everybody. That was James Carville, President Clinton's chief political consultant, talking to this newspaper in February 1993. When President Clinton backed away from HillaryCare and the rest of his big-government agenda, it wasn't just Democratic losses in the 1994 midterm elections that forced his hand. It was the power of the bond market, a point Mr. Carville understood but Republicans seem to have forgotten. If today's Republicans are going to roll back President Obama's massive expansion of government, they will need the muscle of a bond market free from the Federal Reserve's manipulation. History suggests that only the prospect of higher and increasingly painful financing costs chastens committed big spenders. A liberated, and consequently less docile, bond market would not only restrain Washington's profligacy, it would also free the Republican Party to refocus on the big ideas and positive vision that made it a global force in the 1980s. No cause unites the Republican Party like the battle for limited government. From Ted Cruz's government shutdown to Paul Ryan's budget compromise with Patty Murray, the political tactics have varied but the goal of limited government has remained the same. The push for limited government even polls well. According to a recent Gallup poll, an overwhelming majority of Republicans, 81, and a solid majority of Americans, 60, think the federal government has too much power. But despite the public's support and Republicans' herculean efforts, the campaign to pare back government has failed both politically and substantively. The federal government continues to grow while Republicans are increasingly derided for their obsession with spending cuts. Far too many Americans now see the GOP as opposing everything and favoring nothing.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616087","date":"2014-01-05","texts":"For the past few years, investors could probably have made more money by picking up loose change from the sidewalk than by investing in a money-market mutual fund. Money funds are likely to regain appeal once interest rates rise again. Historically, when rates start moving upward, money-fund yields quickly follow, unlike those of bank savings accounts, which can lag. But for now, persistently low rates--coupled with uncertainty about a possible regulatory overhaul for money funds--are reasons to avoid using the funds for all but very-short-term parking of cash, financial advisers say. Money funds are mutual funds that invest in very-short-term debt issued by governments and large corporations, and that strive to maintain a set 1 share price. The average yield on taxable money funds for individual investors is just 0.01 a year, according to Crane Data LLC of Westborough, Mass. On an investment of 10,000, that is 1 a year. Such low yields are unlikely to climb soon, as many market professionals think there is still too much economic uncertainty for the Federal Reserve to start raising short-term rates. Moreover, the reason money funds have been able to offer any yield at all in recent years is that management companies have been waiving billions of dollars in fees.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614862","date":"2014-01-06","texts":"One of the most buzzed about figures at the annual meetings of the American Economic Association in Philadelphia this weekend was Alvin Hansen, an economist who has been dead for nearly 40 years. Mr. Hansen posited in December 1938 that the U.S. was stuck in a period of profoundly slow economic growth he called secular stagnation, driven by slowing population growth and insufficient technological progress. He turned out to be wrong, but top U.S. economists are now hotly debating whether his ideas apply today, and if so what to do about it. The self-appointed heir to Mr. Hansen's theory is Lawrence Summers, the former top economic adviser to President Barack Obama, who points to nagging sluggish U.S. growth since the bursting of the tech bubble in 2000 and proposes more aggressive government spending. Mr. Summers first raised the secular stagnation idea in November and pressed his argument during three days of meetings this past weekend. Expansionary fiscal policy is the right primary response to our current woes, one that offers more potential than is generally imagined, Mr. Summers said on a panel at the conference Saturday.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616659","date":"2014-01-09","texts":"Rising rates and a banner year for stocks could lift earnings at some large companies that have made an arcane but significant change to the way their pension plans are valued. Companies including AT&T Inc. and Verizon Communications Inc. could show stronger results than some expect when they report fourth-quarter earnings in coming weeks. They and about 30 other companies in the past few years switched to mark-to-market pension accounting to make it easier for investors to gauge plan performance. With the switch, pension gains and losses flow into earnings sooner than under the old rules, which are still in effect and allow companies to smooth out the impact over several years. Companies that switch to valuing assets at up-to-date market prices may incur more volatility in their earnings, but it offers a more current picture of a pension plan's health and its contribution to the bottom line. In 2011 and 2012, that change hurt the companies' earnings, largely because interest rates were falling at the time. But for 2013, it may be a big help to them, accounting experts said, a factor of the year's surge in interest rates and strong stock-market performance. It's going to account for a huge rise in operating earnings at the affected companies, said Dan Mahoney, director of research at accounting-research firm CFRA.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615552","date":"2014-01-10","texts":"Subprime auto lenders will likely ease underwriting standards further in 2014 as low interest rates keep profit margins fat enough to offset rising defaults, Moody's Investors Service said in a report. Auto lending has soared since the recession, buoying the U.S. auto industry, as lenders capitalized on low interest rates. But the increased volume has come at a cost of weaker loans, Moody's said, especially in subprime loans to borrowers with credit scores below 660, on a Fair Isaac Corp. scale from 300 to 850. Originations of subprime loans have increased to their highest levels since the financial crisis, with quarterly volume reaching 40.3 billion in the second quarter of last year, up from a recent low of 14.9 billion in late 2009 and the most since the second quarter of 2007, according to Equifax. Subprime auto loan volume was 39.8 billion in the third quarter. The low interest rate environment is giving auto lenders a boost because they can get low-cost financing themselves, Moody's said. The warning from Moody's comes as Federal Reserve officials have been focused on financial bubbles that may be lurking in the economy due to the central bank's efforts since the financial crisis to suppress rates to historic lows.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616390","date":"2014-01-10","texts":"J.P. Morgan Chase & Co. took another step in its strategy to unload some of its minor businesses, exploring putting part of its prepaid card operations on the auction block. The big New York bank said Thursday it is exploring the sale of the card business, which includes plastic disbursed by governments for tax refunds, child support, food stamps, unemployment benefits and state payrolls. The business also includes cards used for health-savings accounts. Such cards are increasingly coming under scrutiny from regulators amid concerns about high fees. The Consumer Financial Protection Bureau in September said that employers can't require that workers receive paychecks on debit cards, also known as payroll cards. J.P. Morgan has been considering the move for several months as part of its strategy to sell operations that are risky or aren't significant to its bottom line.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617307","date":"2014-01-11","texts":"Many people fear that high inflation is right around the corner. The evidence says they shouldn't. Still, there are moves investors can take that will pay off even if inflation is low and provide ample benefit if inflation takes off. For now, the market is sanguine -- though some high-profile individuals aren't. On Tuesday, the day after the U.S. Senate voted to confirm Janet Yellen as chairwoman of the Federal Reserve, Sen. Richard Shelby R., Ala., who voted against the nomination, explained his opposition to the Fed's easy-money policies. Said Sen. Shelby Should inflation expectations become unmoored, prices could increase uncontrollably. Others warning about the prospects of higher inflation include Federal Reserve Bank of Philadelphia President Charles Plosser.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615722","date":"2014-01-13","texts":"WASHINGTON--Regulators are close to issuing a rule designed to provide relief to banks that want to own certain types of debt investments without running afoul of the so-called Volcker rule, according to people briefed on the matter. Regulatory agencies are planning to issue an interim final rule this week that would allow banks to hold some collateralized debt obligations, or CDOs, as long as they meet certain criteria, such as containing specific types of loans, these people said. Regulators haven't made a final decision, but people familiar with the matter said the agencies want to allow most small banks to avoid having to divest the securities, though the impact could vary by institution. Regulators have promised a decision on the Volcker rule provision by Wednesday. The change under consideration comes in response to pressure from Capitol Hill and a lawsuit from the banking industry, which last month challenged the Volcker rule's restriction on banks' holding of CDOs made up of trust-preferred securities. The CDOs at issue often are made up of debt issued by banks that was then bundled together and sold to investors, including other banks. The Dec. 10 release of the Volcker rule, which bans banks from making certain investments, took some small firms by surprise because it applied the ban to certain CDO holdings. The banks sued on Dec. 24, and several members of Congress wrote letters asking regulators to reconsider.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615458","date":"2014-01-14","texts":"When Andy Franko started Fluid-Quip Inc. in 1987, interest rates on its bank loans were around 13 a year. Today, the Springfield, Ohio, company, which manufactures equipment for the corn industry, pays 4 or so to its lender, a unit of Huntington Bancshares Inc. No wonder Mr. Franko, Fluid-Quip's president, is a big fan of the low interest-rate policies pursued by the Federal Reserve since the financial crisis. My biggest headache is having the cash-flow to fund the work in progress and our inventory, he told me last week. Without low interest rates, he says, his company would have lost 25 to 30 of its projects for lack of financing. Loose monetary policy has delivered substantial benefits to borrowers of all kinds, from corporations and households to the most indebted entity of them all, the U.S. government. With the Fed taking the first steps to end quantitative easing--its huge stimulus program--it is worth taking a deeper look at the winners and losers in the real economy.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617281","date":"2014-01-15","texts":"Do bonds and REITs march to their own beats That question was the crux of Urban Legend The Myth of REIT Interest Rate Sensitivity, a report issued late last year by the National Association of Real Estate Investment Trusts. It argued that the sharp decline in REIT stock prices wasn't so much the result of rising interest rates, but was due mainly to misperceptions by investors. The timing of the report was crucial. REIT stocks, which typically perform better than the broader stock market, had been trailing the market since May, when statements by the Federal Reserve prompted yields on Treasury bonds, along with other interest rates, to rise. NAREIT's goal was to convince investors that real-estate stocks shouldn't be viewed similarly to bonds, which tend to experience price declines when interest rates rise. But the report also rekindled a debate among real-estate investors about the very nature of REITs, why they have performed so dismally over the past eight months and what lies ahead in 2014 if interest rates continue to rise. The urban myth is that there's a lock-step correlation between rising interest rates and REIT performance. There are other factors at play, says Michael Grupe, an economist with NAREIT. REITs are clearly not bonds. A lot of investors may look at them that way, and make decisions based on that, but it doesn't mean they're right.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616383","date":"2014-01-19","texts":"For investors, last year's losses in the bond market should serve as a wake-up call that the era of big bond-market returns is over. For the foreseeable future, many say meager returns and occasional losses will be the norm. With the Federal Reserve having pushed interest rates to record-low levels to boost the economy, bond-market math means returns for the next five to 10 years should be in the low single digits at best, market pros say. That doesn't mean investors should abandon bonds. That's especially the case for those, such as retirees, who need to protect their portfolios against significant price swings. But for many investors, particularly those with very long time horizons, it may call for notching down the level of U.S. government bonds in favor of higher-returning investments, including conservative stocks, even if that means greater short-term ups and downs in a portfolio. Worst Loss in 19 Years","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616909","date":"2014-01-21","texts":"Austan Goolsbee, former chairman of President Obama's Council of Economic Advisers, is on dubious ground in declaring Fed Chairman Ben Bernanke's QE era a success and the QE critics wrong Bravo for Bernanke and the QE Era, op-ed, Jan. 11. There are always tradeoffs and harm from price controls, and quantitative easing has been the most ambitious and far-reaching price-control policy ever attempted. QE's massive bond purchases and money creation eroded market confidence and sidelined capital for many who attributed a phony recovery and an artificial economy to QE. Mohammed El Erian, the CEO of Pimco, the world's largest bond fund manager, points out that Fed creation of money in 4 trillion of QE bond purchases added a mere quarter of 1 0.25 to GDP growth -- a lousy tradeoff considering the heightened risks of inflation from QE money expansion and the risks of Fed insolvency from the attendant precipitous fall in bond prices. In spite of the rise in asset prices of stocks and real estate from QE policies, it may turn out that far less new wealth was actually created if those prices deflate when QE liquidity is withdrawn. QE has been accompanied by the worst post-recession recovery on record since the Great Depression in terms of GDP growth and a 40-year low in the labor-force participation rate. By maintaining interest rates at abnormally low levels, QE masks the real cost of the growing entitlement state while it also helped bailout and re-elect President Obama, resulting in a continuation of failed fiscal policies and the postponement of the day of reckoning on national debt and entitlement reform, which are essential for sustainable economic recovery. Scott S. Powell Discovery Institute","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616540","date":"2014-01-24","texts":"State Street Corp.'s quarterly profit missed Wall Street analyst views Friday, and operating expenses climbed, triggering a stock slide. Shares sank 4.3 in midday trading as the trust bank reported that compensation and other expenses jumped both from a year earlier and the prior quarter. On a call, State Street Chief Financial Officer Michael W. Bell said he expects some upward pressure on regulatory compliance costs. The Boston-based trust bank reported a profit of 545 million, or 1.22 a share, up from 468 million, or 1 a share, a year earlier. After stripping out one-time items, earnings rose to 1.15 from 1.11 a share. But analysts polled by Thomson Reuters had forecast earnings of 1.19 a share. Although the bank logged a stronger performance in servicing fees, results in the business were affected by what Chief Executive Joseph L. Hooley said were pretty negative fixed-income flows during the course of 2013, which outstripped positive equity flows in the second half of the year. Servicing fees--easily the largest contributor to revenue--rose 7.1 from a year earlier and 1.7 from the third quarter, to 1.23 billion.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615066","date":"2014-01-27","texts":"WASHINGTON -- President Barack Obama's State of the Union address Tuesday night will seek to shift the public's souring view of his leadership, a challenge the White House sees as critical to shaping the nation's policy direction over the next three years. Mr. Obama will emphasize his intention to use unilateral presidential authority -- bypassing Congress when necessary -- to an extent not seen in his previous State of the Union speeches, White House officials said. He also is expected to announce that some of the nation's largest employers, including Xerox Corp., AT&T Inc., Lockheed Martin Corp. and Procter & Gamble Co., have signed a White House pledge agreeing not to discriminate against the long-term unemployed when making hiring decisions, according to a draft of the policy and interviews with several people familiar with the matter. Mr. Obama will stress that he intends to take unilateral action on a host of other issues infrastructure development, job training, climate change and education. Administration officials hinted broadly at the assertive new direction Sunday. We need to show the American people that we can get something done, Dan Pfeiffer, a senior White House adviser, told CNN as part of a round of interviews previewing the speech.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614209","date":"2014-01-29","texts":"Outgoing Federal Reserve Chairman Ben Bernanke will provide testimony after he leaves office in a lawsuit filed against the federal government over the 2008 bailout of American International Group Inc., according to a person involved in the case. The lawsuit was filed in 2011 by Starr International Co., run by former longtime AIG Chief Executive Maurice Hank Greenberg. Starr, an investment and charitable firm, was AIG's largest shareholder at the time of the government rescue. Filed in Federal Claims Court in Washington, D.C., the lawsuit alleges that the government takeover of AIG had elements that were unconstitutional, including that the government took valuable property from Starr and other AIG shareholders without just compensation. Starr is seeking billions in damages. Mr. Greenberg's legal team has sought the deposition for months. In October 2013, the U.S. Court of Appeals for the Federal Circuit ruled Mr. Bernanke didn't have to provide testimony in the lawsuit, at least until his term expires on Jan. 31, 2014. The Federal Circuit ruling overturned a decision made by the lower claims court that Mr. Bernanke should be required to give testimony to attorneys representing Starr International. With Mr. Bernanke's departure from the Fed at the end of this month, the team persisted in seeking it.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614879","date":"2014-01-31","texts":"FRANKFURT--Euro-zone inflation unexpectedly weakened in January, raising pressure on the European Central Bank to act decisively to prevent a debilitating period of excessively soft consumer prices, or even outright declines, that threaten to derail the region's fragile economic recovery. The report came as Germany's conservative central bank signaled it backs additional measures to combat recent volatility in money markets. The Bundesbank favors ending the ECB's policy of draining funds from banks to offset its government bondholdings, a person familiar with the matter said. That would raise the amount of surplus funds in the banking system, the person said, and anchor money-market rates, thus providing a more stable environment for banks to lend. Consumer prices grew 0.7 in January from a year earlier in the euro zone, the European Union's statistics office Eurostat said Friday, well below the ECB's target of just below 2. That was down from 0.8 in December and short of economists' expectations for a slight rise. Some economists expect it to weaken further in February. Although January's figure wasn't far different from the previous month, it carries symbolic importance. The last time inflation fell so low, in October, the ECB responded with a surprise reduction in its key interest rate to a record-low 0.25. The ECB meets Thursday, and while many economists expect the bank to stand pat, some say the inflation report increases the chances of immediate steps to convince financial markets that officials take the threat of deflation seriously.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613840","date":"2014-02-06","texts":"Good morning from New York, The U.S. economy is improving and the unemployment rate is falling, but we report on what seems to be a fixed feature of our new economy. More than one in six prime-working-age men doesn't have a job--a chronic condition that, economists say, shows how technology and globalization are transforming the job market faster than many workers can adapt. In a society that has long venerated work, the bleak prospects for the long-term unemployed--who aren't included in the unemployment rate if they stop actively searching for work--has been raising concern among policy makers and economists. We tell the stories of family men who never recovered from the recession, young people who have put major life events on hold and others for whom the job market might have passed them by. The Obama administration is revising its contentious drone program in Pakistan. We report that senior U.S. officials have told their Pakistani counterparts that they will narrow the program to target a finite short-list of known terrorists and aim to eventually end it before the conclusion of Pakistani Prime Minister Nawaz Sharif's current term. Pakistani officials have long complained that the CIA keeps a rolling list of terrorist targets, making the program self-perpetuating. The revision, we find, reflects not only Pakistani objections to the strikes but logistical constraints on the CIA as U.S. troops are expected to pull out of Afghanistan at the end of 2014. We note, however, that strikes may continue if Afghanistan approves a security pact to keep U.S. troops in the country longer. Is it hypocritical for a business aimed at maximizing health outcomes to sell cigarettes The second-largest pharmacy chain in the U.S. has decided it is. In an unprecedented move, CVS said on Wednesday that it plans to stop selling all tobacco products nationwide by October. Cigarettes have no place in an environment where health care is being delivered, said the company's CEO. Our story looks at what the move means for the 100 billion tobacco industry as it struggles with slumping sales and widening smoking bans, and for CVS as it attempts to evolve from a drugstore into a health-care company. We also consider the million-dollar question of whether other retailers will follow CVS's example. The arrest of Charles Shrem, one of the best-known bitcoin advocates, is a setback to the popular currency that has been raising concern among regulators and governments. We profile the 24-year-old founder of a popular website that allowed users to buy and sell bitcoin, who faces legal troubles in connection with his currency exchange and an online black market. We find that his arrest underscores the challenges faced by bitcoin and its supporters as they try to expand the currency's influence. Despite his legal predicament, Mr. Shrem remains hopeful 2014 will be like the Industrial Revolution for bitcoin, he said in an interview on Wednesday, while serving house arrest.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614301","date":"2014-02-06","texts":"As the feel-good talk emanating from the World Economic Forum gathering at Davos last month fades and equity investors contemplate the possibility of a major market correction, a combination of factors suggests that something ominous may be afoot. Taken together, these three factors--simultaneous liquidity withdrawal by the Federal Reserve and China, a U.S. stock market on a knife's edge, and emerging markets in disarray--indicate that the global economy could be in danger of snatching defeat from the jaws of victory. Some observers continue to predict a synchronized global recovery in 2014. The U.S. economy is accelerating, the story goes, Europe has bottomed and will return to growth, while Japan has turned the corner on deflation. China is stable at 7 GDP growth, and the rest of the emerging world is stronger than in prior crises, such as the one in 1998. The counterargument suggests that the U.S. economy is ready to cool that Europe faces a serious risk of deflation and that Japan needs to do much more to ensure that growth and gradual inflation are entrenched. China is trying to deflate a credit bubble while the remainder of the emerging markets are divided among the mismanaged, the overly indebted and the unbalanced. The current geo-economic framework may help to determine which of these visions is likely to play out. This framework suggests that the world economy has yet to find and implement new growth models to replace those broken in the past decade the U.S. consumer engine, European vendor-financed growth and the emerging markets' export-driven model. Three additional factors are critical to understanding the global economic outlook. First, the adjustment to the new post-crisis economics has been buffered by the Fed's unprecedented quantitative easing programs in the U.S. and record credit expansion in China. Now these two wellsprings of post-crisis liquidity and economic activity are drying up at the same time, with no growth-model replacement or policy at hand. This is a worrisome development, given the underlying realities of inadequate global demand and very low inflation.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616812","date":"2014-02-07","texts":"Investors swapped out of U.S. equity funds and into bonds at the fastest clip on record in the most recent week, according to Lipper Inc., as they grasped for safety while the stock market swooned. Traditional U.S. stock mutual funds and exchange-traded funds together saw withdrawals of 18.8 billion in the week ended Wednesday, their biggest weekly withdrawals on record. The reversal, led by ETFs, comes after U.S. stock funds attracted 172 billion in 2013, the biggest inflow since the financial crisis. Meanwhile, taxable bond mutual funds and ETFs soaked up 10.7 billion, their biggest intake on record, the data from Lipper, a unit of Thomson Reuters Corp., showed. There's been jitteriness in the markets, said David Mazza, head of ETF research at State Street Global Advisors. Broadly, flows are moving away from U.S. equities, he said. Investors also continued to yank cash out of emerging-market stocks for the fourth week in a row. Emerging-market stock funds shed 2.7 billion in the most-recent week, the biggest outflow since February 2011, compared with 2.6 billion a week earlier. Virtually all of the shift came from money sloshing out of U.S. stock ETFs and into bond ETFs, which often can see big weekly asset swings. Just 386 million flowed out of traditional U.S. stock mutual funds in the most recent week. Traditional bond mutual funds attracted 1.2 billion. Helping drive that shift was one fast-moving ETF money manager, Good Harbor Financial LLC. It cashed in roughly 5 billion in U.S. stock ETFs on Monday and bought roughly that same amount in ETFs made up of Treasury bonds, the firm's chief executive, Paul Ingersoll, confirmed with The Wall Street Journal Monday.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617193","date":"2014-02-07","texts":"NEW YORK--Gold prices rose on Friday as a mixed U.S. employment report forced investors to recalibrate their assumptions about the Federal Reserve's future monetary policy. Gold for April delivery, the most active contract, gained 5.70, or 0.5, to settle at 1,262.90 a troy ounce on the Comex division of the New York Mercantile Exchange. This was the highest settlement price since Jan. 27, when futures closed at 1,263.40 an ounce. The Labor Department reported Friday that the U.S. economy added 113,000 new jobs in January, well below forecasts of a 189,000 increase. The disappointing data fanned hopes that the Federal Reserve would keep its stimulus program in place for longer than previously thought, sending gold to the day's high of 1,272 an ounce. However, gold futures were unable to hold those intraday highs. Some market participants pointed to bright spots in the jobs report such as the upward revisions to November's employment data as well as a month-on-month improvement from December. It is a bad report, but I think you'll need to get another one or two pretty bad ones before the Fed makes a move, said Bob Haberkorn, a senior commodities broker with RJO Futures in Chicago.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614100","date":"2014-02-08","texts":"Federal Reserve officials don't appear inclined to alter the course they have set out for monetary policy, despite a disappointing jobs report Friday that raised questions about the economy's underlying strength. Central bank officials are on a path to reduce their monthly bond buying by 10 billion at coming policy meetings. At their meeting in late January, they lowered the purchases by that amount to 65 billion and will consider cutting them to 55 billion at their next meeting March 18-19. They have said they would stick to the plan if the economy lives up to their forecasts. A weakening economy could spur them to keep the program going longer than expected, but Fed officials have said in recent weeks they are inclined to stay on track, a message one official repeated Friday. We don't want to be moving monetary policy very dramatically in either direction at this point unless we see strong validation in the data, Boston Fed President Eric Rosengren said in an interview after poring through the jobs report. Fed Chairwoman Janet Yellen will testify Tuesday and Thursday before Congress on the outlook for the economy and monetary policy, her first public appearance since being sworn in as the Fed's leader Monday.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616973","date":"2014-02-12","texts":"Asian markets moved higher on Wednesday after the release of stronger-than-expected trade data from China, and U.S. Federal Reserve Chairwoman Janet Yellen said she planned no major changes in the central bank's monetary policies. In the biggest economic headline in Asia on Wednesday, China reported that exports climbed 10.6 in January from a year earlier, a much strong gain than the 0.1 rise that had been expected. The figure also marked an improvement on December's 4.3 growth, and a rise from a high base early last year, when exports were widely believed to have been overstated as capital flows were disguised as trade payments. The impact was most felt in Hong Kong, where the Hang Seng Index jumped 1.5 to 22285.79. In mainland China, the Shanghai Composite gained 0.3 to 2110.79 after gaining 2.9 over the previous two sessions. In Australia, a country with strong trade links with China, the benchmark S&PASX 200 rose 1.1 to 5310.10. More broadly for the region, Ms. Yellen suggested in her first congressional testimony as chairwoman that the Fed would keep in place most of its easy-money policies as it gradually reduces the extraordinary bond-buying program that it has used to stimulate the U.S. economy.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615491","date":"2014-02-13","texts":"China's inflation remained tepid in January, but economists said the country's central bank still has little room to ease monetary policy as concerns over growing debt overshadow slowing economic growth. China's consumer-price index rose 2.5 year-over-year, data released by the National Bureau of Statistics on Friday showed, matching December's pace. Economists had expected a slightly lower figure, but on Friday said January's figure was still mild. China's CPI typically spikes around the Lunar New Year holiday, which fell at the end of January, but this year muted food prices helped to keep overall inflation modest. A stronger Chinese yuan has also helped push down the prices of imported goods, said Bill Adams, an economist at U.S.-based PNC Financial Services. Consumer inflation could pick up somewhat later this year, averaging 3 in 2014, according to estimates by J.P. Morgan. Still, that would be easily within the government's stated tolerance of 3.5. Despite a slowing economy and tepid price rises, the central bank is unlikely to cut interest rates or tone down its commitment to slowing the growth of credit, experts said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614331","date":"2014-02-18","texts":"NEW YORK--The Federal Reserve Bank of New York said Tuesday that David Cote of Honeywell International, Inc. has been named as a candidate for its board of directors. Mr. Cote has been chairman and chief executive officer at Honeywell since 2002. The business leader is the sole nominated candidate for the position, with voting to conclude on March 6. The boards that oversee each of the 12 regional Fed banks have been a source of controversy in recent years given the presence of bankers on this oversight panels, who are in turn regulated by the central bank. Fed officials counter that the boards have no direct input into monetary policy-making. And while the boards are responsible for overseeing the search process to find a new regional Fed bank presidents, bankers on the boards aren't involved in that key function. Regional Fed leaders say their boards provide valuable business intelligence on the economy, and offer important guidance in managing the operations of each regional Fed bank.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613908","date":"2014-02-21","texts":"The Federal Reserve on Friday released 1,865 pages of transcripts of its behind-closed-doors policy meetings in 2008, the year of the worst financial crisis in generations. The Fed announced the outcome of the meetings right after they occurred, and it released minutes summarizing the discussions a few weeks later. But these documents reveal for the first time officials' verbatim remarks during the heat of many difficult moments that year. Among the insights they provide 1. The Fed was often behind the curve A perception has developed that we are tentative and indecisive, then-Chairman Ben Bernanke warned his colleagues in January 2008. At times, he moved aggressively to cut short-term interest rates at others, he held back. After Lehman Brothers collapsed, he thought monetary policy, with short-term interest rates at 2, was in the right place. By year-end, he acknowledged the Fed was at a historic juncture and moved aggressively to unconventional policies to avert another depression. 2. Janet Yellen's forecasting record was mixed The current Fed chairwoman said in March 2008 that history would probably show a recession had started in November 2007. That was a good call The National Bureau of Economic Research put the date at December 2007. Ms. Yellen is highly regarded for her ability to read the economy, but she also makes mistakes. In June 2008, she guessed the Fed's next move would be interest-rate increases to fight inflation before year-end. Instead, the Fed continued cutting rates through the year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616056","date":"2014-02-22","texts":"Two days after U.S. officials decided to let Lehman Brothers collapse in September 2008, and just before the Federal Reserve unleashed a torrent of programs to bolster the financial system, central-bank officials were still struggling to grasp the magnitude of the calamity that had hit the economy. I think that our policy is looking actually pretty good, Fed Chairman Ben Bernanke said of the level of interest rates at a closed-door Fed policy meeting on Sept. 16, 2008, according to transcripts of its policy meetings that were released Friday after the traditional five-year lag. Officials decided at the meeting to hold interest rates steady at 2. It was one of Mr. Bernanke's last moments of passivity in the financial crisis. As he spoke, the Fed was moving ahead with plans to help bail out American International Group Inc., the large failing insurer seen as crucial to the financial system. Within days Mr. Bernanke and Treasury Secretary Henry Paulson would go to Congress and make an urgent plea for a bank-bailout plan. By year-end, the Fed chairman had pushed a still-hesitant central bank toward an unprecedented experiment with easy-money policies aimed at reviving the economy. The Fed transcripts, 1,865 pages documenting one of the most turbulent economic times in the nation's history, covered eight formal and six emergency policy meetings the central bank conducted in 2008. They provide the most complete view yet into developments inside the nation's central bank as the financial crisis worsened and threatened to plunge the U.S. into another Great Depression.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614815","date":"2014-02-26","texts":"J.P. Morgan Chase & Co. offered a cautious outlook as it lowered its projections of a key profitability measure amid a slump in trading at the start of the year and boosted job-cut targets for its branches and mortgage business. The reduced ambitions outlined Tuesday by Chief Executive James Dimon and others at the bank's annual investor day in New York show how J.P. Morgan's size and power across various markets hasn't made it immune to the struggles weighing down results at financial companies of all stripes. Executives across the banking industry, despite some early signs of loan growth, are wrestling with a sluggish U.S. economy and the effect of low interest rates on profits from lending, investing and trading. J.P. Morgan executives said trading revenue had fallen 15 this year, due largely to a slump in trading activity in fixed-income markets. The bank lowered projections of a profitability measure known as return on tangible common equity to 15 to 16 for 2014, down from 16 in 2013. Pressures on J.P. Morgan are acute in part because the bank has had to increase compliance costs. Tuesday, the bank said it would add 3,000 employees to compliance areas as it works to shore up relationships with the numerous regulators that oversee the bank's global operations. Executives said the 3,000 employees would be on top of the 7,000 additions to compliance in 2013. The bank has agreed to more than 20 billion in settlements over the past year to resolve a number of government investigations and lawsuits, but it still faces a number of federal probes.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615355","date":"2014-02-27","texts":"DuPont Co. anticipates generating as much as 500 million a year in revenue from high-tech farm data services over the coming decade, a senior official said Thursday. The chemical and agricultural company outlined plans to begin selling to farmers next month a suite of data-driven services called Encirca. The services, sold through local dealers, are aimed at increasing farmers' yields through analysis of their weather, soil and crop performance. There is enormous potential for these services to help improve productivity for North America corn and soybean farmers and extend globally to a wide range of crops and markets, said James Borel, executive vice president for DuPont, in a statement. DuPont, of Wilmington, Del., is revamping and expanding a range of services built around analyzing information gathered from farmers' fields by modern combines and tractors, and delivering tailored advice on planting, fertilizer use and water management. DuPont, rival Monsanto Co. and other seed and software companies are investing and striking deals with weather and equipment companies and soil analysis specialists to broaden the range of analysis they are able to deliver for farmers, which can mean more crops per acre and increased revenue at harvest time.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614517","date":"2014-03-01","texts":"Warren Buffett is poised to disclose a blockbuster 2013, with record earnings expected when the billionaire investor releases his company's annual report on Saturday. Berkshire Hathaway Inc.'s earnings should reflect an improving economy, a soaring stock market and the lack of a major catastrophe that could have put a dent in the conglomerate's insurance profits. At the same time, the market's steep climb last year probably means Mr. Buffett will miss his own target for increasing Berkshire's net worth. Analysts polled by Thomson Reuters expect Berkshire to post, on average, annual revenue of about 180 billion, up roughly 11 from 2012. The Omaha, Neb.-based company is projected to report net profit of about 18.5 billion, up from 14.8 billion in 2012. Berkshire will release its annual report and its annual letter to shareholders Saturday morning. The release of the letter is a much-awaited event, not just for Berkshire shareholders but for the wide universe of acolytes who look to the 83-year-old chairman for investing wisdom and insights.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616847","date":"2014-03-03","texts":"Corrections & Amplifications Luxury goods that see increased demand with higher prices are called Veblen goods, named for American economist Thorstein Veblen, who described the phenomenon. A Page One article on Monday about spending by the wealthy incorrectly said such items were Giffen goods as identified by Scottish economist Robert Giffen. WSJ March 4, 2014 Despite expanding into new markets, the luxury-retail business has been relying on price increases to drive sales. Now, even the very wealthy are nearing the limits of what they are willing to spend. In the past five years, the price of a Chanel quilted handbag has increased 70 to 4,900. Cartier's Trinity gold bracelet now sells for 16,300, 48 more than in 2009. And the price of Piaget's ultrathin Altiplano watch is now 19,000, up 6,000 from 2011.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617393","date":"2014-03-03","texts":"The big question on investors' minds now is a simple, if scary, one Is the stock market topping out After surging 32 last year, including dividends, the S&P 500 index has bogged down in 2014. It closed at a record 1859.45 Friday, but that is up just 0.6 from Dec. 31. The Dow Jones Industrial Average closed at 16321.71 Friday, still down 1.5 from Dec. 31. Just to be safe, some professional money managers are lightening up on stocks, traders say. But analysts who track investor psychology and trading patterns say it could be too soon to head for the exits. Many expect stocks to be volatile and some predict a sharp pullback in 2014. Just not yet. Investors simply aren't acting the way they typically do when stocks are on the brink of serious trouble, these analysts say. There's nothing that I see here now that says imminent demise, said Phil Roth, a veteran independent analyst who correctly predicted the end of the previous bull market in 2007. True, Mr. Roth says, the current bull market has been running for nearly five years and is weary. Based on corporate earnings levels, stocks are probably overpriced. A negative event, such as trouble in the bond market or in the world economy, could send stocks down.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616225","date":"2014-03-10","texts":"The Federal Reserve may have to accelerate the pace of tapering to take into account the economic pickup currently ongoing in the U.S. and the improving forecast for the near future, Federal Reserve Bank of Philadelphia President Charles Plosser said. We must back away from increasing the degree of policy accommodation in a manner commensurate with an improving economy, Mr. Plosser told a panel in Paris. Reducing the pace of asset purchases in measured steps is moving in the right direction, but the pace may leave us well behind the curve if the economy continues to play out according to the FOMC forecasts. Based on the latest gross domestic product numbers, the U.S. economy accelerated its pace of expansion in the second half of 2013 from the first half. Real output showed growth of 3.3 from 1.8 in the first half. As the economic outlook improves, the Fed announced in January its second cut to its monthly purchase program to 65 billion. At the current pace, the FOMC will end the purchase program later this year. But Mr. Plosser noted the pace may not be fast enough.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616325","date":"2014-03-10","texts":"Washington's effort to push banks out of the mortgage-servicing business is propelling the handling of customers' loans into companies such as hedge funds and nonbank financial firms. The shift is fueling concern among federal and state regulators about the level of oversight and capital requirements in the industries now servicing a growing share of these loans. Banks such as Morgan Stanley, Bank of America Corp., Goldman Sachs Group Inc. and Ally Financial Inc., have been selling mortgage-servicing rights to nonbank companies, including Ocwen Financial Corp., and Nationstar Mortgage Holdings Inc., which have doubled their servicing portfolios in the past year. About 1.03 trillion of mortgage-servicing rights were sold in 2013, with the vast majority going to nonbank firms, said Guy Cecala, publisher and chief executive officer of industry newsletter Inside Mortgage Finance. Among the 30 largest mortgage servicers, nonbank firms held a 17 market share at the end of 2013, up from 9 at the end of 2012 and 6 at the end of 2011. The business can be lucrative. Servicers typically make money by collecting a fee from the mortgage's owner -- usually a bank or investor -- for handling billing and payment collection. Ten of the largest U.S. mortgage lenders took in 8.23 billion in servicing income in 2013, according to an analysis by Inside Mortgage Finance.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615501","date":"2014-03-14","texts":"Seeking Clues in Mixed Sentiment Signals Stocks Rise on Strong Consumer Sentiment. A headline reading something like that, or its inverse, is a distinct possibility Friday morning. It may even be true in the short run as information-hungry traders parse every piece of major or minor data these days for a clue about markets' direction. Or it may reflect the simple urge to rationalize stocks' sometimes frustratingly random walk. Friday's Thomson ReutersUniversity of Michigan consumer-sentiment survey is the longest-running poll of its kind. That history hasn't translated into a great stock-market-timing tool, though, even though plenty of investors have tried to use it that way. But the survey's breadth enhances its usefulness as an economic early-warning system.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615857","date":"2014-03-19","texts":"OTSU, Japan--One of the Bank of Japan's more outspoken policy board members warned on Wednesday that too much monetary stimulus could cause problems for the economy in the future, even as the head of the bank said that it should stand ready to act again if needed. Board member Takahide Kiuchi, a former Nomura Securities economist, has been skeptical over the BOJ's ability to attain its 2 inflation target in two years and is wary of maintaining an ultra-easing monetary policy for an extended period. If the current large-scale easing policy were to be protracted or strengthened by additional measures, the associated side effects would instead outweigh the positive effects, he said at a meeting with business leaders in the city of Otsu in Shiga Prefecture, western Japan. Financial markets and many private-sector economists say, however, that the central bank will add more fuel to its massive easing program later this year to shore up the economy. Speaking in Tokyo, BOJ Gov. Haruhiko Kuroda took a different tack, saying that the central bank stood ready to take additional action if necessary to achieve the 2 inflation target.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613975","date":"2014-03-20","texts":"U.S. regulators are warning banks to stop lending excessive sums to fund corporate takeovers. A year after the Office of the Comptroller of the Currency, Federal Reserve and Federal Deposit Insurance Corp. issued guidelines designed to deter banks from funding deals that regulators feel are too laden with debt, some banks have continued to finance such deals under the impression that the guidelines are flexible. But now, the OCC says it isn't giving banks any wiggle room on the guidelines, which limit the amount they can lend to fund corporate buyouts and attempt to stamp out other lending practices regulators consider risky. On new issuance, we have a 'no exceptions' policy, Martin Pfinsgraff, the OCC's senior deputy comptroller for large-bank supervision, said in an interview. Starting late last summer, the Federal Reserve and OCC sent letters to banks demanding they comply with guidance published in March 2013 saying they should avoid financing takeover deals that would put debt on a company of more than six times its earnings before interest, taxes, depreciation and amortization, or Ebitda. The guidelines also are designed to limit borrowing agreements that don't contain lender protections known as covenants and stretch out payment timelines.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615712","date":"2014-03-20","texts":"U.S. stocks rallied Thursday after an upbeat report on factory activity helped shift the focus away from concerns that the Federal Reserve might raise interest rates sooner than expected. The Dow Jones Industrial Average climbed 108.88 points, or 0.7, to 16331.05. The S&P 500 advanced 11.24 points, or 0.6, to 1872.01, and the Nasdaq Composite Index gained 11.68 points, or 0.3, to 4319.29. The rally wiped away Wednesday's 0.6 drop in the S&P 500, which came after Fed Chairwoman Janet Yellen said in a news conference that the central bank could raise rates something on the order of six months after it winds down its bond-buying program. That could mean a rate increase as early as April of next year, instead of later in 2015, as many had expected. Stocks had started Thursday's session lower, but major benchmarks turned higher after the Philadelphia Federal Reserve's manufacturing-activity index for March topped expectations. Other economic data were firm as well, giving credence to the idea that soft reports clouding markets earlier this year reflected cold winter weather rather than a true growth slowdown. The rebound also came as investors rethought Ms. Yellen's comments.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616195","date":"2014-03-20","texts":"Discover Financial Services proposed a 20 increase to the credit-card company's dividend and up to 1.6 billion in stock buybacks over the next year, moves that would need approval from the Federal Reserve. The announcement comes as the lender was among 29 of the 30 largest institutions that the Fed said have enough capital to continue lending even when faced with a hypothetical jolt to the U.S. economy lasting into 2015. The so-called stress test is an annual test of big banks' financial health, and positive views can clear the way for the companies to reward investors with dividends and buybacks. Discover on Thursday said its proposed actions include an increase to the company's next quarterly dividend to 24 cents a share from 20 cents previously. It also intends to repurchase up to 1.6 billion in stock during the next four quarters ended March 31. The company said the actions would be subject to a non-objection from the Fed later this month, and the dividend increase will also need approval from Discover's board.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616349","date":"2014-03-20","texts":"U.S. Treasury prices trickled lower Thursday as nervousness about when the Federal Reserve might raise rates settled down a bit. After suffering a sharp selloff Wednesday on the back of the Fed's policy announcement, Treasurys wobbled between minor gains and losses most of the session. The ten-year note traded down 132 in price by late afternoon to yield 2.775, according to Tradeweb. The 30-year slipped 832 to yield 3.665, while the two-year held flat to yield 0.428. Bond yields move inversely to prices. The session's ups and downs reflected buying from bargain hunters who took advantage of Wednesday's sharp price drop, offset by sellers facing the newfound fear of a potential Fed rate increase on the horizon. There's been a shift in the Fed's thinking, said Tom di Galoma, head of fixed income rates at ED&F Man Capital. They're beginning to say we have to address raising rates. The Fed's policy update Wednesday rattled bond investors after the committee's rate projections showed some officials shifting forward their forecast for higher rates. Comments from Fed Chairwoman Janet Yellen exacerbated those concerns after she said a rate increase could happen around six months after the central bank is done buying bonds.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616792","date":"2014-03-20","texts":"Lending Club, the biggest peer-to-peer consumer-lending platform, is expanding to businesses. The San Francisco-based company on Thursday will launch a platform for investors to fund loans to small companies. It joins a number of upstarts, including Dealstruck and Funding Circle, offering small businesses alternatives to banks, credit cards and short-term lenders. The ventures aim to capitalize on a crunch that has been growing since the financial crisis. The value of outstanding commercial loans under 1 million at federally insured banks -- a proxy for small business -- has declined nearly 15 since 2008 to 287.6 billion in last year's fourth quarter, according to the Federal Deposit Insurance Corp. The data, the most recent available, aren't adjusted for inflation. We see a lot of unmet demand and needs in the market, said Renaud Laplanche, Lending Club's chief executive. Small-business owners don't have access to bank loans, so they resort to just charging credit cards, paying a high interest rate, similar to the consumer side. Lending Club has originated 3.8 billion in consumer loans since it began in 2007.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614807","date":"2014-03-21","texts":"Looser corporate-governance standards are luring foreign companies to U.S. markets, a development causing concern among some large investors. Overseas companies like Chinese e-commerce giant Alibaba Group Holding Ltd. have recently opted to list their shares in New York rather than in their home markets or on other international exchanges, in part because the U.S. in some respects is more lenient, people familiar with the matter say. Unlike venues in London and Hong Kong, their main rivals in the race for global listings, the New York Stock Exchange and the Nasdaq Stock Market allow corporate insiders who collectively own less than half their companies' stock to exercise control through dual-share structures and other means. In addition, many foreign companies are exempted from some of the disclosure requirements imposed on U.S. corporations. If you're looking to do dual-class, the U.S. is where you can do that, said Alex Cohen, a former Securities and Exchange Commission official who is now a partner at law firm Latham & Watkins LLP. That's certainly a draw for some companies. So far this year, at least 15 foreign companies have filed papers in preparation for initial public offerings in the U.S., according to a search of securities filings, with most likely to trade on Nasdaq or the NYSE. That puts 2014 on track to be the busiest year for such filings since at least 1996--though the increase in activity comes amid a broader pickup in IPOs, with firms listing at the fastest rate in years.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616975","date":"2014-03-22","texts":"With Sunday marking the fourth anniversary of the Affordable Care Act being signed into law, it's worth revisiting the initial purpose of the president's signature legislation Universal coverage was the main goal. Four years later, not even the White House pretends that this goal will be realized. Most of those who were uninsured before the law was passed will remain uninsured, according to the Congressional Budget Office. Democrats also fixated on another goal protection for people with pre-existing conditions. One of the first things the new law did was create federal risk pools so that people who had been denied coverage for health reasons could purchase insurance for the same premium a healthy person would pay. Over the next three years, about 107,000 people took advantage of that opportunity. Think about that. One of the main reasons given for interfering with the health care of 300 million people was to solve a problem that affected a tiny sliver of the population. More recently, the president has had to explain why between four million and seven million people are losing their health insurance despite his promise that they would not. The new insurance will be better, he tells us. No longer will insurers be able to cancel your coverage after you get sick. What he doesn't say is that this practice was made illegal at the federal level by the Health Insurance Portability and Accountability Act of 1996, and was illegal in most states long before that. While the president and his party struggle to find more convincing reasons why we need ObamaCare, three huge problems won't go away.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615741","date":"2014-03-23","texts":"Management issues, poor performance and redemptions from its flagship fund have been headline headaches for Pacific Investment Management Co. Investors pulled 47.8 billion, or 16.5 of assets, from its huge Total Return Fund in the 12 months through February, according to Morningstar. Relative to assets, though, redemptions at some of Pimco's peers have been. Investors pulled 8.03 billion, or 20.5 of assets, from DoubleLine Total Return Bond Fund in the period 6.07 billion, or 20.7 of assets, from J.P. Morgan Core Bond and 6.06 billion, or 18.3 of assets, from American Funds Bond Fund of America, says Morningstar. DoubleLine Capital says Morningstar's figures are slightly off, and that redemptions for its fund were actually 7.62 billion. The redemptions were partly the result of the convulsion in the financial markets last summer as investors began to fear that the Federal Reserve would begin to reduce its monthly bond purchases and perhaps move to boost interest rates, which is bad for bond prices. Daisy Maxey WSJ.com","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613883","date":"2014-03-26","texts":"HONG KONG--The U.S. unemployment rate should fall below 6 by the end of 2014, St. Louis Federal Reserve President James Bullard said Wednesday at an investor conference in Hong Kong. Mr. Bullard, a member of the policy-setting Federal Open Market Committee, said the U.S. economy is improving and unemployment had fallen much more quickly than many people expected. The Fed had previously committed to keeping short-term rates low well past the time when the unemployment rate fell below 6.5, especially if inflation remained below 2. The unemployment rate stood at 6.7 in February, while inflation has failed to rise significantly and economic growth remains fragile. That pushed the Fed at its policy meeting last week to drop reference in its regular statement to the unemployment threshold. Instead, the statement said rates will stay low for a considerable time after the Fed's bond-buying program ends. Mr. Bullard, speaking at a conference organized by Credit Suisse, said the FOMC from now on would use more standard and qualitative language rather than relying on quantitative thresholds to guide market expectations of future rate decisions.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614643","date":"2014-03-27","texts":"Regulators have opened investigations into municipalities that may have misled investors about their financial condition, the top official at the Securities and Exchange Commission's municipal-bond enforcement unit said Thursday. The unit launched a wide-ranging review of past disclosures by financially stressed states and local governments a little over a year ago, signaling regulators have stepped up scrutiny of municipal-bond sales amid mounting investor anxiety. That review has resulted in an unspecified number of investigations of issuers, said LeeAnn Gaunt, the chief of the municipal securities and public pensions unit at the SEC. The unit is looking for instances where there is tension between the disclosures and the subsequent announcements of financial stress by municipal bond issuers, Ms. Gaunt said at a National Association of Bond Lawyers conference in Boston. She didn't specify which issuers are under investigation. The review underscores officials' interest in ensuring proper sales and trading practices in the 3.7 trillion municipal-bond market. The market has long been seen by many mom-and-pop investors as a reliable source of tax-exempt income and a vehicle for retirement savings.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615376","date":"2014-03-27","texts":"The 30-year bond stole the show Thursday, with its yield sinking to a nine-month low in an otherwise mixed trading session for the U.S. Treasurys market. In late-afternoon trading, the so-called long bond rallied 1032 in price to yield 3.526, according to Tradeweb. The yield sunk as low as 3.492, the first time it has crossed under 3.5 since July. Benchmark 10-year notes rose 232 to yield 2.685, while two-year notes shed a fraction in price to yield 0.450. Bond yields move inversely to their prices. Selling shorter-end Treasurys in favor of longer maturities is a powerful trade that has been in play since March 19, when the Federal Reserve's policy update stirred up concerns about the timing of its first rate increase. The Fed's statement was a good reminder that the rate hike can come sooner or later than the Fed's base case, said Jake Lowery, portfolio manager at ING U.S. Investment Management. There will be greater volatility in fixed income than when the Fed's policy was calendar- or threshold-based.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615812","date":"2014-03-27","texts":"Gold prices sank to a six-week low on Thursday as signs of improving U.S. economic growth and easing concerns about Ukraine sapped investor interest in the haven asset. Gold for April delivery, the most active contract, fell 8.70, or 0.7, to 1,294.70 a troy ounce on the Comex division of the New York Mercantile Exchange. This was gold's lowest settlement price since Feb. 11, when futures closed at 1,295 an ounce. Gold had rallied over the first two months of 2014 as investors sought to protect their wealth from risks such as a slowing U.S. economy, turbulence in emerging markets, and a political crisis in Ukraine. Gold is considered by some traders as a safer investment than currencies or Treasury bonds, because the precious metal's value isn't tied to a government or country. But after Russia annexed Ukraine's Crimea region in mid-March, some of the uncertainty surrounding the geopolitical tensions in Eastern Europe appeared to subside and gold prices turned lower. Futures are now on track to post a 2 loss for March. If you're a gold bull, you have to be disappointed with what's happened, said Bill O'Neill, a principal with commodities investment company Logic Advisors. To go from 1,380 to 1,290 and change in a very brief time shows that this market doesn't have very much momentum, he added.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615595","date":"2014-03-28","texts":"The Securities and Exchange Commission's municipal-bond enforcement unit said it is reviewing the past disclosures of defaulted and distressed municipalities to see if financial conditions were properly disclosed. The typical debt load of borrowers leaving school with a master's, medical, law or doctoral degree jumped an inflation-adjusted 43 between 2004 and 2012, the New America Foundation said, helping fuel the surge in student-loan debt. Jurors found five former employees of Bernard Madoff guilty of aiding and hiding his 17 billion Ponzi scheme in a trial that painted the money manager's Manhattan offices as a hive of illegal activity. U.S. stocks snapped a losing streak on Friday, and the tech-heavy Nasdaq rebounded from nearly two-month lows. The S&P 500 fell 0.5 for the week to 1857.62, while the Nasdaq fell 2.8, to 4155.76. The Internal Revenue Service will treat bitcoin like property. The rule generally would impose capital-gains taxes on profits and on bitcoin retail transactions--a potential boost to investors, but one that requires extensive record-keeping.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613834","date":"2014-03-31","texts":"The euro strengthened Monday, while European stocks retreated from early highs, despite data showing inflation in the euro zone sank to its lowest level since 2009. The anemic pace of price increases steps up the pressure on the European Central Bank to introduce fresh measures to stave off low inflation, but analysts and investors say the ECB will need to back up its recent dovish rhetoric with action before the euro will weaken significantly. The European Union's statistics agency Monday said consumer prices rose 0.5 from March 2013, the lowest annual rate of inflation since November 2009 and well below the European Central Bank's target of just under 2. The euro dipped immediately after the data, but quickly recovered. At the end of the European session it was 0.2 higher against the dollar at 1.3777. It remains not far below the 212-year high of almost 1.40 hit early this month. The common currency gained 0.3 against the yen on Monday. The market is testing the ECB's resolve. Investors are waiting to see concrete action and we will not see the euro weaken in a sustainable fashion until we get that, said Phyllis Papadavid, a senior foreign-exchange strategist at BNP Paribas.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617394","date":"2014-04-01","texts":"The International Monetary Fund is the latest organization to weigh in on what many lawmakers have been saying since the financial crisis Size does matter when it comes to being a bank. Large U.S. banks received a funding advantage of as much as 70 billion between 2011 and 2012, as investors demanded lower interest rates because of a perception that the government wouldn't let such firms fail during turbulent times, an IMF study found. The benefit is global Big banks in the euro area received as much as 300 billion in funding-cost advantages during that period, varying from 25 billion to 110 billion in Japan and 20 billion to 110 billion in the U.K., based on the analysis by the international organization based in Washington. The study suggests regulators have work to do to curb the perception that banks are too big to fail. The IMF found the expected value of government guarantees for a distressed bank is roughly comparable to what they enjoyed before the 2008 financial crisis. The high degree of concentration carries with it a high degree of potential systemic risk, according to the study. The distress or failure of one of the top three banks in a country, for example, could destabilize the country's entire financial system, in part because its activities may not easily be replaced by other institutions.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614798","date":"2014-04-02","texts":"While much of the country spent the first three months of 2014 sheltering against snow and ice, banks began to fire up the lending furnaces. That is welcome news for bank investors. Loan growth has been the missing ingredient for banks for some time. Without it, they have been left to try to bolster earnings through repeated rounds of cost cutting and reversals of loan-loss reserves, even as the Federal Reserve's superlow interest rate policy has weighed heavily on margins. While loan growth seen in the first quarter isn't yet strong enough to suggest banks are anywhere near out of the woods, it does provide some reason to hope the lending environment is improving. And it could bode well for banks' coming first-quarter results, especially as firms continue to grapple with lower mortgage-origination activity. Not that any lending gains have been immediately apparent. In the first quarter through the third week of March, the latest date for which Federal Reserve data are available, overall bank loans grew from a year earlier at an average of 2.5. The pace is the same as seen in the final quarter of 2013. While this at least marked stabilization following a long period of declining rates of loan growth, it wasn't anything for bank investors to write home about.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614855","date":"2014-04-08","texts":"NEW YORK--Federal Reserve Bank of Minneapolis President Narayana Kocherlakota said on Tuesday the U.S. central bank needs a more effective plan to boost hiring and get tepid inflation back to its official target. We need to do better as a committee to achieve the hiring and price pressure mandates Congress has directed the Fed to achieve, Mr. Kocherlakota said in the text of a speech prepared for delivery before a local group in Rochester, Minn. When it comes to creating a policy that will prove more effective in driving the economy forward, the official said, I look forward to working with my colleagues to make that happen. But Mr. Kocherlakota stopped short in his speech of saying what he would like to see done. The official is currently a voting member of monetary-policy setting Federal Open Market Committee. At the FOMC's March meeting, he dissented against the committee's decision to stop providing numbers-based guidance about the potential timing of interest-rate rises. Ahead of last month's meetings, the Fed said it wouldn't consider increases in short-term rates until unemployment fell well past 6.5 as long as expected inflation stayed under 2.5. A rapid and still hard-to-explain decline in unemployment--joblessness currently stands at 6.7--drove the Fed to shift the way it describes its expected path for monetary policy. Now, the FOMC says rate increases are off the table until a broader and vaguer set of improvements are seen in the job market. Mr. Kocherlakota believed the change in the Fed's language weakened its commitment to push very weak levels of inflation back to the official target of 2. He said he would have preferred for the Fed's existing guidance to have been altered, and for the rate increase threshold to have been lowered to 5.5.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616905","date":"2014-04-09","texts":"Stocks gained ground for the first time in four sessions, led by strength in tech stocks, as investors girded for the start of earnings season. The Nasdaq Composite Index climbed 33.23 points, or 0.8, to 4112.99 after falling 4.6 in the past three trading sessions. That was the biggest three-day percentage decline since November 2011. The Dow Jones Industrial Average advanced 10.27 points, or 0.1, to 16256.14 in choppy trading that reflected uncertainty about corporate profits, the health of the U.S. economy and the impact of the Federal Reserve lessening its stimulus. The Dow, which last closed at a record high on Dec. 31, is down 1.9 in the year to date. The S&P 500 index gained 6.92 points, or 0.4, to 1851.96. The index is up 0.2 since the start of the year. Tesla Motors Inc., one of the stocks caught up in the recent selloff, rallied 7.94, or 3.8, to 215.46 after the auto maker said it started offering a business-leasing program that is expected to spur sales of its electric vehicles. Investors had been selling stocks such as Tesla amid worries that such a quick run-up in share prices -- and valuations -- was happening on shaky fundamentals. In the past month, Tesla shares tumbled 12, although they are up 43 since the start of the year.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616633","date":"2014-04-10","texts":"WASHINGTON--The number of Americans filing new claims for unemployment benefits fell last week to the lowest level in seven years, a new sign the labor market is rebounding from a winter-related soft spell. Initial claims for jobless benefits, a measure of layoffs, fell 32,000 to a seasonally adjusted 300,000 in the week ended April 5. That was the largest decline in claims since late 2012, pushing the overall level down to lows last seen in May 2007. Economists had forecast 320,000 new claims for last week. Jobless claims data can be especially volatile at this time of year as the shifting date of the Easter holiday makes seasonal adjustments difficult. The four-week moving average of claims, which aims to smooth out volatility, fell 4,750 to 316,250, its lowest level since September. These data point to a labor market that is picking up steam along with activity as the weather normalizes in the spring, said Barclays economist Dean Maki. Jobless claims have been trending lower in recent weeks after economic disruptions caused by unusually harsh weather over the winter months. Job creation slowed early in the winter as consumers postponed shopping trips and businesses put new investments on hold.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615989","date":"2014-04-11","texts":"WASHINGTON--A gauge of U.S. inflation surged in March, driven by volatile categories that may not push broader price measures out of their long stretch of sluggishness. The producer-price index for final demand, which measures changes in the prices businesses receive for their goods and services, rose a seasonally adjusted 0.5 from February, the Labor Department said Friday. It rose 0.6 excluding the volatile categories of food and energy. Economists surveyed by The Wall Street Journal had expected the index to rise a more modest 0.1, and predicted a 0.2 increase excluding food and energy. It had fallen 0.1 in February. The index was up 1.4 in March from a year earlier, the biggest year-over-year increase since last August. It could be that the difficult weather over the past few months has distorted prices, and wholesale inflation will settle down in April, PNC chief economist Stuart Hoffman wrote in a note to clients. But there is also the possibility that inflation may be picking up, as firms raise prices given the recent limited acceleration in wage growth and stronger demand.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616283","date":"2014-04-13","texts":"For some money managers, the recent turbulence in the stock market isn't a reason to worry. It is a healthy sign. Markets were rattled last week as the Nasdaq Composite Index fell 3.1 and the Dow Jones Industrial Average slipped 2.4. The Dow, Nasdaq and S&P 500 are all down for the year after advancing earlier in 2014, following a sharp reversal in once-hot corners of the market such as initial public offerings and the shares of young biotechnology and Internet companies. The pullback underscores concern over the broader outlook for share prices following a 30 rise in the S&P 500 last year. Valuations remain above long-term averages, while U.S. growth and corporate earnings have hit a soft patch. That is exactly kind of environment that calls for a bumpier stock market, investors say. You don't want a market to go just straight up to the sky, says Lew Piantedosi, manager of the 142 million Eaton Vance Large-Cap Growth Fund, which has lost 5.5 over the past month but is up 19 over the past year. When you go straight up, there's not a lot of support on the way down. After a run such as the nearly 30 gain in the S&P 500 in 2013, it is better for stocks to level off for a bit, he said. We're seeing that now, he said. He expects that as investors get more comfortable with the global economic outlook, stocks will resume their rally.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615869","date":"2014-04-14","texts":"Industrial production across the 18 countries that share the euro rose slightly in February, although output in many of the currency area's troubled southern members declined. The modest nature of the industrial expansion, together with its narrow spread, underline the weakness of the euro zone's recovery as policy makers at the European Central Bankconsider new measures to counter a period of very low inflation. The European Union's statistics agency Monday said output rose by 0.2 from January, and by 1.7 from February 2013. The rise in output met expectations. Eurostat also revised its calculations for January, and now estimates production was unchanged during the month, having previously recorded a decline of 0.2. The rise in output may reassure members of the European Central Bank's governing council that the modest growth they expect to see this year is materializing. But there were signs of continued weak consumer demand, an indication that inflationary pressures are likely to remain weak. Production of durable consumer goods fell by 1.2 from January, and was down 0.6 from February 2013. Durable goods such as washing machines and other items of household equipment are the type of nonrecurring purchases that consumers postpone if they expect to see price falls.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617459","date":"2014-04-14","texts":"MIAMI -- As Florida Gov. Rick Scott campaigns for re-election, his pitch boils down to this Look at the numbers. Under his watch, the state's jobless rate has fallen to 6.2 from 10.9 when he took office in 2011, the nation's third-largest decline. Employment rose by 470,000 jobs, or 6.5, the seventh-best gain. And rising tax revenue yielded a 1.2 billion budget surplus this year. Yet Mr. Scott, a Republican, finds himself in a close race with Charlie Crist, his likely Democratic opponent, who accrued dismal statistics as his immediate predecessor. Florida lost roughly 825,000 jobs during Mr. Crist's four years as governor ending in 2011, primarily due to the worst global economic downturn in a generation. The state also grappled with a 3.6 billion budget shortfall the year Mr. Crist left office. Mr. Scott faces a quandary similar to that facing many Republican governors seeking re-election this year after arguing that austerity steps would boost their states The economy is improving, but many voters remain gloomy about the future. Will they come to see the recovery as strong -- and credit state policies for that -- or see the change as part of broad, national trends In Michigan, Republican Gov. Rick Snyder has dubbed himself the Comeback Kid, citing tax cuts and deficit reduction in part for boosting employment by 123,000 jobs, or 5.2, just ahead of the national average of 5.1.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614454","date":"2014-04-16","texts":"Banks are boosting their lending to businesses, providing fuel for companies to increase spending on workers and equipment as the economy improves. The rise is being driven both by banks, which are loosening their lending standards, and companies, which are seeking more money, bank executives said. Earnings results from the six largest U.S. commercial banks by assets, which include J.P. Morgan Chase & Co., Citigroup Inc., Bank of America Corp. and Wells Fargo & Co., show a 8.3 increase in commercial loans outstanding in the first quarter from the same period a year earlier. The results suggest companies are getting more confident about the economy after years of sluggish growth, and are anticipating interest rates might start to climb from rock-bottom levels. Lenders, too, are making bigger bets on an economic expansion at a time when tighter regulatory restrictions on many banking functions have placed more importance on core lending activities to boost earnings.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617398","date":"2014-04-17","texts":"Rockwell Collins Inc. said its fiscal second-quarter revenue jumped 12, as a recent acquisition helped push up sales. Its earnings declined, however, largely due to an unfavorable comparison to the prior year's quarter. The company also raised the lower end of its earnings guidance for the current fiscal year by five cents. It now expects per-share earnings from continuing operations between 4.40 and 4.55 a share. It backed its revenue outlook. The aerospace and defense electronics group's revenue has been pressured over much of the past year as there was uncertainty about U.S. military spending and slow pace of economic recovery in the U.S. But earlier this year, the company boosted its outlook for 2014 and 2015 in response to the bipartisan federal budget agreement passed in December that provided an unexpected cushion to declining U.S. military spending this year and next. The company closed its 1.42 billion acquisition of transportation communications specialist ARINC Inc. from investment firm Carlyle Group in late December. The move was designed to help the company reduce its reliance on government contracts and capitalize on the fast-growing information management market.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614205","date":"2014-04-21","texts":"Zions Bancorp. said its first-quarter earnings fell 8.6 as the regional lender continued to slash its exposure to complex investments that hindered the firm's stress-test results with the Federal Reserve. The Salt Lake City-based bank posted a profit of 101.2 million, down from a year-earlier profit of 110.7 million. On a per-share basis, which reflects the payment of preferred dividends, earnings were 41 cents, down from 48 cents a year earlier. Revenue rose 2.9 to 554.8 million. Analysts polled by Thomson Reuters had expected earnings of 42 cents a share and revenue of 543.7 million. While the banking industry has struggled to boost revenue in the face of low interest rates and muted economic recovery, several regional lenders have reported an uptick in borrowing, especially among business clients, in recent days.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613733","date":"2014-04-22","texts":"Federal Reserve officials are on track to reduce their monthly bond buying to 45 billion at their policy meeting next week and stick with a communications approach that leaves investors guessing about when the central bank will start raising short-term interest rates. While monetary-policy discussions naturally begin with a baseline outlook, the path of the economy is uncertain, and effective policy must respond to significant unexpected twists and turns the economy may take, Fed Chairwoman Janet Yellen said in a speech at the Economic Club of New York last week, her last comments before the central bank's one-week quiet period ahead of its April 29-30 policy meeting. Her emphasis on uncertainty in the speech underscored a shift in Fed communications early in Ms. Yellen's tenure as chief. For much of the economic recovery, the Fed has tried to provide concrete assurances to investors about the path of short-term interest rates. Officials now are trying to retain some flexibility on the interest-rate outlook as they try to resolve several mysteries about the recovery, which has generated surprisingly slow economic growth, low inflation and faster declines in standard measures of unemployment than expected. Tying the response of policy to the economy necessarily makes the future course of the federal funds rate uncertain, Ms. Yellen said last week, referring to the Fed's benchmark short-term interest rate, which has been near zero since late 2008. Other Fed officials have sounded the same refrain in recent comments. In 2011 and 2012, the Fed's interest-rate assurances came in the form of promises that officials wouldn't raise rates until after certain dates passed. Then in late 2012, the Fed switched to economic markers, saying it wouldn't shift short-term rates until after the unemployment rate fell to 6.5. The jobless rate was 6.7 in March.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617361","date":"2014-04-24","texts":"Business activity in the euro zone expanded at an accelerated pace at the start of the second quarter, a closely watched business survey showed. But companies cut the prices they charged customers, indicating that the European Central Bank's worries over low inflation are far from over. The ECB is prepared to act on interest rates or other stimulus measures if inflation undershoots the central bank's forecasts, ECB board member Ardo Hansson, who heads Estonia's central bank, said in an interview on Wednesday. Data firm Markit's survey of 5,000 manufacturing and services businesses found that activity was on track to expand in April, at the fastest pace since May 2011. The composite Purchasing Managers Index rose to 54.0 from 53.1 in March. A reading above 50 indicates month-to-month expansion in activity. The business surveys add to recent evidence that the currency area's return to growth, which started in the second quarter of 2013, is gaining some momentum. A survey released by the European Commission on Tuesday found that consumer confidence is at its highest since October 2007, while recent data releases have pointed to rises in retail sales, industrial production, exports and construction. However, the business surveys carried a warning for the ECB, with manufacturers and service providers reporting that they cut their prices in April at the fastest pace since August 2013.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613682","date":"2014-04-29","texts":"WASHINGTON--A comprehensive review of major banks' foreclosure files could have delivered an additional 1.5 billion in cash to consumers if it wasn't halted last year, a federal watchdog has found. The Government Accountability Office, in a report being released Tuesday, evaluated federal bank regulators' decision last year to cancel a prolonged review of foreclosure-processing and loan-assistance mistakes. A draft of the GAO report was reviewed by The Wall Street Journal. The foreclosure probe has been controversial from its start three years ago. Many lawmakers said regulators should not have allowed banks to hire consulting firms who had done previous work for them. Some Democratic lawmakers also have been skeptical of regulators' decision to reach a settlement ending the review early last year, saying it was premature. The GAO report shows that the settlement was reached without adequate investigation into the harms committed by the servicers, Rep. Maxine Waters D., Calif. said in a prepared statement. Many of the files did not contain complete data, making it impossible to know whether borrowers were disqualified from the possibility of the greatest cash payouts. The foreclosure review could have provided up to 5.4 billion in cash to consumers, instead of the 3.9 billion ultimately agreed upon, the GAO report found.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613795","date":"2014-04-30","texts":"Wanted small investors willing to commit part of their savings to less-developed countries with fast-growing economies and the potential for big returns. That, in essence, is the pitch of the first U.S. mutual fund that invests primarily in the government bonds of so-called frontier markets. Launched in late February by American Beacon Advisors Inc., an investment firm in Fort Worth, Texas, with 55 billion under management, this fund takes investors to countries such as Venezuela and Rwanda that are one notch lower in economic development than emerging markets like India and China. The mutual fund is managed by Global Evolution, a hedge fund in Denmark. The push into frontier markets is the latest effort by money managers to make high-risk, high-return bets more accessible to mom-and-pop investors. Individuals in the U.S. already have the option of investing in a handful of stock funds dedicated to frontier markets. Some wealth advisers argue that small investors may be better served putting their retirement savings into more-transparent investments. Even American Beacon advises that its new fund is only appropriate for long-term investors and that the fund shouldn't make up the majority of a portfolio.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614456","date":"2014-04-30","texts":"When electricity deregulation rolled out in Texas, private-equity shops were eager to get their hands on old-guard utilities suddenly capable of generating big returns. It looked like nothing but upside, but the 32 billion buyout of TXU Corp. was based on assumptions that didn't pan out, said Shalini Mahajan, credit analyst for Fitch Ratings who covers the company, now known as Energy Future Holdings Corp. The deal closed on Oct. 10, 2007, the day before the Dow Jones Industrial Average hit its prerecession peak of 14,164. Not only did the buyers pay too much for the utility, they financed most of the deal with debt, creating an enormous repayment burden. They also managed to miss the change in U.S. energy markets. At the time of the buyout, the investors assumed electricity prices in Texas, an electrical island -- it has its own grid -- that can't import much power, would stay high for years to come. Before the recession, power prices in Texas were inflated because much of the state's electricity generation came from burning natural gas, an expensive fuel at the time. TXU was uniquely positioned to profit from high electricity prices because it made most of its electricity with coal or uranium, which were cheaper than natural gas. So it was able to collect prices for its electricity that were pegged to gas prices even though its actual costs were much lower.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614584","date":"2014-05-01","texts":"Novo Nordisk AS, the world's largest maker of insulin, cut its sales guidance for the full year because of challenges to its U.S. business, even as it reported a greater-than-expected rise in net profit. The Danish drug maker cut its sales-growth guidance in local currencies for the full year to a range of 7 to 10, from the 8-to-11 range it gave in January, mainly because of a difficult rebate and contract environment in the U.S. and intensifying competition within the diabetes-treatment field. The company maintained expectations of operating-profit growth of around 10 for the full year. When asked about industry consolidation and Pfizer Inc.'s rebuffed takeover approach for AstraZeneca PLC, Novo's rival in diabetes treatment, Chief Financial Officer Jesper Brandgaard said Novo Nordisk was focused on organic growth rather than mergers and acquisitions. Novo Nordisk has no intentions of participating in the current consolidation in the industry, Mr. Brandgaard said on a conference call Thursday. We believe that the focus that Novo Nordisk has is a key driver behind the success of the company.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616701","date":"2014-05-01","texts":"Voices is an occasional column that allows wealth managers to address issues of interest to the advisory community. Valerie Porter is the director of the Financial Planning Association's Research and Practice Institute, as well as president of SummitView Financial in Indianapolis. In 2012 I started working as a consultant for the Financial Planning Association. FPA was interested in creating a Research and Practice Institute to gather information about practice management for its 23,000 members. There are lots of tools and resources available online for financial planners, but little empirical data regarding how advisory firms are actually run. A lot of advisers are great technicians, or great at planning or investments. But many struggle with the business side of their practice. So we created quarterly surveys to ask advisers about the technical aspects of practice management such as their time management and productivity. Our goal is to use the responses from quarterly surveys to identify how advisers can become better business people. The first pilot survey was conducted in the fall of 2013. It was designed as a broad baseline study, to get a feel for what's happening in the industry overall as it relates to practice management. We'd hoped to receive 1,000 responses to this first survey, but we received 2,400, which indicated a big interest. This inaugural study showed several performance-related gaps. Advisers agreed that effective time management is important to their business success, but that they struggle in this area. For example, most advisers don't have formal practices and systems in place to ensure for efficiency. Additionally, younger advisers and female advisers indicated that they had no access to a formal training system geared specifically toward them and that they would be interested in participating in one.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616804","date":"2014-05-05","texts":"The stock market's decline in the face of Friday's strong jobs report shows how uncomfortable investors have become about taking risks. The report showed that in April, job creation was its highest in more than a year, while unemployment fell sharply to 6.3 from 6.7. Stocks greeted that news with across-the-board declines Friday, including a 46-point drop in the Dow Jones Industrial Average to 16512.89. On Wednesday, the Dow had closed at a record high for the first time this year. Since then, it has pulled back and is now once again down slightly, 0.4, for 2014. The problem is the one that has plagued stocks since the Dow's 26 gain last year a concern that they have risen too far, too fast, and that the economic and corporate-earnings outlooks aren't strong enough to push them much higher now. For all its strong job-creation news, the jobs report also showed soft wage growth and a lot of people abandoning job searches. A significant stock upturn will take more than good job creation, said Scott Clemons, chief investment strategist at Brown Brothers Harriman Private Banking, which oversees 28 billion in New York.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617068","date":"2014-05-08","texts":"Shares of young technology companies fell further out of favor with investors, extending a two-month-long decline and sending the Nasdaq Composite Index to its third retreat in four sessions. The slide has been most pronounced among shares of firms that had been market favorites earlier this year because of anticipated strong revenue growth. Twitter finished 3.7 lower at 30.66, a day after its shares tumbled 18 as early investors in the company were freed from restrictions on selling the stock following last year's IPO. The Global X Social Media Index exchange-traded fund is down 23 in the year to date. Wednesday's tech selloff marks the latest shift among investors toward more-mature companies with lower valuations and more predictable business prospects. This so-called rotation has left the major averages largely flat for the year but within range of recent highs, while many individual shares have suffered significant drops. The Nasdaq lost 13.09 points, or 0.3, on Wednesday to 4067.67. The Nasdaq has fallen 6.7 from its most recent high hit on March 5. Other stock benchmarks gained broadly after Federal Reserve Chairwoman Janet Yellen gave a relatively upbeat outlook for the U.S. economy, but said her optimism hadn't changed the Fed's plans to keep short-term interest rates near zero for the foreseeable future.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615170","date":"2014-05-11","texts":"The next small steps up in inflation could set off big tremors in financial markets. The two main U.S. inflation gauges, the Labor Department's consumer-price index and the Commerce Department's personal consumption expenditures price index, are hovering near the lowest levels ever seen outside of recessions. Both sit poised to drift upward. Wholesale and import prices show signs of picking up, suggesting some inflation in the pipeline, and some items that briefly declined in price over the past year--such as prescription drugs, financial fees and garments--have started climbing again. The underlying trends seem to be more positive, said Michael Pond, global head of inflation market strategy at Barclays Capital. It's not alarming. We won't all of a sudden see very high inflation. There's just a bit more upside than what we've seen over the past year. Normally, a move of a couple of tenths of a percentage point in the inflation measures wouldn't matter much to anyone. But the stakes are high now as Federal Reserve officials justify their plan to keep short-term interest rates near zero in part because inflation is running so far below their 2 objective.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615833","date":"2014-05-13","texts":"WASHINGTON--Two of the biggest companies in the student-loan market agreed on Tuesday to pay a combined 97 million to settle federal charges they overcharged military members and imposed excessive fees for student loans. The government accused Sallie Mae, formally known as SLM Corp., and the new owner of its loan-servicing business, Navient Corp., of violating a federal law that caps loan interest rates at 6 for military members. The Justice Department and Federal Deposit Insurance Corp. alleged the companies charged 60,000 service members interest rates that exceeded the cap, resulting in hundreds of dollars in excess interest charges. The government said the companies also maximized late fees and failed to adequately disclose how consumers could avoid the fees. In settling the charges, the companies didn't admit or deny the allegations. Federal and state scrutiny of the nearly 1.2 trillion student-loan industry has increased. On Tuesday, Education Secretary Arne Duncan said at a news conference that his agency is reviewing whether Navient violated the terms of its contract to manage payments on federal student loans. Asked whether the company's contract could be terminated if violations are found, Mr. Duncan said Everything's on the table. Democrats on Capitol Hill have questioned whether Navient should retain its contract to collect payments for the Education Department, which makes the bulk of student loans.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617374","date":"2014-05-20","texts":"Republicans already obsessing about the 2016 presidential sweepstakes have paid little attention so far to Rick Santorum. That's a mistake. A mistake not because Mr. Santorum, the former Pennsylvania senator and unsuccessful 2012 presidential candidate, is likely to win his party's nomination. He's a long shot if he runs again. It is a mistake because Mr. Santorum has written a new book, Blue Collar Conservatives, that shows he grasps two important realities that seem to escape many others. The first is that, outmoded stereotypes notwithstanding, blue-collar Americans, particularly working-class whites in the South and Midwest, today comprise a core element of the Republican Party. The second reality is that, because of the alienation these people feel from both the political and economic systems, the table is set for a new period of populism. That helps explain why longtime private-equity executive Mitt Romney, though an accomplished and experienced figure, wasn't the ideal standard-bearer for the party in 2012, Mr. Santorum argues. More important, he says, these realities suggest Republicans need to rethink their policy focus going forward. We Republicans have neglected to focus our policies and our rhetoric on the plight of lower-income Americans, he writes. Later, he adds Our focus on tax cuts for individuals not only leaves us open to the 'tax breaks for the rich' sloganeering of the Left but seems irrelevant to the nearly 50 of the population who don't pay federal income taxes today.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614693","date":"2014-05-21","texts":"Much of the financial world hangs on Janet Yellen's every word, looking for policy portents in language that is crafted to be circumspect about the central bank's plans. A more useful place to look for guidance on regulation of the financial system is Daniel Tarullo, a Federal Reserve Board governor and its point man for banking reform. Mr. Tarullo gave a speech in Chicago on May 8 that was as unsettling as it was, by the Fed's inscrutable standards, unguarded. Addressing the Chicago Fed Bank Structure Conference, Mr. Tarullo proposed that the central bank must broaden the perimeter of prudential regulation, both to certain nonbank financial institutions and to certain activities by all financial actors. This expansion of regulatory authority would take the Fed far beyond the current power it exercises thanks to the Dodd-Frank law passed in the aftermath of the 2008 financial crises. The casualties of such an expansion could include small- and medium-size banks. Under Dodd-Frank, ultimate financial regulatory power resides with the Financial Stability Oversight Council, or FSOC, a council of 10 regulators chaired by the Treasury and which includes the Fed chairman. The FSOC can designate asset managers, mutual funds, hedge funds, or even broker-dealers as systemically important financial institutions, or SIFIs, a classification that puts an institution under the Fed's regulatory authority. The council has already designated the large insurers AIG and Prudential as SIFIs, and it has many more nonbank financial companies in its sights. The council's moves are part of a larger blueprint that Mr. Tarullo has now laid out. In the Chicago speech, he proposed ditching complex Basel III capital and liquidity regulations and reducing regulations on small banks. The new system he outlined would use simpler, Basel I capital charges for small banks, on grounds that the failure of these banks would pose no threat to financial stability. Larger regional banks would require slightly elevated regulatory standards, but nothing too complex. Once a bank joins a club of the 80 largest institutions, however, the Federal Reserve should be its regulator, Mr. Tarullo said, and regulation should focus on annual stress tests. The very largest institutions, U.S. global banks and nonbank SIFIs, would receive the most intrusive Fed oversight and be required to satisfy the full range of new international macroprudential rules.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616127","date":"2014-05-21","texts":"The latest place where investors are taking on more risk in exchange for apparently meager returns the U.S. housing market. Bond buyers on Tuesday jockeyed to get a piece of 1.6 billion of riskier Fannie Mae securities, enabling the government-backed mortgage company to twice cut the yields it offered on the debt. The offering is Fannie's third sale of so-called risk-sharing certificates that enlist investors to pay for potential defaults on the home loans Fannie guarantees. The riskiest of the securities, linked to loans to home purchasers who paid as little as 3 cash upfront, drew 19 times the bids necessary to complete the sale before yields were cut, said people familiar with the offering. The sale of the debt, called Connecticut Avenue Securities after the location of one of the Washington company's offices, is expected to be completed on Wednesday, according to the people. Robust investor demand for the deal is the latest sign of investors' willingness to take on more risk in return for higher income amid soft economic growth and low interest rates on safe investments.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616219","date":"2014-05-21","texts":"Federal Reserve Chairwoman Janet Yellen has argued consistently in recent months that labor markets are abundant with slack that will hold inflation and wages down. But she hasn't convinced all her colleagues. Minutes of the Fed's April 29-30 policy meeting showed a lengthy debate on this subject and suggested labor-market slack will become an important battleground in the central bank's coming discussions about how long to continue its low-interest-rate policies. Many economists believe lots of slack in the labor market--large numbers of unemployed or underutilized workers--means the Fed can keep interest rates very low to help boost economic growth without generating high inflation. Conversely, they think that if there isn't much slack, or that it decreases rapidly, the central bank should raise rates more quickly to keep price pressures under control. The unemployment rate fell to 6.3 in April, not far from its long-run average of 5.8. Ms. Yellen has argued other measures--such as the nation's many part-time workers who want full-time work--represent slack holding wages down. While that view is broadly held at the Fed, the minutes showed she faced some pushback at the last meeting. Some participants reported that labor markets were tight in their districts or that contacts indicated some sectors or occupations were experiencing shortages of workers, the minutes said about the Fed's discussions, without identifying the participants by name or specifying the number holding certain views.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614006","date":"2014-05-22","texts":"The stock market's fear gauge has fallen to its lowest level in more than a year, as investors drop their bets on large stock swings. The Chicago Board Options Exchange Volatility Index, or VIX, hit a 14-month low on Thursday of 11.68 before closing at 12.03. The index, an options-based measure of traders' expectations for price swings in the S&P 500, is widely viewed as a proxy for the stock market's capacity for sudden spikes and plunges. Many traders say they detect little fear in the market lately. They cite a financial outlook that is widely perceived to pose little risk of an economic or market downturn near-record stock prices, low interest rates, steady if unspectacular U.S. growth and expansive if receding Federal Reserve support for the economy and financial markets. The VIX's three-month average this week hit 14.1, a level, before 2013's stock rally, last consistently seen in 2007. In the past 10 years, the VIX has averaged 20.08, including a 2008 financial-crisis spike above 80 and a 2011 euro-crisis jump to 48.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614623","date":"2014-05-22","texts":"Credit Suisse Group AG's ability to serve as a counterparty to the Federal Reserve Bank of New York hasn't been affected by the Swiss bank's criminal tax-evasion settlement reached earlier this week with U.S. authorities. The New York Fed considered the bank's settlement and decided to continue its counterparty relationship with Credit Suisse, a New York Fed official said Wednesday. The official noted that Credit Suisse's settlement pertained to activities that didn't involve the bank's broker-dealer business, and that the bank has taken steps to address compliance issues. The firm keeping its primary-dealer status is the latest example of how the criminal guilty plea that Credit Suisse reached with prosecutors is designed to minimize the collateral damage that historically flowed from guilty pleas or criminal convictions. Primary dealers trade billions of dollars of government securities with the Fed every day, and must meet various broker financial requirements and other standards to participate. Credit Suisse is one of 22 such firms. A spokeswoman for Credit Suisse declined to comment.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615711","date":"2014-05-28","texts":"AMSTERDAM--Dutch retailer Royal Ahold NV said Wednesday that first quarter net profit fell 97 as last year's results were boosted by a large gain, and that it expects volumes to remain under pressure during the second quarter. First quarter net profit was euro50 million 68.2 million compared with euro1.95 billion a year earlier, when it booked a euro1.75 billion gain from the sale of its stake in Swedish retailer ICA. In the first quarter Ahold set aside a euro177 million provision to settle a class-action lawsuit related to improper accounting practices at its former subsidiary, U.S. Foodservice. First-quarter sales were down 2.5 at euro9.82 billion from euro10.1 billion in the first quarter of 2013. Excluding the impact of currency losses, sales were up 0.3. First-quarter sales trends were similar to the previous quarter with a flat year-on-year performance, impacted by low inflation and volumes that remained under pressure in all our markets, Chief Executive Dick Boer said. Ahold, which generates around 60 of its sales in the U.S., said it expects trading conditions in the second quarter to be similar to the first quarter.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616095","date":"2014-05-29","texts":"Prof. Alan Blinder Fed Hawks vs. Doves The Sequel, op-ed, May 20 states that we have a smart, competent and apolitical Fed. Many would disagree. Smart Within the confines of academic standards, there is no doubt. However, there are many kinds of smart. Competent In a recent interview, Dallas Fed President Richard Fisher stated the Federal Reserve should not be involved in the business of deciding which assets you invest in. We've driven yields . . . to the lowest rates, in what, 237 years of U.S. history. Which direction do we go from here And how long can we do that . . . we are playing a central role in American capitalism here . . . and I think it is a dangerous place to be. I worry about the fact that we've painted ourselves into a corner which is going to very hard to get out of. Apolitical Members of the Board of Governors are presidential appointees, approved by the Senate. They are in the sixth year of a program which, like any bureaucratic intervention, creates selected winners and losers by fiat. They are vainly attempting to execute their mandates without the required complementary fiscal policy, and as a result they are supplanting our elected representatives' responsibilities regarding the economy without being subject to election, appeal or recall. No thinking person could conclude that Fed decisions are apolitical. Despite the increasing burdens of bureaucracy, what remains of capitalism will eventually survive. The Fed can claim that its intervention was responsible, capital markets will once again have some bearing on interest rates, and we can all settle in to the new normal, awaiting the next government-induced crisis.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617391","date":"2014-05-29","texts":"The emerging split between President Obama and young voters may be occurring more quickly than anyone predicted, judging by a Wednesday email from Mr. Obama's former presidential campaign. This report has previously noted how difficult the Obama era has been for the young people who helped to elect him. The left-leaning Center for Economic and Policy Research reports that among recent college graduates age 22-27, a full 45 were underemployed in 2013, meaning they were either unemployed or doing jobs that typically don't require a four-year college degree. And the Pew Research Center says that the so-called millennial generation is the first in the modern era to have higher levels of student loan debt, poverty and unemployment, and lower levels of wealth and personal income than their two immediate predecessor generations Gen Xers and Boomers had at the same stage of their life cycles. Looking at recent survey data, former Obama pollster Sergio Bendixen recently told the New York Times that Mr. Obama's onetime core supporters among the young went on to the next website and then the next click on their computer. Now it appears that Mr. Obama is also moving on--to the next generation willing to click the donation button on barackobama.com. And the speed of Mr. Obama's generational pivot appears stunning. As recently as February of this year, an Obama fundraising pitch made one wonder if its intended recipients were even old enough to vote. Warning Cute animals inside, announced the subject line. The text of the email then urged Obama supporters to send Affordable Care Act valentines. Choose your favorite -- we've got kittens, pandas, badgers, and more. Then click to share it with your special Facebook friends, it helpfully suggested. Just three months later, a message from Organizing for Action to Obama supporters emailed yesterday announces that When James Taylor plays an outdoor concert in Chicago next month, two VIP backstage tickets will be reserved for OFA supporters like you.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615793","date":"2014-06-01","texts":"ALBANY, N.Y.--In a raucous and divisive 11th-hour decision, the left-leaning Working Families Party late Saturday voted to nominate Democratic Gov. Andrew Cuomo for re-election despite a swell of discontent among many party members with the governor's record during his first term in office. At a day-long convention laced with suspense, the WFP, composed of labor unions and liberal activists, nominated Mr. Cuomo with 59 of the vote after an intense ideological and tactical struggle within the state's leading left-wing faction. Mr. Cuomo's nomination came at the conclusion of nearly three hours of vigorous debate that at times included chanting, stomping and references to everyone from the rapper Drake to country singer Kenny Rogers. The New York governor's appearance at the party's convention, albeit via video and phone, and his pledge to return Democrats in the state Senate to power, were conditions of WFP leaders before they would deliver the nod to him, according to a person familiar with the matter. Let's unify around this simple goal taking back the Senate, Mr. Cuomo said in a video.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613901","date":"2014-06-02","texts":"A lot of Americans buy life insurance and a lot hold stocks. But only a small number own a product combining the two, called variable universal life insurance, or VUL. It's a product that has long been out of favor with many financial advisers. But these days it's a better choice for some families than other combinations of insurance and savings, says James Hunt, longtime insurance specialist for the Consumer Federation of America. Variable universal life is a type of permanent insurance--designed to remain in place no matter how long the policyholder lives, unlike term life. Permanent life insurance combines a death benefit with a tax-deferred savings component that becomes tax-free at the death of the holder. Variable universal life, unlike other permanent life insurance, allows the holder to select from a menu of stock and bond funds. For years, VUL got a thumbs-down from many financial advisers and insurance specialists, largely because these policies typically come with steep insurance charges and high investment fees. Mr. Hunt has been one of the critics of those high costs.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615046","date":"2014-06-02","texts":"WASHINGTON--The Federal Reserve is hiring a former state supervisor and insurance company executive to lead its oversight of big insurance firms, adding an experienced hand to counter criticism the central bank lacks knowledge of the business. The Fed named Thomas Sullivan, who served as Connecticut Insurance Commissioner during the financial crisis, to a new senior adviser position, a Fed spokeswoman said. Mr. Sullivan will lead oversight of some of the nation's largest insurers and represent the Fed in global discussions about rules for the industry. Mr. Sullivan will become a rarity at the Fed a senior official with lengthy experience in an area where critics have accused it of being a novice and taking a bank-centric view. The 2010 Dodd-Frank law gave the Fed new authority to regulate insurers and other large, nonbank financial firms that were deemed by regulators to be systemically important, including dictating capital requirements for those firms. Large insurers like Prudential Financial Inc. and MetLife, Inc. have said banklike capital rules could have negative consequences for their business. So far, the Fed has given few details about how it will fashion the insurance capital rules, but Mr. Sullivan's appointment is a signal that the Fed wants to change that by moving forward with publishing them. In an interview, Mr. Sullivan declined to comment on the key policy question facing the Fed Whether the Dodd-Frank law gives the agency enough flexibility to design capital rules in a way that differentiates insurers from banks. I am not a policy maker, he said, adding If someone asks me my opinion I'm going to give it to them.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613600","date":"2014-06-03","texts":"Nicholas Schorsch, a prolific deal maker in commercial real estate, announced a pair of multibillion-dollar transactions Monday, expanding his hotel empire and selling a large company that specializes in health-care properties. Mr. Schorsch said he would sell his American Realty Capital Healthcare Trust Inc. to Ventas Inc., a giant health-care real-estate investment trust, in a 2.6 billion cash-and-stock deal. Also Monday, Mr. Schorsch's American Realty Capital Hospitality Trust said it would acquire the Equity Inns, which owns 126 hotels in 35 U.S. states, from a real-estate fund sponsored by Goldman Sachs Group Inc., for 1.92 billion. Separately, Mr. Schorsch's flagship company, the publicly traded REIT American Realty Capital Propeties Inc. disclosed Monday in a securities filing that shareholders had voted against the company's executive-compensation plan. The vote against the plan was nonbinding. The plan would make Mr. Schorsch one of the most highly paid REIT executives, if the company hits certain performance objectives. Under the terms of the health-care deal, shareholders of New York-based ARC Healthcare will have the option to receive 0.1688 Ventas shares for each of their shares in ARC. The deal values the ARC shares at 11.33 each, a 14 premium to their 9.95 close on Friday.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615480","date":"2014-06-04","texts":"In hockey-mad Canada, the golf industry is fighting for what it sees as its due a tax break on green fees. Unlike the U.S., Canada bars businesspeople from deducting golf-course fees, a policy that dates back four decades, when the government closed tax loopholes deemed to benefit the wealthy disproportionately. Canada does, however, allow people to write off up to 50 of the cost of business entertainment, such as tickets to the opera or hockey games. The golf industry says that's unfair. A coalition of golfing associations and owners of the country's 2,300 courses -- including ClubLink Enterprises Ltd., auto-parts magnate Frank Stronach and smaller operators -- said the direct and indirect economic impact of golf spending is 14.3 billion Canadian dollars US13.12 billion a year, or roughly 1 of Canada's gross domestic product. About 1.5 million Canadians play golf, according to Statistics Canada, while 1.3 million lace up for recreational ice hockey. It's blatant unfairness in government legislation, said Jeff Calderwood, head of Canada's National Golf Course Owners Association, which commissioned a report on golf's economic impact. The tax rule imposes a major disadvantage on the golf industry, he said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614113","date":"2014-06-06","texts":"LONDON--The proportion of Britons expecting interest rates to rise in the coming year is increasing, but slowly, according to a Bank of England survey published Friday. The BOE said 42 of Britons polled in May expect the central bank's benchmark interest rate to rise from 0.5 in the next 12 months, up from 40 in February and 37 in November. The survey found the proportion of Britons expecting rates to stay the same over the next 12 months fell only slightly, to 36 from 37 in February. With the economy growing strongly and unemployment falling, most economists and investors expect the BOE to raise its interest rate for the first time since the onset of the financial crisis early next year. BOE officials have done little to question those expectations, but have said their benchmark interest rate will rise only gradually, and will remain low by precrisis standards. Some economists fear that when it comes, a hike in the BOE benchmark rate may come as a shock to homeowners and other borrowers, some of whom have never experienced a rate hike. The BOE's surveys suggest consumers aren't as prepared as investors for rising interest rates. In addition to the 36 who expect rates to be unchanged, 3 expected the interest rate to fall, and 18 said they had no idea how interest rates were going to behave.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615555","date":"2014-06-06","texts":"Friday's jobs report should reassure Federal Reserve officials the economy is improving as they have predicted and it could intensify their debate about when to start raising short-term interest rates. Fed officials have encouraged a view in financial markets that they won't start raising rates from near zero until mid-2015. But a swift decline in the jobless rate in recent months--while welcome for the economy--means slack in the labor market might be diminishing a bit faster than officials expected, a possible source of higher inflation in the future and of tension inside the Fed as officials consider how long to wait on raising rates. There is a pretty high bar for them changing the mid-2015 indication, said Alan Levenson, chief economist at T. Rowe Price Associates. I have thought for quite some time that they ought to be getting off of zero. The surprise in Friday's report for the Fed was the stability of the U.S. unemployment rate at 6.3 in May and April. A number of officials expected to see the jobless rate rise a bit in May after such a large drop in April from 6.7 in March. The next touch point in Fed officials' debate about labor-market slack will be the projections they release in mid-June for the unemployment rate, inflation, growth and interest rates.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613715","date":"2014-06-09","texts":"Investors aren't heartless, but they usually don't mind when workers' pay doesn't rise quickly. That is because slow wage increases, while painful on an individual level, usually keep corporate profits high and inflation low, creating better opportunities for shareholders. And yet, as if anyone needed further proof that we live in exceptional times, Wall Street is starting to complain that wages are too low. Without a real acceleration in wages it is hard to get a meaningful pickup in consumer spending, explained Michelle Meyer, senior U.S. economist at Bank of America Merrill Lynch. Weak consumer spending holds back profits and economic growth, one reason stock gains this year have been soft. Both the Dow Jones Industrial Average and the S&P 500 closed at records on Friday, but the Dow is up only 2.1 for 2014, and the S&P is up just 5.5.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615227","date":"2014-06-09","texts":"John Steele Gordon's The Little Miracle Spurring Inequality op-ed, June 3 is short on facts. For example, he could have cited figures showing how the share of the country's wealth held by the top 1 has gone from approximately 25 in 1981 to approximately 35 in 2010. He could also have mentioned that the Gini coefficient, a broad-based, widely accepted measure of income inequality, for the U.S. was higher than in Sweden, Norway, Austria, Germany, Denmark, Austria, Italy, Canada, France, Switzerland, the United Kingdom, Japan, Israel, Iran, etc. I agree with Mr. Gordon that capitalism has benefited more people than any other widely practiced economic system. But the question is, Have its benefits been fairly distributed I think not. Personally, I tend to agree with a recent pope who condemned what he called rapacious capitalism. This is what it seems to me we now have in the U.S. Bernard Schrautemeier St. Louis","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614666","date":"2014-06-11","texts":"WASHINGTON--The U.S. budget deficit has narrowed through two-thirds of the year, aided by both increased tax receipts and smaller federal outlays. The U.S. government's deficit from October through May totaled 436.38 billion, down 30 from the same period a year earlier, the Treasury Department said Wednesday. The 2014 federal fiscal year started Oct. 1, 2013. The year-to-date deficit is the smallest since the same period in 2008. Deficits reached a recent peak in 2009 at the end of the recession, and have narrowed since. Spending outpaced revenue in May, but the month's budget deficit of 129.97 billion narrowed 6 compared with the prior year's May shortfall. Economists surveyed by The Wall Street Journal had forecast a May deficit of 130.5 billion.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614109","date":"2014-06-12","texts":"The House voted Thursday to make permanent a tax break allowing small businesses to write off up to 500,000 in new equipment purchases. While the move adds to momentum for congressional efforts to extend a range of now-temporary tax breaks, it also sharpens a conflict between the House and Senate over whether to extend the breaks permanently or temporarily. Thursday's vote was 272-144, with several dozen Democrats joining Republicans to support the measure. The list of temporary tax breaks, many of which expired at the end of 2013, has grown over the years and now includes over 50 separate provisions affecting businesses as well as individuals. By now, the cost of making them all permanent is proving to be prohibitive--almost 1 trillion over the next decade. But many of the breaks are so popular or important that lawmakers are reluctant to eliminate them.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614870","date":"2014-06-12","texts":"BANGALORE, India--Infosys Ltd. appointed its first outsider to head the company on Thursday, hoping new blood will help in its struggle to stay competitive, as it tries to evolve from a low-cost outsourcing company into a global technology brand. India's second-largest software exporter said Vishal Sikka, a veteran of German software company SAP AG, will take over as managing director and chief executive. While India- and U.S.-listed Infosys led the Indian outsourcing revolution for decades, it has failed to adjust to the radical changes in the information-technology-services industry in recent years, analysts say. Rising wages of programmers in India, stiffer competition and slowing demand has cut into India's low-cost advantage and forced Infosys to try to shift away from labor-intensive outsourcing work. The company is hoping that Mr. Sikka, educated at Stanford University and known for leading and accelerating the launch of sophisticated software platforms at SAP, can make Infosys an industry trendsetter again.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614606","date":"2014-06-13","texts":"WASHINGTON--A gauge of U.S. inflation ticked lower last month, a sign that price pressures remain tame amid subdued economic growth and one that could ease concern from central bankers. The producer-price index for final demand, which measures changes in the prices firms receive for their goods and services, fell a seasonally adjusted 0.2 in May from a month earlier, the Labor Department said Friday. Economists surveyed by The Wall Street Journal had forecast a 0.2 rise in prices. Producer prices were up 2 from a year ago. May's report showed inflationary pressures abruptly falling off after building in March and April. May prices for food, energy and the trade services all fell from the prior month. A gauge that excludes these volatile components was unchanged, an indication of broad-based weakness in prices. Lindsey Piegza, chief economist at Sterne Agee, said the data should ease concerns among some Federal Reserve officials that inflation was gathering steam. A potential catalyst for a change in monetary policy, inflationary pressures reported in April, appear to be short-lived, Ms. Piegza said. Other economists cautioned against reading too much into one month of data from a report that has been giving volatile readings since its methodology was changed in January. Cooper Howes, economist at Barclays, said the producer-price index is likely taking pause after moving steadily higher in recent months. We expect it to gradually trend upward.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616724","date":"2014-06-13","texts":"It's almost summertime, and the lending is easy. Companies with junk ratings, ranging from designer fashion house Kate Spade & Co. to nut specialist Diamond Foods Inc., have been borrowing cash with few strings attached. Lending to weaker companies on easy terms is becoming more and more common as investors' appetite for higher-yielding debt grows stronger and the Federal Reserve keeps money flowing at ultralow rates. Since the financial crisis, companies have been able to borrow more without offering investors what were once considered standard protections against possible losses. More than half of the loans in the 747 billion U.S. market for loans made to junk-rated companies don't have financial covenants, triggers that could cause a borrower to shore up its health, including periodic tests of overall debt levels and cash flow to cover scheduled interest payments. Thus far this year through Thursday, 62 of leveraged loans lacked these regular requirements, up from 57 for all of 2013, according to S&P Capital IQ LCD. The shift recalls a boom era for loan deals that led up to the 2008 financial crisis. Easy lending terms are once again appearing as part of an expansion of credit to riskier borrowers, including companies often being bought out or financed by private-equity firms.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615917","date":"2014-06-16","texts":"SHANGHAI--China has overtaken the U.S. as the world's largest issuer of corporate debt, but a slowing Chinese economy and the weakened financial health of its companies are creating risks globally, according to Standard & Poor's Ratings Services. The assessment by the U.S. rating firm echoes increasing concerns over the health of China's financial system, as stresses rise among struggling property developers and cash-strapped local governments. Adding to the worries is the fact that Beijing has started allowing some small, private borrowers to default on loans and bonds, suggesting a reduced willingness by the state to bail out troubled firms. In a report released on Monday, S&P said it expects companies around the world to seek up to 60 trillion in new debt and refinancing between 2014 and 2018, an increase from an estimated 53 trillion for the 2013-2017 period. Asian-Pacific corporate issuers will likely account for half of the 60 trillion, and more than half of the 72 trillion in debt the ratings company projects will be outstanding in 2018. China now has more corporate debt outstanding than any other country, having surpassed the U.S. in 2013, a year sooner than S&P originally expected, the rating firm said. Although Beijing has tried to rein in credit growth to reshape an economy that has depended on big investments, such as infrastructure projects, an abundant supply of cash at Chinese banks and large capital expenditures by state-owned enterprises have allowed corporate debt to build up quickly in recent years, it said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614920","date":"2014-06-18","texts":"The latest spasm of violence in the Middle East has sent crude-oil prices climbing in recent weeks, a familiar action-reaction that frequently has proved to be a drag on economic growth. Yet that dynamic figures to ease in coming months and years as U.S. dependence on Mideast oil is, by a variety of measures, at a generational nadir. In the current flare-up of unrest, Islamist militants have swept across northern Iraq, threatening Baghdad and spurring fears that violence could disrupt the country's 2.7 million barrels a day in exports. Amid this, the U.S. crude-oil benchmark on the New York Mercantile Exchange has climbed to around 107 a barrel, the highest level since September. The oil-price instability has been playing out broadly since late 2010, when a string of popular political revolutions across the Middle East drove up the price of crude to 113 a barrel from 85 over five months. Much has changed since the so-called Arab Spring to alter the U.S. energy picture. Advanced technologies such as hydraulic fracturing, or fracking, have boosted U.S. crude-oil production by 47 since late 2010. Domestic U.S. oil production in October surpassed imports for the first time in nearly two decades, putting slack into the global oil market and making more crude available at lower prices to countries like China and India.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615201","date":"2014-06-18","texts":"JERUSALEM--U.S. Treasury Secretary Jack Lew said Wednesday that he expects strong economic data for the second half of the year after lackluster growth in the first quarter. After a harsh winter that restrained growth in the first quarter, we are still expecting the underlying strength of the economy that was evident last year to result in a strong second half of this year, Lew said in a speech in Jerusalem at a conference of the U.S.-Israel Joint Economic Development Group. Lew said recent economic data supports his optimistic outlook. In May, the U.S. economy added 217,000 new jobs, after similar job growth in the previous three months, although unemployment in May remained flat at 6.3. Inflation has also been picking up, with the consumer-price index rising 0.4 on the month in May. In the first quarter, the U.S. economy grew just 1. This recently caused the International Monetary Fundto cut its growth outlook for the U.S. economy in 2014 to 2 from 2.8. Lew's comments came hours before the U.S. Federal Reserve is scheduled to issue an outlook on the economy as well as comments on monetary policy.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615487","date":"2014-06-18","texts":"A burst of higher inflation is fueling debate about whether the Federal Reserve should move sooner to reduce its support for the U.S. economy than currently anticipated. Consumer prices rose 0.4 in May from a month earlier, the most in more than a year, the Labor Department said. That reflected higher household costs for everything from groceries and gasoline to rent and medical care. Core prices, which strip out volatile food and energy costs, climbed 0.3, the most since August 2011. Tuesday's report showed the overall consumer-price index up 2.1 from a year earlier. The Fed targets annual inflation of 2, a pace it views as healthy for price stability and economic growth. But the central bank prefers a separate measure -- the Commerce Department's price index for personal consumption expenditures -- that has shown less-dramatic price increases and inflation still running below its target, at 1.6 in April. Still, both measures suggest inflation picked up in the spring after two years of sluggishness.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616575","date":"2014-06-19","texts":"KKR & Co. pumped 1.2 billion into First Data Corp., an unusual move showing that its debt-fueled takeover of the payment processor seven years ago remains a burden for the buyout firm. Credit-card processor First Data has been in the red since KKR took it over in 2007 for roughly 26 billion in one of the largest-ever private-equity buyouts. For a while, KKR refinanced First Data's hefty debt load to ease pressure on the company. Now, it is injecting equity as part of a 3.5 billion investment that includes 2 billion from pension funds, mutual funds, asset managers and wealthy individuals, KKR said Thursday. The total investment, among the largest of its kind, gives First Data a boost as it tries to rebound from previous losses and reshape its business. KKR will invest 500 million from its fund that did the original buyout and another 700 million from its own cash, or balance sheet, the firm said. Private-equity firms rarely put additional cash into a company they have bought years after closing the deal. Instead, these firms--which buy companies largely with borrowed money--often pay themselves by having the company borrow more money. Owners eventually try to sell companies or take them public. In the past couple of years, with stocks on the rise, conditions have been ripe for private-equity firms to sell out of investments they have held for years, including some stragglers. But KKR hasn't been able to shed Atlanta-based First Data, which was weighed down by an outsize debt load taken on in the takeover. Thursday's deal gives First Data, which employs about 23,000 people and processes credit-card and debit-card payments for merchants and banks, additional cash to reduce by 375 million its annual interest payments on debt, KKR said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617418","date":"2014-06-19","texts":"Gold prices posted the biggest daily gain in nine months on Thursday, driven by investors who were caught flat-footed by the Federal Reserve's outlook for continued low interest rates. Gold for August delivery, the most actively traded contract, rose 3.3, the biggest one-day percentage gain since September 2013. The contract rose 41.40 to 1,314.10 a troy ounce, its highest level since April 14. Meanwhile, silver for July delivery gained 4.4 to 20.648 an ounce, its highest settlement since March 19. Gold prices rocketed past the psychologically important 1,300-an-ounce level, breathing new life into the market and luring momentum-chasing funds in as buyers, brokers said. Gold futures had crossed above their 50-day and 100-day moving averages in quick order, sending buy signals to investors who follow such technical indicators. Fed Chairwoman Janet Yellen on Wednesday gave a positive assessment of the U.S. economy and reiterated that rates would stay low for a long time. The comments surprised some traders, who had bet against gold expecting a more hawkish view from the Fed, forcing them to cut their losses Thursday by purchasing the metal. Prices for gold, which pays no dividend, tend to weaken in times of rising interest rates, as investors seek out higher-yielding assets.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614850","date":"2014-06-20","texts":"Even as the U.S. job market has improved, companies have been slow to pay workers more. But they may now be approaching the time when they have to cut bigger paychecks to compete. What's more, they appear to be getting ready for this. The unemployment rate has been falling swiftly, dropping to 6.3 in May from 7.5 a year earlier. But there's an open question about how much slack there is in the job market. Some 37.2 of the working-age population is out of the labor force now, compared with 34 when the recession started in 2007. And while some of those people lost to the labor pool will likely return, some, such as those nearing retirement age and those whose skills have eroded, may never come back. At Wednesday's news conference following the Federal Reserve's two-day policy meeting this week, Chairwoman Janet Yellen indicated that for her, an important sign the labor market is tightening will be when wages are increasing more rapidly. So far, that hasn't been happening. Average hourly earnings were up just 2.1 in May versus a year earlier, and the Labor Department on Tuesday reported that, when adjusted for inflation, they were actually a shade lower. But companies think they will soon be paying more. This month, a quarterly survey conducted by Duke University and CFO Magazine showed that U.S. chief financial officers expect wages and salaries at their companies to increase 3 over the next 12 months. Last June, they had expected year-ahead gains of 2.5. Further, they now expect their workforces to increase 1.9 versus 0.8 a year ago. That leaves the little matter of how companies will pay for those bigger, more expensive workforces.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615754","date":"2014-06-27","texts":"U.S. consumers are less worried about the economy as June draws to a close, according to a survey of households released Friday. The Thomson-ReutersUniversity of Michigan final June sentiment index rose to 82.5 from an unexpectedly weak preliminary reading of 81.2 and a final May reading of 81.9. The final June figure is better than the 81.9 expected by economists surveyed by The Wall Street Journal but is still below the recent high of 84.1 posted for April. This month's final index for current economic conditions advanced to 96.6 from an early-June reading of 95.4. The expectations index rose to 73.5 from 72.2. Friday's consumer-sentiment readings, along with Tuesday's Conference Board confidence index, indicate that American households are feeling better about the economy and labor market.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617150","date":"2014-06-30","texts":"Optimism ahead of this week's jobs report is at one of the highest levels since the financial crisis. Economists polled by The Wall Street Journal expect the economy added 218,000 jobs in June. During the five-year economic recovery, the only time that the consensus estimate was higher was in May 2010, a month in which figures were sharply inflated by the temporary hiring of census workers. With the June jobs report due Thursday a day earlier than usual due to the Fourth of July holiday, market watchers are hoping job growth will be able to sustain its recent momentum. The labor market is in the midst of its first four-month stretch of job creation above 200,000 since the late 1990s. And the economy last month put the finishing touches on clawing back all the jobs lost since the recession hit in 2007. The jobs report is set to come after a week of disappointing economic data. First-quarter GDP figures showed the U.S. economy contracted at 2.9, a significantly worse pace than previously estimated. Consumer-spending data for May also came in on the light side, suggesting continued struggles in the economy. We hope the coming payroll report will help pull some investors away from the ledge, says Tom Porcelli, chief U.S. economist at RBC Capital Markets.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616307","date":"2014-07-01","texts":"A gauge of pending home sales jumped in May, the latest evidence that the U.S. housing recovery began to regain its footing this spring even if it isn't firing on all cylinders. The National Association of Realtors' index tracking pending sales of existing homes rose a seasonally adjusted 6.1 in May from the prior month to 103.9, the group said Monday. The increase was the index's largest monthly gain since April 2010, when home sales spiked 9.6 ahead of the expiration of a tax credit for first-time buyers of homes. It looks like May was a good month for home sales. . .and many of the housing indicators we track have pointed to a pickup in the housing market over the past few months following its recent earlier slump, J.P. Morgan Chase economist Daniel Silver said in a note to clients. Economists surveyed by The Wall Street Journal had expected pending home sales to rise a more modest 1.1 in May. April's reading was raised slightly to 97.9 from the initial estimate of 97.8.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614399","date":"2014-07-02","texts":"WASHINGTON -- A U.S. regulator said banks' trading revenue declined 16 in the first quarter compared with the same period last year, the latest sign of a slowdown in a traditional Wall Street profit engine. Bank holding companies reported trading revenue of 16.8 billion in the first quarter, down 3.3 billion from first quarter of 2013, the Office of the Comptroller of the Currency said in a quarterly report. This year's first-quarter revenue also was 23 less than the average for the same quarter over the previous five years, driven by lost revenue from equities as well as interest-rate and foreign-exchange products, the OCC said. In May, some big banks warned that a slump in trading revenue would deepen in the second quarter. The extended period of both low interest rates and low volatility has weakened client demand for risk management transactions, Kurt Wilhelm, director of the OCC's Financial Markets Group, said in a statement. Overall, banks reduced their exposure to derivatives, but two institutions -- Citigroup Inc. and Goldman Sachs Group Inc. -- reported increases in value at risk, a measure of the maximum expected loss in a trading day. Credit By Ryan Tracy and James Sterngold","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614665","date":"2014-07-03","texts":"Looks like there has been some international coordination of monetary policy rhetoric lately. At the beginning of the week, the central bankers' central bank -- the Bank for International Settlements in Basel -- warned loudly of the risks of moving too slowly and too late to raise interest rates back toward normal. As it did before the global financial crisis, the BIS emphasized the need to act early to avoid the booms-and-busts in financial markets and offered all sorts of reasons why today's very low inflation shouldn't be the primary concern of central bankers. Central bankers appear to have agreed on a common response. In the past couple of days, Federal Reserve Chairwoman Janet Yellen, European Central Bank President Mario Draghi and Bank of England deputy governor Jon Cunliffe have used the same phrases to say Fuggedaboutit With price and wage inflation not a concern right now, we aren't going to raise interest rates and throw at lot of people out of work to avoid excesses in financial markets or to head off possible asset bubbles, they said. There may come a day when our worries about financial stability will prompt us to hike interest rates, but rates are the last line of defense. Not now. The first line of defense is making the financial system more resilient so it can better withstand shocks and using our supervisory and regulatory macroprudential tools to rein in excesses, as we are doing now.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615920","date":"2014-07-04","texts":"The U.S. economic expansion is entering its sixth year with the best stretch of job growth in almost a decade. Beneath the shiny exterior, however, lurk soft patches that worry economists and policy makers. Investors on Thursday seized on robust jobs numbers--not lingering soft spots--and drove the Dow Jones Industrial Average past 17000 for the first time. The Dow closed up 92.02 points, or 0.5, at 17069.26 in holiday-shortened trading. Overall job growth in June showed businesses gaining confidence and shedding the caution that has defined the labor market in the five years since the recession ended. Employers added 288,000 jobs during the month and unemployment fell to 6.1, the lowest level since September 2008, the Labor Department said Thursday, pushing the rate closer to what many economists consider full employment. Yet those gauges don't capture other weaknesses in the employment spectrum. Nor do those figures explain the mysteries of an economy that has been struggling to gain enough velocity to shake off its many ailments long after the recession ended. Consumer spending remains weak, a consequence of a labor market delivering new jobs but skimpy wage growth. And the share of Americans working or looking for work--the so-called labor-force participation rate--is near its lowest levels since the late 1970s, despite steady hiring.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614180","date":"2014-07-06","texts":"U.S. food prices are on the rise, raising a sensitive question When the cost of a hamburger patty soars, does it count as inflation It does to everyone who eats and especially poorer Americans, whose food costs absorb a larger portion of their income. But central bankers take a more nuanced view. They sometimes look past food-price increases that appear temporary or isolated while trying to control broad and long-term inflation trends, not blips that might soon reverse. The Federal Reserve faces an especially important challenge now as it mulls the long-standing dilemma of what to make of the price of a pork chop. As Fed officials debate when to start raising short-term interest rates to prevent the economy from overheating and causing inflation, Fed Chairwoman Janet Yellen has signaled she wants to take her time. Broad measures of inflation have been running below the Fed's 2 target for more than two years, but show signs of picking up. And the unemployment rate has fallen to 6.1 from 7.5 a year ago, which suggests that slack in the labor market is diminishing and the risk of overheating is gradually rising.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614508","date":"2014-07-07","texts":"Stocks eased, as investors paused following last week's push to records and looked ahead to the start of the second-quarter earnings season. The Dow Jones Industrial Average declined 44.05, or 0.3, to 17024.21, briefly dipping below 17000 in intraday trading. The S&P 500 index sank 7.79 points, or 0.4, to 1977.65. The pullback comes a session after those major indexes hit records. The Dow rose above 17000 for the first time ever on Thursday, following June's stronger-than-expected report on U.S. jobs. The market was closed Friday for July Fourth. Shares of small companies and technology stocks declined the most. The Nasdaq Composite Index fell 34.40 points, or 0.8, to 4451.53. The Russell 2000 small-cap index declined 21.41 points, or 1.8, to 1186.74. Traders cast Monday's pullback as a breather following last week's brisk rally, with market participants awaiting further insight into Federal Reserve officials' thinking on interest rates later in the week, as well as the start of the second-quarter earnings season. Trading volumes were light, they said. Many investors said the coming corporate earnings season will provide a test for stocks.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616193","date":"2014-07-09","texts":"Uncertainty Abounds Around Rate Rise The Federal Reserve faces two big policy questions when to raise rates, and how to go about raising them. After last Thursday's strong jobs report, the day the Fed begins raising rates seems closer. With the unemployment rate falling to 6.1 in June from 6.3 in May, several economists brought forward forecasts for when the first rate increase will come. Federal-funds futures, which price off Fed policy expectations, imply the target rate will be 0.5 by August 2015 versus near-zero today. But there still is a great deal of uncertainty on when liftoff, as Fed policy makers call it, will occur. That is largely because the unemployment rate doesn't seem to be fully capturing how much slack remains in the job market. There is no way to know how many of the people who left the labor force during the recession and its aftermath, and who therefore aren't counted among the unemployed, will return to the job hunt. That makes it hard to tell when wages, and inflation, might start to really heat up.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616758","date":"2014-07-11","texts":"WASHINGTON--The House voted Friday to make permanent a depreciation tax break aimed at encouraging business investment and boosting the economy, but long-term prospects for the measure appeared dim, given its large impact on federal coffers. The vote was 258 to 160, with more than 30 Democrats voting in favor of the break. The Republican-backed proposal would allow businesses to deduct 50 of many equipment purchases and other investments up front. It has been in effect in various forms for much of the last decade. But the tax break always has been temporary. House Republicans view a permanent extension as a way to give a jolt to the economy and job creation, at a time when partisan disagreements are blocking a broader overhaul of the tax system. The House has held a series of votes in recent weeks to permanently extend other business-friendly temporary tax breaks, such as a research credit. Republicans said the extensions are steps toward a tax overhaul. By making long-standing features of the tax code permanent, we can facilitate a comprehensive overhaul of the tax code, House Ways and Means Chairman Dave Camp R., Mich. said during a House floor debate. Such an overhaul, in turn, will create an America that works, with a strong, vibrant economy.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616284","date":"2014-07-14","texts":"A better-than-expected earnings report from Citigroup helped kick-start a rally in stocks, lifting market indexes nearly back to levels seen before last week's swoon. Many investors remain optimistic about the outlook for stocks broadly, amid improving U.S. economic data and an accommodative Federal Reserve policy. U.S. stocks have steadily pushed to records through the year. But with prices at lofty levels, investors are looking to second-quarter-earnings reports for validation of the record-setting rally. The Dow Jones Industrial Average climbed 111.61 points, or 0.7, to 17055.42. The blue-chip index pushed to a record in intraday trading but fell back before the day's end. The S&P 500 index tacked on 9.53 points, or 0.5, to 1977.10. With Monday's rally, stocks have largely recovered losses posted last week, which followed news of financial woes at a Portuguese bank.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613569","date":"2014-07-17","texts":"The House Financial Services Committee held a hearing on Federal Reserve reform on July 10. The hearing didn't get much press attention. But it was remarkable. While the House can't manage to engage on important issues like tax reform, immigration reform and the minimum wage, it's more than willing to propose radical reform of one of the few national policies that is working well. The bill under consideration is called the Federal Reserve Accountability and Transparency Act. That's right FRAT. To be fair to an otherwise dreadful bill, accountability and transparency are worthy objectives, and FRAT does include some reasonable ideas, such as trimming the news blackouts before and after meetings of the Federal Open Market Committee. But it also includes some corkers, such as requiring public disclosures--in advance--before entering into international negotiations, disclosures that could make such negotiations next to impossible. How would you like to play your poker hand open But the meat-and-potatoes of the House bill has little to do with either transparency or accountability. Instead, it seeks to intrude on the Fed's ability to conduct an independent monetary policy, free of political interference. As the title of Section 2 puts it, FRAT would impose Requirements for Policy Rules of the Federal Open Market Committee. A rule in this context means a precise set of instructions--often a mathematical formula--that tells the Fed how to set monetary policy. Strictly speaking, with such a rule in place, you don't need a committee to make decisions--or even a human being. A handheld calculator will do. In the debate over such rules, two have attracted the most attention. More than 50 years ago, Milton Friedman famously urged the Fed to keep the money supply growing at a constant rate--say, 4 or 5 per year--rather than varying money growth to influence inflation or unemployment.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613860","date":"2014-07-17","texts":"WASHINGTON--New applications for unemployment benefits fell again last week, a fresh sign of an improving labor market. Initial claims for jobless aid decreased by 3,000 to a seasonally adjusted 302,000 in the week ended July 12, the Labor Department said Thursday. That was the second lowest reading so far this year and was below the 310,000 new claims forecast by economists surveyed by The Wall Street Journal. The four-week moving average of claims, which smooths out weekly volatility, fell by 3,000 to 309,000, its lowest level in seven years. A year ago, this measure stood at 345,000. The improvement has been substantial, said Ian Shepherdson, chief economist at Pantheon Macroeconomics. Jobless claims traditionally jump this time of year because of temporary layoffs at auto-manufacturing plants, so the Labor Department adjusts the data in order to give a better picture of the underlying trend of layoffs. Auto makers traditionally halt production at some factories in the first half of July to prepare for model year changeovers.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614946","date":"2014-07-23","texts":"Hudson City Bancorp Inc. said its second-quarter earnings fell 20 on lower net interest income. The company's bottom line edged analysts' expectations, however. The Paramus, N.J., bank's pending acquisition by M&T Bank has been delayed for nearly two years. As the wait drags on, the bank--whose results have been pressured by low interest rates in recent years--has sought to pursue two initiatives it first developed in 2012 commercial real estate and secondary mortgage operations. The bank's results in the second quarter took a hit from a decline in the average balance of interest-earning assets and continued low interest rates, among other items. Net interest income fell 26 to 117.7 million. Hudson City posted a net interest margin of 1.29, down from 1.64 a year earlier and 1.41 in the previous quarter.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613623","date":"2014-07-28","texts":"WASHINGTON--The number of contracts signed to buy previously-owned homes slipped in June, a sign the housing recovery remains choppy despite a retreat in interest rates. An index of pending home sales, reflecting purchases under contract but not yet closed, fell 1.1 to a reading of 102.7 in June from May, ending three months of gains, the National Association of Realtors said Monday. The above-100 reading indicates market activity was still average, if not robust, the trade group said. Economists surveyed by The Wall Street Journal had forecast a 0.5 rise in June sales. Compared with a year ago, pending-home sales were down 7.3 last month. That suggests many Americans remain unwilling or unable to enter the market despite historically low borrowing costs and a pickup in job creation. Lenders are still imposing strict lending standards, and home prices have risen sharply over the past two years. Meanwhile, Americans' incomes are growing tepidly. Lawrence Yun, NAR's chief economist, said sales conditions have improved since the winter as price gains have eased and more homes have come on the market. However, supply shortages still exist in parts of the country, wages are flat, and tight credit conditions are deterring a higher number of potential buyers from fully taking advantage of lower interest rates, Mr. Yun said in a statement.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617341","date":"2014-07-28","texts":"Dollar Tree Inc. on Monday said that it would buy Family Dollar Stores Inc. for 8.5 billion. Suddenly, everyone looks like a winner. Family Dollar shares shot up 24, above the hefty premium Dollar Tree is offering. But while buyers' shares often fall on news of hefty acquisitions, Dollar Tree's rose. Even Dollar General Corp., which had been seen as the favorite to buy Family Dollar, saw its stock edge higher initially. In sum, by virtue of the deal announcement, the stock market valued the three big publicly traded dollar-store operators by roughly 2 billion more on Monday than on Friday. One explanation goes like this Dollar Tree will run Family Dollar much more effectively. The combined company will have a much bigger footprint, and with the scale that comes from 13,000 U.S. locations, it will be able to keep costs and prices low. That is especially important with Wal-Mart Stores Inc. rolling out smaller-format stores aimed at taking back the market share it has lost to the dollar retailers. Meanwhile, although combining Dollar Tree with Family Dollar would present Dollar General with a much bigger rival, it also poses more of a threat to Wal-Mart. So while the environment for Dollar General looks more challenging, the market seems unconcerned. One possibility investors might be entertaining is that Wal-Mart reacts by stepping up its push into smaller stores--by buying Dollar General.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616619","date":"2014-07-30","texts":"The Federal Reserve's tone has gotten a bit more hawkish. Judging from what the economy is doing, there may be more to come. In the statement released Wednesday following its two-day meeting, the Fed offered a less qualified assessment of the improvement in the job market than it did when it met last month. That was before the strong June jobs report came out. And whereas last month the Fed said that inflation was running below its 2 target, it acknowledged this time that inflation has moved somewhat closer to it. Indeed, Wednesday's unexpectedly strong report on second-quarter gross domestic product from the Commerce Department showed that the Fed's preferred inflation measure--the price index for personal consumption expenditures--was up 1.6 from a year ago. The first quarter's gain was just 1.1. The core measure, which excludes food and energy, was only slightly more muted, gaining 1.5 compared with the first quarter's 1.2. Moreover, inflation's pace picked up, with prices increasing at a 2 annual rate in the second quarter. As long as wage growth remains low, though, most members of the Fed's rate-setting committee will probably view a move above 2 inflation as transitory. In their view, as the statement put it, there remains significant underutilization of labor resources. In plain language, there is still plenty of slack in the job market. But the GDP report suggested the economy has strengthened to the point that it should be able to sustain the recent pickup in hiring. And with that, growth in wages may finally get a lift.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617387","date":"2014-07-30","texts":"In late April, a few hundred of Morgan Stanley's top stockbrokers and their spouses jetted off to Hawaii for a gathering spiced with golf, deep-sea fishing and suntanning. When they arrived at the Ritz-Carlton, Kapalua, on Maui, the first perks of their all-expenses-paid trip were waiting for them pillow gifts of GoPro cameras and Maui Jim sunglasses, according to one attendee. With the stock market at record levels and wealth-management fees rising, Wall Street is reviving posh recognition'' junkets that were abruptly suspended in the 2008-2009 financial meltdown, when banks taking government bailouts wanted to avoid the appearance of extravagance. Morgan Stanley's Hawaii gathering was its most lavish since the crisis and its first outside of the continental U.S., according to advisers. Industry executives and analysts say the return of the junket reflects the bullish market and growing competition for top revenue-producing brokers, who, in addition to high pay, expect significant rewards for their efforts. Still, trips aren't as costly as those in precrisis days, and many now include work-related education and training. Prerecession, those trips were nothing but fun, but those are never coming back, said Steven Dudash, a financial adviser and president of IHT Wealth Management in Chicago, who has been in the industry for 15 years and recently left a job at Bank of America Corp.'s Merrill Lynch. I understand why in the public eye it would be frowned upon.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614095","date":"2014-07-31","texts":"In late April, a few hundred of Morgan Stanley's top stockbrokers and their spouses jetted off to Hawaii for a gathering spiced with golf, deep-sea fishing and suntanning. When they arrived at the Ritz-Carlton, Kapalua, on Maui, the first perks of their all-expenses-paid trip were waiting for them pillow gifts of GoPro cameras and Maui Jim sunglasses, said one attendee. With the stock market at record levels and wealth-management fees rising, Wall Street is reviving posh recognition junkets that were abruptly suspended in the 2008-2009 financial meltdown, when banks taking government bailouts wanted to avoid the appearance of extravagance. Morgan Stanley's Hawaii gathering was its most lavish since the crisis and its first outside of the continental U.S., according to advisers. Industry executives and analysts say the return of the junket reflects the bullish market and growing competition for top revenue-producing brokers, who, in addition to high pay, expect significant rewards for their efforts. Still, trips aren't as costly as those in precrisis days, and many now include work-related education and training. Prerecession, those trips were nothing but fun, but those are never coming back, said Steven Dudash, a financial adviser and president of IHT Wealth Management in Chicago, who has been in the industry for 15 years and recently left a job at Bank of America Corp.'s Merrill Lynch. I understand why in the public eye it would be frowned upon.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614153","date":"2014-08-02","texts":"The Federal Reserve was left on a patient course as it weighs interest-rate increases after a roster of economic reports Friday pointed to steady U.S. job growth and firming -- but still low -- inflation and wages. A Commerce Department report showed the Fed's favored measure of inflation -- the personal consumption expenditure price index -- was up 1.6 in June, its 26th straight month below the Fed's 2 inflation goal, though higher than readings at 1 and below last year. Meantime, the Labor Department reported average hourly earnings of private-sector workers were up 2 from a year earlier, unchanged from the range of the past few years. That could give Fed Chairwoman Janet Yellen leeway to stick to a plan to keep short-term rates near zero until well into 2015. Still, Ms. Yellen is facing increasing internal pressure from easy-money skeptics on her policy committee to move more quickly toward rate increases. In a statement Friday, Philadelphia Federal Reserve Bank President Charles Plosser pointed to current inflation and employment levels to argue that the going Fed schedule for weighing rate increases remains well behind what I consider to be appropriate given our goals. Mr. Plosser dissented at the Fed's policy meeting this past week, wanting a shift away from easy-money policies.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616534","date":"2014-08-02","texts":"Wondering if the market is in for a tumble If you find yourself Googling a lot of political and financial terms, it may well be. In the past, trends in Google searching have been shown to predict flu outbreaks, unemployment rates and the success of movies at the box office. There was even evidence that financially oriented searches -- of Google and Wikipedia -- could predict stock market movements. The pattern was simple Before stocks moved lower, there was an uptick in searches of finance-related terms. Now researchers from Boston University and the University of Warwick, in England, are reporting that stepped-up searching for terms relating to politics also points to a lower market. Building on their previous work, the scientists used the techniques of computational linguistics to group all the words in Wikipedia into topics. Then, using Google Trends, a publicly available service, they determined how often salient keywords within each topic area were searched from 2004 to 2012. The result Increased searching of finance or political terms predicted falling stocks. The scientists used their keyword searches to make hypothetical trades based on historical data for the S&P 500 index. For each keyword topic, they bought or sold the index weekly depending on whether searches were rising or falling, comparing their results to a strategy of buying and selling randomly each week. The median return for trading based on a collection of politics keywords was 38 above the random strategy. For business-oriented keywords, it was 28. Crucially, the scientists write, we find no robust link between stock-market moves and search-engine queries for a wide range of further semantic topics.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617294","date":"2014-08-02","texts":"Treasury bonds rallied broadly, as the U.S. employment report for July soothed concerns that the Federal Reserve may raise interest rates sooner than investors expect. In late afternoon trading Friday, the benchmark 10-year note was up 1532, yielding 2.505. The two-year note was up 432, yielding 0.476. Bond yields fall when their prices rise. Investors piled into U.S. government bonds after the Labor Department said the U.S. economy added a smaller-than-forecast 209,000 nonfarm payrolls in July. Average hourly earnings rose one cent from June to 24.45 last month, a sign that wage inflation remains tame. The bond market is telling you that it is not a bad report, but it is not strong enough to force the Fed to rush to raise interest rates, said Gary Pollack, who helps oversee 12 billion as head of fixed-income trading in New York at Deutsche Bank AG's private wealth-management unit.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614701","date":"2014-08-03","texts":"July marked the first time since 1997 that employers have added 200,000 or more jobs for six consecutive months, but the increased demand for labor doesn't yet seem to be translating into bigger wage gains for workers. On Friday, the Labor Department reported that the economy added 209,000 jobs last month and that the jobless rate ticked up to 6.2 in July from 6.1 in June, though that was partly the result of more people returning to the labor market as conditions improve. The rate is down from 7.3 a year ago. The same report showed annual average earnings rose 2 in July, a rate that barely keeps purchasing power ahead of inflation and which has varied little since the recession ended more than five years ago. A separate gauge of employee compensation, the Labor Department's employment-cost index, rose in the second quarter. Data released Thursday showed this broad measure of pay and benefits rose a seasonally adjusted 0.7 from April through June, its fastest rate of increase since late 2008. Some economists treated Thursday's report with caution, noting the data could include some payback from an unusually weak reading in the first quarter, when the index rose 0.3. Compared with the same period last year, the index rose 2 in the second quarter, in line with its recent trend.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617006","date":"2014-08-04","texts":"U.S. oil prices are sliding as weak equities, logistical hiccups and ample global crude supplies prompt investors to pull back from the market. Prices are down 8.7 after peaking at a nine-month high in June. On Friday, light, sweet crude for September delivery fell 29 cents, or 0.3, to 97.88 a barrel on the New York Mercantile Exchange, the lowest closing price since Feb. 6. A host of factors were at work, analysts and traders said, from logistical delays in the pipeline and refinery system that would damp demand for crude, to a lack of global supply problems despite violence in Iraq, Libya and Eastern Europe. Taken together, the factors resulted in traders cutting back on bets that prices would rise from the record levels reached in recent months. As time has gone by, speculators have decided they don't want to wait much longer for an actual impact on oil supply, said Mark Vonderheide, managing partner of trading firm Geneva Energy Markets. Last week, a fire caused CVR Refining LP to shut down its 115,000-barrel-a-day refinery in Coffeyville, Kan., for repairs, the latest problem for U.S. crude. The refinery draws supply directly from the delivery point for the U.S. benchmark contract in Cushing, Okla., and the loss of demand resulting from the outage could arrest a monthslong trend of declining oil stocks at Cushing that has been a bullish driver in the market for most of this year.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613522","date":"2014-08-06","texts":"Robert Yaro, a fierce advocate for the New York City region in an era that included a deep disinvestment in public infrastructure, rugged recessions and the Sept. 11, 2001, terrorist attacks, is retiring from his post running the Regional Plan Association. He will be succeeded by Thomas Wright, the organization's executive director. Mr. Yaro is kind of like an oracle for the industry. Everybody wanted to hear what he wanted to say on any subject, said Janette Sadik-Khan, a principal at Bloomberg Associates, an international consulting organization, and a former New York City transportation commissioner. She is a former board member of the Regional Plan Association. Mr. Yaro, 64 years old, came to the group in 1989 and became president in 2001, when he was thrust into the role of helping lower Manhattan rebuild after the terrorist attacks. All of the big systems were busted, he said of New York City when he started at the association. It's been rewarding to see this place not only get back on its feet but become the center of the galaxy like it was when I was a kid, said Mr. Yaro, who grew up in Kew Gardens, Queens.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613473","date":"2014-08-08","texts":"By the time the parents of Serena Violano were in their early 30s, they had solid jobs, their own home and two small daughters. Today, Serena, a 31-year-old law graduate, is still sharing her teenage bedroom with her older sister in their family home in the small town of Mercogliano, near Naples. Ms. Violano spends her days studying for the exam to qualify as a notary in the hopes of scoring a stable job. The tension over her situation sometimes spills over in arguments with her sister over housework or their shared space. And with her 34-year-old boyfriend subsisting on short-term contracts, Ms. Violano doesn't even dare dream of building the sort of life her parents took for granted. For our parents, everything was much easier, she says. They had the opportunity to start their own life. Instead, we don't have any guarantees for our own future. Ms. Violano's stunted adulthood and dashed expectations mark a generational divide between younger and older Europeans that is challenging the Continent's dream of broad-based prosperity.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617083","date":"2014-08-09","texts":"It's hard to decide when the market has peaked and it's time to get out. It may be even harder to know when the damage is over and it's time to get back in. But pulling off both in succession is exceedingly rare. This would be important to keep in mind at any time, but especially right now as the bull market that began in March 2009 is entering its 54th month. Since peaking on July 24, the broad stock market -- as measured by the Wilshire 5000 index -- has fallen 2.7. Even if the market has topped out and you sidestep a decline by getting out of stocks now, the odds of long-term success still are against you. Trying to time the market is by and large a losing proposition, even for the pros.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616495","date":"2014-08-11","texts":"All that glitters isn't gold -- at least for the investors who are eschewing the precious metal in favor of the companies that mine it. After years spent in the shadow of gold, miners are back in favor, driven by stronger earnings and cuts to mining costs. The NYSE Arca Gold Miners Index, which tracks 39 gold-mining companies, has soared 26 so far this year, compared with a 8.9 rise in gold and a 4.5 increase in the S&P 500. The gold-miner rally is a boon for high-profile hedge-fund managers such as George Soros and John Paulson -- as well as traditionally gold-focused traders like Peter Palmedo and Eric Sprott. Their gold bets were pummeled last year, when a rise in bond yields and muted inflation dulled gold's allure, sparking a stampede that drove the precious metal's price down 28 and the gold-mining index down 54. Gold stocks tend to outpace gold's losses when gold falls, and overshoot its gains when prices rally. Now, the prospects for gold are promising, some investors say, but those for gold miners are even better. Flare-ups in Ukraine and the Middle East have prompted fund managers to pile back into relatively safe investments like gold, pushing up prices on those haven assets.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614350","date":"2014-08-13","texts":"A large California pension manager is using complex derivatives to supercharge its bets as it looks to cover a funding shortfall and diversify its holdings. The new strategy employed by the San Diego County Employees Retirement Association is complicated and potentially risky, but officials close to the system say it is designed to balance out the fund's holdings and protect it against big losses in the event of a stock-market meltdown. San Diego's approach is one of the most extreme examples yet of a public pension using leverage--including instruments such as derivatives--to boost performance. The strategy involves buying futures contracts tied to the performance of stocks, bonds and commodities. That approach allows the fund to experience higher gains--and potentially bigger losses--than it would by owning the assets themselves. The strategy would also reduce the pension's overall exposure to equities and hedge funds. The pension fund manages about 10 billion on behalf of more than 39,000 active or former public employees.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615630","date":"2014-08-17","texts":"In a recent Wall Street Journal survey, 30 private economists said they feared the Federal Reserve would wait too long before raising short-term interest rates, while only three said they feared the Fed would move too early. Will the Fed fall behind the curve and keep interest rates too low for too long as the economy strengthens The question looms as officials travel this week to their annual gathering in Jackson Hole, Wyo., where they and the world's leading central bankers discuss economic issues. Fed Chairwoman Janet Yellen and academic papers presented at the meeting will focus on labor markets, which are improving rapidly even though U.S. economic growth has been sluggish and erratic. Ms. Yellen seems likely to acknowledge the improving job market, though she has argued for much of the year that slack and headwinds endure after the 2008-09 financial crisis. A growing number of economists believe slack in labor markets is diminishing, making the economy prone to inflation and financial markets prone to overshooting with short-term interest rates near zero. The unemployment rate fell to 6.2 in July from 7.3 a year ago, a decline far faster than Fed officials expected. They are making me nervous, Arun Raha, the chief global economist for Cleveland-based Eaton Corp., an industrial manufacturer, said of Fed officials. Given the strength of the job market, manufacturing and nonresidential construction, it's about time they got rid of their low-rates-for-an-extended-period viewpoint.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617004","date":"2014-08-18","texts":"Gold prices fell Monday, as last week's fears of a direct military confrontation between Russia and Ukraine have proven unfounded, leaving the precious metal vulnerable to concerns about higher interest rates in the U.S. Gold for December delivery, the most actively traded contract, settled down 6.90, or 0.5, at 1,299.30 an ounce on the Comex division of the New York Mercantile Exchange. Ukrainian officials said Friday that the country's army had partially destroyed a column of Russian military vehicles that had entered its territory, The news sent gold prices higher on worries that the two countries were heading toward a military escalation. Some investors buy gold during times of geopolitical or economic uncertainty, believing the metal will hold its value better than other assets. By Monday, however, there was little evidence that the conflict would widen, as Kiev sought to play down the clash's significance, while Moscow called reports of the battle some kind of fantasy. Western officials criticized the apparent incursion, but some played down the significance of the incident, noting that military equipment were believed to have been flowing over the border to pro-Russia separatists for months. Investors exited gold, which has been weighed down by worries of tightening monetary policy in the U.S. Higher interest rates are seen as a negative influence for gold, which costs money to hold and struggles to compete with yield-bearing investments. A stronger dollar and rising stocks also detracted from gold's appeal.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613894","date":"2014-08-22","texts":"It isn't the forecast but the weather that tells you when to open the umbrella. Janet Yellen opened the Kansas City Federal Reserve annual symposium in Jackson Hole, Wyo., Friday with the observation that conditions in labor markets have outperformed Fed forecasts--and that if this continues the Fed funds target rate could rise earlier and more rapidly than expected. That is a subtle change of emphasis from the Fed chairwoman. Consider a speech she gave at the Economic Club of New York in April. The background message was the same--monetary policy isn't on a preset course and will change based on economic conditions. But the policy implications of this centered around the possibility of a labor shortfall necessitating a continuation of ultralow interest rates. Now Ms. Yellen is also talking about the possibility of raising rates sooner and at a brisker pace in the case of a faster convergence toward the Fed's labor market and inflation goals. Additionally, Ms. Yellen noted that the labor market may not have as much slack as stagnant wages might seem to indicate. The inability of some employers to push down wages during the economic slump may have resulted in pent-up wage deflation that could hold worker pay down even as the labor market tightens.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613493","date":"2014-08-23","texts":"In the latest sign of an improving labor market, the number of people filing new claims for unemployment benefits in the second week of August was 298,000, marking the third time in five weeks it had fallen below 300,000. The last time claims were so low was in early 2000 and 2006, at the height of previous economic expansions. Jobless claims, a proxy for layoffs, are also near record lows when population growth is taken into account. Yet the improvement seems out of step with other labor-market indicators. The nation's unemployment rate was 6.2 in July, a historically elevated rate for this point in the recovery, and many economists believe even that gauge overstates the true health of the job market. The jobless rate doesn't capture, for example, discouraged workers who have given up their job searches. Economists believe that one reason for a lower rate of layoffs is a labor market that has become generally less dynamic over the last few decades. Employers have become less likely to lay off workers over time, though they have also grown more cautious about hiring. Similarly, workers have grown more reluctant to change jobs, possibly stunting career development and earnings growth as a result. But more recently, most of the fall in jobless claims has been driven by a decline in the number of the newly laid off who don't bother to apply for government benefits in a generally improving economy.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613664","date":"2014-08-24","texts":"JACKSON HOLE, Wyo.--Janet Yellen delivered a cliffhanger in the mountains of Wyoming. Encouraged by progress in the U.S. labor market, but uncertain if it is enough, the Federal Reserve Board chairwoman and other officials who gathered here for a central-bank conference left the public guessing about when they will start raising short-term interest rates. The annual economic symposium, sponsored by the Federal Reserve Bank of Kansas City, marked an important bookend to a speech Ms. Yellen had delivered five months earlier to a conference of community organizers in Chicago. Back then, Ms. Yellen argued with conviction that the U.S. economy was still far from what Fed officials call full employment--the highest level of hiring that can be reached without causing the economy to overheat and spark inflation. The jobless rate was 6.7, while 3.8 million Americans were out of work for six months or longer and 7.2 million more had part-time work but wanted full-time jobs. Wages were creeping up at a glacial pace. Ms. Yellen saw this as evidence that the economy was burdened with slack, which would allow her to keep short-term interest rates low far into the future.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613755","date":"2014-08-28","texts":"U.S. Treasurys shadowed euro-zone government bonds higher as global investors anticipate more easing measures from the European Central Bank. The 30-year bond rallied 2532 to yield 3.110, hitting its lowest level this year. Benchmark U.S. 10-year notes rose 932 to yield 2.361. Two-year notes rose 132 to yield 0.516. Yields fall when prices rise. Rates on U.S. government bonds have become increasingly attractive relative to comparable bonds across the Atlantic, helping to support Treasurys despite worries about when the Federal Reserve might tighten monetary policy by raising interest rates. There are greater expectations of quantitative easing from the ECB as it relates to asset-backed securities, said Wilmer Stith, portfolio manager of the Wilmington Trust Broad Market Fund. The question is how effective it will be. ECB President Mario Draghi spoke at the Jackson Hole, Wyo., central-banking conference last weekend, emphasizing the lack of inflation in the euro zone and reiterating that the central bank is ready to act when necessary.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614380","date":"2014-08-29","texts":"Government-bond yields touched new lows in the U.S. and Germany, as investors piled anew into ultrasafe debt amid growing concern about the pace of European growth. The gains underscore the dynamics that have made government bonds a surprise star performer this year -- a winning streak many analysts now expect will continue. When 2014 started, many Wall Street strategists predicted interest rates would rise, sending bond prices lower, as the U.S. economy picked up speed and the Federal Reserve reduced its monthly stimulus, due to end in October. Instead, government-bond prices have surged amid softness in Europe's economy and geopolitical tumult, sending yields down to levels rarely seen. Bonds in Europe have gained even more than those in the U.S., fueled by slowing economic growth and fears that trouble in Ukraine could spiral. The rally in European debt has made U.S. government bonds look like a relative bargain, some investors say.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616488","date":"2014-09-01","texts":"For stocks, September can be the cruelest month. The big crashes of 1929 and 1987 came in October, but on average, October shows gains over the past 20, 50 and 100 years. The only month that shows an average decline in all three periods is September. Money managers debate why that is. It could be that people sit down after Labor Day and re-evaluate their portfolios. Regardless, the arrival of September is making some people nervous now. Even some who feel bullish for the long run are warning clients to beware of September. I am a little worried, said James Paulsen, chief investment strategist at Wells Capital Management, which oversees 345 billion. Mr. Paulsen has been one of the business's most relentless stock bulls for years, but now he says U.S. stocks could fall as much as 15 some time this autumn. He is urging clients to shift some money into foreign stocks, which as a whole are less expensive than U.S. stocks. Mr. Paulsen emphasizes that he doesn't think the bull market is over it could run another five years, he said. But bull markets aren't typically straight-line events, he said. A 15 decline would be less than the 20 drop that typically defines a bear market, but would certainly be enough to rattle investors.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617386","date":"2014-09-01","texts":"Summer brought companies some hopeful signs of economic recovery. This fall, the optimism will be put to the test. That's because it is unclear whether consumers--the engine behind more than two-thirds of the American economy--are ready to resume spending at significant levels. Signals are mixed. After years of lackluster growth, corporate revenues for large companies grew more rapidly in the second quarter, and company guidance suggests that trend will continue in the second half of the year. The Conference Board said consumer confidence picked up in August. Employment continued to tick upward. Gross domestic product jumped in the second quarter as businesses and consumers made up for the first quarter's lousy weather. Economists are predicting growth at a 3 rate for the second half, and 2 growth for the full year. Still, the retail industry, tied more closely to consumer spending than any other, is struggling. In August, the Commerce Department said U.S. retail spending was flat in July. And household spending declined by 0.1 in July, the first drop in personal spending since January.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616118","date":"2014-09-08","texts":"Gold prices slid Monday, as a stronger U.S. dollar led investors to sell the precious metal. Gold for December delivery, the most actively traded contract, fell 13, or 1, to 1,254.30 a troy ounce on the Comex division of the New York Mercantile Exchange, the lowest close for the precious metal since June 9. Prices for gold have been under pressure from a burgeoning dollar, with investors flocking to the U.S. currency as the economic recovery gains momentum and on expectations of a rise in interest rates next year. A rising dollar is bad news for gold, an asset many investors buy to offset the risk of dollar weakness. In addition, higher interest rates make gold a less attractive investment, as the metal costs money to hold and struggles to compete with investments that offer yield during times of tightening monetary policy. On Monday, the dollar was up 0.8 against the yen at 105.91, a six-year high. The British pound was down 1.3 against the U.S. currency at 1.61. Gold prices are down about 5 from July highs. The stronger dollar and weak U.S. inflation are keeping investors on the sidelines, said James Cordier, a principal at Liberty Trading Group. The landscape for gold is not bullish at all.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615310","date":"2014-09-09","texts":"Don't get fooled by the coming Wall Street head fake. Even as market conditions appear to be more favorable for the trading operations of big Wall Street banks, the weight of regulation will continue to be a drag on the business. Daniel Tarullo, the Federal Reserve governor who serves as the central bank's point person on regulation, told the Senate Banking Committee Tuesday that regulators are crafting rules that would require banks to finance their short-term securities lending with a significant amount of stable funding. And customers such as hedge funds would be required to post collateral meeting regulatory minimums. The combined effect would be akin to a tax on leveraged trading, making it more expensive for banks to provide short-term credit to the customers of their trading desks. The very likely result is a long-term reduction in trading activity and slimmer profits. Mr. Tarullo also outlined Fed plans to impose a risk-based capital surcharge on the most systemically important banks. Importantly, that will penalize reliance on short-term funding that the Fed considers vulnerable to runs.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613749","date":"2014-09-11","texts":"WASHINGTON--The number of new applications for jobless benefits rose last week to the highest level since June, but stayed near prerecession lows. Initial claims for unemployment benefits increased by 11,000 to a seasonally adjusted 315,000 in the week ended Sept. 6, the Labor Department said Thursday. Claims for the previous week were revised higher to 304,000. Last week's claims level was well above the 300,000 forecast by economists surveyed by The Wall Street Journal, though it was possibly distorted by the Labor Day holiday. A Labor Department analyst noted that claims, a proxy for layoffs, tend to be especially volatile around holidays. The four-week moving average of claims, which smooths out weekly volatility, was up 750 to 304,000. It has been trending higher since hitting a 2014 low of 293,750 in early August. But that is still well below the average for the first half of the year and remains at levels last consistently seen before the recession. The claims data show clear improvement in labor-market conditions over the past few months, but some modest deterioration over the most recent few weeks, said J.P. Morgan Chase economist Daniel Silver.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614567","date":"2014-09-17","texts":"The European Bank for Reconstruction and Development Thursday urged the European Central Bank to launch a large-scale program of asset purchases known as quantitative easing, becoming the latest international organization to signal that the package of stimulus measures announced earlier this month won't solve the eurozone's twin problems of low growth and inflation. On Sept. 4, ECB President Mario Draghi announced new cuts to its key interest rates along with programs to buy asset-backed securities and covered bonds, having cut rates in June and announced a program of cheap loans for eurozone banks. Mr. Draghi and a majority of his colleagues on the ECB's governing council had pressed ahead with the new package despite opposition from Germany's Bundesbank. However, the Organization for Economic Cooperation and Development Monday cut its growth forecasts for the currency area, now seeing growth of 0.8 in 2014, having projected an expansion of 1.2 in May. The Paris-based research body called on the ECB to launch a program of large-scale asset purchases, including government bonds. The OECD was joined Thursday by the EBRD, which was established in 1991 to help countries in Eastern Europe and the former Soviet Union make the transition from centrally planned to market economies. The development bank has in recent months cut its growth forecasts for many of the 34 countries in which it invests, partly because of the conflict in Ukraine, but also because of a slower recovery in the 18 countries that share the euro. The case for quantitative easing has become compelling to support the still fragile recovery in the eurozone, to which much of the CEB Central Europe and the Baltics and SEE Southeastern Europe are strongly linked, the EBRD said. An effective eurozone QE may help lessen the risk of setbacks in the recovery of those regions.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614736","date":"2014-09-17","texts":"Treasury bonds pulled back Wednesday for the first time this week as the Federal Reserve's latest monetary-policy releases renewed worries about higher interest rates. The benchmark 10-year Treasury note fell by 432 in price, yielding 2.6. Yields rise as prices fall. The yield rose to as high as 2.625, the highest intraday level since July 7. Shorter-dated Treasurys led the selling, as their yields are directly affected by the Fed's interest-rate outlook. The two-year note was 132 lower, yielding 0.556, near the highest level since 2011. The five-year note was 532 lower, yielding 1.804.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615009","date":"2014-09-18","texts":"The crosscurrents roiling the bond market intensified Thursday, as the gap between short- and long-term U.S. Treasury yields narrowed in the latest sign of uncertainty over the pace of U.S. growth. Yields on short-term U.S. Treasury debt maturing in two to five years hit the highest level since 2011, reflecting an investor scramble to place bets on an expected Federal Reserve rate increase as soon as next spring. Yields rise when prices fall. The selloff in short-term government debt extended a pullback that began following Wednesday's Federal Reserve decision to end its bond purchases later this year. At the same time, yields on government debt maturing in 10 or more years have risen only modestly this week and remain well below their levels at the start of 2014, a year that many analysts forecast would include rising long-term interest rates and falling bond prices. The 10-year U.S. Treasury note was 832 lower, yielding 2.629. That is the highest closing level since July 3 but compares with 3 at the end of 2013. The softness of longer-term yields highlights concerns shared by many analysts and policy makers about the uneven growth of the U.S. economy and falling expectations for inflation. Investors broadly expect the Fed to raise the fed funds rate next year for the first time since 2006. But many analysts say that even a small uptick in rates could slow the economy and send already-low inflation further below the Fed's target.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617202","date":"2014-09-18","texts":"The unemployment rate in New York City fell to its lowest level in more than five years in August as the city added jobs in industries that usually pay healthy salaries, such as financial services and manufacturing. The jobless rate, which has been diminishing the past several years, fell last month to 7.3, the lowest since January 2009, according to the state Department of Labor. The national unemployment rate was 6.1 in August. One of the worries is that there hasn't been much wage growth because the mix of jobs has been toward lower-wage jobs, said Ken McCarthy, senior managing director of economic analysis and forecasting for real-estate services firm Cushman & Wakefield Inc. You are starting to see job growth in higher-paying, better-compensating positions, which is also good for the economy. Some economists, however, cautioned against giving too much weight to the 0.5 percentage-point drop in unemployment from July to August. They noted the number of those employed and seeking jobs also dropped significantly month to month. Building construction jobs were up 1,100 or 3.2 for the year ending in August, and the category of specialty trade contractors rose by 5,100 jobs or 6.3.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613967","date":"2014-09-19","texts":"The crosscurrents roiling the bond market intensified Thursday, as the gap between short- and long-term U.S. Treasury yields narrowed in the latest sign of uncertainty over the pace of U.S. growth. Yields on short-term U.S. Treasury debt maturing in two to five years hit the highest level since 2011, reflecting an investor scramble to place bets on an expected Federal Reserve rate increase as soon as next spring. Yields rise when prices fall. The selloff in short-term government debt extended a pullback that began following Wednesday's Federal Reserve decision to end its bond purchases later this year. At the same time, yields on government debt maturing in 10 or more years have risen only modestly this week and remain well below their levels at the start of 2014, a year that many analysts forecast would include rising long-term interest rates and falling bond prices. The 10-year U.S. Treasury note was 832 lower, yielding 2.629. That is the highest closing level since July 3 but compares with 3 at the end of 2013. The softness of longer-term yields highlights concerns shared by many analysts and policy makers about the uneven growth of the U.S. economy and falling expectations for inflation. Investors broadly expect the Fed to raise the fed funds rate next year for the first time since 2006. But many analysts say that even a small uptick in rates could slow the economy and send already-low inflation further below the Fed's target.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615225","date":"2014-09-22","texts":"Investors like to debate whether the bull market is unloved, but one thing is clear It has been misunderstood. Since markets began rebounding in 2009, money managers repeatedly have misjudged the risks of inflation, higher interest rates and market volatility. They also have underestimated central banks' ability to keep the world economy intact. All this misunderstanding has been disconcerting for investors, but terrific for stock and bond performance. A recovering economy with low interest rates and low inflation is probably an ideal backdrop to make money in financial markets, said Jack Ablin, chief investment officer at BMO Private Bank, which oversees 66 billion. Moreover, when people are skeptical they hold money out of markets, avoiding the excess optimism that can kill bull markets. And as the doubters gradually give up and put money into stocks and bonds, it just helps propel the market, Mr. Ablin said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615565","date":"2014-09-22","texts":"Boston law firm Bingham McCutchen LLP is in substantive merger talks with a larger firm, Morgan, Lewis & Bockius LLP, according to two people familiar with the matter. Bingham, which has about 800 lawyers, began making overtures to rival firms after a leadership change in May. The firm is working to reverse a 12.6 revenue decline in 2013 and has lost a number of partners. It has worked on some high-profile matters this year, including the 2 billion sale of Oculus VR Inc. to Facebook Inc. Morgan Lewis was founded in Philadelphia and has roughly 1,350 lawyers in 25 offices around the world. A combination with Bingham could create a significantly larger firm, though the details and scope of any potential deal aren't clear and no formal agreement appears to have been signed. Talks could shift direction or end. Major law firms are grappling with diminished demand for legal services since the recession, and a number have turned to mergers as a way to expand market share. Earlier this month, for example, Texas firm Locke Lord LLP and Edwards Wildman Palmer LLP announced their intention to merge. In June, a new firm, Squire Patton Boggs, was formed through the tie-up of Washington, D.C., firm Patton Boggs LLP and a larger international firm, Squire Sanders. But mergers can also be risky, and discussions between firms often end before formal agreements are reached or put to a partnership vote. Even advanced talks can founder as a result of client conflicts or other differences that emerge during detailed negotiations.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614170","date":"2014-09-24","texts":"Accenture PLC said its fiscal fourth-quarter profit rose 4.5, driven by gains in revenue in both its consulting and outsourcing businesses. The company's results surpassed expectations, though its forecast for the current fiscal year's per-share earnings fell short of analysts' estimates. For the new year, the company projected earnings between 4.74 and 4.88, with revenue growth of 4 to 7. Analysts polled by Thomson Reuters were expecting earnings of 4.91 a share, with revenue growth of 6 Accenture provides consulting services to large, multinational technology firms such as International Business Machines Corp. Its earnings have grown steadily in recent years, while its outsourcing business has enjoyed strong growth in revenue. For the period ended Aug. 31, the consulting unit's net revenue rose 6 to 4 billion in constant currency, while revenue from outsourcing jumped 15 to 3.8 billion.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616925","date":"2014-10-02","texts":"Assyria to Iberia At the Dawn Of the Classical Age Metropolitan Museum of Art Through Jan. 4, 2015 New York -- When John Kerry made a public appearance at the Metropolitan Museum of Art on Sept. 22, he toured From Assyria to Iberia at the Dawn of the Classical Age, the new exhibition about the Middle East's ancient civilizations of the first millennium B.C. He had just delivered a speech in the nearby Temple of Dendur gallery on the danger ISIS poses to the region's heritage. His visit and his comments merely punctuated what any visitor to the show will feel that it has a somber contemporary resonance no curator could have anticipated. From Assyria to Iberia features some 260 objects, most of them ancient, from institutions as far afield as North Africa, the Caucasus and the Middle East as well as the Met's own collection.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613912","date":"2014-10-05","texts":"For the past week, investors have probably been worrying about the wrong things. Amid disappointing reports on U.S. manufacturing, consumer confidence and home prices, traders knocked the Dow Jones Industrial Average down 1.8 in the week's first four days. Fears spread that the U.S. economy was slowing down again. Then came Friday's upbeat jobs report and they pushed the Dow up 208.64 points, or 1.24, to 17009.69, the second-biggest one-day point and percentage gain of 2014. With stock prices high, there are plenty of problems that could interfere with further gains. Those include Federal Reserve interest-rate increases due next year, uncertainty about future corporate earnings gains, soft economic growth in Europe and China, and tensions with Russia. But U.S. growth probably shouldn't be on that list. There seems to be this lingering doubt about whether the U.S. economy is really recovering, said Jim Dunigan, chief investment officer at PNC Wealth Management, which oversees 130 billion. They are probably worrying about the wrong thing.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615450","date":"2014-10-06","texts":"San Francisco real-estate agent Jeffrey Moeller wants tech entrepreneurs to spend less. A four-person startup will tell me, 'We need a 10,000-square-foot office for future growth,' he explains. I'll say, 'No, you need 1,000 square feet.' Generally, they just get angry at me, says Mr. Moeller, who during the dot-com-bust had clients that were burned by leases they couldn't afford. Mr. Moeller is resisting pressure in startup land to spend, spend, spend. The trend is especially pronounced in San Francisco, where venture capital is pouring in, competition among startups is fierce and rents are rising to dot-com-boom levels. Startups feel the need to outspend on recruiting, marketing and designing their offices, echoing poor choices made 15 years ago when companies overextended themselves, then crumbled when the market turned.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616688","date":"2014-10-06","texts":"The financial scandal du jour involves leaked audio recordings that purport to show that regulators at the Federal Reserve Bank of New York were soft on Goldman Sachs. Say it ain't so. The news is being treated as shocking by journalists who claim to be hard-headed students of financial markets. One especially impressionable columnist calls it a jaw-dropping story about Wall Street regulation. The real scandal here is the excessive faith that liberal journalists and politicians continue to put in financial regulation. The media pack is discovering regulatory capture--a mere 43 years after George Stigler published his landmark paper on the concept. The secret recordings were made by Carmen Segarra, who went to work as an examiner at the New York Fed in 2011 but was fired less than seven months later in 2012. She has filed a wrongful termination lawsuit against the regulator and says Fed officials sought to bury her claim that Goldman had no firm-wide policy on conflicts-of-interest. Goldman says it has had such policies for years, though on the same day Ms. Segarra's revelations were broadcast, the firm added new restrictions on employees trading for their own accounts. The New York Fed won against Ms. Segarra in district court, though the case is on appeal. The regulator also notes that Ms. Segarra demanded 7 million to settle her complaint. And last week New York Fed President William Dudley said, We are going to keep striving to improve, but I don't think anyone should question our motives or what we are trying to accomplish. On the recordings, regulators can be heard doing what regulators do--revealing the limits of their knowledge and demonstrating their reluctance to challenge the firms they regulate. At one point Fed officials suspect a Goldman deal with Banco Santander may have been legal but shady in the words of one regulator, and should have required Fed approval. But the regulators basically accept Goldman's explanations without a fight.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616456","date":"2014-10-07","texts":"Local governments in the U.S. are more vulnerable than states or the nation's transportation infrastructure to a potential interest-rate shock and resulting economic slowdown, according to a new report by Fitch Ratings. Most local governments are still recovering from the effects of the Great Recession and a sharp rise in interest rates, combined with low growth, could negate the effect of incremental improvements in state funding and moderate revenue increases, Fitch said. A shock could lead to budget shortfalls and higher borrowing costs, in part because it would likely hit the property tax collections that provide about three-quarters of local government revenues, Fitch said. When you think about the impact of a recession or zero-growth environment, it's often lagged with local governments, said Olu Sonola, senior director at Fitch. Most of them are just recovering, so if we do have zero growth induced by an interest-rate shock, the ones that are not fully recovered would suffer the most. States would also face economic challenges in a low-growth, higher-rate environment, since income and sales taxes provide almost two-thirds of their revenue, the report said. While sales taxes have proven relatively resilient in times of economic stress, income tax receipts often become volatile. Stock market declines can also affect state governments, since those can impact the assets of pension plans and reduce capital gains tax collections that can make up a large part of income taxes. States are still better positioned to cope than local governments, Fitch said. The federal government has provided states with some sort of aid during four of the past five recessions and states have repeatedly demonstrated the willingness to balance their budgets in the absence of federal assistance. That includes passing fiscal challenges down to local governments.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615991","date":"2014-10-08","texts":"Treasury bonds rallied Wednesday, sending the benchmark 10-year note's yield to its lowest in more than a year, as the minutes for the Federal Reserve's September policy meeting reassured investors that the central bank would be in no rush to raise interest rates. The 10-year note's yield fell to 2.331, the lowest closing level since June 2013. The previous low of 2014 was 2.334 made on Aug. 28. Yields fall as prices rise. Yields on shorter-dated notes dropped at a sharper pace after the minutes as they are directly affected by the Fed's official interest-rate outlook. Longer-dated bonds are more affected by inflation, which chips away at investors' fixed returns over time. The yield on the two-year note fell to 0.46, the lowest closing since Aug 19. The yield has tumbled after last month rising to near 0.6, the highest level since 2011. Wednesday's price rally is the latest chapter in a yearlong flight to safe assets that underscores anxiety over the global economic outlook. A broad selloff in commodities over the past few months has heightened concern over demand from once-robust China, while the eurozone is teetering on the edge of a recession and Japan's economy has failed to break out of its decadelong stagnation.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613641","date":"2014-10-10","texts":"Global stocks tumbled on Friday, dragging the Dow Jones Industrial Average into negative territory for 2014 and shaking the confidence that many investors had clung to despite lackluster growth around the world. A wave of selling in the final hour of trading on Friday left the Dow at 16544.10, down 115.15 points, or 0.7. The blue-chip index fell 466 points, or 2.7, for the week, its worst weekly performance since August. The Dow rose or fell at least 1 on three separate days, a sign of the stomach-churning worries now spreading through global financial markets. As big U.S. companies begin reporting third-quarter results, many investors fear that some firms will say weakening foreign markets and the strengthening U.S. dollar held down sales and could hurt future performance. Another problem Because stock-price valuations are high, many investors believe low interest rates and inflation, strong earnings and steady economic growth are needed to keep pushing stocks higher overall.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617406","date":"2014-10-10","texts":"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. 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. 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. 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. We need to keep sending the message...that such expansionary policy will continue for the time being, he said.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616958","date":"2014-10-15","texts":"WASHINGTON--A gauge of U.S. inflation dropped in September for the first time all year, pulled lower by falling fuel costs. The producer-price index for final demand, which measures changes in the prices firms receive when they sell goods and services, offered the latest sign that inflation pressures remain soft across the U.S. economy. The index decreased a seasonally adjusted 0.1 last month from August, the Labor Department said Wednesday. It was the first decline in the measure in more than a year, following a flat reading in August. Excluding the more volatile food and energy categories, producer prices were unchanged. Economists surveyed by The Wall Street Journal had forecast prices would rise 0.1 in September. No inflation here, wrote Jennifer Lee, senior economist at BMO Capital Markets, in a client note Wednesday. Producer prices rose 1.6 in September from a year earlier. Prices rose 1.8 for the 12-month period through August and 1.7 in July.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613667","date":"2014-10-16","texts":"History will mark down 2014 as the year predicted 49 years ago by Martha and the Vandellas. In 1965 the group recorded a Motown classic, Nowhere to Run, Nowhere to Hide. We're there, at the brink. Liberia, ISIS, Ukraine, Hong Kong, a hospital fighting Ebola infections in Dallas, the year's stock-market gains obliterated, and I almost forgot -- just last week Secretary of State John Kerry warned that climate change could end life as we know it. Then this week the clouds parted and the year's best news arrived Led by Europe's sinking economies, global economic growth is falling, taking stocks and bonds with it, and the world's central bankers say they have run out of ideas on doing anything about it. How this is good news requires explanation. The annual meetings of the International Monetary Fund concluded in Washington last weekend. This gathering of the world's finance ministers, central bankers and international financial organizations sets the tone for the direction of the world's economic prospects.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617324","date":"2014-10-16","texts":"A downturn in consumer spending threw a new domestic worry into mounting global turmoil, threatening to again undercut hopes for a breakout performance in the U.S. economy. Retail sales fell 0.3 in September, the Commerce Department said Wednesday. The broad-based decline came alongside weakening consumer confidence and minimal wage growth that has weighed on the recovery in recent years. While spending at retailers is up 4.3 from a year earlier, double the pace of inflation, the September stumble continues a choppy pattern that shows many Americans are cautious heading into the holiday shopping season. We're still trudging along, but not at the accelerating pace that we'd like to see, said Moody's Analytics economist Scott Hoyt. The data don't change expectations for modest U.S. growth in gross domestic product, but it's a cautionary note. September's reading also could be reversed or revised next month. A slowdown from strong summer auto sales, falling gasoline prices and the timing of Apple Inc.'s iPhone 6 release all played a role in the latest data. Earlier concerns of a consumer slowdown in July were eased when sales for that month were revised up to a respectable 0.3 gain from an initial flat reading.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614684","date":"2014-10-17","texts":"U.S. economic activity appears to be holding steady despite market convulsions over fears of a global slowdown, with American manufacturers and employers showing new signs of stability. Industrial production rebounded strongly in September and capacity utilization climbed to its highest level since June 2008, the Federal Reserve said Thursday. Meanwhile, the number of new claims for jobless benefits fell last week to the lowest level since 2000, the Labor Department said, signaling continued payroll gains ahead. As a share of the U.S. labor force, claims are now lower than any time since record-keeping began in the early 1970s. Manufacturing is strong and with jobless claims at the lowest level in over 14 years, it is clear that the economy and Wall Street are in different worlds, said Joel Naroff, who runs an economic-forecasting firm in Holland, Pa. U.S. employers have added 227,000 workers a month on average this year, the best annual pace of job growth since 1999. Manufacturing payrolls have increased in 15 of the past 16 months, and the average workweek of factory workers in recent months has neared its highest levels since World War II.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617256","date":"2014-10-17","texts":"Japan shares fell into correction territory Friday, pressured by global market volatility, but stocks in Indonesia jumped ahead of the inauguration of President-elect Joko Widodo. Japan's Nikkei Stock Average, Asia's biggest victim of fears about a global slowdown given the country's heavy reliance on global trade, fell 1.4 to 14,532.51. The index is now down more than 10 from its recent peak at the end of September--a move described by analysts as a correction. The last time the Nikkei had such a fall was May last year, when worries about the U.S. Federal Reserve tapering its economic stimulus program roiled markets globally. Financial markets have been struck by volatility over the past week and a half, amid concerns about a stagnating European economy, questions about the strength of the U.S. economy and again, worries about the prospect of higher U.S. interest rates. There are signs that the selloff in Asia is cooling, however.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616060","date":"2014-10-19","texts":"The roaring rally in government bonds has thrown Wall Street for a loop, but it comes as no surprise to a group of veteran money managers in Austin, Texas. Van Hoisington, president of Hoisington Investment Management Co., and Lacy Hunt, its chief economist, have been wagering for more than a decade that bond yields in the U.S. will fall, thanks to rising debt that they say inhibits economic growth, retards inflation and pushes down interest rates. In recent weeks, Hoisington, which manages 5.4 billion invested mostly in long-term U.S. Treasury securities, has looked especially prescient, as the potential for economically damaging deflation in Europe has become a serious concern for investors. The yield on 10-year government bonds has tumbled below 1 in Germany for the first time ever and below 2 in the U.S. for the first time in more than a year, a surprisingly low level at a time of healthy employment gains in the U.S. Prices rise when yields fall. While many fund managers and analysts have been predicting bond yields would move higher as the U.S. economy picks up steam and the Federal Reserve prepares to wind down its bond-buying stimulus program, Hoisington disagrees. Mr. Hunt says the U.S. debt burden will continue to weigh on rates for many years, pushing bond yields down, regardless of actions central bankers around the globe might take to reflate economic growth.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616375","date":"2014-10-20","texts":"Federal Reserve officials are taking a steady-as-she-goes stance as they prepare for their policy meeting this month, even though market volatility and uncertainties about the global economic outlook have rattled investors in recent weeks and led to some mixed messages from central bank officials. The Fed is highly likely to end its bond-buying program on schedule at the Oct. 28-29 meeting, according to recent interviews with officials and their public statements. Officials also are preparing to debate whether to fine-tune the Fed's formal assessment of the labor market and the guidance it provides about the likely path of interest rates. I haven't really changed my view on the economic outlook, San Francisco Fed President John Williams said in an interview Friday. He sees the economy growing at a 3 annual rate in the second half of the year and into 2015, the jobless rate continuing to fall and inflation gradually rising to the Fed's 2 goal. My baseline forecast implies ending the asset-purchase program on schedule. The Fed has been buying mortgage and long-term Treasury bonds since 2012 in an effort to hold down long-term interest rates and stimulate the economy. The Fed said after its September meeting it intended to end the program this month. St. Louis Fed President James Bullard said last week the Fed should consider extending the program because U.S. inflation expectations appear to be drifting down, a possible sign of continuing economic headwinds. But other officials haven't embraced the idea of continuing the bond purchases.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615219","date":"2014-10-25","texts":"The Rev. Al Sharpton once epitomized New York's bad old days of the 1980s, when the then-corpulent, gold-medallion-bedecked tub thumper inflamed racial hatred and courted violence. Today, against all expectations and at least 100 pounds lighter, he has been rehabilitated into the Democratic Party's civil-rights leader of choice. Has Mr. Sharpton changed or simply outlasted his critics President Obama's embrace of Mr. Sharpton has been particularly intense this year. On Monday he called Mr. Sharpton's radio show to discuss the Nov. 4 elections. In April the president appeared at a political rally organized by Mr. Sharpton's National Action Network. Mr. Obama's closest adviser, Valerie Jarrett, conferred with Mr. Sharpton in August about the police killing of an unarmed black teenager in Ferguson, Mo., as Mr. Sharpton led protests against the Ferguson police. The Democratic establishment is just as obsequious. It turned out in force earlier this month to celebrate Mr. Sharpton's 60th birthday party at New York's tony Four Seasons restaurant. Hillary Clinton phoned in with best wishes. Barack and Michelle Obama sent a congratulatory letter. New York Gov. Andrew Cuomo gushed He's the nation's Rev. Sharpton -- and the nation is better for it. New York Attorney General Eric Schneiderman, Sen. Kirsten Gillibrand, and Reps. Charles Rangel and Jerry Nadler rushed to pay their respects. Worrying as it might be for America to see Mr. Sharpton catapulted into the national limelight, that is nothing compared with the alarm felt by many New Yorkers now witnessing his emergence as a political power in their city. When New Yorkers elected Bill de Blasio as mayor last year, they knew they were getting a self-styled progressive who pledged to soak the rich and shackle the New York Police Department. What they didn't know was that they were also voting to bring Al Sharpton and his influence into the very heart of City Hall. The mayor's alliance with the racial provocateur is now creating the biggest crisis of his mayoralty.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615640","date":"2014-10-28","texts":"STOCKHOLM--Sweden's central bank cut its main interest rate to zero after similar attempts to boost inflation by central banks in the U.S., Japan and other parts of Europe, prompting the Swedish krona to sink to a four-year low against the euro and dollar. The surprise move by the Riksbank on Tuesday underscores the challenge for smaller neighbors of the eurozone in grappling with weak inflation. The European Central Bank's moves to bolster anemic prices in the currency bloc have caused currencies such as the krona to strengthen against the euro, which in turn, has weighed on import prices in Sweden and elsewhere in the region. With interest rates now at zero, some analysts think the Riksbank may eventually have to opt for more aggressive monetary policy tools--including a Swiss-style currency floor--to weaken the krona and bolster price growth. The Riksbank lowered its main repurchase, or repo, rate from the previous level of 0.25. The cut was larger than expected, with analysts polled by The Wall Street Journal forecasting a reduction to 0.05. Sweden last cut borrowing costs in July in a bid to boost inflation, which has been stuck around zero for most of this year--well below the 2 inflation target set for the central bank by lawmakers.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615118","date":"2014-10-30","texts":"Treasury prices gained Thursday as investors kept their optimism about the U.S. economy in check despite a solid headline reading on last quarter's growth. In late-afternoon trading, benchmark 10-year notes gained 632 in price to yield 2.305. Two-year notes rose a fraction to yield 0.481. Bond yields decline when prices rise. Those gains came despite the U.S. reporting that gross domestic product grew 3.5 in the third quarter, surpassing expectations. Investors felt details to the report were less rosy, with typically volatile spending on defense boosting the reading, while the price index continued to show a lack of inflation. The internal mix of the GDP report was not as good as the headline suggests, said Andres de Lasa, a government bond trader at Pierpont Securities, adding that prices are reverting a bit higher after Wednesday's decline. Mr. De Lasa said last session's declines came as investors placed new bets against Treasurys, particularly around the two- and five-year maturities, after a policy statement by the Federal Reserve showed increased optimism about the U.S. economy. While the central bank maintained that it will wait a considerable time before raising rates, for investors, the latest statement moves policy one step closer to tightening.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616366","date":"2014-11-01","texts":"BRUSSELS -- Anheuser-Busch InBev said weakness in the U.S., Russia and Ukraine weighed on its third-quarter sales volumes, but cost cuts and strong demand elsewhere boosted profit for the world's largest brewer. AB InBev, whose dozens of brands include Budweiser, Stella Artois and Corona, reported on Friday a profit of 2.32 billion euros 2.93 billion, up from 2.21 billion euros a year earlier. Sales volumes fell 2.6. A closely watched profit measure -- earnings before interest, taxes, depreciation and amortisation adjusted for one-time items -- grew only 1.3. That is a marked slowdown, but the brewer said the result is not reflective of expected future trends for the business. The U.S., AB InBev's largest market, continued to be a soft spot, with sales volumes off 3.7 and revenue down 2.6. The brewer has been working, unsuccessfully so far, to reverse market-share losses for its flagship Budweiser brand in the U.S.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614608","date":"2014-11-04","texts":"DENVER--For much of his tenure as Colorado's governor, John Hickenlooper tried to straddle the divide between urban and rural political factions in a state where the middle seemed safest. But Mr. Hickenlooper's centrism is being put to the test this year, and the first-term Democrat has struggled to fend off an unheralded Republican challenger in an unexpectedly tight re-election battle here. Polls show Mr. Hickenlooper essentially tied with former GOP Congressman Bob Beauprez, who lost a previous campaign for governor in 2006 and initially wasn't viewed as a big threat to Mr. Hickenlooper. Political experts say a confluence of factors have hurt Mr. Hickenlooper, a former Denver mayor who easily won the governorship in 2010 with 51 of the vote. He has faced general discontent with Democratic incumbents nationally, and he lost credibility with some Colorado voters after his attempts to tack to the center angered some on both sides of the political spectrum. After Mr. Hickenlooper signed a series of gun-control laws passed by the Democratic-controlled legislature in 2013--laws that upset many rural voters--he apologized in June to a group of sheriffs that had opposed the laws, saying he didn't realize they would be so divisive. His remarks caught both Democrats and Republicans off guard, and further inflamed the situation.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616917","date":"2014-11-12","texts":"Borrowing for U.S. colleges declined for the third year in a row as the federal government clamped down on for-profit schools and families became more cost-conscious. Federal and private-loan lending totaled 106 billion for the 2013-14 academic year, down 8 from the prior year, according to a report to be released Thursday by the nonprofit College Board. The decline marks a significant reversal in borrowing, which peaked at 122.1 billion in 2010-11 after rising for years. The drop is partly due to a decline in enrollment at for-profit colleges, where most students borrow and where default rates are generally higher. The schools have come under increased scrutiny since 2010, when a report by the Government Accountability Office found deceptive practices that ranged from promising unrealistically high pay for graduating students to not disclosing total tuition costs for students before they enrolled. At traditional colleges, families have been cutting back on expenses, experts say. A growing share of students are commuting from home rather than living on campus, for example, according to a report issued earlier this year by SLM Corp., the largest private student lender, also known as Sallie Mae. An improving economy and stock market are also likely contributing to families borrowing less, says Mark Kantrowitz, senior vice president at Edvisors.com, a Las Vegas-based firm that tracks financial aid and student loans. As the unemployment rate has declined and the stock market has improved, parents have been able to access more cash than during the downturn, he says.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617403","date":"2014-11-12","texts":"Early gains in U.S. Treasurys evaporated Wednesday as investors balanced choppy growth signals abroad with the economic progress being made at home. In late afternoon trading, benchmark 10-year notes were unchanged in price to yield 2.359. The 30-year bond erased gains to trade flat, yielding 3.094. Bond yields decline when prices rise. The sideways drift kept the market in the tight range it has established since the start of the month. Bond investors have faced dueling forces of decent U.S. economic signals and uncertainties abroad, leaving the 10-year yield in a 2.27 to 2.40 range. While some bond analysts say U.S. economic conditions and the end of the Federal Reserve's active bond purchases would typically warrant higher yields, offsetting policies overseas are capping global bond yields, including those on U.S. Treasurys. The European Central Bank is helping the dollar and dollar-denominated securities by pledging to keep pushing their rates down to a level that stimulates the economies of the eurozone, said Kevin Giddis, head of fixed-income capital markets at Raymond James. With inflation as a current nonfactor, investors will likely continue to add Treasurys to their portfolios.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613947","date":"2014-11-14","texts":"U.S. Treasury bonds rose on Friday as fresh signs of tame inflation bolstered investors' confidence that the Federal Reserve isn't in a hurry to raise interest rates. In late afternoon trading, the benchmark 10-year note was 732 higher, yielding 2.320. Yields fall as prices rise. The yield was little changed compared with 2.314 at the end of last week. It was 3 at the start of the year. Long-term inflation expectations fell to the lowest level since 2009, according to the Thomson-ReutersUniversity of Michigan November consumer sentiment survey released Friday. Meanwhile, a report from the Labor Department showed prices of imported goods fell 1.3 in October, the largest monthly decline in more than two years. Inflation chips away investors' fixed returns on bonds over time and is the main threat to long-dated bonds. Low inflation makes bonds more attractive to investors.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614717","date":"2014-11-19","texts":"WASHINGTON--Market regulators approved a new rule putting in place more stringent safeguards and oversight for computer trading on U.S. stock and options markets. The rule, proposed in March 2013, is a response to the dramatic increase in computerized trading in recent years and the ensuing glitches that have plagued markets and harmed investor confidence. From the flash crash of May 6, 2010, to the breakdown in trading on the Nasdaq Stock Market in August 2013, technology failures have become increasingly common, raising concerns about the potential for broader market failures and systemic risk. On Wednesday, the five-member Securities and Exchange Commission unanimously approved the rule, called Regulation Systems Compliance and Integrity, or Reg SCI, which will require stock and options exchanges, clearinghouses and certain other trading venues to implement procedures to safeguard computer trading systems. The rule will require so-called SCI entities to immediately notify the SEC about any major computer glitches and submit annual reports detailing how they are complying with its requirements. The number and significance of technology-related incidents have grown as our securities markets have attained unprecedented levels of automation, demonstrating the need for stronger, mandatory rules that reflect current market reality, SEC Chairman Mary Jo White said at the agency's open meeting.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613609","date":"2014-11-20","texts":"For America's 44 million senior citizens, plus tens of millions of others who are on the threshold of retirement, last month marked a watershed moment that is worth celebrating. At the end of October, the Federal Reserve announced the first step in returning to a more normal monetary policy. After nearly six years of near-zero interest rates and quantitative easing, the Fed is ending its bond-buying program and has signaled a plan to eventually begin raising the federal-funds rate, raising interest rates to more normal levels by 2017. U.S. households lost billions in interest income during the Fed's near-zero interest rate experiment. Because they are often reliant on income from savings, seniors were hit the hardest. Households headed by seniors 65-74 years old lost on average 1,900 in annual income over the past six years, according to a November 2013 McKinsey Global Institute report. For households headed by seniors 75 and older, the loss was 2,700 annually. With a median income for senior households in the U.S. of roughly 25,000, these are significant losses. In total, according to my company's calculations, approximately 58 billion in annual income has been lost by America's seniors since 2008. Retirees depend on income from their savings for basic living expenses. Without that income, many seniors have taken on greater risk to increase the potential yield on their savings, or simply spent down their nest eggs. After decades of playing by the rules, putting off spending and socking away money, seniors have taken it on the chin. This strikes a blow at the core American principles of self-reliance, individual responsibility and fairness. Their lost income affects all Americans. Seniors make up 13 of the U.S. population and spend about 1.2 trillion annually -- a big chunk of America's 11.5 trillion consumer economy. In general, seniors spend more than their income, withdrawing each year from accumulated savings, and so their interest earnings get spent right back into the economy.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842615664","date":"2014-11-20","texts":"More than usual, iron-ore miners are in a hole. And the Australian dollar hasn't thrown down a rope. Benchmark iron-ore prices are now 70 a metric ton, down nearly 50 this year. The largest miners of the steel-making commodity, with the lowest costs, have ramped up supply even as demand from China has waned. Iron ore accounted for about 40 of earnings before interest, tax, depreciation and amortization at Anglo-Australian miner BHP Billiton in the first six months of the year at peer Rio Tinto, that figure was nearly 80. Usually, lower prices for Australia's key commodities would go hand in hand with a weaker currency, easing the pain for producers there. The biggest miners price their output and report earnings in U.S. dollars, but their costs for labor, transport and services are denominated in local currency. So a weaker Aussie dollar can effectively reduce costs in U.S.-dollar terms at mines there. That hasn't happened this time. The average price of iron ore in the first half of this year was about 110, according to the Steel Index. So far in the second half, it is 86, down about 23. And while Australia's currency has fallen since early September, on average it has barely budged Just like in the first half of 2014, one Australian dollar has been worth, on average, US0.91. That makes iron ore's tumble all the tougher. Take Rio Tinto. The miner said in August that a 10 decline in the average iron-ore price would knock about US1.2 billion off 2014's underlying earnings. But a 10 drop in the Australian dollar would add back about 500 million, mitigating the impact.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615803","date":"2014-11-20","texts":"Activity in the eurozone's private sector slowed in November, according to surveys of purchasing managers, an indication the currency area's economy will continue to grow weakly, if at all, in the final quarter of the year. The surveys also found that businesses again cut their prices in the face of weak demand, a development that will concern the European Central Bank, which is struggling to raise the currency area's inflation rate from the very low level it has settled at for more than a year. Data firm Markit on Thursday said its composite purchasing managers index--a measure of activity in the manufacturing and services sectors in the currency bloc--fell to 51.4 from 52.1 in October, reaching a 16-month low. A reading below 50.0 indicates activity is declining, while a reading above that level indicates it is increasing. Preliminary results from Markit's survey of 5,000 manufacturers and service providers also showed that a significant pickup in activity is unlikely in the coming months, with new orders falling for the first time since July 2013, while employment was unchanged. The surveys also found that businesses continued to cut their prices, although at a slightly less aggressive pace.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614147","date":"2014-11-23","texts":"The divergent policy paths taken by the world's advanced economies provide lessons for global leaders navigating difficult post-crisis environments. The U.S. and U.K. appear to have gotten something right, while the eurozone and Japan have fumbled. Unemployment rates after the crisis peaked at 10 in the U.S. and 8.5 in the U.K., and are down to 5.8 and 6, respectively. The eurozone rate has climbed in the past few years to 11.5, while Japan's economy has fallen back into recession. The American and British central banks embraced aggressive easy-money policies early on. Japan lurched toward consumption-tax increases to restrain budget deficits, while Europe moved slowly in addressing weaknesses in banks and stuck to a course of fiscal austerity. Here are three lessons from this inadvertent experiment in post-crisis policy-making Quantitative easing helps address a long-standing economic riddle. What can central banks do to help the economy after short-term rates hit the zero lower bound When rates are near zero, central banks lose a tool typically employed when the economy is weak short-term interest-rate cuts. Rate cuts spur borrowing, spending and investment, helping to smooth out the economic cycle by bringing forward activity from a more optimistic future during depressed times.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614622","date":"2014-11-24","texts":"WASHINGTON--The headlines in the long-running trial over the bailout of American International Group Inc. have been dominated by three heavy hitters who testified--and one who didn't. But as testimony likely wraps up Monday after eight weeks, legal observers said two low-profile witnesses from early in the proceedings addressed what may be the key question whether the government correctly interpreted a 1930s-era section of the Federal Reserve Act to allow it to acquire a sizable equity stake in AIG to help compensate taxpayers. That issue stands out as one that former longtime AIG Chief Executive Maurice R. Hank Greenberg has the best chance of winning, said attorneys and legal scholars. The lawsuit is at its strongest as a test of the scope of a government agency's authority Did it do things it was authorized to do by law, or did it exceed those boundaries said Anthony Sabino, a professor of law at St. John's University. The government is vulnerable on that argument. The nearly two months of testimony in the U.S. Court of Federal Claims delivered few bombshells.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842613825","date":"2014-11-25","texts":"WASHINGTON--U.S. regulators said Wells Fargo & Co. has convinced them that the financial system could avoid serious damage if the bank were to ever collapse, giving it a passing grade that ratchets up the pressure on other big banks slammed for producing unrealistic bankruptcy plans a few months ago. The San Francisco-based lender graded better than its peers Tuesday on its plan for a theoretical bankruptcy, but it still doesn't have the top score regulators would like to see. The bank declined to comment. The Federal Reserve and Federal Deposit Insurance Corp. said a hypothetical bankruptcy plan submitted by Wells Fargo provides a basis for a resolution strategy that could facilitate an orderly resolution under bankruptcy but said the blueprint still had some shortcomings that must be addressed when the bank files a revised plan in 2015. The agencies didn't specify the shortcomings. Resolution is shorthand for the process of unwinding a failing firm. The results are the latest indication that regulators favor simplicity. Though it is one of the largest bank holding companies in the U.S. by assets, Wells Fargo has a simpler structure than other conglomerate financial firms. Compared to peers like J.P. Morgan Chase & Co., Wells Fargo has a relatively small broker-dealer business and a relatively small international footprint. Much of its operations take place in its FDIC-insured banking subsidiary.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614791","date":"2014-11-25","texts":"The Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency recently released their 2014 report card on leveraged lending by U.S. banks. Not surprisingly, federal regulators believe they can tell a good loan from a bad loan better than the institutional loan market populated by the world's most sophisticated investors. From the report's executive summary In many cases, examiners questioned the borrower capacity to repay newly underwritten loans if economic conditions deteriorated or if interest rates rose to historical norms. Henceforth, the frequency of reviews will increase to ensure risks are well understood and well controlled. Regulated banks are being told in no uncertain terms to stop arranging loans for the more risky, more leveraged borrowers, even though those loans are the most profitable and are quickly sold to investors -- typically hedge funds, mutual funds and publicly owned vehicles like business development companies -- not held by the banks, and so do not utilize FDIC insured deposits. Yet despite the healthy investor appetite, the federal banking regulators want the banks to rein in these profitable loans. Why are the regulators doing this It can't be because of systemic risk, too big to fail or any of the other catchphrase risks touted by those looking to justify punishing big banks for the alleged sins of the past. The regulators made it clear in their report that they want the banks to stop arranging these loans even if there is zero risk the banks will end up holding the loans. In essence, the regulators are making the banks the gatekeepers for leverage in corporate America.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616018","date":"2014-11-28","texts":"OTTAWA--Canadian economic growth slowed in the third quarter from the second, but beat market expectations and the central bank's forecast by a wide margin, led by exports and household spending. The positive surprise suggested Canada is reaping some benefits from improved U.S. demand and a weaker currency. However, a sharp drop in the price of oil--one of Canada's biggest exports--hovers over the economy as a wild card that could weigh on growth. Economic weakness in Europe and Japan and a slowdown in China could also reinforce the Bank of Canada's view that ultra-low interest rates are required for the foreseeable future. Canada's gross domestic product expanded 2.8 on an annualized basis in the third quarter, Statistics Canada said Friday. Market expectations were for 2.1 growth, according to a report from Royal Bank of Canada. The Bank of Canada had forecast a 2.3 advance for the third quarter. The report was solid, and the gain didn't rely on a big buildup in inventories. But the oil-price drop marks a new, unexpected headwind for Canada in the coming months, BMO Capital Markets said in a note to clients. The bounty of good news is almost precisely countered by the coming hit to incomes, government revenues, consumer prices and growth from sagging crude prices, which is a net negative for Canada overall. The good news is that the economy was in a surprisingly very good place heading into the energy price storm, said Douglas Porter, BMO's chief economist.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616178","date":"2014-11-28","texts":"I'm often asked, especially as the holiday gift-giving season approaches, which books I recommend for investors. I haven't kept exact count, of course, but over the past quarter-century I have surely read or tried to read a couple thousand books on investing. Nearly all of them were a tragic waste of good trees. Most of which weren't worth reading even a few pages. So I feel strongly that the usual article on best investing books has way too many entries and ends up suggesting good books you might read, rather than recommending great books you must read. Here's a list that I would still be comfortable with decades from now. Every book below has stood the test of time and, I'm confident, will remain useful for generations to come. You will quickly note that some aren't even about investing. But they all will help teach you how to think more clearly, which is the only way to become a wiser and better investor. I've listed them alphabetically by author. Why Smart People Make Big Money Mistakes and How to Correct Them, by Gary Belsky and Thomas Gilovich","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616907","date":"2014-12-02","texts":"Good morning from D.C., CEO Council Day One I'm here at our annual meeting of top global chief executives to talk about the political and economic priorities that will shape our near future. Yesterday who told us he is nearing a decision on whether to run for president. The former governor of Florida laid out a blueprint that could serve as the underpinnings of a 2016 campaign platform, in which he called for a new energy policy, an economically driven overhaul of the immigration system, and a radical transformation'' of the education system, among other reforms. Earlier, I interviewed International Monetary Fund Managing Director the state of the global economy and ways to boost growth. Falling oil prices, she said, will be a net positive for a world struggling with slowing growth. other potential 2016 contenders, experts and policy makers, including Stanley Fischer, vice chairman of the Federal Reserve, incoming Senate Majority Leader Mitch McConnell and National Security Adviser Susan Rice. For the latest updates on the conference, please and be sure to coverage. Antisocial Media When does a social-media post become a criminal threat The yesterday. We analyze its role in a case involving a Pennsylvania man's conviction following comments he made on Facebook about harming his estranged wife and others. The case, we note, pits law-enforcement and victims' rights groups against free-speech advocates and could affect how freely individuals can speak online and in traditional forums. The argument yesterday featured discussions between the justices and lawyers about violent rap music and tweets about the turmoil in Ferguson, Mo. A lawyer for the convicted man said prosecutors should have to show that someone accused of making threats intended to put the listener in fear, while justices questioned how prosecutors could prove what was in someone's mind and whether it would make sense to try. A ruling is expected by the end of June.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615293","date":"2014-12-03","texts":"Benchmark Treasury bonds were flat on Wednesday as the faster pace of expansion in the U.S. service sector was offset by disappointing jobs growth in the private sector. In late afternoon trading, the benchmark 10-year note was flat, yielding 2.285. The yield was 3 at the start of January. Yields fall as prices rise. The monthly gauge of the service sector from the Institute for Supply Management rose to 59.3 last month, the latest signal the U.S. economy has gained traction. The upbeat report sent prices of shorter-dated notes lower as it bolstered expectations the Federal Reserve will start raising interest rates sometime next year.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842616979","date":"2014-12-06","texts":"U.S. businesses ramped up hiring across the board in November, putting 2014 on pace to be the best year for job growth since 1999. Nonfarm employers added a seasonally adjusted 321,000 jobs in November, the most in one month since January 2012, . Payroll gains in October and September were revised higher as well. The unemployment rate stood at 5.8, unchanged from October but down from 7 in November 2013. Friday's report also showed nascent signs that wage growth, which has been slow during the recovery, is accelerating. If sustained, that could lift incomes and bolster consumer spending during the holidays. This is another sign that says we're taking off, said Beth Ann Bovino, chief U.S. economist at Standard & Poor's Ratings Services. The labor market's improving health could help cushion the U.S. from a deepening slowdown in other parts of the global economy. Continued strong job gains also would bring forward the day when the Federal Reserve starts raising short-term interest rates, which have been near zero for six years during the financial crisis, recession and slow recovery.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614692","date":"2014-12-11","texts":"Shares of Lending Club Corp surged 56 from their initial public offering price Thursday--a strong debut for the first publicly traded peer-to-peer lending company. That first-day pop left Lending Club at a valuation more in line with high-tech firms than the banks and other financial companies it is seeking to displace. 58 million shares for 15 apiece, above the 12 to 14 a share range that was outlined in a filing with regulators. Thursday morning, more than 100 employees, directors, investors and other guests cheered on the floor of the New York Stock Exchange as shares opened at 24.75. The stock quickly rose to a high of 25.44 and later closed at 23.43. In the crowd, all wearing matching red jackets, were founder and Chief Executive Renaud Laplanche and Morgan Stanley's former chief executive, John Mack, who is on Lending Club's board.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616113","date":"2014-12-11","texts":"WASHINGTON--Prices of imported goods posted their biggest drop in nearly 212 years in November, more evidence that falling oil prices, slow growth abroad and a strong dollar are holding down inflation in the U.S. Import prices fell 1.5 from October, the said Thursday. Compared to one year earlier, prices were down 2.3, the biggest year-over year drop since the spring of 2013. The cost of overseas goods has been falling since July alongside a steady decline in oil prices. . Prices are down more than 40 since June. But the price of other goods also is falling, potentially pushing key inflation gauges lower and complicating the Federal Reserve's plans to raise interest rates as the labor market improves and the overall economy shows signs of steadier growth. Thursday's report said petroleum import prices fell 6.9 in November from the previous month and were down 12.3 on the year. Excluding petroleum, import prices declined 0.3 from the previous month and are up only 0.1 from a year earlier.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614681","date":"2014-12-16","texts":"Activity in the eurozone's private sector picked up only modestly in December, according to surveys of purchasing managers, an indication that the currency area's economy is ending the year on a weak footing. The surveys also found that businesses again cut their prices in the face of weak demand, a development that will concern the European Central Bank, which is struggling to raise the currency area's inflation rate from the very low level it has settled at for more than a year. Data firm Markit on Tuesday said its composite purchasing managers index--a measure of activity in the manufacturing and services sectors in the currency bloc--rose to 51.7 in December from 51.1 in November. A reading below 50.0 indicates activity is declining, while a reading above that level indicates it is increasing. Preliminary results from Markit's survey of 5,000 manufacturers and service providers also showed that a significant pickup in activity is unlikely in the coming months, with new orders up only marginally following November's decline. The surveys also found that businesses continued to cut their prices, although at a slightly less aggressive pace.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842614823","date":"2014-12-17","texts":"The dollar slumped to a one-month low against the yen on Tuesday, as tumbling oil prices continued to fuel investors' concerns about global growth. The dollar fell 1.2 in late-afternoon trading to 116.35 yen, its lowest in a month. The euro gained 0.6 to 1.2512, its strongest since Nov. 27. Global oil prices fell for a fifth session in a row, with Brent crude futures ending at 59.86 a barrel, the lowest in more than five years. Some investors are worried that oil's drop signals a softening global economy, prompting them to shed their bets on a stronger dollar and buy haven assets such as the Japanese yen and U.S. Treasurys. The concern is that the decline in oil prices will be more persistent, and that this will start to hurt economies and change central banks' behavior, said Sireen Harajli, foreign-exchange strategist at Mizuho Bank. So investors have headed into assets that are considered safer, like the yen and the Swiss franc, which is why we see the dollar-yen pair back around 116 yen.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842617407","date":"2014-12-21","texts":"The elastic U.S. stock market keeps snapping back, but last week's surge is deepening concerns about a possible stock-price stumble in early 2015. A burst of buying by mutual-fund managers and other investors who are trying to catch up with the overall stock market's climb this year helped spark a 736-point jump by the Dow Jones Industrial Average from Wednesday through Friday. Three straight days of gains left the blue chip stock index at 17804.80, or less than 1 below its record of 17958.79 reached Dec. 5. The surge came right after an 890-point slide that included declines in six out of seven trading days. Fuel for last week's stock-market gains came from investor confidence that the U.S. economic recovery is for real, inflation will stay low and interest-rate increases expected from the Federal Reserve next year won't end the bull market. Another source of upward momentum for stocks is causing jitters, though. Many money managers whose recent performance lags behind the overall market are hoping for a last-minute boost from pumping cash into especially fast-rising stocks, investment strategists say.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614252","date":"2014-12-22","texts":"WASHINGTON--Sales of previously owned homes tumbled to a six-month low in November, a sign the housing market continues to underperform despite a burst of stronger economic growth. Existing-home sales declined 6.1 in November from a month earlier to a seasonally adjusted annual rate of 4.93 million, the National Association of Realtors said Monday. That was the lowest level since May. November's sales were 2.1 higher than a year ago and followed a particularly strong October, when sales reached their highest level of the year. NAR chief economist Lawrence Yun called last month's decline puzzling given strong job creation, rising consumer confidence, low interest rates and near-record stock-market levels. Factors for improving home sales are rising, Mr. Yun said. Today's decline, which is a large decline, is a bit puzzling, and I think it will be a one-month aberration. He pointed to several possible reasons for the latest drop. Tightening inventory levels, exacerbated by weak home construction, have left consumers with fewer choices. And stock-market volatility in October may have rattled prospective buyers.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616931","date":"2014-12-22","texts":"Benchmark Treasury bonds strengthened on Monday, underscoring the appeal of highly-liquid assets as the end of the year approaches. In late-afternoon trading, the yield on the benchmark 10-year note fell to 2.157 from 2.178 Friday. When bond yields fall, their yields rise. Traders said the buying reflected some tweaking of bond portfolios and that the price moves might have been exaggerated by thinner trading before Thursday's Christmas holiday. It just shows a continuation of demand for longer-dated Treasury bonds'' which have rallied during the course of 2014, said Scott Buchta, head of fixed-income strategy at Brean Capital LLC. Trading volumes have begun to settle down as many accounts begin to close out their books for 2014.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842613758","date":"2014-12-23","texts":"The dollar gained against the yen and the euro on Tuesday after the U.S. economy grew at , bolstering the market's expectations for higher interest rates. The dollar increased 0.6 in late-afternoon trade to 120.77 yen, a two-week high. The euro pushed to a more than two-year low in early trade and was recently down 0.5 to 1.2169. U.S. gross domestic product grew 5 in the third quarter, well above last month's estimate of 3.9, the Commerce Department said Tuesday. It was the fastest pace since GDP grew 6.9 during the third quarter of 2003. The GDP data encouraged investors who have been betting that a recovering U.S. economy would spur the Federal Reserve to raise interest rates before other major central banks do. Higher U.S. rates would bring more investors to the dollar, as they would increase returns on assets denominated in the currency. With 5 growth in the U.S. now, even if we don't improve at that pace next quarter, we're still light years ahead of the eurozone and Japan, said Joseph Quinlan, chief market strategist at U.S. Trust Private Wealth Management. It sets us up for Fed tightening by the second half of next year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842615135","date":"2014-12-23","texts":"Gold prices fell Tuesday, weighed down by a larger-than-expected revision to U.S. economic growth. Gold for February delivery, the most actively traded contract, closed down 1.80, or 0.2, at 1,178.00 a troy ounce on the Comex division of the New York Mercantile Exchange. The U.S. economy posted its strongest growth in more than a decade during the third quarter, supported by robust consumer spending and business investment, Commerce Department data showed Tuesday. Gross domestic product growth was revised to 5 in the period, beating analysts' expectations of 4.3 expansion. The economy's robust expansion bolstered the case for the Federal Reserve to raise interest rates next year, hurting prices for gold, which struggles to compete with yield-bearing investments during times of tighter monetary policy. Gold didn't like this number at all, said Bob Haberkorn, a broker at RJO Futures. There is now more ammo for the Fed to raise rates.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842617266","date":"2014-12-24","texts":"The dollar gained against the yen and the euro on Tuesday after the U.S. economy grew at the fastest pace in 11 years, bolstering the market's expectations for higher interest rates. The dollar increased 0.6 in late-afternoon trade to 120.77 yen, a two-week high. The euro pushed to a more than two-year low in early trade and was recently down 0.5 to 1.2169. U.S. gross domestic product grew 5 in the third quarter, well above last month's estimate of 3.9, the Commerce Department said Tuesday. It was the fastest pace since GDP grew 6.9 during the third quarter of 2003. The GDP data encouraged investors who have been betting that a recovering U.S. economy would spur the Federal Reserve to raise interest rates before other major central banks do. Higher U.S. rates would bring more investors to the dollar, as they would increase returns on assets denominated in the currency. With 5 growth in the U.S. now, even if we don't improve at that pace next quarter, we're still light years ahead of the eurozone and Japan, said Joseph Quinlan, chief market strategist at U.S. Trust Private Wealth Management.","wsj":1,"wapo":0,"economy":1,"noneconomy":0}
{"id":"842614354","date":"2014-12-26","texts":"Gold prices rose Friday, as investors locked in profits on bets for the precious metal's decline in a thinly traded market. Gold for February delivery, the most actively traded contract, closed up 21.80, or 1.9, at 1,195.30 a troy ounce on the Comex division of the New York Mercantile Exchange. It was the highest settlement since Dec. 19. Prices for the precious metal are down 3 from December's highs, as a swiftly improving U.S. economy has raised concerns that the Federal Reserve will lift interest rates sooner than expected in 2015. Gold struggles to compete with yield-bearing investments when rates rise. On Friday, some investors appeared to be buying gold to cover their bets on a decline in prices, while others were looking for bargains after the metal's drop, analysts said. Thin, postholiday trading conditions are likely exacerbating the bigger daily price move, said Jim Wyckoff, an analyst at Kitco.com, in a note to clients. Many traders and investors have checked out for the week, if not for the rest of the year.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}
{"id":"842616130","date":"2014-12-31","texts":"Gold prices ended down for second year in a row, weighed down by investors' expectations of higher U.S. interest rates and tame inflation around the world. Gold for February delivery, the most actively traded contract, closed down 16.30, at 1,184.10 a troy ounce on the Comex division of the New York Mercantile Exchange. Prices fell 1.5 for the year. A stronger dollar weighed on gold Wednesday, making the metal more expensive for buyers holding other currencies. The WSJ Dollar Index, which gauges the dollar against other major currencies, was recently up 0.4, at 83.00. The way things stand, I would be looking to sell into any rallies from here, said Bob Haberkorn, a broker at RJO Futures. Gold will continue to be weak because of rate expectations. An improving U.S. economy has sparked expectations that the Federal Reserve will raise interest rates in 2015, a move that would hurt gold, which struggles to compete with yield-bearing investments in times of tighter monetary policy. At the same time, inflation has been elusive in the world's major economies, reducing gold's attractiveness as a hedge against rising consumer prices.","wsj":1,"wapo":0,"economy":0,"noneconomy":1}