SAVING FOR RETIREMENT IS TOUGH FIGURING OUT HOW MUCH YOU NEED TO SAVE CAN BE EVEN TOUGHER IT IS LIKE TRYING TO HIT A MOVING TARGET WHILE BLINDFOLDED SAYS STEVEN NORWITZ A VICE PRESIDENT WITH T ROWE PRICE ASSOCIATES A BALTIMORE MUTUALFUND COMPANY THE ONLY THING YOU KNOW FOR SURE IS THAT IT'S A HIGH PRICE TAG IS THERE A SHORTCUT TAKE A LOOK AT THE TABLES THAT ACCOMPANY THIS STORY WHICH WERE PUT TOGETHER BY T ROWE PRICE AT THE REQUEST OF THIS NEWSPAPER THE TABLES AIM TO GIVE YOU A ROUGH IDEA OF HOW MUCH YOU SHOULD SAVE EACH YEAR FOR RETIREMENT HERE'S HOW TO USE THEM START BY CONSIDERING WHAT YOU'RE LIKELY TO GET FROM SOCIAL SECURITY AND WHETHER YOU WILL RECEIVE MONEY FROM A TRADITIONAL COMPANY PENSION PLAN ONE THAT PAYS A CERTAIN DEFINED BENEFIT THAT'S RELATED TO YOUR SALARY AND YEARS OF SERVICE MANY EMPLOYEES WON'T RECEIVE A TRADITIONAL PENSION INSTEAD EMPLOYERS ARE SWITCHING TO DEFINED CONTRIBUTION PLANS SUCH AS 401KS WITH THESE PLANS THE AMOUNT OF MONEY YOU HAVE IN RETIREMENT DEPENDS ON HOW MUCH YOU AND YOUR EMPLOYER CONTRIBUTE EACH YEAR TO THE PLAN AND HOW ASTUTELY YOU INVEST THE MONEY SOCIAL SECURITY CAN BE A SIGNIFICANT SOURCE OF RETIREMENT INCOME IF YOU RETIRE LATER OR HAVE RELATIVELY MODEST NEEDS IN 1994 FOR INSTANCE THE MAXIMUM SOCIAL SECURITY BENEFIT WILL BE 20640 FOR A COUPLE APPLYING JOINTLY AND 13764 FOR AN INDIVIDUAL PRESUMING YOU TAKE SOCIAL SECURITY AT AGE 65 BUT YOUR BENEFITS WILL BE 20 LOWER IF YOU APPLY FOR SOCIAL SECURITY AT AGE 62 THE FIRST YEAR OF ELIGIBILITY AND IF YOU RETIRE EVEN EARLIER YOU WILL INITIALLY HAVE TO PAY YOUR ENTIRE LIVING EXPENSES WITHOUT ANY HELP FROM THE GOVERNMENT ONCE YOU'VE GOT A HANDLE ON YOUR LIKELY INCOME FROM SOCIAL SECURITY AND YOUR COMPANY PENSION CONSIDER HOW MUCH ADDITIONAL MONEY YOU'LL NEED YOU MIGHT NOT BE COVERED BY A COMPANY PENSION FOR INSTANCE BUT YOU FIGURE THAT SOCIAL SECURITY WILL REPLACE ABOUT 20 OF YOUR SALARY IN RETIREMENT YOU WANT TO HAVE AN INCOME EQUAL TO 70 OF YOUR CURRENT SALARY SO THE ADDITIONAL MONEY 50 OF YOUR SALARY WILL HAVE TO COME FROM YOUR SAVINGS INCLUDING MONEY SOCKED AWAY IN 401K PLANS AND INDIVIDUAL RETIREMENT ACCOUNTS IF 50 IS YOUR GOAL HOW MUCH DO YOU NEED TO SAVE EACH YEAR TAKE A LOOK AT THE FIRST OF THE TWO TABLES STEP NO 1 IT TELLS YOU HOW MUCH YOU NEED TO SAVE DEPENDING ON HOW FAR AWAY YOUR RETIREMENT IS IF YOU ARE 20 YEARS FROM QUITTING THE WORK FORCE AND LOOKING TO REPLICATE 50 OF YOUR CURRENT SALARY THE FIRST TABLE SUGGESTS A 22 ANNUAL SAVINGS RATE PRESUMING YOU DON'T CURRENTLY HAVE ANY SAVINGS BUT MANY PEOPLE ESPECIALLY THOSE CLOSER TO RETIREMENT WILL ALREADY HAVE A SUBSTANTIAL SUM STASHED AWAY TO ADJUST YOUR SAVINGS RATE FOR MONEY YOU ALREADY HAVE SAVED GO TO THE SECOND TABLE STEP NO 2 SUPPOSE YOUR SAVINGS EQUAL TWICE YOUR CURRENT SALARY IF YOU WANT TO RETIRE IN 20 YEARS THE SECOND TABLE SUGGESTS YOU CAN REDUCE THE 22 SAVINGS RATE YOU GOT IN THE FIRST STEP BY 16 PERCENTAGE POINTS THUS YOUR ANNUAL SAVINGS RATE ADJUSTED FOR YOUR CURRENT SAVINGS WOULD BE 6 FIGURES LIKE THIS OF COURSE ARE ONLY AS GOOD AS THE ASSUMPTIONS THEY'RE BASED ON THE TABLES ASSUME THAT YOUR INVESTMENTS EARN 9 A YEAR IN THE PERIOD PRIOR TO RETIREMENT AND 8 ANNUALLY AFTER RETIREMENT WITH INFLATION RUNNING AT 3 A YEAR THUS TO MAKE THE NUMBERS IN THE TABLE WORK YOU NEED TO EARN 6 A YEAR MORE THAN INFLATION BEFORE YOU RETIRE AND 5 ABOVE INFLATION AFTERWARD THESE ARE PRETAX RATES OF RETURN DURING THE PAST 20 YEARS YOU COULD HAVE EARNED 6 MORE THAN INFLATION BY DIVIDING YOUR MONEY EQUALLY BETWEEN STOCKS AND BONDS WHILE A 5 ANNUAL GAIN WOULD HAVE BEEN POSSIBLE WITH 30 STOCKS AND 70 BONDS SAYS WILLIAM JOHN MIKUS A MANAGING DIRECTOR WITH FINANCIAL DESIGN A LOS ANGELES INVESTMENT ADVISER IN BOTH CASES THE STOCK COMPONENT INCLUDES A HEALTHY DOSE OF US SMALLCOMPANY STOCKS AND FOREIGN STOCKS GIVEN THAT THE NEXT 20 YEARS ARE UNLIKELY TO MIRROR THE PAST 20 YEARS YOU CAN'T EXPECT TO GET THE SAME RATES OF RETURN WITH THOSE MIXES SAYS MR MIKUS TO EARN 6 AND 5 A YEAR MORE THAN INFLATION YOU WILL PROBABLY NEED TO HAVE A SLIGHTLY MORE AGGRESSIVE ALLOCATION BY PUTTING MORE INTO STOCKS FOR INSTANCE A RETIREE MIGHT WANT TO HAVE AS MUCH AS 50 IN STOCKS THOSE WHO AREN'T WILLING TO INVEST SO HEAVILY IN STOCKS WILL EITHER HAVE TO SAVE MORE OR PLAN ON A SHORTER LESS COMFORTABLE RETIREMENT IF YOU'RE NOT INCLINED TO INVEST IN THE STOCK MARKET YOU'RE EITHER GOING TO HAVE TO DELAY RETIREMENT OR SPEND LESS IN RETIREMENT SAYS KENNETH KLEGON A FINANCIAL PLANNER IN LANSING MICH THE TWO TABLES ALSO ASSUME THAT YOUR PORTFOLIO PAYS YOU AN INCOME THAT RISES EACH YEAR WITH INFLATION THROUGH A RETIREMENT THAT LASTS 30 YEARS AT THE END OF THE 30 YEARS YOUR PORTFOLIO WOULD BE ENTIRELY DEPLETED A RETIREMENT STRETCHING OUT OVER 30 YEARS MAY SEEM UNLIKELY ESPECIALLY IF YOU RETIRE AT AGE 65 BUT WHEN MR KLEGON PUTS TOGETHER FINANCIAL PLANS FOR 65 YEAR OLDS HE PRESUMES THAT MEN WILL LIVE UNTIL AGE 90 AND WOMEN UNTIL AGE 95 THE MORTALITY TABLES INDICATE THAT ONLY 15 OF 65 YEAR OLDS WILL LIVE BEYOND THOSE AGES MOREOVER IF YOU QUIT THE WORK FORCE AT AGE 55 OR 60 THE ASSUMPTIONS IN THE TABLES SUGGEST THAT YOUR MONEY WILL RUN OUT WHEN YOU TURN 85 OR 90 IF YOU RETIRE AT AGE 55 YOU MAY WANT TO SAVE MORE BECAUSE OF THE CHANCE OF LIVING BEYOND AGE 85 SAYS MR KLEGON THE CONSEQUENCES AREN'T NECESSARILY DIRE IF YOU DO OUTLIVE YOUR SAVINGS MR KLEGON NOTES THAT MANY PEOPLE CAN TAP INTO THE EQUITY IN THEIR HOMES THROUGH A REVERSE MORTGAGE OR BY MOVING TO SMALLER HOMES IN ADDITION YOU'LL STILL HAVE SOCIAL SECURITY COMING IN AND YOUR PENSION MIGHT BE COMING IN AS WELL MR KLEGON SAYS AND AS WE AGE HE ADDS WE TYPICALLY SPEND LESS MONEY AT SOME AGE SAY AGE 80 OUR SPENDING SLOWS DOWN WE GO OUT LESS WE GO ON LESS TRIPS THE TABLES HOLD SOME IMPORTANT LESSONS FOR THOSE SAVING FOR RETIREMENT THE CLEAR IMPLICATION IS THAT YOU HAVE TO START EARLY AND BE DISCIPLINED IF YOU'RE GOING TO MEET YOUR RETIREMENT NEEDS SAYS T ROWE PRICE'S MR NORWITZ SOMEBODY WHO IS 35 YEARS FROM RETIREMENT CAN REPLICATE 70 OF HIS OR HER SALARY BY SAVING JUST 10 A YEAR BUT BY WAITING UNTIL YOU ARE 25 YEARS FROM RETIREMENT THE NECESSARY SAVINGS RATE JUMPS TO 21 RETIRING EARLY IS THE PROFESSED DESIRE OF MANY YET THE TABLES INDICATE IT'S ENORMOUSLY DIFFICULT TO DO IN PRACTICE THE DIFFERENCE BETWEEN RETIRING AT 55 AND RETIRING AT 65 IS HUGE SAYS ROBERT BINGHAM AN INVESTMENT ADVISER WITH SAN FRANCISCO'S BINGHAM OSBORN & SCARBOROUGH YOU HAVE 10 MORE YEARS THAT YOUR ASSETS HAVE TO WORK FOR YOU IF YOU RETIRE AT AGE 55 AS WELL AS 10 YEARS LESS TO SAVE CONVERSELY DELAYING RETIREMENT CAN MAKE A HUGE DIFFERENCE TO THE AMOUNT YOU NEED TO SAVE EACH YEAR FOR EVERY YEAR YOU DELAY YOUR RETIREMENT THERE'S A TWOSIDED BENEFIT SAYS MR KLEGON THE FINANCIAL PLANNER THERE'S ONE YEAR LESS YOU'LL BE RETIRED AND THERE'S ONE MORE YEAR TO SAVE FOR RETIREMENT AND TO LET YOUR SAVINGS GROW IN USING THE TABLES BE REALISTIC ABOUT HOW MUCH YOU CAN SAVE SAYS MR NORWITZ IF YOUR CHILDREN ARE OUT OF COLLEGE AND YOUR MORTGAGE IS PAID OFF YOU MIGHT HIT A SAVINGS RATE IN EXCESS OF 20 HE SAYS BUT MOST PEOPLE SHOULD THINK IN TERMS OF A 15 SAVINGS GOAL THROUGH A COMBINATION OF THEIR OWN SAVINGS AND EMPLOYER CONTRIBUTIONS TO THINGS LIKE 401K PLANS DECIDE WHAT PERCENTAGE OF YOUR ANNUAL SALARY YOU WILL NEED IN RETIREMENT ON TOP OF TRADITIONAL COMPANY PENSION IF ANY AND SOCIAL SECURITY THEN USE THIS TABLE TO FIND THE PERCENTAGE OF SALARY YOU NEED TO SAVE EACH YEAR DEPENDING ON HOW LONG YOU HAVE UNTIL RETIREMENT ADJUST THE REQUIRED SAVINGS RATE TO TAKE ACCOUNT OF YOUR CURRENT SAVINGS BY FINDING THE APPROPRIATE NUMBER IN THIS TABLE AND SUBTRACTING IT FROM THE PERCENTAGE DETERMINED IN STEP 1 IF YOU ARE 25 YEARS FROM RETIREMENT AND WANT A RETIREMENT INCOME EQUAL TO 70 OF YOUR SALARY THE FIRST TABLE SUGGESTS YOU NEED TO SAVE 21 A YEAR BUT IF YOU ALREADY HAVE SAVINGS EQUAL TO 200 OF YOUR SALARY YOU WOULD REDUCE THAT NUMBER BY 14 TO GET A 7 ANNUAL SAVINGS RATE NOTE TABLES ASSUME 9 ANNUAL INVESTMENT GAINS PRIOR TO RETIREMENT 8 ANNUAL GAINS AFTER RETIREMENT 3 INFLATION RETIREMENT INCOME MUST LAST 30 YEARS AT WHICH POINT YOUR PORTFOLIO IS DEPLETED 9401030129 940103 LETTERS TO THE EDITOR FAIR SHARE' LIABILITY FOR TOXIC SITE CLEANUP YES IT'S TRUE THAT THE CHEMICAL MANUFACTURES ASSOCIATION OPPOSES SCRAPPING SUPERFUND'S RETROACTIVE LIABILITY STANDARD CLINTON FACING CONFLICTING ADVICE ON SUPERFUND MAY ATTEMPT TO EAST THE BURDEN ON BUSINESS DEC 2 BECAUSE OF UNCERTAINTIES OVER HOW CLEANUPS WILL BE FUNDED BUT OUR MAIN QUARREL WITH THE TREASURY DEPARTMENT'S PLAN IS THAT IT WILL MEAN MORE LITIGATION OVER SUPERFUND CLEANUPS NOT LESS ELIMINATING RETROACTIVE LIABILITY MEANS THAT NO PARTY WILL BE HELD RESPONSIBLE FOR SITE CLEANUPS BEFORE A CERTAIN DATE 1980 IS LIKELY SINCE THAT'S THE YEAR SUPERFUND WAS ENACTED UNDER THIS PLAN PARTIES WILL BE HELD RESPONSIBLE FOR CLEANING UP WASTES SENT TO SITES AFTER 1980 THIS PROVISION CREATES A GIANT LOOPHOLE FOR LAWYERS PARTIES WILL LITIGATE LIKE CRAZY TO PROVE THEY SENT THEIR WASTE TO A SITE BEFORE THE CUTOFF DATE WHILE THE PARTIES LITIGATE SITES GO UNCLEANED CMA HAS DEVELOPED A PLAN THAT IS INTENDED TO SPEED CLEANUPS BY DEALING THE LAWYERS OUT OF THE GAME WE WOULD ELIMINATE CONTRIBUTION SUITS BY DESIGNING A SYSTEM THAT ASSIGNS CLEANUP RESPONSIBILITIES BASED ON WHAT A PARTY ACTUALLY CONTRIBUTED TO CONTAMINATING A SITE WE CALL OUR PLAN FAIR SHARE LIABILITY HERE'S HOW IT WORKS EPA IDENTIFIES ALL THE PARTIES AT A SUPERFUND SITE AN ADMINISTRATIVE LAW JUDGE ALLOCATES RESPONSIBILITY FOR SITE CLEANUPS BASED ON WHAT A PARTY CONTRIBUTED TO THE SITE THE JUDGE'S DECISION IS BINDING THAT MEANS PARTIES WILL BE PROHIBITED FROM SUING EACH OTHER IN ORDER TO SHIFT LIABILITY EACH PARTY PAYS ITS FAIR SHARE FOR A SITE CLEANUP NOT A PENNY MORE NOT A PENNY LESS THIS PLAN SCRAPS SUPERFUND'S JOINT AND SEVERAL LIABILITY CLAUSE THAT'S THE PART OF THE LAW THAT ALLOWS EPA TO STICK ONE PARTY WITH THE ENTIRE BILL FOR A MULTIMILLION DOLLAR CLEANUP REGARDLESS OF WHAT THAT PARTY DID TO CONTAMINATE THE SITE IT'S THIS PART OF THE LAW THAT HAS TURNED SUPERFUND INTO A LAWYER'S PARADISE AND HAS BROUGHT THE PACE OF CLEANUPS TO A CRAWL 9401030128 940103 1993 YEAREND REVIEW OF MARKETS AND FINANCE REVIEW OF MARKETS VANDERHEIDEN CHOICES TOP OTHER PICKERS A YEAR AGO IN THIS SPACE THREE PROMINENT WALL STREET PROFESSIONALS AND ONE COMPUTER PROGRAM PROVIDED THEIR FAVORITE STOCK PICKS FOR 1993 SOME THRIVED SOME DIVED GEORGE VANDERHEIDEN MANAGER OF THE FIDELITY DESTINY FUND IN BOSTON BURNED UP THE TRACK WITH AN AVERAGE GAIN OF 691 FOUR OF HIS FIVE STOCK PICKS HARMAN INTERNATIONAL INDUSTRIES MERISEL HOSPITAL CORP OF AMERICA AND VARITY ROSE MORE THAN 77 EVEN MR VANDERHEIDEN'S LAGGARD GOOD GUYS ROSE 209 ALL FIGURES INCLUDE DIVIDENDS CALCULATIONS WERE PERFORMED BY HULBERT FINANCIAL DIGEST DAVID HENWOOD DIRECTOR OF RESEARCH AT RAYMOND JAMES THE ST PETERSBURG FLA BROKERAGE HOUSE ACHIEVED AN AVERAGE GAIN OF 404 HE MORE THAN DOUBLED HIS MONEY IN PROMUS THE CASINO COMPANY THE COMPUTER PROGRAM MACROWORLD SHORTCIRCUITED PICKING LOSERS IN FOUR CASES OUT OF FIVE AVERAGE LOSS 115 JAMES H MORGAN PRESIDENT OF INTERSTATE/JOHNSON LANE WHO HAS DONE EXTREMELY WELL IN SIMILAR STOCKPICKING FORUMS IN THE PAST SUFFERED AN OFF YEAR BIG LOSSES IN HEALTH IMAGES AND PCA INTERNATIONAL DRAGGED HIM DOWN TO AN AVERAGE LOSS OF 167 FOR THE COMING YEAR MR VANDERHEIDEN RECOMMENDS CHERRY CORP ANTHEM ELECTRONICS INC AND PINKERTON'S INC THE COMMON THREAD IS THAT ALL THREE HAVE LARGE DOLLAR AMOUNTS OF SALES PER SHARE AND A GOOD CHANCE TO IMPROVE THEIR PROFIT MARGINS CHERRY MAKES AUTOMOTIVE ELECTRONIC PARTS SUCH AS DIRECTIONAL SIGNALS AND POWER DOOR LOCKS IT BENEFITS AS AUTO MAKERS OUTSOURCE THE TASK OF MAKING SUCH GIZMOS TO SAVE ON LABOR COSTS ANTHEM RAN INTO A PROBLEM LAST YEAR IN DISKDRIVE MANUFACTURING BUT SHOULD BOUNCE BACK AS ITS ELECTRONICSDISTRIBUTION BUSINESS REMAINS STRONG MR VANDERHEIDEN BELIEVES PINKERTON'S IS A LOWCOST PROVIDER OF SECURITY SERVICES TO COMPANIES SUCH AS GENERAL MOTORS ITS PROFITS SHOULD IMPROVE THIS YEAR DEMONSTRATING THAT CRIME PAYS MR VANDERHEIDEN SAYS 9401030126 940103 INDUSTRY FOCUS EUROPEAN VENTURE CAPITALISTS TRY TO THAW US CHILL NATIONAL DIVERSITY AND A LACK OF SUITABLE STOCK MARKETS POSE PROBLEMS BY MARTIN DU BOIS STAFF REPORTER OF THE WALL STREET JOURNAL EUROPEAN VENTURE CAPITALISTS CAME AWAY WORRIED FROM A US TRIP LATE LAST YEAR THEY FOUND THAT FOR AMERICAN INVESTORS THE CONTINENT REMAINS VERY MUCH THE OLD WORLD EUROPE'S VENTURE CAPITAL ASSOCIATION A BRUSSELSBASED INDUSTRY FEDERATION STRUGGLED TO DRUM UP INVESTOR INTEREST DURING THE WEEKLONG US ROADSHOW WHILE A FEW CORPORATE INVESTORS PENSION FUNDS INVESTMENT BANKS AND INSURANCE COMPANIES SHOWED STRONG INTEREST IN EUROPE'S 227 BILLION VENTURECAPITAL INDUSTRY MANY POOHPOOHED THE OLD CONTINENT THE ASSOCIATION'S OFFICIALS SAY THE PERCEPTION IS THAT THERE'S ASIA LATIN AMERICA AND EUROPE COMES THIRD SAYS THE GROUP'S MARKETING MANAGER CATHERINE LEWIS WHO ALONG WITH OTHER ASSOCIATION OFFICIALS VISITED SEVERAL US INSTITUTIONAL INVESTORS AS WELL AS NASDAQ OFFICES THE FEDERATION WHICH AIMS TO PROMOTE EUROPEAN VENTURE CAPITAL AND DEFEND THE INDUSTRY'S INTERESTS WITH LEGISLATORS OF THE EUROPEAN UNION FORMERLY THE EUROPEAN COMMUNITY SAYS EUROPE HAS AN IMAGE PROBLEM US INVESTORS THEY SAY APPEAR DISAPPOINTED BY THE GAP BETWEEN THE EUROPEAN REALITY THE STEPBYSTEP PAINSTAKING PACE OF EU INTEGRATION AND THE HIGH EXPECTATIONS ROUSED LITTLE MORE THAN A YEAR AGO BY THE EU'S 1992 PROGRAM AFTER 1992 THEY THOUGHT THAT ALL OF A SUDDEN THERE WOULD BE A UNITED STATES OF EUROPE WITH A SINGLE CURRENCY SAYS MS LEWIS WHAT FOREIGN INVESTORS SAW IN 1993 WAS EUROPE'S ECONOMIC RECESSION CONTINUED WAR IN THE FORMER YUGOSLAVIA THE BREAKUP OF THE EXCHANGE RATE MECHANISM AND CORRUPTION IN ITALY ALL OF THIS DOESN'T ADD UP TO ANY CONFIDENCE MS LEWIS SAYS DURING THEIR TRIP THE GROUP'S OFFICIALS SAID THEY SOUGHT TO EXPLAIN THAT EUROPEAN UNIFICATION IS A GRADUAL PROCESS MARKED BY FORWARD LEAPS BUT ALSO SETBACKS THAT'S A DIFFICULT MESSAGE TO DELIVER AND ONE THAT EVEN MANY EUROPEANS HAVE TROUBLE DIGESTING BUT THE OFFICIALS SAY THEY DID MANAGE TO CLEAR UP A FEW OF THE MISCONCEPTIONS ABOUT EUROPE AND THAT THEY'RE PLANNING FURTHER ROADSHOWS IN THE US STILL FACTORS OTHER THAN MERE MISCONCEPTIONS ARE UNDERMINING THE VITALITY OF EUROPE'S VENTURECAPITAL BUSINESS WOULDBE INVESTORS LACK A PROPER MARKET IN WHICH THEY CAN SELL STAKES IN FLEDGLING COMPANIES EFFORTS TO SET UP PARALLEL SMALLCAPITALIZATION MARKETS AT VARIOUS EUROPEAN STOCK MARKETS HAVE BEEN DISAPPOINTING LAST MONTH THE LONDON STOCK EXCHANGE ABANDONED PLANS TO SET UP AN ENTERPRISE MARKET FOR SMALL COMPANIES MEANWHILE ACTIVITY IS SLUGGISH ON THE FEW SMALLCAPITALIZATION MARKETS THAT EXIST SUCH AS THE SECOND MARCHE IN PARIS CREATING AN OPEN AND LIQUID CAPITAL MARKET FOR SMALL COMPANIES IS THE VENTURECAPITAL INDUSTRY'S TOP PRIORITY RIGHT NOW SAYS THE FEDERATION'S SECRETARY GENERAL WILLIAM STEVENS WE'RE SEEKING WAYS TO IMPROVE THE EXISTING MARKETS AND ARE LOOKING AT NEW OPTIONS HE SAYS THE EUROPEAN COMMISSION FORMERLY THE EUROPEAN COMMUNITY COMMISSION IS AWARE THAT SMALL ENTERPRISES ARE ONE OF ITS MAIN HOPES FOR BOLSTERING EMPLOYMENT AND IS CURRENTLY DISCUSSING VARIOUS OPTIONS WITH THE INDUSTRY ONE WOULD BE TO LOWER THE ENTRY REQUIREMENTS TO OBTAIN A LISTING ON AN EXISTING STOCK EXCHANGE EASIER ENTRY RULES HELPED 50 CONCERNS JOIN THE LONDON EXCHANGE THIS YEAR AND VENTURE CAPITALISTS SAY SIMILAR MEASURES COULD BE SPREAD TO OTHER EUROPEAN EXCHANGES PLANS ARE AFOOT TO AMEND CERTAIN RESTRICTIVE PROVISIONS IN A 1980 EU DIRECTIVE COORDINATING STOCKLISTING REQUIREMENTS BUT A PLANNED DIRECTIVE TO LIBERALIZE CROSSBORDER INVESTMENTS BY EU PENSION FUNDS MEANWHILE REMAINS STUCK AMID POLITICAL SQUABBLING TO GET THE BALL ROLLING THE INDUSTRY GROUP AND THE EUROPEAN COMMISSION PLAN TO BRING ENTREPRENEURS PROFESSIONAL INVESTORS AND FUND MANAGERS TOGETHER TO DISCUSS OTHER IDEAS SUCH AS EASING CROSSBORDER STOCK LISTINGS AND HARMONIZING ACCOUNTING REQUIREMENTS THRIVING STOCK MARKETS INDEED REQUIRE ONE KEY INGREDIENT INFORMATION BUT EACH EUROPEAN COUNTRY HAS DIFFERENT RULES ON ACCOUNTING PRINCIPLES REPORTING REQUIREMENTS AND TAXATION IN ADDITION TO THE NATURAL LANGUAGE BARRIERS FOR EUROPEWIDE INVESTORS THAT MEANS OPERATING IN A PARTICULARLY OPAQUE AND THUS POTENTIALLY RISKY ENVIRONMENT STARTUPS AND VENTURECAPITAL FUNDS FIND IT HARD TO RAISE MONEY OUTSIDE THEIR HOME MARKET EUROPE'S VENTURECAPITAL INDUSTRY IS TRYING TO FIX THAT BY INTRODUCING COMMON GUIDELINES TO GAUGE VENTURE FUNDS' PERFORMANCE AND VALUATION THE GROUP'S NEW GUIDELINES TO BE ADOPTED ON A VOLUNTARY BASIS ARE SCHEDULED TO BE SENT OUT TO INDUSTRY PLAYERS THIS MONTH INDUSTRY OFFICIALS SAY SUCH MEASURES SHOULD HELP EUROPEAN VENTURE CAPITAL MAKE ITS ENTRY ON THE GLOBAL INVESTMENT SCENE STILL THEY ACKNOWLEDGE THERE REMAINS A LONG WAY TO GO BEFORE ACHIEVING USSTYLE EFFICIENCY 9401030125 940103 MONEY RATES THE KEY US AND FOREIGN ANNUAL INTEREST RATES BELOW ARE A GUIDE TO GENERAL LEVELS BUT DON'T ALWAYS REPRESENT ACTUAL TRANSACTIONS PRIME RATE 6 THE BASE RATE ON CORPORATE LOANS POSTED BY AT LEAST 75 OF THE NATION'S 30 LARGEST BANKS FEDERAL FUNDS 3 1/2 HIGH 1 LOW 2 NEAR CLOSING BID 3 OFFERED RESERVES TRADED AMONG COMMERCIAL BANKS FOR OVERNIGHT USE IN AMOUNTS OF 1 MILLION OR MORE SOURCE PREBON YAMANE USA INC DISCOUNT RATE 3 THE CHARGE ON LOANS TO DEPOSITORY INSTITUTIONS BY THE FEDERAL RESERVE BANKS CALL MONEY 5 THE CHARGE ON LOANS TO BROKERS ON STOCK EXCHANGE COLLATERAL SOURCE TELERATE SYSTEMS INC COMMERCIAL PAPER PLACED DIRECTLY BY GENERAL ELECTRIC CAPITAL CORP 318 30 TO 119 DAYS 324 120 TO 189 DAYS 328 190 TO 239 DAYS 340 240 TO 270 COMMERCIAL PAPER HIGHGRADE UNSECURED NOTES SOLD THROUGH DEALERS BY MAJOR CORPORATIONS 334 30 DAYS 331 60 DAYS 331 90 DAYS CERTIFICATES OF DEPOSIT 258 ONE MONTH 262 TWO MONTHS 268 THREE MONTHS 278 SIX MONTHS 303 ONE YEAR AVERAGE OF TOP RATES PAID BY MAJOR NEW YORK BANKS ON PRIMARY NEW ISSUES OF NEGOTIABLE CDS USUALLY ON AMOUNTS OF 1 MILLION AND MORE THE MINIMUM UNIT IS 100000 TYPICAL RATES IN THE SECONDARY MARKET 320 ONE MONTH 330 THREE MONTHS 340 SIX MONTHS BANKERS ACCEPTANCES 318 30 DAYS 318 60 DAYS 321 90 DAYS 324 120 DAYS 328 150 DAYS 331 180 DAYS OFFERED RATES OF NEGOTIABLE BANKBACKED BUSINESS CREDIT INSTRUMENTS TYPICALLY FINANCING AN IMPORT ORDER LONDON LATE EURODOLLARS 3 1/4 3 1/8 ONE MONTH 3 5/16 3 3/16 TWO MONTHS 3 3/8 3 1/4 THREE MONTHS 3 3/8 3 1/4 FOUR MONTHS 3 7/16 3 5/16 FIVE MONTHS 3 1/2 3 3/8 SIX MONTHS LONDON INTERBANK OFFERED RATES LIBOR 3 1/4 ONE MONTH 3 3/8 THREE MONTHS 3 1/2 SIX MONTHS 3 13/16 ONE YEAR THE AVERAGE OF INTERBANK OFFERED RATES FOR DOLLAR DEPOSITS IN THE LONDON MARKET BASED ON QUOTATIONS AT FIVE MAJOR BANKS EFFECTIVE RATE FOR CONTRACTS ENTERED INTO TWO DAYS FROM DATE APPEARING AT TOP OF THIS COLUMN FOREIGN PRIME RATES CANADA 550 GERMANY 600 JAPAN 3 SWITZERLAND 750 BRITAIN 550 THESE RATE INDICATIONS AREN'T DIRECTLY COMPARABLE LENDING PRACTICES VARY WIDELY BY LOCATION TREASURY BILLS RESULTS OF THE MONDAY DECEMBER 27 1993 AUCTION OF SHORTTERM US GOVERNMENT BILLS SOLD AT A DISCOUNT FROM FACE VALUE IN UNITS OF 10000 TO 1 MILLION 306 13 WEEKS 321 26 WEEKS FEDERAL HOME LOAN MORTGAGE CORP FREDDIE MAC POSTED YIELDS ON 30YEAR MORTGAGE COMMITMENTS DELIVERY WITHIN 30 DAYS 706 60 DAYS 715 STANDARD CONVENTIONAL FIXEDRATE MORTGAGES 3875 2 RATE CAPPED ONEYEAR ADJUSTABLERATE MORTGAGES SOURCE TELERATE SYSTEMS INC FEDERAL NATIONAL MORTGAGE ASSOCIATION FANNIE MAE CLOSED DUE TO HOLIDAY SOURCE TELERATE SYSTEMS INC MERRILL LYNCH READY ASSETS TRUST 273 ANNUALIZED AVERAGE RATE OF RETURN AFTER EXPENSES FOR THE PAST 30 DAYS NOT A FORECAST OF FUTURE RETURNS 9401030124 940103 CLOSED END FUNDS CLOSEDEND FUNDS SELL A LIMITED NUMBER OF SHARES AND INVEST THE PROCEEDS IN SECURITIES UNLIKE OPENENDED FUNDS CLOSEDENDS GENERALLY DO NOT BUY THEIR SHARES BACK FROM INVESTORS WHO WISH TO CASH IN THEIR HOLDINGS INSTEAD FUND SHARES TRADE ON A STOCK EXCHANGE THE FOLLOWING LIST PROVIDED BY LIPPER ANALYTICAL SERVICES SHOWS THE EXCHANGE WHERE EACH FUND TRADES A AMERICAN C CHICAGO NNYSE O NASDAQ T TORONTO Z DOES NOT TRADE ON AN EXCHANGE THE DATA ALSO INCLUDE THE FUND'S MOST RECENT NET ASSET VALUE ITS CLOSING SHARE PRICE ON THE DAY NAV WAS CALCULATED AND THE PERCENTAGE DIFFERENCE BETWEEN THE MARKET PRICE AND THE NAV OFTEN CALLED THE PREMIUM OR DISCOUNT FOR EQUITY FUNDS THE FINAL COLUMN PROVIDES 52WEEK RETURNS BASED ON MARKET PRICES PLUS DIVIDENDS FOR BOND FUNDS THE FINAL COLUMN SHOWS THE PAST 12 MONTHS' INCOME DISTRIBUTIONS AS A PERCENTAGE OF THE CURRENT MARKET PRICE FOOTNOTES APPEAR AFTER A FUND'S NAME A THE NAV AND MARKET PRICE ARE EX DIVIDEND B THE NAV IS FULLY DILUTEDC NAV MARKET PRICE AND PREMIUM OR DISCOUNT ARE AS OF THURSDAY'S CLOSE D NAV MARKET PRICE AND PREMIUM OR DISCOUNT ARE AS OF WEDNESDAY'S CLOSE E NAV ASSUMES RIGHTS OFFERING IS FULLY SUBSCRIBED V NAV IS CONVERTED AT THE COMMERCIAL RAND RATE Y NAV AND MARKET PRICE ARE IN CANADIAN DOLLARS ALL OTHER FOOTNOTES REFER TO UNUSUAL CIRCUMSTANCES EXPLANATIONS FOR THOSE THAT APPEAR CAN BE FOUND AT THE BOTTOM OF THIS LIST N/A SIGNIFIES THAT THE INFORMATION IS NOT AVAILABLE OR NOT APPLICABLE 9401030123 940103 WALL STREET UNDERWRITING FOURTH QUARTER 1993 REVIEW NO END IN SIGHT FOR UNDERWRITING BOOM BY MICHAEL SICONOLFI AND ALEXANDRA PEERS STAFF REPORTERS OF THE WALL STREET JOURNAL NEW YORK WALL STREET'S THREEYEAR UNDERWRITING EXPRESS IS LIKELY TO KEEP SPEEDING ALONG IN 1994 INVESTMENT BANKERS SAY SECURITIES FIRMS HELPED BRING TO MARKET A RECORD 15 TRILLION WORLDWIDE IN NEW STOCKS AND BONDS IN 1993 SHATTERING THE PRIOR YEAR'S RECORD BY 36 AND TRIPLING THE CAPITAL RAISED IN 1990 SAYS SECURITIES DATA CO A NEWARK NJ COMPANY THAT TRACKS CORPORATEFINANCE ACTIVITY NEARLY THREEQUARTERS OF 1993'S VOLUME WAS IN US STOCKS AND BONDS MARKING THE FIRST TIME US FINANCING TOPPED 1 TRILLION RECORDS WERE SMASHED IN NEARLY EVERY SECTOR OF THE STOCK AND BOND UNDERWRITING ARENAS FROM COMMON STOCK TO HIGHYIELD JUNK BONDS TO INTERNATIONAL STOCKS AND EUROBONDS BY THE THIRD QUARTER BUT WHAT CAPTURED THE HEADLINES WAS THE RECORD SURGE IN INITIAL PUBLIC STOCK OFFERINGS CLEARLY THE IPO HAS BEEN THE EQUITY STORY OF 1993 SECURITIES DATA SAYS BEHIND THE FEVERISH CAPITALRAISING PUSH WAS A POWERFUL BLEND OF HISTORICALLY LOW INTEREST RATES A CONTINUED RUSH BY US CORPORATIONS TO SHAVE DEBT AND ACCELERATED LEVELS OF FINANCING IN EMERGING MARKETS PARTICULARLY THROUGH PRIVATIZATIONS BOND VOLUME MAY SLOW AS REFINANCINGS TAIL OFF IN 1994 BUT THE INCREASED PACE OF INTERNATIONAL ISSUANCE WILL PICK UP THE SLACK BANKERS SAY COUPLE THAT WITH RELATIVELY LOW OIL PRICES AND OVERALL INFLATION AND IT PORTENDS ANOTHER STRONG YEAR FOR UNDERWRITING BANKERS PREDICT THE EFFECTS OF INFLATION ON INTEREST RATES CERTAINLY WILL BE NEGLIGIBLE SO I ANTICIPATE CANDIDLY THAT THE MARKET WILL BE ON CRUISE CONTROL FOR MOST OF '94 SAYS MICHAEL D MADDEN EXECUTIVE MANAGING DIRECTOR AT KIDDER PEABODY GROUP INC THE QUESTION IS WHETHER THE FLOW OF MONEY INTO THE STOCK MARKET FROM INDIVIDUAL INVESTORS PARTICULARLY THROUGH MUTUAL FUNDS WILL CONTINUE TO SOP UP ALL THE NEW UNDERWRITING ISSUES THERE'S A VERY LONG PIPELINE OF PRODUCT THE ONLY ISSUE IS WHETHER THE MARKET WILL TAKE IT SAYS THOMAS W DAVIS HEAD OF STOCK CAPITAL MARKETS AT MERRILL LYNCH & CO STILL DON'T LOOK FOR THE CAPITALRAISING ACTIVITY TO MATCH THAT OF 1993 WHEN NEARLY EVERY MONTH SIZZLED WITH NEW ISSUES THE REAL SURPRISE OF 1993 WAS THAT THERE WAS NO LETUP NO RESPITE SAYS T ANTHONY BROOKS MANAGING DIRECTOR OF LEHMAN BROTHERS INC THE BROKERAGE UNIT OF AMERICAN EXPRESS CO ACTIVITY WAS UNRELENTING THOUGH OVERALL UNDERWRITING ACTIVITY IS LIKELY TO EBB A BIT IN 1994 INVESTMENT BANKS HOPE TO GET A BOOST FROM HEIGHTENED MERGERANDACQUISITION BUSINESS PARTICULARLY STRATEGIC COMBINATIONS WHERE COMPANIES ISSUE NEW STOCK TO COMPLETE THE DEAL COMPANIES WILL BE OUT THERE USING STOCK AS AN ACQUISITION TOOL SAYS E GARRETT BEWKES III COCHIEF OF INVESTMENT BANKING AT BEAR STEARNS COS OF COURSE ANY SHARP SURGE IN INTEREST RATES COULD PUMMEL THE STOCK MARKET DERAILING THE UNDERWRITING TRAIN SOME ANALYSTS WARN A SOUTHERLY MARKET TURN WILL SIGNIFICANTLY REDUCE THIS UNDERWRITING REVENUE SOURCE AND THEREBY THE PROFITS OF THESE FIRMS PARTICULARLY MORGAN STANLEY AND SALOMON INC WHO TYPICALLY DERIVE OVER 35 OF THEIR REVENUE FROM INVESTMENT BANKING NANCY ZAMBELL AN ANALYST AT JW CHARLES SECURITIES INC SAID IN A RECENT REPORT MERRILL LYNCH THE NATION'S LARGEST BROKERAGE FIRM KEPT ITS UNDERWRITING CROWN FOR THE SIXTH STRAIGHT YEAR MERRILL WITH A 164 US MARKET SHARE DOMINATED NEARLY EVERY UNDERWRITING SECTOR GOLDMAN SACHS & CO WHICH PLACED HIGHLY IN MOST STOCK AND BOND CATEGORIES AGAIN FINISHED NO 2 WITH A 12 MARKET SHARE LEHMAN BROTHERS WITH A STRONG BOND SHOWING PLACED THIRD WITH A 109 MARKET SHARE WHAT SIZZLED MOST IN 1993 WAS THE BOOMING MARKET FOR NEW STOCK ISSUES PARTICULARLY INITIAL PUBLIC OFFERINGS THESE NEW STOCK OFFERINGS HAVE BEEN SCOOPED UP BY INDIVIDUAL INVESTORS IN A FRENZY SEEKING GREATER RETURNS IN THE FACE OF LOW INTEREST RATES THE VOLUME OF ALL COMMONSTOCK OFFERINGS SURGED TO A RECORD 102 BILLION UP ABOUT 40 FROM THE PRIOR RECORD OF 73 BILLION IN 1992 MORE THAN 800 COMPANIES CAME TO MARKET FOR THE FIRST TIME IN 1993 WITH IPO VOLUME TOTALING A RECORD 57 BILLION SMASHING 1992'S PRIOR RECORD OF 40 BILLION INVESTORS FARED WELL IN MANY IPOS WHICH AVERAGED A 21 GAIN FOR THE YEAR SECURITIES DATA SAYS THERE WERE SOME BIG IPO FLOPS TO BE SURE THE 98 MILLION OFFERING OF WILT CHAMBERLAIN'S RESTAURANTS INC WAS WITHDRAWN AFTER A 14 PLUNGE IN ITS FIRST DAY OF TRADING IN FEBRUARY AND SEVERAL PLANNED BIGNAME OFFERINGS NEVER MADE IT TO MARKET INCLUDING THE HOTLY ANTICIPATED IPO FOR DONNA KARAN CORP WHICH WAS ABRUPTLY SUSPENDED IN NOVEMBER BUT THE YEAR ALSO BOASTED SOME MEGADEALS IN THE IPO SECTOR AMONG THEM A 27 BILLION OFFERING OF YPF SOCIEDAD ANONIMA ARGENTINA'S STATEOWNED OIL COMPANY AND A 21 BILLION OFFERING OF ALLSTATE CORP THE IPO ACTIVITY WAS SO FRENETIC THAT EVEN SMALLER REGIONAL SECURITIES FIRMS SNATCHED A PIECE OF THE ACTION PARTICULARLY NEWSTOCK DEALS OF BELOW 30 MILLION MANY SMALLER FIRMS FOCUSED ON NARROWLY FOCUSED NICHES FOR INSTANCE ADVEST INC A SMALL HARTFORD CONN REGIONAL FIRM DID MUCH OF ITS NEWSTOCK BUSINESS IN FINANCIAL INSTITUTIONS THERE'S A LOT OF BUSINESS THAT THE MAJOR FIRMS WON'T TOUCH THAT'S AVAILABLE SAYS MURRAY BEACH ADVEST'S HEAD OF CORPORATE FINANCE SOME ANALYSTS WARN THAT THE STAMPEDE INTO NEW STOCKS COULD BACKFIRE BECAUSE MANY INVESTORS AREN'T PREPARED FOR BIG LOSSES IF THE EQUITY MARKET SOURS IN OUR VIEW THE SITUATION IS REMINISCENT OF THE EARLY 1980S WHEN INDIVIDUALS IN THE PURSUIT OF HIGHER RETURNS TRANSFERRED THEIR FUNDS FROM CONSERVATIVELYRUN INSTITUTIONS INTO SAVINGSANDLOANS OFFERING HIGHER YIELDS EARNED FROM THEIR JUNK BOND INVESTMENTS THE JW CHARLES REPORT SAYS AMONG THE BIG BENEFICIARIES OF LOW INTEREST RATES LAST YEAR WAS THE BONDUNDERWRITING MARKET NEW US BOND ISSUES EXCLUDING MORTGAGE AND ASSETBACKED SECURITIES SOARED TO A RECORD 433 BILLION IN 1993 A 37 JUMP FROM 1992'S 314 BILLION THE BIG STORY IN THE BOND ARENA WAS THE THOROUGHLY REVIVED MARKET FOR HIGHYIELD BONDS THE VOLUME OF THESE JUNK BONDS AT 54 BILLION SURPASSED THE TOTAL RAISED IN ALL OF 1990 1991 AND 1992 COMBINED SECURITIES DATA SAYS ON THE BOND SIDE MANY CORPORATIONS RUSHED TO REFINANCE EXISTING DEBT AT LOWER INTEREST RATES THE US HAS BEEN WRINGING OUT MUCH OF THE EXCESS OF THE 1980S WITH CONSIDERABLE PAIN WHILE MANY OF OUR COMPETITOR COUNTRIES HAVE YET TO GO THROUGH WITH THIS PROCESS SAYS JEFFREY SCHAEFER RESEARCH CHIEF OF THE SECURITIES INDUSTRY ASSOCATION A TRADE GROUP AS MUCH AS ONETHIRD OF CORPORATEBOND FINANCING IN 1993 WAS TO REFINANCE MORE COSTLY DEBT WALL STREET EXECUTIVES ESTIMATE BUT SOME ANALYSTS SAY THE HEAVY REFINANCING THOUGH STILL SIZABLE COULD SLOW SOMEWHAT IN 1994 IT SEEMS AS THOUGH MOST COMPANIES HAVE ALREADY TAKEN ADVANTAGE OF THE LOW RATES AND REFINANCED SAYS LESLIE FELDMAN AN ANALYST AT SECURITIES DATA MERRILL MAINTAINED ITS DOMINANCE IN BOND UNDERWRITING THE FIRM RAISED 94 BILLION FOR A 22 MARKET SHARE GOLDMAN RANKED NO 2 HELPING TO BRING TO MARKET 70 BILLION OF NEW BONDS FOR A 16 MARKET SHARE AND LEHMAN BROTHERS TOOK THE THIRD SPOT HELPING TO ISSUE 58 BILLION OR A 13 SHARE AMID 1993'S ACTIVITY TWO MAJOR TRENDS IN THE UNDERWRITING BUSINESS EMERGED THAT WILL ACCELERATE THIS YEAR INVESTMENT BANKERS SAY CORPORATE AMERICA WANTS A MORE CONSERVATIVELY POSITIONED BALANCE SHEET WHICH RESULTED IN A GROWING PREFERENCE FOR STOCK OVER BONDS AS A CAPITALRAISING MEASURE SAYS LEHMAN'S MR BROOKS BUT THE BIGGEST SEA CHANGE IN THE BUSINESS BANKERS SAY IS THE CONTINUED STRONG ACTIVITY FROM LATIN AMERICA THE FAR EAST AND EUROPE PROPORTIONALLY THOSE ISSUES WILL BE A LARGER SHARE OF THE BUSINESS IN THE FUTURE MR BROOKS SAYS INDEED THE FIERCE PACE OF INTERNATIONAL ISSUANCE EVEN HAS THE POTENTIAL OF THE CROWDING OUT OF MARGINAL US ISSUES IN SELECTED INDUSTRIES STEEL CHEMICALS INDEPENDENT PHONE COMPANIES BY NONUS ISSUERS SAYS TERRY FITZGERALD SALOMON BROTHERS INC'S MANAGING DIRECTOR OF EQUITY CAPITAL MARKETS WALL STREET INVESTMENT BANKS COULD TAKE A HIT IN ONE SECTOR THIS YEAR HOWEVER BUSINESS IS EXPECTED TO BE DOWN SHARPLY IN MUNICIPAL UNDERWRITING WITH THE MAJORITY OF THE SECTOR'S REFINANCINGS BEHIND IT RICHARD CICCARONE DIRECTOR OF FIXEDINCOME RESEARCH FOR KEMPER SECURITIES INC SEES VOLUME FALLING MORE THAN 25 WHILE MUNIBOND DEPARTMENTS ARE WELL AWARE OF THE POTENTIAL DECLINE IN VOLUME THEY HAVEN'T NECESSARILY PREPARED FOR IT SAYS MR CICCARONE THEY'RE GOING TO HAVE TO WORK A LITTLE HARDER TO GET NEW BUSINESS 9401030122 940103 BUSINESS BRIEF BERTRIX PLANS TO ACQUIRE ASPEN MARINE IN CASH STOCK AND PROPERTY TRANSACTION GREENBACK TENN BERTRIX CORP A HOLDING COMPANY CREATED TO DEVELOP CASINOS IS ACQUIRING ASPEN MARINE GROUP INC A BOAT MANUFACTURER AND MARINA OPERATOR FOR 100 MILLION ACCORDING TO AN INVESTMENT BANKER FOR ASPEN AS PART OF THE DEAL ASPEN WILL ACQUIRE A HOTEL AND CASINO BEING DEVELOPED BY BERTRIX FOR ABOUT 100 MILLION IN STOCK THE TRANSACTION WILL GIVE THE CLOSELY HELD BERTRIX BASED IN THE DOMINICAN REPUBLIC 94 CONTROL OF ASPEN ACCORDING TO BRETT SALTER ASPEN'S INVESTMENT BANKER AT FIRST YALE FINANCIAL GROUP IN EVANSVILLE IND ASPEN IN TURN IS ACQUIRING THE TIERA DEL SOL HOTEL & CASINO FOR 41 MILLION ASPEN RESTRICTED COMMON SHARES AND 10 MILLION SERIES C PREFERRED SHARES ASPEN HAS ABOUT 10 MILLION SHARES OUTSTANDING THE REST WILL BE NEWLY ISSUED THE TIERA PROJECT IS IN THE DOMINICAN REPUBLIC AS PART OF THE ACQUISITION ASPEN'S THREEMEMBER BOARD HAS RESIGNED THREE NEW DIRECTORS WERE APPOINTED INCLUDING JUAN A RODRIGUEZ 40 YEARS OLD A MIAMI ARCHITECT SPECIALIZING IN HOTELS AND CASINOS BRAULIO CORVEA 65 A MIAMI IMPORTER AND ELWYN R JACOBS 67 RETIRED CHIEF EXECUTIVE OF PRIVATELY HELD MUNICIPAL INSURANCE CO OF AMERICA IN ELGIN ILL THEY SUCCEED GEORGE FOWLER 48 ASPEN'S CHIEF EXECUTIVE AND CHAIRMAN MARK OVERBYE 34 ASPEN'S VICE PRESIDENT OF SALES AND MARKETING AND JOSEPH CHOW 60 AN ENGINEER MR FOWLER WILL BECOME PRESIDENT OF ASPEN'S BOATING DIVISION AFTER THE ACQUISITION AND MR OVERBYE WILL BECOME VICE PRESIDENT OF SALES AND MARKETING OF THE BOATING DIVISION NO SUCCESSORS FOR THEIR CORPORATE POSTS HAVE YET BEEN NAMED ASPEN WILL BE RENAMED WITHIN 60 DAYS AND ITS BOARD EXPANDED TO NINE MR SALTER SAID THE TIERA PROJECT WILL BE VALUED AT ABOUT 490 MILLION WHEN COMPLETED BY THE END OF THIS YEAR MR SALTER SAID ASPEN SAID THE TIERA ACQUISITION MAY NOT BE COMPLETED IF TIERA DOESN'T SHOW 14 MILLION IN EQUITY IN AN AUDIT OF ITS BALANCE SHEETS TO BE COMPLETED THIS MONTH BERTRIX IS ALSO IN NEGOTIATIONS TO ACQUIRE SPORT OF KINGS INC A CASINO IN LAS VEGAS AND A GAMBLING LICENSE IN INDIANA MR SALTER SAID IN NASDAQ STOCK MARKET TRADING FRIDAY ASPEN CLOSED AT 1875 A SHARE DOWN 625 CENTS IN HEAVY TRADING 9401030121 940103 CAMDEN PROPERTY TRUST PURCHASE HOUSTON CAMDEN PROPERTY TRUST SAID IT PURCHASED TWO PROPERTIES CONTAINING 1078 APARTMENT UNITS IN THE DALLASFORT WORTH TEXAS AREA FOR 269 MILLION THE ACQUISITIONS INCREASE CAMDEN'S PORTFOLIO OF EXISTING APARTMENTS AND PROJECTS UNDER DEVELOPMENT TO 11780 UNITS 9401030120 940103 MERRY LAND BUYS CLAIRE POINTE AUGUSTA GA MERRY LAND & INVESTMENT CO BOUGHT ALL OF THE OUTSTANDING STOCK OF CLAIRE POINTE INC A SINGLEASSET CORPORATION THAT OWNS A 256UNIT APARTMENT COMMUNITY IN JACKSONVILLE FLA MERRY LAND SAID UNDER THE STATUTORY MERGER IT EXCHANGED COMMON SHARES AND ASSUMED OUTSTANDING TAXFREE BONDS SECURED BY THE PROPERTY THE COMPANY SAID THE ACQUISITION INCREASES ITS PORTFOLIO TO 13979 UNITS REPRESENTING A TOTAL INVESTMENT OF 554 MILLION 9401030119 940103 WHO'S NEWS ZEOS INTERNATIONAL LTD ZEOS INTERNATIONAL LTD MINNEAPOLIS RONALD M MEYERS WAS NAMED ACTING CHIEF OPERATING OFFICER SUCCEEDING MARTYN RATCLIFFE WHO ACCEPTED A POSITION WITH ANOTHER COMPANY GREGORY E HERRICK CHAIRMAN AND CHIEF EXECUTIVE OF THE COMPUTER MAKER WILL ASSUME THE PRESIDENT'S TITLE FROM MR RATCLIFFE MR MEYERS WAS PRESIDENT OF RONALD MEYERS & ASSOCIATES A SAN ANTONIOBASED MANAGEMENT CONSULTING FIRM 9401030118 940103 BIRGMINHAM STEEL SHARE SALE BIRMINGHAM ALA BIRMINGHAM STEEL CORP SAID THE SECURITIES AND EXCHANGE COMMISSION DECLARED EFFECTIVE ITS REGISTRATION STATEMENT ON FORM S3 COVERING 1145873 COMMON SHARES FOR A PUBLIC OFFERING BY CERTAIN SHAREHOLDERS THE COMPANY SAID THE SHAREHOLDERS ACQUIRED THEIR SHARES IN CONNECTION WITH BIRMINGHAM STEEL'S ACQUISITION OF AMERICAN STEEL & WIRE CORP IN NOVEMBER SELLING SHAREHOLDERS PROPOSE TO OFFER THE STOCK PERIODICALLY DURING THE NEXT 24 MONTHS THROUGH NEW YORK STOCK EXCHANGE BROKERS AND PRIVATE TRANSACTIONS 9401030117 940103 SYMANTEC'S TECHNOLOGY PURCHASE CUPERTINO CALIF SYMANTEC CORP SAID IT ACQUIRED CERTAIN TECHNOLOGY FROM DATAEASE INTERNATIONAL INC IN A TRANSACTION VALUED AT 75 MILLION THE COMPANY SAID THE TRANSACTION INCLUDED 65 MILLION PAID IN SYMANTEC STOCK REPRESENTING ABOUT 391000 SHARES SYMANTEC SAID THE TECHNOLOGY PURCHASED IS FOR THE PURPOSE OF DEVELOPING ARCHITECTURE AND TOOLS TO BUILD CLIENT/SERVER APPLICATIONS PRODUCT DEVELOPMENT WILL CONTINUE THROUGH SYMANTEC'S ENTERPRISE SYSTEMS GROUP IN SHELTON CONN 9401030116 940103 WHO'S NEWS PEER REVIEW NAMES LEWIS TO CHAIRMAN POST MALDEN MASS PEER REVIEW ANALYSIS INC SAID IT NAMED ITS PRESIDENT AND CHIEF EXECUTIVE ALFRED LEWIS TO THE ADDITIONAL POST OF CHAIRMAN MR LEWIS 38 YEARS OLD SUCCEEDS BARRY MANUEL WHO RESIGNED BECAUSE OF THE TIME AND TRAVEL COMMITMENT INVOLVED WITH THE POST THE MANAGED HEALTHCARE SERVICES CONCERN SAID DR MANUEL WILL REMAIN A DIRECTOR 9401030115 940103 MIDLAND WALWYN ACQUISITION TORONTO MIDLAND WALWYN INC SAID IT HAS COMPLETED THE ACQUISITION OF FINSCO SERVICES LTD FROM IMASCO LTD TERMS WEREN'T DISCLOSED MIDLAND SAID THAT WITH THIS ACQUISITION THE LAUNCH OF THE HERCULES FUNDS AND THE SCHEDULED INTRODUCTION OF ADDITIONAL FUNDS IT IS MOVING AHEAD TO ESTABLISH A STRONG PRESENCE IN MUTUAL FUNDS 9401030114 940103 1993 YEAREND REVIEW OF MARKETS AND FINANCE REVIEW OF COMMODITIES MARKETS COMMODITY PRICES' GAINS IN 1993 DON'T PRESAGE 1994 RUNAWAY RALLY A WALL STREET JOURNAL NEWS ROUNDUP THOUGH THE US ECONOMIC REVIVAL LAST YEAR HELPED COMMODITY PRICES BREAK OUT OF A TWOYEAR FUNK THE MOMENTUM ISN'T LIKELY TO PRODUCE A RUNAWAY RALLY IN 1994 THE MOST SIGNIFICANT HINDRANCES FOR WORLD COMMODITY PRICES WILL BE THE CONTINUING ECONOMIC WOES OF EUROPE AND JAPAN WHOSE CORPORATE COMMUNITIES ARE HUGE CONSUMERS OF INDUSTRIAL COMMODITIES INDEED THE WEAK DEMAND FROM THESE COUNTRIES FOR SUCH COMMODITIES AS COPPER AND PLATINUM SERVED TO STALL LATEYEAR RALLIES IN THESE AND OTHER MATERIALS STILL 1993 WILL BE REMEMBERED FOR A MAJOR TURNAROUND IN MANY COMMODITY MARKETS IT MARKED A RESURGENCE IN THE PRICES OF SUCH BASIC INDUSTRIAL COMPONENTS AS BASE METALS AND LUMBER WHILE THE FLOODING OF THE AMERICAN MIDWEST SPAWNED A SURGE IN PRICES OF GRAINS AND OTHER AGRICULTURAL COMMODITIES FOR THE FIRST TIME IN NEARLY A DECADE PRECIOUSMETALS MARKETS SHOWED SIGNS OF LIFE THE PRICE OF GOLD LEAPT TO 414 AN OUNCE LAST SUMMER ONLY TO RETREAT BACK TO ITS RELATIVELY NARROW TRADING RANGE OF 360 TO 380 AN OUNCE BY FALL BUT AS 1993 WOUND TO A CLOSE GOLD WAS AGAIN FLIRTING WITH 400 DRIVEN HIGHER BY BULLISH MARKET PSYCHOLOGY AND THE STUNNING STRENGTH OF SILVER WHICH TOPPED AND REMAINED ABOVE THE KEY 5ANOUNCE LEVEL THE COMMODITY RESEARCH BUREAU'S WIDELY WATCHED INDEX OF 21 COMMODITY FUTURES CONTRACTS STAGED AN IMPRESSIVE RALLY IN 1993 CLOSING AT 22631 UP 12 YET EVEN AS THE US ECONOMY CONTINUES TO EXPAND THE ADVANCE OF PRECIOUSMETALS AND OTHER COMMODITY PRICES IN 1994 IS LIKELY TO BE LIMITED BY A LACK OF INFLATION FOR INSTANCE MUCH OF LAST YEAR'S GAIN IN THE CRB INDEX WAS FUELED BY SURGES IN AGRICULTURAL COMMODITIES LIKE GRAINS AND LUMBER WHICH HAD THEIR OWN SUPPLYANDDEMANDBASED REASONS TO RALLY MEANWHILE THE JOURNAL OF COMMERCE INDEX OF 18 INDUSTRIAL COMMODITIES WHICH MANY ECONOMISTS REGARD AS A BETTER INFLATION INDICATOR THAN THE CRB INDEX DIDN'T MATCH THE CRB'S STRENGTH AND THE STUNNING WEAKNESS OF WORLD ENERGY MARKETS ANALYSTS SAY CONTINUES TO BE AN ANTIINFLATIONARY DRAG ON THE PRICES OF OTHER COMMODITIES ENERGY PRICES PARTICULARLY FOR OIL ARE LIKELY TO REMAIN LOW FOR AT LEAST ANOTHER YEAR AFTER THE NEARCOLLAPSE IN 1993 SOME IN THE WORLD OIL INDUSTRY QUESTION IN FACT WHETHER PETROLEUM PRICES HAVE REACHED BOTTOM DESPITE THE 5ABARREL DROP OVER THE PAST YEAR BUT THERE ARE ALSO OIL ANALYSTS AND ECONOMISTS WHO LOOK FOR A PRICE REBOUND IN 1994 STILL THIS YEAR'S PRICE RANGE GENERALLY IS EXPECTED TO BE MUCH LOWER THAN IN PREVIOUS YEARS THAT IS BECAUSE THE CONDITIONS THAT UPSET THE FRAGILE OIL SUPPLYDEMAND BALANCE IN 1993 ARE STILL VERY MUCH IN PLACE THESE INCLUDE SLUGGISH WORLD ECONOMIES HIGH OUTPUT BY THE ORGANIZATION OF PETROLEUM EXPORTING COUNTRIES AND RISING NONOPEC PRODUCTION ALSO FOR YET ANOTHER YEAR IRAQ IS A WILD CARD IN THE SUPPLY PICTURE DEBATE CONTINUES OVER WHEN THE UNITED NATIONS MAY EASE THE BAN AGAINST IRAQI OIL EXPORTS BUT IT EVENTUALLY WILL OCCUR AND PETROLEUM PRICES LIKELY WILL BE HAMMERED FURTHER ANOTHER UNKNOWN IS THE AMOUNT OF OIL THAT WILL FLOW TO THE REST OF THE WORLD FROM RUSSIA AND THE OTHER FORMER SOVIET REPUBLICS ALTHOUGH THEIR PRODUCTION CONTINUES TO FALL THEIR CONSUMPTION OF OIL HAS FALLEN EVEN FASTER BECAUSE OF POLITICAL AND ECONOMIC CHAOS STILL FOR THE MOMENT ABOUT THE ONLY BULLISH FACTOR ANALYSTS SEE FOR THE OIL MARKET IS THE SEVERE COLD SNAP THAT HIT MUCH OF THE US THE WORLD'S BIGGEST OIL USER IN LATE DECEMBER THAT INCREASED USE OF HEATING FUEL AND SENT NATURALGAS PRICES SURGING BRIEFLY WEATHER ASIDE GLOBAL OIL DEMAND WHICH DROPPED SLIGHTLY IN 1993 MAY RISE IN 1944 DESPITE JAPAN'S RECESSION AND THE SLOW GROWTH IN OTHER MAJOR OILCONSUMING NATIONS ONE ENERGY ECONOMIST WHO THINKS SO IS JOHN LICHTBLAU CHAIRMAN OF THE PETROLEUM INDUSTRY RESEARCH FOUNDATION HE ESTIMATED 1994 DEMAND WILL BE UP 1 TO 15 WE COULD SEE AN INCREASE OF ONE MILLION BARRELS A DAY HE SAID BUT THIS COULD BE OFFSET BY A JUMP OF ONE MILLION BARRELS A DAY IN OIL OUTPUT FROM NONOPEC PRODUCING AREAS SUCH AS THE NORTH SEA AS A RESULY MR LICHTBLAU SAID PRICES COULD DECLINE 1 TO 150 A BARREL ON AVERAGE IN 1994 FOR ALL OF 1993 THE WTI PRICE AVERAGED 1840 A BARREL DOWN FROM 1992'S 2054 MR LICHTBLAU'S FORECAST CALLS FOR THE 1994 WTI PRICE TO AVERAGE AROUND 17 A BARREL OTHER ESTIMATES RANGE FROM 14 TO 20 A BARREL TRADERS EXPECT A VOLATILE YEAR IN THE WAKE OF THE MIDWEST CROP DISASTER SUPPLIES OF AMERICA'S BIGGEST CROP CORN ARE THE TIGHTEST SINCE THE MID1970S BECAUSE RECORD RAIN AND FLOODING REDUCED THE 1993 HARVEST 31 TO 65 BILLION BUSHELS US CORN PRICES SOARED ABOUT 37 IN 1993 TO BUMP AGAINST 3 A BUSHEL PRICES WILL PROBABLY GYRATE THIS SPRING ON ANY SIGN THAT TOODRY OR TOOWET WEATHER MIGHT DISRUPT NORTH AMERICAN PLANTING THE PRICE RALLY SO FAR WILL PROBABLY PROMPT CORN FARMERS TO PLANT ROUGHLY 80 MILLION ACRES IN 1994 WHICH WITH GOOD WEATHER COULD GENERATE A BUMPER HARVEST OF MORE THAN NINE BILLION BUSHELS OF CORN SUCH A HARVEST WOULD BE ENOUGH TO REPLENISH US STOCKPILES BUT TRADERS ARE ON EDGE BECAUSE EVEN A MODERATELY POOR CROP WOULD DEPLETE US CORN SUPPLIES AND FORCE PRICES HIGHER THE TREND IS FOR THE AVERAGE ACRE OF US CORN LAND TO PRODUCE ABOUT 123 BUSHELS A YIELD OF JUST 107 BUSHELS AN ACRE WOULD RESULT IN SUCH TIGHT SUPPLIES THAT CORN PRICES WOULD PROBABLY JUMP PAST 350 A BUSHEL SOME ANALYSTS SAY US SOYBEAN PRICES ROSE ABOUT 21 IN 1993 AS THE MIDWEST FLOODS REDUCED THE CROP 16 TO 183 BILLION BUSHELS THE US PRICE RALLY TRIGGERED AN EXPANSION IN SOUTH AMERICA WHICH IS NOW PREPARING FOR LARGE HARVESTS AROUND APRIL THOSE BIG HARVESTS IF THEY MATERIALIZE WILL TEND TO KEEP A LID ON US SOYBEAN PRICES THIS SPRING GRAIN PRICES LIKELY WILL BE 1994'S BIGGEST INFLUENCE ON LIVESTOCK MARKETS HIGHER GRAIN PRICES ENCOURAGE LIVESTOCK PRODUCERS TO TRIM HERDS CORN AND SOYBEANS MAKE UP MUCH OF THE DIETS OF CATTLE AND HOGS AND REPRESENT MUCH OF THE EXPENSE OF RAISING THE ANIMALS THE SHARP RISE IN CORN PRICES IN 1993 HAS ALREADY TRIGGERED SOME HOG PRODUCERS TO SCALE BACK EXPANSION PLANS ABSENT ANOTHER CROP DISASTER LIVESTOCK ANALYSTS GENERALLY EXPECT HOG PRICES TO REMAIN STRONG FOR A SECOND YEAR JOHN NALIVKA EXECUTIVE VICE PRESIDENT OF STERLING MARKETING INC LENEXA KAN PREDICTS HOGS WILL FETCH AN AVERAGE PRICE OF 45 CENTS TO 46 CENTS A POUND IN 1994 THAT'S A PROFITABLE PRICE FOR MOST HOG PRODUCERS WHO GENERALLY HAVE A BREAKEVEN PRICE OF ROUGHLY 37 CENTS A POUND MR NALIVKA EXPECTS STEERS IN THE TEXAS PANHANDLE TO AVERAGE 74 CENTS TO 75 CENTS A POUND A SLIGHT DROP FROM 1993 MANY ANALYSTS AGREE THAT GOLD WILL BREACH 400 AN OUNCE EARLY IN 1994 BUT OPINION IS SHARPLY DIVIDED ABOUT IT WILL GO FROM THERE IAN MACDONALD CHIEF OF PRECIOUSMETALS TRADING FOR CREDITSUISSE THINKS THE FORMATION OF A FIRM TRADING RANGE IN THE MID300ANOUNCE REGION IN 1993 CONSTITUTED A FOUNDATION FROM WHICH GOLD WILL CONTINUE TO BUILD BUT OTHERS SEE STIFF RESISTANCE FOR GOLD PRICES ABOVE 400 INDUSTRIAL CONSUMERS SUCH AS THE JEWELRY AND ELECTRONICS INDUSTRIES HAVE BEEN BIG BUYERS OF GOLD AT ABOUT 360 AN OUNCE BUT HAVE VANISHED FROM THE MARKET WHEN PRICES ROSE ABOVE 380 AN OUNCE PRICES WOULD HAVE TO REMAIN ABOVE 380 FOR WEEKS OR MONTHS TO CONVINCE THESE INDUSTRIES THAT IT IS NECESSARY TO BUY GOLD AT THOSE LEVELS ANALYSTS SAY I THINK YOU WILL SEE HIGHER AVERAGE PRICES FOR GOLD AND SILVER IN 1994 MAINLY BECAUSE THE ECONOMIC CYCLE INDICATES THE END OF THE DEFLATIONARY PERIOD AND A GRADUAL MOVE INTO A HIGHER GROWTH ERA SAYS WILLIAM O'NEILL CHIEF FUTURES STRATEGIST FOR MERRILL LYNCH THE GOLD MARKET EARLY IN 1994 WILL TEST 420 AN OUNCE BUT I DON'T THINK WE'LL SEE A MAJOR RALLY OTHER ANALYSTS SEE GREATER CAUSE FOR CONCERN FOR EXAMPLE A DECEMBER RALLY IN GOLD PRICES STALLED SHORT OF 400 WITH THE PRICE OF THE ACTIVELY TRADED FEBRUARY 1994 CONTRACT ENDING 1993 AT 39190 AN OUNCE MAYBE IT WILL BRIEFLY POKE ITS HEAD ABOVE 400 SAYS BERNARD SAVAIKO SENIOR ANALYST AT PAINEWEBBER INC BUT THERE IS VERY FORMIDABLE RESISTANCE AT THE 410 AND 420 LEVELS BASICALLY I SEE A SEESAWING ACTION WITH INFLATION CONCERNS NOT STRONG ENOUGH TO KEEP GOLD ABOVE 420 THE PSYCHOLOGICAL STRENGTH OF PRECIOUSMETALS MARKETS LATE LAST YEAR FLOWED FROM SILVER PRICES WHICH ENJOYED SUBSTANTIAL PHYSICAL DEMAND THAT WASN'T MATCHED IN GOLD AND PLATINUM MIDDLE EASTERN INVESTOR SYNDICATES HELPED TO INSTIGATE ACROSSTHEMARKET RALLIES BY TAKING DELIVERY OF HUGE QUANTITIES OF SILVER BULLION THROUGHOUT THE SECOND HALF THEIR PARTICIPATION HELPED THE MARKET SHRUG OFF BEARISH SENTIMENT FROM THE DEVELOPMENT OF A SILVERLESS PHOTOGRAPHIC TECHNOLOGY BY XEROX CORP AND EXPECTATIONS OF CONTINUED PARTICIPATION IN THE MARKET BY MIDDLE EASTERN SYNDICATES MR O'NEILL SAYS COULD HELP TO DRIVE SILVER TO 550 OR 560 AN OUNCE IN 1994 SAPPING THE STRENGTH OF PRECIOUS METALS RALLIES THROUGHOUT 1993 WERE THE WOES OF PLATINUM WHICH DROPPED BELOW THE PRICE OF GOLD FOR THE FIRST TIME IN YEARS THE DROP MAINLY REFLECTED WEAK BUYING BY JAPANESE AND GERMAN AUTO INDUSTRIES WHICH USE PLATINUM TO MAKE CATALYTIC CONVERTERS TO A LARGE DEGREE COFFEE PRICES WILL BE DRIVEN BY THE SUCCESS OR FAILURE OF THE WORLD'S FIRST COFFEE CARTEL AN AFFILIATION OF LATIN AMERICAN AND AFRICAN PRODUCERS THEY BANDED TOGETHER LAST YEAR AGREEING TO WITHHOLD 20 OF THEIR MONTHLY COFFEE EXPORTS DURING MONTHS WHEN THE PRICE OF COFFEE AS A MOVING AVERAGE WAS BELOW 80 CENTS A POUND ANTICIPATION OF THE FORMATION OF THE CARTEL DROVE A SUSTAINED RALLY FROM SPRING UNTIL FALL PROMPTLY UPON FORMAL ANNOUNCEMENT OF THE CARTEL HOWEVER TRADERS BID COFFEE PRICES LOWER EXPRESSING THEIR SKEPTICISM ABOUT ITS PROSPECTS OF SUCCESSFULLY WITHHOLDING EXPORTS FROM WORLD MARKETS MANY TRADERS WERE FORCED TO REEVALUATE WHEN WITH AVERAGE PRICES BELOW 80 CENTS DURING OCTOBER COFFEE PRODUCERS SUCCEEDED IN WITHHOLDING THE REQUIRED AMOUNT OF COFFEE THE FOLLOWING MONTH THESE EFFORTS HELPED THE MARCH 1994 COFFEE CONTRACT TO FINISH 1993 AT 7155 CENTS A POUND SOME TRADERS AND ANALYSTS REMAIN SKEPTICAL ABOUT THE LONGTERM PROSPECTS OF THE CARTEL BUT NOT EVERYONE I THINK THE COFFEE MARKET IS GOING TO HAVE A TOUGH TIME NOT RALLYING EARLY IN 1994 SAYS SANDRA KAUL SENIOR ANALYST FOR SMITH BARNEY SHEARSON AMONG THE FACTORS MS KAUL THINKS WILL LEND STRENGTH TO THE MARKET A SHARP DECLINE IN US COFFEE INVENTORIES AND THE CONTINUATION OF THE PEAK DEMAND PERIOD FOR COFFEE EVEN IF THE CARTEL ISN'T SUCCESSFUL IN WITHHOLDING COFFEE EXPORTS OVER THE LONG TERM PRICES MAY STILL RISE SOME ANALYSTS BELIEVE THE WITHHELD COFFEE WILL LEAK OUT INTO WORLD MARKETS BUT NOT UNTIL INVENTORIES ARE NEARLY DEPLETED I THINK 90 CENTS A POUND IS A REASONABLE TARGET FOR THE FIRST QUARTER OR SO MS KAUL SAYS AND THEN I THINK WE'LL HAVE A PERIOD OF SEASONAL WEAKNESS BY JUNE OR JULY WE COULD START A NEW UPTREND POSSIBLY TAKING THE MARKET TO 1 A POUND IN THE SECOND HALF IN THE CHICAGO MERCANTILE EXCHANGE'S LUMBER PIT 1993 WILL BE REMEMBERED AS THE YEAR THAT PUT LUMBER ON THE MAP PREVIOUSLY AN OBSCURE COMMODITY USED PRIMARILY BY THE LUMBER INDUSTRYAND OCCASIONALLY AS AN INDICATOR BY ECONOMISTS AND STOCK TRADERS LUMBER BECAME A REDHOT TRADING VEHICLE BECAUSE OF RAGING BULL MARKETS IN EARLY AND LATE 1993 BY YEAR END IT WAS EVEN ATTRACTING INTEREST FROM COMMODITY FUNDS WHOSE HUGE TRADES OFTEN DRIVE THE PRICES OF OTHER COMMODITIES THE MERC'S LUMBER CONTRACT WHICH HAD NEVER BEFORE TRADED ABOVE 400 PER THOUSAND BOARD FEET SOARED TOWARD 500 EARLY LAST YEAR BEFORE PEAKING AT ABOUT 495 NOW A NEW RALLY COULD DRIVE LUMBER FUTURES PRICES ABOVE 500 THIS RALLY IS BEING DRIVEN BY SURGES IN HOME BUYING AND HOME BUILDING BY ENVIRONMENTALLY INSPIRED LOGGING LIMITATIONS IN THE PACIFIC NORTHWEST AND BY A PRONOUNCED CHANGE IN THE BUYING AND STOCKING HABITS OF LUMBER WHOLESALERS STEVE MOORE PRESIDENT OF MOORE RESEARCH CENTER A EUGENE ORE COMMODITY RESEARCH FIRM SAYS HE THINKS LUMBER WILL RISE ABOVE 500 PER THOUSAND BOARD FEET EARLY IN 1994 A MILD WINTER WHICH WOULD ALLOW THE CONSTRUCTION INDUSTRY TO CONTINUE TO BUILD AT A RAPID PACE COULD LEND STRENGTH CONVERSELY A HARSH WINTER MIGHT STALL CONSTRUCTION AND TAKE THE FORCE OUT OF THE MARKET'S LATEST RALLY ANALYSTS SAY EITHER WAY LOGGING RESTRICTIONS APPEAR TO HAVE FORCED LUMBER PRICES TO ESTABLISH AN ENTIRELY NEW LEVEL AFTER UNEXPECTED WEAKNESS THAT PULLED COPPER PRICES BELOW THEIR LONGSTANDING 93CENTAPOUND SUPPORT LEVEL EARLY IN 1993 PRICES RALLIED A BIT LATE IN THE YEAR LARGELY BECAUSE OF THE US ECONOMIC RECOVERY LIKE LUMBER COPPER IS USED HEAVILY IN HOUSING AND THE HOMEBUILDING SURGE PUSHED THE PRICE OF THE MARCH 1994 CONTRACT TO 8330 CENTS A POUND AT YEAR END MANY ANALYSTS EXPECT COPPER PRICES TO CONTINUE TO CLIMB BUT HERE TOO THE WEAKNESS OF THE JAPANESE AND EUROPEAN ECONOMIES COULD TAKE A TOLL DRAINING INDUSTRIAL DEMAND FOR COPPER DESPITE COPPER'S RELATIVELY LOW PRICE MINING COMPANIES ARE STILL EARNING PROFITS ANALYSTS SAY THIS IS PARTLY BECAUSE OF PRODUCTIVITYENHANCING MINING TECHNOLOGY AND PARTLY BECAUSE OF THE SOPHISTICATION AMONG COPPER PRODUCERS IN HEDGING AGAINST LOWER PRICES BY USING FUTURES OPTIONS AND OTHER DERIVATIVE PRODUCTS THUS NEW MINE OUTPUT OF COPPER HASN'T DECLINED AND MAY IN FACT INCREASE IN 1994 THIS POTENTIAL RISE IN AVAILABLE COPPER SUPPLIES MAY CONTINUE TO BE A DRAG ON PRICES THE MOST OPTIMISTIC SCENARIO FOR COPPER PRICES IN THE FIRST HALF MR SAVAIKO SAYS ARE PRICES OF ABOUT 93 TO 95 CENTS A POUND FOR THE NEARBY FUTURES CONTRACT WITH THE SUGAR MARKET ENTERING ITS SECOND CONSECUTIVE SEASON OF DEFICIT SUPPLIES THE LEVEL OF SHIPMENTS OF SUGAR FROM SUCH BIGPRODUCING NATIONS AS CUBA AND THAILAND IS LIKELY TO DRIVE PRICES CHINA AND RUSSIA ARE EACH OWED HUGE QUANTITIES OF SUGAR UNDER LONGTERM CONTRACTS WITH CUBA AND THAILAND THE LATTER TWO COUNTRIES ENCOUNTERED SERIOUS PROBLEMS FULFILLING SUPPLY COMMITMENTS IN 1993 ANALYSTS SAY BOTH MAY HAVE TROUBLE REBOUNDING FROM 1993'S PROBLEMS SHORTTERM SUPPLY SHORTAGES COULD LEAD TO RALLIES THAT DRIVE SUGAR PRICES AS HIGH AS 12 OR 13 CENTS A POUND ANALYSTS SAY BY MIDYEAR HOWEVER IT WILL BE HARD FOR TRADERS TO SUSTAIN RALLIES IN SUGAR AUSTRALIA ANOTHER BIG SUGAR SUPPLIER APPEARS LIKELY TO HAVE A RECORD CROP WHICH WILL BE READY TO SHIP TO COUNTRIES BY SUMMER BECAUSE OF THIS MANY ANALYSTS THINK PRICES WILL HEAD BACK TOWARD EIGHT CENTS A POUND BY JULY SOME ANALYSTS THINK COTTON HAS THE MOST BULLISH OUTLOOK OF ALL THE MAJOR COMMODITY MARKETS EARLY IN 1994 THE PRICE OF THE MAY 1994 FUTURES CONTRACT WHICH FINISHED 1993 AT 6993 CENTS A POUND COULD RISE TO THE MID70S AND POSSIBLY TO 80 CENTS WITHIN THE FIRST HALF MS KAUL SAYS BECAUSE OF DAMAGE RELATED TO EXTREMELY WET AND THEN EXTREMELY HOT WEATHER IN THE SOUTHERN DELTA GROWING REGIONS SUPPLY PROSPECTS FOR US COTTON HAVE DROPPED SHARPLY THE AGRICULTURE DEPARTMENT HAS REDUCED ITS CROP ESTIMATE TO 163 MILLION BALES FROM A FAR MORE OPTIMISTIC ESTIMATE OF 185 MILLION BALES AS RECENTLY AS AUGUST MOREOVER INTERNATIONAL DEMAND HAS EXCEEDED SUPPLY FOR TWO STRAIGHT YEARS FOREIGN USERS AND SUPPLIERS OF COTTON HAVE FACED SUPPLY SHORTAGES AND THEIR SCRAMBLE FOR COTTON HAS REDUCED WORLD INVENTORIES MANY CONSUMERS HAVEN'T YET LOCKED IN THEIR SUPPLY NEEDS FOR THE FIRST HALF AND WILL HAVE TO BE AGGRESSIVE BUYERS 9401030113 940103 SCRIPPS SELLS PUERTO RICO PAPER CINCINNATI EW SCRIPPS CO SAID IT SIGNED AN AGREEMENT TO SELL THE SAN JUAN STAR TO SANTA RITA ACQUISITIONS INC TERMS WERE NOT DISCLOSED IN A STATEMENT SCRIPPS SAID THE STAR IS THE ONLY ENGLISHLANGUAGE NEWSPAPER ON THE ISLAND OF PUERTO RICO IT IS THE COMPANY'S ONLY PROPERTY OUTSIDE THE CONTINENTAL US 9401030112 940103 POLITICS & POLICY CLINTON AND GORE SMOOTHLY OVERCOME THE PERILS OF THEIR RELATIONSHIP AND THEY'RE BUDDIES TOO BY JAMES M PERRY AND JEFFREY H BIRNBAUM STAFF REPORTERS OF THE WALL STREET JOURNAL WASHINGTON EARLY IN THE CLINTON ADMINISTRATION A FORMER TOP AIDE TO WALTER MONDALE WAS TALKING TO VICE PRESIDENT AL GORE AT A FORMAL PARTY IN ONE OF WASHINGTON'S TONIER HOMES YOU NEED TO MAKE TWO THINGS CLEAR THE OLD HAND SAID FIRST IT MUST BE UNDERSTOOD YOU CAN GO TO ANY MEETING ANYWHERE IN THE WHITE HOUSE ANYTIME SECOND YOU NEED THE PRESIDENT TO PASS THE WORD THAT NO ONE ON HIS STAFF MESSES WITH YOU OR YOUR STAFF AND IF THEY DO THEY'RE OUT OF HERE MR GORE GRABBED THE OLD MONDALE HAND BY THE ELBOW AND MARCHED HIM ACROSS THE ROOM TO TALK TO BILL CLINTON HIMSELF TELL HIM WHAT YOU JUST TOLD ME MR GORE SAID AND HE DID WORD FOR WORD MR CLINTON AND MR GORE AGREED ON THE SPOT THAT THEY WOULD MAKE THE ADVICE PART OF THEIR UNDERSTANDING OF HOW THEY WOULD CONDUCT A RELATIONSHIP THAT HAS FRUSTRATED MOST PRESIDENTS AND ALMOST ALL VICE PRESIDENTS THROUGHOUT HISTORY SO FAR IT SEEMS TO BE WORKING BILL CLINTON AND AL GORE BY MOST ACCOUNTS ARE OPERATING SMOOTHLY MORE THAN THAT THEY ARE BUDDIES THAT'S THE ODD THING ABOUT THIS COUPLE THEY ACTUALLY SEEM TO LIKE EACH OTHER EVEN THEIR WIVES TIPPER GORE AND HILLARY RODHAM CLINTON ARE GETTING ALONG NO ONE CAN QUITE RECALL ANY COMPARABLE SITUATION THERE WAS NEVER THIS KIND OF SOCIAL INTERACTION BETWEEN RONALD REAGAN AND GEORGE BUSH SAYS PETE TEELEY WHO WAS MR BUSH'S VICE PRESIDENTIAL SPOKESMAN MR REAGAN AND MR BUSH MAINTAINED A PROPER BUT NEVER A WARM RELATIONSHIP AND THE GLITZY NANCY REAGAN CONSIDERED BARBARA BUSH A FRUMP JIMMY CARTER THE OUTSIDER FROM GEORGIA AND MR MONDALE THE VETERAN CAPITAL INSIDER SET THE MODERN STANDARD FOR HOW THE PRICKLY RELATIONSHIP COULD FUNCTION THEY MANAGED TO WORK EFFECTIVELY AS A TEAM BUT THEY WERE NEVER CLOSE PERSONAL FRIENDS PRESIDENTS AND VICE PRESIDENTS RARELY ARE GEORGE WASHINGTON WATCHED WITH SOME DISTASTE AS HIS VICE PRESIDENT JOHN ADAMS PARADED AROUND TOWN IN A FANCY COACH WITH SERVANTS IN LIVERY FRANKLIN ROOSEVELT NEVER BOTHERED TO TELL HARRY TRUMAN ABOUT THE ATOMIC BOMB OR ABOUT MUCH OF ANYTHING ELSE WHEN DWIGHT EISENHOWER GOT SICK HE TURNED THE COUNTRY OVER TO HIS CHIEF OF STAFF NOT TO HIS VICE PRESIDENT RICHARD NIXON THIS TIME IT'S DIFFERENT EVEN CRITICS OF THIS ADMINISTRATION CONCEDE THAT A COZY RELATIONSHIP EXISTS BETWEEN THE FIRST AND SECOND FAMILIES THEY DO SEEM CLOSER THAN YOUR TYPICAL PRESIDENT AND VICE PRESIDENT SAYS WILLIAM KRISTOL WHO SERVED AS DAN QUAYLE'S VICE PRESIDENTIAL CHIEF OF STAFF BUT HE SAYS THE FACT THEY'RE CLOSE DOESN'T MAKE MUCH DIFFERENCE WHEN IT COMES TO THE FATE OF THE COUNTRY DEMOCRATS BEG TO DIFFER BILL CLINTON AND AL GORE HAVE TAKEN THE CARTERMONDALE EXPERIENCE AND GONE FAR BEYOND IT SAYS RICHARD MOE WHO WAS MR MONDALE'S CHIEF OF STAFF MR MONDALE WAS THE FIRST VICE PRESIDENT WITH A WEST WING OFFICE AND THE FIRST TO BE GIVEN CARTE BLANCHE TO ATTEND WHITE HOUSE MEETINGS AL GORE IS NOW THE MOST PLUGGEDIN VICE PRESIDENT IN HISTORY MR MOE SAYS NOT THAT MR GORE DOESN'T KNOW HIS PLACE IN MOST THINGS IT TURNS OUT HE HAS CHOSEN TO PLAY A SUBSERVIENT ROLE NO 2 TO MR CLINTON'S NO 1 GIVEN THAT MR CLINTON IS THE KIND OF PERSON WHO LIKES TO BE IN CONTROL THAT PROBABLY HAS ENHANCED THE RELATIONSHIP OBSERVERS WHO SAW THE TWO MEN JOG TOGETHER DURING THE CAMPAIGN OR PLAY A LITTLE TOUCH FOOTBALL WITH OTHER MEMBERS OF THE ENTOURAGE SAY MR GORE IS CLEARLY A BETTER ATHLETE BUT HE HAS WISELY CHOSEN TO DOWNPLAY HIS SKILLS IT CERTAINLY HASN'T HURT THAT THE TWO MEN ARE PART OF THE SAME GENERATION FROM THE SAME REGION OF THE COUNTRY AND FROM THE SAME CENTRIST WING OF THE PARTY IT HELPS TOO THAT THEY NEVER RAN AGAINST EACH OTHER IN PURSUIT OF THE PRESIDENCY ENTER PROPINQUITY IT ALL STARTED ON THE BUS SAYS MARK GEARAN A TOP AIDE TO MR GORE DURING THE CAMPAIGN AND NOW THE WHITE HOUSE COMMUNICATIONS DIRECTOR THE EXTENSIVE CAMPAIGN BUS TRIPS THE TWO FAMILIES TOOK AFTER THE DEMOCRATIC NATIONAL CONVENTION MR MOE OBSERVES GAVE THEM A CHANCE TO BOND SOMETHING THAT NEVER HAPPENED WITH MESSRS CARTER AND MONDALE MORE IMPORTANTLY MR GORE QUICKLY BECAME ONE OF MR CLINTON'S MOST TRUSTED ADVISERS DURING THE TRANSITION HE BEGAN A PATTERN OF SITTING IN ON ALMOST ALL MAJOR DECISIONMAKING SESSIONS WITH THE PRESIDENT HE HELPED ADVISE MR CLINTON ABOUT CABINET APPOINTMENTS AND HE WAS PRESENT FOR FINAL DECISIONS ABOUT THE PRESIDENT'S BIG BUDGET PLAN MR GORE IS IN THE OVAL OFFICE SO OFTEN FOUR OR FIVE TIMES A DAY ROUTINELY THAT IT IS SOMETIMES DIFFICULT FOR HIS STAFF TO KEEP HIM ON HIS OWN SCHEDULE MR GORE DOESN'T HIMSELF SET MUCH POLICY HIS HOPES FOR A HIGHSPEED RAIL INITIATIVE AN AGGRESSIVE ANTIPOLLUTION STANCE AND A LARGE GOVERNMENT ROLE IN BUILDING THE INFORMATION SUPERHIGHWAY HAVE BEEN SHELVED OR DEFERRED STILL MR GORE REMAINS A RESPECTED VOICE IN THE PRESIDENT'S INNER CIRCLE FOR THESE AND OTHER INITIATIVES AND THAT ALONE IS FAR MORE INFLUENCE THAN MOST OTHER VICE PRESIDENTS CAN CLAIM ON SOME ISSUES THE PRESIDENT DOES DEFER TO THE VICE PRESIDENT ON A MATTER RELATING TO THE CLINTON INITIATIVE TO STREAMLINE GOVERNMENT THE PRESIDENT WROTE IN THE MARGINS OF A DECISION MEMO IF IT'S OK WITH THE VICE PRESIDENT IT'S OK WITH ME DURING A RECENT INTERVIEW WITH THE WALL STREET JOURNAL MR CLINTON WAS ASKED ABOUT THE PENDING MERGER BETWEEN BELL ATLANTIC CORP AND TELECOMMUNICATIONS INC HE DUCKED REPLYING IN PART A LOT OF THIS IS STUFF THAT I NORMALLY RELY ON THE VICE PRESIDENT TO HELP ME WORK THROUGH AND GIVE ME ADVICE ON TO THE DESPAIR OF THE SECRET SERVICE WHICH OPPOSES HAVING THE PRESIDENT AND THE VICE PRESIDENT IN THE SAME PLACE OUTSIDE THE WHITE HOUSE THE CLINTONS AND GORES ALSO SOCIALIZE TOGETHER AWAY FROM HOME EARLY ON THE CLINTONS WENT TO THE GORES' HOUSE FOR A SMALL DINNER PARTY IN HONOR OF BRITAIN'S PRINCE CHARLES WHO WAS IN TOWN LATER MRS GORE MADE RESERVATIONS FOR ALL FOUR OF THEM AT RT'S RESTAURANT IN ALEXANDRIA VA BEFORE THEY WENT ON TO THE BIRCHMERE NIGHTCLUB TO HEAR JERRY JEFF WALKER SING MORE TYPICALLY THE GORES DROP BY THE WHITE HOUSE TO ATTEND SOME OF THE CLINTONS' INFORMAL DINNER PARTIES WHICH ARE USUALLY FOLLOWED BY A MOVIE IN THE FAMILY THEATER NOW AND AGAIN THEY ALSO WIND UP SNACKING TOGETHER ON THE SECOND FLOOR IN THE REMODELED BUTLER'S PANTRY THAT IS NOW THE KITCHEN IT IS ONE OF THE PRESIDENT'S FAVORITE SPOTS MRS CLINTON AND MRS GORE SCHMOOZE FAIRLY FREQUENTLY TOO THEY HAVE DINED ALONE IN THE WHITE HOUSE RESIDENCE AND CHELSEA CLINTON INVITED SARA GORE TO A SLEEPOVER BIRTHDAY PARTY AT THE WHITE HOUSE EARLY LAST YEAR MR CLINTON AND MRS GORE ALSO SHARE SOMETHING SPECIAL THE SAME BIRTHDAY ON AUG 19 THEY CELEBRATED TOGETHER IN THE OVAL OFFICE AND EXCHANGED GIFTS MR GORE GAVE THE PRESIDENT A LIFESIZE CARDBOARD CUTOUT OF THE VICE PRESIDENT HE JOKED THAT MR CLINTON COULD TAKE IT WITH HIM ON VACATION 9401030111 940103 INTERNATIONAL PLAN TO RESTART JAPAN ECONOMY ELUDES LEADERS PREMIER MOSTLY AVOIDS ISSUE OF DOWNTURN IN SPEECH UNVEILS VISION OF FUTURE BY MICHAEL WILLIAMS STAFF REPORTER OF THE WALL STREET JOURNAL TOKYO AT A TIME OF DEEPENING BUSINESS PESSIMISM JAPAN'S LEADERS ARE STILL GROPING FOR WAYS TO RESTART THE NATION'S STALLED ECONOMY PRIME MINISTER MORIHIRO HOSOKAWA OFFERED MORE STARK EVIDENCE OF THE POLICY STALEMATE ON SATURDAY WHEN HE ALL BUT IGNORED THE DOWNTURN IN A NEW YEAR'S DAY SPEECH INVESTORS HAD BID UP TOKYO STOCKS ON THURSDAY THE LAST DAY OF TRADING OF 1993 PARTLY ON HOPES THAT THE PRIME MINISTER WOULD DISCUSS DETAILS OF A PROPOSED INCOMETAX CUT AND OTHER STEPS INSTEAD MR HOSOKAWA ROLLED OUT SOME CHARTS TO DEMONSTRATE HOW RAPIDLY JAPAN'S POPULATION OF RETIREES IS SWELLING AND TO BRACE THE NATION FOR HIGHER TAXES IN THE FUTURE MR HOSOKAWA SAID IT IS UNAVOIDABLE THAT THE BURDEN OF EACH ONE OF US WILL INCREASE TO A CERTAIN EXTENT IN HIS REMARKS MR HOSOKAWA OUTLINED HIS TWENTYFIRST CENTURY VISION A MIXTURE OF NEW AND WARMEDOVER IDEAS FOR BUILDING A CONSUMERORIENTED RETIREEFRIENDLY SOCIETY THE FEATURES INCLUDE PROVIDING NURSING CARE FOR THE ELDERLY BUILDING MORE PARKS AND BIGGER HOUSES AND SUPPORTING YOUNG ARTISTS NOTABLY MR HOSOKAWA DIDN'T ADDRESS THE CURRENT SLUMP UNTIL THE END OF HIS SPEECH IN RESPONSE TO REPORTERS' QUESTIONS HE SAID HE WOULD CONSIDER GOVERNMENT AID TO SPUR DEALS IN THE COUNTRY'S SLUMBERING PROPERTY MARKET HE ALSO REPEATED A PROMISE TO PRESENT DETAILED ECONOMIC MEASURES IN THE MIDDLE OF JANUARY BUT OFFERED NO SPECIFICS JAPAN'S GOVERNMENT IS NOW CONSIDERING THE DETAILS OF A TAXREFORM PACKAGE WHICH IS WIDELY EXPECTED TO INCLUDE AN INCOMETAX CUT THIS YEAR OF 5 TRILLION YEN 447 BILLION OR MORE MANY TRIAL BALLOONS HAVE BEEN SENT UP RECENTLY PROPOSALS ON EXTRA PUBLICWORKS SPENDING SCHEMES TO REINVIGORATE THE REALESTATE MARKET BUT GOVERNMENT OFFICIALS SAY NOTHING HAS BEEN SETTLED YET MR HOSOKAWA'S TIPTOEING AROUND THE ECONOMY'S ILLS REFLECTS HOW THOROUGHLY THIS DOWNTURN HAS STUMPED JAPAN'S POLITICIANS AND TECHNOCRATS TRADITIONAL RESPONSES SUCH AS PUBLICWORKS SPENDING AND LOWER INTEREST RATES HAVEN'T REIGNITED GROWTH BY ONE CONSENSUS ESTIMATE JAPAN'S ECONOMY WILL EXPAND JUST 05 IN FISCAL YEAR BEGINNING APRIL 1 EVEN WITH A TAX CUT BUT POLICY MAKERS HAVE RESISTED CALLS FOR MORE RADICAL THERAPY OFFICIALS AT THE FINANCE MINISTRY ARE PRESSING FOR AN INCREASE IN JAPAN'S 3 CONSUMPTION TAX TO OFFSET ANY LOSS IN REVENUE FROM AN INCOMETAX CUT THEY ARE MAKING THEIR CASE DESPITE OBJECTIONS THAT THE PROSPECT OF HIGHER SALES TAXES WOULD PROMPT CONSUMERS TO POCKET ANY EXTRA TAKEHOME PAY RATHER THAN SPEND IT THE PROPONENTS' ARGUMENT DEFICITSPENDING IS A MISTAKE BECAUSE JAPAN NEEDS TO SCRIMP AND SAVE FOR ITS GRAYING FUTURE KEY LEADERS SUPPORT THIS REASONING THAT HELPS EXPLAIN WHY DURING JAPAN'S WORST SLUMP IN FOUR DECADES MR HOSOKAWA AND HIS COLLEAGUES ARE DEVOTING MORE ENERGY TO PREPARING THE PUBLIC FOR HIGHER SALES TAXES THAN TO TALKING UP AN IMPENDING INCOMETAX CUT SIMILARLY THE GOVERNMENT HAS BEEN COOL TO THE IDEA OF USING PUBLIC MONEY TO SPUR REALESTATE TRANSACTIONS A PLUNGE IN LAND VALUES HAS CAUSED A VIRTUAL FREEZE IN SECTORS OF THE COMMERCIALPROPERTY MARKET AND HAS STUCK BANKS WITH A HEAP OF PROPERTYRELATED BAD DEBTS THE DEBT MESS HAS LED BANKS TO TRIM LENDING AND HAS CHILLED CONFIDENCE IN THE FINANCIAL SYSTEM BUT THE PUBLIC ARGUE POLICY MAKERS WON'T STAND FOR BAILING OUT FATCAT BANKERS IN RECENT DAYS HOWEVER POLITICIANS APPEAR TO HAVE BEGUN CONSIDERING BROADER MEASURES THESE IDEAS COULD WELL COME TO NOTHING BUT THE LARGE NUMBER OF PROPOSALS SUGGESTS THAT THE INTENSITY OF THE SLUMP IS CAUSING SOME LEADERS TO CHALLENGE JAPAN'S FISCAL SACRED COWS LOCAL REPORTS LAST WEEK SAID THAT THE TAXREFORM PACKAGE MIGHT CONTAIN A PROVISION FOR DELAYING A SALESTAX INCREASE BEYOND MARCH 1995 THE MOST COMMONLY MENTIONED STARTING DATE IF THE ECONOMY HASN'T RECOVERED BY THEN SHORTTERM BONDS WOULD BE ISSUED TO COVER A REVENUE SHORTFALL THERE HAS ALSO BEEN A SPURT OF SUGGESTIONS TO INJECT GOVERNMENT MONEY INTO THE PROPERTY MARKET UNDER ONE SCENARIO THE GOVERNMENT WOULD JOIN WITH PRIVATE LENDERS TO SET UP AN AGENCY THAT WOULD BUY REAL ESTATE THAT IS HELD AS COLLATERAL ON THE LENDERS' BAD LOANS THE AGENCY WOULD BE FUNDED PARTLY BY A GOVERNMENT INVESTMENT FUND A PARTY IN THE RULING COALITION SHINSEITO PROPOSES CREATING AN ENTITY THAT WOULD BUY BAD LOANS FROM SMALL FINANCIAL INSTITUTIONS USING FUNDS LENT BY THE BANK OF JAPAN OTHER IDEAS INCLUDE HAVING LOCAL GOVERNMENTS BUY LAND AND BUILD PUBLIC HOUSING IN MAJOR CITIES AS WELL AS A VARIETY OF TAX BREAKS ON THE SALE OF COMMERCIAL PROPERTY SUPPORT FOR ADDITIONAL SPENDING AND LOWER INTEREST RATES IS POPPING UP TOO RECENT REPORTS INDICATE THAT THE GOVERNMENT IS CONSIDERING ADDITIONAL PUBLICWORKS SPENDING OF AS MUCH AS 5 TRILLION YEN LAST WEEK SHINSEITO PROPOSED THAT THE BANK OF JAPAN SLASH THE OFFICIAL DISCOUNT RATE TO BETWEEN ZERO AND 05 A SCHEME THE CENTRAL BANK IS UNLIKELY TO ACCEPT THE RATE IS NOW AT A RECORDLOW 175 9401030110 940103 INTERNATIONAL SPAIN'S CIGARETTE PRICES RISE 17 MADRID THE AVERAGE PRICE OF A PACK OF CIGARETTES IN SPAIN WAS RAISED 17 BEGINNING SATURDAY THE SPANISH TOBACCO COMPANY TABACALERA SA SAID THE INCREASE PARTLY REFLECTS HIGHER TAXES FACED BY THE COMPANY IT SAID EXCLUDING THE EFFECT OF TAXES THE AVERAGE PRICE INCREASE IS 35 TABACALERA SAID TABACALERA HOLDS A MONOPOLY ON SPANISH TOBACCO PRODUCTION AND WHOLESALE DISTRIBUTION THE COMPANY ALSO CONTROLS RETAIL TOBACCO SALES THROUGH A NETWORK OF TOBACCONISTS ITS OTHER MAIN SOURCES OF REVENUE ARE THE SALE OF STATE FORMS AND POSTAL STAMPS 9401030109 940103 BUSINESS BRIEFS HALO INDUSTRIES INC A DISTRIBUTOR OF ADVERTISING PRODUCTS ACQUIRED THE OPERATING ASSETS OF LEE WAYNE CO STERLING ILL TERMS WEREN'T DISCLOSED CANONIE ENVIRONMENTAL SERVICES CORP SAID WR GRACE & CO SOLD ITS 465 STAKE IN CANONIE TO SMITH ENVIRONMENTAL TECHNOLOGIES CORP E BRIAN SMITH WAS NAMED CHIEF EXECUTIVE OFFICER SUCCEEDING RICHARD A ZARTLER WHO WILL REMAIN PRESIDENT CANONIE ALSO NAMED FOUR NEW DIRECTORS PHILADELPHIA SUBURBAN WATER CO A UNIT OF PHILADELPHIA SUBURBAN CORP ACQUIRED THE MALVERN BOROUGH WATER SYSTEM IN CHESTER COUNTY PA FOR 13 MILLION STERLING BANCSHARES INC ACQUIRED ENTERPRISE BANK HOUSTON FOR 15 MILLION 9401030108 940103 HUMMING MILLS ONCE THE RUST BELT' MIDWEST NOW BOASTS REVITALIZED FACTORIES ITS HEAVY CAPITAL SPENDING PAYS OFF IN PRODUCTIVITY NEW MANUFACTURING JOBS BUT WAGES TEND TO BE LOW BY ROBERT L ROSE STAFF REPORTER OF THE WALL STREET JOURNAL COLUMBUS IND NEXT TO A CORNFIELD SOUTH OF TOWN A FACTORY HAS SPRUNG BACK TO LIFE BRINGING WITH IT HUNDREDS OF JOBS THAT ALMOST WENT FARTHER SOUTH TO ALABAMA AS RECENTLY AS 1991 THE CUMMINS ENGINE CO FACTORY WAS EMPTY CLOSED IN THE COMPANY'S FEROCIOUS DRIVE TO CUT COSTS NOW ITS LIGHTS GLOW IN THE EARLYMORNING DARKNESS AS THE ASSEMBLY LINE CRANKS OUT ENGINES FOR NEW DODGE RAM PICKUPS FRESH CONCRETE HAS REPLACED DIRTY BRICK FLOORS FLEXIBLE WORK RULES HAVE REPLACED CUMBERSOME ONES THAT ONCE PREVAILED AND MANAGEMENTLABOR TEAMWORK HAS REPLACED USAGAINSTTHEM WE WORK SMARTER DECLARES RANDY ACTON WHO LIKE THE OTHER 200 MIDDLEAGED PRODUCTION WORKERS HERE WAS RECALLED FROM LAYOFF IN 1992 TO STAFF THE PLANT FARTHER DOWN THE ROAD 400 WORKERS AT ONKYO CORP OF JAPAN MAKE CAR STEREO SPEAKERS MANY OF THEM FOR EXPORT TO JAPAN IN 1994 TOYOTA INDUSTRIAL EQUIPMENT MANUFACTURING INC MAKES FORKLIFTS FOR THE US CANADA AND SOON MEXICO THOUGH THE COLUMBUS AREA HAS BEEN MORE SUCCESSFUL THAN MOST COMMUNITIES ACROSS THE MIDWEST BOAST SIMILAR SUCCESS STORIES THE TERM RUST BELT DESCRIBING A SWATH OF THE COUNTRY THAT RETRENCHED IN THE FACE OF STRONG INTERNATIONAL COMPETITION IN THE 1980S ALWAYS WAS AN EXAGGERATION TODAY IT IS A MISNOMER ECONOMISTS WHO STUDY THE REGION AND EXECUTIVES NOT PRONE TO HYPERBOLE SAY THE MIDWEST ISN'T MERELY COMPETITIVE WITH THE REST OF THE COUNTRY IT IS TAKING ON THE WORLD WE'RE SLIMMED DOWN AND MUSCLED UP SAYS CATERPILLAR INC CHAIRMAN DONALD FITES WHO CALLS HIS CONSTRUCTIONEQUIPMENT COMPANY A WORLDCLASS HEAVYDUTY IRON CUTTER TRADE FIGURES BACK HIM UP CATERPILLAR'S EXPORTS CONTRIBUTED 185 BILLION TO THE NATION'S BALANCE OF TRADE IN 1992 THAT SEEMS SURE TO GROW AS TARIFFS ARE ELIMINATED UNDER THE PENDING NEW GLOBAL TRADE AGREEMENT AND WHEN RECESSIONS IN EUROPE AND JAPAN END ECONOMIST DIANE SWONK OF FIRST CHICAGO CORP SAYS THAT FOR THE TYPE OF NONAUTOMOTIVE CAPITAL EQUIPMENT MADE IN THE MIDWEST THE NATION SWUNG FROM A TRADE DEFICIT OF 6 BILLION IN 1987 TO A SURPLUS OF ABOUT 20 BILLION IN 1993 SEEDS OF THE MIDWEST'S SUCCESS WERE PLANTED EVEN AS ITS COMPANIES SHUTTERED PLANTS AND DISMISSED WORKERS BETWEEN 1986 AND 1990 CAPITAL SPENDING PER WORKER WAS 9 HIGHER IN THE MIDWEST THAN ELSEWHERE ACCORDING TO A STUDY BY THE FEDERAL RESERVE BANK OF CHICAGO IN OTHER WORDS MIDWEST MANUFACTURERS MODERNIZED MORE AGGRESSIVELY THAN THOSE ELSEWHERE AND THEY ARE BEING REWARDED WITH SOARING PRODUCTIVITY THAT ONLY NOW IS BEGINNING TO STRENGTHEN CORPORATE PROFITS TWO YEARS AGO AO SMITH CORP OPENED LOWCOST AUTOPRODUCTS PLANTS IN ILLINOIS OHIO AND KENTUCKY BUT CHAIRMAN ROBERT O'TOOLE'S PRIZE PLANT IS IN MILWAUKEE THE COMPANY'S HOMETOWN A NEW UNION CONTRACT THAT FOCUSED ON IMPROVING QUALITY AND EFFICIENCY LED TO A 20 GAIN IN PRODUCTIVITY IN 1992 AND ADDITIONAL GAINS LAST YEAR THIS PLANT SOMEDAY WILL BE A HARVARD BUSINESS REVIEW CASE MR O'TOOLE SAYS THE HEARTLAND'S MANUFACTURING RENAISSANCE COMES AT A PRICE THE TYPICAL WAGE OF 860 AN HOUR AT THE REOPENED CUMMINS PLANT IS HALF THAT AT THE COMPANY'S MAIN HEAVYDUTY ENGINE PLANT IN DOWNTOWN COLUMBUS MOST WORKERS AT THE REOPENED PLANT CAN'T AFFORD TO BUY THE DODGE PICKUPS THAT RUN ON THE ENGINES THEY ASSEMBLE NOR WILL COMPETITION FOR NEW PLANTS EASE UP THE SOUTH WITH GENEROUS TAX AND OTHER INDUCEMENTS CONTINUES TO SNARE PRIZES SUCH AS THE MERCEDESBENZ PLANT TO BE BUILT IN ALABAMA AND MANUFACTURERS WILL CONTINUE TO USE THEIR FACTORIES IN OTHER REGIONS TO PRESSURE HIGHERPAID WORKERS IN THE MIDWEST IN MILWAUKEE BRIGGS & STRATTON CORP IS THREATENING TO MOVE JOBS SOUTH UNLESS IT GETS ADDITIONAL BREAKS FROM ITS UNIONIZED WORKERS BUT WITH INCREASING FREQUENCY THE MIDWEST IS DISPROVING THE NOTION THAT AS CATERPILLAR'S MR FITES PUTS IT SOMEHOW MANUFACTURING HAS BEEN HOLLOWED OUT HERE AND EVERYBODY IS FLIPPING HAMBURGERS AMONG SMALL COMPANIES THAT IOWA RECENTLY SNATCHED FROM CALIFORNIA ARE A ROLLERBLADE MANUFACTURER AND A MAKER OF MOTORCYCLE SIDECARS IN DECEMBER RESIDENTS OF NEWTON IOWA WORE BLUE RIBBONS AND RALLIED AT THE HIGH SCHOOL IN AN EFFORT TO PERSUADE MAYTAG CORP TO EXPAND ITS WASHINGMACHINE PLANT AND ADD UP TO 200 JOBS IN ITS HOMETOWN NEWTON'S COMPETITION FOR THE STILLTOBE SITED OPERATION ISN'T TENNESSEE WHICH A FEW YEARS AGO LANDED MAYTAG'S NEW DISHWASHER PLANT IT IS ACROSS THE MISSISSIPPI RIVER IN HERRIN ILL A STUDY BY A GEORGIA INSTITUTE OF TECHNOLOGY TEAM FOUND THAT MANUFACTURERS FAVOR SUCH EXURBAN AREAS OUTSIDE BIG CITIES THEY ARE AWAY FROM PROBLEMS SUCH AS HIGH TAXES BUT CLOSE TO TRANSPORTATION AND SKILLED WORKERS THE SURPRISE WAS THAT WHILE THOSE ATTRIBUTES HELP THE SOUTH THEY COULD BENEFIT THE MIDWEST EVEN MORE WITH ITS ABUNDANCE OF EDUCATIONAL FACILITIES AND OF WORKERS BROUGHT UP WITH FARMERS' MECHANICAL KNOWHOW THE MIDWEST HAS EMERGED AS AN EQUAL IF NOT BETTER OPTION THAN THE SOUTH SAYS ARTHUR C NELSON ONE OF THE AUTHORS OF THE STUDY THE REGION'S PROGRESS CAN BE SEEN AT THE REOPENED CUMMINS PLANT SOUTH OF COLUMBUS CUMMINS'S HEADQUARTERS CITY SHORTLY BEFORE 8 AM A TEAM OF WORKERS RESPONSIBLE FOR QUALITY HAS GATHERED IN A CONFERENCE ROOM OVERLOOKING THE FACTORY FLOOR THE WALLS ARE PAPERED WITH DOZENS OF INDEX CARDS DETAILING IMPROVEMENT PROJECTS OVER COFFEE AND DOUGHNUTS THE GROUP REVIEWS DEFECTS FOUND BEFORE ENGINES WERE SHIPPED DURING THE PREVIOUS WEEK SOME OF THE PROBLEMS CALL FOR JUST EASY FIXES SUCH AS MORE TRAINING OR BETTER LIGHT ON ENGINE PARTS OTHER PROJECTS WILL TAKE WEEKS ALL INVOLVE EXCEPTIONAL COOPERATION BETWEEN PRODUCTION WORKERS AND MANAGERS IT DOES GIVE YOU A SENSE OF SATISFACTION KNOWING WE HAVE SOME CONTROL AND THAT MANAGEMENT ACTUALLY LISTENS SAYS CLARENCE GATES A PRODUCTION WORKER WHO HAD YEARS OF EXPERIENCE AT THE DOWNTOWNCOLUMBUS PLANT THERE QUALITY AND PRODUCTION CONCERNS WERE OFTEN MET WITH A TERSE THAT'S NOT MY JOB IN THE PLANT'S EARLIER LIFE AS MANY AS 2100 WORKERS MADE PARTS SUCH AS PISTONS AND AIR COMPRESSORS FOR THE MAIN ENGINE PLANT IN 1987 THE PLANT BECAME A VICTIM OF SWEEPING CUTBACKS AS CUMMINS TRIMMED ITS PRODUCTION FLOOR SPACE BY 30 THE PLANT'S SECOND CHANCE CAME IN EARLY 1991 AS CUMMINS SOUGHT MORE SPACE FOR ITS SUCCESSFUL MIDRANGE ENGINES MADE IN ROCKY MOUNT NC ELEVEN POSSIBLE SITES FOR THE ADDED CAPACITY WERE WHITTLED DOWN TO HUNTSVILLE ALA WHERE THE COMPANY MAKES GENERATORS AND COLUMBUS COLUMBUS WON WITH A COMBINATION OF STATE AND LOCAL TAX BREAKS AND A DEAL WITH THE DIESEL WORKERS UNION WHICH ALLOWED CUMMINS TO HIRE LAIDOFF WORKERS WITHOUT REGARD TO SENIORITY CUMMINS IMMEDIATELY RULED OUT THOSE WITH POOR ATTENDANCE RECORDS IT TESTED CANDIDATES' MATH ABILITY AND INTERVIEWED THEM EXTENSIVELY WE WANTED PEOPLE TO KNOW THIS WAS A REAL DIFFERENT ENVIRONMENT THAN THEY WERE USED TO SAYS F JOSEPH LOUGHREY VICE PRESIDENT OF WORLDWIDE OPERATIONS THE COMPANY WANTED WORKERS COMMITTED TO ITS DESIRE FOR A FACTORY RUN ON TEAMWORK A SYSTEM ALREADY IN PLACE AT SOME OF ITS NONUNION PLANTS TEAM MEMBERS SWITCH JOBS EVERY TWO HOURS AND SOLVE PROBLEMS TOGETHER MANAGERS PITCH IN WITHOUT GETTING A UNION RULE BOOK THROWN AT THEM TO FURTHER BREAK DOWN BARRIERS PRODUCTION WORKERS AND MANAGERS ALIKE WEAR COMPANYISSUE KHAKI PANTS AND DRESS SHIRTS WITH NO NECKTIES IT ALL FITS WITH THE PLANT'S NOTSOMODEST GOAL STATED ON THE FIRST PAGE OF THE UNION CONTRACT TO BE THE BEST DIESELENGINE PRODUCER IN THE WORLD THOSE HIRED GOT 250 HOURS OF TRAINING INCLUDING 36 HOURS TO LEARN STATISTICAL PROCESS CONTROL A METHOD OF CALIBRATING QUALITY SIXTEEN HOURS OF ENGINE STUDY INCLUDED TAKING MOTORS APART PIECE BY PIECE AND REASSEMBLING THEM SCARIEST OF ALL WERE 72 HOURS OF MATH TAUGHT BY A LOCAL COLLEGE INSTRUCTOR SUCCESS CARRIED AN UNEXPECTED PAYOFF FOR THE FIRST TIME MANY WORKERS COULD HELP THEIR CHILDREN WITH ALGEBRA CUMMINS HAD HIGH EXPECTATIONS FOR THE REOPENED PLANT AND IT HAS BEAT EVERY SINGLE TARGET SINCE THE DAY IT OPENED IN 1992 SAYS TIM SOLSO CUMMINS'S EXECUTIVE VICE PRESIDENT FOR OPERATIONS DEFECTS ON ENGINES SHIPPED ARE AMONG THE LOWEST OF ANY CUMMINS PLANT SO FAR THE UNIONIZED WORKERS HAVEN'T FILED A SINGLE GRIEVANCE THEIR IDEAS TO STREAMLINE THEIR JOBS HAVE HELPED RAISE DAILY CAPACITY TO 180 ENGINES OR MORE FROM 150 IN EARLY 1993 IN DECEMBER BY WORKING EXTRA HOURS AND SATURDAYS THEY PUMPED OUT 230 A DAY YET THE WORKERS MUST SETTLE FOR HALF THE PAY AND FEWER BENEFITS THAN FORMER COWORKERS AT THE MAIN ENGINE PLANT INSTEAD OF A PENSION FOR EXAMPLE CUMMINS CONTRIBUTES JUST 325 A YEAR TO A 401K RETIREMENT PLAN AND UP TO 450 A YEAR FOR A SAVINGS PLAN FRANCIS SMALLWOOD WHO TESTS FINISHED ENGINES FOR THE NEW DODGE PICKUP DRIVES TO WORK IN A 1984 FORD STATION WAGON WITH 150000 MILES ON IT HIS WIFE TAKES A 1988 FORD TO HER JOB CARING FOR THE ELDERLY A NEW CAR IS OUT OF THE QUESTION AT 860 AN HOUR MR SMALLWOOD IS BARELY AHEAD OF HIS 19YEAROLD SON WHO WORKS AT A NEARBY FORGE PRETTY SOON HE'LL PASS ME THE 42YEAROLD CUMMINS WORKER SAYS I'M NOT REAL PROUD OF THE WAGES AND BENEFITS SAYS LARRY NEIHART PRESIDENT OF THE DIESEL WORKERS UNION AN INDEPENDENT UNION THAT HAS LONG REPRESENTED CUMMINS WORKERS BUT I'M PROUD THE JOBS ARE THERE HE WANTS TO NARROW THE GAP WHEN THE CONTRACT EXPIRES IN 1995 MEANWHILE THE MAIN COLUMBUS PLANT IS MOVING TO A SIMILAR TEAMBASED SYSTEM IN 1996 BUT WITH HIGHER WAGES 16 TO 19 AN HOUR A SIMILAR PAY GAP BETWEEN OLD AND NEW MANUFACTURING JOBS IS EVIDENT THROUGHOUT THE COLUMBUS AREA BROOKE TUTTLE PRESIDENT OF THE COLUMBUS ECONOMIC DEVELOPMENT BOARD FIGURES THAT THE AREA HAS LOST 5700 JOBS AT THE MAJOR EMPLOYERS THAT PAID 12 TO 15 AN HOUR AT THE SAME TIME IT HAS GAINED 6000 NEW JOBS PARTLY BY PROMOTING THE WAGES OF 6 TO 8 AN HOUR TO BUSINESS PROSPECTS YOU DON'T HAVE TO BE A ROCKET SCIENTIST TO KNOW WE'RE STILL LOSING OUR STANDARD OF LIVING MR TUTTLE CONCEDES BUT HE PREDICTS THE GAP WILL NARROW AS DEMAND FOR SKILLED LABOR PUSHES UP WAGES AT THE LOW END COLUMBUS MAYOR ROBERT STEWART FIGURES NEW EDUCATION AND TRAINING FACILITIES WILL HELP INCREASE SKILLS AND INCOMES MEANWHILE HE SHAMELESSLY PROMOTES COLUMBUS ON ANNUAL TRIPS TO EUROPE AND ASIA WITH MR TUTTLE THE MAYOR'S OFFICE IS LITTERED WITH GIFTS FROM SOME OF THE 14 FOREIGN COMPANIES THAT HAVE MOVED OPERATIONS INTO THE AREA SINCE 1985 A JAPANESE DOLL A GERMAN PLATE AND A CANADIAN GOOSE THE COLUMBUS AREA'S TOTAL GAIN FROM BUSINESSGOVERNMENT COOPERATION SINCE 1985 26 NEW BUSINESSES AND 87 PLANT EXPANSIONS ECONOMIC FORCES ARE ON THE SIDE OF MIDWEST COMMUNITIES LIKE THIS DEMAND FOR DURABLE GOODS SUCH AS APPLIANCES AND CONSTRUCTION EQUIPMENT IS RISING SO IS DEMAND FOR ALMOST ANYTHING ON WHEELS CARS LIGHT AND HEAVY TRUCKS AND RECREATIONAL VEHICLES WITH INFLATION AND INTEREST RATES UNDER CONTROL THE RECOVERY IN THIS COUNTRY IS THE WAY YOU'D LIKE IT AS A MANUFACTURING PERSON CUMMINS PRESIDENT JAMES HENDERSON SAYS IT'S SLOW AND STEADY FAVORABLE EXCHANGE RATES PAD THE ADVANTAGE IN TOKYO CATERPILLAR'S NEMESIS KOMATSU LTD IS CUTTING ITS WORK FORCE BY 1000 OVER TWO YEARS CATERPILLAR IS HIRING 265 NEW PRODUCTION WORKERS IN ILLINOIS ITS BIGGEST BATCH SINCE THE 1970S NEVERTHELESS ADDING WORKERS IS A LAST RESORT CATERPILLAR'S TOTAL EMPLOYMENT HOVERS AROUND 50000 DOWN FROM 73000 IN 1982 AND AT CUMMINS MR HENDERSON SAYS WE'RE TRYING TO DO MORE AND MORE WITH THE SAME NUMBER OF PEOPLE SO THE REOPENED PLANT HERE IS MEETING INCREASED DEMAND FIRST BY SIMPLIFYING PRODUCTION AND THEN WITH OVERTIME AND TEMPORARY EMPLOYEES SUCH CAUTION MAKES IT LESS LIKELY THAT THE MIDWEST WILL SLIP BACK INTO THE OVERCONFIDENCE THAT CHARACTERIZED EARLIER BOOMS AT COMPANY AFTER COMPANY THE REFRAIN IS THE SAME THEY ARE MORE EFFICIENT THAN EVER BUT AIM TO BE STILL MORE EFFICIENT 9401030107 940103 CENTURA BANKS CLOSES MERGERS TERMS WEREN'T DISCLOSED OFFICES OF ALL THREE INSTITUTIONS WILL OPEN AS CENTURA BANK BRANCHES TOMORROW WITH THE MERGERS CENTURA BANKS ADDS FIVE OFFICES IN THE CHARLOTTE AREA FOUR IN THE LUMBERTON AREA AND TWO IN THE CANTON AREA 9401030106 940103 ECUADOR SLOWS INFLATION QUITO ECUADOR INFLATION TOTALED 31 IN 1993 HALF THE 1992 FIGURE THE GOVERNMENT SAID THE 1993 INFLATION FIGURE WAS THE LOWEST SINCE 1987 WHEN PRICES ROSE 295 THE ECUADOREAN INSTITUTE OF STATISTICS AND CENSUS SAID PRESIDENT SIXTO DURANBALLEN IMPOSED AUSTERITY MEASURES SHORTLY AFTER TAKING OFFICE IN AUGUST 1992 TO SLASH INFLATION AND A FISCAL DEFICIT HE RAISED GASOLINE PRICES DEVALUED THE CURRENCY AND ELIMINATED SOME SUBSIDIES PRICES ROSE 602 IN 1992 AND 49 IN 1991 9401030105 940103 US JAPAN FAR APART' IN TRADE TALKS BY ASRA Q NOMANI STAFF REPORTER OF THE WALL STREET JOURNAL WASHINGTON JAPAN AND THE US ARE STILL VERY FAR APART IN NEGOTIATIONS TO ESTABLISH A SOCALLED FRAMEWORK FOR TRADE RELATIONS IN AREAS SUCH AS MOTOR VEHICLES AND AUTO PARTS A SENIOR CLINTON ADMINISTRATION OFFICIAL SAID THE TWO COUNTRIES HAVE BEEN SEEKING TO HAMMER OUT DIFFERENCES OVER AUTOS AND AUTO PARTS AS WELL AS GOVERNMENT PROCUREMENT POLICIES BY FEB 11 WHEN PRESIDENT CLINTON AND JAPANESE PRIME MINISTER MORIHORO HOSOKAWA ARE SCHEDULED TO MEET HERE BUT JEFFREY E GARTEN UNDERSECRETARY OF COMMERCE FOR INTERNATIONAL TRADE SAID LAST WEEK IN AN INTERVIEW THERE'S MILES TO GO BEFORE ANY COMMON GROUND SEEMS TO BE IN SIGHT SUCH TALKS USUALLY GO DOWN TO THE WIRE BEFORE ANY AGREEMENT IS REACHED AS MR GARTEN SAID THE HISTORY OF USJAPAN TRADE NEGOTIATIONS IS THAT MOST OF THE BREAKTHROUGHS OCCUR AT THE VERY LAST MINUTE BUT HE ADDED RIGHT NOW THE TWO SIDES ARE VERY FAR APART AND THERE IS AN ENORMOUS GAP TO BE BRIDGED OVER LESS THAN SIX WEEKS WHEN THE TWO SIDES GATHER FOR THE SUMMIT THERE HAS BEEN WIDESPREAD SPECULATION THAT THE CLINTON ADMINISTRATION MIGHT EASE UP ON THE HOSOKAWA GOVERNMENT WHICH IS HAVING A DIFFICULT TIME KEEPING ITS FRACTIOUS POLITICAL COALITION TOGETHER AND DEALING WITH SEVERE ECONOMIC TROUBLES BUT MR GARTEN SOUGHT TO DISPEL SUCH SPECULATION THE US IS OBVIOUSLY VERY SUPPORTIVE OF THE HOSOKAWA GOVERNMENT HE SAID BUT THESE TRADE ISSUES ARE SO CENTRAL TO OUR NATIONAL INTEREST AND OUR OVERALL ECONOMIC STRATEGY THAT THERE'S NO LETUP IN THE URGENCY OF REACHING AN AGREEMENT ON AUTOS OR ANY OTHER PART OF THE TRADE AGREEMENT MR GARTEN ADDED DESPITE THE FACT THAT THE HOSOKAWA GOVERNMENT IS NEW AND CLEARLY HAS A VERY BROAD AGENDA WITH VERY SENSITIVE ISSUES SUCH AS POLITICAL REFORM AND DESPITE THE FACT THAT JAPAN IS IN A REAL RECESSION AMERICAN TRADE STRATEGY HASN'T CHANGED SINCE JULY 1993 THE GOAL IS STILL THE SAME TO GET CONCRETE AGREEMENTS IN SEVERAL AREAS SUCH AS GOVERNMENT PROCUREMENT OF TELECOMMUNICATIONS AND MEDICAL EQUIPMENT AMONG OTHERS AND AUTOMOTIVE TRADE DURING A NEWS CONFERENCE IN TOKYO ON SATURDAY PRIME MINISTER HOSOKAWA SOUGHT TO DEFLECT ASSERTIONS THAT TOKYO IS DRAGGING ITS FEET IN THE NEGOTIATIONS VERY LARGE DOMESTIC PROBLEMS HAVE PILED UP AND SLOWED PROGRESS HE SAID BUT WE CONTINUE TO MAKE EFFORTS SO THAT THE IMPORTANT ISSUES IN JAPANUS RELATIONS CAN MOVE IN A GOOD DIRECTION BY THE FEBRUARY SUMMIT HE SAID I THINK THAT WE MUST RESOLVE THINGS SO THAT WE CAN ARRIVE AT SOMETHING ACCEPTABLE TO ONE ANOTHER EVEN IF IT ISN'T 100 SATISFACTORY TO BOTH SIDES ONE SPECIFIC AREA OF CONTENTION INVOLVES A US DEMAND THAT JAPAN COMMIT ITSELF TO QUANTIFIABLE LEVELS OF IMPORTS FROM THE US JAPANESE NEGOTIATORS ARGUE THAT SETTING NUMERICAL TERMS WOULD PUT UNFAIR RESTRICTIONS AND EXPECTATIONS ON THEIR COUNTRY ON THAT ISSUE TOO MR GARTEN SAID THE US IS UNBENDING THOSE AGREEMENTS IN THE AMERICAN VIEW WILL BE SATISFACTORY ONLY IF THERE ARE VERY CONCRETE RESULTS AND ONLY IF THE RESULTS CAN BE MEASURED OVER TIME HE SAID JAPANESE OFFICIALS ARGUE THAT THEY HAVE BEEN MAKING IMPORTANT PROGRESS OPENING THEIR MARKETS INCLUDING THEIR POLITICALLY SENSITIVE DECISION LAST MONTH TO END JAPAN'S BAN ON RICE IMPORTS BUT THE US HAS ANOTHER TRADE DISPUTE WITH JAPAN SIMMERING IN THE BACKGROUND OPENING JAPAN'S MARKET TO FOREIGNMADE SEMICONDUCTORS LAST WEEK US TRADE REPRESENTATIVE MICKEY KANTOR SAID THE THIRDQUARTER MARKETSHARE FIGURE FOR FOREIGN SEMICONDUCTORS WAS A DISAPPOINTMENT HE CALLED FOR EMERGENCY TALKS TO SETTLE ON WAYS TO OPEN THE MARKET FURTHER JAPANESE OFFICIALS CONTEND THEIR MARKET IS OPEN ENOUGH WITH FOREIGN SALES FIGURES AT LEAST INCREASING IN OTHER MATTERS MR GARTEN SAID COMMERCE SECRETARY RON BROWN PLANS TO OPEN AN ADVOCACY CENTER FOR US BUSINESSES AS PART OF ITS EXPORTPROMOTION PROGRAM THE CENTER WILL INCLUDE A TEAM OF ABOUT 15 US OFFICIALS WHO WILL FOCUS ON IDENTIFYING BIG OVERSEAS PROJECTS FOR US COMPANY BIDS WE'RE TRYING TO MARSHAL THE FINANCIAL RESOURCES OF THE GOVERNMENT WITH DIPLOMATIC MUSCLE MR GARTEN SAID THE IDEA IS TO COMPETE HEADTOHEAD WITH OUR MAJOR COMPETITORS HE CITED GERMANY FRANCE JAPAN SOUTH KOREA AND SINGAPORE AS MAJOR RIVAL COUNTRIES THAT AGGRESSIVELY PUSH THEIR COMPANIES' BIDS WITH LOWINTEREST FINANCING HE SAID THE COMMERCE DEPARTMENT ALSO PLANS IN JANUARY AND FEBRUARY TO OPEN CONSOLIDATED EXPORTPROMOTION CENTERS CALLED ONESTOP SHOPS IN MIAMI BALTIMORE LOS ANGELES AND CHICAGO THE COMMERCE DEPARTMENT THE SMALL BUSINESS ADMINISTRATION AND THE EXPORTIMPORT BANK ARE COORDINATING THAT EFFORT HE SAID TARGET COUNTRIES FOR THE PROMOTION PROGRAM INCLUDE MEXICO BRAZIL ARGENTINA INDONESIA CHINA INDIA AND SOUTH KOREA PRIORITY INDUSTRIES WILL BE INFORMATION TECHNOLOGY INCLUDING TELECOMMUNICATION HEALTH SERVICES INCLUDING MEDICAL EQUIPMENT AND AEROSPACE WHICH MR GARTEN SAID IS VERY HIGH ON THE LIST 9401030104 940103 HEARD ON THE STREET PRICE OF CML A MAKER OF EXERCISE MACHINES APPEARS TO BE TOO FAT SOME INVESTORS SAY BY SUSAN PULLIAM STAFF REPORTER OF THE WALL STREET JOURNAL IMAGINE A PATIENT WHO APPEARS TO BE IN PERFECT HEALTH THE ONLY TROUBLE IS THE PATIENT'S ELECTROCARDIOGRAM IS GOING HAYWIRE TRADERS SAY THE PATIENT IN THIS CASE IS CML GROUP OF ACTON MASS MAKER OF THE FAMILIAR NORDICTRACK BRAND OF CROSSCOUNTRY SKITYPE EXERCISE MACHINES MANAGEMENT IS HIGHLY REGARDED AND EARNINGS HAVE BEEN ON TRACK SO FAR YET THE STOCK SANK 14 TO 24 1/2 THE DAY CJ LAWRENCE DOWNGRADED IT TO HOLD FROM BUY TWO WEEKS AGO CITING IN PART THE GENERAL RETAILSALES CLIMATE ON FRIDAY THE STOCK WAS AT 23 5/8 SOME INVESTORS STILL HAVE NAGGING WORRIES ABOUT THE COMPANY'S BIGGEST PRODUCT NORDICTRACK THE QUESTION ON THEIR MINDS IS WHETHER IN THIS ERA OF AGING BABYBOOMERS CML MAY SOON SATURATE THE MARKET FOR NORDICTRACKS HAVING ALREADY SOLD ABOUT 15 MILLION MACHINES IN STREET LINGO NORDICTRACK DOESN'T HAVE A RAZOR BLADE ASPECT MEANING IT HAS NO COMPONENT THAT CAN GENERATE REVENUE BY REPEATEDLY BEING REPLENISHED OR REPLACED THE STOCK'S RECENT DROP MARKED ITS SECOND BOBBLE LAST YEAR BELOW 26 THE AVERAGE CLOSING PRICE FOR 200 DAYS THE OTHER TIME IT MISSED THIS IMPORTANT BENCHMARK CAME IN JULY FOLLOWING SIMILAR AND THENUNWARRANTED SPECULATION OF A SALES SLOWDOWN SLIPPING BELOW THAT AVERAGE AGAIN IS A BAD SIGN FOR A SOCALLED GROWTH STOCK LIKE CML ECONOMYDEPENDENT CYCLICAL STOCKS ARE ROUTINELY EXCUSED BY INVESTORS IF THEY FALL BELOW THEIR 200DAY AVERAGES BUT FOR GROWTH STOCKS MISSING THE 200DAY AVERAGE A COUPLE OF TIMES MAY BE THE FIRST SIGN OF AN IMPENDING DOWNTURN SOME MONEY MANAGERS SAY MAKE NO MISTAKE CML HAS BEEN A TOUGH STOCK TO BET AGAINST BEARS ON THE STOCK WERE CLOBBERED REPEATEDLY AS QUARTER AFTER QUARTER EARNINGS MET OR BEAT THE STREET'S TARGETS BUT NOW EVEN SOME OF THE COMPANY'S STAUNCH SUPPORTERS NOTABLY MONTGOMERY SECURITIES LEADMANAGER OF A CML STOCK OFFERING IN 1992 SEEM TO BE CHANGING THEIR TUNE WE ARE SOMEWHAT CONCERNED MARSHA AARON A MONTGOMERY ANALYST SAID IN DEC 21 COMMENTS TO CLIENTS THE COMPANY PREVIOUSLY INDICATED THAT SALES WERE GREAT' NOW THEY ARE MERELY GOOD' OR OK' FURTHER SHE SAID THE COMPANY IS MUM ABOUT HOW CHRISTMAS SALES WENT EMPHASIZING INSTEAD THE IMPORTANCE OF JANUARY SALES MS AARON DIDN'T CHANGE HER BUY RATING ON THE COMPANY HOWEVER OTHER ANALYSTS FRET ABOUT THE COMPANY'S RETAILING DIVISIONS WHICH INCLUDE NATURE CO AN ENVIRONMENTORIENTED GIFT STORE AND BRITCHES OF GEORGETOWNE A MEN'S STORE PETER BARRY AN ANALYST AT CJ LAWRENCE DOWNGRADED THE STOCK AFTER CONCLUDING THAT SAMESTORE SALES AT NATURE CO AND BRITCHES WERE IN NEGATIVE TERRITORY ROBERT TOD CML'S PRESIDENT AND CHIEF OPERATING OFFICER CALLED THE RECENT SLIDE IN CML AN OVERREACTION ALTHOUGH HE CONFIRMED SAMESTORE SALES AT NATURE AND BRITCHES WERE IN FACT DOWN FROM A YEAR EARLIER ASKED ABOUT THE OVERALL PACE OF CHRISTMAS SALES INCLUDING NORDICTRACK HE SAID IN GENERAL IT WILL BE A GOOD BUT NOT A GREAT CHRISTMAS SEASON AN OKAY CHRISTMAS SEASON IN GENERAL WE'RE RUNNING ALONG OUR EXPECTATIONS THE EXECUTIVE SAID HE EMPHASIZED THAT CML RETAILING OUTFITS' PROFIT MARGINS WILL BE STRONG AS THEY DIDN'T DISCOUNT HEAVILY TO LURE HOLIDAY SHOPPERS SOME INVESTORS WONDER WHETHER CML CAN CONTINUE ITS SPEEDY GROWTH OVER THE LONG TERM SOME ANALYSTS EXPECT NORDICTRACK SALES GROWTH TO DROP TO AROUND 27 FOR THE YEAR THROUGH JULY 1994 FROM 40 LAST FISCAL YEAR THE COMPANY IS STRIVING TO DIVERSIFY HENCE THE BRITCHES AND NATURE STORES NOT TO MENTION A HANDFUL OF NORDICTRACK RETAIL STORES AND ITS SMITH & HAWKEN DIVISION IT HAS INTRODUCED A SLEW OF NEW MACHINES INCLUDING A TREADMILL CALLED WALKFIT AND A WEIGHT MACHINE THE NORDICFLEX GOLD THE PAYOFF FOR ALL THIS IS UNCERTAIN MR TOD SAID HE BELIEVES NORDICFLEX GOLD EVENTUALLY WILL BE AS LARGE OR LARGER IN SALES THAN NORDICTRACK AND THAT SALES OF THE PRODUCT ARE ABOUT ON PLAN ANALYSTS ARE SKEPTICAL SAYING THE WEIGHT MACHINES ADDED ONLY ABOUT 37 MILLION TO SALES IN THE YEAR THROUGH JULY WITHOUT ANOTHER HOME RUN CML'S STOCK COULD BE IN FOR A SLIDE WHEN NORDICTRACK SALES HIT THEIR INEVITABLE SLOWDOWN AND IT WILL BE NO EASY JOB PROPELLING ANOTHER PRODUCT TO GENERATE 377 MILLION OR MORE IN ANNUAL SALES AS NORDICTRACK DID LAST FISCAL YEAR 9401030103 940103 1993 YEAREND REVIEW OF MARKETS AND FINANCE REVIEW OF THE STOCK MARKET FOLLIES FOIBLES & FUMBLES BY WILLIAM POWER AND ALEXANDRA PEERS THE MARKET WAS BULLISH BUT BORING FOR MOST OF 1993 YET ON WALL STREET THERE'S RARELY A DULL MOMENT EXCEPT FOR ECONOMIST CONVENTIONS AS USUAL THE JOURNAL KEPT TRACK OF THE YEAR'S MORE LUDICROUS MOMENTS IN INVESTING SOME HIGHLIGHTS WITH THE NEXT LETTER IN A LETTER TO POTENTIAL ATTENDEES TO JIM BLANCHARD'S NEW ORLEANS 1993 INVESTMENT CONFERENCE A BIG GATHERING OF INVESTORS HELD EVERY FALL MR BLANCHARD ADMITTED HIS CONFERENCES HAVEN'T ALWAYS BEEN COMPELLING LET ME BE CANDID HE SAID SOME OF THE CONFERENCES WE'VE HELD DURING THE LAST 20 YEARS HAVE BEEN FAR MORE EXCITING AND FRANKLY MORE PROFITABLE THAN OTHERS THAT'S BECAUSE THERE WERE YEARS WHEN INVESTMENT MARKETS WERE AS INTERESTING AS WATCHING PAINT DRY AND THE SPEAKERS DIDN'T HAVE ALL THAT MUCH TO SAY THE 1993 CONFERENCE HE ASSURED READERS WOULD BE DIFFERENT JUST 595 PER PERSON THE YEAR IN IPOS IN 1993 INVESTORS PREFERRED A MISDIRECTED FOWL OVER A MISDIRECTED FOUL SHOT INVESTORS SNAPPED UP THE INITIAL PUBLIC OFFERING IN FASTFOOD CHICKEN CHAIN BOSTON CHICKEN INC WHICH ISN'T BASED IN BOSTON AT ALL BUT IN NAPERVILLE ILL WHATEVER SEVERAL MONTHS EARLIER INVESTORS GREETED RUDELY A NEW OFFERING OF WILT CHAMBERLAIN'S RESTAURANTS INC NAMED AFTER THE LEGENDARY BASKETBALL PLAYER WHO DID EVERYTHING WELL BUT SHOOT FREE THROWS THE CHAMBERLAIN'S OFFERING HAD TO BE WITHDRAWN AFTER IT HIT THE MARKET WITH A CLANG BUT NOW THAT THE CHICKEN STOCK HAS MADE IT IS THERE ANY CHANCE THAT WILT WILL TRY AGAIN IN 1994 IT'S ON THE VERY BACK BURNER SAYS A CHAMBERLAIN'S SPOKESMAN IT WAS ONE OF THE BETTER PUBLICITY STUNTS FOR THE COFFEE SUGAR & COCOA EXCHANGE ELSIE THE BORDEN COW WAS TRUCKED IN ALL 950 POUNDS OF HER ON JUNE 15 TO HELP LAUNCH THE EXCHANGE'S FUTURES CONTRACTS ON CHEDDAR CHEESE AND NONFAT DRY MILK SHE EVEN GOT HER OWN TRADING BADGE AS THE COW AMBLED PAST THE BEMUSED TRADERS ONE WAS OVERHEARD TO REMARK THAT'S ALL WE NEED ANOTHER ANIMAL IN HERE WALL STREET'S TERSEST DISCLAIMER ON A RESEARCH REPORT FROM JEFFERIES & CO'S TRACY HERRICK INFORMATION IS BELIEVED TO BE CORRECT BUT THERE'S NO GUARANTEE NOT EVERYONE ON WALL STREET HAS NERVES OF STEEL IN MAY THE NEW YORK STOCK EXCHANGE FILED AN UNUSUAL DISCIPLINARY ACTION IT SUSPENDED A TRADING FIRM'S CLERK FOR DOING IMPROPER TRADES IN RESPONSE TO PERSISTENT HECKLING FROM HIS COLLEAGUES THE BIG BOARD SAID THE PROBLEM AROSE WHEN VINCENT A REGAN A CLERK WHO WAS TAKING A COURSE IN TECHNICAL MARKET ANALYSIS BOUGHT A PARTICULAR STOCK THAT DIDN'T DO SO WELL EVERY DAY THE STOCK FELL THE FIRM'S PARTNERS TOOK THE OPPORTUNITY TO HECKLE REGAN UNMERCIFULLY ABOUT HIS' STOCK A BIG BOARD HEARING PANEL EXPLAINED SO IN A FIT OF STRESS MR REGAN BEGAN ENTERING FICTITIOUS TRADES TO PROP UP THE STOCK'S PRICE AND THUS AVOID ANOTHER ROUND OF COMMENTS THE BIG BOARD SAID JUST WHEN YOU THOUGHT WALL STREETERS WEREN'T ALL SQUARES THIS HAPPENS THE MUNICIPALBOND HOUSE GRIFFIN KUBIK STEPHENS & THOMPSON RESCHEDULED AN INVESTMENT SEMINAR PLANNED FOR JUNE IN CHICAGO AFTER DISCOVERING THAT THE GRATEFUL DEAD AND STING WOULD BE HOLDING A GIGANTIC OUTDOOR ROCK CONCERT AT THE SAME TIME THE BOND FIRM EXPLAINED IN A POSTPONEMENT NOTICE TO ATTENDEES THEY ARE EXPECTING 100000 DEAD HEADS' APPROXIMATELY 100 YARDS FROM THE SITE OF THE INVESTMENT SEMINAR WE FELT IT NECESSARY TO RESCHEDULE OUR SEMINAR ONE OF THE BOND FIRM'S CONCERNS IT SAID WAS THE NATURE OF THE OTHER EVENT'S CROWD RESPONDS THE GRATEFUL DEAD'S PUBLICIST AND HISTORIAN DENNIS MCNALLY IT MIGHT SHOCK THE HELL OUT OF THAT COMPANY BUT IF YOU TOOK AWAY ALL THE PEOPLE ON WALL STREET WHO WERE PROBABLY AT THAT CONCERT ON THEIR SUMMER VACATION THE MARKET WOULDN'T FUNCTION VERY WELL GUERNICA PAINTING WITH RED PAINT THE SECURITY GUARDS SEEMED SLIGHTLY MORE VIGILANT THAN USUAL WHAT'S NEXT MIKE MILKEN VISITS THE SEC AT SMITH BARNEY'S ANNUAL COUNTRYFUND CONFERENCE IN APRIL ONE FUND MANAGER DEMONSTRATED AN OLDFASHIONED WAY TO WIN FRIENDS LAURENCE FREEDMAN MANAGER OF FIRST AUSTRALIA FUND GAVE AWAY SMALL CANS OF FOSTER'S LAGER LADIES' SIZE HE SAID TO INVESTORS WHO ATTENDED HIS FUND'S PUBLICLY TRADED STOCK PROMPTLY ROSE 25 CENTS A SHARE THAT DAY ON THE AMERICAN STOCK EXCHANGE ON THE HIGHEST VOLUME IN THREE MONTHS INTERPLAY PRODUCTIONS INC OF IRVINE CALIF INTRODUCED RAGS TO RICHES A COMPUTER GAME THAT CLAIMS TO REPLICATE WALL STREET IT IS LONG ON TIPS BUT SHORT ON ETHICS PLAYERS BUY AND SELL STOCKS BONDS GOLD OIL AND INFORMANTS AND WHEN THE GAME'S VERSION OF THE SECURITIES AND EXCHANGE COMMISSION CATCHES ON THE PLAYER CAN HIRE AN ACCOUNTANT TO STALL THEM THE ONLY SURE WAY TO AVERT A JAIL TERM CHARITY CONTRIBUTIONS TO NUNS ANDREW ECONOMOS MANAGER OF SCUDDER NEW ASIA FUND WARMED UP THE CROWD AT AN INVESTORS' CONFERENCE BY MOCKING THE LOGO OF HIS OWN EMPLOYER SCUDDER STEVENS & CLARK THE LOGO FEATURES A STYLIZED DRAWING OF A FISHERMAN STEERING HIS BOAT PEOPLE STILL THINK I WORK FOR A SUBSIDIARY OF A FROZENFOOD MANUFACTURER MR ECONOMOS JESTED THE CROWD ROARED WHICH PROBABLY ENSURES THAT MR ECONOMOS WILL USE THE LINE AGAIN THIS YEAR 9401030102 940103 MARKETING & MEDIA BOSTON GLOBE UNION AGREE ON A FOURYEAR CONTRACT NEW YORK THE BOSTON GLOBE SAID NEGOTIATING COMMITTEES FOR THE NEWSPAPER AND THE BOSTON GLOBE EMPLOYEES ASSOCIATION REACHED A TENTATIVE AGREEMENT ON A NEW FOURYEAR CONTRACT THE GLOBE SAID THE AGREEMENT IS SUBJECT TO RATIFICATION BY THE UNION'S 1100 MEMBERS THE TENTATIVE PACT FOLLOWS THREE YEARS OF NEGOTIATIONS THE LAST TWO UNDER FEDERAL MEDIATION THE GLOBE SAID IT EXPECTS A VOTE IN EARLY FEBRUARY TERMS OF THE CONTRACT INCLUDE AVERAGE 3 ANNUAL WAGE INCREASES AND LIFETIME JOB GUARANTEES FOR MORE THAN 90 OF THE FULLTIME MEMBERSHIP THE GLOBE SAID THE NEWSPAPER WHICH WAS ACQUIRED BY NEW YORK TIMES CO LAST YEAR SAID THE AGREEMENT ALSO CALLS FOR CERTAIN WORKRULE CHANGES THAT WILL RESULT IN 27 MILLION IN ANNUAL SAVINGS THE COMPANY ADDED THAT THE AGREEMENT ALSO GIVES IT NEW LIMITATIONS ON MILEAGE RATES AND USE OF SINGLE VACATION DAYS ELIMINATES A NOLAYOFF CLAUSE AND PROVIDES NEW NOSTRIKE NOLOCKOUT LANGUAGE 9401030100 940103 INTERNATIONAL DISNEY DOESN'T RULE OUT CLOSURE OF EURO DISNEY SPECIAL TO THE WALL STREET JOURNAL PARIS WALT DISNEY CO CHAIRMAN MICHAEL EISNER IN A FRENCH MAGAZINE INTERVIEW DIDN'T RULE OUT THE POSSIBILITY THAT ITS EURO DISNEY THEME PARK IN FRANCE MIGHT BE CLOSED IF ITS US PARENT AND CREDITOR BANKS DON'T AGREE ON A RESTRUCTURING PLAN IF THE ENGINE OF AN AIRPLANE FALLS OUT IN FULL FLIGHT WHAT ARE THE OPTIONS ANYTHING IS POSSIBLE TODAY INCLUDING THE CLOSURE OF EURO DISNEY MR EISNER TOLD THE MAGAZINE LE POINT HIS REMARKS PUBLISHED FRIDAY COME AS WALT DISNEY CO WHICH HOLDS 49 OF EURO DISNEY SCA IS WRANGLING WITH SOME 60 CREDITOR BANKS OVER THE RESTRUCTURING AND REFINANCING OF THE DEBTLADEN AND UNPROFITABLE THEME PARK EAST OF PARIS THE OFFICIAL PUBLICATION OF EURO DISNEY'S 199293 ACCOUNTS IN DECEMBER INCLUDED A WARNING FROM THE COMPANY'S AUDITORS THAT IF A RESTRUCTURING ISN'T COMPLETED EURO DISNEY MIGHT BE UNABLE TO CONTINUE AS A GOING CONCERN A RESTRUCTURING PLAN PRESUMABLY MUST BE AGREED UPON BY THE SPRING WHEN WALT DISNEY CO'S FINANCIAL SUPPORT OF EURO DISNEY RUNS DRY MR EISNER'S LATEST COMMENTS APPEAR TO KEEP UP THE PRESSURE ON THE BANKS BUT WATCHERS OF THE SITUATION NOTE THAT THE CLOSURE OF EURO DISNEY WOULD NEITHER BE IN THE BEST INTERESTS OF THE BANKS THE THEME PARK NOR ITS US PARENT IN FRIDAY TRADING IN PARIS EURO DISNEY SHARES FELL 47 TO 304 FRANCS 516 9401030099 940103 INTERNATIONAL TOTAL ELF FACE FINES OF 12 MILLION APIECE FROM FRENCH AGENCY PARIS A FRENCH AGENCY ORDERED TWO OIL COMPANIES TOTAL SA AND STATECONTROLLED SOCIETE NATIONALE ELF AQUITAINE TO PAY SEVEN MILLION FRANCS 12 MILLION EACH CHARGING THEM WITH ANTICOMPETITIVE PRACTICES ON THE ISLAND OF REUNION A FRENCH OVERSEAS DEPARTMENT TOTAL AND ELF HAVE LODGED AN APPEAL WITH THE PARIS APPEAL COURT THE FRENCH COMPETITIVENESSWATCHDOG AGENCY CONSEIL DE LA CONCURRENCE CHARGED THAT ELF ANTAR FRANCE AND TOTAL REUNION COMORES USED TACTICS TO DELIBERATELY PREVENT ESSO REUNION'S ENTRY INTO THE AVIATIONFUEL AND LUBRICANT MARKET AT THE AIRPORT AT SAINTDENISGILLOT ON REUNION IN VIOLATION OF FRENCH LAW ELF AND TOTAL HAVE DOMINANT POSITIONS IN THAT MARKET THEY CONTROL THE AVIATIONFUEL DEPOT AT THE AIRPORT THE ONLY ONE ON THE ISLAND SERVING LONGHAUL FLIGHTS TO THE POPULAR REMOTE VACATION SPOT REUNION IS IN THE INDIAN OCEAN EAST OF MADAGASCAR 9401030098 940103 NOTICE TO READERS TODAY'S EDITION APPEARS IN TWO SECTIONS WITH THE SECOND SECTION COMPRISING THE YEAREND REVIEW OF MARKETS AND FINANCE 9401030097 940103 COMMONS BROS UNIT TO PURCHASE KRELITZ IN 51 MILLION PACT MINNETONKA MINN KRELITZ INDUSTRIES INC AN INDEPENDENT DRUG WHOLESALER SAID IT SIGNED A DEFINITIVE AGREEMENT TO BE ACQUIRED BY COMMONS MIDWEST INC A UNIT OF COMMONS BROS OF ELMSFORD NY FOR 51 MILLION THE PRICE IS SUBJECT TO ADJUSTMENT BASED ON THE SHAREHOLDERS' EQUITY OF KRELITZ AS OF NOV 30 AND OTHER FACTORS COMMONS BROS ALSO A DRUG WHOLESALER HAS SERVED HOSPITAL AND COMMUNITY PHARMACIES SINCE 1896 IN JULY IT EMERGED AS THE WINNING SUITOR FOR KRELITZ WHICH EARLIER ACCEPTED AN ACQUISITION OFFER FROM NORTHERN DRUG CO FOR 4 MILLION TO 5 MILLION COMMONS BROS SAID AT THE TIME IT WOULD BUY THE STOCK OUTSTANDING OF PRIVATELY HELD NORTHERN DRUG BASED IN DULUTH MINN UNDER UNDISCLOSED TERMS LAST YEAR KRELITZ POSTED A STRING OF LOSSES AND A DECLINING REVENUE BASE BECAUSE OF COMPETITIVE CONDITIONS IN THE DRUG INDUSTRY AND THE LOSS OF SEVERAL LARGE ACCOUNTS LAST JANUARY KRELITZ HIRED MARSHALL FINANCIAL GROUP INC TO HELP TURN THE COMPANY AROUND IN A STATEMENT BARRY M KRELITZ CHIEF EXECUTIVE OFFICER OF KRELITZ INDUSTRIES SAID DIRECTORS BELIEVE THE ACQUISITION BY COMMONS REPRESENTS THE BEST OPPORTUNITY FOR THE SHAREHOLDERS TO REALIZE THE VALUE OF THEIR INVESTMENT THE ACQUISITION IS SUBJECT TO CERTAIN CONDITIONS INCLUDING KRELITZ SHAREHOLDER APPROVAL AND CLEARANCE BY ANTITRUST OFFICIALS 9401030096 940103 BRAINERD INTERNATIONAL DROPS SPEEDWAY PLAN BUT BACKER REMAINS MINNEAPOLIS BRAINERD INTERNATIONAL INC SAID ITS DIRECTORS DROPPED EFFORTS TO DEVELOP A STADIUMSTYLE AUTORACING FACILITY IN GENOA CITY WIS BRAINERD WHICH OWNS AND OPERATES A MOTOR SPEEDWAY IN NORTHCENTRAL MINNESOTA SAID IT WILL RECOGNIZE AN EXPENSE OF ABOUT 730000 IN CAPITALIZED FUNDS SPENT IN THE PAST FIVE YEARS ON THE WISCONSIN PROJECT WHILE BRAINERD DROPPED OUT THE COMPANY'S CHIEF SHAREHOLDER OIL MAN AND DRAG RACER GENE SNOW ADVISED THE COMPANY HE INTENDS TO CONTINUE HIS EFFORTS TO DEVELOP THE MOTORSPORTS STADIUM ON LAND HE OWNS NEAR GENOA CITY MR SNOW A COMPANY OFFICER AND DIRECTOR SAID THAT IF HE SHOULD DEVELOP THE FACILITY WITHIN FIVE YEARS HE WILL ASSIGN ONEQUARTER OF HIS INTEREST IN THE SPEEDWAY TO BRAINERD IN GENOA CITY A COMMUNITY OF 1300 NEAR THE ILLINOIS BORDER AS WELL AS THE SURROUNDING AREA MANY RESIDENTS OPPOSE THE ESTIMATED 85 MILLION PROJECT CALLED THE WISCONSIN INTERNATIONAL MOTORSPORTS STADIUM OPPONENTS SAY NOISE AND CONGESTION FROM THE TRACK WILL HARM THE COMMUNITY'S RURAL CHARACTER PROPONENTS SAY THE PROJECT WILL BRING JOBS INCREASED TOURISM AND 60 MILLION TO 90 MILLION ANNUALLY INTO THE AREA'S ECONOMY 9401030095 940103 INTERNATIONAL WORLD WIRE COMPILED BY RICHARD L HOLMAN THOUGH JAPANESE CONSUMERS DIDN'T LET RECESSION CRIMP THEIR YEAREND HOLIDAY TRAVEL THEY INCREASINGLY SHUNNED DELUXE TOURS IN FAVOR OF BARGAIN SOJOURNS JAPAN TRAVEL BUREAU INC THE COUNTRY'S LARGEST TRAVEL AGENCY ESTIMATED THAT 254 MILLION JAPANESE VACATIONED BETWEEN DEC 23 AND TODAY UNCHANGED FROM A YEAR EARLIER OF THAT TOTAL THOSE TRAVELING ABROAD TOTALED A RECORD 518000 UP 11 BUT THE STRONG NUMBERS DON'T REFLECT ANY ECONOMIC REBOUND RATHER JTB SAID TRAVELERS RESPONDED TO AGGRESSIVELY ADVERTISED BUDGET TOURS AND INCREASED PURCHASING POWER FROM THE YEN'S STRONG VALUE THE JAPANESE TOURISM INDUSTRY CALLS THE NEW BREED OF BUDGET TRAVELER TRIPLE R FOR REPEAT VISITORS AT A RESORT DESTINATION BOOKED AT A REASONABLE PRICE FAVORED DESTINATIONS INCLUDE HAWAII HONG KONG SOUTH KOREA GUAM AND SAIPAN A TYPICAL FOURDAY HOLIDAY TOUR COVERING AIR TRAVEL AIRPORT TRANSFERS LODGING AND SIGHTSEEING WAS OFFERED FOR ABOUT 895 IN ASIA AND 1345 IN HAWAII HALF THE PRICES OF DELUXE PACKAGES HUNGARY ATTRACTED A RECORD 22 BILLION IN FOREIGN INVESTMENT LAST YEAR UP FROM 17 BILLION A YEAR EARLIER ABOUT 25 OF THE TOTAL CAME FROM THE US 25 FROM GERMANY AND 12 FROM AUSTRIA THE PRIME MINISTER'S OFFICE REPORTED THE INCREASE IN 1993 WAS LARGELY ATTRIBUTED TO AN 875 MILLION GERMANLED DEAL IN THE TELECOMMUNICATIONS SECTOR IN THE PAST FIVE YEARS FOREIGN INVESTMENT TOTALED 7 BILLION MALAYSIA MOVED TO FURTHER AN ISLAMIC BANKING SYSTEM TO PARALLEL CONVENTIONAL BANKS AS ISLAMIC LAW BARS PAYING OR RECEIVING INTEREST MALAYSIA'S CENTRAL BANK WILL LAUNCH TODAY TWO SEPARATE CHECKCLEARING POOLS FOR INTERESTBASED BANKS AND FOR INSTITUTIONS OFFERING ISLAMIC FINANCIAL SERVICES NEW INTERESTFREE BANKING METHODS ALSO INCLUDE AN INTERBANK MONEY MARKET OPERATING ON THE BASIS OF PROFITSHARING COMMISSIONS OR DEFERRED PAYMENTS ALLOWED UNDER ISLAMIC PRINCIPLES FEWER BABIES THAN EVER WERE BORN IN JAPAN LAST YEAR AND A RECORD NUMBER OF COUPLES DIVORCED THE GOVERNMENT ESTIMATED THE BIRTH RATE FELL TO A HISTORIC LOW OF 96 FOR EVERY 1000 PEOPLE AND TOTAL BIRTHS DECREASED 17 TO 119 MILLION BELOW 12 MILLION A YEAR FOR THE FIRST TIME THE FERTILITY RATE OR AVERAGE BIRTHS IN A WOMAN'S LIFETIME IS EXPECTED TO DECLINE FROM THE 1992 RECORD LOW OF 15 A RATE OF 21 IS NEEDED TO MAINTAIN THE CURRENT POPULATION THE NUMBER OF MARRIAGES ROSE 5 TO 792000 LAST YEAR DIVORCES TOTALED 189000 A RECORD HIGH THE LEADING CAUSES OF DEATH UNCHANGED SINCE 1985 ARE CANCER AND HEART AND CEREBROVASCULAR DISEASES ABOUT 15 OF RUSSIA'S TERRITORY IS AN ENVIRONMENTAL DISASTER THE ENVIRONMENT MINISTRY ASSERTED SAYING ABOUT 100000 PEOPLE RESIDE WHERE RADIATION LEVELS ARE TOO HIGH BLAMING SOVIETERA NUCLEAR TESTS AND ACCIDENTS THE AGENCY SAID THAT HALF OF RUSSIA'S ARABLE LAND IS UNSUITABLE FOR FARMING AND THAT ONLY ONEFIFTH OF INDUSTRIAL WASTE IS ADEQUATELY TREATED POSING ANOTHER HAZARD LOWLEVEL RADIOACTIVE WASTE FROM THE PACIFIC FLEET'S DECOMMISSIONED NUCLEAR SUBMARINES IS STORED ABOARD TWO OLD TANKERS RUSSIA'S NAVY HAS DUMPED NUCLEAR WASTE INTO THE SEA OF JAPAN PROMPTING INTERNATIONAL PROTESTS CHINA LAST YEAR PRODUCED A RECORD 1438 MILLION TONS OF OIL OR ABOUT 29 MILLION BARRELS A DAY UP 13 FROM 142 MILLION TONS A YEAR EARLIER OF THE 1993 TOTAL ONLY 46 MILLION TONS OR 32 CAME FROM OFFSHORE OIL FIELDS WHICH THE OFFICIAL XINHUA NEWS AGENCY SAID HAVE PROVED DISAPPOINTING DESPITE EXPLORATION FOR MORE THAN A DECADE CHINA IS PINNING ITS HOPES FOR AN ENERGY BONANZA ON THE UNDEVELOPED FIELDS OF THE TARIM BASIN IN THE FAR NORTHWEST FOREIGN FIRMS AND JOINT VENTURES IN CHINA MAY AVOID HIGHER TAXES UNDER THE SYSTEM'S REFORM THIS YEAR THE HONG KONG TRADE DEVELOPMENT COUNCIL SAID THE COUNCIL SAID FOREIGN CONCERNS ENTERING CHINA PARTICULARLY IN HIGHTECHNOLOGY SECTORS STILL MAY NEGOTIATE PREFERENTIAL TAX TREATMENT AS BEIJING'S PRIORITIES CONTINUE TO FAVOR FOREIGN INVESTMENT CHINA'S SWEEPING TAX REVISIONS INCLUDE INTRODUCTION OF A UNIFORM 33 CORPORATETAX RATE AND A NEW 17 VALUEADDED TAX A FIVEYEAR REBATE PROGRAM IS DESIGNED TO ENSURE THAT FOREIGN ENTERPRISES WON'T FACE BIGGER TAX PAYMENTS AND IF AN INDUSTRIAL AND COMMERCIAL TAX ON FOREIGN FIRMS IS ABOLISHED JOINT VENTURES THAT ADD LOWER VALUES TO THEIR PRODUCTS SUBJECT TO THE VAT MAY SEE A TAX REDUCTION VAT PROVISIONS ALSO WILL BENEFIT FOREIGN COMPANIES AND VENTURES THAT BUY RAW MATERIALS IN CHINA TO MAKE GOODS FOR EXPORT RATES IN A NEW UNIFORM SET OF PERSONAL INCOME TAXES ON FOREIGNERS RANGE FROM 5 TO 45 WITH INCREASES OFFSET BY HIGH ALLOWANCES BUT CHINA'S PROVINCIAL AUTHORITIES COULD CHARGE NEW FEES TO MAKE UP FOR BIGGER TAX SUMS THEY MUST SEND TO BEIJING BRITAIN'S PRINCE CHARLES IS NEGOTIATING WITH THE GOVERNMENT FOR NEW DUTIES AS AMBASSADOR FOR BRITISH BUSINESS ESPECIALLY PROMOTING EXPORTS A ROLE THAT THE TRADE MINISTRY WELCOMED AN OFFER OF 59 JOBS AT THE FRENCH CUSTOMS POST FOR THE ENGLISH CHANNEL TUNNEL LINK TO BRITAIN ATTRACTED 15000 APPLICANTS INCLUDING SOME UNIVERSITY GRADUATES THE REQUIRED EDUCATION LEVEL IS MIDSECONDARY SCHOOL 9401030094 940103 1993 YEAREND REVIEW OF MARKETS AND FINANCE REVIEW OF THE STOCK MARKET ECONOMIC OPTIMISTS PROBABLY OWNED 1993'S BESTPERFORMING STOCKS BY STEVEN E LEVINGSTON STAFF REPORTER OF THE WALL STREET JOURNAL IF YOU WERE AN OPTIMIST ABOUT THE ECONOMY IN 1993 YOU PROBABLY ENDED THE YEAR PLEASED WITH THE PERFORMANCE OF YOUR STOCK PORTFOLIO THAT'S BECAUSE INVESTORS WHO REAPED SOME OF THE HANDSOMEST REWARDS LAST YEAR PLACED THEIR BETS ON STOCKS THAT BENEFIT FROM AN IMPROVING ECONOMY WITH THE ECONOMIC OUTLOOK PRETTY BRIGHT FOR 1994 MANY ANALYSTS PREDICT THAT CYCLICAL STOCKS WILL LEAD THE PACK AGAIN THIS YEAR INVESTORS CHANGED THEIR PERCEPTION OF THE ECONOMY IN 1993 SAYS W ANTHONY HITSCHLER CHIEF INVESTMENT OFFICER AT BRANDYWINE ASSET MANAGEMENT IN WILMINGTON DEL THEY WENT FROM EXPECTING BELOW AVERAGE UNSUSTAINABLE GROWTH TO BELIEVING THAT GROWTH IS ACTUALLY GOING TO BE PRETTY ROBUST THAT SHIFT IN PERCEPTION ACCOUNTS FOR THE TOP PERFORMANCES IN AUTOS HEAVY MACHINERY HOME FURNISHING AIR FREIGHT AND OTHER STOCK GROUPS THAT SIZZLE WHEN THE ECONOMY CRACKLES OF COURSE OTHER STOCK GROUPS SEEMINGLY UNRELATED TO THE ECONOMY'S NEW THRUST SUCH AS CASINOS HEALTH CARE AND SOME SPECIALTY COMPANIES ALSO TURNED IN TERRIFIC PERFORMANCES SOME OF THESE STOCKS AS WELL AS MANY TELECOMMUNICATIONS SHARES RODE POLITICAL OR SPECULATIVE WAVES ANALYSTS CAUTION INVESTORS TO TREAD CAREFULLY AMONG THESE HIGHFLYERS IN 1994 AMONG THE BEST PERFORMERS IN 1993 WITH BRIGHT PROSPECTS FOR 1994 WERE STOCKS OF COMPANIES THAT PROVIDE THE BASIC EQUIPMENT TO FUEL THE ECONOMY'S GROWTH SUNG WON SOHN CHIEF ECONOMIST AT NORWEST CORP IN MINNEAPOLIS POINTS OUT THAT THE ECONOMY HAS BEEN PROPELLED BY COMPANIES BOOSTING CAPITAL INVESTMENT TO ENHANCE PRODUCTIVITY THOSE EXPENDITURES HAVE PROVIDED WINDFALLS FOR EQUIPMENT SUPPLIERS SUCH AS CATERPILLAR AND GENERAL ELECTRIC WE NOW HAVE THE OPPOSITE SITUATION WE HAD IN THE 1980S CONSUMPTION IS OUT AND CAPITAL INVESTMENT IS IN SAYS MR SOHN COMPANIES LIKE CATERPILLAR AND GE HAVE DONE EXCEEDINGLY WELL BECAUSE THEY ARE AMONG THE PRODUCERS MEETING THE DEMAND FOR CAPITAL INVESTMENTS I EXPECT THIS PATTERN TO CONTINUE IN 1994 AND WELL INTO THE DECADE OF THE 1990S INVESTORS ALSO REAPED PROFITS FROM COMPANIES THAT HAVE UNDERGONE SUCCESSFUL RESTRUCTURINGS ONE STANDOUT IN THIS CATEGORY WAS WHEELINGPITTSBURGH WHICH SOARED 198 POSITIVE RESTRUCTURINGS TEND TO GENERATE POSITIVE EARNINGS SURPRISES SAYS STEVEN RESNICK DIRECTOR OF QUANTITATIVE ANALYSIS AT COWEN ASSET MANAGEMENT THE MARKET ENVIRONMENT WE'VE EXPERIENCED AND WILL CONTINUE TO EXPERIENCE TENDS TO REWARD INVESTORS IN INDUSTRIES THAT GENERATE POSITIVE EARNINGS SURPRISES IT'S A VIABLE THEME FOR THE WHOLE DECADE INDEED EARNINGS SURPRISES WERE KEY TO VIGOROUS JUMPS IN MANY STOCK PRICES MR RESNICK SAYS THAT OF THE TOP 30 STOCKS ON THE NEW YORK STOCK EXCHANGE 75 REPORTED POSITIVE EARNINGS SURPRISES LAST YEAR ON AVERAGE ONLY ABOUT HALF OF THE 2000 COMPANIES IN HIS RESEARCH UNIVERSE WERE ABLE TO POST POSITIVE SURPRISES DURING THE YEAR COMMUNICATIONS STOCKS WERE STELLAR PERFORMERS BECAUSE INVESTORS BEGAN TO RECOGNIZE THAT ECONOMIC GROWTH NO LONGER RELIES JUST ON CAPITAL AND LABOR SAYS NORWEST'S MR SOHN BECAUSE OF THE COMMUNICATIONS REVOLUTION CAPITAL AND LABOR ALONE ARE NOT SUFFICIENT FOR ECONOMIC GROWTH YOU ALSO NEED INFORMATION MR SOHN SAYS IT'S NOW A THREELEGGED STOOL AS A RESULT STOCKS SUCH AS TELEPHONES CABLE CELLULAR MULTIMEDIA AND INTERACTIVE WERE BARNBURNERS THEY WERE AIDED BY INVESTOR FASCINATION WITH TECHNOLOGICAL INNOVATION AND BY HIGHPROFILE MERGERS SUCH AS BELL ATLANTIC AND TELECOMMUNICATIONS INC BUT SOME OF THE ENTHUSIASM COOLED IN THE FOURTH QUARTER SUGGESTING THAT THE FEVERISH RALLY IN THE STOCKS WAS OVERDONE SOME ANALYSTS SAY THE SHARPEST GAINS AMONG THE GROUP WERE IN STOCKS TRADED OVERTHECOUNTER BUT ANALYSTS WARN THAT THE ENTIRE COMMUNICATIONS INDUSTRY IS IN SUCH FLUX THAT LAST YEAR'S FABULOUS WINNERS COULD WIND UP AT THE BOTTOM OF THE HEAP THIS YEAR THERE'S A LOT OF UNCERTAINTY ABOUT WHICH TECHNOLOGIES WILL DOMINATE AND WHO WILL BE THE WINNERS AND LOSERS SAYS JOSEPH MCALINDEN MARKET STRATEGIST AT DILLON READ & CO THE QUESTION FOR INVESTORS IS WHICH IF ANY OF THESE OTC WINNERS ARE GOING TO GIVE YOU 10 OR 50FOLD ON YOUR MONEY 10 YEARS FROM NOW THE SURGE IN PRECIOUSMETALS STOCKS ALSO PARTLY REFLECTED THE PICKUP IN THE ECONOMY SOME INVESTORS BET THAT STRONGER ECONOMIC GROWTH WILL NUDGE INFLATION HIGHER WHICH TRADITIONALLY LEADS TO A JUMP IN GOLD PRICES BUT WITH THE DROP IN OIL PRICES THE JURY IS STILL OUT ON INFLATION GOLD STOCKS ALSO BENEFITED FROM A BELIEF AMONG SOME INVESTORS THAT THE PRICE OF GOLD IS ENDING A LONGTERM SLUMP THANKS PARTLY TO STRONGER DEMAND FOR GOLD PRODUCTS AMONG THE HOTTEST GOLD STOCKS LAST YEAR WAS ECHO BAY MINES WHICH JUMPED 1607 ECHO BAY IS ONE OF THE LOWER COST PRODUCERS OF GOLD SAYS JAMES SOLLOWAY DIRECTOR OF RESEARCH AT ARGUS RESEARCH THAT'S A NAME MONEY MANAGERS GRAVITATE TOWARD WHEN THEY WANT TO BUY A GOLD STOCK THE IMPROVING ECONOMY PUT MORE PEOPLE ON THE ROAD FOR BUSINESS AND LEISURE TRAVEL GIVING A STRONG BOOST TO LODGING STOCKS THE GROUP WAS AMONG THE YEAR'S BEST PERFORMERS GAINING 635 SOME INDIVIDUAL LODGING STOCKS PROSPERED NOT ONLY BECAUSE OF THE ECONOMY BUT BECAUSE THE LODGING COMPANIES OFFERED VALUE TO TRAVELERS FOR EXAMPLE LA QUINTA MOTOR INNS WAS ONE OF THE YEAR'S TOP GAINERS SOARING 1644 LA QUINTA PROVIDES REAL VALUE SAYS NORWEST'S MR SOHN YOU GET REAL NICE CLEAN ROOMS AT A VERY REASONABLE PRICE PROVIDING ENERGY TO FUEL THE EXPANDING ECONOMY ALSO PROVED A PROFITABLE ENDEAVOR EVEN THOUGH THE PRICE OF OIL SLUMPED LATE IN THE YEAR CAUSING OIL STOCKS TO PLUNGE IN THE FOURTH QUARTER THE OIL STOCKS TURNED IN RESPECTABLE PERFORMANCES FOR THE FULL YEAR THE GREATER BENEFICIARIES OF IMPROVED DEMAND FOR ENERGY WERE COMPANIES INVOLVED IN THE NATURAL GAS INDUSTRY MR SOHN POINTS OUT THAT THE NATURAL GAS INDUSTRY BENEFITS FROM A GROWING EMPHASIS ON CLEANER AIR AND THE POSSIBLE WIDE USE OF SOME FORM OF NATURAL GAS TO POWER AUTOS PRICES FOR NATURAL GAS HAVEN'T GONE DOWN LIKE OIL PRICES HAVE IF ANYTHING THEY'VE GONE UP HE SAYS THERE'S A PERCEPTION OF A BETTER MARKET FOR NATURAL GAS SOME COMPANIES' STOCKS WERE REWARDED LESS FOR THE STATE OF THE ECONOMY ITSELF THAN FOR THE COMPANIES' OWN EFFORTS AT CARVING OUT NICHE MARKETS AMONG STANDOUTS IN THIS REGARD WERE CALLAWAY GOLF WHICH JUMPED 2072 TIMBERLAND UP 1737 AND LEWIS GALOOB TOYS UP 1885 CALLAWAY HAS FOUND AVID ACCEPTANCE FOR ITS LARGEHEAD GOLF CLUBS WHILE TIMBERLAND'S RUGGED OUTDOORSWEAR HAS BECOME FASHIONABLE BUT TO SOME ANALYSTS THERE'S A FINE LINE BETWEEN A NICHE AND A FAD DILLON READ'S MR MCALINDEN WONDERS IF A TOY COMPANY SUCH AS GALOOB CAN MAINTAIN ITS LOFTY LEVEL THE COMPANY GOT A STRONG BOOST FROM VINNIE MODO AND THROTTLE CHARACTERS IN THE POPULAR BIKER MICE FROM MARS CHILDREN'S CARTOON INVESTORS HAVE TO BE MAKING SOME BIG ASSUMPTIONS THAT A TOY COMPANY WITH A HOT PRODUCT IS GOING TO CONTINUE TO JUSTIFY THESE PRICE LEVELS MR MCALINDEN SAYS THAT KIND OF PERFORMANCE IS SUGGESTIVE OF FROTHINESS CHARACTERISTIC OF A MARKET NEARING ITS TOP SOME NICHE PLAYERS HAD THEIR STARS DIM LAST YEAR NIKE FOR INSTANCE SAW ITS REVENUE SLIDE SIGNIFICANTLY FROM 1992 TO 1993 TAKING ITS STOCK PRICE DOWN TOO NIKE PLUMMETED 79 LAST YEAR HELPING MAKE THE FOOTWEAR INDUSTRY THE WORST PERFORMER IN 1993 A LOT OF PEOPLE ARE NO LONGER PUTTING UP WITH THE CONCEPT OF THE 130 SNEAKER SAYS BRANDYWINE'S MR HITSCHLER THE RAPID GROWTH OF GAMBLING THROUGHOUT THE COUNTRY IGNITED CASINO STOCKS SPARKING CONCERN AMONG ANALYSTS THAT PRICES ARE REACHING SPECULATIVE HIGHS ONE STANDOUT PERFORMER LAST YEAR WAS PROMUS WHICH GAINED 1495 PROMUS JUST SKYROCKETED SAYS MR HITSCHLER IT LOOKS VERY DANGEROUS RIGHT NOW THE CASINOS GROUP MANAGED TO FINISH AMONG THE TOP PERFORMERS LAST YEAR EVEN THOUGH IT FLAGGED CONSIDERABLY IN THE FOURTH QUARTER DROPPING 92 SOME ANALYSTS BELIEVE THE GROUP'S FOURTHQUARTER WOES MAY BE A WINDOW ON ITS PROSPECTS FOR 1994 THE CLINTON HEALTHCARE PLAN TRANSLATED INTO OPPORTUNITIES FOR SOME IN THE INDUSTRY AND DISAPPOINTMENTS FOR OTHERS WHILE SOME HEALTH MAINTENANCE ORGANIZATIONS CLIMBED THE DRUG MAKERS SUFFERED MR SOHN SAYS HE EXPECTS SOME KIND OF HEALTHCARE PROGRAM TO BE PASSED THIS YEAR RESULTING IN MORE MONEY DIRECTED AT THE INDUSTRY THE COMPANIES THAT WILL PROSPER ARE THOSE THAT HOLD THE LINE ON PRICES AND PERFORM EFFICIENTLY HE SAYS IF YOU'RE IN HEALTH CARE YOU HAVE TO ASK YOURSELF ARE YOU PART OF THE PROBLEM LIKE HOSPITALS WITH A LOT OF BEDS OR PART OF THE SOLUTION LIKE HMOS THAT ARE TRYING TO CUT COSTS MR SOHN SAYS THOSE THAT ARE PART OF THE SOLUTION WILL BE THE BIG WINNERS BUT THAT DOESN'T RULE OUT A COMEBACK FOR THE GIANT DRUG MAKERS COMPANIES LIKE MERCK AND UPJOHN ARE STRONGLY POSITIONED TO WIDEN THEIR MARKET SHARES WHEN THE HEALTHCARE INDUSTRY EXPANDS UNDER THE CLINTON PLAN MR SOHN ARGUES THEY HAVE THE CAPITAL TO INVEST TO GENERATE EFFICIENCY AND TO BID FOR BUSINESS HE SAYS I LIKE THE BIG DRUG MAKERS FOR 1994 AND BEYOND FED UP WITH HIGH PRICES FOR FOOD AND TOBACCO CONSUMERS TURNED VALUE CONSCIOUS IN 1994 SNAPPING UP GENERIC PRODUCTS AND SENDING SHOCK WAVES THROUGH THE GIANT BRANDNAME COMPANIES SUCH AS KELLOGG AND PHILIP MORRIS THE FOOD MAKERS AND TOBACCO COMPANIES ENDED UP AT THE BOTTOM OF THE YEAR'S PERFORMANCE RANKINGS BUT SOME ANALYSTS BELIEVE THE WORST MAY BE OVER FOR A COMPANY LIKE PHILIP MORRIS BRANDYWINE'S MR HITSCHLER A VALUE INVESTOR BELIEVES THE COMPANY HAS DONE WELL TO RECOGNIZE IT HAS TO BE PRICE CONSCIOUS WE'RE INTERESTED IN STOCKS THAT HAVE COME DOWN AND STABILIZED LIKE THE TOBACCOS HE SAYS MR HITSCHLER ALSO NOTES A RECENT REPORT INDICATING THAT THE 25YEAR DECLINE IN CIGARETTE SMOKING MAY BE ENDING AND MAY EVEN BE REVERSING THAT BODES WELL FOR REVENUE INCREASES FOR THE TOBACCO MAKERS IT'S A SAD TALE BUT WE'RE NOT HERE TO MORALIZE MR HITSCHLER SAYS A BATTERED GROUP WHOSE FUTURE IS LESS CLEAR IS POLLUTION CONTROL AND WASTE MANAGEMENT AN EXPANDING ECONOMY SHOULD BENEFIT THESE TYPES OF STOCKS BECAUSE MORE WASTE AND POLLUTION WOULD NORMALLY BE CREATED BUT THE INDUSTRY IS SUFFERING FROM AN OVERCAPACITY AT THE SAME TIME THAT CONSERVATION EFFORTS ARE IMPROVING ANALYSTS SAY THE INDUSTRY'S WOES TRANSLATED INTO A TOUGH YEAR FOR COMPANIES SUCH AS CHEMICAL WASTE DOWN 598 AND ROLLINS ENVIRONMENTAL SERVICES DOWN 545 THERE'S NOT ENOUGH VOLUME OF JUNK BEING PRODUCED BECAUSE OF RECYCLING AND OTHER ATTEMPTS TO REDUCE WASTE SAYS MR SOLLOWAY OF ARGUS IT PLAYS INTO THE THEME OF COMPANIES DOING WHATEVER THEY CAN TO CUT COSTS IF THEY CAN OPERATE WITH LESS WASTE THAT IMPROVES THE BOTTOM LINE 9401030093 940103 1993 YEAREND REVIEW OF MARKETS AND FINANCE PERSONAL INCOME TAX EXEMPTION WASHINGTON THE 2350 PERSONAL EXEMPTION FROM FEDERAL INCOME TAXES RISES TO 2450 FOR 1994 AN EXEMPTION IS ALLOWED FOR EACH TAXPAYER SPOUSE AND DEPENDENT THE FIGURE IS ADJUSTED EACH YEAR TO ACCOUNT FOR INFLATION THE SAME ADJUSTMENT WILL INCREASE THE 1994 STANDARD DEDUCTIONS FOR TAXPAYERS WHO DON'T ITEMIZE THAT WILL MEAN 6350 FOR A COUPLE FILING A JOINT RETURN AND 3800 FOR A SINGLE PERSON THE THREE LOWEST TAX BRACKETS ALSO WILL BE WIDENED SO THAT MORE INCOME IS TAXED AT A LOWER RATE 9401030092 940103 INTERNATIONAL BRIEF NAN YA PLASTICS CORP PLAN IS SET TO BUILD FACILITIES TO MAKE PVC PIPE IN CHINA NAN YA PLASTICS CORP A MEMBER OF TAIWAN'S FORMOSA PLASTICS CORP SAID IT COMPLETED PLANS TO BUILD THREE PLANTS IN CHINA TO MANUFACTURE PIPES OF POLYVINYL CHLORIDE OR PVC NAN YA SAID 900 MILLION NEW TAIWAN DOLLARS US341 MILLION WILL BE SPENT IN THE PRELIMINARY STAGE TO BUILD FACILITIES IN SHANGDONG ANHUI AND FUJIAN THREE PROVINCES BORDERING THE LONG RIVER ANNUAL CAPACITY OF EACH PLANT EVENTUALLY WILL GROW TO 40000 TONS THE COMPANY SAID NAN YA WILL HAVE A 15 STAKE IN THE PROJECT THREE TAIWANBASED COMPANIES WILL TOGETHER HOLD A 50 STAKE AND THE REMAINING 35 WILL BE IN THE HANDS OF LOCAL CHINESE AUTHORITIES THE PROJECT IS THE FIRST STEP BY FORMOSA PLASTICS IN ITS LONG RIVER PROJECT THE COMPANY PLANS TO INVEST AS MUCH AS US800 MILLION TO SET UP 40 PLANTS PRODUCING PVC PRODUCTS IN CHINA 9401030091 940103 WALL STREET UNDERWRITING FOURTH QUARTER 1993 REVIEW SURGE IN PROFITS FROM FEES IS LIKELY TO CONTINUE IN 1994 BY MICHAEL SICONOLFI STAFF REPORTER OF THE WALL STREET JOURNAL NEW YORK A DELUGE OF FEES FROM UNDERWRITING NEW STOCKS AND BONDS IS LIKELY TO CONTINUE TO SHOWER BIG PROFITS ON WALL STREET INVESTMENT BANKS IN 1994 ANALYSTS SAY SECURITIES FIRMS POCKETED A RECORD 913 BILLION IN DISCLOSED UNDERWRITING FEES IN 1993 BREAKING 1992'S PRIOR RECORD BY 35 AND NEARLY DOUBLING THE LEVEL OF 1991 ACCORDING TO SECURITIES DATA CO A NEWARK NJ COMPANY THAT TRACKS CORPORATEFINANCE ACTIVITY INVESTMENT BANKS EARN UNDERWRITING FEES BY BUYING NEW SECURITIES FROM CORPORATE ISSUERS AND RESELLING THEM TO INVESTORS AT A MARKUP MANY DEALS THAT WEREN'T DONE IN 1993 WILL FLOW INTO 1994 SAYS GREG A SMITH AN ANALYST AT PRUDENTIAL SECURITIES INC ADD THAT TO THE NEW OFFERINGS ALREADY PLANNED FOR 1994 AND IT KEEPS THE CALENDAR BOILING BY FEBRUARY WE WILL BACK TO THE GRIND OF ROAD SHOWS AND THE BLIZZARDS OF PROSPECTUSES AND MORE FAT FEES THE 1993 FEE BOOM HELPED BOOST PROFITS ALL OVER WALL STREET WITH THE EXPLOSION OF STOCK AND BOND UNDERWRITING AND TRADING WALL STREET SECURITIES FIRMS ARE EXPECTED TO HAVE EARNED PRETAX PROFIT OF NEARLY 9 BILLION IN 1993 ACCORDING TO ESTIMATES BY THE SECURITIES INDUSTRY ASSOCIATION A TRADE GROUP THAT IS 45 HIGHER THAN THE PRIOR PROFIT RECORD SET IN 1992 TRIGGERING THE SURGE IN UNDERWRITING FEES WAS RECORD ACTIVITY IN A NUMBER OF HIGHMARGIN BUSINESSES THE YEAR'S SIZZLING ISSUANCE OF STOCK ISSUES THE MOST LUCRATIVE UNDERWRITING AREA LED TO 538 BILLION IN FEES ALONE SECURITIES DATA SAYS THE AVERAGE UNDERWRITING FEE FOR COMMONSTOCK ISSUES WAS ABOUT 65 OF PROCEEDS SECURITIES DATA SAYS THAT'S MORE THAN 10 TIMES THAT OF INVESTMENTGRADE BOND DEALS THE FEE TABLE PROVIDES THE BEST MEASURE OF HOW MUCH INVESTMENT BANKS GENERATE FROM UNDERWRITING NEW STOCKS AND BONDS BUT THE RANKINGS DON'T NECESSARILY CORRELATE WITH THE ACTUAL PROFITS EARNED FROM UNDERWRITING AMONG SECURITIES FIRMS SOME FIRMS AGGRESSIVELY BUY DEALS BY ACCEPTING LOWER SPREADS OR FEES AND SOME SMALLER DEALS AREN'T PROFITABLE UNLESS THEY GENERATE FOLLOWUP BUSINESS INVESTMENT BANKERS SAY THE NUMBERS REFLECT ONLY DISCLOSED FEES ON MANY DEALS PARTICULARLY MORTGAGEBACKED AND DERIVATIVES TRANSACTIONS FEES AREN'T FULLY SHOWN FOR THE SIXTH STRAIGHT YEAR MERRILL LYNCH & CO GRABBED THE NO 1 UNDERWRITINGFEE SPOT THE NATION'S BIGGEST BROKERAGE FIRM EARNED A RECORD 18 BILLION IN FEES FOR A 20 MARKET SHARE THIS STEMMED FROM MERRILL'S DOMINANCE IN NEARLY EVERY SECTOR OF THE UNDERWRITING BUSINESS FROM INITIAL PUBLIC STOCK OFFERINGS TO HIGHYIELD JUNK BONDS GOLDMAN SACHS & CO EARNED 11 BILLION IN FEES FOR SECOND PLACE AND LEHMAN BROTHERS INC CAME IN NO 3 WITH 745 MILLION IN FEES SECURITIES DATA SAID THERE WAS GOOD STABILITY IN THE FEE STRUCTURE IN '93 SAYS MICHAEL D MADDEN EXECUTIVE MANAGING DIRECTOR AT KIDDER PEABODY GROUP INC UNTIL 1993 FEES HAD NARROWED SOMEWHAT OVER THE PAST SEVERAL YEARS AS COMPANIES WENT SHOPPING FOR PRICE AS WELL AS QUALITY MR MADDEN SAYS ONE AREA THAT HASN'T GENERATED A WINDFALL OF FEES FOR WALL STREET HAS BEEN INTERNATIONAL UNDERWRITING OFFERINGS DESPITE A PICKUP IN ACTIVITY AS THE WORLD IS GETTING MORE AND MORE GLOBALIZED FEES AROUND THE WORLD SEEM TO BE COMING MORE INTO LINE WE DON'T SEE A PREMIUM ON FOREIGN DEALS SAYS THOMAS W DAVIS HEAD OF STOCK CAPITAL MARKETS AT MERRILL WALL STREET FIRMS EARNED 347 BILLION IN FEES FROM INITIAL PUBLIC STOCK OFFERINGS LAST YEAR SECURITIES DATA SAYS THIS REPRESENTS NEARLY ONETHIRD OF ALL UNDERWRITING FEES EVEN THOUGH IPOS MADE UP A SMALL FRACTION OF ALL FINANCING VOLUME THE AVERAGE FEE FROM AN IPO WAS 72 OF THE ISSUE'S PROCEEDS SECURITIES DATA SAYS AMONG THE BIGGEST FEE DEALS OF 1993 WERE THE 212 BILLION GLOBAL OFFERING OF ALLSTATE CORP 89 MILLION IN FEES THE 266 BILLION OFFERING OF YPF SOCIEDAD ANONIMA 494 MILLION AND THE 138 BILLION OFFERING OF PACIFIC TELESIS 483 MILLION IN FEES SOCALLED SECONDARY STOCK OFFERINGS OF SEASONED COMPANIES AVERAGED ABOUT 55 PER DEAL AND PREFERRED STOCK 2 SECURITIES DATA SAYS AMONG THE BIGGER SECONDARY STOCK DEALS WERE CHRYSLER CORP 43 MILLION IN FEES TENNECO CORP 27 MILLION IN FEES AND U S WEST 17 MILLION IN FEES BY COMPARISON THE AVERAGE FEE FOR EACH INVESTMENTGRADE BOND ISSUE FOR INSTANCE WAS 05 IN 1993 CONVERTIBLESECURITIES DEALS AVERAGED 29 OF TRANSACTION PROCEEDS AMONG LAST YEAR'S BIG BOND MONEYMAKERS WERE JUNK BONDS WHICH TOTALED 118 BILLION IN FEES FOR AN AVERAGE OF 24 FOR EACH JUNKBOND DEAL SECURITIES DATA SAYS ALTHOUGH THAT'S FAR MORE LUCRATIVE THAN MOST OTHER DEBT DEALS IT'S STILL FAR LOWER THAN THE NEARLY 4 IN THE JUNKBOND MARKET'S HEYDAY IN THE 1980S 9401030090 940103 1993 YEAREND REVIEW OF MARKETS AND FINANCE REVIEW OF FINANCE MONEY MANAGERS TAKE ON MORE RISK IN SEARCH FOR EVERBIGGER REWARDS BY LAURA JERESKI STAFF REPORTER OF THE WALL STREET JOURNAL IT PAID TO BE A PICKY INVESTOR LAST YEAR STOCK AND BOND MANAGERS MODESTLY OUTPERFORMED THEIR BENCHMARK INDEXES NEARLY SIX OUT OF 10 STOCK MANAGERS OUTPERFORMED THE STANDARD & POOR'S 500STOCK INDEX OF LARGE COMPANY SHARES IN 1993 AMONG FIXEDINCOME MANAGERS THE RESULTS WERE EVEN MORE IMPRESSIVE MORE THAN TWOTHIRDS HANDILY BEAT THE SALOMON BROTHERS BROAD INDEX BUT THAT HASN'T BEEN ENOUGH TO KEEP RETURNRABID INVESTORS HAPPY INSTEAD THEY'VE BEEN PROPELLED BY PERSISTENTLY LOW INTEREST RATES TO EXPERIMENT MORE AGGRESSIVELY WITH INVESTMENTS SUCH AS SMALL STOCKS AND INTERNATIONAL STOCKS AND BONDS COMPANIES AND STATE AND LOCAL GOVERNMENTS ARE STRETCHING FOR HIGH RETURNS IN PART TO AVOID PUTTING FRESH CASH INTO THEIR PENSION FUNDS COMPANY PENSION FUNDS IN PARTICULAR ARE UNDER PRESSURE FROM THE SECURITIES AND EXCHANGE COMMISSION TO BRING THE ASSUMPTIONS GOVERNING THEIR PENSION FUNDING IN LINE WITH CURRENT INTEREST RATES AND RETURNS ON INVESTMENT THAT FORCES CORPORATE PENSION FUND SPONSORS WHO ARE EAGER TO FORESTALL THROWING MORE CASH INTO THEIR PENSION FUNDS TO CHOOSE BETWEEN TWO UNCOMFORTABLE ALTERNATIVES LOWER THOSE EXPECTATIONS OR SEIZE ON POTENTIALLY REWARDING BUT RISKY VENTURES TO BOOST RETURNS MORE PEOPLE ARE REACHING TO SEE IF THEY CAN IMPROVE THEIR RETURNS WITH INTEREST RATES SO LOW SAYS RODGER F SMITH A PARTNER AT GREENWICH ASSOCIATES AND THAT MEANS MOVING OUT ON THE RISK SPECTRUM AS INVESTORS REACH OUT FOR MORE RISK THEIR EXPECTATIONS OF RETURNS ARE SHIFTING TOO MR SMITH SAYS THE PENSION FUNDS AND ENDOWMENTS HE CONSULTS WITH NOW EXPECT LESS FROM US STOCKS AND BONDS OVER THE NEXT FIVE YEARS THAN THEY DID JUST ONE YEAR AGO BUT THAT'S NOT THE CASE IN EMERGING CATEGORIES WHERE THESE INVESTORS HAVE LITTLE EXPERIENCE SUCH AS REAL ESTATE JUNK BONDS AND OTHER ALTERNATIVE INVESTMENTS THAT SO FAR HAVE CAPTURED A SMALL SHARE OF PENSION FUND MONEY THERE MR SMITH FINDS THAT EXPECTATIONS ARE STILL HIGH HE FOUND THAT INVESTORS NUDGED UP THEIR EXPECTATIONS OF INTERNATIONAL STOCKS TO 109 OVER THE NEXT FIVE YEARS FROM AN EXPECTED 105 FIVEYEAR RETURN THEY LOOKED FOR AT THE BEGINNING OF 1993 BY CONTRAST EXPECTATIONS FOR THE S&P 500 RATCHETED DOWN TO 9 OVER THAT TIME FROM 98 REFLECTING A SODDEN 87 GAIN FOR THOSE LARGE COMPANY STOCKS THROUGH THE END OF NOVEMBER NATURALLY THOSE EXPECTATIONS ARE DRIVING INVESTMENT DECISIONS THE BIGGEST SHIFT ACCORDING TO MR SMITH CONTINUES TO BE TOWARD INTERNATIONAL STOCKS AND BONDS HIS FIRM FOUND THAT 57 OF 1600 CORPORATE AND PUBLIC PENSION PLANS ENDOWMENTS AND FOUNDATIONS SURVEYED HAD MADE A SIGNIFICANT ALLOCATION TO INTERNATIONAL INVESTING AN ADDITIONAL 33 INTENDED TO START INVESTING ABROAD AS A RESULT MR SMITH PROJECTS THAT THESE FUNDS' INTERNATIONAL ASSETS WILL GROW TO 380 BILLION BY 1996 FROM 210 BILLION TODAY TWO YEARS AGO THESE FUNDS HAD INVESTED 95 BILLION ABROAD THE LURE OF FOREIGN INVESTMENTS IS SO GREAT THAT EVEN SMALL FUNDS ARE HEEDING ITS CALL SMITH COLLEGE'S 460 MILLION ENDOWMENT FOR EXAMPLE JUST HIRED LAZARD FRERES TO MANAGE A 20 MILLION PORTFOLIO OF GLOBAL EQUITIES OUR COMMITTEE WAS INTERESTED IN DIVERSIFYING FOR SUPERIOR RETURNS SAYS CHARLES L JOHNSON THE SCHOOL'S ASSISTANT TREASURER SOME MONEY MANAGERS ARE GETTING APPREHENSIVE OF MEETING SUCH EXPECTATIONS BRINSON PARTNERS IN CHICAGO IS TYPICAL OF THE LARGE ASSET MANAGERS WHO GAINED MOST OF THE 50 BILLION OF NEW INTERNATIONAL INVESTMENTS THAT INSTITUTIONAL INVESTORS MADE LAST YEAR BUT SUCCESS DOESN'T GRATIFY GARY BRINSON FOUNDER OF BRINSON PARTNERS THE CHICAGO INVESTMENT FIRM MANAGING 32 BILLION HE WORRIES THAT UNREASONABLY HIGH RETURN EXPECTATIONS COULD DISAPPOINT CLIENTS AS A RESULT HE FEARS THE FLOOD OF NEW FUNDS TO GLOBAL INVESTING MAY GRIND TO A HALT IN VIRTUALLY EVERY MEETING WITH CLIENTS OVER THE LAST THREE MONTHS WE HAVE TALKED ABOUT SCALING BACK EXPECTATIONS MR BRINSON SAYS THE REACTION'S BEEN VERY MIXED SOME CLIENTS JUST LOOK AT YOU QUIZZICALLY AND SAY IT STILL LOOKS FINE TO ME' SO FAR HE SAYS HE HASN'T PARTED WAYS WITH ANY DISSENTING CLIENTS BUT IS RESIGNED TO THAT POSSIBILITY THE OTHER BIG WINNERS IN THE ASSETALLOCATION SWEEPSTAKES CONTINUE TO BE SMALL AND MEDIUM STOCK MANAGERS NO WONDER THOSE STOCKS HAVE ROARED AHEAD OF LUMBERING LARGE STOCKS AS THE ECONOMY LIFTED OUT OF THE DOLDRUMS THE RUSSELL 2000 INDEX OF SMALL VALUE STOCKS RETURNED 203 THROUGH NOV 30 FOUR PERCENTAGE POINTS MORE THAN THE RUSSELL 1000 INDEX FOR LARGE VALUE STOCKS ACCORDING TO FRANK RUSSELL CO OF TACOMA WASH AND THE SMALL STOCKS THAT MAKE UP THE RUSSELL 2000 GROWTH INDEX RETURNED 9 IN THE PERIOD HANDILY OUTPACING THEIR LARGER COUNTERPARTS IN THE RUSSELL 1000 WHICH RETURNED A PALTRY 12 THAT WAS GOOD NEWS FOR MANAGERS LIKE DUNCANHURST CAPITAL MANAGEMENT A 11 BILLION MANAGER IN SAN DIEGO LIKE A NUMBER OF SMALL STOCK MANAGERS PRESIDENT BEAU DUNCAN CLOSED HIS SMALL STOCK FUND TO NEW INVESTMENT LIQUIDITY IS A BIG PROBLEM IN SMALL STOCKS HE SAYS SHUT OUT OF SMALL STOCKS MORE INSTITUTIONS ARE TURNING TO MEDIUMCAP STOCKS WITH STOCK MARKET VALUES OF 1 BILLION TO 5 BILLION SOME OF MR DUNCAN'S PICKS FOR HIS MIDCAP FUND SUCH AS PARAMETRIC TECHNOLOGY AND CISCO SYSTEMS ARE SUCCESSES THAT OUTGREW HIS SMALLCAP FUND JUST BECAUSE THEY'VE DONE WELL IS NO REASON TO SELL THEM SAYS MR DUNCAN BUT THESE FAMILIAR SECURITIES MARKETS AREN'T DELIVERING ENOUGH ZING TO CALM MANY INVESTORS' YIELD ANXIETY SO LARGE INVESTORS ARE ONCE AGAIN ON THE LOOKOUT FOR NOVEL INVESTMENTS NOTABLY LEVERAGED BUYOUT FUNDS MADE A COMEBACK LED BY THE BLACKSTONE GROUP'S 11 BILLION FUND SEVERAL FACTORS CONTRIBUTED TO THIS RESURGENCE LIKE OTHER BUYOUT FIRMS BLACKSTONE FELT PRESSURED TO START RAISING NEW MONEY ONCE ITS INVESTORS FULFILLED THEIR COMMITMENTS TO ITS FIRST BUYOUT FUND IF YOU DON'T RAISE MONEY YOU DON'T STAY IN BUSINESS EXPLAINS MR GALANTE THOUGH THE FUNDS' RETURNS ARE HARDLY STELLAR 25 FOR THE FIRST BLACKSTONE FUND THEY OUTSHINE THE MORE PROSAIC RETURNS IN THE STOCK MARKET A FORM OF ALTERNATIVE INVESTMENT IS CATCHING ON WITH INSTITUTIONS THESE LUMBERING INVESTORS ARE PLUNGING INTO HEDGE FUNDS THE HIGHLY LEVERAGED PRIVATE PARTNERSHIPS ONCE THE PROVINCE OF WEALTHY INDIVIDUALS INCREASINGLY INSTITUTIONS ARE FUNNELING MONEY THROUGH FUNDOFFUNDS MANAGERS WHO ALLOCATE THOSE MONEYS BETWEEN DOZENS OF THESE NIMBLER FUNDS THE PITCH BY PROVIDING A BLENDED PORTFOLIO COMPOSED OF HIGHRISK STRATEGIES THAT MAY STIR AND SWOON AT DIFFERENT TIMES THE FUNDOFFUNDS APPROACH PROMISES RETURNS THAT WILL BE HIGHER YET MORE STABLE THAN A NARROW FOCUS ON THE STOCK MARKET PLUS THE FUNDOFFFUNDS MANAGERS OFFER ENTREE INTO BIGTIME HEDGE FUNDS THAT HAVE BEEN NOMINALLY CLOSED TO INVESTORS THIS SEDUCTIVE GAMBIT DOESN'T COME CHEAP TO THE INSTITUTIONS THAT OPT FOR IT FUNDOFFUNDS MANAGERS TYPICALLY SKIM A 15 MANAGEMENT FEE FROM THE FUNDS UNDER THEIR CONTROL ON TOP OF THE HEADY 20PLUS CUT OF PROFITS THAT THE HEDGE FUND MANAGERS THEMSELVES TAKE 9401030089 940103 CRIMINAL THEFT OF TIME BY LINDA LICHTER THE COSTS OF CRIME ARE USUALLY MEASURED IN MORTALITY RATES HOSPITAL VISITS AND PROPERTY LOSS BUT AS I RECENTLY DISCOVERED THERE IS A PERVASIVE COST OF CRIME THAT GOES LARGELY UNNOTICED UPON RETURNING FROM CHRISTMAS SHOPPING AT A SUBURBAN SHOPPING MALL HAVING FOUND THE PERFECT GIFT AT THE VERY FIRST STORE I WAS SURPRISED TO SEE HOW LATE IT WAS THEN I REALIZED THAT ALL THE ROUTINE SAFETY MEASURES I EMPLOYED TO AVOID BEING RAPED ROBBED OR MURDERED HAD DOUBLED THE LENGTH OF THE TRIP I WAS CHEATED OF TIME EVEN BEFORE ENTERING THE MALL SINCE I DARED NOT PARK IN THE MOST CONVENIENT LOT A COVERED CONCRETE STRUCTURE FILLED WITH MENACING SHADOWS WHERE ONE WOMAN HAD BEEN ATTACKED AND ANOTHER CARJACKED INSTEAD I PARKED IN AN OPEN AREA ADJACENT TO A BUSY BUS STOP THIS SAFETY IN NUMBERS COST ME AN EXTRA 10MINUTE WALK EACH WAY ONCE INSIDE I THOUGHT BETTER OF USING THE NEAREST RESTROOM WHICH WAS PLACED AT THE END OF A DARK HALLWAY CRISSCROSSING THE MALL IN SEARCH OF A WELLLIT FACILITY TOOK ANOTHER 10 MINUTES THAT FELT LIKE HOURS LEAVING THE MALL SEEMED AN EVEN RISKIER VENTURE EXITING THE STORE I NOTICED A SUSPICIOUS LOOKING MAN IN THIS HAIRTRIGGER WORLD ANY MALE WEARING A WOOL HAT ON A BALMY DAY QUALIFIES AS SUSPICIOUS WHO WAS DANCING AMONG THE CARS NEAR MINE WHILE THRUSTING HIS ARMS TOWARD HEAVEN AS IF PRAYING FOR RAIN BEING ALONE AND UNARMED I FELT IT WAS THE BETTER PART OF VALOR TO WAIT UNTIL THIS SHABBY HOOFER TWOSTEPPED HIS WAY TO THE OTHER SIDE OF THE PARKING LOT ANOTHER FIVE MINUTES STOLEN ADD A FEW MISCELLANEOUS MOMENTS TO CHECK FOR PREDATORS UNDERNEATH AND INSIDE THE CAR AS A RECENT POLICE PAMPHLET SUGGESTED AND MY BARGAIN SHOPPING TRIP COST NEARLY 40 MINUTES OF IRRETRIEVABLE CRIMEPREVENTION TIME A QUICK SURVEY OF FAMILY AND FRIENDS REVEALED A LENGTHY LIST OF SIMILAR HABITS THAT SAVE YOUR SKIN BUT STEAL YOUR TIME THE ZIGZAGGING BACK AND FORTH ACROSS DOWNTOWN STREETS TO AVOID AGGRESSIVE PANHANDLERS THE HOURS SPENT FERRYING CHILDREN TO AND FROM SCHOOLS TO SHIELD THEM FROM PERVERTS AND KIDNAPPERS THE ETERNAL COMMUTES FROM DANGEROUS CITIES TO SEMISAFE SUBURBS THE CONSTANT LOCKING OF COLUMNS OF BOLTS ON HOUSE AND APARTMENT DOORS THEN THERE ARE THE TIME STEALERS THAT ARE IMPOSED ON US SUCH AS METAL DETECTORS IN SCHOOLS AND AIRPORTS SEVERAL WOMEN MENTIONED THAT THEY ALWAYS WAIT FOR ANOTHER ELEVATOR RATHER THAN RIDE ONE ALONE WITH A STRANGE MAN NO MATTER HOW WELLDRESSED ONE RECOUNTED A DINNER IN MANHATTAN WHERE SHE AND SEVERAL FEMALE FRIENDS SPENT THEIR LAST HALF HOUR DISCUSSING THE LOGISTICS OF HOW TO GROUP TOGETHER TO SAFELY ESCORT EACH OTHER HOME SHE FINALLY EXCLAIMED DID DDAY TAKE THIS MUCH PLANNING FOR OBVIOUS REASONS WOMEN ARE MORE LIKELY TO TAKE TIMEDRAINING SECURITY MEASURES BUT SINCE THEY LIVE LONGER THAN MEN PERHAPS THIS IS NATURE'S WAY OF BALANCING THE SCORE MANY PEOPLE SEEM OBLIVIOUS OR RESIGNED TO THE INCALCULABLE HOURS THE ROUTINE AVOIDANCE OF CRIME THIEVES FROM THEIR LIVES EVEN A RECENT ASSESSMENT BY BUSINESS WEEK OF THE TRUE COSTS OF CRIME INCLUDING NOT ONLY POLICE PROTECTION AND RUNNING THE CRIMINAL JUSTICE SYSTEM BUT PROPERTY LOSS URBAN DECAY THE PRICE OF SECURITY DEVICES THE MEDICAL TREATMENT OF VICTIMS AND THEIR LOST INCOME DID NOT INCLUDE THE LOSS OF TIME BUT IN AN AGE OF 12HOUR WORKDAYS OVERBURDENED TWOCAREER FAMILIES AND CUISINE COOKED IN MICROWAVE MINUTES WE CAN ILL AFFORD THIS HIDDEN COST OF SELFDEFENSIVE LIVING EVEN IF WE HAD TIME TO STOP AND SMELL THE ROSES WE WOULD PROBABLY GET OUR POCKETS PICKED WHILE BENDING OVER THEM CRIMINOLOGISTS FREQUENTLY ATTRIBUTE THE ESCALATING VIOLENCE OF OUR NATION'S YOUTH TO A DECREASING RESPECT FOR LIFE IN THE DAYS BEFORE WE NEEDED SUCH EXPLANATIONS POLITE PEOPLE OFTEN REFUSED SOME OFFER OF ASSISTANCE BY SAYING I WOULDN'T DREAM OF IMPOSING ON YOUR TIME A RESPONSE THAT LINKS RESPECT FOR LIFE WITH THE PRECIOUS MOMENTS THAT CONSTITUTE A LIFE THE DECLINE OF CIVILITY AND THE RISE IN CRIME MIGHT BE MORE THAN A CURIOUS COINCIDENCE UNFORTUNATELY THE ADJUSTMENTS WE MUST MAKE TO AVOID BECOMING FBI STATISTICS ARE SAPPING OUR LIVES THE WAR ON CRIME WON'T BE WON UNTIL THE TERM STOLEN MOMENTS RIGHTFULLY REGAINS ITS ROMANTIC CONNOTATIONS MS LICHTER IS CODIRECTOR OF THE CENTER FOR MEDIA AND PUBLIC AFFAIRS A WASHINGTONBASED RESEARCH INSTITUTE 9401030088 940103 1993 YEAREND REVIEW OF MARKETS AND FINANCE BIG BOARD VOLUME SET A RECORD IN 1993 NEW YORK INVESTORS TURNED UP THE VOLUME ON THE NEW YORK STOCK EXCHANGE LAST YEAR THE BIG BOARD SET A RECORD FOR THE NUMBER OF SHARES TRADED IN 1993 WITH 672 BILLION SHARES CHANGING HANDS A 30 GAIN FROM THE 518 BILLION SHARES TRADED IN 1992 THE EXCHANGE ALSO ADDED A RECORD 306 COMPANIES TO ITS RANKS LAST YEAR A 22 INCREASE OVER THE 251 ADDITIONS LOGGED IN 1992 AND OF THE 306 ADDITIONS A RECORD 191 WERE INITIAL PUBLIC OFFERINGS THAT RAISED A TOTAL OF 452 BILLION IN NEW CAPITAL IN 1992 THE BIG BOARD LISTED 165 IPOS YIELDING 345 BILLION IN FRESH CAPITAL 9401030087 940103 YOUR MONEY MATTERS SAVINGS BONDS' YIELDS BELIE STODGY IMAGE BY GEORGETTE JASEN STAFF REPORTER OF THE WALL STREET JOURNAL ATTENTION YIELDHUNGRY INVESTORS WANT AN EASY RISKFREE WAY TO BOOST INCOME THAT'S RIGHT STODGY SERIES EE US SAVINGS BONDS YOU CAN BUY THEM AT MOST FINANCIAL INSTITUTIONS THEY'RE BACKED BY THE FULL FAITH AND CREDIT OF THE US GOVERNMENT AND THEY PAY MORE THAN MOST BANK CERTIFICATES OF DEPOSIT OR MONEYMARKET MUTUAL FUNDS WHAT'S MORE INTEREST INCOME ON SAVINGS BONDS IS EXEMPT FROM STATE AND LOCAL INCOME TAX AND FEDERAL INCOME TAX ISN'T DUE UNTIL THE BONDS ARE REDEEMED YOU CAN HOLD THE BONDS FOR AS SHORT A PERIOD AS SIX MONTHS OR AS LONG AS 30 YEARS WHEN YOU'RE READY TO CASH THEM IN THEY CAN BE REDEEMED AT MOST FINANCIAL INSTITUTIONS YOU'D BE MORE THAN JUSTIFIED TRANSFERRING MONEY TO SAVINGS BONDS FROM MONEY FUNDS OR MATURING CDS SAYS WILLIAM G BRENNAN A PARTNER WITH ACCOUNTANTS ERNST & YOUNG AND EDITOR OF ITS FINANCIAL PLANNING REPORTER NEWSLETTER IT'S A VERY ATTRACTIVE ALTERNATIVE IN TODAY'S ENVIRONMENT SIXMONTH CDS ARE YIELDING LESS THAN 275 ON AVERAGE AND MONEY FUNDS ARE ONLY FRACTIONALLY HIGHER ON ONEYEAR CDS THE AVERAGE YIELD IS BELOW 3 THE ANNUAL YIELD ON SAVINGS BONDS HELD JUST SIX MONTHS IS 4 INTEREST RATES ON SAVINGS BONDS ARE RESET EVERY SIX MONTHS BASED ON A FORMULA TIED TO THE RATE ON FIVEYEAR TREASURY NOTES LAST MARCH THE CLINTON ADMINISTRATION LOWERED THE MINIMUM ON BONDS HELD FIVE YEARS OR LONGER TO 4 FROM 6 TO REFLECT CURRENT LOW INTEREST RATES THE CURRENT RATE EFFECTIVE UNTIL APRIL 30 IS 425 RATES ON BONDS HELD FOR SHORTER PERIODS THAN FIVE YEARS ARE BASED ON A FIXED GRADUATED SCALE BUT UNDER A 1974 FEDERAL LAW THOSE RATES CAN'T BE LESS THAN 4 AS A RESULT SAVINGS BONDS ARE PARTICULARLY ATTRACTIVE THESE DAYS AS SHORTTERM INVESTMENTS THE AVERAGE YIELD ON FIVEYEAR CDS IS ABOUT 445 ACCORDING TO BANXQUOTE MONEY MARKETS BUT UNLIKE FIVEYEAR CDS SAVINGS BONDS CAN BE REDEEMED ANY TIME AFTER SIX MONTHS AND THE INTEREST RATE CAN RISE SUBSTANTIALLY OVER TIME INTEREST PAYMENTS ON BONDS HELD MORE THAN FIVE YEARS ARE BASED ON THE AVERAGE OF MARKETBASED RATES OVER THE PERIOD WHICH THESE DAYS HAVE NOWHERE TO GO BUT UP SAVINGS BONDS ARE SOLD FOR HALF THEIR FACE VALUE WHICH STARTS AT 50 AT THE NEW MINIMUM INTEREST RATE NEWLY ISSUED BONDS WOULD REACH THEIR FACE VALUE AFTER 18 YEARS BUT IT COULD BE SOONER IF PREVAILING RATES ARE HIGHER THAN THE MINIMUM THEY'RE A GOOD WAY FOR SMALL INVESTORS TO ACCUMULATE MONEY SAYS RONALD W ROGE A FINANCIAL PLANNER IN CENTEREACH NY INTEREST ON SAVINGS BONDS MAY BE ENTIRELY TAXEXEMPT FOR PARENTS WHO USE THE PROCEEDS TO PAY COLLEGE TUITION IF THEIR INCOME SUBJECT TO CERTAIN ADJUSTMENTS FALLS BELOW THRESHOLDS THAT ARE ADJUSTED ANNUALLY FOR INFLATION FOR THE 1993 TAX YEAR THE THRESHOLDS WERE 40000 FOR INDIVIDUALS AND 60000 FOR COUPLES FILING JOINTLY THE EXCLUSION FROM FEDERAL TAX PHASED OUT GRADUALLY UNTIL 1993 INCOME REACHED 55000 FOR SINGLE FILERS AND 90000 FOR COUPLES FILING JOINTLY COUPLES FILING SEPARATELY AREN'T ELIGIBLE FOR THE EXCLUSION AT ALL THE 1994 THRESHOLDS ARE SUBJECT TO CHANGE BECAUSE OF PENDING LEGISLATION TO MAKE TECHNICAL CORRECTIONS IN THE 1993 TAX ACT BUT CURRENTLY THEY ARE 41200 FOR INDIVIDUALS AND 61850 FOR COUPLES FILING JOINTLY THE FEDERALTAX EXCLUSION WOULD DISAPPEAR ENTIRELY WHEN INCOME REACHES 56200 FOR INDIVIDUALS AND 91850 FOR COUPLES INVESTORS WHO BUY THEIR BONDS AT THE END OF THE MONTH CAN EFFECTIVELY BOOST THE YIELD BECAUSE INTEREST IS CREDITED FROM THE FIRST DAY OF THE MONTH OF PURCHASE THERE ARE LIMITS ON HOW MUCH YOU CAN BUY IN ANY ONE YEAR 15000 ISSUE PRICE OR 30000 FACE VALUE PER PERSON BUT A COUPLE WITH TWO CHILDREN COULD PUT UP TO 60000 INTO BONDS IN ANY ONE CALENDAR YEAR 9401030086 940103 1993 YEAREND REVIEW OF MARKETS AND FINANCE REVIEW OF FINANCE THE WAITTILNEXTYEAR' DOLLAR MAY FINALLY MAKE ITS OFTPREDICTED REBOUND BY MICHAEL R SESIT STAFF REPORTER OF THE WALL STREET JOURNAL LONDON AFTER BETTING FOR THREE YEARS THAT THE DOLLAR WOULD SOAR ON THE BACK OF A ROBUST US ECONOMIC RECOVERY AND THEN BEING DISAPPOINTED WITH BOTH THE PACE AND VIGOR OF US GROWTH CURRENCY TRADERS AND ANALYSTS ARE AT IT AGAIN THIS TIME THEY MAY FINALLY BE RIGHT ECONOMISTS SUCH AS PAUL CHERTKOW OF UNION BANK OF SWITZERLAND AND AVINASH PERSAUD OF JP MORGAN & CO BOTH IN LONDON ARGUE THAT A COMBINATION OF ECONOMIC FUNDAMENTALS AND POLITICS AUGURS FOR A STRONGER DOLLAR IN 1994 THEY SEE THE US CURRENCY CLIMBING TO 185 TO 200 MARKS BY LATE THIS YEAR UP 64 TO 15 FROM NOW AND TO AROUND 120 YEN AND POSSIBLY AS HIGH AS 130 YEN BOTH MEN ALSO PREDICT THE BRITISH POUND WILL FALL TO 135 WE ARE ON THE THRESHOLD OF AN ALMIGHTY RALLY OF THE DOLLAR DECLARES MR PERSAUD THE MARK HE SAYS WILL BE HURT BY A LETHAL COCKTAIL OF GROWING POLITICAL RISKS IN GERMANY FALLING POLITICAL AND ECONOMIC RISKS IN THE US ROBUST ECONOMIC GROWTH IN THE STATES AND A FRAGILE RECOVERY IN GERMANY JAMES M CONNORS A VICE PRESIDENT AT KIDDER PEABODY & CO IN ST LOUIS COULDN'T CARE LESS ABOUT COUNTRIES' RELATIVE GROWTH RATES INTEREST RATES OR CURRENT ACCOUNT DEFICITS HE CONTENDS THAT THE LAW OF AVERAGES DICTATES A HIGHER DOLLAR NOTING THAT THE US CURRENCY HAS BEEN WEAK AGAINST THE MARK FOR EIGHT YEARS HE SAYS THE STATISTICAL PROBABILITY OF THE DOLLAR BEING DOWN A NINTH YEAR IS VERY SLIM BUT THE TRADER WHO LOOKS AT MARKETS AS AN ACTUARY WOULD SEARCHING FOR REGULAR TENDENCIES DURING SPECIFIC TIME PERIODS AND TRYING TO BUILD A TRADING STRATEGY THAT REFLECTS THE HIGHEST STATISTICAL PROBABILITY WARNS THAT THE DOLLAR'S RIDE UP WON'T BE SMOOTH BEFORE CLIMBING TO A HIGH OF 190 MARKS IN THE SECOND QUARTER MR CONNORS PREDICTS THE DOLLAR WILL FALL TO 160 MARKS HE ALSO SEES IT RETREATING TO 103 YEN BEFORE RISING AGAIN AT THE END OF 1993 THE DOLLAR STOOD AT 17382 MARKS AND 11180 YEN COMPARED WITH 16209 MARKS AND 12484 YEN AT THE START OF THE YEAR AT THE END OF 1993 THE POUND WAS TRADING AT 14770 COMPARED WITH 15100 AT THE START OF THE YEAR IN 1993 CURRENCY MARKETS WERE MARKED BY TWO MAJOR EVENTS THE UNEXPECTEDLY LARGE APPRECIATION OF THE YEN AND THE EFFECTIVE COLLAPSE OF EUROPE'S EXCHANGERATE MECHANISM A JOINT FLOAT OF NINE EUROPEAN CURRENCIES BOLSTERED BY JAPAN'S HUGE TRADE SURPLUS THE YEN CLIMBED TO A POSTWORLD WAR II HIGH OF 10040 YEN TO THE DOLLAR ON AUG 17 AND SOARED TO RECORD HIGHS AGAINST MANY OTHER CURRENCIES EUROPE WAS ANOTHER STORY TRADERS AND INVESTORS REFUSED TO BELIEVE EUROPEAN COUNTRIES WOULD BE WILLING TO DEFEND THEIR CURRENCIES WITH HIGH INTEREST RATES WHILE SUFFERING FROM RECESSION AND RISING UNEMPLOYMENT THE RESULT WAS REPEATED SELLING ASSAULTS ON NEARLY EVERY EUROPEAN CURRENCY EXCEPT THE MARK AND DUTCH GUILDER INITIALLY THE IRISH PUNT SPANISH PESETA AND PORTUGUESE ESCUDO WERE FORCED TO DEVALUE THEN THE ATTACKS SPREAD BY AUG 1 SPECULATORS HAD FORCED EUROPEAN COMMUNITY GOVERNMENTS TO SAVE FACE BY WIDENING THE BANDS IN WHICH ERM CURRENCIES COULD FLUCTUATE TO 30 FROM 45 AND 12 ONLY THE MARK AND DUTCH GUILDER WERE LEFT AT THE OLD 45 FLUCTUATION BAND AGAINST ONE ANOTHER MEANWHILE INVESTORS WHO HAD BET ON A SURGING DOLLAR LAST YEAR WERE CAUGHT SHORT THE US RECOVERY WAS WEAKER THAN MANY HAD ANTICIPATED AND THE BUNDESBANK WAS LOWERING GERMAN INTEREST RATES MORE SLOWLY THAN MANY ANALYSTS HAD PREDICTED EARLY IN THE YEAR THE UNUSUALLY VOLATILE CURRENCY MOVEMENTS WITHIN THE EXCHANGERATE MECHANISM AND THE SUBSTANTIAL APPRECIATION OF THE SWISS FRANC AND THE YEN AGAINST THE DEUTSCHE MARK DEFLECTED INVESTORS' AND TRADERS' ATTENTION FROM THE DOLLAR SAYS MR CHERTKOW HE POINTS OUT THAT MEASURED ON A YEAREND TO YEAREND BASIS THE MAGNITUDE OF THE DOLLAR'S SWINGS AGAINST THE MARK WERE THE SMALLEST SINCE CURRENCIES BEGAN FLOATING IN 1973 NOT SO THIS YEAR HE AND OTHER ANALYSTS CONTEND PROPELLING THE DOLLAR HIGHER SAYS MR CHERTKOW WILL BE CONTINUED US ECONOMIC GROWTH AND HIGHER US INTEREST RATES IN CONTRAST WITH CONTINUED GERMAN ECONOMIC MALAISE AND DECLINING GERMAN INTEREST RATES THAT REFLECT LOWER INFLATION AND RISING UNEMPLOYMENT ON THE ASIAN FRONT HE SAYS THE DOLLAR'S ADVANCE WILL REFLECT THE STRONGER US ECONOMY AND WASHINGTON'S RETREAT FROM USING A WEAK DOLLAR AS A LEVER TO FORCE JAPAN TO OPEN ITS MARKETS TO MORE IMPORTS THE JAPANESE ECONOMY IS DEPRESSED AND IT NOW APPEARS THAT THE CLINTON ADMINISTRATION REALIZES THAT FURTHER REDUCTIONS OF THE JAPANESE TRADE SURPLUS WITH THE US WILL ONLY COME ABOUT WITH ECONOMIC RECOVERY IN JAPAN HE SAYS 9401030085 940103 LAW MEMBER GROUP SUES 14 DIRECTORS TRUSTEES OF CHRISTIAN SCIENCE BOSTON A GROUP OF MEMBERS OF THE FIRST CHURCH OF CHRIST SCIENTIST FILED SUIT IN STATE COURT HERE SEEKING AN INJUNCTION FOR CHURCH DIRECTORS TO FOLLOW CHURCH BYLAWS ON FINANCIAL MATTERS THE SUIT FILED IN SUFFOLK SUPERIOR COURT ALLEGES THAT 14 PAST AND PRESENT CHURCH DIRECTORS AND TRUSTEES OF THE CHRISTIAN SCIENCE PUBLISHING SOCIETY BROKE CHURCH RULES WHEN THEY APPROVED MAJOR EXPENDITURES FOR A CABLETELEVISION VENTURE AND OTHER MEDIA PROJECTS WITHOUT CONSULTING A CHURCHFINANCE COMMITTEE THE CHRISTIAN SCIENCE CABLE OPERATION THE MONITOR CHANNEL WAS FORCED TO SHUT DOWN IN JUNE 1992 BECAUSE OF CONTINUED LOSSES THE PLAINTIFFS WHO INCLUDE ELIZABETH A WEAVER OF GLEN ARBOR MICH AND ROY D VARNER OF SILVERDALE WASH SEEK AN ACCOUNTING OF HOW THE CHURCH DIRECTORS SPENT FUNDS FOR THE MONITOR CHANNEL AND CHANNEL 68 A SEPARATE BOSTON TV STATION SAID ALLAN VAN GESTEL AN ATTORNEY FOR THE GROUP MR VAN GESTEL SAID THE PLAINTIFFS ARE ALSO ASKING THE COURT TO DECLARE THAT THE DEFENDANTS FAILED TO ABIDE BY CHURCH BYLAWS THE COMPLAINT SEEKS AN INJUNCTION STATING THE DIRECTORS MUST ABIDE BY CHURCH RULES IN THE FUTURE HE SAID THE LAWSUIT DOESN'T NAME THE CHRISTIAN SCIENCE CHURCH VICTOR WESTBERG A SPOKESMAN FOR THE CHURCH SAID ITS DIRECTORS HAVE ALWAYS FOLLOWED CHURCH BYLAWS HE ADDED THAT THE CHURCH MADE FULL DISCLOSURE OF ITS FINANCIAL PICTURE TWO YEARS AGO AT THE ANNUAL MEETING TO SAY WE HAVEN'T DIVULGED THAT IS STRANGE 9401030084 940103 LAW LEGAL BEAT DOCTORS SEEK RIGHT TO JOIN FORCES TO NEGOTIATE WITH HEALTH PLANS BY EDWARD FELSENTHAL STAFF REPORTER OF THE WALL STREET JOURNAL DOCTORS ARE PUSHING THE FEDERAL GOVERNMENT TO RELAX ANTITRUST LAWS SO THAT THEY CAN JOIN FORCES TO NEGOTIATE WITH HEALTH PLANS THE LOBBYING EFFORT REFLECTS PHYSICIANS' WORRIES THAT THEIR INTERESTS ARE GETTING TRAMPLED ON BECAUSE THEY ARE SMALL PLAYERS IN A WORLD THAT IS BECOMING DOMINATED BY GIANT HEALTHCARE NETWORKS PRESIDENT CLINTON'S HEALTHCARE PROPOSAL WOULD SET UP ALLIANCES OF EMPLOYERS TO SHOP FOR HIGH QUALITY HEALTH COVERAGE AT LOW PRICES BUT BIG NETWORKS ALREADY HAVE BEGUN POPPING UP IN THE FORM OF HOSPITAL MERGERS AND RAPIDLY GROWING HEALTHMAINTENANCE ORGANIZATIONS BY POOLING THEIR MARKET STRENGTH AND NEGOTIATING COLLECTIVELY DOCTORS HOPE TO GAIN LEVERAGE ON A VARIETY OF ISSUES FROM FEES TO THE FREEDOM OF HEALTH PLANS TO SELECT OR DISMISS INDIVIDUAL PHYSICIANS DOCTORS WANT HEALTH PLANS TO HAVE AN INCENTIVE TO SIT DOWN AT THE TABLE AND DISCUSS POLICIES BEFORE THEY'RE IMPLEMENTED SAYS KIRK JOHNSON GENERAL COUNSEL OF THE AMERICAN MEDICAL ASSOCIATION THE PHYSICIAN GROUP HEALTH INSURERS AND MANY ANTITRUST SPECIALISTS OPPOSE EXTENDING THE RIGHT OF PHYSICIANS TO NEGOTIATE COLLECTIVELY THEY ARGUE THAT POWERFUL BLOCS OF PHYSICIANS MIGHT TRY TO SET HIGH FEES MAKING IT DIFFICULT FOR HEALTH PLANS TO CONTROL COSTS I DON'T THINK THE SOLUTION IS TO ESSENTIALLY ENABLE COMPETING PROVIDERS TO FORM SMALL CARTELS TO COLLECTIVELY NEGOTIATE SAYS ROBERT BLOCH A WASHINGTON ANTITRUST LAWYER AT THE LAW FIRM MAYER BROWN & PLATT WHO UNTIL MARCH HEADED THE JUSTICE DEPARTMENT'S HEALTHCARE ANTITRUST SECTION THE BETTER SOLUTION IS TO HAVE MORE COMPETITIVE ALLIANCES WITH LESS MARKET POWER MR BLOCH SAYS THE DRIVE FOR LESS RIGID ANTITRUST ENFORCEMENT ALREADY HAS MET WITH SOME SUCCESS SEN ORRIN HATCH R UTAH AND REP BILL ARCHER R TEXAS INTRODUCED LEGISLATION LAST MONTH THAT WOULD BROADEN THE CIRCUMSTANCES UNDER WHICH DOCTORS COULD LEGALLY COLLABORATE THE BILL WOULD ALSO DIRECT THE JUSTICE DEPARTMENT TO CREATE A SPECIAL PROGRAM FOR REVIEWING PHYSICIANS' JOINTVENTURE REQUESTS AND APPROVING THEM IN CASES WHERE COMPETITION ISN'T THREATENED IN SEPTEMBER THE JUSTICE DEPARTMENT AND THE FEDERAL TRADE COMMISSION ISSUED GUIDELINES LISTING LIMITED CIRCUMSTANCES IN WHICH DOCTORS ARE ALLOWED TO ENTER INTO JOINT VENTURES WITHOUT FACING PROSECUTION FOR ANTICOMPETITIVE PRACTICES THE FEDERAL GOVERNMENT SINCE 1990 HAS WON OR SETTLED FIVE CASES IN WHICH DOCTORS' GROUPS WERE BARRED FROM COLLABORATING THE NEW GUIDELINES ALLOW UP TO 20 OF THE DOCTORS IN A GIVEN GEOGRAPHICAL AREA TO FORM JOINT VENTURES AS LONG AS THE VENTURE DOESN'T INCLUDE TOO MANY DOCTORS IN ANY ONE SPECIALTY IN A RECENT 21PAGE LETTER TO THE TWO FEDERAL AGENCIES THE AMA'S MR JOHNSON DESCRIBED THE GUIDELINES AS AN IMPROVEMENT BUT STILL INADEQUATE THE GUIDELINES AREN'T SUFFICIENT FOR USE IN THE HEALTHCARE SYSTEM ENVISIONED BY THE PRESIDENT'S PLAN MR JOHNSON WROTE THEY ARE DESIGNED FOR A COMPETITIVE MARKET SYSTEM THAT WOULD NO LONGER EXIST THE CLINTON PLAN ITSELF WOULD ALLOW PHYSICIANS TO NEGOTIATE COLLECTIVELY BUT ONLY IN CASES WHERE THEY ARE WORKING ON A FEEFORSERVICE BASIS RATHER THAN GETTING PAID A LUMP SUM FOR SERVING A LARGE GROUP OF PATIENTS THE PLAN WOULDN'T ALLOW PHYSICIANS TO JOIN FORCES TO NEGOTIATE WITH HMOS AND MOST OTHER MANAGEDCARE ORGANIZATIONS THE CALIFORNIA SUPREME COURT HAS MADE IT HARDER FOR PEOPLE EXPOSED TO CANCERCAUSING SUBSTANCES TO SUE OVER THEIR FEAR OF DEVELOPING CANCER IN RECENT YEARS COURTS IN CALIFORNIA AND OTHER STATES HAVE ALLOWED SUCH CANCERPHOBIA LAWSUITS IN WHICH PEOPLE WHO HAVEN'T BECOME ILL SEEK DAMAGES FOR THEIR FEAR THAT THEY EVENTUALLY WILL GET SICK SUCH RULINGS HAVE RAISED CONCERNS AMONG COMPANIES THAT THEY COULD FACE MASSIVE CLAIMS FOR EXPOSURE TO EVEN HARMLESS AMOUNTS OF TOXIC MATERIALS THE CALIFORNIA SUPREME COURT LAST WEEK SAID DAMAGES IN SUCH A CASE CAN BE AWARDED ONLY WHEN IT IS PROVED THAT THE EXPOSURE IS MORE LIKELY THAN NOT TO CAUSE CANCER IN THE FUTURE THE COURT SAID THAT WITHOUT A STRICT LEGAL STANDARD ALL OF US ARE POTENTIAL FEAROFCANCER PLAINTIFFS BECAUSE EXPOSURE TO CARCINOGENS IS SO COMMON THE STATE SUPREME COURT SAID AN EXCEPTION TO THE TOUGHER STANDARD APPLIES THOUGH IN CASES IN WHICH THE DEFENDANT ACTED EGREGIOUSLY IN EXPOSING PEOPLE TO A TOXIC SUBSTANCE BUT EVEN WHEN THAT OCCURS THE COURT SAID THE PLAINTIFF HAS TO SHOW THAT THE EXPOSURE HAS RESULTED IN AN ACTUAL RISK OF CANCER THAT IS SIGNIFICANT THE CASE BEFORE THE CALIFORNIA HIGH COURT INVOLVED TWO FAMILIES WHOSE DRINKING WATER WAS CONTAMINATED BY CARCINOGENS ILLEGALLY DUMPED BY FIRESTONE TIRE & RUBBER CO AT A LANDFILL IN SALINAS CALIF BEFORE THE COMPANY WAS TAKEN OVER BY BRIDGESTONE CORP OF JAPAN IN 1988 THE SUPREME COURT AGREED THAT FIRESTONE HAD ACTED EGREGIOUSLY BUT IT SENT THE CASE BACK TO THE LOWER COURT TO BE REVIEWED UNDER THE NEW STANDARDS THE TRIAL COURT HAD ORDERED FIRESTONE TO PAY THE FAMILIES 800000 FOR THEIR FEAROFCANCER CLAIMS PLUS ADDITIONAL DAMAGES MANUFACTURING CHEMICAL AND INSURANCE GROUPS HAVE BEEN CLOSELY FOLLOWING THE CASE AND INDUSTRY ATTORNEYS PRAISED THE RULING CALIFORNIA IS TYPICALLY A CUTTINGEDGE JURISDICTION THAT OTHER COURTS LOOK TO SAID ALAN CHARLES RAUL A LAWYER AT LAW FIRM BEVERIDGE & DIAMOND IN WASHINGTON MR RAUL SAID THE RULING GOES AGAINST A TREND IN WHICH COURTS HAVE ALLOWED CANCERPHOBIA CLAIMS AS LONG AS THE PLAINTIFF HAD A REASONABLE FEAR OF CONTRACTING CANCER AN EASIER STANDARD TO MEET AN ATTORNEY FOR FIRESTONE PRAISED THE DECISION AND PREDICTED THE PLAINTIFFS WOULDN'T BE ABLE TO MEET THE STANDARDS SET BY THE COURT THE ATTORNEY PIERCE O'DONNELL OF THE LOS ANGELES OFFICE OF THE LAW FIRM KAYE SCHOLER FIERMAN HAYS & HANDLER SAID THE DUMPING IN THE LANDFILL WAS A DEPARTURE FROM FIRESTONE'S POLICY BUT THERE WASN'T ANY INTENTION TO DO ANY HARM TO THE PLAINTIFFS OR THE PUBLIC FIRESTONE MAINTAINS THAT THE FAMILIES WERE EXPOSED TO ONLY TRACE AMOUNTS OF THE TOXIC SUBSTANCES BERJ BOYAJIAN A LOS ANGELES ATTORNEY FOR THE FAMILIES DISAGREED HE SAID THE MOST STRINGENT OF THE NEW STANDARDS SET BY THE COURT WON'T APPLY BECAUSE THE COURT HAD FOUND THAT THE CONDUCT OF FIRESTONE WAS SO OUTRAGEOUS WE WON'T HAVE DIFFICULTY MEETING THE STANDARDS SET BY THE COURT 9401030083 940103 GLOBAL VIEW CHALK UP 1993 AS A YEAR OF BRAVE BEGINNINGS BY GEORGE MELLOAN FRIDAY NIGHT'S CELEBRATIONS AND SATURDAY'S HANGOVERS ARE HISTORY AND IT'S TIME TO EXAMINE THE HOPES AND FEARS OF THIS NEW YEAR A QUICK GLOBAL SWEEP SUGGESTS THAT 1993 WAS TRULY A YEAR OF AMBITIOUS NEW BEGINNINGS SOME HOPES WILL BE FULFILLED OTHERS SHATTERED MANY WILL BE NEITHER BLESSED NOR DAMNED MERELY MUDDLED AN EXERCISE IN TRYING TO GUESS WHICH WILL BE WHICH FOLLOWS LET'S START WITH SOUTH AFRICA NOT BECAUSE IT IS THE MOST IMPORTANT COUNTRY IN THE WORLD BUT BECAUSE ITS LEAP OF FAITH WAS ONE OF THE WORLD'S MOST DRAMATIC POLITICAL EVENTS OF 1993 IT ABANDONED 45 YEARS OF RACIAL CLASSIFICATION AND SEPARATION THAT HAD MADE IT A PARIAH THROUGHOUT MUCH OF THE WORLD AND BEGAN A PROCESS OF CONSTITUTIONAL CHANGE IT NOW IS MARCHING RESOLUTELY TOWARD ONE MAN ONE VOTE WITH ITS FIRST MULTIRACIAL ELECTION DUE APRIL 27 THIS YEAR WILL TRUE DEMOCRACY TAKE ROOT IN SOUTH AFRICA THE HOPES AMONG THE COUNTRY'S LEADERSHIP ELITES ARE SURPRISINGLY HIGH WHEN YOU CONSIDER THE TRIBAL RIVALRIES AND ECONOMIC AND CULTURAL DIFFERENCES THAT WILL SOMEHOW HAVE TO BE SUBORDINATED TO A RULE OF LAW MOST LIKELY DEMOCRACY WILL HAVE A VERY PAINFUL BIRTH IN SOUTH AFRICA AND IT MAY NOT SURVIVE BUT THE LEADERS OF ITS MUCHMALIGNED WHITE TRIBES DESERVE PRAISE FOR ACCEPTING RISKS OF CIVIL DISORDER AND ECONOMIC DISINTEGRATION BY FINALLY YIELDING TO THE DEMANDS AND ASPIRATIONS OF NONWHITE TRIBES AND POLITICAL GROUPINGS FOR CHRISTIANS BETHLEHEM SYMBOLIZES THE HOPES AND FEARS OF ALL THE YEARS AND THERE IS NO MORE APPROPRIATE SITE FOR BOTH EMOTIONS TODAY CONSIDERING THE TROUBLE THAT HAS SWIRLED AROUND THIS WEST BANK VILLAGE FOR THE LAST 26 YEARS HOPE OF A SORT IS ONCE AGAIN ASCENDANT AS ARABS AND JEWS TRY TO FIND POLITICAL STABILITY IN A FORMULA THAT WOULD GIVE THE PALESTINE LIBERATION ORGANIZATION ADMINISTRATIVE POWERS IN THE TOWNS OF THE WEST BANK AND GAZA YET THE FEARS MUST BE GIVEN GREATER WEIGHT THAN THE HOPES THERE ARE TOO MANY MAJOR PLAYERS WHO SEE IT IN THEIR INTEREST TO PERPETUATE THE ARMED STRUGGLE AS IN SOUTH AFRICA THE HAVES IN THIS CASE THE ISRAELIS AS REPRESENTED BY THE RABIN GOVERNMENT DESERVE CREDIT FOR ACCEPTING THE RISKS OF CHANGE RUSSIA AS WITH SOUTH AFRICA LAUNCHED ITS NEW BEGINNING WITH A REFORM CONSTITUTION IT TOO ATTEMPTS TO BURY THE OLD TRADITION OF ONEPARTY RULE AND INSTITUTE REGULAR MULTIPARTY ELECTIONS THE FIRST PARLIAMENTARY ELECTION LAST MONTH GAVE THE WORLD A SHOCK WHEN IT BROUGHT FORTH A NEW POLITICAL FIGURE THE WILD AND DANGEROUSSOUNDING VLADIMIR ZHIRINOVSKY BUT HE IMMEDIATELY SET ABOUT TO MAKE HIMSELF A LAUGHING STOCK BY GETTING THROWN OUT OF BULGARIA AND BARRED FROM GERMANY MEANWHILE BORIS YELTSIN IS USING HIS NEW CONSTITUTIONAL POWERS TO TRY TO BRING SOME SORT OF ORDER OUT OF THE CHAOS THAT IS RUSSIA TODAY HIS ECONOMIC TEAM WILL CONTINUE TO MAKE MISSTEPS BUT PRIVATIZATION OF THE RUSSIAN ECONOMY NOW SEEMS IRREVERSIBLE OUT OF THAT EVENTUALLY WILL COME ECONOMIC REDEVELOPMENT AND RECOVERY IF MR YELTSIN MUST ERR IT HAD BETTER BE ON THE SIDE OF DEREGULATION TO GIVE FREE PLAY TO THE ENTREPRENEURIAL JUICES NOW FLOWING A PROPOSED RESTRICTION OF DOLLAR USE THIS MONTH IS NOT A GOOD AUGURY ITALY LAUNCHED A NEW BEGINNING IN 1993 WITH A PURGE OF ITS POLITICAL CLASS AND A NEW ELECTORAL LAW THAT WILL RADICALLY CHANGE ITS POLITICAL STRUCTURE AFTER NEW ELECTIONS THIS YEAR THE OLD PARLIAMENT IS FIGHTING A DESPERATE REARGUARD ACTION BUT IT CAN'T PUT OFF THE INEVITABLE FOREVER IT IS BY NO MEANS CERTAIN THAT ITALY WILL GET A MORE COMPETENT GOVERNMENT AFTER THE ELECTIONS BUT WHATEVER GOVERNMENT IS IN POWER WILL HAVE LITTLE CHOICE IF THE COUNTRY IS TO REMAIN SOLVENT BUT TO CONTINUE ECONOMIC PRIVATIZATION THAT WILL CHANGE ITALY FOR THE BETTER BY REDUCING THE POWER OF POLITICIANS AND BUREAUCRATS THE EUROPEAN COMMUNITY NOW EUROPEAN UNION HAD A BEGINNING IN 1993 WITH THE FINAL RATIFICATIONS BY MEMBER NATIONS OF THE MAASTRICHT TREATY IGNORING THE LESSONS TAUGHT BY CURRENCY MARKETS IN 1993 BRUSSELS BUREAUCRATS WILL PRESS ONWARD TOWARD MONETARY UNION THIS YEAR WITH A NEW EMBRYO EUROPEAN CENTRAL BANK BUT DON'T BET THAT THEY WILL EVER GET THERE OR ACHIEVE GENUINE POLITICAL SOLIDARITY IF THE EU CAN CONTINUE PERFECTING THE SINGLE MARKET AND BRINGING NEW MEMBERS INTO THE BLOC IT WILL REMAIN VIABLE SPEAKING OF TRADE 1993'S NEW BEGINNINGS ON THE TRADE FRONT DESERVE ALL THE PRAISE THEY CAN GET NAFTA AND THE URUGUAY ROUND WERE HISTORIC ACCOMPLISHMENTS THE CLINTON ADMINISTRATION WHICH STARTED THE YEAR LOOKING PROTECTIONIST DESERVES MUCH CREDIT FOR REVERSING ITSELF AND PUSHING THROUGH THESE TWO MAJOR FREETRADE AGREEMENTS THE DEALS ARE ONLY BEGINNINGS BECAUSE THE DETAILED IMPLEMENTATION MUST YET BE LEGISLATED BUT THERE NOW ARE TWO FRAMEWORKS IN WHICH NATIONS WILL WORK FOR FREER COMMERCE THE WORLD WILL PROSPER AS A RESULT A FAR LESS AUSPICIOUS BEGINNING FOR THE CLINTON ADMINISTRATION WAS THE OUTLINE OF A COERCIVE AND COSTLY OVERHAUL OF THE US HEALTH CARE SYSTEM IF EVER IMPLEMENTED IT WOULD BUREAUCRATIZE AND WRECK THE COMPLEX APPARATUS THAT NOW DELIVERS HIGHQUALITY CARE TO MOST AMERICANS BUT IT PROBABLY WON'T BE IN PART BECAUSE THE CLINTONS WILL BE PREOCCUPIED THIS YEAR TRYING TO MANAGE THE POLITICAL FALLOUT FROM REVELATIONS OF PAST FINANCIAL AND PERSONAL MISBEHAVIOR IN ARKANSAS FINALLY THERE IS ASIA JAPAN MADE A NEW BEGINNING BY DUMPING ITS LIBERAL DEMOCRATIC PARTY IN FAVOR OF A NEW REFORM TEAM TAX CUTTING IS ONE OF THE GOOD IDEAS THE REFORMERS ARE EXPLORING AS A MEANS OF PULLING JAPAN OUT OF ITS ECONOMIC SLUMP BUT JAPAN WILL NEED A GREAT DEAL MORE THAN THAT IT MOST LIKELY WILL HAVE TO SCRAP THE WHOLE CONCEPT OF JAPAN INC IN FAVOR OF A MORE OPEN AND COMPETITIVE DOMESTIC ECONOMY WHEREAS SOME AMERICAN PUNDITS WERE NOT LONG AGO ADVOCATING THAT THE US ADOPT THE JAPANESE ECONOMIC MODEL THE REVERSE IS MORE LIKELY NOW WITH JAPAN BECOMING MORE LIKE THE US CHINA CONTINUES ITS OWN EXPERIMENT WITH PRIVATE ENTERPRISE BEIJING HAS CONTRIBUTED MAINLY BY STAYING OUT OF THE WAY BUT IT COULD HELP A GREAT DEAL IF IT SUCCEEDS IN MAKING THE YUAN CONVERTIBLE THE CHINESE COMMUNISTS ALSO ARE CAPABLE OF COURSE OF CREATING NEW TANGLES BUT IMMEDIATE PROSPECTS REMAIN HOPEFUL SO HOW WILL 1994 LOOK AS A WHOLE WELL MAYBE NOT SO BAD THE US ECONOMIC RECOVERY IS LOOKING STRONGER AND MAY NOT SUFFER FATALLY FROM THIS YEAR'S NEW TAXES MOREOVER THERE IS A LOT OF POLITICAL YEAST WORKING AROUND THE WORLD THE MERE PRESENCE OF SO MUCH HOPE IS ITSELF A CAUSE FOR OPTIMISM 9401030082 940103 SMALL STOCK FOCUS AMEX DERIVATIVES OFFER SHOT AT CHINESE ECONOMY BY ANNE NEWMAN STAFF REPORTER OF THE WALL STREET JOURNAL YOU DON'T HAVE TO BOARD AN AIRPLANE TO TAKE A FLIER ON CHINA THE AMERICAN STOCK EXCHANGE NOW OFFERS PUBLICLY TRADED DERIVATIVES THAT GIVE INVESTORS IMMEDIATE ACCESS TO THE CHINA PLAY VIA THE HONG KONG STOCK MARKET AND WHAT A PLAY IT HAS BEEN THE HONG KONG STOCK MARKET MORE THAN DOUBLED IN VALUE LAST YEAR SOARING ROUGHLY 10 LAST WEEK ALONE SOME OF THE NEW DERIVATIVES GREATLY EXCEEDED THE MARKET'S GAINS TO YIELD SIZZLING PROFITS FOR INVESTORS IN JUST THE PAST TWO MONTHS BUT BEFORE SIGNING UP INVESTORS SHOULD TAKE NOTE THESE DERIVATIVES CAN OFFER A WILD RIDE AND GIVEN THEIR COMPLEXITIES THEY'RE ONLY SUITED TO HIGH ROLLERS WHO CAN TOLERATE THE TWIN RISKS OF INVESTING IN EMERGING MARKETS AND DOING SO THROUGH OPTIONS THE HONG KONG STOCK MARKET WAS FAVORED TURF FOR EMERGINGMARKET BULLS IN 1993 THE BRITISH COLONY IS CONSIDERED AN IDEAL PLAY ON CHINA'S BOOMING ECONOMY AS ROUGHLY 60 OF CHINA'S EXPORTS GO THROUGH IT AND MANY HONG KONG COMPANIES HAVE LARGE INVESTMENTS IN CHINA THE NEW DERIVATIVES AREN'T ONLY FOR CHINA BULLS HOWEVER INVESTORS WHO ARE PESSIMISTIC ABOUT HONG KONG'S FUTURE PARTICULARLY GIVEN UNCERTAINTIES OVER THE COLONY'S 1997 TRANSFER TO CHINESE CONTROL CAN FIND AMEXLISTED DERIVATIVES TO SUIT THEIR VIEWS TOO LATELY SUCH BEARISH DERIVATIVES HAVE BEEN MORE IN DEMAND THAN THOSE TAILORED TO BULLS THE DERIVATIVES KNOWN AS WARRANTS TRACK THE PRICE PERFORMANCE OF THE AMEX HONG KONG 30 INDEX THIS INDEX OF 30 STOCKS INTRODUCED IN JUNE BY THE AMEX COMPRISES 67 OF THE CAPITALIZATION OF ALL 475 STOCKS THAT TRADE ON THE HONG KONG MARKET WARRANTS ARE A KIND OF OPTION THAT TRADES LIKE A SECURITY THE HONG KONG WARRANTS GIVE HOLDERS THE RIGHT BUT NOT THE OBLIGATION TO BUY IN THE CASE OF A CALL WARRANT OR SELL IN THE CASE OF A PUT WARRANT THE HONG KONG 30 INDEX AT A SPECIFIED STRIKE PRICE IN A GIVEN PERIOD OF TIME UNLIKE MOST OPTIONS WHICH TEND TO BE QUITE SHORT TERM WARRANTS DON'T EXPIRE FOR TWO YEARS OR MORE WHEN THE WARRANTS ARE EXERCISED THE HOLDER GETS CASH RATHER THAN DELIVERY OF THE UNDERLYING SECURITIES SETTLEMENT IS GUARANTEED AND PAID BY THE BROKERAGE FIRMS THAT ISSUE THEM THE HONG KONG 30 INDEX CLIMBED ROUGHLY 36 SINCE OCT 26 WHEN THE FIRST HONG KONG WARRANTS WERE ISSUED BY PAINE WEBBER GROUP INC INVESTORS MEANWHILE COULD HAVE GAINED SEVERAL TIMES THAT OR LOST MONEY DEPENDING ON WHICH WARRANT THEY BOUGHT AND WHEN UNFORTUNATELY THERE'S NO WAY TO TELL AT FIRST GLANCE HOW A GIVEN WARRANT WILL REACT TO A MARKET MOVE THAT'S BECAUSE DIFFERENT HONG KONG WARRANTS CARRY DIFFERENT STRIKE PRICES EXPIRATION DATES AND OTHER TERMS MAKING COMPARISONS STILL KNOTTIER SOME WARRANTS ARE DESIGNED TO PROVIDE MORE LEVERAGE THAN OTHERS FOR INSTANCE ALL OTHER THINGS BEING EQUAL WHICH THEY'RE NOT IT WOULD TAKE ONLY 10 SALOMON INC WARRANTS TO GET ROUGHLY THE SAME PERFORMANCE KICK AS 23 WARRANTS FROM BEAR STEARNS COS RETURNS ON THE WARRANTS HAVE VARIED ALL OVER THE MAP BEFORE THE YEAREND RALLY EVEN BULLISH CALL WARRANTS WEREN'T GUARANTEED WINNERS JUST A WEEK AGO CALLS ISSUED BY BEAR STEARNS HAD LOSSES OF 3 SINCE THEIR DEBUT ON DEC 10 BUT BY YEAR END THEY REBOUNDED TO GAIN 19 BY CONTRAST SALOMON CALL WARRANTS GENERATED WHOPPING PROFITS OF 142 SINCE COMING ON THE MARKET NOV 5 ACCORDING TO THE AMEX MEANWHILE DEFYING ACCEPTED OPTION THEORY PUT WARRANTS ACTUALLY ROSE IN PRICE AS THE MARKET SOARED LAST WEEK INVESTORS WHO BOUGHT NEWLY ISSUED PUTS FROM BEAR STEARNS ON DEC 10 ENDED 1993 WITH GAINS OF ABOUT 6 WHILE BUYERS OF PAINE WEBBER PUTS ON OCT 26 ENDED WITH A NARROW 1 LOSS THE AMEX SAYS CRITICS OF THE NEW DERIVATIVES INCLUDING SANDOR CSEH PRESIDENT OF CSEH INTERNATIONAL & ASSOCIATES SAY THE HONG KONG WARRANTS ARE TYPICAL OF THE PRODUCTS THAT PROLIFERATE WHEN A MARKET BECOMES OVERHEATED MR CSEH'S FIRM A UNIT OF CASHMAN FARRELL & ASSOCIATES OF BERWYN PA SPECIALIZES IN UNDERVALUED SECURITIES SUCH EMPHASIS ON VALUE MEANS THE WARRANTS ARE NOT OUR INVESTMENT STYLE SAYS MR CSEH GLOBETROTTING INVESTOR GEORGE SOROS WHO HAS MADE BILLIONS BETTING ON FLUCTUATIONS IN INTERNATIONAL INVESTMENTS LIKEWISE IS SHUNNING THESE HONG KONG WARRANTS SOROS ISN'T TRADING THEM SAYS A TRADER FOR MR SOROS BUT WE CAN'T GO INTO DETAILS BUT ENTHUSIASTS SAY THE AMEX WARRANTS PROVIDE SMALL INVESTORS WITH A WAY TO VENTURE INTO ASIAN MARKETS THAT IS CHEAPER AND EASIER THAN BUYING SHARES DIRECTLY ON THE HONG KONG EXCHANGE TO COMPARISONSHOP AMONG THE DIFFERENT WARRANTS INVESTORS WOULD NEED TO CONSULT SOPHISTICATED OPTIONPRICING MODELS THE RISKS AND PECULIARITIES OF HONG KONG WARRANTS MEAN THEY AREN'T APPROPRIATE FOR AVERAGE INVESTORS ANALYSTS AND AMEX OFFICIALS WARN WE'RE NOT TALKING ABOUT RETIREES OR OCCASIONAL INVESTORS AS BUYERS CAUTIONS MICHAEL SCHWARTZ AN OPTIONS ANALYST FOR OPPENHEIMER & CO WHICH COMANAGED THE PAINE WEBBER OFFERING BROKERS SAY THAT CUSTOMERS WHO BUY THE WARRANTS MUST NOT ONLY BE PREAPPROVED FOR OPTIONS TRADING BUT ALSO MUST UNDERSTAND THE RISKS OF INVESTING IN EMERGING MARKETS SOME FIRMS SUCH AS PAINE WEBBER AND MERRILL LYNCH & CO SPECIALIZE IN SELLING THESE SECURITIES TO WEALTHY INDIVIDUAL INVESTORS WHILE OTHERS SUCH AS MORGAN STANLEY GROUP INC AND SALOMON HAVE FOCUSED ON INSTITUTIONAL INVESTORS INVESTOR DEMAND FOR THE HONG KONG WARRANTS SO FAR HAS EXCEEDED EXPECTATIONS SAYS IVERS RILEY THE AMEX'S SENIOR VICE PRESIDENT FOR DERIVATIVE SECURITIES MR RILEY HIMSELF IS SOMETHING OF A HONG KONG BULL HE'S MOVING THERE THIS MONTH TO BECOME CHIEF EXECUTIVE OFFICER OF THE HONG KONG FUTURES EXCHANGE UNTIL RECENTLY HOWEVER THE MOST POPULAR VIEW OF HONG KONG'S FUTURE WAS A BEARISH ONE DEMAND FOR PUTS HAS BEEN RUNNING HIGH SAYS JIM DICKSON SALOMON'S DIRECTOR OF ASIAN EQUITY DERIVATIVES FOR INSTANCE A BEAR STEARNS' PUTWARRANT OFFERING ON DEC 10 HAD TO BE INCREASED TO 15 MILLION WARRANTS FROM ONE MILLION TO MEET DEMAND BY CONTRAST BEAR STEARNS MANAGED TO ISSUE JUST ONE MILLION NEW CALL WARRANTS THAT DAY SUBSEQUENTLY MERRILL'S DEC 17 OFFERING OF CALL WARRANTS HAD TO BE CUT BACK TO 16 MILLION WARRANTS FROM TWO MILLION ON WEAK DEMAND THE HONG KONG WARRANTS ARE JUST THE LATEST COCKTAIL THE AMEX HAS SERVED UP TO ALLOW INVESTORS TO BET ON FOREIGN SECURITIES MARKETS THE AMEX HAD HUGE SUCCESS IN 1990 WITH WARRANTS TIED TO JAPAN'S HIGHFLYING NIKKEI INDEX LUCKY INDIVIDUALS WHO MADE BEARISH BETS WITH THOSE WARRANTS CLINCHED PROFITS OF AS MUCH AS 400 WHEN JAPANESE SHARE PRICES SUBSEQUENTLY COLLAPSED UNLUCKY BULLS MEANWHILE LOST ALL THE MONEY THEY INVESTED A BANNER YEAR FOR SMALLCOMPANY STOCKS FINISHED ON A POSITIVE NOTE AS INVESTORS KICKED PRICES HIGHER ON ENDOF1993 MARKUPS THE RUSSELL 2000 INDEX A MEASURE OF SMALLCAPITALIZATION ISSUES TRADED ON THE NASDAQ STOCK MARKET AND THE MAJOR EXCHANGES SURGED 240 POINTS OR 094 TO END AT 25859 ALTHOUGH THE BAROMETER STARTED MARGINALLY WEAKER IT GAINED GROUND ALL DAY AS PARTICIPANTS MADE THEIR FINAL MOVES FOR THE YEAR ON NASDAQ THE COMPOSITE INDEX JUMPED 572 POINTS OR 074 TO END AT 77680 IN LIGHT NEW YEAR'S EVE TRADING ADVANCING NASDAQ ISSUES OUTRAN DECLINERS ON NASDAQ NATIONAL MARKET VOLUME OF 202965700 SHARES AND OVERALL VOLUME OF 253736200 SHARES ON THURSDAY NATIONAL MARKET VOLUME STOOD AT 207734000 SHARES AND TOTAL VOLUME REGISTERED 262686500 NASDAQ NATIONAL MARKET STOCKS THAT SET HIGHS TOTALED 150 WHILE 15 HIT LOWS HOW WARRANTS ON THE HONG KONG 30 INDEX COMPARE DATA AS OF DEC 9401030081 940103 BUSINESS BRIEF DESTEC ENERGY INC FIRM COMPLETES FINANCING OF TIGER BAY POWER PLANT DESTEC ENERGY INC HOUSTON SAID IT COMPLETED DEBT AND EQUITY FINANCING OF THE 220 MILLION TIGER BAY COGENERATION PLANT THE POWER COMPANY SAID FUJI BANK LTD WAS THE AGENT FOR BANKS THAT WILL UNDERWRITE CONSTRUCTION FINANCING OF THE PLANT NEAR FORT MEADE FLA DESTEC OWNS A 50 EQUITY INTEREST IN THE PROJECT OTHER GENERAL PARTNERS ARE GENERAL PEAT RESOURCES DEVELOPMENT CO OF ST PETERSBURG FLA AND ENERGY INVESTORS FUNDS OF BOSTON CONSTRUCTION ON THE TIGER BAY PROJECT HAS BEGUN AND IS EXPECTED TO BE COMPLETE IN EARLY 1995 A DESTEC SPOKESMAN SAID THE PLANT WILL SELL ELECTRICITY TO FLORIDA POWER CORP AND STEAM TO US AGRICHEMICALS 9401030080 940103 ABREAST OF THE MARKET CYCLICAL ISSUES ARE SEEN DRIVING MARKET'S NEW PHASE BY STEVEN E LEVINGSTON STAFF REPORTER OF THE WALL STREET JOURNAL THE CURTAIN IS RISING ON A NEW PHASE IN THE PROLONGED BULL MARKET ANALYSTS SAY THE FOURTH QUARTER MARKED A STOCK MARKET TURNING POINT IN WHICH ECONOMICALLY SENSITIVE STOCKS BEGAN A SURGE THAT WILL CONTINUE FAR INTO THE YEAR AS THE ECONOMY IMPROVES WITNESS LAST QUARTER'S STRONG PERFORMANCE OF SUCH CYCLICAL STOCK GROUPS AS AUTO MANUFACTURERS COMMODITIES AIR FREIGHT AND NONDURABLE HOUSEHOLD PRODUCTS AMONG OTHERS AT THE SAME TIME STOCKS THAT HAVE BENEFITED FROM FALLING INTEREST RATES SUCH AS UTILITIES BANKS AND SECURITIES BROKERS SUFFERED DURING THE QUARTER THAT FURTHER SUGGESTS A SHIFT FROM AN INTERESTRATE DRIVEN STOCK MARKET TO ONE DRIVEN BY EARNINGS ANALYSTS SAY DON HAYS DIRECTOR OF INVESTMENT STRATEGY AT WHEAT FIRST SECURITIES/BUTCHER & SINGER IN RICHMOND VA SAYS THE TRANSITION SIGNALS THAT INVESTORS ARE ENTERING THE THIRD PHASE OF THE BULL MARKET AT LONG LAST PEOPLE UNDERSTAND THAT THE ECONOMY IS PICKING UP FOR THE FIRST TWO PHASES OF THE BULL MARKET EVERYBODY IS ALWAYS LOOKING OVER THEIR SHOULDER EXPECTING THE ECONOMIC SLOWDOWN TO RETURN MR HAYS SAYS NOW THOSE STOCKS THAT HAVE AN ECONOMIC SENSITIVITY WILL CONTINUE TO BE IN THE FOREFRONT BUT WHAT WAS GOOD FOR CYCLICAL STOCKS LAST QUARTER WAS BAD FOR THE INTERESTRATESENSITIVE UTILITIES BANKS AND SECURITIES BROKERS THAT SHIFT MAY BE FLASHING A WARNING SIGN ABOUT INTEREST RATES SAYS WALTER C REVIS MARKET ANALYST AT HAMILTON INVESTMENTS IN CHICAGO THE WEAKNESS IN UTILITIES INDICATES THE MARKET IS ANTICIPATING HIGHER INTEREST RATES MR REVIS SAYS HE ALSO POINTS TO THE STRONG PERFORMANCE AMONG COMMODITIES STOCKS SUCH AS PRECIOUS METALS NONFERROUS METALS AND ALUMINUM AS A SIGN SOME INFLATION PRESSURES WILL EMERGE IN THE NEW YEAR THE FACT THEY WERE STRONG IN THE QUARTER SAYS THE MARKET IS LOOKING FOR A RESURGENCE IN COMMODITY INFLATION MR REVIS SAYS THE EXCEPTION OF COURSE IS OILPRICE INFLATION HE ADDS OIL STOCKS SKIDDED TO THE BOTTOM OF THE PERFORMANCE LIST AS OIL PRICES SLUMPED DURING THE QUARTER IT'S NO SURPRISE TO SEE OIL STOCKS AT THE BOTTOM WITH OIL PRICES AT FIVEYEAR LOWS MR REVIS SAYS IF THE STOCKGROUP ROTATION HAS BEEN TREACHEROUS FOR INVESTORS MR REVIS POINTS OUT THAT SAVVY INVESTORS ATTUNED TO THE MARKET'S NEW PHASE CAN STILL REAP BIG REWARDS THE MARKET IS SHIFTING TOWARD STOCKS THAT ARE MORE POPULAR DURING A MATURE BULL MARKET HE SAYS IF YOU STICK WITH GROUPS THAT ARE APPROPRIATE FOR THIS STAGE AND FIND COMPANIES DOING WELL IN THOSE GROUPS THERE'S STILL PLENTY OF MONEY TO BE MADE SOME STOCK GROUPS SIMPLY FALTERED DURING THE QUARTER AFTER FLOURISHING FOR MOST OF THE YEAR SUCH AS SEMICONDUCTORS AND CASINOS SEMICONDUCTORS WHICH RANKED NEAR THE TOP IN THE THIRD QUARTER PLUNGED NEARLY TO THE BOTTOM OF THE PERFORMANCE LIST IN THE FOURTH QUARTER A SPECULATIVE FEVER PUSHED STOCKS OF THE FASTGROWING CASINO INDUSTRY TO FABULOUS HIGHS UNTIL LAST QUARTER IT'S QUESTIONABLE HOW STRONG A MOVE ANY SECTOR CAN HAVE WHEN IT'S AS OVERDONE AS THE CASINOS WERE MR REVIS SAYS THEY'LL BE NO MORE THAN MARKET PERFORMERS FOR THE REST OF THIS BULL MARKET AFTER STUMBLING FOR PART OF THE YEAR HEALTHCARE STOCKS MADE A STRONG COMEBACK IN THE FOURTH QUARTER ALONG WITH THESE STOCKS THE DRUG MAKERS AND RETAILERS TURNED IN RESPECTABLE PERFORMANCES THAT'S A SHARP TURNAROUND FROM THE BATTERING THE ENTIRE HEALTH CARE AND PHARMACEUTICAL INDUSTRIES SUFFERED AMID THE EARLY DISCUSSIONS OF THE CLINTON HEALTHCARE REFORM PLANS IN CONTRAST TO EVERYONE'S EXPECTATIONS THE CLINTON PLAN IS NOT A TOTAL DISASTER FOR THE HEALTHCARE INDUSTRY SAYS JOSEPH BATTIPAGLIA CHIEF INVESTMENT STRATEGIST AT GRUNTAL & CO SUDDENLY THESE STOCKS HAVE COME TO LIFE BECAUSE THEIR EXPECTATIONS WERE HURT THE MOST BY THE PLAN MR BATTIPAGLIA SAYS PROSPECTS FOR DRUG MAKERS AND HEALTHCARE STOCKS ARE RELATIVELY BRIGHT GOING INTO 1994 INVESTORS MAY SEE SOME IMPROVEMENT IN THE INDUSTRY'S OUTLOOK AS A RESULT OF FURTHER NEGOTIATIONS ON THE HEALTHCARE PLAN MOREOVER MR BATTIPAGLIA SAYS EVIDENCE OF PROMISING NEW PRODUCTS AND BETTER RESPONSIVENESS IN APPROVALS FROM THE FOOD AND DRUG ADMINISTRATION MAY HELP THE STOCKS THESE STOCKS SHOULD HAVE A VERY ROBUST FIRST HALF HE SAYS THEY'RE NOW VALUE PLAYS RATHER THAN STRICTLY GROWTH MOMENTUM PLAYS SOME INSTITUTIONS WILL CONTINUE TO BOTTOMFISH IN THESE AREAS COMMUNICATIONS STOCKS SAGGED DURING THE QUARTER PARTLY BECAUSE OF FALLOUT FROM THE BATTLE OVER PARAMOUNT MR BATTIPAGLIA ARGUES HE SAYS THE TAKEOVER FIGHT CAUSED INVESTORS TO TAKE A HARD LOOK AT THE WHOLE SPECTRUM OF STOCKS RELATED TO THE INTERACTIVE MULTIMEDIA CELLULAR AND CABLE INDUSTRIES THERE ARE NO CLEAR VICTORS IN SIGHT IN THE INDUSTRY HE SAYS THERE MAY BE A FALLOUT PERIOD SO INVESTORS REALIZE THEY HAVE TO PICK THEIR STOCKS CAREFULLY ONE STOCK THAT HAD FALLEN ON HARD TIMES THIS YEAR SHOWED SURPRISING STRENGTH IN THE FOURTH QUARTER INTERNATIONAL BUSINESS MACHINES MR BATTIPAGLIA SAYS INVESTORS HAVE BEGUN TO RECOGNIZE THAT IBM IS WELL DIVERSIFIED THROUGH ITS RANGE OF PRODUCTS AND THAT ITS INTERNATIONAL STATURE COULD PROVE A BOON TO SALES WHEN THE EUROPEAN ECONOMIES BEGIN TO PICK UP THERE'S A RECOGNITION OF WHAT IS POSITIVE ABOUT THE COMPANY RATHER THAN WHAT'S NEGATIVE HE SAYS INSTITUTIONS LOOKING FOR VALUE HAVE RUSHED IN IN A BIG WAY STOCK PRICES ENDED THE YEAR WITH A TUMBLE IN LATE TRADING THE DOW JONES INDUSTRIAL AVERAGE LOST 2179 POINTS TO 375409 STANDARD & POOR'S 500STOCK INDEX FELL 219 TO 46645 AND THE NEW YORK STOCK EXCHANGE COMPOSITE INDEX EDGED DOWN 069 TO 25908 THE NASDAQ COMPOSITE INDEX GAINED 572 TO 77680 THE AMERICAN STOCK EXCHANGE MARKET VALUE INDEX ADDED 460 TO 47715 VOLUME ON THE BIG BOARD FELL TO 167620000 SHARES FROM 193640000 THURSDAY IT WAS THE LIGHTEST TRADING DAY FOR A FULL SESSION SINCE THE SAME DAY LAST YEAR WHEN 1676 MILLION SHARES WERE TRADED RISING ISSUES OUTNUMBERED DECLINERS 1191 TO 891 FOR THE WEEK THE DOW INDUSTRIALS SLIPPED 01 AND THE S&P 500 DIPPED 02 BUT THE NASDAQ COMPOSITE ROSE 24 WORLDWIDE STOCK PRICES FELL FRIDAY IN DOLLAR TERMS THE DOW JONES WORLD STOCK INDEX LOST 010 TO 11107 AFTER SPENDING A LOT OF THE DAY IN POSITIVE TERRITORY A WAVE OF SELL ORDERS NEAR THE CLOSE SENT THE DOW INDUSTRIALS SKIDDING 30 POINTS IN THE LAST HALF HOUR OF TRADING PROFESSIONAL INVESTORS OFTEN PLACE ORDERS TO BE EXECUTED AT THE CLOSE OF TRADING ON THE FINAL DAY OF A FISCAL QUARTER THAT LAST MINUTE ACTION CAN MEAN SUDDEN AND SHARP PRICE MOVES MCI COMMUNICATIONS JUMPED FOR A SECOND STRAIGHT DAY FOLLOWING NEWS THAT IT WILL SPEND 1 BILLION TO BUILD LOCAL NETWORKS IN MANY MAJOR US CITIES THE STOCK GAINED 1 1/4 TO 28 1/4 ON NASDAQ IT ROSE 1 1/2 THURSDAY MCI'S PLAN WILL INTENSIFY THE WASHINGTON DC COMPANY'S COMPETITION WITH REGIONAL TELEPHONE SERVICE PROVIDERS MANY BABY BELL STOCKS FELL FOR A SECOND STRAIGHT DAY AMERITECH DROPPED 1 TO 76 3/4 SOUTHWESTERN BELL LOST 1 1/4 TO 41 1/2 AND PACIFIC TELESIS EASED 7/8 TO 54 1/4 INFINITY BROADCASTING LOST 3 TO 30 1/4 ON NASDAQ AFTER FEDERAL COMMUNICATIONS COMMISSIONER JAMES QUELLO SAID HE AND TWO OF THE FOUR OTHER COMMISSIONERS AGREED TO DELAY A VOTE ON INFINITY'S 170 MILLION PURCHASE OF TWO RADIO STATIONS HE SAID THE COMMISSION WON'T MOVE UNTIL THERE IS ACTION ON COMPLAINTS ABOUT ALLEGEDLY OFFENSIVE COMMENTS FROM INFINITY RADIO PERSONALITY HOWARD STERN STONE CONTAINER SKIDDED 1 3/8 TO 9 5/8 AFTER THE CHICAGO PAPER PACKAGING AND NEWSPRINT COMPANY SAID IT PLANS TO OFFER 21 MILLION ADDITIONAL COMMON SHARES AND 500 MILLION IN DEBT IT HAS ABOUT 71 MILLION SHARES OUTSTANDING NOW MONTEDISON'S AMERICAN DEPOSITARY RECEIPTS INCREASED 1 TO 6 5/8 THEY ROSE 1/4 THURSDAY AFTER THE ITALIAN COMPANY AND ROYAL DUTCH/SHELL GROUP AGREED TO MERGE MOST OF THEIR POLYPROPYLENE AND POLYETHYLENE BUSINESSES ROYAL DUTCH PETROLEUM LOST 7/8 TO 104 3/8 SHELL TRANSPORT & TRADING ROSE 1/4 TO 64 3/4 WALT DISNEY DROPPED 1 1/8 TO 42 5/8 AFTER A FRENCH MAGAZINE REPORTED THAT MICHAEL EISNER DISNEY'S CHAIRMAN HADN'T RULED OUT CLOSURE OF THE EURO DISNEY THEME PARK THE EUROPEAN OPERATION WHICH HAS BEEN LOSING MONEY IS PREPARING TO NEGOTIATE A RESTRUCTURING OF ITS DEBT CENTERIOR ENERGY ADDED 3/4 TO 13 1/4 AFTER OPPENHEIMER & CO ANALYST CRAIG LUCAS INITIATED COVERAGE OF THE INDEPENDENCE OHIO ELECTRIC POWER COMPANY'S STOCK WITH AN ANALYST'S BUY RATING HE SAID THE STOCK HAS BEEN BATTERED HARDER THAN NECESSARY BY FEARS THE COMPANY WILL CUT ITS DIVIDEND RATE SHARES OF SEVERAL COMPANIES THAT PROVIDE MANAGED HEALTHCARE SERVICES RALLIED IN NASDAQ TRADING TAKECARE INCREASED 2 5/8 TO 57 1/8 OXFORD HEALTH PLANS CLIMBED 1 1/2 TO 53 SNAPPING BACK FROM A LOSS THURSDAY 9401030079 940103 INTERNATIONAL BRIEF ROTHMANS INTERNATIONAL PLC UNIT REJECTS PLAN TO MERGE WITH OTHER ASIAN SUBSIDIARY AN AMBITIOUS PLAN TO MERGE ASIAN UNITS OF UK TOBACCO GROUP ROTHMANS INTERNATIONAL PLC WAS DEALT A CRIPPLING BLOW WHEN SHAREHOLDERS OF THE MALAYSIAN UNIT ROTHMANS OF PALL MALL MALAYSIA BHD REJECTED THE PLAN SHAREHOLDERS OF ROTHMANS'S OTHER LISTED ASIAN UNIT SINGAPORE'S ROTHMANS INDUSTRIES LTD VOTED IN FAVOR OF THE MERGER ON DEC 22 ROTHMANS DECLINED TO GIVE THE OBJECTIONS OF THE INSTITUTIONAL SHAREHOLDERS BUT ANALYSTS SAID THAT AMONG OTHER THINGS THE MERGER'S AIM OF TAPPING INTO THE TWO SOUTHEAST ASIAN UNITS' CASH RESERVES IN EXCHANGE FOR THE MARKETING RIGHTS TO LESS SATURATED COUNTRIES RIGHTS HELD BY A SEPARATE NORTHEAST ASIAN DIVISION MAY HAVE FIGURED IN THE DECISION TRADING IN BOTH THE SINGAPORE AND MALAYSIA ROTHMANS UNITS WAS SUSPENDED FRIDAY BECAUSE OF THE SHAREHOLDERS MEETING ANALYSTS SAID THEY EXPECT BOTH SHARE PRICES TO FALL SHARPLY MONDAY 9401030078 940103 BUSINESS BRIEF CALTON INC HOME BUILDER RESTATES NET FOR ITS FISCAL THIRD QUARTER CALTON INC MANALAPAN NJ RESTATED ITS NET INCOME FOR THE THIRD QUARTER ENDED AUG 31 TO 13 MILLION OR FIVE CENTS A SHARE INSTEAD OF THE PREVIOUSLY REPORTED 21 MILLION OR EIGHT CENTS A SHARE CALTON SAID THE RESTATEMENT DOESN'T HAVE ANY ECONOMIC IMPACT ON ITS CASH FLOW OR FINANCIAL CONDITION AND WILL REDUCE FUTURE AMORTIZATION OF GOODWILL THE COMPANY SAID IT EXPECTS FOURTHQUARTER HOUSING REVENUE OF 409 MILLION COMPARED WITH 433 MILLION IN LAST YEAR'S FOURTH QUARTER IT DELIVERED 230 UNITS IN THE LATEST FOURTH QUARTER DOWN FROM 260 UNITS IN THE YEAREARLIER PERIOD 9401030077 940103 WALL STREET UNDERWRITING FOURTH QUARTER 1993 REVIEW JUNKBOND MARKET HAD ANOTHER RECORD YEAR IN 1993 BY LAURA JERESKI STAFF REPORTER OF THE WALL STREET JOURNAL THE JUNKBOND MARKET HAD ITS GREATEST YEAR EVER IN 1993 AND SHOWS LITTLE SIGN OF SLACKENING THIS YEAR TO PUT LAST YEAR'S RECORD IN PERSPECTIVE CONSIDER A FEW STATISTICS COMPANIES WITH CREDIT RATINGS BELOW INVESTMENT GRADE ISSUED 54 BILLION OF PUBLICLY TRADED HIGHYIELD DEBT IN 1993 PLUS 14 BILLION OR SO OF PRIVATE BONDS WITH REGISTRATION RIGHTS ACCORDING TO DUFF & PHELPS/MCM LAST YEAR'S 68 BILLIONPLUS TOTAL IS NEARLY TWICE 1992'S RECORD ISSUANCE AND EQUAL TO THE TOTAL RAISED FROM 1982 THROUGH 1986 THAT'S QUITE A COMEBACK FROM 1990 WHEN JUNK ISSUANCE FELL TO A NIGGARDLY 14 BILLION SO MUCH FOR THE DEATH OF THE JUNKBOND MARKET THERE IS NO END IN SIGHT SAYS KINGMAN PENNIMAN DIRECTOR OF HIGHYIELD RESEARCH AT DUFF & PHELPS BUT THIS RESURRECTED MARKET BEARS LITTLE RESEMBLANCE TO THE DEALDRIVEN ISSUANCE OF THE 1980S MUCH OF THE ACTIVITY CAME FROM COMPANIES REFINANCING TO TAKE ADVANTAGE OF LOW INTEREST RATES INCREASINGLY THESE ARE COMPANIES JUST AS ANXIOUS TO WRIGGLE OUT OF BANKS' STRICT PRINCIPAL PAYBACK SCHEDULES AS THEY ARE TO LOWER THEIR INTEREST PAYMENTS ABOUT ONETHIRD OF THE FINANCINGS IN 1993 CAME FROM FORMER BANK CLIENTS ACCORDING TO INFORMATION COMPILED BY SECURITIES DATA CO INCREASINGLY TOO THE JUNK MARKET IS THE PROVINCE OF PRIVATE MEDIUMSIZED COMPANIES THAT HAD ONCE TURNED TO INSURANCE COMPANIES FOR PRIVATEPLACEMENT FINANCING THIS MARKET HAS BECOME A SIGNIFICANT SOURCE OF FINANCING FOR THESE COMPANIES NOTES MARTIN S FRIDSON A MANAGING DIRECTOR AT MERRILL LYNCH & CO MANY OF THESE NEWCOMERS NEEDED ONLY MINIMAL FINANCING AND WALL STREET WAS HAPPY TO OBLIGE MORE THAN ONETHIRD OF THE ISSUES LAST YEAR WERE MICRODEALS OF 100 MILLION OR LESS WHICH RAISED A RECORD 87 BILLION IT USED TO BE THAT NO ONE WOULD FOLLOW AN ISSUE OF LESS THAN 500 MILLION SAYS MR PENNIMAN NOW MOST BUYERS HAVE LOWERED THEIR THRESHOLD TO 75 MILLION THAT'S IN PART BECAUSE TODAY'S JUNKBOND BUYERS ARE A NEW BREED GONE ARE THE INSURANCE COMPANIES FOREIGN BUYERS AND BANKS THAT ABSORBED MOST OF THE ISSUANCE NOW THE BIGGEST BUYERS OF JUNK ARE HIGHOCTANE MUTUAL FUNDS MUTUAL FUNDS HAVE AN APPETITE FOR TAKING IN BIG CHUNKS OF A NEW DEAL BECAUSE THEY FEEL THAT ALLOWS THEM TO FLEX SOME MUSCLE IN DEMANDING BETTER TERMS SO FAR BUYERS HAVE BEEN HANDSOMELY REWARDED JUNK BONDS CONTINUED TO OUTPACE OTHER ASSETS DELIVERING A TOTAL RETURN OF 1699 FOR THE YEAR THROUGH DEC 10 WHILE THAT'S DOWN SOMEWHAT FROM 1992'S 1952 RETURN ACCORDING TO DUFF & PHELPS'S HIGHYIELD INDEX IT'S VASTLY SUPERIOR TO OTHER STOCK AND BOND INDEXES I THINK WE'LL HAVE ANOTHER STRONG YEAR THIS YEAR SAYS DWIGHT SIPRELLE MANAGING DIRECTOR AT MORGAN STANLEY & CO A STRENGTHENING ECONOMY SPELLS IMPROVING CREDIT QUALITY FOR HIGHYIELD ISSUES MEANWHILE AS LONG AS INTEREST RATES STAY LOW INVESTORS ESPECIALLY PENSION FUNDS REACHING TO MEET LONGTERM INVESTMENT TARGETS WILL HAVE LITTLE CHOICE FOR HIGH RETURNS NO WONDER UNDERWRITERS ARE CROWING THERE'S BEEN ENOUGH BUSINESS TO KEEP EVERYONE HAPPY UNDERWRITING FEES ALREADY FATTER THAN FEES GARNERED FROM INVESTMENTGRADE CORPORATEBOND BUSINESS GAINED BACK SOME HEFT LAST YEAR WALL STREET COLLECTED ABOUT 3 OF BONDUNDERWRITING PROCEEDS UP FROM 1992'S BELTTIGHTENING 22 INVESTMENT BANKERS ATTRIBUTE THE REBOUND IN FEES TO THE EXTRA WORK IT TAKES TO UNDERWRITE SMALL ISSUERS THAT HAVE NEVER BEEN IN THE PUBLIC VIEW BEFORE BUT DECLINING CREDIT QUALITY IS ALSO A FACTOR SINCE UNDERWRITERS CHARGE MORE TO COMPENSATE FOR THE EXTRA RISK THEY TAKE ON WHEN THEY MARKET LOWERQUALITY BONDS TO INVESTORS FOR THE THIRD CONSECUTIVE YEAR MERRILL LYNCH DOMINATED THE PLAYING FIELD INCREASING ITS SHARE OF THE MARKET TO 235 WITH 126 BILLION IN UNDERWRITINGS FROM 202 IN 1992 THE LEADING UNDERWRITERS SECURED THEIR GRIP ON THE BIGGEST SHARE OF THE MARKET MORGAN STANLEY CAME IN THIRD WITH 12 COMPARED WITH 101 A YEAR EARLIER AND SALOMON BROTHERS FOURTH WITH 86 COMPARED WITH 72 BUT JUNK'S SURPRISING NEW STAR IS DONALDSON LUFKIN & JENRETTTE SECURITIES CORP A UNIT OF EQUITABLE CO DLJ MUSCLED ITS WAY FROM FIFTH PLACE TO SECOND BY MORE THAN DOUBLING ITS UNDERWRITING TO 81 BILLION THE FIRM MADE ITS MARK WITH SMALLER AND LESSKNOWN CREDITS MANY OF WHICH LACK THE RESOURCES TO MAKE SIZABLE INTEREST PAYMENTS TODAY GARRETT MORAN MANAGING DIRECTOR OF THE HIGHYIELDBOND DEPARTMENT PREDICTS THAT THESE COMPANIES WITH IMMATURE CASH FLOW WILL CONTINUE TO FUEL THE FIRM'S GROWTH INDEED THE STRATEGY HAS BEEN SO WIDELY HAILED THAT DLJ'S LAGGING COMPETITORS TALK OF BEATING THE BUSHES FOR NEW CLIENTS AS DLJ HAS DONE RESTRUCTURINGS HAVE VIRTUALLY FADED FROM VIEW AS MOST OF THE PROMINENT COMPANIES ONCE STUCK IN BANKRUPTCYCOURT PROCEEDINGS REORGANIZED STILL MIRED RH MACY'S & CO WHOSE BONDS FLUCTUATED WILDLY SEVERAL TIMES LAST YEAR ON SPECULATION THAT THE RETAILER WAS HEADED FOR A QUICK EXIT NO SUCH LUCK THE COMPANY RENEGOTIATED TO EXTEND THE DEBTORINPOSSESSION FINANCING THAT ALLOWS IT TO FUNCTION WHILE IN BANKRUPTCY COURT 9401030076 940103 THE OUTLOOK THE UNDERRATED ROLES OF WEALTH CONFIDENCE BY HENRY F MYERS NEW YORK CONSIDERING THE PROBLEMS LONG PLAGUING THE ECONOMY THE CURRENT ACCELERATION IN THE RECOVERY MAY SEEM A BIT MYSTERIOUS WHERE DID THE STRONGER DEMAND COME FROM AND WILL IT LAST THE DRAGS ON THE ECONOMY NOTED REPEATEDLY BY ECONOMISTS MAKE A LONG LIST FEDERAL DEFICIT REDUCTION DEFENSE CUTBACKS STATE AND LOCAL FISCAL PROBLEMS WEAK EXPORTS DUE TO ECONOMIC SLUMPS ABROAD CONTINUING CORPORATE DOWNSIZING STILLDEPRESSED COMMERCIAL REAL ESTATE AND HIGH THOUGH DECLINING DEBT BURDENS OF COMPANIES AND CONSUMERS ALIKE EVEN BUSINESS INVESTMENT A RELATIVELY BRIGHT SPOT HAS A DARK SIDE IT IS MAINLY BUYING COSTCUTTING EQUIPMENT RATHER THAN ADDING CAPACITY HOWEVER THE DROP IN INFLATION AND THUS INTEREST RATES HAS PROVIDED MAJOR STIMULUS ESPECIALLY TO THE HOME BUILDING AND ALLIED INDUSTRIES SUCH AS FURNITURE AND APPLIANCES BUT WITH MANY BABYBOOMERS ALREADY HOMEOWNERS THE SURGE IN HOUSING ISN'T GOING TO REACH THE DEMOGRAPHICALLY DRIVEN HEIGHTS OF THE 1970S OR EVEN THE 1980S LOWER INTEREST RATES ALSO HAVE HELPED THE AUTO INDUSTRY IN ADDITION THE AVERAGE AGE OF THE NATION'S CARS NOW EXCEEDS EIGHT YEARS SPURRING REPLACEMENT OF OLD CLUNKERS BUT THE LACKLUSTER SALES OF NONDURABLE CONSUMER GOODS SUGGEST THAT THE ECONOMIC BENEFITS OF LOWER INTEREST RATES CAN GO ONLY SO FAR A GARY SHILLING AN ECONOMIC CONSULTANT NOTES THAT ABOUT 40 OF THE OWNEROCCUPIED HOUSES HAVE NO MORTGAGES AND MANY OTHERS HAVE ONLY SMALL DEBT THESE OWNERS DON'T BENEFIT FROM LOWER RATES AND HE ADDS FOR INDIVIDUALS OVERALL INTEREST RECEIVED HAS DECLINED 5 BILLION MORE THAN INTEREST PAID IN THE LAST TWO YEARS MEANWHILE WITH JOB GROWTH SLOW NO ONE SECTOR IS SUPPLYING ENOUGH DEMAND TO SET OFF AND SUSTAIN A POWERFUL ECONOMIC REBOUND SO WHY HAS THE RECOVERY STEPPED UP ONE PARTIAL EXPLANATION MUCH AS WITH DIETING PEOPLE MAY SIMPLY GET FED UP WITH WATCHING THEIR PENNIES THE URGE TO GO OUT AND DO SOMETHING OR MORE ACCURATELY BUY SOMETHING MAY BE UNDERRATED FINANCIAL PRUDENCE TENDS TO GET BORING BUT SOMETHING ELSE MAY WELL BE AT WORK THOUGH ITS SIGNIFICANCE IS EVEN MORE UNDERRATED A SIZABLE GROUP OF AMERICANS IS RICH BY ANYONE'S STANDARDS THE COUNTRY ALSO HAS HUGE NUMBERS OF PEOPLE WHO HOLD HIGHLY PAID JOBS AND ARE CLEARLY AFFLUENT THE AMOUNT OF READILY DISPOSABLE WEALTH IS APPARENT TO ANYONE WHO DRIVES AROUND THE COUNTRY AND HOWEVER IT IS CALCULATED IT SURELY TOTALS MANY BILLIONS OF DOLLARS THESE PEOPLE CAN SUDDENLY DECIDE IF THEY WISH TO POUR BIG MONEY INTO THE ECONOMY ALMOST REGARDLESS OF CURRENT ECONOMIC CONDITIONS IN ADDITION VAST NUMBERS OF OTHER AMERICANS MAY NOT BE ABLE TO PUT THEIR HANDS ON A LOT OF LIQUID ASSETS BUT THEY CAN PICK UP THEIR CREDIT CARDS AT ANY TIME EVEN THOUGH THEY MAY WORK FOR MODEST WAGES AND ALREADY BE DEEP IN DEBT THEY CAN DRAW UPON THIS MAJOR SOURCE OF SPENDING AND DO SO PRACTICALLY EVERY CHRISTMAS SHOPPING SEASON IN MUCH OF 1993 IN FACT CONSUMERS' SPENDING INCREASED FASTER THAN THEIR INCOMES THEY SAVED LESS AND BORROWED MORE THE EXISTENCE OF THESE ENORMOUS SOURCES OF CONSUMER SPENDING IS A MAJOR REASON THE ECONOMY HAS BECOME SO UNPREDICTABLE ANALYZING INCOME LEVELS AND FINANCIAL FLOWS CAN EXPLAIN ONLY SO MUCH WHEN MILLIONS OF PEOPLE CAN SUDDENLY OPEN THE MONETARY SLUICES AND UNLEASH A FLOOD OF SPENDING IF HOWEVER PEOPLE LOSE CONFIDENCE IN THE ECONOMIC OUTLOOK THEY CAN QUICKLY SNAP SHUT THEIR POCKETBOOKS AND PUT AWAY THEIR CREDIT CARDS IF THEY DO SO NOW THE CURRENT BUSINESS PICKUP COULD SOON FADE AT THE MOMENT THAT SEEMS UNLIKELY INDEXES OF CONSUMER AND BUSINESS CONFIDENCE ARE UP THOUGH IT'S WORTH NOTING THAT SUCH SURVEYS HAVE HAD A MIXED RECORD IN FORECASTING ACTUAL SPENDING BUT AS THE ECONOMY GROWS RICHER EVEN IF GRADUALLY THE IMPORTANCE OF ACCUMULATED WEALTH DISCRETIONARY INCOME AND CREDIT AVAILABILITY AND THUS THE ABILITY TO TURN A LOT OF SPENDING ON AND OFF QUICKLY SEEMS SURE TO INCREASE PEOPLE'S ATTITUDES WILL PLAY AN EVERMORECRUCIAL ROLE IN THE ECONOMY SUCH ATTITUDES OF COURSE CAN BE AFFECTED BY MANY EVENTS SOME AS UNPREDICTABLE AS THE OILPRICE SHOCKS OF THE 1970S AND THE SUDDEN COLLAPSE OF THE SOVIET UNION FORCES WITHIN THE US ECONOMY FORCES EQUALLY BEYOND WASHINGTON'S DIRECT CONTROL CAN STRONGLY AFFECT CONSUMER AND BUSINESS CONFIDENCE TOO ALL LAST YEAR A CONSTANT DRUMBEAT OF CORPORATELAYOFF ANNOUNCEMENTS TENDED TO DROWN OUT THE QUIET HIRING GOING ON SIMULTANEOUSLY AND IT DEPRESSED PUBLIC SPIRITS SO DID THE WEAK GROWTH IN PERSONAL INCOME AS HIGHLY PAID MANUFACTURING AND WHITECOLLAR JOBS WERE BEING LOST WHILE JOB GROWTH WAS CONCENTRATED IN LOWPAYING FIELDS HEALTH CARE TEMPORARY HELP AND RESTAURANTS HOWEVER THE FEDERAL GOVERNMENT ALSO CAN DIRECTLY AFFECT CONFIDENCE TOO AND IN WAYS GOING FAR BEYOND THE STEEPER TAXES ABOUT TO HIT THE WELLHEELED ONE OBVIOUS RISK IS CITED BY DAVID H RESLER CHIEF ECONOMIST AT NOMURA SECURITIES INTERNATIONAL INC THE UNCERTAINTY SURROUNDING THE PROCESS OF HEALTHCARE REFORM HEADS THE LIST OF FACTORS THAT COULD RETARD GROWTH HE SAYS IN ADDITION TO THE HEALTHCARE COMPANIES DIRECTLY AFFECTED THE UNCERTAINTY EXTENDS TO THE ENTIRE BUSINESS COMMUNITY WHICH FACES MUCH OF THE BILL AND THE PUBLIC WHICH MAY SEE ITS TAXES GO UP AND THOUSANDS OF MEDICAL JOBS LOST AND PERHAPS EVEN MORE THREATENING TO CONFIDENCE WOULD BE ANY CLINTONADMINISTRATION MOVES TO PUSH THROUGH HEALTHCARE OR OTHER PROGRAMS WITH GRATUITOUS ATTACKS ON THE BUSINESS COMMUNITY OR TO PAY FOR THEM WITH MEASURES THAT REIGNITE INFLATION 9401030075 940103 IF OLD ACQUAINTANCE BE FORGOT THEN JUST GIVE THIS SERVICE A RING BY SHARON MASSEY STAFF REPORTER OF THE WALL STREET JOURNAL EVERYBODY WANTS SOMEBODY SOMETIME AND MORE PEOPLE WANT TO FIND SOMEONE DURING THE YEAREND HOLIDAYS THAN AT ANY OTHER TIME SAYS OLD FRIENDS INFORMATION SERVICES WHICH FINDS LONGLOST FRIENDS THE TWOYEAROLD OAKLAND CALIF COMPANY CHARGES A 40 LISTING FEE FOR CUSTOMERS WHO WANT TO LOOK FOR OLD FRIENDS AND ANOTHER 40 AFTER THEY'RE REUNITED OLD FRIENDS WHICH CLAIMS A 70 SUCCESS RATE DID 208 SUCCESSFUL SEARCHES BETWEEN OCTOBER 1992 AND JANUARY 1993 SAYS ITS FOUNDER AND PRESIDENT MICHAEL FRANKS HE ESTIMATES THE COMPANY WILL FIND AS MANY AS 300 FRIENDS THIS HOLIDAY SEASON PAUL MAY A SAN FRANCISCO CONSULTANT HAD THE FRIENDFINDING FIRM FIND A BUDDY HE HADN'T SEEN SINCE THEY ATTENDED SUMMER CAMP IN 1944 ALL MR MAY KNEW WAS HIS CAMP MATE'S NAME OLD FRIENDS FOUND THE 66YEAROLD CHUM IN FALLS CHURCH VA THE MEN CAUGHT UP ON THE PAST 50 YEARS OVER DINNER AND IT FULFILLED MY DESIRE TO KNOW THAT THINGS WENT WELL FOR HIM SAYS MR MAY WHO WON'T GIVE HIS AGE CLIENTS TYPICALLY HAVEN'T SEEN THEIR BUDDIES FOR 20 YEARS THE AVERAGE SEARCH RUNS 41 DAYS ALTHOUGH SOME HUNTS ARE STILL ON AFTER TWO YEARS DOROTHY DAWSON A HUMANRESOURCES CLERK IN FREMONT CALIF COULDN'T FIND A GIRLFRIEND AT WHOSE WEDDING SHE WAS MAID OF HONOR MORE THAN A QUARTER CENTURY AGO AFTER 15 MONTHS OF SEARCHING OLD FRIENDS FOUND HER IN MONTANA IT WAS LIKE FINDING A LONGLOST SISTER AGAIN SAYS THE 62YEAROLD MS DAWSON ADDING THAT SHE PLANS TO GET TOGETHER REGULARLY WITH HER FRIEND OLD FRIENDS FINDS OLD FRIENDS BY SENDING OUT DOZENS OF LETTERS TO OLD ADDRESSES AND TO PEOPLE WITH THE SAME LAST NAME FOR EXAMPLE THE COMPANY ALSO DEVELOPED ITS OWN SEARCH SOFTWARE THAT USES NATIONWIDE PHONE LISTINGS OF COURSE NOT EVERYONE WANTS TO BE DISCOVERED TWO OF OLD FRIENDS' PAST FINDEES ASKED THAT THEY NOT BE FOUND THE COMPANY SAYS AND DON'T CALL IF YOU'RE LOOKING FOR A DEADBEAT HUSBAND TO PAY ALIMONY OR IF THERE'S FAMILY DISCORD INVOLVED IN THE SEPARATION MR FRANKS SAYS THIS SERVICE JUST WANTS OLD FRIENDS TO BE HAPPY HE SAYS AND EVEN SOME SATISFIED CLIENTS HAVE DECIDED NOT TO USE THE SERVICE AGAIN IT HAS BROUGHT TO MIND A COUPLE OF OLD BOYFRIENDS SAYS MS DAWSON BUT THAT WOULD BE JUST CURIOSITY TO SEE WHAT THEY TURNED OUT LIKE IT'S TEMPTING BUT I DON'T THINK SO 9401030074 940103 PEPPERAND SALT AREN'T KWITE WHAT EYE HAD IN MINED AND ONE THING REALLY PROVES IT NOTHING EVER MOVES IT 9401030073 940103 CREDIT MARKETS A BOND BULL STANDS PAT AFTER ROUT MANAGER OF TOP FUND DOESN'T SEE INFLATION THREATENING TREASURYS BY LESLIE SCISM STAFF REPORTER OF THE WALL STREET JOURNAL AFTER ROUTS LIKE THURSDAY'S IN THE TREASURY DEBT MARKET BOND BULLS SEEM TO BE A DYING BREED BUT THEY INCLUDE A FEW SAVVY INVESTORS SUCH AS MARGARET PATEL WHO RUNS A TOPPERFORMING BOND MUTUAL FUND HER ADVANTAGE GOVERNMENT SECURITIES FUND IS LOADED WITH LONGTERM BONDS EXACTLY THE KIND MOST VULNERABLE TO INTERESTRATE FLUCTUATIONS AND THE ONES INVESTORS WERE DUMPING THURSDAY BUT MS PATEL JUST KEPT CLEARING THE MAIL AND RESEARCH REPORTS OFF HER DESK NOT TEMPTED TO JOIN THE SELLOFF YOU JUST CAN'T TRADE EVERY LITTLE GLITCH SHE SAYS ADDING CONFIDENTLY I THINK THAT TALK OF A BOND BEAR MARKET IS PREMATURE AS WE GO INTO 1994 ON FRIDAY THE LONG BOND'S PRICE WAS UNCHANGED FROM THURSDAY AND ITS YIELD REMAINED AT 634 SURE MS PATEL SAYS THERE WILL BE SOME ROUGH PATCHES OVER THE NEXT FEW MONTHS AS THE MARKET ADJUSTS TO STRONG FIRSTQUARTER ECONOMIC GROWTH BUT SHE'S CONVINCED THAT THE STRENGTH WON'T TRANSLATE INTO INFLATION BEYOND A 3 ANNUAL RATE BOND INVESTORS LOATHE INFLATION BECAUSE IT ERODES THE VALUE OF THE YIELD ON FIXEDINCOME INVESTMENTS INSTEAD MS PATEL BELIEVES THAT CURRENT LONGTERM BOND YIELDS ACTUALLY OVERCOMPENSATE INVESTORS FOR ANY RISK THEY FACE FROM INFLATION IN 1994 AND SHE BELIEVES THAT THE MARKET WILL REACH THE SAME CONCLUSION SOMETIME THIS SPRING OR SUMMER THEN SHE PREDICTS THE YIELD ON THE BENCHMARK 30YEAR TREASURY COULD FALL TO 55 WHICH WOULD PUT IT BELOW 1993'S LOW OF 579 SO FAR SHE HAS MADE GOOD CALLS ON THE DIRECTION OF INTEREST RATES FOR THE FIRST 11 MONTHS OF 1993 HER FUND HAD THE HIGHEST TOTAL RETURN OF 114 GENERAL US GOVERNMENTBOND FUNDS MONITORED BY LIPPER ANALYTICAL SERVICES INC WHICH TRACKS MUTUALFUND PERFORMANCE HOLDING MORE LONGERTERM SECURITIES THAN MANY COLLEAGUES' FUNDS MS PATEL'S PORTFOLIO BENEFITED MIGHTILY FROM 1993'S SHARP DECLINE IN INTEREST RATES SHE LOGGED AN 1801 TOTAL RETURN IN A BROADSPECTRUM GOVERNMENTFUND FIELD WITH AN AVERAGE RETURN OF 871 WHEN INTEREST RATES FALL LONGERTERM SECURITIES PROFIT MORE THAN SHORTERTERM SECURITIES HOWEVER THEY ALSO LOSE MORE THAN SHORTERTERM BONDS WHEN INTEREST RATES RISE MS PATEL'S 190 MILLION FUND IS PART OF THE ADVANTAGE SERIES MANAGED BY BOSTON SECURITY COUNSELLORS IT'S SOLD THROUGH ADVEST INC HARTFORD CONN MS PATEL ISN'T THE ONLY PORTFOLIO MANAGER WHO BELIEVES THAT THE INFLATION RATE WILL BE 3 OR LESS IN 1994 SETTING THE STAGE FOR A BOND RALLY BUT MANY OTHERS ARE FAIRWEATHER BULLS THAT IS THEY'VE REDESIGNED THEIR PORTFOLIOS IN RECENT MONTHS TO INCLUDE FEWER LONGERTERM SECURITIES BRACING FOR THE BUMPINESS OF A POTENTIAL REBOUND IN THE FIRSTQUARTER ECONOMY THESE FIRMS EXPECT TO LOAD THEMSELVES BACK UP WITH LONGERTERM BONDS AS THE FIRSTQUARTER UNFOLDS TAKING ADVANTAGE OF ANY UPTICK IN YIELDS AS BOND BEARS SHUCK LONGTERM TREASURYS ON NEWS OF A STRENGTHENING ECONOMY AMONG THE FIRMS OPERATING LOOSELY ALONG THESE LINES IS MASSACHUSETTS FINANCIAL SERVICES OF BOSTON IF THERE IS A SIGNIFICANT SELLOFF BY THE MARKET DURING THE FIRST QUARTER THAT MIGHT PRESENT A BUYING OPPORTUNITY SAYS STEVEN NOTHERN A MASSACHUSETTS FINANCIAL PORTFOLIO MANAGER AND SENIOR VICE PRESIDENT IN FIXEDINCOME HE SAYS HIS FIRM HAS BECOME MUCH MORE CAUTIOUS IN THE LAST COUPLE MONTHS THE INTERESTRATE SENSITIVITY OF THE FIRM'S PORTFOLIOS NOW MATCHES THAT OF LEADING BOND INDEXES MR NOTHERN ISN'T EAGER TO HOLD AN ABOVEAVERAGE LEVEL OF LONGERTERM DEBT FOR NOW BECAUSE HE BELIEVES OTHER INVESTORS ARE GOING TO NEED A LITTLE MORE INFORMATION TO REASSURE THEM THAT THERE'S NOT A PROBLEM OF RESURGING PRICE PRESSURES AS UNLIKELY AS WE THINK THEY ARE UNTIL THESE UNCERTAINTIES RESOLVE THEMSELVES THE MARKET REMAINS UNDER PRESSURE IN THE NEAR TERM BUT MS PATEL HAS BEEN BUYING LONGERMATURITY TREASURYS OVER THE PAST COUPLE MONTHS AS INVESTORS PUSHED THE YIELD ON THE BENCHMARK 30YEAR TREASURY TO 638 IN MIDNOVEMBER FROM AN OCTOBER LOW OF 579 AS A RESULT MS PATEL'S PORTFOLIO IS LARGELY COMPOSED OF COUPONBEARING TREASURYS DUE 2014 TO 2019 ABOUT 60 OF THE PORTFOLIO AND ZEROCOUPON BONDS MATURING IN THOSE SAME YEARS ABOUT 35 OF THE FUND ZEROCOUPON BONDS DON'T PAY INTEREST BUT ARE SOLD AT A DEEP DISCOUNT TO THEIR FACE VALUE FOR A GIVEN MATURITY A ZEROCOUPON BOND WOULD BE MUCH MORE SENSITIVE TO INTERESTRATE CHANGES THAN A NORMAL BOND MS PATEL REJECTS THE NOTION OF SHORTENING HER MATURITIES NOW TO GET BACK INTO LONGER ONES LATER AT A LOWER PRICE I DON'T KNOW THAT I COULD CALL THE TIMING THAT PERFECTLY SHE SAYS BUT WHAT GIVES MS PATEL THE CONFIDENCE TO BUCK THE BEARISH SENTIMENT SHE NOTES THAT HOLDERS OF 30YEAR TREASURYS HAVE HISTORICALLY RECEIVED A YIELD OF TWO TO THREE PERCENTAGE POINTS ABOVE INFLATION WITH INFLATION RUNNING AT AN ANNUAL RATE OF ABOUT 3 CURRENT YIELDS EXCEED THAT HISTORICAL PREMIUM BUT WHAT MAKES HER THINK INFLATION WON'T TAKE OFF ALTHOUGH THERE ARE SPOTTY PRICE INCREASES IN SOME BASIC COMMODITIES THE OUTLOOK FOR INFLATION FOR MANY IMPORTANT SECTORS IS STILL LOW SHE SAYS SHE CITES EXCESS CAPACITY IN LABOR AND PLANT THAT PREVENTS US COMPANIES FROM RAISING PRICES AND TREMENDOUS OVERCAPACITY OVERSEAS AND WILLINGNESS TO HOLD OR CUT PRICES IN ORDER TO SELL GOODS SHE BELIEVES ECONOMIC GROWTH WILL BE SOMEWHAT MORE SUBDUED AFTER A STRONG FIRSTQUARTER AS FOR A POSSIBLE DECISION BY THE FEDERAL RESERVE BOARD TO FIGHT INFLATION BY RAISING SHORTTERM INTEREST RATES SHE WOULD WELCOME IT IF THE FED SHOWS IT'S RESPONSIVE TO INFLATION IT'S ACTUALLY QUITE POSITIVE FOR THE LONG BOND SHE SAYS OTHERS AGREE WITH SOME OF HER CONCLUSIONS ALSO ANTICIPATING A 1994 INFLATION RATE OF 3 OR LESS IS SALOMON BROTHERS INC ECONOMIST SUSAN HERING THERE IS AN OPPORTUNITY FOR THE LONG BOND TO TEST AND POSSIBLY PIERCE ITS AUTUMN LOWS MS HERING SAYS BUT THE NEARTERM RISKS ARE OBVIOUSLY ON THE HIGH SIDE I DON'T THINK THE ECONOMY WILL SLOW DOWN LIKE A LIGHT SWITCH WAS SWITCHED COME JAN 1 IT WILL TAKE LONGER FOR THE SLOWING TO BECOME APPARENT AND BOND INVESTORS MAY BE DISAPPOINTED BY THAT TREASURYS ENDED THE YEAR AT YIELD LEVELS FAR BELOW WHERE THEY STARTED LAST JANUARY BUT UP FROM RECORD LOWS SEEN IN THE FALL ON FRIDAY PRICES ENDED LITTLE CHANGED AFTER MEANDERING THROUGH MUCH OF THE SHORTENED SESSION WITH THE YEAR ENDING AND NO FRESH ECONOMIC DATA TO FUEL SENTIMENT FRIDAY'S ACTIONS GAVE LITTLE HINT OF WHAT TO EXPECT IN THE NEW YEAR FRIDAY'S SESSION CLOSED AT 2 PM NEW YORK TIME FOR NEW YEAR'S EVE THE BENCHMARK 30YEAR TREASURY ENDED UNCHANGED AT 98 22/32 TO YIELD 634 THE FIVEYEAR NOTE ROSE LESS THAN 1/8 POINT OR LESS THAN 125 FOR A BOND WITH 1000 FACE VALUE TO 99 21/32 TO YIELD 519 COMPARED WITH 520 ON THURSDAY ON THURSDAY PRICES HEADED MARKEDLY LOWER AS A SPATE OF ECONOMIC DATA POINTING TO SUSTAINED ECONOMIC STRENGTH TRIGGERED A SELLOFF WITH NO BUYERS IN THE MARKET TO PICK UP THE SLACK PRICES FELL SHARPLY ON NEW YEAR'S EVE WITH BUYERS EVEN MORE SCARCE TREASURYS COULDN'T FIND ANY SUPPORT TONY CRESCENZI DIRECTOR OF FIXEDINCOME AT MILLER TABAK HIRSCH & CO SAYS SELLERS WHO WEREN'T AROUND THIS HOLIDAY WEEK COULD BE BACK TODAY READY TO DO SO 9401030072 940103 FOREIGN EXCHANGE DOLLAR IS LIKELY TO BENEFIT THIS WEEK FROM PROSPECT OF EUROPEAN RATE CUTS BY ALEKSANDRS ROZENS AND JOHN P HUGHES SPECIAL TO THE WALL STREET JOURNAL NEW YORK THE PROSPECT OF FURTHER CUTS IN EUROPEAN INTEREST RATES IS LIKELY TO LEND FURTHER SUPPORT TO AN ALREADY FIRMING US DOLLAR THIS WEEK EUROPEAN INTEREST RATES SHOULD HEAD LOWER AS THE CONTINENT'S MAJOR ECONOMIES CONTINUE TO FALTER WHILE AN INCREASINGLY ROBUST US RECOVERY MAY LEAD TO TIGHTER MONETARY POLICY IN THE FIRST QUARTER HIGHER RATES MAKE DOLLARDENOMINATED DEPOSITS MORE ATTRACTIVE TO INVESTORS A LOT OF PEOPLE ARE CALLING FOR A FED TIGHTENING IF THE ECONOMY CONTINUES TO GROW AT THE PRESENT RATE SAID EARL JOHNSON VICE PRESIDENT AT HARRIS TRUST & SAVINGS BANK THE GERMAN BUNDESBANK'S CENTRAL COUNCIL IS SCHEDULED TO MEET THURSDAY MARKET WATCHERS SAY A CUT IN THE GERMAN DISCOUNT AND LOMBARD RATES WOULD BOLSTER THE DOLLAR AGAINST THE MARK THE EXPECTED RATE CUT BY THE GERMAN CENTRAL BANK MAY BRING THE MARK RATE TO ABOUT 174 TO 175 TO THE DOLLAR MR JOHNSON SAID A GERMAN RATE CUT MAY ALSO TRIGGER A 050PERCENTAGEPOINT EASING BY THE BANK OF ENGLAND SAID MR JOHNSON THE DOLLAR IS LOOKING BULLISH RIGHT ACROSS THE BOARD AND WHILE THERE MAY BE A SLIGHT DIP MONDAY OR TUESDAY YOU CAN THEN LOOK FOR IT TO SHOOT THE MOON SAID FRANK PUSATERI VICE PRESIDENT OF FOREIGN EXCHANGE WITH BANK OF BOSTON HE NOTED THAT THE DOLLAR BREACHED IMPORTANT TECHNICAL RESISTANCE LEVELS AT 112 YEN AND 174 MARKS LAST WEEK DURING LAST WEEK'S LIGHT PREHOLIDAY TRADE THERE WAS A SURPRISING AMOUNT OF DEMAND FOR THE DOLLAR MR PUSATERI SAID EUROPEAN INTEREST RATES ARE LIKELY TO CONTINUE DOWNWARD MAKING THEIR CURRENCIES LESS DESIRABLE TO HOLD WHILE US INTEREST RATES WILL REMAIN STABLE OR INCREASE MR PUSATERI SAID ALSO BUOYING THE US DOLLAR ARE CONTINUING ECONOMIC WEAKNESS AND POLITICAL UNREST IN JAPAN MR PUSATERI SAID MAKING IT LIKELY THAT THE DOLLAR WILL CONTINUE TO GAIN AGAINST THE YEN WALTER SIMON FIRST VICE PRESIDENT WITH BANK JULIUS BAER LOOKED FOR CONTINUING STRENGTHENING OF THE DOLLAR AGAINST EUROPEAN CURRENCIES BUT NOT NECESSARILY AGAINST THE YEN OR THE CANADIAN DOLLAR HE CALLED THE CANADIAN DOLLAR AND YEN LOGICAL ALTERNATIVES TO SOME EUROPEAN CURRENCIES AND SAID SOME INVESTORS ARE SHYING AWAY FROM THE MARK DETECTING WEAKNESS IN THE GERMAN ECONOMIC SYSTEM FOREIGNEXCHANGE MARKETS WILL CLOSELY WATCH DEVELOPMENTS IN JAPAN WHERE PRIME MINISTER MORIHIRO HOSOKAWA IS PRESSING POLITICAL AND ECONOMIC REFORM IF AN ECONOMIC PACKAGE DOESN'T MAKE IT THROUGH THE LEGISLATIVE GANTLET THE BANK OF JAPAN MAY ANNOUNCE AN INTERESTRATE CUT MR HOSAKAWA NEEDS TO GET REFORM PASSED BY THE END OF JANUARY SAID HARRIS TRUST'S MR JOHNSON THE JAPANESE PARLIAMENT'S SESSION HAS BEEN EXTENDED TO JAN 29 JAPAN COULD CUT ITS RATE FROM 175 TO 1 SAYS MR JOHNSON THE YEN HE SAYS WOULD FALL TO ABOUT 11250 TO 11300 TO THE DOLLAR BUT A TECHNICAL PULLBACK IS EXPECTED WHEN IT HITS 113 THE SNAPBACK WILL BE LIMITED BECAUSE FUNDAMENTALS SUCH AS A WEAK ECONOMY WILL OVERRULE AND EVENTUALLY WEIGH ON THE YEN MR JOHNSON SAYS THE POLITICAL REFORMS AND AN ECONOMY DEAD IN THE WATER ARE ALL NEGATIVE FOR THE YEN HE SAYS HOWEVER MR JOHNSON NOTES THAT A LARGE TRADE SURPLUS AND REPATRIATION OF CAPITAL TO JAPAN FROM INVESTMENTS OVERSEAS ARE FACTORS SUPPORTING THE YEN UNTIL RECENTLY GAINS IN THE DOLLAR AGAINST FOREIGN CURRENCIES HAVE BEEN MUTED SAID SANDY BATTEN SENIOR ECONOMIST AT CITIBANK THE MARKET HAS BEEN BIDING TIME NOT REALLY REACTING TO STRONG ECONOMIC NUMBERS HE SAID THE MARKET WILL GET BACK INTO FULL FORCE NEXT WEEK TRADING LAST WEEK WAS QUIET BECAUSE OF HOLIDAY CLOSINGS IN OBSERVANCE OF CHRISTMAS AND NEW YEAR'S EVE THIN VOLUME PARTICIPANTS SAID ALLOWED FOR GREATER THAN USUAL VOLATILITY 9401030071 940103 1993 YEAREND REVIEW OF MARKETS AND FINANCE REVIEW OF FINANCE MERGER ACTIVITY SHIFTS INTO HIGH GEAR AS THE INFORMATION SUPERHIGHWAY OPENS BY RANDALL SMITH STAFF REPORTER OF THE WALL STREET JOURNAL US MERGER ACTIVITY TOOK OFF UNEXPECTEDLY LAST YEAR AFTER THREE SLACK YEARS SURGING 80 ON A CRESCENDO OF EVERLARGER DEALS AIMED AT SOMEDAY BRINGING THE INFORMATION SUPERHIGHWAY INTO AMERICAN LIVING ROOMS RUNAWAY DEALMAKING BY LONGDISTANCE AND LOCAL TELEPHONE COMPANIES CABLETV CONCERNS AND ENTERTAINMENT GIANTS ALL JOSTLING TO DELIVER SERVICE BY PHONE LINES OR CABLE SENT ANNOUNCED 1993 US MERGER VOLUME TO 2752 BILLION UP FROM 153 BILLION IN 1992 ACCORDING TO A PRELIMINARY COUNT BY SECURITIES DATA CO THE PACE OF LAST YEAR SURPRISED EVEN THOSE WHO ANTICIPATED AN UPTURN SAID MICHAEL LEVITT COHEAD OF INVESTMENT BANKING AT SMITH BARNEY SHEARSON INC WORLDWIDE ACTIVITY ALSO ROSE 38 TO 4794 BILLION WITH US MERGERS ACCOUNTING FOR MORE THAN HALF THE GLOBAL TOTAL FOR THE FIRST TIME SINCE 1989 BUT MR LEVITT CAUTIONED THAT THE ENTIRE MERGER BUSINESS HASN'T BEEN REBORN THE ACTIVITY HE SAYS HAS BEEN SPECIFICALLY FOCUSED ON MEDIA AND TELECOMMUNICATIONS HEALTH CARE AND TO A MORE LIMITED EXTENT THE DEFENSE INDUSTRY THE US VOLUME WAS ONLY 18 BELOW THE RECORD OF 336 BILLION SET IN 1988 BY THE HEADY MIX OF CORPORATE RAIDERS JUNK BONDS AND LEVERAGED BUYOUTS BUT THE TENOR REMAINED SEDATE BY COMPARISON WITH GIANT HOSTILE BATTLES STILL FEW AND FAR BETWEEN AT ONE POINT THE YEAR'S NASTIEST TAKEOVER BATTLE WAS BETWEEN TWO MIDWEST UTILITIES VYING FOR THE SAME 17 BILLION ACQUISITION IN INDIANA THAT WAS BEFORE THE EPIC 10 BILLION BATTLE FOR PARAMOUNT COMMUNICATIONS INC BEGAN IN SEPTEMBER WITH TWO CABLE COMPANIES WRESTLING FOR PARAMOUNT'S FILM LIBRARY AND OTHER MEDIA ASSETS AND SOMEWHERE IN THE MIDDLE OF THE PARAMOUNT DONNYBROOK WHICH HAS RAGED FOR 3 1/2 MONTHS AND COUNTING ONE OF THE BIGGEST TAKEOVERS ON RECORD WAS ANNOUNCED THAT CLIMAXED THE MULTIMEDIA FRENZY IN THAT DEAL BELL ATLANTIC CORP THE PHILADELPHIABASED BABY BELL SAID IT WOULD ACQUIRE TELECOMMUNICATIONS INC THE NATION'S LARGEST CABLETV COMPANY WHICH COULD REQUIRE THE ISSUANCE OF MORE THAN 20 BILLION IN NEW BELL ATLANTIC STOCK BECAUSE MOST OF THE BIG MULTIMEDIA DEALS HAVEN'T CLOSED YET THE YEAR'S BIGGEST US DEAL WAS THE 61 BILLION ACQUISITION OF MEDCO CONTAINMENT SERVICES INC A DRUG DISCOUNTER BY MERCK & CO A LEADING DRUG MAKER MICHAEL KOENEKE COHEAD OF MERGERS AT MERRILL LYNCH & CO SAID THAT IN MANY OF LAST YEAR'S ANNOUNCED HEALTHCARE DEALS THE NAME OF THE GAME IS TO GET COSTS DOWN ONE OBVIOUS THREAT IS FROM PRESIDENT CLINTON'S PROPOSED HEALTHCARE REFORMS ANOTHER IS FROM PRIVATE INSURERS LOOKING TO SERVE THEIR BIG CORPORATE CLIENTS COLUMBIA HOSPITAL CORP WHICH ALREADY BOUGHT GALEN HEALTH CARE INC FOR 419 BILLION IN 1993 PLANS TO SPEND 55 BILLION MORE TO ACQUIRE HCAHOSPITAL CORP OF AMERICA FINANCING BOTH ACQUISITIONS WITH ITS OWN HIGHFLYING STOCK THE TWO COLUMBIA DEALS AND BELL ATLANTICTCI SHOW THE IMPORTANCE OF LAST YEAR'S ENVIRONMENT OF LOW INTEREST RATES RECORDSETTING STOCK PRICES AND A BUDDING ECONOMIC RECOVERY THOSE FACTORS GAVE MANY COMPANIES AN ARSENAL OF FINANCIAL FIREPOWER SAYS ERIC GLEACHER CHAIRMAN OF GLEACHER & CO INVESTMENT BANKER FELIX ROHATYN A GENERAL PARTNER AT LAZARD FRERES & CO PREDICTS THAT THE QUICKENED 1993 PACE WILL GO ON INTO 1994 AS LONG AS INTEREST RATES REMAIN LOW THE MARKET FOR EQUITIES REMAINS STRONG AND THE REGULATORY AND TECHNOLOGICAL CHANGES DRIVING THE HEALTHCARE AND MULTIMEDIA DEALS CONTINUE AT A FAST PACE AND THE GENERAL BUSINESS ATTITUDE REMAINS OPTIMISTIC THE SEEDS FOR LAST YEAR'S MULTIMEDIA BOOM WERE PLANTED JUST OVER A YEAR AGO IN NOVEMBER 1992 WHEN AMERICAN TELEPHONE & TELEGRAPH CO SIGNALED ITS READINESS TO TAKE ON ITS FORMER LOCAL SUBSIDIARIES THE BABY BELLS BY NEGOTIATING TO ACQUIRE 33 OF MCCAW CELLULAR COMMUNICATIONS INC FOR 37 BILLION THE DEAL GAVE AT&T A PATHWAY TO GET INTO US HOMES DIRECTLY BYPASSING THE BABY BELLS' LOCAL SYSTEMS THE BABY BELLS ALSO FACE COMPETITION FROM CABLETV COMPANIES WHICH COULD SOON OFFER LOCAL PHONE SERVICE EVEN AS THE BABY BELLS ATTEMPT TO OFFER ENTERTAINMENT OVER PHONE LINES AND SO IN FEBRUARY SOUTHWESTERN BELL CORP BECAME THE FIRST BABY BELL TO GO INTO CABLE AGREEING TO SPEND 650 MILLION TO BUY HAUSER COMMUNICATIONS INC WHICH OWNS TWO CABLE SYSTEMS IN SUBURBAN WASHINGTON DC AFTER THAT THE DEALS JUST SEEMED TO GET BIGGER AND BIGGER IN MAY BABY BELL U S WEST INC AGREED TO INVEST 25 BILLION IN THE ENTERTAINMENT ARM OF TIME WARNER INC IN JUNE MCI COMMUNICATIONS CORP AT&T'S LONGDISTANCE RIVAL SIGNED UP A 20 INVESTMENT FROM BRITISH TELECOMMUNICATIONS PLC VALUED AT 43 BILLION IN AUGUST AT&T UPPED THE ANTE BY CONVERTING ITS DEAL FOR 33 OF MCCAW TO A 100 ACQUISITION FOR 126 BILLION IN SEPTEMBER CAME THE PARAMOUNT DEAL WHERE BIDS THAT EVENTUALLY DREW BACKING FROM TWO BABY BELLS TOPPED 10 BILLION AND OCTOBER BROUGHT BELL ATLANTICTCI AT 20 BILLIONPLUS THE STOCK MARKET WAS SO BOUYANT ALL YEAR THAT THREE OF THE 10 BIGGEST DEALS TO CLOSE WERE SPINOFFS IN WHICH COMPANIES HANDED OVER ILLFITTING UNITS TO HOLDERS RATHER THAN SELL THEM TO OTHER COMPANIES ICI PLC THE BRITISH CHEMICALS CONCERN SPUN OFF ITS ZENECA PHARMACEUTICAL DIVISION VALUED AT 702 BILLION SEARS ROEBUCK & CO THE CHICAGO RETAILER HANDED ITS DEAN WITTER DISCOVER & CO FINANCIAL SERVICES BUSINESS VALUED AT 502 BILLION TO HOLDERS AND MARRIOTT CORP THE HOTEL COMPANY COMPLETED A MUCHDELAYED 274 BILLION SPINOFF OF ITS MARRIOTT INTERNATIONAL INC MANAGEMENT UNIT BUT THE STOCK MARKET'S BOUYANCY ALSO LEFT LEVERAGED BUYOUT FIRMS OUT OF THE MERGER REVIVAL BECAUSE BUYOUT FIRMS FINANCE WITH CASH AND DEBT INSTEAD OF STOCK SUCH BUYOUTS FELL 11 TO 89 BILLION IN 1993 SECURITIES DATA REPORTED A STAGGERING 91 BELOW THE RECORD 1988 TOTAL OF 94 BILLION RICHARD BEATTIE A PARTNER AT THE LAW FIRM OF SIMPSON THACHER & BARTLETT WHO ADVISES THE BUYOUT FIRM OF KOHLBERG KRAVIS ROBERTS & CO SAID THERE WERE NO SIGNIFICANTSIZE BUYOUTS LAST YEAR I DON'T THINK THE BANKS YET HAVE AN APPETITE FOR THAT TYPE OF LENDING HE ADDED MR LEVITT OF SMITH BARNEY SHEARSON NOTES THAT SOME BUYOUT FIRMS ARE BUYING TWO OR MORE COMPANIES IN THE SAME INDUSTRY TO GAIN ECONOMIES OF SCALE INCLUDING KKR IN PUBLISHING AND LEONARD GREEN IN DRUGSTORES MR GREEN'S FIRM ACQUIRED THRIFTY CORP IN 1992 AND RECENTLY STRUCK A DEAL TO BUY THE PAYLESS UNIT OF KMART CORP ONE DEAL THAT DOESN'T FIT MOST GENERALIZATIONS ABOUT THE MERGER MARKET IS THE PENDING BUYOUT OF UNITED AIRLINES PARENT UAL CORP UNITED'S UNION EMPLOYEES HAVE BEEN PURSUING A BUYOUT IN VARIOUS FORMS SINCE THE MID1980S SEVERAL TIMES FALLING SHORT THE LATEST EFFORT A 53 EMPLOYEE ACQUISITION VALUED AT 5 BILLION WAS ENDORSED BY THE UAL BOARD DEC 22 WHILE THEY DON'T EXPECT ANOTHER 77 GAIN IN 1994 MERGER EXPERTS ARE VIRUTALLY UNANIMOUS IN PREDICTING MORE GROWTH FOR 1994 SAYS JACK NUSBAUM COCHAIRMAN OF THE LAW FIRM OF WILLKIE FARR & GALLAGHER AS LONG AS THE STOCK MARKET HOLDS UP COMPANIES WILL CONTINUE TO USE THEIR SUBSTANTIALLY VALUED STOCK PRICES TO EXPAND OR GAIN MARKET SHARE 9401030070 940103 WORLD MARKETS LONDON STOCK PRICES FINISH 1993 ON DOWN NOTE BUT SEVERAL ASIANPACIFIC BOURSES SET NEW HIGHS A WALL STREET JOURNAL NEWS ROUNDUP LONDON EQUITIES WERE HIT AGAIN FRIDAY BY PROFITTAKERS AND LOST GROUND BUT HONG KONG SHARES CLOSED OUT 1993 WITH ANOTHER RECORD HIGH FOR A 115 ANNUAL GAIN THAT MADE THE BOURSE ASIA'S BESTPERFORMING EQUITY MARKET LAST YEAR SYDNEY STOCKS ENDED AT THEIR HIGHEST LEVEL IN MORE THAN SIX YEARS AND TAIPEI PRICES RALLIED TO FINISH AT A THREEYEAR HIGH HOLIDAY OBSERVANCES CLOSED MANY STOCK EXCHANGES FRIDAY INCLUDING THOSE IN TOKYO FRANKFURT AMSTERDAM STOCKHOLM ZURICH BRUSSELS SEOUL AND MANILA WORLDWIDE STOCK PRICES FELL IN DOLLAR TERMS THE DOW JONES WORLD STOCK INDEX WAS AT 11107 DOWN 010 REFLECTING DROPS IN MARKETS IN EUROPE AND THE AMERICAS AND INCREASES IN ASIA/PACIFIC MARKETS CASINO STOCKS WERE THE TOP GAINERS IN THE DOW JONES WORLD INDUSTRY GROUPS CLOSING AT 22946 UP 705 OR 317 WITH GENTING OF MALAYSIA POSTING A 1029 GAIN IN ITS LOCAL CURRENCY OTHER RECREATIONAL PRODUCTS STOCKS TRAILED AT 11558 DOWN 163 OR 139 WITH EURO DISNEY OF FRANCE SLIDING 788 IN LOCAL CURRENCY IN LONDON WHERE PREHOLIDAY TRADING WAS ABBREVIATED THE FINANCIAL TIMESSTOCK EXCHANGE 100SHARE INDEX DROPPED 104 POINTS TO 34184 MARKING A 20 ADVANCE FOR LAST YEAR THE FT 30STOCK INDEX FELL 109 POINTS TO 25595 FOR A 17 INCREASE IN 1993 VOLUME WAS 2506 MILLION SHARES COMPARED WITH THE FULLSESSION TOTAL OF 5541 MILLION SHARES THE PREVIOUS DAY THOUGH LONDON STOCKS MANAGED TO CLAW INTO POSITIVE TERRITORY EARLY IN THE SESSION AFTER PLUMMETING THE PREVIOUS DAY PROFITTAKERS SOON MATERIALIZED AGAIN AS FUTURES TURNED LOWER AND THE SELLING LEFT THE BENCHMARK INDEX NEAR ITS SESSION LOW IN PARIS SHARES LOGGED MODERATE LOSSES AS VOLUME DECLINED BECAUSE OF THE HOLIDAY SEASON SAPPING THE MARKET OF ITS MUSCLE THE PERFORMANCE LEFT THE MAIN INDEX UP 22 FOR 1993 IN MILAN STOCKS ENDED ON A BULLISH NOTE ON FAVORABLE CORPORATE NEWS AND THE KEY MARKET BAROMETER LOGGED A 36 ADVANCE FOR LAST YEAR IN MADRID PRICES ROSE IN A RECOVERY FROM SHARP DECLINES EARLIER IN THE WEEK AND DEALINGS WERE DOMINATED BY LARGE BLOCK TRADES BELIEVED TO BE DONE BY INSTITUTIONS SHORING UP THEIR OWN PRICES TO FINISH THE YEAR ON A HIGH NOTE THE BENCHMARK INDEX ENDED 1993 UP 51 IN HONG KONG STOCKS FINISHED WITH SLIGHT GAINS AT ANOTHER NEW HIGH FOR THE BELLWETHER INDEX AFTER IT RECOVERED FROM A 21 NOSEDIVE ON PROFITTAKING IN EARLY TRADING THE BOURSE FINISHED THE YEAR WITH A STREAK OF RECORD HIGHS POWERED BY OVERSEAS BUYING ESPECIALLY BY JAPANESE INVESTORS AND OPTIMISM ABOUT THE CHINESE ECONOMY WHICH IS STRONGLY LINKED TO THAT OF THE BRITISH COLONY ON FRIDAY THE BROADER MARKET WAS MIXED WITH BANKS AND COMMERCIAL AND INDUSTRIAL ISSUES LOSING GROUND BUT UTILITIES AND PROPERTY STOCKS FARING BETTER IN SYDNEY SHARE PRICES ROSE DESPITE SOME WEAKER OVERSEAS MARKETS A DAY EARLIER AND SOME SLACKNESS IN THE PRICE OF GOLD AS FOREIGN INVESTORS CONTINUED TO BUY HEAVILY WHICH PUSHED PRICES UP IN MOST SECTORS THE MARKET ENDED 1993 AT ITS HIGHEST LEVEL FOR THE YEAR LOGGING A 40 ANNUAL GAIN AND AT ITS HIGHEST SINCE THE GLOBAL STOCKMARKET CRASH IN OCTOBER 1987 IN SINGAPORE SHARES ADVANCED 15 DESPITE SOME PROFITTAKING WITH THE KEY MARKET BAROMETER ENDING AT 242568 JUST 117 POINTS BELOW ITS RECORD HIGH AND RECORDING A 59 CLIMB FOR 1993 BUYING WAS PEGGED TO INVESTORS' STAKING OUT POSITIONS FOR A WIDELY EXPECTED RALLY AS THE NEW YEAR BEGINS IN KUALA LUMPUR ON SOLID DOMESTIC AND FOREIGN BUYING STOCK PRICES JUMPED 35 THE COMPOSITE INDEX ROSE 4359 POINTS TO 127532 A RECORD AND RALLIED 98 LAST YEAR IN TAIPEI EQUITIES JUMPED 44 ON RECORD VOLUME AS FRESH CAPITAL KEPT FLOODING INTO THE MARKET PARTICULARLY FROM SMALL INVESTORS IN REACTION TO BULLISH NEWS ABOUT THE TAIWAN GOVERNMENT'S PLANNED CAPITALGAINS TAX THE FINANCE MINISTRY SAID THE PREVIOUS DAY THAT ABOUT 90 OF INVESTORS WILL BE EXEMPTED FROM THE TAX WHICH WILL TAKE EFFECT IN 1995 THE MARKET'S MAIN INDEX SOARED 25701 POINTS TO 607056 THE HIGHEST MARK SINCE JUNE 22 1991 FOR A 1993 GAIN OF 80 IN WELLINGTON PRICES ROSE WITH THE NZSE40 INDEX ENDING AT 218807 JUST 15 POINTS OFF THE 1993 HIGH THE MARKET JUMPED 40 LAST YEAR FRIDAY'S RISE WAS FUELED BY A DECLINE IN NEW ZEALAND INTEREST RATES WHICH HAVE FALLEN IN RESPONSE TO SLOWING INFLATION AND A GROWING ECONOMY HERE ARE PRICE TRENDS ON THE WORLD'S MAJOR STOCK MARKETS AS CALCULATED BY MORGAN STANLEY CAPITAL INTERNATIONAL PERSPECTIVE GENEVA TO MAKE THEM DIRECTLY COMPARABLE EACH INDEX CALCULATED IN LOCAL CURRENCIES IS BASED ON THE CLOSE OF 1969 EQUALING 100 THE PERCENTAGE CHANGE IS SINCE YEAREND 9401030069 940103 MARKETING & MEDIA ADVERTISING COOPERS & LYBRAND TV ADS PAINT INSPIRATIONAL IMAGE FOR ACCOUNTING BY KEVIN GOLDMAN IT'S MORNING AGAIN IN AMERICA CHILDREN SMILING FROM A RAINSWEPT AUTOMOBILE A MAN WITH AN ARTIFICIAL LEG GLIDING ON ROLLER BLADES PRESIDENT CLINTON PRESIDING OVER THE PEACE AGREEMENT BETWEEN PALESTINIANS AND ISRAELIS ASTRONAUTS TRIUMPHANTLY FIXING A HOBBLED TELESCOPE IN SPACE AND A DOVE FLYING IN SLOW MOTION ARE AMONG THE MANY IMAGES IN A NEW TELEVISION COMMERCIAL ARE THE REPUBLICANS OR DEMOCRATS STARTING A TAD EARLY ON AN IMAGE CAMPAIGN THAT RECALLS FORMER PRESIDENT REAGAN'S SUCCESSFUL FEELGOOD ADS FROM 1984 TRY AGAIN THE MESSAGE OF CHANGE COUPLED WITH UNABASHED HOPE IS BROUGHT TO YOU BY COOPERS & LYBRAND ONE OF THE BIG SIX ACCOUNTING FIRMS THE 60SECOND AD PRODUCED BY THE BOSTON ADVERTISING AGENCY HILL HOLLIDAY CONNORS & COSMOPULOS HAD ITS PREMIERE SATURDAY DURING THE FIRST QUARTER OF THE COTTON BOWL ON NBC THE AD WILL BE SEEN NEXT ON CBS FOLLOWING PRESIDENT CLINTON'S STATE OF THE UNION ADDRESS THIS MONTH THE COOPERS & LYBRAND SPOT IS THE SECOND PART OF A MAJOR FOR AN ACCOUNTING FIRM THAT IS 10 MILLION AD BUDGET FOR 1994 TWO YEARS AGO THE FIRM DIDN'T HAVE AN AD BUDGET AND LAST YEAR COOPERS SPENT 6 MILLION A SERIES OF ADS FEATURING COOPERS'S PARTNERS TALKING ABOUT WHAT THEY DO FOR CLIENTS BEGAN RUNNING LAST MONTH ANOTHER SERIES OF SPOTS THAT BORDER ON HUMOROUS WILL BEGIN NEXT MONTH THE CAMPAIGN IS IN SHARP CONTRAST TO A SPOT CURRENTLY ON THE AIR FROM A BIG SIX RIVAL KPMG PEAT MARWICK WHICH SHOWS THE POSSIBILITY THAT THE LIGHT AT THE END OF THE TUNNEL MIGHT INSTEAD BE A SPEEDING TRAIN HEADED FOR A COLLISION NO SUCH DIRE PREDICAMENTS FOR COOPERS ITS IMAGE AD EVEN HAS RICHIE HAVENS SINGING A MELLOW VERSION OF THE 1964 BOB DYLAN CLASSIC THE TIMES THEY ARE ACHANGIN' IT IS ONE OF THE FEW TIMES PERHAPS EVEN THE FIRST TIME A DYLAN SONG HAS BEEN SOLD FOR COMMERCIAL PURPOSES THE TIMES THEY ARE ACHANGIN' INDEED FOR UNDISCLOSED REASONS NEITHER COOPERS NOR ITS AD AGENCY COULD EVEN UTTER MR DYLAN'S NAME WHEN DESCRIBING THE SONG THE AD AGENCY SAID IT ONLY BOUGHT THE SONG AND A CONFIDENTIALITY AGREEMENT PREVENTED DISCUSSION OF ITS COMPOSER COOPERS HOPES TO RAISE ITS PROFILE WITH ITS BIGGER AD CAMPAIGN THIS YEAR COOPERS SAYS THAT AMONG THE BIG SIX WHICH ALSO INCLUDE ARTHUR ANDERSEN ERNST & YOUNG DELOITTE & TOUCHE AND PRICE WATERHOUSE IT RANKS NO 3 GLOBALLY AND NO 5 DOMESTICALLY OTHER INDUSTRIES PRODUCE BRAND IMAGE ADVERTISING AND COOPERS SAYS THE ACCOUNTING BUSINESS SHOULD BE NO EXCEPTION THE NEW IMAGE SPOT IS IN CONTRAST TO THE ACCOUNTING FIRM'S FIRST FORAY INTO TELEVISION ADVERTISING WHEN IT PLACED AN AD IN LAST YEAR'S SUPER BOWL THAT SPOT WAS DOWNBEAT IN TONE SHOWING A CHIEF EXECUTIVE OFFICER READY TO FACE HIS RESTLESS STOCKHOLDERS A VOICEOVER IN THAT COMMERCIAL REFERRED TO THE CHANGING BUSINESS ENVIRONMENT AND HOW AN ACCOUNTING FIRM COULD HELP MEET NEW CHALLENGES AT THE END OF THE NEW COMMERCIAL AS A DOVE FLIES OFF SLOWLY TEXT APPEARS FROM THE INDUSTRIES THAT HAVE BUILT THE ECONOMY TO THE ONES THAT WILL THERE'S ONE FIRM WITH THE VISION INSIGHT AND COURAGE TO HELP YOU SEIZE OPPORTUNITY IN A CHANGING WORLD THROUGH RESEARCH IT KEPT COMING BACK TO US THAT COOPERS MANAGES CHANGE SAYS FRED BERTINO PRESIDENT OF HILL HOLLIDAY WE PUT TOGETHER IMAGES OF THE CHANGING WORLD THE NEXT PHASE OF THE CAMPAIGN WILL COME IN FEBRUARY IN A SERIES OF CATCHY COMMERCIALS EACH OF WHICH WILL PAIR TWO COOPERS CLIENTS THAT ARE RELATED FOR INSTANCE THE FIRST SPOT FEATURES TESTIMONY FROM SAKS FIFTH AVENUE AND LL BEAN A WELLHEELED WOMAN OPENS THE COMMERCIAL IN FRONT OF THE TONY NEW YORK DEPARTMENT STORE AND SAYS I LOVE NEW YORK CUT TO A MAN IN NEW ENGLAND SITTING IN A CANOE WELCOME TO MAINE THE WOMAN GLIDES THROUGH SAKS AND CALLS IT THE ULTIMATE SHOPPING EXPERIENCE THE MAN IS PLOPPED INTO A COMFORTABLE CHAIR MOOSE HEAD IN THE BACKGROUND AND UTTERS THE SAME DECLARATION WHILE ORDERING BY PHONE BOTH COMPANIES DO BUSINESS WITH DIFFERENT STYLES A VOICEOVER SAYS BUT SEEKING TO EXPAND THEY BOTH RELY ON THEIR BUSINESS ADVISERS AT COOPERS THE FIRM FEELS THIS CAMPAIGN COULD GO ON FOR YEARS ALL THE SPOTS ARE UPBEAT SAYS BRIAN CARTY A PARTNER AND DIRECTOR OF MARKETING AT COOPERS MR BERTINO SAYS COOPERS WANTED TO BE MORE UPLIFTING THAN SOME RIVALS INCLUDING KPMG KPMG TAKES EXCEPTION TO THE NOTION THAT ITS ADVERTISING IS DOWNBEAT WE'RE TAPPING INTO FUNDAMENTAL ANXIETIES FACING CHIEF EXECUTIVES THESE DAYS SAYS MARK LINDER DIRECTOR OF NATIONAL MARKETING AT KPMG THE AD ADDRESSES HOW TO PREVENT GLOOM AND DOOM MEANWHILE COMMERCIALS FROM COOPERS AND KPMG WILL CONTINUE TO SLUG IT OUT ON SUNDAY MORNING NETWORK TELEVISION NEWS PROGRAMS SUCH AS SUNDAY MORNING ON CBS AND MEET THE PRESS ON NBC THE PEOPLE WHO WATCH THOSE SHOWS ARE BOARD MEMBERS OPINION MAKERS CHIEF EXECUTIVES REGULATORS SAYS MR CARTY THAT'S OUR AUDIENCE 9401030068 940103 INTERNATIONAL WASHINGTON INSIGHT IRAN'S ECONOMIC PROBLEMS COULD SPARK FRICTION BETWEEN US AND ITS ALLIES BY ROBERT S GREENBERGER STAFF REPORTER OF THE WALL STREET JOURNAL WASHINGTON IRAN'S ECONOMIC WOES SHOULD BE GOOD NEWS FOR THE CLINTON ADMINISTRATION WHICH WANTS TO PUT PRESSURE ON TEHRAN'S REGIME BUT INSTEAD THESE TROUBLES ARE TRANSLATING INTO POTENTIAL FRICTION BETWEEN THE US AND ITS ALLIES AT ISSUE IS WHETHER THE US OR SOME OF ITS MAJOR ALLIES HAVE THE BEST WAY TO CURB IRAN'S AGGRESSIVE INTERNATIONAL BEHAVIOR IRAN'S IMMEDIATE PROBLEM IS THAT IT CAN'T REPAY ABOUT 8 BILLION IN SHORTTERM DEBT FOR BOTH ECONOMIC AND IDEOLOGICAL REASONS IRAN'S LEADERS ARE UNWILLING TO ACCEPT ANY CONDITIONS FOR STRETCHING OUT REPAYMENT SCHEDULES THAT MIGHT BE IMPOSED BY MULTILATERAL GROUPS SUCH AS THE PARIS CLUB OF WESTERN CREDITOR NATIONS SO TEHRAN IS TRYING A NEW TACK IT IS ATTEMPTING TO SPLIT ITS EUROPEAN AND JAPANESE CREDITORS BY OFFERING TO NEGOTIATE BILATERALLY WITH EACH OF THEM IRAN HASN'T SUCCEEDED YET BUT ITS EFFORTS ARE MAKING US OFFICIALS UNEASY BECAUSE THEY FEAR SOME EUROPEANS MAY TAKE THE BAIT EUROPEANS SAY THAT HELPING IRAN WOULD STRENGTHEN THE HAND OF PRESIDENT ALI AKBAR HASHEMI RAFSANJANI WHO IS BELIEVED TO CHAMPION A MORE PRAGMATIC COURSE OF COURSE THIS VIEW ALSO OFFERS A CONVENIENT RATIONALE FOR BUSINESS DEALINGS WITH IRAN THE US IS LESS SANGUINE ABOUT THE IRANIAN LEADER IF YOU GIVE RAFSANJANI THE SATISFACTION OF NORMALIZED ECONOMIC RELATIONS WHERE IS THE INCENTIVE TO ADDRESS ISSUES WE'RE CONCERNED ABOUT ASKS A US OFFICIAL US CONCERNS INCLUDE SUCH MATTERS AS IRAN'S WORLDWIDE SUPPORT OF EXTREMIST GROUPS AND OPPOSITION TO MIDEAST PEACE AT A RECENT MEETING IN EUROPE THE US EMPHASIZED TO ITS ALLIES THAT IT OPPOSES ANY RESCHEDULING OF IRAN'S DEBT GOVERNMENT OR COMMERCIAL US OFFICIALS REMAIN WATCHFUL FOR ANY SIGNS THE EUROPEANS ARE SOFTENING THEIR STANCE THIS DOESN'T COME UP EVERY DAY BUT WE GO TO THEM THE ALLIES WHEN WE THINK THINGS ARE IN AN ACTIVE MODE SAYS ONE OFFICIAL WHO MONITORS IRAN CLOSELY THE POTENTIAL FOR INCREASED FRICTION IS STRONG LAST FALL SECRETARY OF STATE WARREN CHRISTOPHER DELIVERED A STERN MESSAGE TO GERMANY'S FOREIGN MINISTER COMPLAINING ABOUT WHAT WASHINGTON CONSIDERED GERMANY'S SUPPORT FOR IRAN A US OFFICIAL SAID MEANWHILE SOME ANALYSTS BELIEVE THE ECONOMIC SQUEEZE MAY BE WEAKENING MR RAFSANJANI'S HAND JUST AS EUROPEANS FEAR IT'S CONVINCING PEOPLE HE HAS NO PROGRAMS TO GET THEM OUT OF THEIR ECONOMIC SLUMP SAYS KENNETH KATZMAN AN ANALYST AT THE CONGRESSIONAL RESEARCH SERVICE AND FORMER MIDEAST ANALYST AT THE CENTRAL INTELLIGENCE AGENCY DURING THE PAST FEW MONTHS THERE HAS BEEN MOUNTING DOMESTIC CRITICISM OF MR RAFSANJANI'S ECONOMIC TEAM OF REFORMMINDED TECHNOCRATS A NUMBER OF IRANIAN RADICALS WHO LOST THEIR SEATS IN IRAN'S PARLIAMENTARY ELECTIONS LAST SUMMER HAVE RESUMED MAKING OVERT CRITICISM OF THE GOVERNMENT OTHER OFFICIALS SAY SO FAR THE MOST OBVIOUS RESULT HAS BEEN TO PROMPT MR RAFSANJANI TO PULL BACK FROM SOME OF THE KINDS OF ECONOMIC CHANGES THAT WASHINGTON PUSHES OTHER DEVELOPING COUNTRIES TO MAKE TEHRAN ANNOUNCED THAT IT WOULD REACTIVATE SOME STATERUN DISTRIBUTION CENTERS FOR BASIC CONSUMER GOODS AND THERE APPARENTLY HAS BEEN A POSTPONEMENT OF IRAN'S NEXT FIVEYEAR ECONOMIC PLAN WHICH WAS EXPECTED TO CONTAIN FURTHER REFORMS IRAN'S CURRENT ECONOMIC MESS STEMS IN PART FROM ITS DECISION LAST MARCH TO INSTITUTE A MAJOR REFORM A UNIFORM FOREIGN EXCHANGE RATE JAHANGIR AMUZEGAR A CONSULTANT WHO RECENTLY WROTE A BOOK ON IRAN'S ECONOMY SAYS TEHRAN ONCE HAD AS MANY AS A DOZEN DIFFERENT EXCHANGE RATES BY PERMITTING DIFFERENT EXCHANGE RATES IRAN IN EFFECT SUBSIDIZED PARTS OF ITS ECONOMY BY ARTIFICALLY SUPRESSING THE DOLLAR COST OF CERTAIN GOODS NOW IRAN IS PAYING A HIGH SHORTTERM PRICE FOR ESTABLISHING ONE EXCHANGE RATE AS THE DISTORTIONS WORK THEIR WAY OUT OF THE SYSTEM MR AMUZEGAR ESTIMATES THE INFLATION RATE CURRENTLY IS ABOUT 40 TO 50 AND THE UNEMPLOYMENT RATE IS NEARLY 25 HE SAYS THAT IRAN IS EXPERIENCING THE SAME KIND OF ECONOMIC SHOCK FROM A DOSE OF REFORM THAT IS JOLTING RUSSIA IF THEY CAN HANDLE THIS FOR A YEAR OR TWO THERE WILL BE GREAT BENEFITS HE SAYS IN THE MEANTIME HAS THE PRESSURE FROM WASHINGTON HELPED MODERATE IRAN'S POLITICAL BEHAVIOR MR KATZMAN SAYS THE ECONOMIC SQUEEZE IS PINCHING IRAN'S ABILITY TO KEEP UP ITS HEAVY PURCHASES OF BIGTICKET CONVENTIONAL WEAPONS SUCH AS TANKS AND SUBMARINES BUT IT'S HAVING SCANT EFFECT ON A RELATIVELY LOWCOST ACTIVITYTEHRAN'S SUPPORT FOR RADICAL ANTIWESTERN GROUPS THE US IS CONVINCED THE WAY TO DAMP THIS ACTIVITY IS TO STEP UP THE PRESSURE IF THEY CAN'T REPAY THEIR SHORTTERM DEBT CORPORATIONS WON'T DO BUSINESS WITH THEM SAID A SENIOR US OFFICIAL THE QUESTION THE US MUST DEBATE WITH ITS EUROPEAN ALLIES IS WHETHER SUCH A BLOW WOULD MAKE IRAN MORE OR LESS MILITANT 9401030066 940103 LEISURE & ARTS NEW COP SHOWS CRIME AFTER CRIME BY ROBERT GOLDBERG THE OLD YEAR ENDS THE NEW YEAR BEGINS AND STILL THE COPS ARE WALKING THE BEAT IN TVLAND THESE DAYS OF COURSE THEY RUN THE RISK OF BEING OUTGUNNED BY THOSE WITH MORE FIREPOWER NAMELY JANET RENO AND THE US CONGRESS HOT ON THE TRAIL OF TELEVISUAL VIOLENCE AS THE NEW ROOKIE CLASS OF POLICE SHOWS HITS THE STREETS WE THOUGHT WE'D RIDE SHOTGUN RIDING IS CLEARLY THE OPERATIVE WORD IN VIPER NBC FRIDAYS 89 PM EST THE STORY OF ONE REALLY COOL SET OF CRIMEFIGHTING WHEELS SLEEK RED AND VERY VERY FAST THE VIPER IS AN EXPERIMENTAL PROTOTYPE DESIGNED SOMETIME IN THE NEAR FUTURE TO HALT THE NEFARIOUS SCHEMES OF BAD GUYS KNOWN ONLY AS THE OUTFIT IF YOU REMEMBER KNIGHT RIDER THIS SHOW IS IN THE SAME MOLD ONLY THIS CAR HAS THE GOOD GRACE NOT TO TALK THE LINES IN VIPER GO TO ACE DRIVER JOE ASTOR JAMES MCCAFFREY AND WHEELCHAIRBOUND ENGINEER JULIAN WILKES DORIAN HAREWOOD FORMER POLICE OPERATIVES WHO DUE TO POLITICS CORRUPTION AND BUREAUCRATIC BUDGETCUTTING FIND THEMSELVES OPERATING OUTSIDE OF THE FORCE FROM AN ABANDONED WAREHOUSE THAT RESEMBLES THE BATCAVE BUT IN THIS MONDO FUTURO SHOW WHOEVER GETS THE WORDS IT'S THE TECHNOLOGY THAT'S CLEARLY CENTER STAGE ELECTRONIC GIZMOS THAT HUM AND WHISTLE AND WHIR COMPUTERGENERATED IMAGES EXPLODING MISSILES AND ALL SORTS OF OTHER THINGS THAT TAKE AT LEAST TWO DOUBLEA BATTERIES AND OF COURSE THERE ARE THE CARS ROARING AND ZOOMING THROUGH THE STREETS OF THE FUTUROPOLIS SCREECHING AROUND CORNERS BURNING RUBBER SPINNING 180S AND 360S FOR THE TEENAGE MALE SOONTOBE CARDRIVERS DODGE COULDN'T HAVE IMAGINED A BETTER ADVERTISEMENT THE BAD GUYS ALL DRIVE SINISTER BLACK DODGE STEALTHS OUR HERO HAS A SOUPEDUP VERSION OF THE 50000 DODGE VIPER AND EVERY SINGLE ONE OF THESE MACHINES GLEAMS WHAT A STEP UP FROM THE KCAR AS FOR PLOTTING VIPER IS STRAIGHT OFF THE ASSEMBLY LINE EXECUTIVE PRODUCERS DANNY BILSON AND PAUL DE MEO HAVE GONE TO GREAT PAINS TO GET THE TECHNICAL DETAILS RIGHT BUT THEY'RE A LITTLE FUZZIER ON THE PEOPLE PROTAGONIST JOE ASTOR HAS BRAIN SURGERY AFTER A CRASH AND EMERGES WITH ONLY HIS BEARD SHAVED OFF WHEN THE VILLAINS WANT JOE TO WORK FOR THEM THEY PICK A LOGICAL WAY TO ENCOURAGE HIM THEY BLOW UP HIS GIRLFRIEND ONE LINE FROM VIPER STAYS WITH ME ENGINEER JULIAN WILKES SHAKES HIS HEAD AND SAYS LET'S HOPE THE HUMAN FACTOR DOESN'T DERAIL US AGAIN THAT PESKY HUMAN FACTOR THERE AREN'T ANY SPORTS CARS IN BURKE'S LAW CBS FRIDAYS 910 PM EST BUT THE PEOPLE ARE ALMOST AS GLOSSY SET IN GLAMOROUS BEVERLY HILLS BURKE'S LAW IS A REPRISE OF THE 1960S SERIES GENE BARRY RETURNS AS AMOS BURKE HOMICIDE CHIEF OF 90210 WEALTHY WELLDRESSED DETECTIVE TO THE RICH AND FAMOUS AFTER 30 YEARS BURKE IS NOW THE ELDER STATESMAN OF CRIMESOLVERS AND OF COURSE STILL ATTRACTIVE TO THE LADIES BUT HE NOW HAS A DETECTING SON A FREE SPIRIT NAMED PETER PETER BARTON WHO IS APPARENTLY EVEN MORE ATTRACTIVE TO WOMANKIND THAN DEAR OLD DAD WHEN THIS FATHER AND SON TAG TEAM OF SEDUCTION TAKE A BREAK FROM THE FAIR SEX THEY OCCASIONALLY SOLVE A CRIME OR TWO THIS WEEK THEIR WITS ARE TESTED BY THE DEATH OF A BEAUTIFUL STARLET WHO DROWNS IN A BATHTUB ON A MOVIE SET THE SUSPECTS ARE THE CRASS PRODUCER THE ATHLETIC STUNTMAN THE WILD ROCKANDROLLER THE FORLORN SPECIAL EFFECTS WIZARD AND COLONEL MUSTARD WITH A KNIFE IN THE LIBRARY OUR HEROES WILL HAVE TO GET OUT OF THEIR ROLLS ROYCE TO SOLVE THIS ONE LIKE MURDER SHE WROTE OR MATLOCK BURKE'S LAW IS A SHOW IN WHICH PEOPLE MAY GET KILLED OR ASSASSINATED BUT NO ONE EVER GETS HURT THE PRODUCERS DON'T WANT BRUISES OR REALITY TO INTRUDE AND WITH EXECUTIVE PRODUCER AARON SPELLING IN CHARGE VIEWERS CAN BE ASSURED OF A HIGHLY POLISHED PROGRAM WITH PLENTY OF GOODLOOKING YOUNG MEN AND WOMEN UNTROUBLED BY COMPLICATIONS OF CHARACTER FOR DRAMAS WITH REAL LIVE PEOPLE THE BIG EVENT OF THE WEEK IF NOT THE SEASON IS THE RETURN OF HOMICIDE NBC THURSDAYS 1011 PM EST JAGGED EDGY JUMPCUT THIS SERIES FOLLOWS BALTIMORE DETECTIVES OUT INTO THE STREET ON THEIR SEARCH FOR KILLERS THERE'S NO ONSCREEN VIOLENCE IN THIS SHOW NO GUNPLAY NO 100MPH CAR CHASES HOMICIDE GETS ITS EMOTIONAL POWER THE OLDFASHIONED WAY WITH WRITING AND ACTING THIS WEEK'S EPISODE BOP GUN TELLS ITS STORY FROM THE POINT OF VIEW OF A VICTIM A TOURIST WHOSE WIFE GETS KILLED IN A STICKUP WHILE HE AND HIS KIDS STAND FROZEN NEARBY ROBIN WILLIAMS PLAYS THE SHATTERED HUSBAND AND IT'S A GREAT ROLE FOR HIM WITHOUT A SINGLE COMIC LINE JUST A SAD EMPTY SMILE AS HIS FACE WRINKLES UNDER THE WEIGHT OF HIS PAIN AND BITTERNESS THESE DAYS COP SHOWS CAN RANGE FROM FROTH LIKE VIPER AND BURKE'S LAW TO STRONGLYWRITTEN PROGRAMS LIKE NYPD BLUE AND LAW AND ORDER WHICH ARE ABOUT AS GOOD AS CURRENT NETWORK TV GETS HOMICIDE IS EVEN BETTER RETURNING THURSDAY FOR A LIMITED FOURWEEK RUN THIS SHOW IS SHARP INTELLIGENT CUTTING AND GENUINELY MOVING A 12INCH SERRATED BLADE OF A PROGRAM HOMICIDE ISN'T JUST A COP SHOW IT'S THE FINEST SERIES CURRENTLY ON THE AIR 9401030065 940103 ECONOMY ISI'S HYMAN SPRINTS FROM LAST TO FIRST IN PREDICTING RATES REYNOLDS AT HUDSON INSTITUTE STANDS BY BOLD FORECAST OF SHARPLY RISING YIELDS BY FRED R BLEAKLEY STAFF REPORTER OF THE WALL STREET JOURNAL SOONER OR LATER MOST ECONOMISTS WILL GET IT RIGHT IN THE CASE OF ED HYMAN OF ISI GROUP IT WAS SOONER OFF BY A COUNTRY MILE IN HIS JUNE 1992 PREDICTIONS FOR YEAREND INTEREST RATES HE SPRANG FROM THE WORST INTERESTRATE FORECASTER OUT OF 44 TO A FIRSTPLACE TIE OVERALL AMONG PREDICTORS IN THE JUNE 1993 WALL STREET JOURNAL SURVEY HE DID SO BY SWITCHING FROM SKYHIGH SHORTTERM AND LONGTERM RATES TO BELOWCONSENSUS ESTIMATES OF 31 FOR THE THREEMONTH TREASURY BILL AND 63 FOR THE 30YEAR TREASURY BOND THOSE RATES CLOSED LAST WEEK AT 305 AND 634 RESPECTIVELY AFTER TRADING AS LOW AS 29 AND 579 IN THE FALL JOHN WILLIAMS OF BANKERS TRUST CO HAD BEGINNER'S LUCK OR WAS IT SKILL IN HIS FIRST PARTICIPATION IN THE SURVEY LAST JUNE HE PREDICTED A 30 TBILL RATE AND A 63 LONG BOND RATE FOR YEAR END PUTTING HIM IN A TIE WITH MR HYMAN FOR THE BEST SHORT AND LONGTERM RATE FORECASTS AT THE TIME HOWEVER HIS FORECASTS AS WELL AS THOSE OF SOME OTHER ECONOMISTS WEREN'T PUBLISHED FOR LACK OF SPACE HIS CURRENT ESTIMATE DOESN'T CALL FOR MUCH CHANGE HE EXPECTS A SLIGHT RISE IN SHORT RATES TO 315 AND A MODEST DECLINE IN THE LONG TREASURY BOND YIELD TO 60 BY YEAR END ALAN REYNOLDS ALSO IS STICKING TO HIS GUNS BUT HE HAD THE WORST SHORT AND LONGTERM RATE FORECASTS FOR YEAR END 1993 I VASTLY UNDERESTIMATED THE WEAKNESS IN JAPAN AND EUROPE SAYS THE HUDSON INSTITUTE'S DIRECTOR OF ECONOMIC RESEARCH HE ALSO WAS FOOLED BY THE STRONG RALLY IN JAPANESE STOCKS AT MIDYEAR BUT MR REYNOLDS STILL EXPECTING BETTER ECONOMIES ABROAD TO BOOST US EXPORTS DOESN'T HESITATE TO REPEAT HIS BOLD PREDICTION OF SHARPLY RISING RATES IN THE US HIS OUTONALIMB FORECAST THIS YEAR CALLS FOR RATES ONCE AGAIN TO RISE SHARPLY BY YEAR END WHEN HE EXPECTS TBILLS TO TRADE AT 4 AND LONG TREASURY BONDS TO HIT 73 PHILIP BRAVERMAN OF DKB SECURITIES WHO ALSO HAD ONE OF THE BEST OVERALL FORECASTS IS EVEN MORE DOWNBEAT THIS YEAR HE SEES 30YEAR TREASURY BONDS DROPPING IN YIELD TO 575 AT MIDYEAR AND 55 BY YEAR END SHORTTERM RATES DAMPED BY A FED EASING ARE SEEN DROPPING TO 295 AT MIDYEAR AND 26 ON DEC 31 HIS REASONING STIMULANTS THAT FUELED THE CURRENT EXPANSION SUCH AS THE MIDWEST FLOODS LOW MANUFACTURING INVENTORIES AND CONSUMER BORROWING ARE NOT SUSTAINABLE NOT ONE TO TEMPT FATE NEIL SOSS OF FIRST BOSTON CORP HAS JOINED THE CONSENSUS AFTER STANDING ALONE IN MID1993 WITH A PREDICTION THAT CAME CLOSEST TO THE ACTUAL LOW IN THE LONG BOND HIS PREDICTION OF 599 AT YEAR END WASN'T FAR OFF THE ACTUAL LOW OF 579 NOW HE EXPECTS THE LONG BOND TO HOLD AT ITS PRESENT LEVEL SIX MONTHS FROM NOW AND RISE TO ONLY 65 BY YEAR END AS FOR MR HYMAN WHO HAS BEEN THE MOST FAVORED ECONOMIST IN INSTITUTIONAL INVESTOR MAGAZINE'S ANNUAL SURVEY FOR 14 STRAIGHT YEARS HE'S LOOKING FOR SHORTTERM RATES TO BE AT 38 BOTH AT MIDYEAR AND YEAR END LONG BOND RATES WILL TUMBLE AS INFLATION HOLDS AT 2 THROUGHOUT THE YEAR HE SAYS HIS PREDICTION A 55 30YEAR TREASURY BOND RATE AT MIDYEAR AND YEAR END SEE RELATED ARTICLE ECONOMISTS SEE CONTINUED GROWTH IN THE FIRST QUARTER AND A PREEMPTIVE STRIKE AGAINST INFLATION BY THE FED WSJ JAN 3 1994 9401030064 940103 MANAGEMENT THE MAN WITH THE MIDAS TOUCH MEETS HIS MATCH IN THE NATION'S STEAKHOUSES BY LAURIE P COHEN STAFF REPORTER OF THE WALL STREET JOURNAL JUST BEFORE HE BOUGHT THE PONDEROSA INC STEAKHOUSE CHAIN IN 1988 JOHN W KLUGE MET WITH A GROUP OF SKEPTICAL BANKERS DON'T YOU THINK THIS IS THE WRONG BUSINESS TO BE IN THEY ASKED HIM MR KLUGE EXPLODED POUNDING HIS FIST ON THE TABLE ACCORDING TO PEOPLE WHO WERE THERE THE PEOPLE WANT STEAK HE SAID SO CONFIDENT WAS MR KLUGE OF THE NATION'S APPETITE FOR SIRLOIN AND TBONE THAT HE INVESTED NEARLY 1 BILLION IN STEAK RESTAURANTS OVER THE NEXT THREE YEARS BESIDES PONDEROSA MR KLUGE'S CLOSELY HELD COMPANY METROMEDIA CO ALSO OWNS BONANZA BENNIGAN'S AND STEAK & ALE ALL TOLD THE KLUGE EMPIRE CONTROLS SOME 1500 OWNED AND FRANCHISED RESTAURANTS AS WELL AS OTHER ENTERTAINMENT AND COMMUNICATIONS HOLDINGS WHEN MR KLUGE NOW 79 YEARS OLD PLUNGED INTO THE STEAK BUSINESS HE DIDN'T STOP AT RESTAURANTS HE ALSO BOUGHT A MEAT DISTRIBUTOR AND A SEPARATE PRIMECUT BEEFSUPPLY CONCERN AND SPONSORED RESEARCH AIMED AT DEVELOPING BEEFIER AND MORE DISEASERESISTANT COWS HE WAS INTERESTED IN BOTH GROWING AND SELLING STEAK AN UNUSUAL STRATEGY WITHIN THE INDUSTRY JOHN KLUGE IS REALLY INTO VERTICAL INTEGRATION SAYS JJ FITZSIMMONS THE RECENTLY DISMISSED CHIEF FINANCIAL OFFICER OF S&A CORP THE METROMEDIA UNIT THAT RUNS STEAK & ALE AND BENNIGAN'S A COMPANY CALLED METROMEDIA STEAKHOUSES INC RUNS PONDEROSA AND BONANZA MICHAEL KAUFMAN WHO AFTER A PURGE LAST SEPTEMBER AT THE TOP OF S&A NOW HEADS ALL FOUR RESTAURANT CHAINS AND THE MEAT DISTRIBUTOR SAYS MR KLUGE'S MAIN INTEREST IS IN BUSINESSES THAT GENERATE GOOD CASH FLOW STUART SUBOTNICK METROMEDIA'S CHIEF OPERATING OFFICER SAYS MR KLUGE ALSO FANCIES HIMSELF A CONTRARIAN AND LOVED STEAK RESTAURANTS BECAUSE EVERYONE WAS TALKING HEALTH FOOD ALTHOUGH BEEF CONSUMPTION IS DECLINING STEAK SALES AT RESTAURANTS ARE HOLDING STEADY AT ABOUT 74 BILLION A 1992 FIGURE SO MR KLUGE WAS RIGHT PEOPLE DO WANT STEAK THEY JUST DON'T WANT HIS STEAK METROMEDIA WON'T RELEASE PROFIT OR LOSS NUMBERS CALLS SEEKING MR KLUGE'S COMMENT WERE REFERRED TO MESSRS SUBOTNICK AND KAUFMAN WHO RESPONDED TO QUESTIONS BUT ACCORDING TO CHICAGO RESTAURANT CONSULTANTS TECHNOMIC INC SALES FOR THE FOUR CHAINS HAVE STAGNATED AT AROUND 18 BILLION SINCE 1991 IN 1988 METROMEDIA PUT PONDEROSA'S SHARE OF THE 4 BILLIONAYEAR FAMILY STEAKHOUSE BUSINESS AT 20 TODAY METROMEDIA CONFIRMS THAT PONDEROSA'S SHARE OF THAT SEGMENT HAS DECLINED AND THAT THE COMBINED SHARE OF PONDEROSA BONANZA AND STEAK & ALE IS 162 OF THE 74 BILLION MARKET FOR ALL STEAK RESTAURANTS BENNIGAN'S IS NOT DEFINED AS A STEAK CHAIN COMPETITORS SUCH AS SIZZLER RESTAURANTS INC GOLDEN CORRAL AND RYAN'S FAMILY STEAKHOUSE ARE QUICKLY GAINING GROUND UNTIL NOW MR KLUGE HAS BEEN KNOWN FOR HIS MIDAS TOUCH STARTING WITH A SINGLE RADIO STATION WHICH HE BOUGHT IN 1946 MR KLUGE BUILT A VAST COMMUNICATIONS AND ENTERTAINMENT EMPIRE AND THEN BEGAN DISMANTLING IT IN 1985 AMONG THE ASSETS HE SOLD WERE TELEVISION STATIONS FOR 2 BILLION A CELLULAR PHONE AND BEEPER BUSINESS FOR 4 BILLION A BILLBOARD BUSINESS FOR 700 MILLION AS WELL AS THE ICE CAPADES AND THE HARLEM GLOBETROTTERS WITH SOME OF THE PROFITS FROM THE SALES MR KLUGE ENTERED THE RESTAURANT BUSINESS BUT MR SUBOTNICK CONCEDES THAT PONDEROSA IN PARTICULAR HAS BEEN PLAGUED BY HEAVY LOSSES METROMEDIA HAS HAD TO POUR MONEY INTO THE CHAIN TO KEEP IT OPERATING IN THE LAST YEAR WE'VE PUT IN SOMETHING LESS THAN 60 MILLION HE SAYS METROMEDIA CONCEDES THAT THE FOUR CHAINS HAVE SUFFERED FROM AGING CONCEPTS AND FACILITIES AND PROBLEMS WITH FOOD AND SERVICE MOST OF PONDEROSA'S 430 COMPANYOWNED STORES HADN'T BEEN RENOVATED SINCE THEY WERE BUILT IN THE 1970S IN JUNE 1992 CONSUMER REPORTS RATED 36 RESTAURANT CHAINS ACCORDING TO TASTE SELECTION SERVICE CLEANLINESS AND ATMOSPHERE BENNIGAN'S AND PONDEROSA WERE NEAR THE BOTTOM OF THE LIST IN ALL CATEGORIES MR SUBOTNICK SAYS METROMEDIA IS COMPLETING A 30 MILLION RENOVATION OF 360 PONDEROSAS UPGRADING FOOD AND GIVING THE RESTAURANTS A NEW LOOK THE ACCEPTANCE BY CUSTOMERS HAS BEEN ENORMOUS HE SAYS PREDICTING THE COMPANY WILL SOON OPERATE IN THE BLACK METROMEDIA WILL SOON FIX BENNIGAN'S AND STEAK & ALE AS WELL MR SUBOTNICK SAYS IMPROVING THE QUALITY OF FOOD SERVICE AND IMAGE WE MAKE MISTAKES LIKE EVERYONE ELSE DOES HE SAYS THE BUSINESS IS NOT WHERE WE WANT IT TO BE BUT WE THINK WE KNOW HOW TO GET IT THERE WITHIN METROMEDIA THERE HAS BEEN GREAT MANAGEMENT TURMOIL OVER THE PAST FIVE YEARS THE COMPANY HAS HIRED AND FIRED FOUR CHIEF EXECUTIVES IN SEPTEMBER THE THREE TOP EXECUTIVES OF S&A CORP WERE ABRUPTLY DISMISSED STEVEN R LEIPSNER THEN S&A'S CHIEF EXECUTIVE WILLIAM FLOCK SENIOR VICE PRESIDENT OF HUMAN RESOURCES AND MR FITZSIMMONS SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER SAY THEY WERE ESCORTED FROM THEIR OFFICES BY SECURITY GUARDS LAST MONTH THE THREE EXECUTIVES SUED METROMEDIA IN STATE COURT IN NEW YORK ALLEGING THEY WERE FIRED WITHOUT CAUSE THEY SEEK MORE THAN 7 MILLION IN BACK PAY AND DAMAGES MESSRS SUBOTNICK AND KAUFMAN WOULDN'T SAY WHY THEY DISMISSED THE S&A EXECUTIVES HOWEVER IN A METROMEDIA COUNTERCLAIM AGAINST MR LEIPSNER FILED IN DECEMBER METROMEDIA ACCUSED MR LEIPSNER OF MISREPRESENTING HIS EMPLOYMENT HISTORY AND OF EXPENSEACCOUNT VIOLATIONS CHARGES HE DENIES RESTAURANT INDUSTRY EXPERTS SAY THAT METROMEDIA'S FOCUS ON CASH FLOW ACCOUNTS FOR MUCH OF THE CHAINS' TROUBLES METROMEDIA EXECUTIVES KEPT SCREAMING THAT THEY NEEDED TO GET CASH FLOW UP SO THEY COULD PAY DOWN DEBT QUICKLY SAYS MR LEIPSNER MR KLUGE BOUGHT PONDEROSA FROM ASHER EDELMAN A TAKEOVER SPECULATOR FOR 87 MILLION IN CASH AND ASSUMED DEBT TOTALING 294 MILLION S&A RESTAURANTS CORP ALREADY HAD MORE THAN 350 MILLION IN DEBT WHEN MR KLUGE BOUGHT IT JOHN KLUGE MADE THE MISTAKE OF VIEWING RESTAURANTS AS A COMMODITY BUSINESS SAYS NORMAN BRINKER THE FOUNDER OF STEAK & ALE AND BENNIGAN'S IT'S BIZARRE WHAT IS HAPPENING TO THESE RESTAURANTS RIGHT NOW VOLUMES ARE WAY DOWN HE SAYS SINCE MR KLUGE FIRST ENTERED THE STEAKHOUSE BUSINESS COMPETITION HAS GROWN FIERCE CUSTOMERS ABSOLUTELY NOTICE IF THERE'S CHIPPED PAINT ON THE WALLS SO IF YOU DON'T RENEW EVERY FIVE TO SEVEN YEARS YOU'RE BEHIND SAYS MALCOLM KNAPP A NEW YORK RESTAURANT CONSULTANT METROMEDIA HAS SPENT LESS ON ITS RESTAURANTS THAN COMPETITORS MR KNAPP PUTS THE AVERAGE COST OF AN UPGRADE AT 50000 TO 100000 PER UNIT SUZANNE HANNA A FORMER REGIONAL MANAGER FOR BENNIGAN'S WHO QUIT LAST AUGUST AFTER SEVEN YEARS SAYS SHE INTERVIEWED WITH MORE THAN A DOZEN COMPETITORS BEFORE MR KAUFMAN REHIRED HER LAST MONTH EVERY INTERVIEW I'D GO ON I'M ASKED WHAT HAPPENED TO THAT COMPANY' MS HANNA SAYS COMPETITORS HAVE WATCHED IT DETERIORATE AND THEY WANT TO KNOW WHAT WENT WRONG SO THEY CAN PREVENT IT FROM HAPPENING TO THEIR COMPANIES WE WERE GETTING BOMBARDED WITH EMPLOYEE ALLEGATIONS OF SEX AND RACE DISCRIMINATION AND IT WAS DIFFICULT TO ADDRESS THOSE CHALLENGES BECAUSE THERE WERE SO MANY SAYS MR FLOCK THE DISMISSED HUMAN RESOURCES EXECUTIVE MR KLUGE'S TROUBLES DON'T STOP AT RESTAURANTS THE METROMEDIAOWNED BEEF DISTRIBUTOR BRISTOL VALLEY INC IS ALSO HAVING PROBLEMS THIS YEAR PONDEROSA STOPPED BUYING MEAT FROM BRISTOL VALLEY AFTER IT FOUND THAT COMPETITORS' BEEF WAS CHEAPER AND BETTER WE COULDN'T COMPETE CONCEDES MR KAUFMAN WHO SAYS HE EXPECTS BRISTOL VALLEY TO BE PROFITABLE AGAIN NEXT YEAR THEN THERE ARE THE TRANSGENIC COWS MR KLUGE FUNDED RESEARCH AT COLORADO STATE UNIVERSITY FOR THE LAST FOUR YEARS AIMED AT GENETICALLY ALTERING COWS TO PRODUCE ANIMALS THAT ARE MORE DISEASERESISTANT AND WHOSE BEEF HAS LESS FAT THE RESULT WE WERE ABLE TO MAKE A COW WITH EXTRA GROWTH GENES AND WHICH HAD MORE MEAT THAN NORMAL EXPLAINS GEORGE SEIDEL A RESEARCHER ON THE PROJECT BUT THEN THE ANIMAL DEVELOPED A WEAKNESS AT FOUR MONTHS OF AGE AND WE HAD TO KILL IT 9401030063 940103 IN FORTRESS LA' DINGBAT BUILDINGS ARE BEING WIPED OUT THE CHEAP RENTAL APARTMENTS WITH COMEHITHER NAMES INSPIRED SOME AFFECTION BY RICHARD TURNER STAFF REPORTER OF THE WALL STREET JOURNAL LOS ANGELES THEY LINE STREETS HERE BY THE THOUSAND DRAB TWOSTORY PASTEL STUCCO APARTMENT BUILDINGS WITH LIVING QUARTERS PERCHED ON STILTS ABOVE THE THINGS THAT REALLY MATTER THE CARS OUTDOOR STAIRWAYS CLING TO THE SIDES THE BEST OF THE STRUCTURES SURROUND A BARE COURTYARD ORANGE SHAG RUGS YOU CAN BET LURK WITHIN THE BUILDINGS WHICH OFTEN HAVE DECORATIVE SIGNS AND FANCIFUL NAMES ARE CALLED DINGBATS A SCORNED PRODUCT OF LOS ANGELES ARCHITECTURE THEY WERE CHEAPLY CONSTRUCTED IN THE BUILDING BOOM OF THE LATE 1950S AND EARLY 1960S THEIR INTENDED PURPOSE TO HOUSE A NEW GENERATION OF RENTERS AND GIVE THEM OFFSTREET PARKING DINGBATS CAME TO SYMBOLIZE WHAT WAS EMPTY AND SOULLESS ABOUT THE CITY ESPECIALLY BECAUSE SO MANY CHARMING RAYMONDCHANDLERESQUE BUNGALOW COURTS WERE RAZED TO MAKE ROOM FOR THEM BUT IN SOUTHERN CALIFORNIA YESTERDAY'S TACKINESS IS TODAY'S RELIC THE EXISTENTIAL FRETFULNESS OF FREEWAYCENTRIC LOS ANGELES DESCRIBED BY NOVELIST JOAN DIDION AMONG OTHERS NOW ACTUALLY EVOKES NOSTALGIA THERE'S SOMETHING EXUBERANT ABOUT THE DINGBATS SAYS GREG HISE ASSISTANT PROFESSOR OF URBAN HISTORY AT THE UNIVERSITY OF SOUTHERN CALIFORNIA BUT THE SPIRIT HAS BEEN ENVELOPED BY LA'S CURRENT FUNK THE NEW RAGE IN THIS RIOTSCARRED CITY IS WHAT AUTHOR MIKE DAVIS CALLS FORTRESS LA WHERE NEW STRUCTURES ARE HUNKEREDDOWN EFFORTS TO KEEP THE WORLD OUT IN RECENT YEARS DINGBATS HAVE BEEN TORN DOWN LEFT AND RIGHT TO BE REPLACED BY BIG HIGHSECURITY CONDOS WITH WHAT MR DAVIS CALLS THE SIEGE LOOK ARCHITECTURE CRITIC SAM HALL KAPLAN CALLS THEM CELLBLOCKS MR KAPLAN ADMITS TO HAVING AN AFFECTION FOR DINGBATS WHICH GENERALLY HAVE BETWEEN FOUR AND 16 UNITS BUT CAN HAVE AS MANY AS 70 STRETCHING BACK ON A 50FOOTWIDE LOT THEY WEREN'T WHAT YOU'D CALL STREETFRIENDLY HE SAYS THE BACKS OF THE PARKED CARS LOOK LIKE THEY'RE MOONING THE STREET BUT THEY DID CARRY ON THE OPEN COMMUNAL FEELING OF THE BUNGALOW COURTS DINGBAT DEMOLITIONS AREN'T BEING PICKETED BY PROTESTERS BUT SOMEONE HAS FOUND ART HERE NOT SO MUCH IN THE BLANK STRUCTURES THEMSELVES AS IN THE COMEHITHER NAMES OF THE BUILDINGS AND THE WAY SIGNS ON THE FRONTS ARE LETTERED TINY BITS OF INDIVIDUALITY AMID ALL THE SAMENESS LOOK AT THESE SUNDIAL PALMS PALM WILTON TROPICAL PALMS THE PALM HANCOCK PALM GROVE PALMDALE HOUSE WOOSTER PALMS PALM TERRACE FELIZ PALMS ROMI PALMS CORAL PALMS PHOTOGRAPHER LESLEY MARLENE SIEGEL HAS COVERED THE WALLS OF HER STUDIO WITH BLACKANDWHITE PHOTOS OF DINGBAT SIGNS ONE WALL HAS A 48PHOTO ASSEMBLAGE OF PALM SIGNS MS SIEGEL A 30YEAROLD WHO SUPPORTS HERSELF WITH A PARTTIME CLERICAL JOB AT A MEDICAL OFFICE HAS A COLLECTION OF 1600 SUCH PHOTOGRAPHS SOME OF WHICH SHE HAS EXHIBITED PEOPLE DON'T APPRECIATE THEM SHE SAYS REFERRING TO THE BUILDINGS ALTHOUGH WHAT SHE REALLY CARES ABOUT ARE THE DECORATIVE SIGNS BEARING THEIR NAMES THEY DON'T EVEN NOTICE THEM THEY DON'T REALLY KNOW THE URGENCY OF MY WORK SOME PHOTOS LIKE THE PALMSHOTS ARE GROUPED IN THEMED COMPOSITIONS SHOWBOAT SOUTH PACIFIC CAROUSEL OKLAHOMA FLOWER DRUM AND CAMELOT TO MS SIEGEL THE SEARCH HAS BECOME AN OBSESSION SHE DEVOTES EVERY SPARE MOMENT TO PATROLLING DINGBATINTENSIVE NEIGHBORHOODS IN HER BATTERED TOYOTA THE SIGNS MOSTLY BRUISED WOODEN STATEMENTS OFTEN IN CURSIVE SCRIPT CRY OUT TO HER THEY MAY REFER TO NONDESCRIPT ANONYMOUS BOXES WITH A LONG SUCCESSION OF ROOTLESS TRANSIENT TENANTS BUT THE SIGNS GIVE THEM A ROMANTIC WHIMPER OF IDENTITY TANGIER CASABLANCA CARAVAN EL MOROCCO DESERT SANDS SHE CALLS SIGNLESS BUILDINGS DEPRIVED DINGBATS BUT THE ONES WITH NAMES FASCINATE HER FOR ME SHE SAYS THEY'RE LIKE LITTLE JEWELS ON AN UNREMARKABLE STREET IN A BLUECOLLAR PATCH OF URBAN SPRAWL SOUTHEAST OF LA CALLED DOWNEY MS SIEGEL CAME UPON A DINGBAT CALLED CLOSE TO YOU WAS THIS A WRY COMMENT ON POPULATION DENSITY ACROSS THE STREET THE NAME OF THE DINGBAT IS ONLY JUST BEGUN A MESSAGE ABOUT EVENTUALLY GETTING OUT AND BUYING A FIRST HOME MS SIEGEL THEORIZED OTHERWISE AND TOOK HER SUSPICIONS TO THE DOWNEY HALL OF RECORDS INDEED IT TURNED OUT THERE THAT IN 1971 THE CARPENTERS KAREN AND RICHARD PUT SOME OF THE MONEY FROM THEIR GOLD RECORDS INTO BUYING THESE TWO BUILDINGS IN THEIR HOMETOWN THEY NAMED THEM AFTER TWO OF THEIR HIT SONGS MS SIEGEL FOLLOWED UP WITH A CALL TO RICHARD CARPENTER HE REFERRED HER TO HIS FAN CLUB I DON'T THINK HE REALLY UNDERSTOOD WHY I WAS CONTACTING HIM SAYS MS SIEGEL I DON'T THINK HE UNDERSTOOD MY APPROACH AS AN ARTIST MANY DINGBATS WERE BOUGHT BY SMALL INVESTORS SOMETIMES WITH THEIR LIFE SAVINGS AND THEY LEFT THEIR OWN GRAFFITI OF LOVE AND LOSS ONE MAN NAMED THE JANICE ANN AFTER HIS DAUGHTER HOPING IN VAIN THAT SHE WOULD BECOME A BALLERINA HE DECORATED IT WITH A BLUE DANCER IT REMAINS TODAY BUT WITH ONE LEG MISSING JANICE ANN BECAME A SCHOOLTEACHER HER SISTER HAS A NAMESAKE THE CINDY SUE AND SHE HERSELF LIVED THERE UNTIL RECENTLY NOW THE SIGN READS CI DY SUE THE GAYLE MARC IS NAMED AFTER SOMEBODY'S CHILDREN TOO THE MELNORM ON THE OTHER HAND IS NAMED AFTER ITS LOCATION AT MELROSE AND NORMANDIE AVENUES CALLING THESE BUILDINGS DINGBATS WAS POPULARIZED BY ARCHITECTURE CRITIC REYNER BANHAM IN HIS 1971 BOOK LOS ANGELES THE ARCHITECTURE OF FOUR ECOLOGIES DINGBAT IS ALSO WHAT ARCHIE CALLED EDITH IN ALL IN THE FAMILY AND WHAT THE DICTIONARY CALLS A STONE OR STICK SUITABLE FOR THROWING IN PUBLISHING IT SIGNIFIES DECORATIVE MARKS THAT BREAK UP TEXT PROBABLY THAT LAST MEANING ACCOUNTS FOR THE NAME AS IT IS APPLIED TO THESE BUILDINGS BECAUSE OF ALL THE LITTLE STARS AND DOODADS THAT ADORN THE NAMES OUT FRONT THE TERM IS KNOWN TO THOSE IN ARCHITECTURAL CIRCLES BUT FOR THE AVERAGE ANGELENO THE BUILDINGS ARE JUST PART OF THE LANDSCAPE MS SIEGEL WANTS TO PRESERVE THE DINGBAT IN PHOTOGRAPHS AT LEAST AND SHE IS RACING AGAINST TIME THE SALVAGED SIGNS FROM THE RECENTLY RAZED KIOWA TERRACE AND LOREN LANE ARE ON HER STUDIO WALLS WITH ALL THE PHOTOGRAPHS MORE AND MORE TOPPLE UNDER THE WRECKING BALL ALL THE TIME OTHERS ARE SIMPLY DYING ON THEIR OWN DINGBATS ARE A DISASTER BECAUSE OF HOW THEY AGE SAYS MR DAVIS WHO WROTE THE BOOK CITY OF QUARTZ ABOUT LA'S CITYSCAPE THEY'RE SO FLIMSY THAT AS THEY GET OLDER THEY CREATE SLUM ENVIRONMENTS MAYBE SO BUT EVEN IN DECAY THEY LEAVE THEIR NAMES THE UNIQUE L'PLACE DEBBY DEN 2ND HAND ROSE SHANGRILODGE ULTRA ENCINO VILLA FONTANA LA GAVIOTA VENTURA MONROE MANOR ELITE THE BACHELORS DO RE MI STARLET THE EL MALIBU THE CINEMA SEAFOAM AMY STEVENS CONTRIBUTED TO THIS ARTICLE 9401030062 940103 DOW JONES EQUITY MARKET INDEX GETS SEVERAL LISTING CHANGES TO START TODAY NEW YORK SEVERAL COMPOSITION CHANGES ARE BEING MADE IN THE DOW JONES EQUITY MARKET INDEX EFFECTIVE WITH TRADING STARTING TODAY TRAVELERS CORP IS BEING DELETED FROM THE FULLLINE INSURANCE INDUSTRY GROUP IT WAS ACQUIRED BY PRIMERICA CORP WHICH THEN CHANGED ITS NAME TO TRAVELERS AND ITS STOCK SYMBOL TO TRV THE SURVIVING COMPANY REMAINS IN THE DIVERSIFIED FINANCIALSERVICES INDUSTRY GROUP ELEVEN STOCKS ARE BEING ADDED IN THE FINANCIAL SECTOR OF THE DOW JONES EQUITY MARKET INDEX AND THREE ARE BEING DELETED RESTORING PROPER WEIGHTING TO THE SECTOR AND TO SPECIFIC INDUSTRY GROUPS THOSE BEING ADDED ARE WEST ONE BANCORP AND WASHINGTON MUTUAL SAVINGS BANK TO THE WESTERN REGIONAL BANKS INDUSTRY GROUP FIRST OF AMERICA BANK CORP AND FIRSTAR CORP TO THE CENTRAL REGIONAL BANKS INDUSTRY GROUP NEW PLAN REALTY TRUST MEDITRUST AND WEINGARTEN REALTY CORP TO THE REALESTATE INDUSTRY GROUP CHARLES SCHWAB CORP TO THE SECURITIESBROKERS INDUSTRY GROUP FEDERAL HOME LOAN MORTGAGE CORP AND STUDENT LOAN MARKETING ASSOCIATION TO THE DIVERSIFIED FINANCIALSERVICES INDUSTRY GROUP AND EQUITABLE COS TO THE LIFEINSURANCE INDUSTRY GROUP THOSE BEING DELETED BECAUSE THEIR MARKET CAPITALIZATIONS HAVE SHRUNK SIGNIFICANTLY COMPARED WITH OTHERS IN THEIR GROUPS ARE FIRST UNION REAL ESTATE EQUITY & MORTGAGE FROM THE REALESTATE INDUSTRY GROUP CALIFORNIA FEDERAL BANK CLASS A FROM THE SAVINGSANDLOAN INDUSTRY GROUP AND GFC FINANCIAL CORP FROM THE DIVERSIFIED FINANCIALSERVICES INDUSTRY GROUP NINE STOCKS ARE BEING ADDED TO THE CYCLICAL CONSUMER SECTOR ALSO TO RESTORE PROPER WEIGHTING VARITY CORP TO THE AUTO PARTS AND EQUIPMENT INDUSTRY GROUP INTERNATIONAL GAME TECHNOLOGY CORP TO THE RECREATIONALPRODUCTS AND SERVICES INDUSTRY GROUP BRINKERS INTERNATIONAL INC TO THE RESTAURANTS INDUSTRY GROUP OAKWOOD HOMES CORP TO THE HOMECONSTRUCTION INDUSTRY GROUP BLOCKBUSTER ENTERTAINMENT CORP TO THE SPECIALTYRETAILERS INDUSTRY GROUP CHARMING SHOPPES CORP TO THE APPARELRETAILERS INDUSTRY GROUP STRIDE RITE CORP TO THE FOOTWEAR INDUSTRY GROUP AND FRUIT OF THE LOOM INC AND UNIFI INC TO THE CLOTHING AND FABRICS INDUSTRY GROUP BEING DELETED ALSO BECAUSE OF DIMINISHED MARKET CAPITALIZATION ARE TCBY ENTERPRISES INC FROM THE RESTAURANTS INDUSTRY GROUP MACFRUGAL'S BARGAIN CLOSEOUTS INC FROM THE SPECIALTYRETAILERS INDUSTRY GROUP AND SPRINGS INDUSTRIES INC AND HARTMARX CORP FROM THE CLOTHING AND FABRICS INDUSTRY GROUP 9401030060 940103 LETTERS TO THE EDITOR TURKEY DISPUTES PORTRAYAL IN ARTICLE I AM WRITING IN RESPONSE TO ADRIAN KARATNYCKY'S DEC 16 EDITORIALPAGE ARTICLE IN GLOBAL VACUUM TYRANNY ADVANCES I TAKE PARTICULAR EXCEPTION TO THE COMMENTS CONCERNING TURKEY IN AN OTHERWISE INSIGHTFUL PIECE CONTRARY TO THE ARTICLE'S PREMISE FREEDOM IS NOT IN RETREAT IN TURKEY INDEED IT IS ONE OF THE MOST DEVELOPED DEMOCRATIC AND SECULAR NATIONS IN THE REGION WITH A PROSPERING FREEMARKET ECONOMY THERE EXIST A FULLY FUNCTIONING PARLIAMENT AND A FREE PRESS INCLUDING MANY PRIVATE TV AND RADIO STATIONS NATIONAL ISSUES ARE FREELY DISCUSSED EVERYWHERE THE GOVERNMENT IS ACCOUNTABLE TO THE PEOPLE ONLY THROUGH ITS PARLIAMENT TO SUGGEST THAT THE MILITARY LIMITS THE POWERS OF DEMOCRATICALLY ELECTED LEADERS IS ERRONEOUS THE ASSERTION THAT TURKEY'S HEAVYHANDED EFFORT TO SUPPRESS MINORITY SEPARATISM UNDERMINES FREEDOM INACCURATELY PORTRAYS THE REAL SITUATION THE ARTICLE OBVIOUSLY ALLUDES TO THE PKK WHICH AS AN INTERNATIONALLY CONDEMNED TERRORIST ORGANIZATION USES THE MASK OF NATIONALISTIC SENTIMENTS TO CARRY OUT TERROR AND VIOLENCE THAT TARGET NOT ONLY THE SECURITY FORCES BUT INNOCENT CIVILIANS AS WELL TURKEY IS DEALING WITH THIS PROBLEM NOT IN A BRUTAL AND HEAVYHANDED MANNER BUT WITHIN THE PARAMETERS OF THE RULE OF LAW 9401030059 940103 LEISURE & ARTS BOOKSHELF AN EXILE RETURNS TO EAST EUROPE BY MANUELA HOELTERHOFF IT USED TO BE YOU BOUGHT AN EGG YOU PAID FOR AN EGG SEATED IN A DRAB WARSAW CAFETERIA A FRIEND IS EXPLAINING THE FACTS OF DAILY LIFE IN THE NEW WORLD ORDER TO EVA HOFFMAN NO THINGS WEREN'T BETTER BUT THEY WERE SIMPLER SHE CONTINUES NOWADAYS THE PRICE OF AN EGG WILL ACTUALLY VARY IN DIFFERENT SHOPS THE FRIEND IN WARSAW HAS DISCOVERED COMPARISON SHOPPING AND LIKE SO MANY OF THE PEOPLE MS HOFFMAN MET IN HER TRAVELS THROUGH POLAND CZECHOSLOVAKIA BULGARIA HUNGARY AND ROMANIA SHE FINDS HERSELF THINKING SEVERAL THOUGHTS AT THE SAME TIME ONCE LIFE WAS DULL AND PREDICTABLE NOW IT IS EXHAUSTING AND CHALLENGING ONCE THEY WERE TO BLAME NOW PEOPLE STARE AT EACH OTHER THE FRIEND ADMITS TO FEELING MELANCHOLY QUESTIONS LARGE AND SMALL SHADOW THE LIVES OF THE FRIENDS AND STRANGERS MS HOFFMAN MET IN CAFES SHIPYARDS WRITERS CLUBS REAL ESTATE OFFICES TRAINS AND APARTMENTS IN THE TWO YEARS SHE SPENT WRITING EXIT INTO HISTORY A JOURNEY THROUGH THE NEW EASTERN EUROPE VIKING 410 PAGES 23 HOW DO WE DISMANTLE A SYSTEM THAT WE MAY HAVE HATED BUT THAT DEEPLY CONDITIONED OUR LIVES WHEN IS A CAMPAIGN CONTRIBUTION A BRIBE WHAT'S THE EXCHANGE RATE THIS AFTERNOON WHO THE HECK IS THAT NEW FACE ANCHORING THE EVENING NEWS AS THE BOLD HEADLINES FADE PEOPLE ARE LEFT FORAGING AROUND COMMUNISM'S CORPSE IN A CONFUSING WORLD THAT ALWAYS SEEMS TO HAVE A FOREIGN JOURNALIST STANDING CLOSE BY ASKING HOW THEY FEEL WOULD THAT MORE OF THEM WERE LIKE MS HOFFMAN WHOSE MEMOIR PROVIDES A REFRESHINGLY UNPRETENTIOUS CONTRAST TO THE PILE OF DREARY POSTWALL FALL BOOKS WHOSE NUMBERS COULD PROBABLY REBUILD A FAIR CHUNK OF IT OBSERVANT THOUGHTFUL CHARMING THE POLISHBORN WRITER WHO EMIGRATED AT AGE 13 AND NOW LIVES IN NEW YORK PROVES A WONDERFUL LISTENER RECORDING WITH SENSITIVITY AND WIT HOW JOLLY CENSORS COMPROMISED DISSIDENTS AMONG OTHERS SEEK TO KNIT THEIR COMPLICATED PASTS TO AN UNCERTAIN FUTURE ONLY A FEW OF MS HOFFMAN'S ENCOUNTERS COME OFF AS DATED HER CHRONICLE IS MORE ABOUT PEOPLE THAN POLITICS AND THINGS ARE CHANGING MORE SLOWLY ANYWAY THAN PUNDITS ANTICIPATED YOU'LL COME INTO A LOT OF MONEY LADY BUT FIRST YOU HAVE TO WAIT OUT THIS GODDAMN SHOCK REFORM MUTTERS A POLITICALLY ASTUTE FORTUNETELLER WHO SHUFFLES AN ANCIENT DECK OF CARDS ON WARSAW'S AVENUE OF THE PEOPLE'S ARMY SOOTHSAYING SPIRITUALISM AND ALTERNATIVE MEDICINE MS HOFFMAN NOTES IS A GROWTH AREA IN POLAND PERHAPS BECAUSE OTHER EXPLANATIONS AREN'T HELPING MUCH AS THE FAMILIAR TURNS MYSTIFYING DO YOU MEAN THAT SOME PEOPLE WILL GET PAID MORE THAN OTHERS FOR THE SAME AMOUNT OF WRITING MS HOFFMAN OVERHEARS A SADDENED WRITER ASKING AT A MEETING OF THE WARSAW LITERARY CLUB WHERE THE RULES OF CAPITALIST PUBLISHING ARE BEING UNFOLDED FROM THE LECTERN AND WHAT ABOUT THESE ADVANCES WILL THEY BE CALCULATED PER PAGE NO THEN HOW THE CIVILIZED GATHERING OF ONETIME DISSIDENTS AND OFFICIAL WRITERS BECOMES INCREASINGLY DISTURBED AS IT DAWNS ON THEM THAT JUNK WILL PROBABLY OUTSELL FINELY CRAFTED LITERATURE AND A SOLIDARITY REPRESENTATIVE ARRIVES TO SAY THE GOVERNMENT THINKS THE WORLD OF WORDS BUT HAS NO MONEY TO PROVE THIS THAT THE OLD OVERLORDS PUT A GREATER VALUE ON WORDS BY EITHER SUPPORTING WRITERS OR LOCKING THEM UP IS AN IRONY NOT LOST ON THE DEPRESSED LITTLE GROUP GIVEN THIS PATHETIC SCENE JUST HOW MUCH HAS CHANGED IS NOT ONLY SURPRISING BUT AMAZING THE HABIT OF HOPE CANNOT BE ACQUIRED OVERNIGHT THE CUSTOMS OF CAUTION AREN'T EASILY DISGARDED SHE WRITES ABOUT CZECHOSLOVAKIA WHERE THE REPRESSION WAS FAR UGLIER THAN IN HER OWN POLAND A SUCCESSFUL ARTIST WHO USED TO PAINT HOUSES IN AMERICA DURING THE BAD YEARS TELLS HER THE MOST IMPORTANT THING HE LEARNED THERE WAS HOW TO MAKE PRICE ESTIMATES PRICE ESTIMATES YES THEY MADE HIM LEARN TO EVALUATE TIME AND MATERIALS PRICE ESTIMATES REQUIRE FORTHRIGHT STATEMENTS AND FORTHRIGHT DISAGREEMENTS IN CZECHOSLOVAKIA NOBODY HAS LEARNED HOW TO TALK DIRECTLY WITH EACH OTHER EVERYBODY FUDGES AND LOOKS AT THE FLOOR DURING A TRANSACTION YET AT LEAST THEY TALK AS SHE DESCRIBES THE NEAR STASIS OF ROMANIA SINCE THE EXECUTION OF THE CONDUCATOR AND HIS FRIGHTFUL WIFE A GARGOYLE OF GRANDIOSITY IN MS HOFFMAN'S MEMORABLE PHRASE SHE CONJURES UP AN ANTIWORLD OF WHISPERING PEOPLE HOVERING SPOOKILY ON THE EDGE OF LIFE SINCE NOT MUCH HAS CHANGED SINCE THE CEAUSESCUS DEPARTED WHY ASSUME IT EVER WILL ONE ABUSED WOMAN WONDERS DETERMINED NOT TO TAKE A POSITION ON EPHEMERAL MATTERS HOW MUCH CAN ONE FORGIVE AND FORGET FOR PEOPLE WHO SUFFERED CRUELLY UNDER THE COMMUNISTS THE QUESTION IS PARTICULARLY COMPLEX BECAUSE SO OFTEN PRISON TERMS IMPARTED A SENSE OF SELFWORTH THAT IS INCREASINGLY HARD TO MEASURE NOW EXCEPT IN TERMS OF MONEY EVEN SO THERE ARE MANY WHO SEEM READY TO MOVE ON WITH SOMETIMES SURREALISTIC RESULTS ONE HALFLAUGHING HUNGARIAN FRIEND TELLS MS HOFFMAN HOW SHE INVITED SHE STILL CAN'T GRASP WHY THE NEIGHBOR WHO HAD SPIED ON HER FOR YEARS INTO HER APARTMENT SO THIS IS HOW IT TURNED OUT THE WOMAN CLUCKED APPROVINGLY SURVEYING THE RENOVATIONS SHE HAD CLEARLY FOLLOWED ON HER LISTENING DEVICE FOR QUITE A WHILE 9401030058 940103 BUSINESS BRIEF PUBCO CORP SUBSIDIARY TO BUY BUCKEYE IN 20 MILLION STOCK DEAL PUBCO CORP CLEVELAND SAID ITS BOBBIE BROOKS INC CLOTHING UNIT PLANS TO ACQUIRE BUCKEYE BUSINESS PRODUCTS INC IN A STOCK TRANSACTION VALUED AT ABOUT 20 MILLION BUCKEYE A MAKER AND DISTRIBUTOR OF PRINTING SUPPLIES WILL BECOME A DIVISION OF BOBBIE BROOKS PUBCO A RETAIL APPAREL REALESTATE AND PRINTING HOLDING COMPANY SAID IT WILL ISSUE ABOUT 18 MILLION ADDITIONAL SHARES OF PUBCO COMMON STOCK TO BUCKEYE'S SOLE STOCKHOLDER AND CHIEF EXECUTIVE ROBERT H KANNER ADDITIONALLY MR KANNER WILL RECEIVE 70000 SHARES OF NEW PREFERRED STOCK WITH A FACE VALUE OF 100 A SHARE BOBBIE BROOKS WILL ISSUE 194600 SHARES OF NEW PREFERRED STOCK TO PUBCO WITH A FACE VALUE OF 100 PER SHARE PUBCO SAID NO OTHER TERMS WERE DISCLOSED IN NASDAQ STOCK MARKET TRADING FRIDAY PUBCO SHARES CLOSED AT 5375 UP 375 CENTS OR 75 9401030056 940103 COMMODITIES FRIGID WEATHER DELIGHTS NATURALGAS INDUSTRY WHOSE PRICES DEPEND HEAVILY ON TEMPERATURES BY CALEB SOLOMON STAFF REPORTER OF THE WALL STREET JOURNAL HOUSTON THIS TIME OF YEAR DAVID LILES SOUNDS MORE LIKE A WEATHEROBSESSED FARMER THAN THE PRESIDENT OF THE TRADING SUBSIDIARY FOR ONE OF THE NATION'S BIGGEST NATURALGAS PIPELINE COMPANIES PANHANDLE EASTERN CORP EVERYBODY IN THIS INDUSTRY GETS DRESSED IN THE MORNING WATCHING THE WEATHER CHANNEL HE SAYS ONCE MR LILES IS IN HIS OFFICE HE GRABS A DAILY TRADE PUBLICATION AND READS THE FIRST PARAGRAPH A REGIONAL FORECAST OF THE DAY'S HIGH AND LOW TEMPERATURES BACK HOME PREPARING TO GO TO SLEEP THE WEATHER CHANNEL IS THE LAST TELEVISION SHOW HE CLICKS OFF THE TEMPERATURE PREOCCUPATION OF MR LILES AND EVERYBODY FROM WALL STREET GAS ANALYSTS TO UTILITY AND EXPLORATIONCOMPANY EXECUTIVES MAKES SENSE THIS TIME OF YEAR BECAUSE NO OTHER SINGLE FACTOR IN WINTER HAS AS BIG AN IMPACT ON PRICE THAT'S BECAUSE WINTER GAS CONSUMPTION IN THE US CAN JUMP ANYWHERE FROM 66 TO NEARLY DOUBLE THE DEMAND IN THE SUMMER THE DIFFERENCE IN THAT WIDE GAP AND OFTEN BETWEEN SURGING FLAT OR PLUNGING GAS PRICES TURNS OUT TO BE HOW FRIGID OR WARM IT IS OUTSIDE IN DIFFERENT PARTS OF THE COUNTRY THE COLDER IT IS THE WARMER OUR HEARTS ARE SAYS BERNARD WHITE A VICE PRESIDENT OF ZAPATA CORP A SMALL NATURALGAS EXPLORATION AND PRODUCTION COMPANY BASED HERE FOR INSTANCE IN THE CHRISTMAS FREEZE OF 1989 US GAS DEMAND SURGED TO TWO TRILLION CUBIC FEET IN DECEMBER AND PRICES SPIKED UPWARDS CONSUMPTION WAS 84 ABOVE THE MONTHLY LOW THAT YEAR SET IN AUGUST ACCORDING TO A REFERENCE GUIDE PREPARED BY ACCOUNTING FIRM ARTHUR ANDERSEN & CO AND CAMBRIDGE ENERGY RESEARCH ASSOCIATES MOST OF THE SURGE COMES FROM PEOPLE HEATING THEIR HOMES RESIDENTIAL GAS DEMAND WAS MORE THAN SIXFOLD HIGHER IN DECEMBER 1989 THAN AUGUST OF THAT YEAR SO WHAT CAN THE WEATHER TELL US ABOUT THIS WINTER SO FAR UP UNTIL THE LAST COUPLE OF WEEKS IT'S BEEN RELATIVELY MILD SAYS HARVEY FREESE PRONOUNCED FREEZE A METEOROLOGIST AT COMMERCIAL WEATHER FORECASTER FREESENOTIS WEATHER IN DES MOINES IOWA BUT IN THE PAST FEW WEEKS THE WEATHER SUDDENLY BECAME COLDER THAN NORMAL WITH SUBZERO TEMPERATURES IN NORTHERN IOWA AND THE OHIO VALLEY THE KIND OF FRIGID WEATHER THAT'S BEEN MISSING FOR SEVERAL YEARS NATURALGAS PRICES SEEMED TO MOVE ON EVERY COLD BREATH FOR INSTANCE ON DEC 22 THE LAST DAY OF TRADING ON THE NEW YORK MERCANTILE EXCHANGE FOR GAS TO BE DELIVERED IN JANUARY PRICES SHOT UP ON NEWS OF A COLD FRONT IN THE SOUTHWEST INCLUDING SNOW IN DALLAS PEOPLE STARTED SEEING IT COMING AND WENT NUTSO SAYS MICHAEL BARBIS AN ENERGY ANALYST FOR NATWEST SECURITIES CORP IN NEW YORK THE CONTRACT SHOT UP TO 214 PER MILLION BRITISH THERMAL UNITS DURING THE DAY AND THEN PLUNGED TO A LOW OF 196 WHEN SOME MARKET PARTICIPANTS FELT OTHERS HAD OVERREACTED THE CONTRACT SETTLED AT 2022 UP TWO CENTS MR FREESE AND OTHERS PREDICT THAT JANUARY COULD BE COLDER THAN NORMAL AND FEBRUARY MIGHT BE CHILLIER TOO ON THE NEW YORK MERC THURSDAY NATURAL GAS FOR FEBRUARY DELIVERY SETTLED AT 1997 DOWN 57 CENTS THE MERC WAS CLOSED FRIDAY FOR THE NEW YEAR'S HOLIDAY RIGHT NOW IT'S COLD AND THE BULLS ARE FEELING PRETTY GOOD SAYS GREGORY DODD VICE PRESIDENT OF ENERGY MARKETING FOR MITCHELL ENERGY & DEVELOPMENT CORP IN THE WOODLANDS TEXAS WHILE MITCHELL SUBSCRIBES TO SEVERAL WEATHER SERVICES MR DODD TRIES TO TAKE A LONGTERM APPROACH TO GAS PRICES BECAUSE WEATHER CAN BE SO FICKLE FORECASTERS CAN TELL YOU PRETTY ACCURATELY WHAT THE TEMPERATURE WAS YESTERDAY HE SAYS MR DODD SAYS THE KEY TO RAPIDLY RISING GAS PRICES IS REALLY THE TEMPERATURE IN TEXAS WHICH IS BOTH THE BIGGEST PRODUCER AND BURNER OF NATURAL GAS IF IT'S COLD DOWN HERE THE SAME MOLECULES ARE BID ON BY SEVERAL MARKETS HE SAYS THAT DEMAND FROM SEVERAL PARTS OF THE COUNTRY CAN CAUSE BIG SPIKES HE SAID THIS WINTER PLUNGING CRUDEOIL PRICES HAVE HAD A MINIMAL IMPACT ON NATURAL GAS EVEN THOUGH MANY BIG BURNERS OF GAS CAN SWITCH TO CHEAPER RESIDUAL OIL A PRODUCT REFINED FROM CRUDE INDEED CRUDEOIL FUTURES PRICES ARE ABOUT 25 LOWER THAN LAST YEAR WHILE NATURALGAS PRICES ARE 18 HIGHER MR BARBIS OF NATWEST SAYS THAT IN MARCH WHEN WINTER IS ENDING AND TEMPERATURES ARE SOON TO RISE WEATHER BECOMES LESS OF AN ISSUE AND GAS AND RESIDUAL OIL START COMPETING MORE HEAD TO HEAD THE ONE OTHER MAJOR FACTOR THAT MARKET PLAYERS ARE LOOKING AT IS THE LEVEL OF GAS STORAGE FOR WHICH STATISTICS ARE FUZZY UTILITIES PIPELINES AND OTHERS OPERATE STORAGE FIELDS FILLED WITH NATURAL GAS THAT ARE USED IN CONJUNCTION WITH GAS DIRECTLY FROM WELLS IN TIMES OF HIGH DEMAND PEOPLE ARE REALLY POSSESSED ABOUT STORAGE MR BARBIS SAYS THEY ALSO FREQUENTLY DISAGREE IN LARGE PART BECAUSE STATISTICS FROM BOTH PRIVATE AND GOVERNMENT SOURCES TRAIL ACTUAL STORAGE LEVELS BY SEVERAL MONTHS PANHANDLE'S MR LILES BELIEVES GAS STORAGE LEVELS ARE ABOVE NORMAL DUE TO THE WARM WEATHER EARLY IN THE WINTER THEREFORE HE SAYS THERE WILL BE PLENTY OF GAS EVEN IF THE WEATHER CHILLS WHICH COULD PUSH PRICES DOWN TO THE 170 TO 180 LEVEL IN THE FIRST QUARTER MITCHELL ENERGY'S MR DODD SAYS GAS INVENTORIES IN STORAGE ARE DOWN SOMEWHAT PARTICULARLY AFTER THE COLD WEATHER OF RECENT WEEKS STORAGE HE SAYS IS A FUNCTION OF WEATHER 9401030055 940103 BUSINESS BRIEF FIRST BANK SYSTEM INC FED CLEARS PURCHASE OF BANK AFFILIATED INSURANCE CONCERN FIRST BANK SYSTEM INC MINNEAPOLIS SAID IT RECEIVED CLEARANCE FROM THE FEDERAL RESERVE SYSTEM TO ACQUIRE PRIVATELY HELD AMERICAN BANCSHARES OF MANKATO INC AND AFFILIATE EAGLE INSURANCE AGENCY INC BOTH OF MANKATO MINN TERMS WEREN'T DISCLOSED AMERICAN BANCSHARES OWNS AMERICAN BANK THE THIRDLARGEST FINANCIAL INSTITUTION IN MANKATO IN SOUTHCENTRAL MINNESOTA THE BANK HAS ASSETS OF ABOUT 120 MILLION EAGLE INSURANCE HAS ANNUAL PREMIUM REVENUE OF 32 MILLION FIRST BANK SYSTEM A REGIONAL BANK HOLDING COMPANY WITH ASSETS OF ABOUT 26 BILLION OWNS THE SECONDLARGEST BANK IN MANKATO FIRST BANK SOUTH WITH 1992 ASSETS OF ABOUT 182 MILLION THE COMBINED INSTITUTION WOULD APPROACH THE SIZE OF NORWEST BANK CENTRAL OF MANKATO WHICH HAD 1992 ASSETS OF 402 MILLION THE ACQUISITION IS EXPECTED TO BE COMPLETED FEB 28 9401030049 940103 BUSINESS BRIEF BANC ONE CORP PURCHASE OF OKLAHOMA BANK FOR 96 MILLION IS COMPLETED BANC ONE CORP COLUMBUS OHIO SAID IT COMPLETED ITS ANNOUNCED ACQUISITION OF CENTRAL BANKING GROUP INC IN A STOCK SWAP VALUED AT 96 MILLION TERMS OF THE AGREEMENT CALL FOR THE EXCHANGE OF 064904 SHARE OF BANC ONE COMMON STOCK FOR EACH SHARE OF CENTRAL BANKING GROUP CENTRAL BANKING GROUP WILL BECOME BANC ONE OKLAHOMA CORP CENTRAL BANKING GROUP SAID THAT ALTHOUGH BANC ONE IS TRADING BELOW THE TERMINATIONOPTION PRICE IT BELIEVES THE STOCK HAS SIGNIFICANT GROWTH PROSPECTS CENTRAL BANKING GROUP OPERATES BANKS AND A LIFEINSURANCE COMPANY IN OKLAHOMA AND HAD ASSETS OF 533 MILLION AS OF SEPT 30 BANK ONE HAD ASSETS OF 765 BILLION AND 65 BILLION IN COMMON EQUITY AS OF SEPT 30 IN COMPOSITE NEW YORK STOCK EXCHANGE TRADING FRIDAY BANC ONE SHARES CLOSED AT 39125 UP 625 CENTS 9401030048 940103 BUSINESS BRIEF STATE OF THE ART INC SOFTWARE MAKER TO POST LOSS FOR 4THPERIOD AFTER CHARGE STATE OF THE ART INC IRVINE CALIF SAID IT EXPECTS TO REPORT A LOSS FOR THE FOURTH QUARTER OF 1993 AFTER TAKING A ONETIME 41 MILLION CHARGE ASSOCIATED WITH ACQUISITION AND DEVELOPMENT OF CERTAIN SOFTWARE THE COMPANY DIDN'T INDICATE THE SIZE OF THE EXPECTED LOSS ACCORDING TO THE DEVELOPER AND MARKETER OF ACCOUNTING SOFTWARE IT WILL WRITE OFF ABOUT 17 MILLION OF CAPITALIZED DEVELOPMENT COSTS ASSOCIATED WITH THE ACQUISITION OF THE PRODUCT LINE CALLED MACP&L AND P&L FOR WINDOWS THE REST OF THE CHARGE RELATES TO THE COMPANY'S WORK ON PROPRIETARY TOOLDEVELOPMENT LANGUAGE THE CHARGE WAS PROMPTED BY RECENT TECHNOLOGY AND COMPETITIVE CHANGES IN THE COMPUTER SOFTWARE MARKETPLACE ACCORDING TO DAVID W HANNA CHAIRMAN AND CHIEF EXECUTIVE OFFICER 9401030047 940103 BUSINESS BRIEF SOUTHWEST AIRLINES PURCHASE OF MORRIS AIR CORP IN STOCK SWAP IS COMPLETED SOUTHWEST AIRLINES DALLAS SAID IT COMPLETED THE ACQUISITION OF MORRIS AIR CORP SOUTHWEST SAID THE PURCHASE RECEIVED CLEARANCE FROM THE FEDERAL TRADE COMMISSION AND THE JUSTICE DEPARTMENT SOUTHWEST ANNOUNCED LAST MONTH THAT IT HAD AGREED TO ACQUIRE THE STOCK OUTSTANDING OF THE PRIVATELY HELD SALT LAKE CITYBASED CARRIER IN EXCHANGE FOR 3574658 SOUTHWEST COMMON SHARES IN NEW YORK STOCK EXCHANGE COMPOSITE TRADING FRIDAY SOUTHWEST SHARES CLOSED AT 37375 NINEYEAROLD MORRIS WAS STARTED AS A CHARTER SERVICE BY A TRAVEL AGENCY LOOKING FOR LOWCOST WAYS TO PACKAGE VACATIONS FOR ITS CLIENTS IT BEGAN SCHEDULED SERVICE A YEAR AGO PATTERNING ITSELF AFTER SOUTHWEST WITH LOW FARES AND FREQUENT FLIGHTS SOUTHWEST PLANS TO COMBINE OPERATIONS WITH MORRIS OVER THE NEXT TWO TO THREE YEARS 9401030046 940103 1993 YEAREND REVIEW OF MARKETS AND FINANCE REVIEW OF THE STOCK MARKET STOCK INDEXES BREAK RECORD AFTER RECORD BUT A REPRISE WON'T BE EASY THIS YEAR BY ANITA RAGHAVAN STAFF REPORTER OF THE WALL STREET JOURNAL LIKE THE EVEREADY ENERGIZER BUNNY CAN THE STOCK MARKET JUST KEEP ON GOING AND GOING AND GOING NOT WITHOUT SOME RECHARGING FROM HIGHER CORPORATE PROFITS DESPITE WIDESPREAD PESSIMISM AND GLOOMY PROGNOSTICATIONS STOCK PRICES CLIMBED LAST YEAR WITH THE DOW JONES INDUSTRIAL AVERAGE PLOWING AHEAD TO END THE YEAR AT 375409 45298 POINTS OR 137 ABOVE THE START OF 1993 STANDARD & POOR'S 500STOCK INDEX ALSO ROSE RALLYING 71 TO 46645 BELL ATLANTIC'S PROPOSED ACQUISITION OF TELECOMMUNICATIONS INC SENT INVESTORS SCRAMBLING TO SNAP UP THE NEXT COMMUNICATIONS OR CABLE STOCK THAT WOULD BE THE LIKELY TARGET OF A TAKEOVER OFFER THE RUSH TO SMALL STOCKS ALSO PROMPTED MORE AND MORE COMPANIES TO SELL STOCK A RECORD 575 BILLION OF NEW STOCKS WAS SOLD IN INITIAL PUBLIC OFFERINGS LAST YEAR SURPASSING 1992'S RECORD LEVELS FOR A WHILE IT SEEMED LIKE ANY COMPANY COULD GO PUBLIC AND THEY DID THERE WAS VERMONT TEDDY BEAR CO WHICH CLAIMS TO BE THE LARGEST MAKER OF TEDDY BEARS IN AMERICA KARATE INTERNATIONAL INC WITH ITS HIGHLY APPROPRIATE TICKER SYMBOL KICKU AND INTERNATIONAL PIZZA CORP A MIAMI BEACH FLA FRANCHISEE THAT SAID IT HAD THE EXCLUSIVE RIGHT TO DEVELOP THE POLISH PIZZA MARKET FOR DOMINO'S BUT THE MOST STUNNING IPO BY FAR WAS BOSTON CHICKEN THE NAPERVILLE ILL RESTAURANT CHAIN THAT LEFT INVESTORS GASPING WHEN ITS SHARES CAME OUT AT 20 EACH ROCKETED TO 51 AND FINALLY ENDED THEIR FIRST TRADING DAY AT 4850 DESPITE SUCH SPECULATIVE BINGES MANY ANALYSTS THINK STOCKS WILL CLIMB AGAIN THIS YEAR BUOYED BY STRONGERTHANEXPECTED CORPORATE PROFITS BUT THE ROAD TO FURTHER GAINS WILL BE FILLED WITH DETOURS THE MAJOR BULL MARKET IS STILL INTACT SAYS GAIL DUDACK STOCK STRATEGIST AT SG WARBURG WHO THINKS STOCKS CAN CLIMB 10 TO 15 THIS YEAR BUT I THINK THE ODDS FAVOR WE WILL HAVE A 10 CORRECTION IN 1994 POSSIBLY AS SOON AS THE FIRST QUARTER RISING INTEREST RATES WHICH CAUSED SOME INDIGESTION FOR STOCKS LATE LAST YEAR COULD DIVERT THE MARKET FROM ITS UPWARD COURSE EARLY THIS YEAR SHE SAYS BUT WHILE CLIMBING INTEREST RATES WILL LIKELY SOCK STOCKS WHAT WILL MITIGATE THE BLOW ANALYSTS SAY WILL BE ROSIER CORPORATE PROFITS ALREADY WALL STREET IS BETTING ON A BRIGHT PROFIT PICTURE ALTHOUGH ANALYSTS TYPICALLY SLASH THEIR EARNINGS ESTIMATES FOR THE STANDARD & POOR'S 500STOCK INDEX BY 13 AS THE YEAR GOES ALONG ANALYSTS LAST YEAR CUT THEIR 1994 PROFIT FORECASTS BY ONLY 8 ACCORDING TO I/B/E/S A SERVICE THAT MONITORS ANALYSTS' EARNINGS ESTIMATES RICHARD PUCCI SENIOR VICE PRESIDENT OF I/B/E/S BELIEVES THE BIGGEST RISK FOR STOCKS IS THAT A REBOUNDING ECONOMY WILL PUSH INTEREST RATES HIGHER DRAWING MONEY OUT OF THE STOCK MARKET AND INTO HIGHERYIELDING FIXEDINCOME INVESTMENTS FOR THREE YEARS THE BULL MARKET IN STOCKS HAS BEEN FUELED BY FALLING INTEREST RATES BUT WITH RATES AT 16YEAR LOWS AND POISED TO EDGE UP SOME STOCK ANALYSTS ARE FRETTING THE BULL MARKET MAY BE OVER IF INTEREST RATES HIT THESE BENCHMARKS AND AN OVERWHELMING MAJORITY OF INVESTMENT ADVISERS TURN BULLISH THEN MS GARZARELLI WOULD ADVISE HER CLIENTS TO SELL WITHOUT A FLOOD OF NEW POLICY INITIATIVES OUT OF WASHINGTON 1993 WOULD HAVE BEEN A HOHUM YEAR FOR THE STOCK MARKET THOUGH THE DOW JONES INDUSTRIAL AVERAGE TRADED IN A NARROW RANGE LAST YEAR SOME STOCK GROUPS WERE ANNIHILATED BY SPORADIC VERBAL LASHINGS FROM WASHINGTON AT THE START OF THE YEAR HEALTHCARE STOCKS PLUNGED AS PRESIDENT CLINTON GOT TOUGH WITH THE DRUG INDUSTRY TOBACCO STOCKS ALSO TUMBLED ON TALK OF A TAX TO FINANCE HEALTHCARE REFORM AND THE INSURANCE INDUSTRY TOOK A DRUBBING AS THE BLAME FOR EXORBITANT HEALTHCARE COSTS FELL ON IT WAYNE NORDBERG A PARTNER AT LORD ABBETT WHICH MANAGES 6 BILLION IN STOCK ASSETS THINKS SOME OF THE PUMMELED STOCK GROUPS OF 1993 WILL BE SPARED THIS YEAR IT IS BECOMING INCREASINGLY CLEAR THAT THERE WILL NOT BE A HEALTHCARE BILL IN 1994 SAYS MR NORDBERG RECOGNIZING THAT MR NORDBERG HAS BEEN BUYING SOME DRUG STOCKS LIKE MERCK AND JOHNSON & JOHNSON HE IS ALSO SNAPPING UP TOBACCO STOCKS LIKE PHILIP MORRIS AND AMERICAN BRANDS OTHER ANALYSTS MEANWHILE SEE MORE LUCRATIVE INVESTMENTS ELSEWHERE MS DUDACK OF SG WARBURG FAVORS FINANCIAL STOCKS SUCH AS BANKS AND MONEY MANAGEMENT FIRMS BASICALLY THE '90S ARE VERY DIFFERENT FROM THE '80S SHE SAYS IT'S HARDER TO MAKE MONEY AND MANAGE MONEY THOSE COMPANIES THAT CAN HELP INVESTORS SWELL THEIR ASSETS WILL PROSPER SO TOO WILL COMPANIES THAT CAN ENHANCE CORPORATE PRODUCTIVITY IN THE '90S COMPANIES WILL STRIVE TO BECOME MORE EFFICIENT BY OUTSOURCING CERTAIN ACTIVITIES MS DUDACK SAYS THUS COMPANIES THAT PROCESS PAPERWORK FOR FINANCIAL FIRMS WILL BECOME ATTRACTIVE AS THESE FIRMS FARM OUT MORE OF THEIR BUSINESS ALSO APPEALING WILL BE TECHNOLOGY TELECOMMUNICATIONS AND SOFTWARE COMPANIES SOME STOCK ANALYSTS LIKE JEFFREY SHAMES CHIEF EQUITY OFFICER AND PRESIDENT OF BOSTONBASED MASSACHUSETTS FINANCIAL SERVICES THINK THE ONLY AREA LIKELY TO PRODUCE DOUBLEDIGIT GAINS ARE SMALLCAPITALIZATION STOCKS MR SHAMES SAYS THAT AFTER THE 19901991 RECESSION BIG COMPANIES ALMOST ACROSS THE BOARD SAW THEIR PRICING POWER DISAPPEAR BECOMING WHOLLY DEPENDENT ON UNIT VOLUME GAINS FOR EARNINGS GROWTH HE THINKS IT'S UNLIKELY THAT LARGE COMPANIES WILL BE ABLE TO OFFSET THEIR LACK OF PRICING POWER WITH SUFFICIENTLY BIG UNIT VOLUME GAINS EVEN IF THE ECONOMY PICKS UP THAT'S WHY HE IS PLACING HIS STOCK BETS ON SMALL COMPANIES THAT HE THINKS WILL GROW THEIR EARNINGS 12 TO 15 MUCH HIGHER THAN THE 7 GROWTH RATE HE PROJECTS FOR LARGE COMPANIES OF COURSE WITH THE ECONOMY ROARING AHEAD THE MOST OBVIOUS INVESTMENT MANY ANALYSTS SAY IS ECONOMICALLY SENSITIVE STOCKS WHOSE FORTUNES ARE DIRECTLY TIED TO THE BUSINESS CYCLE LAST YEAR EVEN THOUGH THE ECONOMY GREW AT A CHOPPY PACE CYCLICAL STOCKS AS TRACKED BY MORGAN STANLEY HANDILY OUTPERFORMED CONSUMER STOCKS DAVID SHULMAN CHIEF EQUITY STRATEGIST AT SALOMON BROTHERS IS LOOKING FOR A REPEAT PERFORMANCE THOUGH MR SHULMAN EXPECTS RISING SHORTTERM INTEREST RATES WILL TRIGGER A 10 CORRECTION IN STOCK PRICES HE BELIEVES INVESTORS CAN INSULATE THEMSELVES FROM THE BRUNT OF THE SELLING BY INVESTING IN CYCLICAL STOCKS DESPITE LAST YEAR'S RALLY IN AUTO STOCKS MR SHULMAN STILL LIKES GENERAL MOTORS HE ALSO FAVORS OTHER CYCLICAL COMPANIES SUCH AS INGERSOLLRAND PARKERHANNIFIN AND PPG INDUSTRIES BUT HIS FAVORITE INVESTMENT IDEA IS HOUSINGRELATED STOCKS MR SHULMAN THINKS THE BIG SURPRISE IN 1994 WILL BE THE CONTINUED STRENGTH IN THE HOUSING MARKET SO HE'S ADVISING CLIENTS TO BUY GEORGIAPACIFIC THE ATLANTA LUMBER COMPANY FEDERAL HOME LOAN MORTGAGE THE PROVIDER OF RESIDENTIAL MORTGAGE FUNDS AND CENTEX THE HOMEBUILDING AND CONSTRUCTIONPRODUCTS CONCERN IN A PERVERSE WAY A LITTLE BACKUP IN RATES WILL HELP THE HOUSING MARKET BECAUSE PEOPLE WILL THINK RATES HAVE BOTTOMED AND WILL RUSH OUT TO BUY HOUSES HE SAYS 9401030044 940103 NEWS QUIZ DID THE PRICE OF TRIX FALL AND OTHER QUESTIONS ABOUT 1993 BY THOMAS R KING STAFF REPORTER OF THE WALL STREET JOURNAL IN 1993 THE RECESSION WAS SAID TO BE OFFICIALLY OVER BUT MANY AMERICANS STILL FELT ITS CHILL BLUECHIP COMPANIES CUT JOBS BY THE THOUSANDS THE HOT ACRONYMS WERE GATT AND NAFTA AND INTERACTIVE BECAME A BUZZWORD THIS QUIZ TESTS YOUR KNOWLEDGE OF THE YEAR'S EVENTS AS REPORTED IN THE WALL STREET JOURNAL EACH CORRECT ANSWER IS WORTH A POINT A PERFECT SCORE IS 45 ANSWERS ARE BELOW WHO GOT THE JOB AND WHO SUCCEEDED HIM WE'RE NOT TALKING ABOUT THE TWO EXECUTIVES WHO SERVED AS INTERIM COCHAIRMEN 9401030043 940103 WHAT'S NEWS WORLDWIDE MEXICAN PEASANTS CLASHED WITH SOLDIERS AND TOOK CONTROL OF FOUR TOWNS ARMED INDIAN PEASANTS FOUGHT TROOPS FOR THE SECOND DAY IN MEXICO'S IMPOVERISHED SOUTHERN STATE OF CHIAPAS NEAR THE GUATEMALAN BORDER THERE WERE REPORTS OF AS MANY AS 55 PEOPLE KILLED IN THE UPRISING THE FIRST ORGANIZED GUERRILLA ACTIVITY IN MEXICO SINCE THE 1970S THE MEXICAN GOVERNMENT SAID IT WANTED TO AVOID USING FORCE TO PUT DOWN THE REBELLION AND THE SECRETARY OF DEFENSE SAID SOLDIERS WERE ORDERED TO STAY IN THEIR BARRACKS THE PEASANTS ATTACKED AND LATER RELINQUISHED THE RESORT TOWN OF SAN CRISTOBAL DE LAS CASAS BUT HELD FOUR OTHER TOWNS THE REBELS SAID THEY WERE MEMBERS OF THE ZAPATISTA ARMY OF NATIONAL LIBERATION A PREVIOUSLY UNKNOWN GROUP AND WERE PROTESTING ABUSES BY AUTHORITIES AGAINST LACANDON INDIANS IN THE REGION PRIME MINISTER RABIN TAKING A TOUGH APPROACH AFTER PLO LEADER ARAFAT'S REJECTION OF A COMPROMISE ON ISRAEL'S PULLOUT FROM OCCUPIED LANDS TOLD THE ISRAELI CABINET THAT ARAFAT COULD SWEAT A BIT BEFORE TALKS RESUME RABIN ALSO WARNED THAT IF ARAFAT FAILED TO ACCEPT THE COMPROMISE WORKED OUT IN CAIRO ALL PRIOR AGREEMENTS WOULD BE PUT ASIDE NEVERTHELESS EGYPT'S FOREIGN MINISTER SAID THE TALKS MIGHT RESUME TODAY OR TOMORROW ARAFAT ALSO FACED PRESSURE FROM JORDAN'S KING HUSSEIN TO SETTLE THE QUESTION OF FUTURE JORDANIANPALESTINIAN TIES ISRAELI AND SYRIAN ACADEMICS MEETING SECRETLY IN NORWAY AGREED ON A DOCUMENT THAT COULD FORESHADOW A BREAKTHROUGH IN THEIR GOVERNMENTS' PEACE TALKS AN ISRAELI PARTICIPANT SAID FACTIONAL BATTLES RAGED IN AFGHANISTAN'S CAPITAL WITH MORE THAN 70 PEOPLE KILLED AND ABOUT 700 INJURED OFFICIALS SAID PRESIDENT RABBANI'S MILITIA WHICH CONTROLS THE LARGEST CHUNK OF KABUL WAS ATTEMPTING TO WITHSTAND AN ONSLAUGHT BY THE COMBINED FORCES OF PRIME MINISTER HEKMATYAR AND EXCOMMUNIST GENERAL DOSTUM THE IRISH REPUBLICAN ARMY MARKED NEW YEAR'S DAY WITH FIREBOMBINGS THAT DAMAGED OR DESTROYED 10 STORES AND A LIBRARY IN BELFAST MEANWHILE AN OFFICIAL OF THE IRA'S POLITICAL WING DISMISSED A BRITISHIRISH PEACE PLAN FOR NORTHERN IRELAND AS WORTHLESS AND BRITAIN'S MAJOR SAID HE WAS LOSING PATIENCE GOP LEADERS CALLED FOR AN INDEPENDENT COUNSEL TO INVESTIGATE POSSIBLE LINKS BETWEEN CLINTON AND A FAILED ARKANSAS SAVINGS AND LOAN IN SEPARATE INTERVIEWS SENATE MINORITY LEADER DOLE AND HOUSE GOP WHIP GINGRICH SAID ATTORNEY GENERAL RENO SHOULD APPOINT AN OUTSIDE COUNSEL TO EXAMINE THE ISSUE RUSSIAN NATIONALIST ZHIRINOVSKY VOICED ANGER LAST WEEK WHEN GERMANY REFUSED TO LET HIM VISIT THE BONN GOVERNMENT SAID ACCORDING TO ONE REPORT HE CLAIMED THE REBUFF WOULD LEAD TO A WORLD WAR AND GERMANY'S DESTRUCTION MEANWHILE FRANCE JOINED THE GROWING LIST OF NATIONS SEEKING TO DISCOURAGE A VISIT BY THE POLITICIAN POLITICAL AND MILITARY LEADERS ISSUED GLOOMY NEW YEAR'S PROCLAMATIONS IN BOSNIA AND THREATENED NEW OFFENSIVES IN THE 21MONTHOLD WAR IN SARAJEVO SNIPERS KILLED ONE MAN AMID CONTINUED SHELLING AND GUNFIRE IN THE CAPITAL THE BOSNIAN SERBS' SELFSTYLED PARLIAMENT IN PALE DELAYED DEBATE ON THE LATEST PEACE TALKS UNTIL JAN 10 PAKISTAN AND INDIA OPENED A TWODAY MEETING ON THEIR DISPUTE OVER KASHMIR BUT NEITHER SIDE APPEARED READY TO COMPROMISE PAKISTAN CALLED ON INDIA TO END ALLEGED HUMANRIGHTS ABUSES AGAINST MUSLIMS IN THE INDIANRULED PART OF THE DIVIDED STATE RUSSIAN POLICE HAVE ARRESTED THE LAST MAJOR LEADER SOUGHT IN CONNECTION WITH OCTOBER'S HARDLINE REBELLION AGAINST PRESIDENT YELTSIN ALEXANDER BARKASHOV HEAD OF THE NEOFASCIST RUSSIAN NATIONAL UNITY GROUP WAS SEIZED LATE LAST WEEK UNIDENTIFIED SOMALI GUNMEN BROKE INTO A WORLD FOOD PROGRAM COMPOUND IN SOMALIA'S SOUTHERN CITY OF BAIDOA ON SATURDAY NIGHT KILLING ONE SOMALI AND WOUNDING ANOTHER UN MILITARY OFFICIALS SAID DIED THOMAS J WATSON JR 79 WHO LED IBM INTO THE COMPUTER ERA AND HEADED THE COMPANY DURING ITS YEARS OF SPECTACULAR GROWTH FRIDAY IN GREENWICH CONN OF COMPLICATIONS FROM A STROKE CESAR ROMERO 86 VETERAN FILM AND TV ACTOR SATURDAY IN SANTA MONICA CALIF AFTER BEING HOSPITALIZED FOR BRONCHITIS AND PNEUMONIA 9401030042 940103 ENTERPRISE VICAL GETS A FAST START IN NEW DRIVE AGAINST DISEASE COMPANY'S NAKED DNA' APPROACH AIMS AT SIMPLER CHEAPER TREATMENTS BY TIMOTHY L O'BRIEN STAFF REPORTER OF THE WALL STREET JOURNAL NAKED DNA ISN'T ONE WHIT SEXIER THAN ANY OTHER KIND BUT VICAL INC LOVES IT JUST THE SAME THE SAN DIEGO BIOTECHNOLOGY COMPANY THINKS IT IS THE TICKET TO FAST GROWTH BY PIONEERING THE USE OF NAKED DNA VICAL AIMS TO PROVIDE SIMPLER AND CHEAPER TREATMENTS IN THE HIGHLY EXPERIMENTAL GENETHERAPY FIELD THE APPROACH HAS HELPED THE COMPANY GET OFF TO A FAST START PRODUCING MORE THAN 4 MILLION IN REVENUE LAST YEAR FOR A COMPANY THAT HAD ONLY 208000 IN REVENUE FIVE YEARS EARLIER THE COMPANY HAS HITCHED ITS FUTURE TO THE EMERGING USE OF DNA TO CURE DISEASE NAKED OR OTHERWISE DNA IS THE GENETIC MATERIAL THAT CARRIES HEREDITARY TRAITS AND HELPS DETERMINE HUMAN DEVELOPMENT SCIENTISTS INCREASINGLY INSERT SPECIFIC BITS OF DNA OR GENES INTO HUMAN CELLS HOPING TO PROMPT THE CELLS TO PRODUCE PROTEINS CAPABLE OF COMBATING DISEASE ESSENTIALLY GENE THERAPY ATTEMPTS TO UNLEASH THE BODY'S OWN RESOURCES TO FIGHT ILLNESS AS SOME SCIENTISTS BELIEVE THIS MAY BE MORE EFFECTIVE AND POSSIBLY SAFER THAN USING DRUGS OR OTHER THERAPIES COMPANIES ARE RACING TO FIND MORE WAYS OF TRANSLATING GENETHERAPY RESEARCH INTO COMMERCIAL REALITY BUT DELIVERING THE GENES TO THE BODY POSES A PROBLEM BIOTECH COMPANIES GENERALLY RELY ON ONE OF TWO METHODS THE FIRST SENDS GENES INTO A CELL BY PIGGYBACKING THEM ONTO A DEACTIVATED VIRUS INJECTED INTO THE BODY THE SECOND RELIES ON EX VIVO TREATMENTS WHICH INVOLVE WITHDRAWING SPECIFIC CELLS MODIFYING THEM AND THEN RETURNING THEM TO THE BODY BUT IT IS DIFFICULT TO TARGET SPECIFIC CELLS IN THE FIRST METHOD WHICH CAN ALSO PRODUCE DANGEROUS SIDE EFFECTS MANY SCIENTISTS BELIEVE THE EX VIVO METHOD ALLOWS FOR BETTER TARGETING OF CELLS BUT IT INVOLVES COSTLIER MANUFACTURING AND REQUIRES PATIENTS TO VISIT CLINICS VICAL'S DELIVERY SYSTEM ATTEMPTS TO SIDESTEP THESE DRAWBACKS ITS DNA IS NAKED BECAUSE THE GENE DOESN'T RIDE UPON A VIRUS OR OTHER MATERIAL TO GET TO THE CELL AS A VIRUS ISN'T PRESENT THE RISK OF VIRAL SIDE EFFECTS IS ELIMINATED AND BECAUSE NAKED DNA CAN BE INJECTED WITH A NEEDLE IN VIVO IT IS CHEAPER TO MANUFACTURE AND SIMPLER TO ADMINISTER THAN EX VIVO TREATMENTS NOBODY THOUGHT YOU COULD JUST INJECT DNA INTO SOMEONE'S BODY AND THEY WOULD JUST SUCK IT UP SAYS LISSA MORGENTHALER AN ANALYST WITH CALIFORNIA TECHNOLOGY STOCK LETTER A HALF MOON BAY CALIF NEWSLETTER TO BE SURE VICAL'S DELIVERY SYSTEM HAS ITS OWN LIMITATIONS NAKED DNA WILL HAVE A RESTRICTED BUT USEFUL APPLICATION IN GENE THERAPY SAYS JAMES WILSON DIRECTOR OF THE INSTITUTE FOR HUMAN GENE THERAPY AT THE UNIVERSITY OF PENNSYLVANIA SCHOOL OF MEDICINE IN PHILADELPHIA IT'S A SIMPLE PREPARATION AND ONE CAN EASILY INJECT IT INTO THE MUSCLES SO IT WILL BE VERY GOOD FOR VACCINES BUT DR WILSON SAYS THAT MORE COMPLEX DISEASES SUCH AS HEMOPHILIA AND CYSTIC FIBROSIS CAN'T BE TREATED WITH SIMPLE VACCINES DISEASES SUCH AS THESE REQUIRE A MASSIVE AMOUNT OF GENES TO BE DELIVERED TO AFFLICTED PARTS OF THE BODY AND WOULD BE RESISTANT TO THE RELATIVELY SMALL AMOUNT OF GENES NAKED DNA THERAPIES CAN DELIVER NONETHELESS NAKED DNA HAS THE POTENTIAL TO TREAT A WIDE VARIETY OF DISEASES THAT ARE CONSIDERED TO BE SUSCEPTIBLE TO VACCINES INCLUDING CANCER AND AIDS VICAL FOUNDED IN 1987 TO FIND WAYS OF IMPROVING THE ABSORPTION RATE OF STANDARD DRUGS STUMBLED UPON THIS TECHNOLOGY ACCIDENTALLY IN THE COURSE OF THIS WORK VICAL SCIENTIST PHILIP FELGNER AND OTHER RESEARCHERS MADE A STUNNING DISCOVERY THEY COULD INJECT GENES DIRECTLY INTO THE MUSCLES OF MICE AND CAUSE NEW GENES TO BE CREATED THOSE FINDINGS WERE PUBLISHED IN 1990 THE SAME YEAR THAT THE NATIONAL INSTITUTES OF HEALTH A FEDERAL RESEARCH AGENCY BASED IN BETHESDA MD SUCCESSFULLY USED GENE THERAPY TO TREAT A CHILD SUFFERING FROM IMMUNE DISORDERS THIS IGNITED THE GENE THERAPY STAMPEDE VICAL HAVING ALREADY APPLIED FOR ITS PATENTS DREW THE ATTENTION OF MERCK & CO THE DRUG GIANT BASED IN WHITEHOUSE STATION NJ MERCK SIGNED AN AGREEMENT IN 1990 WITH VICAL TO JOINTLY DEVELOP GENETHERAPY VACCINES FOR THE COMMON COLD AND ACQUIRED IMMUNE DEFICIENCY SYNDROME OR AIDS MERCK RENEWED THOSE AGREEMENTS LAST YEAR ALSO SIGNING AN OPTION TO LICENSE VACCINES FOR HERPES HEPATITIS AND MEASLES AMONG OTHERS VICAL WHICH SAYS IT HAS ESTABLISHED SUBSTANTIAL ALTHOUGH INCOMPLETE PATENT COVERAGE FOR NAKED DNA HAS ALSO ENTERED INTO DEVELOPMENT AND LICENSING AGREEMENTS WITH OTHER PHARMACEUTICAL COMPANIES IT RECENTLY ALLIED WITH BAXTER INTERNATIONAL INC OF DEERFIELD ILL TO DEVELOP A TREATMENT FOR HEMOPHILIA IT HAS A SIMILAR ALLIANCE WITH GENZYME CORP OF CAMBRIDGE MASS FOR A CYSTIC FIBROSIS TREATMENT THE AGREEMENTS HOLD OUT THE POSSIBILITY OF HUGE ROYALTY PAYMENTS IN THE FUTURE MEANWHILE VICAL COLLECTS A STEADY STREAM OF LICENSING PAYMENTS RIGHT NOW THESE BOOSTED THE COMPANY'S REVENUE 36 MILLION IN 1992 THE COMPANY SAYS IT EXPECTS TO POST REVENUE OF 75 MILLION FOR 1993 THAT FIGURE INCLUDES A 31 MILLION ONETIME GAIN FROM SALE OF TECHNOLOGY RIGHTS RELATED TO OTHER THERAPIES LIKE MOST BIOTECH STARTUPS VICAL HAS YET TO BECOME PROFITABLE AND IT IS SUBJECT TO THE PITFALLS OF ITS VOLATILE FIELD AMONG OTHER THINGS IT IS CRUCIAL TO CHOOSE WHICH PRODUCTS YOU WILL DEVELOP FIRST BECAUSE IF YOU FALTER WALL STREET CAN BE VERY UNFORGIVING SAYS ALAIN SCHREIBER VICAL'S PRESIDENT BUT SO FAR VICAL HAS BENEFITED FROM INVESTORS' ENTHUSIASM ITS STOCK TRADES ON NASDAQ AT 1350 UP FROM 5 WHEN THE COMPANY WENT PUBLIC LAST MARCH AND VICAL THINKS IT HAS A WINNER IN ALLOVECTIN 7 THE FIRST PROPRIETARY PRODUCT IT PLANS TO MARKET AND DISTRIBUTE WITHOUT THE HELP OF A CORPORATE PARTNER IN LIMITED CLINICAL TRIALS AT THE UNIVERSITY OF MICHIGAN THE GENEBASED DRUG CAUSED THE HUMAN BODY TO FIGHT OFF OR DESTROY SKIN CANCER TUMORS BUT VICAL DOESN'T THINK ALLOVECTIN 7 WILL BE COMMERCIALLY AVAILABLE UNTIL 1997 9401030041 940103 1993 YEAREND REVIEW OF MARKETS AND FINANCE REVIEW OF MARKETS ART MARKET REBOUND TURNS INTO A GEM BY ALEXANDRA PEERS STAFF REPORTER OF THE WALL STREET JOURNAL NEW YORK THE ART MARKET IS BACK WITH FEWER PLAYERS AND HIGH HOPES THAT JEWELRY ASIAN ART AND COLLECTIBLES WILL BE THE MONEYMAKERS OF THE DECADE AN ALMOST THREEYEARLONG ARTMARKET RECESSION ENDED EARLY IN 1993 SAYS DAVID NASH WORLDWIDE DIRECTOR OF PAINTINGS AND SCULPTURE SALES AT NEW YORK AUCTION HOUSE SOTHEBY'S HOLDINGS INC IN MAY A PAUL CEZANNE PAINTING SOLD FOR 286 MILLION THE HIGHEST PRICE FETCHED AT AUCTION SINCE 1990 BY THE END OF 1993 THE MARKET FOR BETTER WORKS HAD ACTUALLY BECOME BUOYANT SAYS MR NASH IN NOVEMBER THE AUCTION HOUSE SOLD 88 WORKS BY PABLO PICASSO FOR 32 MILLION IN THREE HOURS FLAT ELSEWHERE IN THE ART MARKET EVERYTHING FROM DIAMONDS TO ISLAMIC ART HIT RECORDS BUT IF BUSINESS IS BUSTLING AGAIN IT ISN'T THE SAME BUSINESS IT USED TO BE HUGE SHIFTS IN WHAT SELLS AND TO WHOM TOOK PLACE IN 1993 THAT WILL SET THE TONE IN THE MARKET FOR YEARS TO COME THE DOMINANT TRENDS ART AUCTION HOUSES AND DEALERS WOKE UP TO THE ASIAN MARKETS MAKING HUGE INVESTMENTS OF MANPOWER AND CAPITAL IN TAIWAN SINGAPORE KOREA HONG KONG AND CHINA LONDON AUCTION HOUSE CHRISTIES INTERNATIONAL PLC PURCHASED VETERAN ASIAN ART AND COIN DEALER SPINK & SON TO SPEARHEAD ITS PUSH INTO THE REGION ART FOLLOWS WEALTH NOTES SAN FRANCISCO ART DEALER SAM BERNSTEIN IN ASIA THERE'S BEEN A SUDDEN INCREASE IN DISPOSABLE INCOME AND THE WEALTHIEST NATION SETS THE TASTES OF THE BROADER MARKET PRICES FOR JADE AND CHINESE PORCELAIN HAVE ALREADY BEGUN TO RISE JEWELRY EMERGED AS PERHAPS THE HOTTEST SECTOR OF THE ART MARKET WITH GEMS VIEWED BY SOME ART EXPERTS AS LIKELY TO BECOME AN INTERNATIONAL CURRENCY IN THE 1990S FOR THE FIRST TIME IN RECENT HISTORY REVENUE FROM JEWELRY SALES ECLIPSED REVENUE FROM SALES OF IMPRESSIONIST PAINTINGS AT SOTHEBY'S AUCTION HOUSE SOTHEBY'S RAISED MORE THAN 200 MILLION IN 1993 JEWELRY SALES IN THE ONCESIZZLING MARKET FOR CONTEMPORARY ART SALES REMAINED SLOW BUT COLLECTIBLES PRICES SOARED WITH FEVERISH DEMAND FOR SOVIET SPACE ARTIFACTS AND HOLLYWOOD MEMORABILIA HOWEVER AUCTION RESULTS SHOWED CLEARLY THAT THE MARKET FOR COLLECTIBLES SUCH AS ANIMATION ART 1950S LUNCH BOXES AND PEZ CANDY DISPENSERSHAS A MUCH SWIFTER BOOMBUST CYCLE THAN MORE ESTABLISHED MARKETS LOOKING FORWARD COLLECTIBLES DEALERS PEG THE NEXT HOT COLLECTIBLES MARKETS PLATES AND OTHER MEMORABILIA FROM DEFUNCT RAILROADS AND AIRLINES PINBALL MACHINES AND VIDEO GAMES VINTAGE COUTURE AND ITEMS OF 20TH CENTURY TECHNOLOGY SUCH AS 1940S HOME APPLIANCES 1950S TYPEWRITERS AND PROTOTYPE PERSONAL COMPUTERS IN WHAT COULD BE THE FIRST IN A WAVE OF INDUSTRY CONSOLIDATION WILDENSTEIN & CO THE LEADING DEALER IN OLD MASTERS AND IMPRESSIONIST ART FOR MUCH OF THE PAST CENTURY ADDED TO ITS EMPIRE WITH THE PURCHASE OF AN INTEREST IN CONTEMPORARY ART DEALER PACE GALLERIES SOTHEBY'S STOCK TRADED ON THE NEW YORK STOCK EXCHANGE AND A PROXY FOR THE ART MARKET AS A WHOLE RECOVERED SOMEWHAT AFTER A LONG DRY SPELL RISING TO 15375 AT YEAR END FROM 1225 AT THE END OF 1992 CHRISTIES SHARES TRADED PRINCIPALLY ON THE LONDON STOCK EXCHANGE BECAME AVAILABLE IN THE US AS AMERICAN DEPOSITARY RECEIPTS AND BROKERAGE FIRM GOLDMAN SACHS & CO PURCHASED AN 11 CHRISTIES STAKE THE RECORDS SET IN 1993 INCLUDED A RECORD FOR SILVER 33 MILLION FOR A CHANDELIER FOR ISLAMIC ART 36 MILLION FOR AN 11THCENTURY BRONZE LION FOR ENGLISH FURNITURE 26 MILLION FOR A DESK FOR HOLLYWOOD MEMORABILIA 563500 FOR VIVIEN LEIGH'S ACADEMY AWARD FOR A PHOTOGRAPH 398500 FOR AN ALFRED STIEGLITZ OF ARTIST GEORGIA O'KEEFFE'S HANDS FOR COMIC ART 112500 FOR A CARL BARKS PAINTING OF DONALD DUCK'S UNCLE SCROOGE AND FOR ENGLISH POTTERY 453500 FOR A STAFFORDSHIRE CERAMIC TEA SET RECORDS WERE ALSO SET FOR SEVERAL TYPES OF CLOCKS AND CARPETS 9401030040 940103 FEDERATED BIDDING FOR MACY THROUGH BANKRUPTCY COURT BOLD MOVE INVOLVES BUYING 50 OF PRUDENTIAL CLAIM AND OPTION ON THE REST BY PATRICK M REILLY AND EBEN SHAPIRO STAFF REPORTERS OF THE WALL STREET JOURNAL FEDERATED DEPARTMENT STORES INC IS SEEKING CONTROL OF RIVAL RH MACY & CO IN A BOLD ATTEMPT TO CREATE THE NATION'S LARGEST DEPARTMENTSTORE CHAIN FEDERATED SAID IT ACQUIRED FOR 4493 MILLION HALF OF PRUDENTIAL INSURANCE CO OF AMERICA'S CLAIM IN MACY'S CHAPTER 11 BANKRUPTCYCOURT REORGANIZATION FEDERATED ALSO HAS AN OPTION TO BUY THE REMAINING 50 OF PRUDENTIAL'S CLAIM PRUDENTIAL HAD BEEN MACY'S SINGLE LARGEST CREDITOR WITH A CLAIM OF MORE THAN 1 BILLION IN MAKING THE ANNOUNCEMENT YESTERDAY FEDERATED BASED IN CINCINNATI SAID ITS OBJECTIVE IS TO COMBINE ITS OPERATIONS WITH NEW YORKBASED MACY'S ATTEMPTING TO USE BANKRUPTCY COURT TO GAIN CONTROL OF A RIVAL IS HIGHLY UNUSUAL AND THERE IS NO GUARANTEE THAT FEDERATED'S AMBITIOUS CHAIRMAN ALLEN I QUESTROM WILL BE ABLE TO PERSUADE OTHER CREDITORS OR THE BANKRUPTCYCOURT JUDGE OVERSEEING THE MACY CASE TO APPROVE THE TAKEOVER BUT AS A SENIOR SECURED CREDITOR FEDERATED HOPES TO PERSUADE THE COURT THAT A MERGER IS IN THE BEST INTEREST OF MACY AND ITS CREDITORS FEDERATED DECLINED TO PROVIDE DETAILS ON HOW IT WOULD GAIN CONTROL OF MACY BUT A SPOKESWOMAN SAID THAT AT SOME POINT MACY'S CREDITORS COULD BE OFFERED STOCK IN A COMBINED FEDERATED AND MACY FEDERATED'S STOCK PRICE HAS MORE THAN DOUBLED SINCE IT EMERGED FROM BANKRUPTCYCOURT PROCEEDINGS IN 1992 IF SUCCESSFUL THE MOVE WOULD CREATE A DEPARTMENTSTORE GIANT WITH PROJECTED ANNUAL SALES OF 138 BILLION AND STORES FROM NEW YORK TO CALIFORNIA AND FLORIDA IT ALSO WOULD COMBINE TWO VENERABLE MERCHANTS THAT EACH TOOK ON TOO MUCH DEBT IN THE 1980S AND WAS FORCED TO SEEK BANKRUPTCYCOURT PROTECTION THE MOVE CAUGHT MACY MANAGEMENT OFF GUARD MACY CHAIRMAN MYRON E ULLMAN FIRST WAS TOLD OF FEDERATED'S ACTION IN A BRIEF TELEPHONE CALL YESTERDAY FROM MR QUESTROM IN AN INTERVIEW MR ULLMAN DIDN'T APPEAR TO WELCOME MR QUESTROM'S SUGGESTION THAT THE TWO COMPANIES MERGE THEIR OPERATIONS IT'S PREMATURE AS TO WHETHER THAT IS IN THE BEST INTEREST OF THE COMPANY HE SAID MY CONCERN IS THE REBUILDING OF MACY A FEDERATED SPOKESWOMAN HOWEVER CHARACTERIZED MR ULLMAN AS BEING VERY RECEPTIVE SHE SAID MR QUESTROM AND OTHER FEDERATED OFFICIALS WOULD MEET TODAY WITH MR ULLMAN IN NEW YORK MACY AS A DEBTOR HAS AN OBLIGATION TO DO WHAT'S BEST FOR ITS ALL ITS CREDITORS THE SPOKESWOMAN ADDED THIS BRINGS US TO THE TABLE IN A VERY STRONG POSITION IT IS UNCLEAR HOW OTHER CREDITORS WILL REACT TO FEDERATED'S MOVE THEIR CLAIMS EXCEED 6 BILLION AMONG THE EQUITY INVESTORS IN CLOSELY HELD MACY ARE REALESTATE DEVELOPER A ALFRED TAUBMAN LAURENCE TISCH CHAIRMAN OF LOEWS CORP MUTUALFUND MANAGER MICHAEL PRICE HONG KONG FINANCIER SIR RUN RUN SHAW AND GENERAL ELECTRIC CAPITAL CORP BUYING PRUDENTIAL'S CLAIM PUTS FEDERATED IN A STRONG POSITION AS A MAJOR SECURED CREDITOR IT CAN BLOCK A REORGANIZATION PLAN THAT IT DOESN'T LIKE IT ALSO CAN PREVENT ANOTHER RIVAL FROM GAINING CONTROL OF MACY RETAILING ANALYSTS SAY BOTH DILLARD DEPARTMENT STORES INC AND MAY DEPARTMENT STORES CO HAVE EXPRESSED INTEREST IN MACY THERE IS NO QUESTION THAT FEDERATED IS NOW POISED TO BLOCK ANOTHER TAKEOVER SAID ISAAC LAGNADO OF TACTICAL RETAIL SOLUTIONS INC A NEW YORK RETAILCONSULTING FIRM ALSO HAVING JUST EMERGED FROM BANKRUPTCYCOURT PROCEEDINGS ITSELF LAST YEAR FEDERATED HAS EXECUTIVES WHO ARE ADEPT AT OPERATING UNDER THE OVERSIGHT OF A BANKRUPTCYCOURT JUDGE FEDERATED OFFICIALS CLAIM THAT THEIR INVOLVEMENT IN MACY'S BANKRUPTCY SHOULD SPEED THE RETAILER'S EMERGENCE FROM COURT PROTECTION THE MOVE IS FRAUGHT WITH IRONY FEDERATED WOUND UP IN BANKRUPTCY COURT BECAUSE OF DEBT PROBLEMS RELATED TO ITS 1988 TAKEOVER BY CANADIAN DEVELOPER ROBERT CAMPEAU MANY OF MACY'S FINANCIAL PROBLEMS CAN BE TRACED TO ITS OWN INVOLVEMENT IN THE BATTLE FOR FEDERATED MACY WHICH MADE AN UNSUCCESSFUL BID FOR FEDERATED ENDED UP BUYING FEDERATED'S BULLOCK'S AND I MAGNIN UNITS ADDING TO DEBT FROM ITS LEVERAGED BUYOUT AND CONTRIBUTING TO ITS EVENTUAL CHAPTER 11 FILING MR QUESTROM WAS RUNNING BULLOCK'S AT THE TIME OF THE CAMPEAU TAKEOVER MORE RECENTLY THE TWO COMPANIES SPARRED OVER FEDERATED EXECUTIVE ROGER N FARAH A MERCHANDISING INNOVATOR WHOM MACY HAS HIRED PETER N SCHAEFFER A PARTNER WITH JOHNSON REDBOOK SERVICE WHICH FOLLOWS RETAILERS SAID THE COMBINATION OF FEDERATED AND MACY COULD CREATE THE COUNTRY'S LARGEST DEPARTMENTSTORE CHAIN LARGER THAN ST LOUISBASED MAY WHICH HAD SALES LAST YEAR OF 11 BILLION QUESTROM WOULD LOVE TO HAVE AN EMPIRE MR SCHAEFFER SAID HE GETS BORED QUICKLY AND IS ALWAYS LOOKING FOR CHANGE MR QUESTROM WASN'T AVAILABLE FOR COMMENT MACY FILED FOR BANKRUPTCY IN 1992 AFTER A ROLLERCOASTER PERFORMANCE UNDER ITS FORMER CHAIRMAN EDWARD S FINKELSTEIN MR FINKELSTEIN WHO RETIRED IN 1992 AFTER 43 YEARS WITH THE COMPANY LED THE 35 BILLION BUYOUT OF MACY IN 1986 WHILE HE IS CREDITED WITH BUILDING MACY INTO ONE OF THE NATION'S PREEMINENT CHAINS THE COMPANY'S FINANCES DETERIORATED SHARPLY AFTER THE BUYOUT THEN HE SPENT ANOTHER 11 BILLION TO BUY THE FEDERATED UNITS JUST AS THE ECONOMY WEAKENED THE COMPANY HAD TROUBLE PAYING ITS BANK LOANS AND FINALLY WAS FORCED TO SEEK COURT PROTECTION RECENTLY BOTH DEPARTMENTSTORE CHAINS HAVE BEEN PERFORMING WELL ALTHOUGH NOT SPECTACULARLY MACY'S MR ULLMAN SAID THAT FOR 10 OF THE LAST 11 MONTHS MACY'S EARNINGS BEFORE INTEREST TAXES AND DEPRECIATION HAVE EXCEEDED THE COMPANY'S PLAN MR ULLMAN SAID HE EXPECTS DECEMBER RESULTS TO BE AHEAD OF THE SAME MONTH A YEAR EARLIER FEDERATED EARNED 473 MILLION FOR THE 39 WEEKS ENDED OCT 30 UP SHARPLY FROM 14 MILLION A YEAR EARLIER THE CHAIN IS EXPECTED TO HIT ITS PROJECTION FOR THE CHRISTMAS SEASON OF BEING UP 2 IN SAMESTORE SALES FOR THE PERIOD BUT MR SCHAEFFER THE RETAILING ANALYST THINKS FEDERATED COULD RUN INTO ANTITRUST PROBLEMS BECAUSE THE TWO COMPANIES ARE COMPETITORS IN SEVERAL MARKETS IN NEW YORK FEDERATED OPERATES BLOOMINGDALE'S ABRAHAM & STRAUS AND STERN'S COMBINED WITH MACY'S STORES THEY COULD CONCEIVABLY HAVE CONTROL OF THE ENTIRE NEW YORK DEPARTMENTSTORE BUSINESS IT WOULD REPRESENT A BIG AMOUNT OF SALES DOLLARS HE SAID MR SCHAEFFER ADDED THAT FEDERATED WOULD LIKE TO HAVE A PRESENCE ON THE WEST COAST WHERE IT OPERATES ONLY THE BON MARCHE CHAIN BASED IN SEATTLE SOME INDUSTRY OBSERVERS THINK FEDERATED MIGHT ALSO SELL OFF ONE OR TWO OF MACY'S DIVISIONS SUCH AS A&S BUT EVEN IF FEDERATED DOESN'T GAIN CONTROL OF MACY FEDERATED OFFICIALS SAID THEY VIEW THE ACQUISITION OF THE PRUDENTIAL CLAIM AS A GOOD INVESTMENT FEDERATED SAID YESTERDAY IT HAD NO PLANS TO MAKE AN OFFER FOR OTHER MACY CLAIMS BOON FOR PRUDENTIAL PRUDENTIAL EXECUTIVES WERE DELIGHTED BY THE 4493 MILLION TRANSACTION WHICH INCLUDED A PREMIUM ABOVE THE FACE VALUE OF THE LOANS TO COVER UNPAID INTEREST THE FACE VALUE OF THE TOTAL PRUDENTIALMACY LOAN IS 8325 MILLION THE LOAN CARRIES A 12 ANNUAL INTEREST RATE EVEN THOUGH NO INTEREST HAS BEEN PAID SINCE MACY'S CHAPTER 11 FILING IN 1992 PRUDENTIAL'S LOAN IS SECURED BY MORTGAGES ON 70 OF MACY'S 110 DEPARTMENT STORES FEDERATED PAID 1093 MILLION IN CASH FOR HALF OF PRUDENTIAL'S MACY DEBT THE BALANCE IS DUE IN THREE YEARS PLUS INTEREST FEDERATED ALSO HAS AN OPTION TO ACQUIRE THE REMAINING 50 OF PRUDENTIAL'S SECURED CLAIM WITHIN THREE YEARS ONE PERSON CLOSE TO PRUDENTIAL SAID THAT FEDERATED WAS WILLING TO PAY MORE FOR ITS MACY CLAIM THAN PRUDENTIAL WOULD HAVE GOTTEN UNDER AN OFFER MADE IN 1992 BY LOEWS'S MR TISCH SHORTLY AFTER MR TISCH'S BID FOR CONTROL OF THE RETAILER FAILED MACY FILED FOR BANKRUPTCY PROTECTION BIDDING FOR CONTROL OF A COMPANY IN BANKRUPTCY PROCEEDINGS IS UNUSUAL BUT NOT UNPRECEDENTED PARTICULARLY SINCE SO MANY LEVERAGED BUYOUTS OF THE 1980S HAVE FOUNDERED FOR EXAMPLE A FUND HEADED BY CHICAGO BUSINESSMAN SAM ZELL BOUGHT ABOUT 80 OF CARTER HAWLEY HALE STORES INC'S UNSECURED DEBT IN ITS BANKRUPTCY REORGANIZATION AND CONVERTED THOSE CLAIMS INTO A CONTROLLING INTEREST IN THAT RETAILER BUT RETAILINGINDUSTRY ANALYSTS CALLED FEDERATED'S MOVE TO ACQUIRE CONTROL OF A COMPETITOR UNPRECEDENTED KURT BARNARD PRESIDENT OF BARNARD'S RETAILING CONSULTING GROUP SAID IT'S VERY UNUSUAL TO OWN THE DEBT OF A COMPETITOR I CAN'T THINK OF IT HAPPENING BEFORE BUT HE ADDED THAT SHOULD THE RETAILING GIANTS MERGE IT COULD REPRESENT BIG SAVINGS IN THE OPERATIONS OF THE COMBINED COMPANIES THIS MERGER COULD BRING SAVINGS THAT WOULD BE PASSED ALONG TO CONSUMERS IN TERMS OF LOWER PRICES AND THAT IS GOING TO BE A CRUCIAL ISSUE FOR DEPARTMENT STORES IN THIS DECADE HE SAID BESIDES POTENTIAL ANTITRUST PROBLEMS MR BARNARD ADDED DEPARTMENTSTORE SUPPLIERS AND INDUSTRY MANUFACTURERS MIGHT NOT CHEER THE MERGER IF IT HAPPENS THE MANUFACTURERS COULDN'T PLAY ONE STORE CHAIN AGAINST THE OTHER BEFORE THEY WOULD SAY 'MACY'S IS CARRYING US YOU'D BETTER CARRY US TOO' NOW THE SUPPLIERS WILL BE EXPOSED TO THE WHIMS OF THE STORES' BUYERS RANDALL SMITH CONTRIBUTED TO THIS ARTICLE SALES 708 BILLION IN YEAR ENDED JAN 30 1993 NET INCOME 113 MILLION STORES OPERATES 219 STORES IN 26 STATES UNDER THE NAMES ABRAHAM & STRAUS BLOOMINGDALE'S BON MARCHE BURDINES GOLDSMITH'S JORDAN MARSH LAZARUS RICH'S AND STERN'S SALES 63 BILLION IN YEAR ENDED JULY 31 1993 NET LOSS 544 MILLION STORES OPERATES 111 MACY'S AND BULLOCK'S DEPARTMENT STORE 12 I MAGNIN STORES AND 84 AEROPOSTALE AND CHARTER CLUB SPECIALTYAPPAREL STORES COMPANY IS IN CHAPTER 11 BANKRUPTCY PROCEEDINGS 9401030039 940103 1993 YEAREND REVIEW OF MARKETS AND FINANCE WHAT WAS NEWS THE ECONOMY GREW IN FITS AND STARTS FLOODING ALONG THE MISSISSIPPI RIVER LAST YEAR WAS THE YEAR OF THE CHIEF BILL CLINTON BECAME CHIEF EXECUTIVE OF THE LAND WHILE JOHN AKERS PAUL LEGO LORD KING KAY WHITMORE AND OTHERS LEFT THEIR POSTS AS CORPORATE CHIEFS J IGNACIO LOPEZ DE ARRIORTUA LEFT GENERAL MOTORS TWICE AND LANDED AT VOLKSWAGEN AS PURCHASING CHIEF LAST YEAR SAW THREE FEMALE NOMINEES FOR ATTORNEY GENERAL AND BROUGHT THE PHRASE ZOE BAIRD PROBLEM INTO THE LEXICON RUTH BADER GINSBURG WITHOUT INTRODUCING ANY TERMS INTO THE LANGUAGE BECAME THE SECOND FEMALE SUPREME COURT JUSTICE IN 1993 THE TREASURY CUT ITS SALES OF 30YEAR BONDS IN A BID TO CUT COSTS WHILE WALT DISNEY MARKETED 100YEAR BONDS IN A BID TO LOCK IN LOW RATES HERE IS A SUMMARY OF NEWS EVENTS CHRONICLED ON THE FRONT PAGE OF THE WALL STREET JOURNAL THE DATE GIVEN IS FOR THE ACTUAL DATE THE ITEM APPEARED THURGOOD MARSHALL 84 RETIRED SUPREME COURT JUSTICE WHO BECAME THE FIRST BLACK TO SERVE ON THE HIGH COURT DIES OF A HEART ATTACK FOUR FEDERAL AGENTS ARE KILLED AND 14 OTHERS INJURED AT THE BRANCH DAVIDIAN COMPOUND IN WACO TEXAS AS MORE THAN 100 OFFICERS TRY TO ARREST DAVID KORESH LEADER OF THE RELIGIOUS CULT JANET RENO IS UNANIMOUSLY CONFIRMED BY THE SENATE AS THE FIRST FEMALE ATTORNEY GENERAL NORTH KOREA SAYS IT IS PULLING OUT OF THE NUCLEAR NONPROLIFERATION TREATY TO PROTEST INTERNATIONAL EFFORTS TO FORCE INSPECTION OF ALLEGED SECRET NUCLEAR SITES THE LONDON STOCK EXCHANGE ENDS A DECADELONG PROJECT TO CREATE AN AUTOMATED TRADING SYSTEM AND THE EXCHANGE'S CHIEF EXECUTIVE RESIGNS AMERICAN EXPRESS SELLS FOR 115 BILLION ITS SHEARSON UNIT TO PRIMERICA ROUSSELUCLAF AGREES TO LICENSE ITS ABORTION PILL RU486 TO A RESEARCH ORGANIZATION FOR DISTRIBUTION IN THE US A MAJOR STEP TOWARD EVENTUAL MARKETING OF THE FRENCH DRUG IN THIS COUNTRY ITALY'S PRIME MINISTER ANNOUNCES HIS RESIGNATION THREE DAYS AFTER VOTERS PASSED A REFERENDUM TO REFORM THE POLITICAL SYSTEM BY INTRODUCING A MAJORITYSTYLE ELECTORAL PROCESS FOR THE SENATE AMATO'S DECISION BRINGS AN END TO POSTWAR ITALY'S 51ST GOVERNMENT CARLO CIAMPI WOULD BE CHOSEN AS PRIME MINISTER LATER IN THE MONTH TAMBRANDS' CHAIRMAN AND CHIEF EXECUTIVE IS OUSTED BY THE BOARD ALLSTATE RAISES 212 BILLION IN THE LARGEST INITIAL PUBLIC STOCK OFFERING EVER BY A US COMPANY NORTH KOREAN DIPLOMATS AGREE TO SUSPEND THEIR WITHDRAWAL FROM A NUCLEAR NONPROLIFERATION TREATY BUT PYONGYANG DOESN'T ALTER ITS REFUSAL TO ALLOW INSPECTION OF TWO SITES VINCENT FOSTER JR DEPUTY WHITE HOUSE COUNSEL COMMITS SUICIDE MIYAZAWA QUITS AS JAPAN'S PRIME MINISTER TO TAKE RESPONSIBILITY FOR A POOR ELECTION SHOWING BY THE LIBERAL DEMOCRATS A FEDERAL TRADE PANEL CLEARS FOREIGN STEELMAKERS OF MOST PENDING CLAIMS OF UNFAIR TRADING CALM SETTLES OVER EUROPEAN CURRENCY MARKETS AS EUROPEAN CENTRAL BANKS SEEM TO BE REGAINING THE UPPER HAND OVER CURRENCY TRADERS FOR THE FIRST TIME IN WEEKS CNA FINANCIAL AND CHUBB AGREE TO PAY AN ESTIMATED 3 BILLION FOR ASBESTOS CLAIMS AGAINST FIBREBOARD THE PLO AND ISRAEL REACH A HISTORIC ACCORD ON MUTUAL RECOGNITION PRIMERICA PLANS TO BUY THE 73 OF TRAVELERS IT DOESN'T ALREADY OWN FOR ABOUT 4 BILLION IN STOCK AT LEAST 12 AMERICANS ARE KILLED AND 78 WOUNDED IN THE FIERCEST FIGHTING SINCE US FORCES ARRIVED IN SOMALIA FORD NAMES ALEXANDER TROTMAN TO SUCCEED HAROLD POLING AS CHAIRMAN CHRYSLER'S DEBT IS UPGRADED TO INVESTMENTGRADE BY S&P THE DEBT WOULD BE UPGRADED LATER IN THE MONTH BY MOODY'S CHEMICAL BANKING NAMES WALTER SHIPLEY CHAIRMAN AND CEO BOSTON CHICKEN'S STOCK MORE THAN DOUBLES IN THE BIGGEST OPENINGDAY LEAP FOR AN IPO IN TWO YEARS PARAMOUNT ACTED IMPROPERLY IN REJECTING A 105 BILLION BID BY QVC A DELAWARE COURT JUDGE DECIDES BLOCKING THE PROPOSED 95 BILLION FRIENDLY TAKEOVER BY VIACOM MINE WORKERS AND COAL FIRMS REACH A TENTATIVE LABOR PACT THAT GUARANTEES JOBS TO UNITED MINE WORKERS MEMBERS IN EXCHANGE FOR RELAXED WORK RULES THE AGREEMENT COMES AFTER A SIXMONTH STRIKE BRITAIN AND IRELAND AGREE ON A FRAMEWORK FOR PEACE IN NORTHERN IRELAND PARAMOUNT AGREES TO BE ACQUIRED BY QVC NETWORK UNTIL NOW A HOSTILE BIDDER AND TO ADVISE SHAREHOLDERS TO EMBRACE QVC'S 10 BILLION BID OVER VIACOM'S 95 BILLION OFFER 9401030037 940103 1993 YEAREND REVIEW OF MARKETS AND FINANCE REVIEW OF THE BOND MARKET FOR THE YIELDSTARVED LOWER AND LOWER EXPECTATIONS BY GEORGETTE JASEN STAFF REPORTER OF THE WALL STREET JOURNAL YIELDHUNGRY INVESTORS HAVE LITTLE TO BE HAPPY ABOUT THESE DAYS SHORTTERM CERTIFICATES OF DEPOSIT ARE YIELDING 3 OR LESS ON AVERAGE AND MONEY MARKET MUTUAL FUNDS ARE HOVERING BELOW 275 THAT'S A 10TH TO A QUARTER OF A PERCENTAGE POINT LOWER THAN A YEAR AGO WHEN THE PUNDITS WERE SAYING YIELDS HAD NOWHERE TO GO BUT UP THEY'RE SAYING IT AGAIN THIS YEAR ALTHOUGH NO ONE EXPECTS HUGE INCREASES BUT WHILE ANY RISE IS SURE TO BE WELCOMED BY THOSE STILL HOLDING CDS AND MONEY FUNDS THOSE INVESTORS WHO MOVED INTO LONGERTERM SECURITIES IN A SEARCH FOR HIGHER YIELDS COULD LOSE SOME OF THEIR PRINCIPAL IF INTEREST RATES DO TURN UP MY BIGGEST JOB IS TO GET PEOPLE TO LOWER THEIR EXPECTATIONS SAYS RON ROGE A FINANCIAL PLANNER IN CENTEREACH NY INDIVIDUAL INVESTORS PULLED ABOUT 90 BILLION OUT OF CDS LAST YEAR ALTHOUGH THERE'S STILL NEARLY 800 BILLION LEFT THERE'S AN ADDITIONAL 400 BILLION OR SO IN MONEY FUNDS OPEN TO INDIVIDUAL INVESTORS NOT MUCH DIFFERENT FROM A YEAR AGO MEANWHILE SALES OF BOND MUTUAL FUNDS HAVE SOARED WITH SHORTTERM FUNDS ESPECIALLY POPULAR AMONG INVESTORS FLEEING CDS AND MONEY FUNDS THE BOND MUTUAL FUNDS HAVE BEEN HEAVILY PROMOTED AS A LOWRISK WAY TO INCREASE YIELD THE AVERAGE WAS 55 ON SHORTTERM CORPORATE FUNDS AT THE END OF NOVEMBER ACCORDING TO LIPPER ANALYTICAL SERVICES THE NET ASSET VALUE OF SHORTTERM FUNDS FLUCTUATES LESS THAN LONGTERM FUNDS IN RESPONSE TO INTEREST RATE CHANGES BUT THE PRICE OF FIXEDINCOME SECURITIES VARIES INVERSELY TO INTEREST RATES WHEN RATES RISE PREVIOUSLY ISSUED LOWERRATE SECURITIES ARE LESS VALUABLE AND THE PRICE FALLS WHEN RATES FALL PRICES FOR OLDER BONDS RISE THE AVERAGE TOTAL RETURN ON SHORTTERM BOND FUNDS WHICH INCLUDES CAPITAL GAINS AND LOSSES AS WELL AS INCOME WAS CLOSE TO 7 FOR THE 12 MONTHS ENDED NOV 30 IF INTEREST RATES RISE THIS YEAR AS MANY INVESTMENT PROFESSIONALS ARE PREDICTING THAT PICTURE IS LIKELY TO CHANGE AS THE TABLE ACCOMPANYING THIS ARTICLE SHOWS IF RATES RISE JUST ONE PERCENTAGE POINT OVER THE NEXT 12 MONTHS THE TOTAL RETURN ON A SHORTTERM BOND FUND WOULD BE ABOUT THE SAME AS A MONEY FUND STILL THAT'S BETTER THAN THE RETURN ON AN INTERMEDIATETERM BOND FUND ACCORDING TO CALCULATIONS BY T ROWE PRICE ASSOCIATES THE BIG BALTIMORE MUTUAL FUND COMPANY THE VALUE OF AN INVESTMENT IN AN INTERMEDIATETERM FUND WOULD DECLINE SLIGHTLY IF RATES RISE ONE PERCENTAGE POINT INDEED FINANCIAL PROFESSIONALS SAY THIS ISN'T THE TIME TO BUY LONGERTERM INVESTMENTS TO GET THEIR HIGHER YIELDS ALTHOUGH SOME OF THEIR ADVICE MAY SEEM SURPRISING NEAL LITVACK EXECUTIVE VICE PRESIDENT OF BOSTONBASED MUTUAL FUND GIANT FIDELITY INVESTMENTS FOR INSTANCE SAYS YIELDSTARVED INVESTORS SHOULD CONSIDER REDEEMING SOME OF THEIR BONDFUND SHARES FOR EXTRA CASH TELLING THEM TO LEARN TO LIVE ON LESS SEEMS RIDICULOUS GIVEN THE PRICE APPRECIATION HE SAYS EVEN IF THEY SELL SOME SHARES THEY'LL STILL HAVE PLENTY OF PRINCIPAL LEFT TO GENERATE INCOME OTHERS ADVISE CONSIDERING OVERSEAS INVESTMENTS JANET BRIAUD A FINANCIAL PLANNER IN BRYAN TEXAS RECOMMENDS THAT CLIENTS PUT 10 OR MORE OF THEIR PORTFOLIO IN INTERNATIONAL BOND FUNDS THE YIELD IS HIGHER NOW SHE SAYS AND WHEN OVERSEAS INTEREST RATES START TO FALL THE MARKET VALUE OF THE SECURITIES WILL RISE I KEEP PREACHING DIVERSIFICATION SHE SAYS T ROWE PRICE'S SPECTRUM INCOME FUND WHICH IS COMPOSED OF INVESTMENTS IN SEVEN DIFFERENT T ROWE PRICE FUNDS AND IS SOMETIMES CONSIDERED A PROXY FOR AN INDIVIDUAL INVESTOR'S PORTFOLIO CURRENTLY HAS 16 OF ITS ASSETS IN THE INTERNATIONAL BOND FUND FOR THE MOST CONSERVATIVE INVESTORS MR ROGE THE CENTEREACH NY PLANNER RECOMMENDS US SAVINGS BONDS THE MINIMUM ANNUAL YIELD IS 4 COMPARED WITH ABOUT 3 CURRENTLY ON ONEYEAR CDS AND INCOME IS EXEMPT FROM STATE AND LOCAL TAXES SAVINGS BONDS YIELDS ARE RESET EVERY SIX MONTHS TO REFLECT CHANGES IN INTEREST RATES 9401030036 940103 1993 YEAREND REVIEW OF MARKETS AND FINANCE REVIEW OF THE BOND MARKET BOND INVESTORS MAY HAVE TO STRETCH TO REPEAT THEIR DOUBLEDIGIT RETURNS BY THOMAS T VOGEL JR STAFF REPORTER OF THE WALL STREET JOURNAL UNLESS YOU REALLY HAD A STOMACH FOR RISK MANY MONEY MANAGERS HAD RECOMMENDED TO CLIENTS THAT THEY SPEND 1993 CLIPPING COUPONS AND BEING SATISFIED WITH MEDIOCRE RETURNS BUT THAT ADVICE WASN'T SO GREAT IN RETROSPECT THAT'S BECAUSE INVESTORS WHO TOOK ON EXTRA RISK IN THE FORM OF JUNK BONDS CONVERTIBLES AND LONGTERM TREASURYS PROFITED HANDSOMELY FROM DOUBLEDIGIT RETURNS AS HIGH AS 37 FOR THOSE BRAVE SOULS WHO INVESTED IN 30YEAR TREASURY ZEROCOUPONS BUT THOSE WHO STAYED WITH MORE STAID SECTORS LIKE INVESTMENTGRADE CORPORATE BONDS AND INTERMEDIATETERM TREASURYS ALSO DID FAIRLY WELL THOSE SECTORS HAD TOTAL RETURNS OF 124 AND 82 RESPECTIVELY IN FACT ONLY A FEW SECTORS INCLUDING MORTGAGEBACKED AND ASSETBACKED SECURITIES HAD SINGLEDIGIT TOTAL RETURNS LAST YEAR DOUBLEDIGIT RETURNS EVEN IN THE HOT SECTORS WILL BE MUCH HARDER TO COME BY THIS YEAR SAY MONEY MANAGERS THAT'S BECAUSE LONGTERM INTEREST RATES ARE UNLIKELY TO DROP MUCH FURTHER AND THE US ECONOMY IS BEGINNING TO GAIN STRENGTH MONEY MANAGERS EXPECT SHORTTERM RATES TO RISE A BIT BUT DON'T THINK INFLATION THE BANE OF BOND INVESTORS WILL HEAT UP ACCORDING TO A NOTE SENT BY WILLIAM GROSS A PORTFOLIO MANAGER AT PACIFIC INVESTMENT MANAGEMENT CO TO HIS CLIENTS WE'VE SHOT THE RAPIDS GONE OVER THE WATERFALL OF PLUNGING INTEREST RATES AND ARE NOW ABOUT TO NAVIGATE A FAR MORE CALM AND PLACID STREAM THAN WE'VE EVER MANAGED BEFORE THAT MEANS IF YOU WANT DOUBLEDIGIT RETURNS RISKY JUNK BONDS AND FOREIGN SECURITIES ARE IN FOR DECENT SINGLEDIGIT RETURNS CONSIDER MORTGAGEBACKED SECURITIES DESPITE ALL OF THE HYPE LATELY MUNICIPAL BONDS ARE STILL A GOOD BET ACCORDING TO MONEY MANAGERS THANKS TO AN EXPECTED DROP IN ISSUANCE OF NEW MUNICIPAL BONDS AND HIGHER INCOME TAXES BUT TREASURYS OF ALL MATURITIES ARE OUT AS ARE CONVERTIBLE SECURITIES A TOPPERFORMING CLASS FOR THE PAST THREE YEARS EVEN ROBERT ANDRES A PARTNER AT MONEY MANAGER MARTINDALE ANDRES & CO OF WEST CONSHOHOCKEN PA WHO WAS A BIG FAN OF ZEROCOUPON TREASURYS LAST YEAR SUGGESTS EASING OFF ON LONGTERM TREASURYS THIS YEAR HE THINKS IT'S UNLIKELY THAT LONGTERM RATES WILL DROP ENOUGH TO MAKE THE RISK WORTHWHILE TO INVESTORS WITH A DEMOCRAT HEADED TO THE WHITE HOUSE AND THE ECONOMY BEGINNING TO SHOW STRENGTH AT THE BEGINNING OF LAST YEAR MONEY MANAGERS SAW INCREASED GOVERNMENT SPENDING AND HIGHER INTEREST RATES IN THEIR FUTURE PRESIDENT CLINTON CONFOUNDED EXPECTATIONS BY TAKING THE BOND MARKET UNDER HIS WING AND MAKING SURE TO COO THE RIGHT THINGS TO IT THUS BECOMING THE FIRST PRESIDENT TO MEASURE SUCCESS BY POPULARITY POLLS AND THE LEVEL OF INTEREST RATES THE 30YEAR BOND YIELD DROPPED AS LOW AS 579 THE LOWEST YIELD SINCE THE TREASURY BEGAN REGULAR AUCTIONS OF THE BOND IN 1977 RATES ROSE TO 634 BY YEAR END BUT WERE STILL FAR BELOW THE 739 AT THE END OF 1992 INVESTORS WHO BOUGHT THE 7625 COUPON 30YEAR BOND ON DEC 31 1992 AND SOLD IT ON DEC 31 1993 WOULD HAVE REAPED A GAIN OF NEARLY 12 POINTS OR ALMOST 120 FOR A BOND WITH A FACE VALUE OF 1000 FOR A TOTAL RETURN OF ABOUT 20 THE 10YEAR NOTE HIT 517 THE LOWEST SINCE THE LATE 1960S IT'S NOW AT 579 AND THREEMONTH BILL YIELDS FELL TO 283 THE LOWEST IN THREE DECADES THEY NOW YIELD 305 THOSE INVESTORS HOLDING LONGTERM SECURITIES ESPECIALLY THOSE HOLDING HIGHLY VOLATILE 30YEAR TREASURY ZEROCOUPON BONDS DID EXTRAORDINARILY WELL A ZEROCOUPON BOND PAYS NO INTEREST AND IS SOLD AT A DEEP DISCOUNT TO FACE VALUE LAST YEAR MANY INVESTORS HUMMING ALONG WITH INVESTMENTGRADE CORPORATE MUNICIPAL AND MORTGAGE BONDS THEY MAY HAVE BOUGHT JUST A YEAR OR TWO AGO SUDDENLY FOUND THEMSELVES HOLDING A LOAD OF CASH THAT'S BECAUSE COMPANIES CITIES AND STATES AND HOMEOWNERS RUSHED TO REPLACE HIGHERYIELDING DEBT WITH LOWERYIELDING DEBT THE RESULT WAS A FRENZIED SEARCH FOR HIGHER YIELDS BY INVESTORS THAT SPARKED A FLOOD OF NEW JUNKBOND ISSUANCE FROM THE LOWESTRATED ISSUERS SINCE THE LATE 1980S A HANDFUL OF 50YEAR AND 100YEAR CORPORATE BOND ISSUES AND A DARING PLUNGE BY MANY US INVESTORS INTO THE UNCHARTED BUT HIGHERYIELDING WATERS OF BONDS OF DEVELOPING NATIONS PEOPLE WHO ONCE BOUGHT INVESTMENTGRADE BONDS PLUNGED INTO JUNK AND VETERAN JUNKBOND BUYERS PLUNGED INTO THINGS LIKE MEXICAN AND ARGENTINE GOVERNMENT BONDS THINGS WILL BE A LOT CALMER IN 1994 SAYS MR GROSS OF PACIFIC INVESTMENT IT WILL PAY TO BUY JUNK BONDS BECAUSE THERE WILL BE LESS MARKET VOLATILITY AND A STRONGER ECONOMY ACCORDING TO ARTHUR STEINMETZ SENIOR VICE PRESIDENT AND MANAGER OF OPPENHEIMER MANAGEMENT CORP'S 4 BILLION STRATEGIC INCOME FUND THE SHORTTERM RISK IS A RISE IN INTEREST RATES BUT THE BIGGEST RISK OF BEING SURPRISED IS IF THE STOCK MARKET CRASHES WHICH COULD BOOST RATES MUCH FURTHER BESIDES TREASURYS ONE SECTOR OF THE MARKET THAT MAY LOSE ITS ALLURE IS THE MARKET FOR CONVERTIBLE BONDS SAYS KENNETH LIPPER CHAIRMAN OF LIPPER & CO A MONEY MANAGER WITH OVER 2 BILLION IN CONVERTIBLE SECURITIES CONVERTIBLE SECURITIES CAN BE CONVERTED AT A FUTURE DATE AND AT A SPECIFIED PRICE FOR ANOTHER TYPE OF SECURITY OFTEN COMMON STOCK THE MARKET FOR CONVERTIBLES IS A TINY ONE COMPARED WITH MOST OTHER BOND MARKETS BUT IT HAD RETURNS OF 32 224 AND 189 IN 1991 1992 AND 1993 RESPECTIVELY THINGS WILL CHANGE THIS YEAR SAYS MR LIPPER BECAUSE THE STOCK MARKET IS PROBABLY GOING TO MOVE SIDEWAYS AND HAVE SOME POTENTIAL FOR DECLINE THE CONVERTIBLE MARKET WILL HAVE RETURNS OF AROUND 6 PREDICTS MR LIPPER THE CONVERTIBLE MARKET BECAME BURDENED WITH A LOT OF LOWQUALITY ISSUES AT THE END OF 1993 MR LIPPER SAYS BUT ONCE IT SINKS INTO PEOPLE'S MINDS THAT THE EASY GAINS ARE GONE THEY WILL NOT WANT LOWQUALITY ISSUES HE SAYS MR LIPPER PREDICTS A SLIGHT RISE IN LONGTERM INTEREST RATES THIS YEAR 1/2 PERCENTAGE POINT IN THE CASE OF THE 30YEAR TREASURY BOND WHICH WON'T HELP MATTERS EITHER BUT UNLESS THERE ARE SOME POLITICAL SURPRISES LIKE UNEXPECTEDLY HIGH COSTS FOR PRESIDENT CLINTON'S PROPOSED HEALTHCARE REFORM OR MAJOR BACKPEDALING ON HIS PROMISES TO REDUCE GOVERNMENT SPENDING MANY MONEY MANAGERS THINK THE INTEREST RATE AND INFLATION ENVIRONMENT WILL BE RATHER BENIGN THIS YEAR STILL INVESTORS NEED TO BE MORE LIMBER THIS YEAR THAN LAST YEAR WARNS MR ANDRES OF MARTINDALE ANDRES THERE ARE TOO MANY UNCERTAINTIES OUT THERE AND IT WILL BE A VOLATILE SCENARIO HE SAYS INVESTORS WHO NORMALLY BUY AND HOLD ARE GOING TO HAVE TO LOOK AT THIS MARKET MORE AS AN INVESTMENT MANAGEMENT COMPANY WOULD THIS YEAR AND ACTIVELY MANAGE THEIR PORTFOLIOS THE TREND AMONG MONEY MANAGERS IS TO REDUCE THE AVERAGE MATURITY OF THEIR HOLDINGS SAYS MR STEINMETZ OF OPPENHEIMER AND INCREASE THE CREDIT QUALITY OF HOLDINGS IN THE RISKY SECTORS LIKE JUNK BONDS HERE IS A CLOSER LOOK AT SOME SEGMENTS OF THE BOND MARKET FOREIGN BONDS THOMAS STEFFANCI HEAD OF FIXEDINCOME INVESTING AT FIDELITY INVESTMENTS SAYS THE REAL MESSAGE OF 1994 IS NONUS BOND INVESTMENTS IN STRUGGLING EUROPEAN INDUSTRIALIZED NATIONS AND THE DEVELOPING NATIONS OF LATIN AMERICA AND ASIA IN THE FORMER INVESTORS CAN EXPECT HIGHSINGLE DIGIT RETURNS IN THE LATTER THEY CAN EXPECT 10 TO 15 RETURNS IN MANY COUNTRIES LIKE MEXICO AND ARGENTINA AND EVEN MORE IN PLACES LIKE ECUADOR BRAZIL SOUTH KOREA CHINA AND SOUTH AFRICA MR GROSS OF PACIFIC INVESTMENT IS STILL A FAN OF EUROPEAN GOVERNMENT BONDS BUT WARNS INVESTORS THAT RETURNS THIS YEAR ARE UNLIKELY TO BETTER LAST YEAR'S RETURNS THE BIGGEST RISKS IN SUCH INVESTMENTS HOWEVER COME FROM CURRENCY SHIFTS IF THE DOLLAR CONTINUES TO GAIN STRENGTH BIG RETURNS IN LOCAL CURRENCIES COULD BE SHARPLY REDUCED WHEN CONVERTED INTO DOLLARS JUNK BONDS THANKS TO A STRENGTHENING ECONOMY JUNK BONDS ARE EXPECTED TO DO VERY WELL THIS YEAR SAY MONEY MANAGERS LAST YEAR JUNK BONDS POSTED A TOTAL RETURN OF 172 COMPARED WITH 182 THE YEAR BEFORE AND 346 IN 1991 OPPENHEIMER'S MR STEINMETZ HAS 40 OF HIS STRATEGIC INCOME FUND IN JUNK BONDS WE WERE RIDING THE WAVE IN 1992 HE SAYS DESPITE HIS LARGE HOLDINGS MR STEINMETZ IS STILL BEING CAUTIOUS AS MORE AND MORE JUNKBOND DEALS WITH LOW CREDIT RATINGS CAME TO THE MARKET TOWARD THE END OF LAST YEAR MR STEINMETZ SAID THAT HE MOVED TO THE UPPER SPECTRUM OF JUNKBOND RATINGS THERE HE SAYS THE BIGGEST BENEFITS WILL ACCRUE WHEN THE ECONOMY PICKS UP STEAM THAT'S BECAUSE THOSE COMPANIES ARE LIKELY TO BE UPGRADED TO INVESTMENT GRADE MORTGAGEBACKED ISSUES MORTGAGEBACKED SECURITIES WERE THE PARIAHS OF 1993 THANKS TO WAVES OF REFINANCING BY HOMEOWNERS BUT THIS YEAR THE SECURITIES ARE PROBABLY THE MOST POPULAR RECOMMENDATION OF MONEY MANAGERS AFTER MUNICIPAL BONDS WITH INTEREST RATES REMAINING RELATIVELY STABLE MORTGAGEBACKED SECURITIES ARE UNLIKELY TO SUFFER THE PREPAYMENT WAVES THAT DEVASTATED THE MARKET LAST YEAR AND PRODUCED RETURNS OF JUST 73 THE MOST POPULAR RECOMMENDATION IS TO BUY 65 TO 7 COUPON SECURITIES FROM THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION BETTER KNOWN AS GINNIE MAE SUCH COUPON SECURITIES FROM THE FEDERAL HOME LOAN MORTGAGE CORP FREDDIE MAC AND THE FEDERAL NATIONAL MORTGAGE ASSOCIATION FANNIE MAE ARE ALSO ON THE LIST 9401030035 940103 NEW STOCK LISTINGS NEW YORK THE NEW YORK STOCK EXCHANGE ANNOUNCED TWO NEW LISTINGS AND THE NATIONAL ASSOCIATION OF SECURITIES DEALERS ANNOUNCED FOUR NEW LISTINGS INCLUDING THREE INITIAL PUBLIC OFFERINGS THE BIG BOARD BEGAN TRADING CORESTATES FINANCIAL CORP PHILADELPHIA A MULTIBANK HOLDING COMPANY UNDER CFL AND WASHINGTON HOMES INC LANDOVER MD A HOME BUILDER WHI BOTH STOCKS PREVIOUSLY TRADED OVERTHECOUNTER ALSO COMMERCE GROUP INC WEBSTER MASS AN INSURER COMG FORMERLY TRADED ON THE PINK SHEETS AND WAS APPROVED FOR THE NATIONAL MARKET THE AMERICAN STOCK EXCHANGE AND THE CHICAGO BOARD OPTIONS EXCHANGE BEGAN TRADING OPTIONS ON US ROBOTICS INC AND WILL BOTH TRADE OPTIONS ON BARNES & NOBLE INC JAN 4 THE AMEX ALSO BEGAN TRADING OPTIONS ON GLENAYRE TECHNOLOGIES INC AND MOVED THE COMMON SHARES OF LEATHER FACTORY INC FROM ITS EMERGING COMPANY MARKETPLACE TO THE AMEX PRIMARY LIST THE CBOE BEGAN TRADING OPTIONS ON THE FOLLOWING STOCKS COREL CORP DISCOVERY ZONE INC INTERACTIVE NETWORK INC PRIMADONNA RESORTS INC AND PROTEIN DESIGN LABS INC 9401030034 940103 1993 YEAREND REVIEW OF MARKETS AND FINANCE REVIEW OF THE BOND MARKET MUNICIPAL BONDS' PLUSES KEEP ADDING UP AS NEW TAXES SUBTRACT MORE INCOME BY TOM HERMAN STAFF REPORTER OF THE WALL STREET JOURNAL HATS OFF TO BOB KERREY SEN KERREY D NEB INSTANTLY BECAME A FOLK HERO AT LEAST IN THE EYES OF MUNICIPALBOND PEDDLERS WHEN HE VOTED FOR HIGHER TAXES IN AUGUST BOND SALESMEN PREDICT SEN KERREY'S VOTE WHICH NARROWLY SAVED THE EMBATTLED TAX BILL FROM DEFEAT WILL GREATLY ENHANCE THE APPEAL OF TAXEXEMPT BONDS FOR YEARS TO COME THE NEW TAX LAW IS EXTRAORDINARILY IMPORTANT BECAUSE IT AUTOMATICALLY MAKES MUNICIPAL BONDS SO MUCH BETTER A TAX SHELTER SAYS ROBERT LAMB A PROFESSOR OF FINANCE AND MANAGEMENT AT NEW YORK UNIVERSITY'S STERN SCHOOL OF BUSINESS AND AUTHOR OF SEVERAL BOOKS ON MUNICIPAL BONDS HE SAYS MANY UPPERINCOME INVESTORS WOULD HAVE TO BUY THE RISKIEST AND LONGESTTERM CORPORATE JUNK BONDS JUST TO MATCH WHAT THEY NOW CAN EARN FROM A MUCH SAFER AND SHORTERTERM MUNICIPAL BOND CONSIDER THE NEW BOND MATH SOME INVESTMENTGRADE MUNICIPAL BONDS DUE IN 10 YEARS NOW YIELD ABOUT 5 ACCORDING TO DELPHIS HANOVER CORP IN SOUTHBURY CONN A 10YEAR TREASURY NOTE NOW YIELDS ABOUT 58 BUT FOR AN INVESTOR IN THE TOP NEW 396 TAX BRACKET THAT 58 YIELD MELTS TO ONLY ABOUT 35 AFTER TAXES OR ABOUT 15 PERCENTAGE POINTS LOWER THAN THE TAXFREE BOND MUNICIPAL BONDS LOOK EXTREMELY ATTRACTIVE COMPARED WITH TREASURY BONDS SAYS ROBERT A DENNIS SENIOR VICE PRESIDENT OF MASSACHUSETTS FINANCIAL SERVICES AND MANAGER OF MFS MUNICIPAL BOND FUND HE PREDICTS STRONG INVESTOR APPETITE FOR MUNICIPALS IN 1994 AT A TIME WHEN THE SUPPLY OF NEW LONGTERM ISSUES IS LIKELY TO SHRINK ABOUT 40 FROM 1993'S RECORD LEVELS AFTER INCLUDING FEDERAL STATE AND LOCAL TAXES THE TOP MARGINAL TAX RATE FOR UPPERINCOME PEOPLE IN SOME HIGHTAX AREAS SUCH AS NEW YORK CITY CALIFORNIA AND WASHINGTON DC NOW IS CLOSE TO 50 SAYS ROBERT J GARNER A PARTNER IN THE ACCOUNTING FIRM OF ERNST & YOUNG THAT MEANS ABOUT 50 CENTS OF EACH ADDITIONAL DOLLAR EARNED BY THOSE TAXPAYERS GOES TO TAX COLLECTORS EVEN BEFORE CONGRESS RAISED TAXES INVESTORS WERE SNAPPING UP RECORD AMOUNTS OF TAXFREE BONDS AND RECEIVING SPARKLING RETURNS THROUGH NOVEMBER OF 1993 THE AVERAGE TOTAL RETURN OF GENERAL MUNICIPALBOND FUNDS MONITORED BY LIPPER ANALYTICAL SERVICES WAS 1016 UP FROM 874 FOR ALL OF 1992 TOTAL RETURN INCLUDES PRICE CHANGES AS WELL AS INTEREST INCOME THIS IMPRESSIVE PERFORMANCE CAME DESPITE ANOTHER RECORD OUTPOURING OF STATE AND LOCAL GOVERNMENT BOND ISSUES HERE ARE ESTIMATES FROM THE PUBLIC SECURITIES ASSOCIATION THE INDUSTRY TRADE GROUP THE TOTAL VOLUME OF BONDS ISSUED IN 1993 SURGED 21 TO 334 BILLION FROM THE PREVIOUS RECORD OF 2765 BILLION IN 1992 LONGTERM BOND ISSUANCE ALONE ROSE 23 TO AN ESTIMATED 2895 BILLION FROM THE PREVIOUS RECORD OF 2346 BILLION IN 1992 REFUNDING ISSUANCE ROSE 57 TO A RECORD 1929 BILLION FROM THE PRIOR RECORD OF 1228 BILLION SET IN 1992 MANY MUNICIPALITIES TOOK ADVANTAGE OF LOW INTEREST RATES TO REFINANCE OLDER BONDS ISSUED WHEN RATES WERE MUCH HIGHER SAID HEATHER L RUTH PSA'S PRESIDENT BOND INSURANCE CONTINUES TO ENJOY SURGING POPULARITY INSURED ISSUANCE ROSE TO A RECORD 1088 BILLION IN 1993 UP 34 FROM THE PRIOR RECORD OF 811 BILLION IN 1992 INSURED ISSUANCE ACCOUNTED FOR A RECORD 376 OF TOTAL LONGTERM ISSUANCE FOR 1993 UP FROM 345 IN 1992 LOOKING AHEAD TOTAL MUNICIPALBOND ISSUANCE IN 1994 WILL DROP 33 TO 2236 BILLION LONGTERM DEBT ISSUANCE WILL FALL 38 TO 1786 BILLION REFUNDING VOLUME WILL DROP 64 TO 689 BILLION AND INSURED ISSUANCE WILL FALL 37 ALSO TO 689 BILLION INDIVIDUAL INVESTORS ARE PLAYING AN EVEN GREATER ROLE THAN EVER BEFORE ABOUT 80 TO 90 OF THE NEW SUPPLY OF MUNIS IS BEING ABSORBED BY THE RETAIL SECTOR WHICH INCLUDES INDIVIDUALS BANK PERSONAL TRUSTS AND MUTUAL MONEY MARKET AND CLOSEDEND FUNDS THIS GROUP HELD ABOUT 767 OF THE 122 TRILLION OF MUNIS OUTSTANDING AS OF MID1993 UP FROM 764 OF MUNIS AT THE END OF 1992 PROF LAMB URGES INVESTORS TO BEWARE OF LONGTERM BONDS SUCH AS THOSE DUE IN 20 OR 30 YEARS DON'T GO OUT ANY LONGER THAN 10 YEARS HE ADVISES BECAUSE YIELDS ON LONGTERM BONDS AREN'T HIGH ENOUGH TO REWARD INVESTORS FOR THE ADDITIONAL MARKET RISK PROF LAMB ALSO CAUTIONS INVESTORS NOT TO PUT 100 OF THEIR TAXEXEMPT BOND MONEY INTO SINGLESTATE FUNDS WHICH TYPICALLY INVEST SOLELY IN BONDS ISSUED WITHIN A SINGLE STATE SUCH FUNDS ARE VERY POPULAR BECAUSE THEY TYPICALLY GENERATE INCOME FREE FROM ALL FEDERAL STATE AND LOCAL TAXES BUT PROF LAMB WARNS THAT INVESTORS AREN'T GETTING AS MUCH GEOGRAPHICAL DIVERSIFICATION AS THEY WOULD BY INVESTING IN NATIONAL BOND FUNDS ONE OF THE MOST IMPORTANT DEVELOPMENTS OF 1993 WAS THE EMERGENCE OF STRUCTURED PRODUCTS AS A MEANINGFUL ALTERNATIVE TO STANDARD CASH MARKET BOND PURCHASES SAYS A REPORT BY JP MORGAN SECURITIES INC 9401030033 940103 LEISURE & ARTS ART CRIME UPDATE SMASH GRAB HIDE AND FENCE BY CONSTANCE LOWENTHAL NOW THERE'S ONLY ONE STOLEN VERMEER OUT THERE AND THE ISABELLA STEWART GARDNER MUSEUM WANTS IT BACK ON SEPT 2 1993 BELGIAN POLICE ACTING ON A TIP FROM IRISH GARDA RECOVERED THE OTHER MISSING VERMEER LADY WRITING A LETTER WITH HER MAID STOLEN IN MAY 1986 IN A NIGHTTIME RAID ON RUSSBOROUGH HOUSE THE COUNTRY HOME OF SIR ALFRED BEIT IN COUNTY WICKLOW IRELAND ALSO RECOVERED FROM THE BEIT COLLECTION WERE DONA ANTONIA ZARATE BY GOYA GABRIEL METSU'S MAN WRITING A LETTER AND ANTOINE VESTIER'S PORTRAIT PRINCESSE DE LAMBALLE IRISH NEWS REPORTS SAID THREE IRISHMEN NIALL MULVIHILL DAMIAN O'BRIEN AND DESMOND GERAGHTY ALL OF DUBLIN WERE ARRESTED NEAR THE ANTWERP AIRPORT DETECTIVE LIAM HOGAN OF THE CRIME & SECURITY DIVISION REACHED AT GARDA HEADQUARTERS IN DUBLIN IDENTIFIED THE FOURTH MAN ARRESTED AS MILAN MARKOVIC A NATIVE OF THE FORMER YUGOSLAVIA RESIDING IN ANTWERP DET HOGAN SAID THE ARRESTED MEN WERE NOT SUSPECTED OF PARTICIPATING IN THE 1986 BURGLARY DETECTIVE HOGAN SAID THAT THE RECOVERED VERMEER WAS IN GOOD CONDITION AND THAT THE OTHERS COULD BE RESTORED THE METSU HE SAID HAD APPARENTLY BEEN ROLLED UP AND ALTHOUGH THE GOYA PORTRAIT WAS BADLY SCRATCHED IN THE AREA OF THE SITTER'S ARM DET HOGAN REPORTED THAT HER FACE WAS IN GOOD CONDITION SIR ALFRED'S COLLECTION HAD SUFFERED AN EARLIER THEFT IN 1974 WHEN THE THIEVES HAD ATTEMPTED TO RANSOM THE PICTURES FOR 500000 IRISH PUNTS AND THE RELEASE OF SEVERAL IRA PRISONERS THE POLICE RECOVERED ALL THE PICTURES IN A MATTER OF DAYS AND THE SUSPECTS WERE CONVICTED THE 1986 BEIT THEFT ONE OF THE MOST IMPORTANT ON RECORD WAS WELLPLANNED THE ALARM WENT OFF AT 2 AM AND THE CARETAKER AND LOCAL POLICE RESPONDED TO IT BUT FOUND NOTHING MISSING OR DISTURBED THEY LEFT BUT THE ALARM WAS NOT RESET A CARETAKER WAS LATER ACQUITTED GARDA INVESTIGATORS BELIEVED FROM THE START THAT PROFESSIONAL THIEVES WERE RESPONSIBLE IN 1990 A METSU WAS RECOVERED IN ISTANBUL TURKEY IN 1992 A GAINSBOROUGH TURNED UP ON A TRUCK IN LONDON STILL MISSING FROM THE BEIT COLLECTION ARE TWO TINY GUARDI VIEWS OF VENICE AND A RUBENS PORTRAIT AND THE GARDNER VERMEER IT'S THE CONCERT STOLEN MARCH 18 1990 IN THE MOST VALUABLE ART THEFT ON RECORD TO THE AMAZEMENT OF THE WORLD OF ARCHAEOLOGY AND MUSEUMS RUSSIA RECENTLY ANNOUNCED THAT IT HAD HIDDEN THE SOCALLED PRIAM'S TREASURE THE LONGLOST GOLD OF TROY FOR ALMOST 50 YEARS MOSCOW'S STATEMENT TEASINGLY MENTIONED A PLAN FOR EXHIBITING THE GOLD OF TROY IN RUSSIA GREECE AND TURKEY NOTABLY OMITTING GERMANY WHERE THE TREASURE HAD RESIDED IN A BERLIN MUSEUM UNTIL 1945 QUICKLY PROTESTS WERE HEARD FROM GERMANY AND THE TURKISH MINISTER OF CULTURE PROMISED TO TAKE LEGAL STEPS TO MAKE HIS GOVERNMENT'S CLAIM KNOWN THE CLAIM IS BASED ON THE GROUNDS THAT THE TREASURE WAS SMUGGLED OUT OF TURKEY ILLEGALLY 120 YEARS AGO TROY'S GOLD WAS EXCAVATED IN TURKEY IN 1873 BY A GERMAN HEINRICH SCHLIEMANNWHO LATER PAID THE TURKS A FINE FOR REMOVING IT ILLEGALLY SCHLIEMANN'S DIARIES AND LETTERS REVEAL MANY INCONSISTENCIES IN HIS ACCOUNT OF THE DISCOVERY SCHLIEMANN IS BELIEVED TO HAVE PURCHASED ANTIQUITIES TO ADD TO THE EXCAVATED MATERIAL HE CLAIMED HE HAD FOUND PRIAM'S TREASURE THE LEGENDARY CACHE KNOWN FROM THE ILIAD BUT ARCHAEOLOGISTS BELIEVE HIS DATING WAS WRONG BY MANY CENTURIES SCHLIEMANN LATER DONATED THE COLLECTION TO GERMANY THE TREASURE OF TROY ALONG WITH THE STILLMISSING AMBER ROOM IS ONE OF THE MOST IMPORTANT GROUPS OF OBJECTS TO HAVE VANISHED DURING WORLD WAR II FOR YEARS KLAUS GOLDMANN A CURATOR AT BERLIN'S MUSEUM FOR PRE AND EARLY HISTORY WAS CONVINCED THAT AMERICANS HAD REMOVED THE TROJAN GOLD AND FREQUENTLY ADVANCED HIS THEORY HOWEVER AS WE NOW KNOW THE TRUTH LAY IN ANOTHER DIRECTION IN RECENT YEARS RUSSIA HAS ADMITTED HAVING MANY DRAWINGS AND OLD MASTER PAINTINGS FROM THE KUNSTHALLE IN BREMEN THE GREATER PART OF THE FRANZ KOENIGS COLLECTION SOUGHT BY THE NETHERLANDS THE LIBRARY FROM DRESDEN SEVERAL PAINTINGS INCLUDING AN IMPORTANT DEGAS BELIEVED TO HAVE BEEN DESTROYED IN BERLIN IN THE LAST WEEKS OF THE WAR AND NOW THE GOLD OF TROY BORIS YELTSIN'S TANTALIZING MENTION LAST YEAR THAT THE AMBER CHAMBER'S WHEREABOUTS WAS KNOWN HAS COME TO NOTHING WITHIN THE LAST TWO YEARS A NEWLY UNIFIED GERMANY AND THE FORMER SOVIET UNION SIGNED A TREATY PLEDGING THEIR BEST EFFORTS TO RETURN WORKS OF ART TAKEN BY BOTH SIDES AT THE END OF THE WAR FOLLOWING THE DISSOLUTION OF THE SOVIET UNION RUSSIAN LEADERS AGREED TO HONOR THAT INTENTION BUT YELTSIN'S MINISTER OF CULTURE YEVGENY SIDOROV SEEMED RELUCTANT TO ACT AGAINST HARDLINERS IN PARLIAMENT WHO WANTED RUSSIA TO KEEP EVERYTHING UNLESS THEY RECEIVED SOMETHING OF COMPARABLE VALUE IN EXCHANGE SINCE GERMANY HAS CONSIDERABLY LESS WAR BOOTY TO OFFER IN NEGOTIATIONS THAN THE RUSSIANS DO THE HARDLINERS' POSITION LEFT LITTLE ROOM FOR RETURNS UNLESS GERMANY PAID HEAVILY TO RECOVER ITS PROPERTY PERHAPS MR SIDOROV WILL FIND THE NEW MEMBERS MORE INCLINED TO HONOR THE EARLIER PROMISES MADE TO GERMANY THE HEART OF STOCKHOLM'S COLLECTION OF CUBIST PAINTINGS WAS STOLEN DURING THE NIGHT OF NOV 8 WHEN THIEVES DROPPED THROUGH A HOLE THEY MADE IN THE ROOF AND TOOK A PICASSO SCULPTURE AND SEVEN PAINTINGS FIVE BY PICASSO AND TWO BY GEORGES BRAQUE VALUED TOGETHER AT 52 MILLION NO ALARM WENT OFF AND THE NIGHT WATCHDOG APPARENTLY DID NOT BARK BY EARLY DECEMBER POLICE HAD RECOVERED THREE OF THE PICASSO PAINTINGS AND HAD ARRESTED TWO MEN DESCRIBED AS POLISH AND IN THEIR 20S STILL MISSING ARE PICASSO'S LA SOURCE AND WOMAN WITH BLACK EYES DORA MAAR A PICASSO BRONZE A BRAQUE LANDSCAPE AND A STILL LIFE THE MUSEUM IS SCHEDULED TO MOVE INTO A NEW BUILDING PRESUMABLY WITH A BETTER SECURITY SYSTEM THIS YEAR ALSO IN STOCKHOLM IN NOVEMBER AN ART DEALER WHO RECOGNIZED A PAINTING BEING OFFERED TO HER AS A STOLEN GABRIELE MUNTERPLAYED ANGEL IT WAS TAKEN LAST APRIL FROM A TRAVELING RETROSPECTIVE AT THE LILJEVACHS KONSTHALL IN STOCKHOLM JAWLENSKY AND WEREFKIN 1909 WAS IDENTIFIED BY DR ANNEGRET HOBERG CURATOR OF THE LENBACHHAUS MUSEUM IN MUNICH WHICH HAD ORGANIZED THE SHOW SHE SAID IT WAS MISSING ITS FRAME AND WAS SLIGHTLY DAMAGED THE MUNTER WAS REINSTALLED AT THE LENBACHHAUS IN A CEREMONY ON DEC 6 MS LOWENTHAL IS EXECUTIVE DIRECTOR OF THE INTERNATIONAL FOUNDATION FOR ART RESEARCH IFAR 9401030032 940103 WHAT'S NEWS BUSINESS AND FINANCE FEDERATED DEPARTMENT STORES IS SEEKING CONTROL OF RH MACY IN A BOLD ATTEMPT TO CREATE THE LARGEST US DEPARTMENT STORE CHAIN FEDERATED ACQUIRED 50 OF PRUDENTIAL INSURANCE'S CLAIM IN MACY'S CHAPTER 11 BANKRUPTCYCOURT REORGANIZATION FOR 4493 MILLION AND ALSO ACQUIRED AN OPTION TO BUY THE REMAINING 50 USING BANKRUPTCY COURT TO GAIN CONTROL OF A RIVAL IS HIGHLY UNUSUAL AND THERE IS NO GUARANTEE THE TAKEOVER WILL WIN APPROVAL THE US ECONOMY'S RECENT STRENGTH WILL CONTINUE IN THE FIRST QUARTER PROMPTING THE FEDERAL RESERVE BOARD TO RAISE SHORTTERM INTEREST RATES AS A PREEMPTIVE STRIKE AGAINST INFLATION ACCORDING TO MOST OF THE 51 ECONOMISTS PARTICIPATING IN THE WALL STREET JOURNAL'S SEMIANNUAL SURVEY ECONOMICALLY SENSITIVE STOCKS BEGAN A SURGE IN THE FOURTH QUARTER THAT ANALYSTS SAY WILL CONTINUE INTO 1994 AS THE ECONOMY IMPROVES MARKING A NEW PHASE IN THE PROLONGED BULL MARKET AMERICA WEST'S MICHAEL CONWAY THE CARRIER'S PRESIDENT CEO AND ONE OF ITS FOUNDERS WAS OUSTED ENDING HIS NEARLY YEARLONG STRUGGLE FOR POWER WITH CHAIRMAN WILLIAM FRANKE A RECORD 15 TRILLION IN NEW STOCKS AND BONDS WERE HELPED TO MARKET BY SECURITIES FIRMS IN 1993 SHATTERING 1992'S RECORD BY 36 THE THREEYEAR UNDERWRITING SPREE IS LIKELY TO KEEP GOING IN 1994 GENERATING FEES IN ITS PATH IN 1993 FIRMS POCKETED A RECORD 913 BILLION IN DISCLOSED UNDERWRITING FEES THE JUNKBOND MARKET HAD ITS BEST YEAR IN 1993 AND SHOWS LITTLE SIGN OF SLACKENING THE TOTAL ISSUANCE IN THE MARKET OF OVER 68 BILLION LAST YEAR IS NEARLY TWICE 1992'S HIGH AND EQUAL TO THE TOTAL RAISED FROM 1982 THROUGH 1986 JAPAN AND THE US ARE STILL VERY FAR APART IN TALKS TO SET A FRAMEWORK FOR TRADE RELATIONS IN AREAS SUCH AS MOTOR VEHICLES AND AUTO PARTS A SENIOR COMMERCE DEPARTMENT OFFICIAL SAID GARTEN SOUGHT TO DISPEL SPECULATION THAT THE CLINTON ADMINISTRATION MIGHT EASE UP ON THE HOSOKAWA GOVERNMENT JAPAN'S HOSOKAWA ALL BUT IGNORED THE NATION'S ECONOMIC DOWNTURN IN A NEW YEAR'S DAY SPEECH A SIGN THAT LEADERS ARE STILL GROPING FOR WAYS TO RESTART THE STALLED ECONOMY INVESTORS BID UP TOKYO STOCKS THURSDAY PARTLY ON HOPES THAT THE PRIME MINISTER WOULD DISCUSS AN INCOMETAX CUT THE FAMILY SEDAN WILL BE THE FOCUS OF DETROIT'S BIG THREE AT THE NORTH AMERICAN INTERNATIONAL AUTO SHOW THIS WEEK THE CAR MAKERS HOPE TO SHED AN OLD CLUNKY IMAGE AND CLOSE THE REFINEMENT GAP WITH JAPAN CHRYSLER IS EXPECTED TO UNVEIL A PROTOTYPE CAR PARTLY POWERED BY A MECHANICAL BATTERY THAT COULD ALTER THE SEARCH FOR AN EFFICIENT ELECTRIC AUTO INFINITY BROADCASTING MISSED A DEADLINE TO WRAP UP ITS PURCHASE OF A LOS ANGELES RADIO STATION AS THE FCC STUDIED WHETHER IT HAS THE AUTHORITY TO BLOCK SUCH RADIOLICENSE TRANSFERS BECAUSE OF A HISTORY OF INDECENCY VIOLATIONS BY INFINITY'S HOWARD STERN XEROX PLANS TO UNVEIL AN INEXPENSIVE PORTABLE COPIER IN ITS EFFORT TO TARGET CONSUMERS AND SMALL BUSINESSES DOCTORS ARE LOBBYING FOR RELAXED ANTITRUST LAWS SO THEY CAN NEGOTIATE COLLECTIVELY WITH HEALTH PLANS REFLECTING CONCERNS THAT THEIR INTERESTS ARE BEING TRAMPLED AS HEALTHCARE NETWORKS GROW DOMINANT IN THE FIELD BONDS LEHMAN BROTHERS TREASURY INDEX 551263 OFF 939 DOLLAR 11180 YEN OFF 003 17382 MARKS UP 00029 9401030031 940103 BOUNCING BACK BRICK HOUSES AND SODA ON ICE BEAR WITNESS TO VIETNAM'S REVIVAL RUBBER TREES THRIVE TOO IN AREAS BOMBED IN WAR STUDENTS THRONG STREETS CONFRONTING OLD MEMORIES BY DAVID ROGERS STAFF REPORTER OF THE WALL STREET JOURNAL THANH AN VIETNAM THE DOCTOR'S SON BOUGHT AN ICE MACHINE TWO YEARS AGO AND YOUNG MEN DRINK COLD SODAS AND PLAY BILLIARDS NOW ACROSS FROM THE CONCRETE MEMORIAL TO THE HUNDREDS FROM HERE WHO DIED IN THE WAR ALONG THE REDDIRT ROAD WHERE CORPSES WERE ONCE PILED WORK CREWS HAVE SET OUT POLES TO CARRY ELECTRICITY AND NEW BRICK HOMES TESTIFY TO AN EMERGING MIDDLE CLASS OF VIETNAMESE WHO ARE MOVING BEYOND MUDANDTHATCH HUTS AND EDUCATING THEIR CHILDREN AT LEAST THROUGH HIGH SCHOOL TRAN VAN HUNG A SOLDIER AND SOURCE OF RICE FOR THE LOCAL COMMUNIST FORCES DURING THE WAR EMBODIES THIS NEW CLASS OF LANDED FARMERS AS HE EXPANDS HIS ACREAGE TO PLANT CASHEW NUTS AND BEANS WHEN HE BUILT HIS HOUSE FOUR YEARS AGO THE 56YEAROLD VILLAGER SALVAGED TILES FROM THE RUINS OF HIS PARENT'S HOME DESTROYED IN A 1972 BOMBING RUN THAT KILLED HIS MOTHER HIS CITATION FROM THE HANOI GOVERNMENT FOR WAR SERVICE SITS IN A CORNER WITH A BLACKANDWHITE PICTURE OF HO CHI MINH THE NATIONALIST LEADER WHO DIED IN 1969 TUCKED INTO THE FRAME IS A POSTCARD SHOWING A SQUARE IN NEW ORLEANS THIS IS THE RUBBER REGION OF VIETNAM A PLACE OF OLD FRENCH PLANTATIONS AND GRAHAM GREENE'S THE QUIET AMERICAN NORTHWEST OF OLD SAIGON NEAR THE CAMBODIAN BORDER IT IS AN AREA WHOSE STRATEGIC LOCATION AND COLONIAL PAST MADE IT A MURDEROUS BATTLEGROUND IN THE WAR WITH THE US THE FIRST INFANTRY DIVISION LOST THOUSANDS HERE AND KILLED THOUSANDS MORE IN THE 1960S RESURGENT COMMUNIST FORCES WERE PITTED AGAINST THE SOUTH VIETNAMESE ARMY IN A SECOND WAVE OF FIGHTING IN THE 1970S AND IN DISTRICT TOWNS TODAY COWS GRAZE AMID ROWS OF WHITE STONE MARKERS ERECTED FOR THE MISSING DEAD THIS REPORTER FIRST CAME HERE AS A MEDICAL CORPSMAN WITH THE FIRST DIVISION TO RETURN AND TRAVEL THROUGH THE REGION AFTER NEARLY 25 YEARS IS TO CONFRONT MEMORIES AND FAMILIAR FACES BUT ALSO TO HAVE SOME BENCHMARK AGAINST WHICH TO MEASURE THE LAND AND THE LIVES OF THE PEOPLE FEW AREAS BETTER ILLUSTRATE THE CYCLES OF HISTORY LEADING UP TO VIETNAM'S HOPES FOR REVIVAL TODAY COLONIALISM WAR AND SOCIALIST RULE ARE THE BACKDROP FOR WHOLESALE ECONOMIC CHANGE TODAY THE COMMUNISTTRAINED SONS OF FRENCHERA RUBBER WORKERS RUN PLANTATIONS THAT RELY ON CHEAP LABOR AND INTERNATIONAL FINANCING IMPROVED AGRICULTURE HAS LIFTED THE STANDARD OF LIVING BUT UNLESS THE REGION TRANSFORMS ITSELF AGAIN BY DEVELOPING A MANUFACTURING BASE AND FINDING TRADE AND INVESTMENT THESE GAINS ARE THREATENED BY THE IMMENSE POPULATION BOOM OF THE POSTWAR YEARS THANH AN WHICH HAS AT LEAST DOUBLED IF NOT TRIPLED IN SIZE SINCE THE WAR IS AMONG THE VILLAGES ALONG THE SAIGON RIVER SOUTHEAST OF DAU TIENG A LARGER TOWN THAT IS THE CENTER OF THE RUBBER REGION AND SITE OF THE OLD MICHELIN HEADQUARTERS TO THE WEST IS TAY NINH TO THE EAST CHON THANH A DUSTY CROSSROADS WHERE SCORES OF AMERICANS WERE KILLED IN AN AMBUSH IN 1967 THE GREAT CONSTANT AND SALVATION IS THE LAND THE BLACK VIRGIN OR NUI BA DEN MOUNTAIN SITS DARK ON THE GREEN PLAIN AT ITS FEET THE MICHELIN PROPERTY HAS BEEN REPLANTED AND EXPANDED FAR BEYOND ITS FORMER FRENCH BORDERS UNTIL IT COVERS MORE THAN 100 SQUARE MILES THE TREES SET IN ROWS 20 FEET APART RISE UNTIL THEIR BRANCHES ARCH TOGETHER TO FORM ABBEYLIKE HALLWAYS TO THE NORTH ALONG HIGHWAY 13 DUBBED THUNDER ROAD BY US SOLDIERS THE LANDSCAPE IS ROLLING REDTILE ROOFS STAND OUT AMID THE GREEN AND NEWLY PLANTED GROVES OF BLACK PEPPER LOOK LIKE VINEYARDS ON A HILLSIDE LARGESCALE SOVIETSTYLE INVESTMENTS INCLUDING A RESERVOIR FOR IRRIGATION HAVE HELPED LAY A FOUNDATION FOR THE REGION'S GROWTH BUT THE HEART OF THE REVIVAL LIES WITH SMALL INVESTMENT DECISIONS BY INDIVIDUALS RESPONDING TO MARKETORIENTED REFORMS THAT HAVE MOVED THE COUNTRY FROM POSTWAR COLLECTIVISM TO VIRTUAL PRIVATE OWNERSHIP OF LAND TODAY THE DIVERSITY OF AGRICULTURE HERE PROTECTS AGAINST POOR RICE PRICES WHICH HAVE HURT OTHER RURAL AREAS THIS YEAR THE VERY DESTRUCTION OF THE WAR LEFT BEHIND A FRONTIER OF SORTS FOR THOSE ABLE TO TAKE ADVANTAGE OF NEW MARKETS AND LAND REFORMS WITH THE COOPERATIVE WE HAD TO WORK AS A DUTY SAYS 64YEAROLD TRAM THI CO WHOSE HUSBAND WAS KILLED IN 1972 WHILE SHE WAS IMPRISONED FOR OPPOSING THE SOUTH VIETNAMESE REGIME NOW WE WORK FOR OURSELVES AND IT IS BETTER WHILE MOST FOREIGN ATTENTION HAS FOCUSED ON VIETNAM'S CITIES THE GREAT BULK OF THE NATION'S POPULATION STILL LIVES IN RURAL SETTINGS LIKE THESE PROVINCES ONLY NOW IS ELECTRIC POWER COMING TO MANY VILLAGES YOUNG PEOPLE CROWD AROUND A BATTERYPOWERED TELEVISION SET IN A SHOP TO KEEP TRACK OF WHAT THEIR COUNTERPARTS IN THE CITY ARE SEEING MIMICKING THE URBAN ELITE THE WEALTHIEST ERECT MODERN THREESTORY EDIFICES RISING OUT OF NOWHERE EMBLAZONED WITH A RECENT DATE TO CELEBRATE THEIR NEWNESS MORE COMMON ARE TWO OR THREEROOM BRICK COTTAGES SHELTERED AT THE FRONT BY A COLUMNED PORCH INDOOR PLUMBING AND INDOOR KITCHENS FOR THAT MATTER ARE IMPOSSIBLE LUXURIES BUT A FAMILY HAS A FLOOR AND DOORS TO KEEP OUT THE CHILL FROM THE SEASONAL RAINS A YOUNG VILLAGE CARPENTER USES HAND TOOLS TO RECREATE FRENCH DOORS FROM A COLONIAL PAST FLOWER GARDENS AND EVEN HEDGES HAVE SPRUNG UP DAU TIENG ITSELF IS STILL A COMPANY TOWN WHERE THE NEWS COMES ON AT 5 AM OVER LOUDSPEAKERS RUBBER WORKERS EARNING THE EQUIVALENT OF ABOUT 20 A MONTH LAG BEHIND VIETNAM'S INDUSTRIAL SECTOR BUT THE EXPANDED PLANTATION PROVIDES EMPLOYMENT FOR 10000 DOAN VAN DAN THE 57YEAROLD DIRECTOR ONCE WAS A POLITICAL COMMANDER FOR THE LOCAL VIET CONG FORCES HE NOW DRIVES AROUND IN AN OLD US ARMY JEEP PART MAYOR PART BUSINESSMAN HE RUNS A COMPANY THAT OVERSEES AN EXPANSE COVERING MORE THAN 100000 ACRES OF TREES VILLAGES FACTORIES AND ROADS IN A NATION WHERE SOCIALISM IS ON THE RUN HE PRACTICES A KIND OF ENLIGHTENED CAPITALISM BLENDING THE WORKER PROTECTIONS OF THE OLD SYSTEM WITH THE MARKET FORCES OF THE NEW MR DAN'S OWN PLANTATION VILLAGE VILLAGE 22 WAS DESTROYED IN THE WAR DURING WHICH MUCH OF HIS FAMILY WAS KILLED HE TRACES THE VILLAGE'S LOCATION ON A GREEN ACETATE MILITARY MAP AND DRIVES THERE TO SHOW WHERE FAMILIES HAVE RESETTLED THIS AND OTHER NUMBERED HAMLETS ONCE GIVEN UP AS LOST A SEVERE MAN WHO LIVES ALONE IN COMPANY HOUSING HE BREAKS INTO SMILES AS CHILDREN GATHER FUTURE RUBBER WORKERS HE SAYS WHILE NEWCOMERS REFLECT A POPULATION EXPLOSION UNDER WAY IN VIETNAM THEIR PRESENCE HERE ALSO IS A LEGACY OF A CERTAIN TURMOIL AFTER THE WAR ALLIES OF THE OLD SAIGON REGIME TELL OF FLEEING OR BEING PUSHED INTO THE COUNTRYSIDE DURING A TIME OF COLLECTIVIZATION SOME ARE MOVING BACK TOWARD THE CITIES WHILE OTHERS REMAIN STRANDED OR HAVE CARVED OUT LIVES IN THEIR NEW SURROUNDINGS A FORMER ARMY RANGER FOR INSTANCE WHEELS HIS LEGLESS BODY ON A SMALL CART AND CALLS OUT A GREETING TO AN AMERICAN WHO HAS WANDERED INTO THE MARKET AT AN LOC AT THE FOOT OF THE BLACK VIRGIN A 53YEAROLD LIEUTENANT WHO SPENT 1975 TO 1981 IN REEDUCATION CAMPS REMAINS MIRED IN POVERTY AND ILL HEALTH EVEN AS HE CLUTCHES PAPERS CLEARING HIM FOR TRAVEL TO THE US BY CONTRAST DOWN THE ROAD FROM MR HUNG THE FARMER IS A SECOND MR HUNG OF VERY DIFFERENT BACKGROUND DINH VAN HUNG 45 WAS A VIETNAMESE SCOUT WITH US FORCES BY RENTING FROM OTHERS HE HAS OVERCOME HURDLES AND EXPANDED INTO CASHEWS AND VEGETABLES ON LAND ONCE PATROLLED BY US FORCES I WILL NEVER BE RICH BUT I AM STRONG HE SAYS THOSE WHO WERE CHILDREN DURING THE WAR ALSO HAVE FELT ITS DISLOCATIONS NGUYEN KIM QUANG'S SCHOOLING ENDED AFTER THE SECOND GRADE AND WITH HER FATHER'S DEATH DURING THE WAR SHE BECAME THE CHIEF SOURCE OF SUPPORT FOR HER FAMILY TODAY AT 39 SHE HASN'T THE STRENGTH TO FARM MORE THAN THE ACRE SHE WORKS WITH HER HUSBAND WHOSE LEGS ARE WEAK FROM WAR WOUNDS WHAT SAVES HER IS AN ARTISTIC STREAK NOTICED BY THOSE WHO KNEW HER DURING THE CONFLICT BY WEAVING BASKETS SHE EARNS CASH TO SUPPLEMENT THE RICE SWEET POTATOES AND FRUIT FROM HER LAND ALL THREE OF HER CHILDREN REMAIN IN SCHOOL AND LAST WINTER THE FAMILY BOUGHT A TV SET AT A FESTIVAL MARKING THE TET LUNAR NEW YEAR IN THE PAST WE HAD ENOUGH MONEY TO LIVE FOR ONE DAY AT A TIME SHE SAYS OF THE FIRST YEARS AFTER THE WAR NOW WE HAVE SAVINGS BUT THE STRAIN ON HER FACE SHOWS LIFE IS STILL HARD ON A GOOD DAY SHE CAN MAKE AS MANY AS FOUR OR FIVE BASKETS WHICH SELL FOR ABOUT 30 CENTS APIECE THAT IS ENOUGH TO MANAGE BUT HER HEALTH IS WEAK AND A NEW WELL FOR CLEAN DRINKING WATER WILL COST ABOUT 200 MORE THAN 600 BASKETS SHE IS A REMINDER THAT THIS STILL IS A VERY POOR COUNTRY WITH MAJOR UNMET NEEDS CHRONIC MALNUTRITION SHOWS ITSELF IN THE STUNTED GROWTH OF CHILDREN IT IS A RIDDLE WHY THE VIETNAMESE A PEOPLE WITH A RELATIVELY HIGH LITERACY RATE FAIL TO DO MORE TO IMPROVE THEIR DIET A CANNED SWEETENED CONCENTRATE INTRODUCED BY EUROPEANS IS PREFERRED BY MANY TO FRESH MILK AND VILLAGERS OFTEN SELL PROTEINRICH FOOD FOR MONEY RATHER THAN GIVE IT TO THEIR CHILDREN AS INCOMES INCREASE A NOODLE BROTH WITH CHICKEN OR BEEF IS AN ALTERNATIVE TO PLAIN RICE BUT ONE FARMER SURROUNDED BY HIS FIVE CHILDREN TELLS OF TRADING HIS TWO COWS FOR A MOTOR BIKE MUCH OF THE WORK IS MANUAL AND SHEER PHYSICAL STRENGTH IS A PRECIOUS COMMODITY LOWCOST CHINESEMADE ENGINES ARE BEING SOLD TO FARMERS WHO ADAPT THEM TO WATER PUMPS TRACTORS AND EVEN LIGHT TRUCKS BUT MOST TRANSACTIONS ARE IN CASH AND WITHOUT A BETTER BANKING SYSTEM TO EXTEND CREDIT THE 170 TO 350 FOR AN ENGINE IS TOO MUCH FOR MANY VILLAGERS WHO INSTEAD RELY LIKE THEIR PARENTS BEFORE THEM ON OLD HANDHELD PLOWS PULLED BY WATER BUFFALO NEW HEALTHCARE FEES AND CORRUPTION MAKE IT HARDER TO AFFORD A DOCTOR AND THERE IS AN IMMENSE AMOUNT OF SELFMEDICINE AS ANTIBIOTICS OF ALL LEVELS AND QUALITY ARE SOLD OVER THE COUNTER THE GOVERNMENT OFFERS NO REAL SYSTEM OF SOCIAL INSURANCE CHILDREN ARE STILL SEEN AS A SOURCE OF LABOR AND PROTECTION AGAINST OLD AGE THE FACT THAT SO MANY HOMES LOOK AS THOUGH THEY WERE DECORATED BY STARSTRUCK TEENAGERS IS NO SURPRISE THEY PROBABLY WERE BUSY INTERSECTIONS COME TO A HALT AT NOON AS STUDENTS CHOKE THE STREETS A NEW 11ROOM THANH AN SCHOOL OPERATING ON SPLITDAY SESSIONS ALREADY IS OVERCROWDED WITH AN ESTIMATED 1900 STUDENTS MOST OF THEM CLUSTERED IN THE YOUNGEST GRADES A SECOND 10ROOM SECONDARY SCHOOL IS SLATED TO BE BUILT WITH AID FROM JAPAN BUT MONEY IS LACKING FOR ANY SORT OF LIBRARY OR LABORATORY PARENTS MUST BUY WHAT TEXTBOOKS THERE ARE FOR THEIR CHILDREN AND A SURVEY LAST YEAR FOUND THAT 40 OF THE STUDENTS WERE MISSING AT LEAST ONE OF THE BOOKS NEEDED FOR CLASSES THE VERY YOUTH OF THE POPULATION MAY IN FACT DISGUISE SOME OF VIETNAM'S LONGERTERM HEALTH AND ENVIRONMENTAL PROBLEMS THE GROWTH IN POPULATION THREATENS TO EXHAUST THE REMAINING LAND AVAILABLE FOR FARMING LOGGING TRUCKS COMING SOUTH THROUGH THE REGION TESTIFY TO THE HEAVY CUTTING NEAR THE CAMBODIA BORDER OLD RUBBER TREES NO LONGER PROVIDING LATEX ARE A RESOURCE TO BE EXPLOITED WARTIME SHRAPNEL STUDDED IN THE WOOD IS A HAZARD FOR SAW BLADES BUT ONCE CUT AND TREATED THE LUMBER MAINTAINS A PALE BLOND COLOR ATTRACTIVE TO ASIAN MARKETS AND DANISH COMPANIES MAKING WEATHERRESISTANT GARDEN FURNITURE IN SONG BE PROVINCE PROTRADE CORP EMPLOYS HUNDREDS OF WORKERS AT A NEW MILL WHERE FINISHED PIECES ARE PREPARED FOR ASSEMBLY IN JAPAN THE GOVERNMENTOWNED COMPANY IS BUYING GERMAN MACHINERY TO BEGIN MAKING FURNITURE ITSELF MOST OF THE OLD RUBBER PLANTATIONS ARE RUN BY GERUCO A STATEOWNED CORPORATION WHOSE DIRECTOR GENERAL PHAM SON TONG GREW UP NEAR HERE IN A VILLAGE NEIGHBORING THE OLD MICHELIN LANDS THE SON OF RUBBER WORKERS HE WAS ONLY 12 WHEN HE JOINED THE RESISTANCE AGAINST THE FRENCH SINCE TAKING CONTROL HE AND HIS CADRE HAVE SINGLEMINDEDLY PLANTED TREES THAT NOW COVER 500000 ACRES BUT A US ECONOMIC EMBARGO WHICH THE CLINTON ADMINISTRATION IS NOW REVIEWING CONTINUES TO DAMP PRICES FOR VIETNAM'S RUBBER BY SHRINKING THE NUMBER OF OUTLETS FOR IT IN AN ALREADY DEPRESSED WORLD MARKET THIS COULD JEOPARDIZE FINANCING NEEDED TO FULLY DEVELOP THE AVAILABLE LATEX WHICH IS SOLD IN BLOCKS AND USED TO MAKE TIRES MEDICAL EQUIPMENT AND FOAM RUBBER FOR FURNITURE A NEW PLANT WITH MODERN MALAYSIAN EQUIPMENT IS OPERATING NEAR THE SITE OF AN OLD COMMUNIST STRONGHOLD IN THE PLANTATION BUT WORLD BANK LOANS WHICH THE US HAS ONLY RECENTLY STOPPED OBSTRUCTING ARE CRUCIAL IF THE COMPANY IS TO MEET ITS PRODUCTION GOAL OF 42000 TONS EACH YEAR OF ITS YELLOWISH DRIED RUBBER PRODUCT WE HAVE THE LAND AND THE RUBBER SAYS MR DAN THE FORMER VIET CONG FIGHTER WHO IS NOW THE COMPANY'S DIRECTOR WE HAVE THE LABOR BUT WE HAVE NO CAPITAL TO WALK AGAIN IN THE RUBBER IS TO REMEMBER HOW SOUND CARRIES AMONG THE TREES IN THE WAR IT WAS THE POP OF AK47 RIFLES AT NIGHT OR THE RUMBLE OF AN ARMORED COLUMN NOW COME THE FOOTSTEPS OF A RUBBERTREE TAPPER OR THE SPUTTERING OF AN ENGINE IN ONE OF THE RUBBER COMPANY'S BLUECABBED TANKER TRUCKS AFTER THE TUMULT OF HIS OWN LIFE MR DAN LOVES THE ORDER AND PRECISE SPACING OF THE TREES IT IS REPLICATED AGAIN IN ROWS OF WHITE MARKERS IN CEMETERIES AND HE WALKS PAST THE GRAVES OF SEVEN OF HIS FAMILY SIX OF WHOM DIED IN THE SPACE OF EIGHT YEARS AT COMPANY HEADQUARTERS HE KEEPS A MUSEUM TO GIVE VISITORS HIS VERSION OF THE WAR AND THE PLANTATION'S EVOLUTION BLACKANDWHITE PORTRAITS THAT MIGHT HAVE COME FROM A SCHOOL YEARBOOK GIVE A SAMPLING OF HIS LOST COMRADES WHILE OIL PAINTINGS SHOW BIGBELLIED FRENCH MASTERS WATCHING A DOG ATTACK WORKERS HIS TOP AIDES INCLUDE THE SON OF A FORMER SOUTH VIETNAMESE GOVERNMENT WORKER IN DAU TIENG BUT HIS REAL SECONDINCOMMAND IS LE VAN KHOA A WIRY 45YEAROLD FORMER COMBAT OFFICER IN THE RESISTANCE WHO BRINGS THIS REPORTER TO A NEARBY VILLAGE WHERE OTHER VETERANS HAVE GATHERED SOME ARE LOCAL POLITICOS GROWN BEEFY WITH TIME AND BEER THEY ARE CURIOUS ABOUT THE AMERICAN VISITOR AND A GREENBOUND JOURNAL HE FOUND IN THE WAR WRITTEN IN PEN IT IS A DETAILED SUMMARY OF MEDICAL NOTES DECORATED NEATLY WITH BLOCK LETTERS AND LIKELY PREPARED BY A SECOND OR THIRDYEAR MEDICAL STUDENT WITH KNOWLEDGE OF FRENCH A MEDIC OR DOCTOR'S ASSISTANT ON THEIR SIDE THE AUTHOR'S NAME NGOC TUONG WAS A CODE OF SORTS TO PROTECT THE WRITER'S IDENTITY FROM THE SAIGON REGIME BUT A SMALL CRY GOES UP AS TWO MEN REMEMBER IT AS THE ALIAS USED BY A MAN WHO TREATED THEM AS SOLDIERS AND WHO WAS BELIEVED KILLED IN 1972 SET AGAINST THESE GHOSTS IS DANG DANH HUY AN 83YEAROLD VILLAGER AND EMBLEM OF THE PEOPLE'S DURABILITY IF THERE IS AN OLD MAN OF THE RUBBER IT IS MR HUY WHO HAS LIVED AT VILLAGE 6 IN THE PLANTATION SINCE THE MID1950S AND REFUSED TO LEAVE EVEN WHEN THE HAMLET WAS DESTROYED IN THE WAR SITTING IN HIS GARDEN WITH A HOE HE IS DEAF BUT DEFIANT HE GRINS DESCRIBING HOW HE BURROWED UNDERGROUND AND PULLED A COVER OVER HIM DURING THE BOMBING YOUNGER RELATIVES ARE AGAIN ON THE PLANTATION PAYROLL AND IF YOU ARE GOING THAT WAY HE LIKES A GOOD CIGARETTE 9401030028 940103 POLITICS & POLICY TRACKING THE ECONOMY BY ALAN YONAN JR A REBOUND IN THE MANUFACTURING AND CONSTRUCTION SECTORS HELPED THE ECONOMY PRODUCE MORE JOBS IN 1993 THAN IN ANY YEAR SINCE THE RECESSION NEARLY 18 MILLION NONFARM PAYROLL JOBS WERE CREATED THROUGH NOVEMBER AND ANALYSTS SAY SOLID ECONOMIC GROWTH IN DECEMBER PROBABLY PUSHED THE TOTAL ABOVE TWO MILLION FOR THE YEAR JOB GROWTH THROUGH NOVEMBER WAS THE BEST SINCE 1989 THE YEAR BEFORE THE RECESSION BEGAN PAYROLLS GREW BY JUST OVER TWO MILLION THAT YEAR PAUL LALLY AN ECONOMIST AT RH WRIGHTSON & ASSOCIATES INC PREDICTED A LABOR DEPARTMENT REPORT THIS WEEK WILL SHOW A GAIN OF 250000 NONFARM JOBS FOR DECEMBER WITH MANUFACTURING SHOWING ITS SECOND CONSECUTIVE MONTHLY GAIN HE ALSO SAID CONSTRUCTION EMPLOYMENT SHOULD INCREASE MANUFACTURERS FOR MONTHS HAD BEEN RELUCTANT TO HIRE PERMANENT WORKERS TO MEET GROWING PRODUCTION DEMANDS THEY INSTEAD WORKED EXISTING EMPLOYEES HARDER BOOSTING OVERTIME AND THE AVERAGE WORKWEEK BUT THEY'VE GONE ABOUT AS FAR AS THEY CAN GO WITH THE CURRENT WORK FORCE AND ARE NOW HAVING TO HIRE AGAIN TO KEEP UP WITH DEMAND MR LALLY SAID THE RESURGENCE IN MANUFACTURING AND CONSTRUCTION HELPED 1993 END ON A STRONG NOTE MR LALLY NOTED ALL SIGNS ARE THAT ECONOMIC GROWTH ACCELERATED TO A 45 ANNUAL RATE IN THE FOURTH QUARTER HE ADDED THAT WOULD BE THE BEST PERFORMANCE SINCE THE FOURTH QUARTER OF 1992 WHEN GROSS DOMESTIC PRODUCT GREW AT A 57 RATE 9401030026 940103 ECONOMISTS SEE CONTINUED GROWTH IN THE FIRST QUARTER AND A PREEMPTIVE STRIKE AGAINST INFLATION BY THE FED BY FRED R BLEAKLEY STAFF REPORTER OF THE WALL STREET JOURNAL THE RECENT STRENGTH OF THE US ECONOMY WILL CONTINUE IN THE FIRST QUARTER PROMPTING THE FEDERAL RESERVE TO RAISE SHORTTERM INTEREST RATES AS A PREEMPTIVE STRIKE AGAINST INFLATION ACCORDING TO MOST OF THE ECONOMISTS PARTICIPATING IN THE WALL STREET JOURNAL'S SEMIANNUAL SURVEY SOME OF THE 51 ECONOMISTS IN THE SURVEY BELIEVE GROWTH WILL SLOW TO A CRAWL IN THE MIDDLE OF THE YEAR BECAUSE OF HIGHER TAXES ON THE WEALTHY AND REDUCED GOVERNMENT SPENDING BUT MOST EXPECT ONLY A MODERATE SLOWDOWN AFTER THAT GROWTH IN GROSS DOMESTIC PRODUCT IS EXPECTED TO REACH AN ANNUAL RATE OF NEARLY 3 IN THE FOURTH QUARTER AS EXPORT MARKETS IN WESTERN EUROPE START REVIVING IN ADDITION LONGTERM INTEREST RATES AND INFLATION ARE EXPECTED TO REMAIN NEAR CURRENT LEVELS FOR MOST OF THE YEAR WITH A SLIGHT RISE AROUND THE END OF THE YEAR IT'S A GREAT COMBINATION RICHARD BERNER OF MELLON BANK SAYS OF THE PROSPECT FOR LOW INFLATION MODERATE ECONOMIC GROWTH AND LOW INTEREST RATES CONFIDENCE THAT INFLATION IS IN CHECK HE ADDS ALSO IS GOOD FOR STOCKS BECAUSE IT MEANS WE CAN HAVE AN EXTENDED RECOVERY AND EXPANSION ECONOMISTS OF COURSE OFTEN FIND THAT ECONOMIC VAGARIES PROVE THEM WRONG THE JOURNAL'S PREVIOUS SURVEY SIX MONTHS AGO FOR INSTANCE FOUND A CONSENSUS ESTIMATE OF 684 FOR THE 30YEAR TREASURY BOND AT YEAR END IN FACT THE YIELD CAME IN AT 634 FEWER THAN HALF OF THE 44 ECONOMISTS SURVEYED THEN WERE CORRECT WITHIN HALF A PERCENTAGE POINT IN THE LATEST SURVEY ECONOMISTS WITH THE MOST DOUR OUTLOOK SAY THE BIGGEST DRAG ON GROWTH WILL BE THE 408 BILLION INCREASE IN INDIVIDUAL AND CORPORATE TAXES THAT CONGRESS APPROVED IN AUGUST WE'RE NOT TALKING RECESSION BUT THE FIRST HALF WILL BE SKATING CLOSE TO THE LINE SAYS MAUREEN ALLYN OF SCUDDER STEVENS & CLARK BESIDES TAXES SHE CITES WEAKNESS IN FOREIGN ECONOMIES AND A HIGHERTHANUSUAL AMOUNT OF MANUFACTURERS' RESTOCKING INVENTORIES WITH PURCHASES ABROAD MICHAEL EVANS OF EVANS GROUP WARNS THAT THE CURRENT INVENTORY BUILDUP IS TRANSITORY BECAUSE OF MOREADVANCED METHODS OF MONITORING DEMAND THAT TEND TO KEEP INVENTORIES LEAN HE SEES THE TAX INCREASE SAPPING ECONOMIC GROWTH TO A SLUGGISH 175 ANNUAL RATE FOR THE YEAR SEVERAL OF THE ECONOMISTS SAY A QUICK DOWNTURN IN GROWTH WOULD KEEP THE FED FROM RAISING RATES AND MIGHT EVEN PUSH THE CENTRAL BANK TO LOWER THEM A NOTCH SO FAR THE CENTRAL BANK HASN'T TIPPED ITS HAND BUT A YEAREND FLURRY OF STATISTICS RANGING FROM CONSUMER CONFIDENCE TO BUSINESSEQUIPMENT SPENDING WAS SUFFICIENTLY BULLISH TO CONVINCE THE MAJORITY OF ECONOMISTS THAT A FED TIGHTENING OF MONETARY POLICY IS LIKELY SOON THE RECENT REPORT OF A 2 RISE IN NOVEMBER'S DURABLEGOODS ORDERS PERSUADED ELLIOTT PLATT OF DONALDSON LUFKIN & JENRETTE TO EXPECT A FED TIGHTENING EVEN IN THE ABSENCE OF THREATENING INFLATION NUMBERS IT ALSO LED HIM TO RAISE HIS GROWTH ESTIMATE TO A 58 ANNUAL RATE FOR THE 1993 FOURTH QUARTER AND 38 FOR THE CURRENT QUARTER OF THE 51 ECONOMISTS RESPONDING TO THE SURVEY 21 BELIEVE THE FED WILL TIGHTEN IN THE FIRST QUARTER 10 SAY IT WILL COME IN THE SECOND QUARTER AND THREE EXPECT A THIRDQUARTER MOVE ONLY FOUR ECONOMISTS MICHAEL KERAN OF PRUDENTIAL INSURANCE IRWIN KELLNER OF CHEMICAL BANKING CORP PHILIP BRAVERMAN OF DKB SECURITIES AND A GARY SHILLING OF A GARY SHILLING & CO FORESEE THE FED'S NEXT MOVE AS A LOWERING OF RATES MOST OF THE ECONOMISTS EXPECT THE FED TO BOOST THE FEDERAL FUNDS RATE CURRENTLY AT 3 BY NO MORE THAN 025 TO 050 PERCENTAGE POINT IN ORDER TO ENSURE THAT INFLATION DOESN'T TAKE OFF SUCH A SMALL RISE IN THE RATE WHICH IS WHAT BANKS PAY WHEN THEY BORROW FROM ONE ANOTHER WILL HELP KEEP LONGTERM INTEREST RATES LOW THEY SAY IT WAS LOW RATES THAT HELPED PULL THE ECONOMY OUT OF THE DOLDRUMS IN THE SECOND HALF OF 1993 AND MOST ECONOMISTS BELIEVE THE RECENT GROWTH IN CONSUMER SPENDING WILL CONTINUE IT CREATES JOBS AND MORE SPENDING SAYS ROBERT BARBERA CHIEF EQUITY ECONOMIST AT LEHMAN BROTHERS THE STRENGTH YOU'VE SEEN IN THE LAST FIVE MONTHS WILL PERPETUATE ITSELF IN THE FIRST HALF ADDS NEIL SOSS FIRST BOSTON CORP'S ECONOMIST IT TOOK A LONG TIME FOR HOUSEHOLDS TO GET ENERGIZED BY LOW INTEREST RATES BUT SINCE MID1993 WE'RE SEEING BETTER HOUSING AUTO APPLIANCE AND FURNITURE SALES HE EXPECTS THE SPENDING TO CONTINUE WITH GDP GROWING AT AN ANNUAL RATE OF 28 IN THE FIRST HALF AND 34 IN THE SECOND HALF HERE ARE AVERAGE FORECASTS AS WELL AS OTHER PREDICTIONS AND OBSERVATIONS CULLED FROM THE JOURNAL'S SURVEY MODERATE ECONOMIC GROWTH BOTH THE FIRST HALF AND THE SECOND HALF WILL HAVE ABOUT THE SAME ANNUAL GROWTH RATES OF 28 ACCORDING TO AN AVERAGE OF ALL 51 ECONOMISTS' FORECASTS WHEN COMPARING ALL OF 1994 WITH THE YEAR JUST ENDED WHICH INVOLVES A SLIGHTLY DIFFERENT MEASUREMENT THE GROWTH RATE COMES IN SLIGHTLY BETTER AT 3 THE BIG QUESTION IS WHETHER THE AIR WILL GO OUT OF THE FOURTHQUARTER BALLOON AS IT DID A YEAR AGO THE ECONOMY HAS MORE STAYING POWER NOW THE ECONOMISTS SAY SO THEY FORESEE A 29 FIRSTQUARTER GROWTH RATE SLOWING TO ONLY 26 IN THE SECOND QUARTER THAT WOULD OUTPACE LAST YEAR'S ANEMIC FIRSTHALF GROWTH OF LESS THAN 2 THE ECONOMISTS SAY BUT STILL WOULD BE A SLOWDOWN FROM YEAR END SIGNIFICANT TAX IMPACT THE TAX INCREASE ON WEALTHY AMERICANS WILL AFFECT SPENDING MOST IN THE SECOND AND THIRD QUARTERS LEAVING THE FIRST AND FOURTH QUARTERS AS THE BOOKENDS OF STRENGTH SAY THE ECONOMISTS EVEN SO MORE THAN HALF OF THOSE SURVEYED 30 OF THE 51 BELIEVE INCREASED TAXES WILL HAVE A SIGNIFICANT IMPACT ON THE ECONOMY KEEPING ITS GROWTH RATE AT LEAST HALF A PERCENTAGE POINT LESS THAN IT WOULD HAVE BEEN OTHER ECONOMISTS HOWEVER HAVE BEEN LESS PESSIMISTIC RECENTLY SAYING THE TAX IMPACT IS LIKELY TO BE MINOR EVEN THOSE IN THE JOURNAL SURVEY SAY IT COULD HAVE BEEN WORSE BY NEARLY A 2TO1 MARGIN THEY EXPECT WEALTHY TAXPAYERS TO CONTINUE SPENDING BY DIPPING INTO SAVINGS LITTLE INFLATIONARY BUILDUP THE CURRENT LOW INFLATION RATE OF LESS THAN 3 A YEAR WILL CONTINUE IN THE FIRST HALF WITH THE CONSUMER PRICE INDEX RUNNING AT 27 YEARONYEAR GROWTH RATE BY MAY BY NOVEMBER AS THE ECONOMY BEGINS STRENGTHENING AGAIN THE RATE WILL CLIMB A BIT TO 3 THE ECONOMISTS SAY OIL PRICES WHICH ARE DOWN TO LESS THAN 14 A BARREL NOW FOR NORTH SEA CRUDE FROM MORE THAN 18 AT THE END OF 1992 WILL RISE MODERATELY TO 1496 AT MIDYEAR AND 1610 BY YEAR END THE ECONOMISTS SAY GOLD TRADING AT ABOUT 392 AN OUNCE LAST WEEK IS EXPECTED TO RISE EVEN MORE SLOWLY TO 394 BY MIDYEAR AND 397 BY YEAR END STEADY LONGTERM INTEREST RATES THE FED'S EXPECTED MOVE WILL PUSH SHORTTERM RATES FROM THE PRESENT 305 LEVEL FOR THREEMONTH TREASURY BILLS TO 34 AT MIDYEAR AND 367 AT YEAR END BUT LONGTERM RATES WILL BE CLOSE TO THE PRESENT 634 LEVEL ECONOMISTS PREDICT THEY SEE THE 30YEAR TREASURY BOND TRADING AT 626 AT MIDYEAR AND 639 AT YEAR END LONGTERM FIXEDRATE HOME MORTGAGES WILL BE AT 72 AT MIDYEAR ABOUT WHERE THEY ARE NOW AND RISE SLIGHTLY TO 734 BY YEAR END THE ECONOMISTS SAY BEST INVESTMENTS MUNI BONDS AND STOCKS THE ECONOMISTS FAVOR STOCKS MUNICIPAL BONDS FOOD COMMODITIES AND FOREIGN SECURITIES AS INVESTMENTS FOR 1994 US STOCKS WILL CONTINUE TO BENEFIT FROM CORPORATE RESTRUCTURING AND PRODUCTIVITY GAINS WHICH ENSURE HEALTHY PROFITS DESPITE LACKLUSTER SALES AND FEW PRICE INCREASES 15 OF THE ECONOMISTS SAY WITH LONGTERM BOND RATES POSING NO THREAT TO PRICECONSCIOUS INVESTORS A DOZEN OF THEM EXPECT THAT TAXEXEMPT BONDS WILL FARE WELL AS SUPPLY IS REDUCED BECAUSE OF LESS MUNICIPAL REFINANCING AND DEMAND INCREASES WITH INVESTORS SEEKING TO AVOID HIGHER TAXES FOOD COMMODITIES GET THE NOD BECAUSE OF REDUCED STOCKPILES DUE TO LAST YEAR'S FLOODS AND FOREIGN SECURITIES SHOULD BENEFIT FROM INTERESTRATE CUTS AND SOME ECONOMIC IMPROVEMENT IN EUROPE SEVERAL OTHER ECONOMISTS SAY INVESTORS IN FOREIGN SECURITIES SHOULD HEDGE AGAINST A DECLINE IN THE VALUE OF THE DOLLAR MR BERNER ADDS A REPEAT OF THE STRONGEST SECTORS THE STRONGEST ECONOMIC SECTORS ONCE AGAIN WILL BE BUSINESS EQUIPMENT HOUSING AUTOS AND OTHER SOCALLED CONSUMER DURABLES MANY ECONOMISTS SAY AND THE OUTLOOK IS FOR CONTINUED WEAKNESS IN DEFENSE AND OTHER INDUSTRIES AFFECTED BY GOVERNMENT SPENDING AS WELL AS COMMERCIAL REAL ESTATE AND EXPORTS CAPITAL SPENDING FOR LABORSAVING BUSINESS EQUIPMENT WILL REMAIN HIGH BUT WILL SLOW DOWN SOMEWHAT LACKLUSTER JOB GROWTH UNDER THE LABOR DEPARTMENT'S NEW METHOD OF CALCULATING JOB STATISTICS THIS YEAR WHICH ADDS ABOUT 05 PERCENTAGE POINT TO THE UNEMPLOYMENT RATE IN THE FIRST HALF AND 04 POINT IN THE SECOND HALF THE JOBLESS RATE IS EXPECTED TO BE AT 68 IN MAY AND 66 IN NOVEMBER THAT WOULD BE 63 AND 62 UNDER THE OLD METHOD COMPARED WITH THE 64 RATE IN NOVEMBER JOHN LONSKI OF MOODY'S INVESTORS SERVICE INC HOWEVER THINKS MANUFACTURERS WILL ADD WORKERS SOONER THE SURPRISE IN THE '94 ECONOMY WILL BE THAT COMPANIES WILL FIND THEMSELVES SHORT OF STAFF AS THE ECONOMY PROCEEDS AT A RATE OF GROWTH EXCEEDING 25 WEAK EXPORTS FOREIGN SALES OF US GOODS AND SERVICES ARE EXPECTED TO REMAIN WEAK BUT THERE WILL BE SOME STRENGTHENING OF WESTERN EUROPEAN ECONOMIES THIS YEAR THE SURVEY FOUND BRITAIN'S GROWTH RATE IS EXPECTED TO MOVE TO 2 OR BETTER WITH THE REST OF EUROPE SOMEWHAT SLOWER AS GERMANY TAKES MORE TIME TO HEAL THE GERMAN ECONOMY WON'T SHOW ANY PICKUP UNTIL THE SECOND HALF FOLLOWING SEVERAL RATE CUTS BY THE BUNDESBANK MOST ECONOMISTS EXPECT SEVERAL OF THEM SEE THE SITUATION THERE GETTING WORSE ASKED ABOUT THE TIMING OF A GERMAN EXPANSION LAWRENCE KUDLOW OF BEAR STEARNS SAYS BLUNTLY NOT IN OUR LIFETIME THE MARK AND THE YEN WILL CHANGE LITTLE AGAINST THE DOLLAR FROM PRESENT LEVELS OF ABOUT 174 MARKS AND 112 YEN TO THE DOLLAR THE ECONOMISTS SAY THEY PREDICT THAT A DOLLAR WILL BE AT 177 MARKS AND 113 YEN AT MIDYEAR AND 180 MARKS AND 118 YEN AT YEAR END RAVES AND BOOS FOR CLINTON ON THE QUESTION OF WHETHER THEY APPROVED OF PRESIDENT CLINTON'S ECONOMIC POLICIES JUST AS MANY ECONOMISTS SAID YES AS NO MOST PRAISED HIM FOR HIS STAND ON PROMOTING THE NORTH AMERICAN FREE TRADE AGREEMENT AND THE GENERAL AGREEMENT ON TARIFFS AND TRADE BUT CRITICIZED HIM FOR THE LACK OF BUSINESSINVESTMENT INITIATIVES IN HIS TAX BILL AND FOR THE POTENTIAL IMPACT ON BUSINESS OF HIS PROPOSED HEALTHCARE PROGRAM AMONG THE INITIATIVES THEY WANTED HIM TO PURSUE IN 1994 WERE REFORMING WELFARE AND ENTITLEMENTS STRENGTHENING THE EDUCATIONAL SYSTEM REDUCING GOVERNMENT SPENDING AND PROMOTING MORE SAVINGS AND INVESTMENT LOOMING PROBLEMS RUSSIA KOREA CHINA THE WEATHER WHEN ASKED WHAT POLITICAL ECONOMIC OR NATURAL EVENT COULD UNDERMINE THEIR FORECASTS THE ECONOMISTS MOST OFTEN CITED CHAOS IN RUSSIA POLITICAL INSTABILITY IN CHINA AND WORRIES ABOUT A FLAREUP OF KOREAN TENSIONS ANY ONE OF THOSE OR FURTHER CONFLAGRATIONS IN EASTERN EUROPE OR THE MIDDLE EAST COULD LEAD TO A RENEWED DEFENSE BUILDUP AND LESS DEFICIT REDUCTION THEY SAID ALSO SIGNIFICANT NATURAL DISASTERS LIKE THE HURRICANES OF 1992 OR THE MIDWEST FLOODS OF LAST YEAR COULD SPUR INFLATION AND INTEREST RATES BEYOND EXPECTATIONS ON THE ECONOMIC FRONT AN OVERHEATING OF THE US ECONOMY AND WORSENING CONDITIONS IN EUROPE WOULD SEND THE ECONOMISTS BACK TO THEIR CRYSTAL BALLS 9401030023 940103 CORRECTIONS & AMPLIFICATIONS GREYHOUND LINES INC REPLACED A 71 MILLION REVOLVING LINE OF CREDIT WITH NEW FINANCING AN ARTICLE FRIDAY INCORRECTLY REPORTED THAT THE OLD CREDIT LINE WAS 116 MILLION CHINA'S DECISION TO REPLACE THE OFFICIAL EXCHANGE RATE WITH THE RATE SET AT THE NATION'S SWAP CENTERS WILL RESULT IN AN EFFECTIVE 33 DEVALUATION OF THE YUAN THE SIZE OF THE DEVALUATION WAS MISSTATED AS 50 IN AN ARTICLE THURSDAY 9401030022 940103 BUSINESS BRIEF STONE CONTAINER TO SELL 500 MILLION OF DEBT AND 21 MILLION SHARES CHICAGO STONE CONTAINER CORP TAKING FRESH STEPS TO IMPROVE ITS DEBTHEAVY BALANCE SHEET SAID IT PLANS TO OFFER 21 MILLION COMMON SHARES AND 500 MILLION OF DEBT SECURITIES THIS MONTH THE HIGHLY LEVERAGED PACKAGING CONCERN SAID PROCEEDS WOULD BE USED TO REPAY BANK DEBT AND THE AMOUNTS OUSTANDING ON ITS 13 5/8 SUBORDINATED NOTES DUE JUNE 1 1995 AS WELL AS FOR GENERAL CORPORATE PURPOSES THE OFFERING WOULD COME UNDER THE COMPANY'S 1 BILLION SHELF REGISTRATION CLEARED BY THE SECURITIES AND EXCHANGE COMMISSION THE SALE OF ADDITIONAL STOCK WOULD BOOST STONE CONTAINER'S COMMON SHARES OUTSTANDING NEARLY 30 THE COMPANY HAS ABOUT 71 MILLION SHARES OUTSTANDING IN COMPOSITE BIG BOARD TRADING FRIDAY STONE CONTAINER SHARES FELL 1375 OR 13 TO 9265 MUCH OF THE COMPANY'S DEBT BURDEN IS FROM ITS 22 BILLION ACQUISITION IN 1989 OF CONSOLIDATEDBATHURST INC AFTER WHICH INDUSTRY CONDITIONS DECLINED AND THE COMPANY HAD DIFFICULTY SERVICING THE DEBT IN APRIL THE COMPANY ANNOUNCED PLANS TO RAISE 800 MILLION THROUGH A SIMILAR COMBINATION OF EQUITY SALES AND DEBT OFFERINGS BUT STONE CONTAINER BACKED AWAY FROM THE REFINANCING PLAN WHEN IT SPOOKED INVESTORS WHO REACTED WITH A HIGHVOLUME SELLOFF SENDING STONE'S ALREADYDEPRESSED SHARES DOWN 42 THE COMPANY HAS TAKEN OTHER STEPS RECENTLY TO CUT DEBT IN MIDDECEMBER IT SOLD ITS 49 STAKE IN ONE OF MEXICO'S LARGEST MAKERS OF CORRUGATED CONTAINERS AND MOLDED CELLULOSE PRODUCTS EMPAQUES DE CARTON TITAN SA STONE CONTAINER ALSO RAISED MORE THAN 500 MILLION LAST MONTH BY SELLING 25 OF ITS CANADIAN NEWSPRINT UNIT STONECONSOLIDATED CORP IN AN INITIAL PUBLIC OFFERING IN THE FIRST NINE MONTHS OF 1993 STONE CONTAINER HAD A LOSS OF 273 MILLION OR 392 A SHARE ON SALES OF 382 BILLION THE COMPANY SAID IT TAPPED SALOMON BROTHERS INC AS LEAD UNDERWRITER FOR THE PROPOSED STOCK AND DEBT OFFERING 9401030021 940103 CHESHIRE FINANCIAL UNIT ASSETS KEENE NH CHESHIRE FINANCIAL CORP SAID ITS CFX BANK UNIT SOLD 66 MILLION IN NONPERFORMING ASSETS TO A PRIVATE INVESTOR CHESHIRE SAID THE NET EFFECT OF THESE TRANSACTIONS SHOULDN'T MATERIALLY IMPACT FOURTHQUARTER 1993 NET INCOME THE COMPANY SAID THE LOSS FROM THE DISPOSITION OF THE ASSETS WAS SUBSTANTIALLY OFFSET BY GAINS ON THE SALE OF PERFORMING LOANS AND THE RESTRUCTURING OF THE COMPANY'S SECURITIES PORTFOLIOS IN PREPARATION FOR THE ADOPTION OF ACCOUNTING CHANGES TAKING INTO CONSIDERATION THE SALE THE BANK REPORTED THAT NONPERFORMING ASSETS AS A PERCENTAGE OF TOTAL ASSETS HAVE DROPPED TO AN ANTICIPATED LEVEL OF 135 AT DEC 31 FROM 277 AT SEPT 30 9401030020 940103 REAL ESTATE BY MICHAEL J YBARRA FEW EXPECT A STRONG RECOVERY IN THE OFFICE MARKET ANYTIME SOON BUT A SWIFT TURNAROUND IS IN THE MAKING IN THE OTHER BIG COMMERCIAL REALESTATE MARKET THE INDUSTRIAL SECTOR INCLUDING EVERYTHING FROM FACTORIES TO WAREHOUSES CUSHMAN & WAKEFIELD A MAJOR COMMERCIAL BROKER SAYS THAT ITS STUDY OF LARGE MARKETS FOUND THAT IN THE FIRST NINE MONTHS OF 1993 COMPANIES HAD LEASED 7 MORE SPACE THAN IN ALL OF 1992 WHICH WAS UP 16 FROM THE PREVIOUS YEAR SALES IN THE SAME PERIOD INCREASED 11 FROM 1992 WHICH WAS UP 14 FROM 1991 WHILE THE MARKET FOR OFFICE SPACE IS REVIVING SOMEWHAT RENTERS ARE STILL DRIVING HARD BARGAINS AND THE RECOVERY IS SPOTTY BUT IN THE INDUSTRIAL SECTOR THE COMEBACK IS MORE UNIFORM WITH LANDLORDS GETTING MULTIPLE BIDS AND RENTS CLIMBING CHICAGO AND SOUTHERN CITIES ARE HEADING THE PACK COMMERCIAL BROKERS SAY WHILE SOUTHERN CALIFORNIA IS STILL MIRED IN THE DOWNTURN THE INDUSTRIAL SECTOR HAS RECOVERED MUCH QUICKER THAN THE OFFICE SECTOR SAYS DAVE LAWTON A MANAGING DIRECTOR AT CUSHMAN & WAKEFIELD A UNIT OF ROCKEFELLER GROUP COMMERCIAL BROKER BINSWANGER COS SAYS ITS INDUSTRIAL TRANSACTIONS JUMPED TWOTHIRDS THROUGH EARLY DECEMBER FROM ALL OF 1991 BOTH IN DOLLAR VOLUME AND SQUARE FEET AFTER A DROP IN PRICES IN 1992 THE COST PER SQUARE FOOT CLIMBED 26 IN 1993 WE'VE SEEN A TOTAL CHANGE SAYS CHAIRMAN FRANK G BINSWANGER JR THERE'S MUCH MORE OF AN UPBEAT FEELING IN THE MARKETPLACE THE COMPANIES NEED SPACE THE INDUSTRIAL RECOVERY HAS BEEN MORE PRONOUNCED BECAUSE THE SECTOR'S SLUMP IN PRICES AND SALES WASN'T AS PRECIPITOUS AS THE OFFICE SECTOR'S INVESTORS NEVER POURED MONEY INTO INDUSTRIAL PROPERTIES THE WAY THEY DID INTO HIGHRISE OFFICE BUILDINGS AND CONSEQUENTLY THERE WAS NEVER THE SAME GLUT MR LAWTON SAYS INDUSTRIAL REAL ESTATE WASN'T A GLAMOROUS INVESTMENT HE SAYS CARLTON THE APARTMENT DOORMAN HAS BEEN REPLACED BY PERT YOUNG PROFESSIONALS AND PHONE SYSTEMS IT USED TO BE ENOUGH FOR AN APARTMENT BUILDING TO CLOAK ITSELF IN THE AURA OF LUXE BY HAVING A DOORMAN IN EPAULETS AND CAP MAYBE THROWING IN A HEALTH CLUB AND FREE CABLE TELEVISION BUT MORE BUILDINGS ARE NOW SELLING THEMSELVES BY OFFERING EXTRA SERVICES FROM THE PERSONAL TO THE HIGHTECH AT THE PARKSHORE A TWOYEAROLD HIGHRISE ON LAKE MICHIGAN JUST SOUTH OF DOWNTOWN CHICAGO A 1300SQUAREFOOT BUSINESS CENTER FEATURES A CONFERENCE ROOM WITH A MAHOGANY TABLE AND A LAKE VIEW A FULLTIME STAFFER TO DO OFFICE CHORES AND A FREEUSE SOFTWARE LIBRARY MANY RESIDENTS WORK AT HOME AND USE THE CENTER FOR ITS OFFICE EQUIPMENT WHILE WORK JUNKIES FIND IT MORE CONVENIENT THAN SLUSHING INTO THE LOOP ON A WINTER WEEKEND SAYS KELLY MULOCK THE MARKETING DIRECTOR OF THE BUILDING ANYBODY CAN PUT UP FOUR WALLS AND A NICE KITCHEN SHE SAYS IT'S REALLY THE SERVICE THAT MAKES IT STAND OUT THAT'S WHERE THE EDGE IS PRIVATE PHONE SYSTEMS ARE ANOTHER TRENDY APARTMENT AMENITY RESCOM A LOS ANGELES PRIVATE TELEPHONE CONCERN SIGNS UP WITH LARGE LUXURY BUILDINGS TO OFFER TENANTS DISCOUNTED RATES AND A PACKAGE OF GOODIES SUCH AS VOICE MAIL USERS CAN GET THEIR PHONE NUMBER AT THE SAME TIME THEY PICK THEIR APARTMENT MICHAEL MULCAHY A VICE PRESIDENT AT RESCOM A UNIT OF CLOSELY HELD R&B REALTY GROUP SAYS THAT IN A FEW YEARS RENTERS WILL BE ABLE TO DO EVERYTHING OVER THE PHONE FROM TURNING ON THEIR KITCHEN APPLIANCES TO GETTING A MOVIE RESIDENTIAL BUILDING MAY BE WAKING UP FROM ITS RECESSIONARY SLUMBER BUT LAND DEVELOPMENT IS STILL HUNG OVER FROM THE WILD PARTY OF THE LATE '80S ACCORDING TO A REPORT FROM LOMAS MORTGAGE USA THE REPORT SAYS THE EXPANSION IN SINGLEFAMILY HOMEBUILDING HASN'T BEEN FOLLOWED BY A GREAT INCREASE IN THE ACQUISITION OF LAND FOR DEVELOPMENT AS HOME SITES THERE'S NOT NECESSARILY GOING TO BE A CRUNCH BUT THE POTENTIAL IS THERE SAYS MACK ROGERS A SENIOR VICE PRESIDENT AND THE AUTHOR OF THE REPORT WHICH CALLS THE DISPARITY BETWEEN SUPPLY AND DEMAND FOR DEVELOPED LAND A RECIPE FOR TROUBLE THAT COULD LEAD TO BUILDING BOTTLENECKS DOWN THE LINE IN THE FIRST NINE MONTHS OF 1993 750000 PERMITS WERE ISSUED FOR NEW SINGLEFAMILY HOMES A FIVEYEAR HIGH BUT WHILE LENDERS HAVE BEEN DOLING OUT MORE MORTGAGES THEY'RE STILL RELUCTANT TO INCREASE LENDING FOR DEVELOPMENT THE REPORT SAYS SUPPLIES OF HOME LOTS ARE TIGHT IN SEVERAL METROPOLITAN AREAS LEADING SOME INTO SHORTAGES AND SOARING PRICES IN LAS VEGAS THE PERACRE PRICE ON ONE LAND PARCEL SHOT UP 14 TO 80000 IN ONE MONTH ATLANTA NOT LONG AGO CONSIDERED OVERBUILT HAS SEEN RENTS TAKE OFF AS A RESULT OF HIGH DEMAND AND NEW MULTIFAMILY LAND PRICES HAVE JUMPED STILL SOME OF THE STRONGEST MARKETS HAVEN'T SEEN IMBALANCE IN SUPPLY AND DEMAND DENVER AND PHOENIX FOR EXAMPLE HAVEN'T SUFFERED A DEVELOPEDLAND SHORTAGE BECAUSE THEY WERE AMONG THE HARDEST HIT BY THE SAVINGSANDLOAN DISASTER AND BUILDING COLLAPSE CONSTRUCTION REVIVED IN BOTH AREAS WITH PLENTY OF EXCESS LAND AVAILABLE ALTHOUGH SOME BANKS ARE BEGINNING TO SHOW INTEREST AGAIN IN LAND DEVELOPMENT MANY REMAIN SKEPTICAL THIS DOWNTURN WAS JUST TOO SEVERE MR ROGERS SAYS A LOT OF PEOPLE ARE WADING INTO THE MARKET INSTEAD OF JUST DIVING BACK IN SAN FRANCISCO'S BEAUTY CONTEST A CITYSPONSORED COMPETITION AMONG DEVELOPERS TO WIN CONSTRUCTION APPROVAL FOR HIGHRISES HAD NO WINNERS IN 1993 THAT'S BECAUSE THERE WERE NO ENTRIES THE CALIFORNIA COURT OF APPEALS UPHELD A DECISION GIVING 50000 TO NANCY SALKA FOR EMOTIONAL DISTRESS CAUSED BY FLOODING IN HER BEVERLY HILLS HOME DEAN HOMES OF BEVERLY HILLS WHICH BUILT THE HOME ADMITTED LIABILITY FOR THE PROPERTY DAMAGE BUT CONTESTED THE DISTRESS AWARD 9401030019 940103 NEW SECURITIES ISSUES THE FOLLOWING WERE AMONG FRIDAY'S OFFERINGS AND PRICINGS IN US AND NONUS CAPITAL MARKETS WITH TERMS AND SYNDICATE MANAGER AS COMPILED BY DOW JONES CAPITAL MARKETS REPORT BANCO DE BOSTON SA US PARENT 60 MILLION OF FLOATINGRATE EURONOTES DUE JANUARY 2002 AT ISSUE AND FIXED REOFFER PRICE PAR VIA SALOMON BROTHERS INTERNATIONAL LTD INTEREST IS PAYABLE SEMIANNUALLY AND FLOATS 363 BASIS POINTS OVER LONDON INTERBANK OFFERED RATE PUT AND CALL OPTION ON JAN 7 1997 AT PAR GUARANTOR FIRST NATIONAL BANK OF BOSTON A UNIT OF BANK OF BOSTON CORP FEES ONE FEDERAL HOME LOAN MORTGAGE CORP US 300 MILLION OF SERIES 1665 MULTICLASS MORTGAGE PARTICIPATING EUROCERTIFICATES DUE 2023 VIA GREENWICH CAPITAL MARKETS INC ISSUE PRICE AND COUPON ARE VARIABLE WEIGHTED AVERAGE COUPON IS 755 AND WEIGHTED AVERAGE MATURITY IS 356 MONTHS GUARANTOR FREDDIE MAC NO FEES SPINTAB SWEDEN 24 BILLION YEN OF FLOATINGRATE EURONOTES DUE JAN 26 1996 AT ISSUE AND FIXED REOFFER PRICE 100551 VIA NOMURA INTERNATIONAL PLC INTEREST IS PAID QUARTERLY AND THE RATE FLOATS 20 BASIS POINTS OVER LIBOR FEES 0125 9401030018 940103 INTERNATIONAL IRA BOMBINGS DIMINISH HOPES FOR ULSTER PEACE BY KEVIN HELLIKER STAFF REPORTER OF THE WALL STREET JOURNAL THE OUTLAWED IRISH REPUBLICAN ARMY WASTED NO TIME CRUSHING HOPES FOR A PEACEFUL NEW YEAR IN NORTHERN IRELAND WITH ITS SOLDIERS BLOWING UP SOME BUILDINGS 45 MINUTES INTO 1994 AND A TOP OFFICIAL DISMISSING THE BRITISHIRISH PEACE INITIATIVE AS WORTHLESS IRA BOMBERS DAMAGED OR DESTROYED 10 STORES AND A LIBRARY EARLY SATURDAY KILLING NO ONE BUT CAUSING MILLIONS OF POUNDS OF DAMAGE AND LEAVING AS MANY AS 200 PEOPLE OUT OF WORK THE BOMBS CAME ONLY TWO DAYS AFTER AN IRA SNIPER SHOT A BRITISH SOLDIER IN CROSSMAGLEN IN THE FIRST TERRORIST KILLING SINCE THE BRITISH AND IRISH GOVERNMENTS UNVEILED THEIR JOINT PLAN FOR PEACE IN NORTHERN IRELAND LAST MONTH THE VIOLENCE PROMPTED THREATS OF REVENGE FROM OUTLAWED PROTESTANT PARAMILITARY GROUPS WHICH LAST YEAR KILLED MORE PEOPLE THAN THE IRA DID INDEED ON SUNDAY NIGHT PROTESTANT TERRORISTS SPRAYED GUNFIRE INTO THE WESTERN BELFAST HOME OF CATHOLIC CITY COUNCILOR ALEX MASKEY HITTING NO ONE PERHAPS MORE DISCOURAGING THAN THE IRA BOMBS WAS A SUNDAY BUSINESS POST INTERVIEW WITH MARTIN MCGUINNESS A TOP OFFICIAL OF THE IRA'S LEGAL POLITICAL WING SINN FEIN THE DUBLIN NEWSPAPER QUOTED MR MCGUINNESS AS SAYING THAT HIS GROUP WOULD REJECT AS WORTHLESS ANY PEACE OFFERING THAT DIDN'T INCLUDE A BRITISH PROMISE TO LEAVE NORTHERN IRELAND THE BRITISHIRISH INITIATIVE CALLS FOR BRITAIN TO LEAVE THE PROVINCE ONLY AT THE REQUEST OF A MAJORITY OF ITS VOTERS 60 OF WHOM ARE PROTESTANT AND GENERALLY LOYAL TO THE BRITISH CROWN MR MCGUINNESS STRESSED THAT HIS COMMENTS DIDN'T REPRESENT AN OFFICIAL IRA RESPONSE TO THE PEACE INITIATIVE THAT ISN'T EXPECTED UNTIL LATER THIS MONTH BUT THE HOPE FOR PEACE THAT EMANATED FROM THE DEC 15 SIGNING OF THE DOCUMENT IS DWINDLING FEWER AND FEWER PEOPLE EXPECT SINN FEIN TO ACCEPT THE INITIATIVE'S OFFER OF A SEAT AT THE BARGAINING TABLE IN LONDON SOMETHING SINN FEIN HASN'T HAD IN NEARLY 20 YEARS AVAILABLE THREE MONTHS AFTER THE IRA CALLS A CEASEFIRE A LEADING MEMBER OF THE PROTESTANT ULSTER UNIONIST PARTY SAID THAT NEITHER BRITAIN NOR THE IRISH REPUBLIC SHOULD BE STRUNG ALONG ANY LONGER WAITING FOR AN OFFICIAL IRA RESPONSE THEY HAVE GOT THEIR ANSWER WHAT MORE DO THEY NEED SAID DAVID TRIMBLE AN ULSTER UNIONIST MEMBER OF BRITIAN'S PARLIAMENT THE WEEKEND VIOLENCE HE ADDED CONFIRMS WHAT WE HAVE ALWAYS THOUGHT THAT THE IRA ARE NOT INTERESTED IN PEACE IRISH OFFICIALS DIDN'T IMMEDIATELY RESPOND TO THE IRA'S WEEKEND ACTIONS IN LONDON PRIME MINISTER JOHN MAJOR TOLD BBC RADIO 4 THAT HE WAS LOSING PATIENCE WITH THE IRA HE SAID THE GROUP COULD EITHER ACCEPT THE PEACE INITIATIVE OR ELSE CONTINUE WITH VIOLENCE AND BECOME INCREASINGLY ISOLATED AS THEY DO SO IT HAS ACHIEVED NOTHING IN THE LAST 25 YEARS AND WILL ACHIEVE NOTHING IN THE NEXT 25 YEARS REJECTION OF THE PLAN WOULD LEAVE THE IRA ALIENATED FROM THE GOVERNMENT THAT IT PURPORTS TO SERVE THE IRISH REPUBLIC THE REPUBLIC WHOSE CONSTITUTION CLAIMS A RIGHT TO NORTHERN IRELAND AGREED IN THE PEACE INITIATIVE NOT TO ATTEMPT TO IMPOSE UNITY ON THE NORTH AND TO ABIDE BY THE WISHES OF A MAJORITY OF NORTHERN VOTERS IN ADDITION IRISH OFFICIALS HAVE THREATENED TO SIGNIFICANTLY STEP UP THEIR ANTITERRORIST CAMPAIGN AGAINST THE IRA AS HAVE BRITISH OFFICIALS IF IT REJECTS THE PEACE INITIATIVE 9401030017 940103 TECHNOLOGY XEROX TO SELL PORTABLE COPIER IN EFFORT TO WOO SMALL BUSINESS AND CONSUMERS BY GAUTAM NAIK STAFF REPORTER OF THE WALL STREET JOURNAL STAMFORD CONN XEROX CORP PLANS TO INTRODUCE AN INEXPENSIVE PORTABLE COPIER TODAY IN ITS GROWING EFFORT TO PURSUE SMALLBUSINESS AND CONSUMER MARKETS THE BATTERYPOWERED COPIER WEIGHS LESS THAN FOUR POUNDS ABOUT THE SAME AS A LARGE HARDCOVER NOVEL AND FITS INSIDE A BRIEFCASE THE 249 MACHINE DUBBED XNOTE IS AIMED AT HOUSEHOLDS SMALL BUSINESSES TRAVELING EXECUTIVES AND OTHER USERS WITH ONLY AN OCCASIONAL NEED FOR COPIES THIS BRINGS US IN TOUCH WITH A NEW SET OF CUSTOMERS MOBILE USERS SAID BRIAN E STERN PRESIDENT OF XEROX'S PERSONALDOCUMENTPRODUCTS DIVISION THE BULK OF XEROX'S DOCUMENTPROCESSING REVENUE AND EARNINGS COME FROM THE SALE AND SERVICE OF LARGE EXPENSIVE COPIERS A MARKET IN WHICH MARGINS TEND TO BE HIGH ALTHOUGH ANALYSTS DON'T EXPECT THE NEW COPIER TO HAVE A SIGNIFICANT EFFECT ON XEROX'S BOTTOM LINE IN THE NEAR FUTURE THE COMPANY BELIEVES IT WILL SET THE STAGE FOR AN EVOLUTIONARY SERIES OF FUTURE PRODUCTS AIMED AT A NICHE MARKET SMALL BUSINESSES THAT BUY THE XNOTE ARE INCUBATORS A SPOKESMAN SAID WHEN THEY GROW UP THEY'LL START BUYING OTHER XEROX PRODUCTS INCLUDING LARGER COPIERS XEROX HAS SHIED AWAY FROM SMALLBUSINESS AND HOUSEHOLD MARKETS IN THE PAST FOR A LONG TIME WE GAVE UP ON LOWEND CONSUMER PRODUCTS BECAUSE WE COULDN'T COMPETE IN TERMS OF PRICE OR MARKETING PROWESS THE SPOKESMAN SAID HOWEVER A PAINFUL SALESFORCE REORGANIZATION AND A STRENGTHENING OF ITS HAND AGAINST DIEHARD JAPANESE COMPETITION HAS MADE XEROX MORE AGGRESSIVE LATELY XEROX HAS ENCIRCLED THE JAPANESE IN MOST DOCUMENTPROCESSING BUSINESS SAID ALEX B HENDERSON ANALYST AT PRUDENTIAL SECURITIES RESEARCH INC AND BECAUSE JAPANESE FIRMS SUCH AS CANON INC SHARP CORP AND RICOH CO TRADITIONALLY HAVE BEEN GOOD AT SELLING LOWEND PRODUCTS XEROX'S NEW COPIER WILL CONTINUE TO PRESSURE THEM IN THOSE MARKETS HE SAID HOWEVER FOR ALL ITS HIGHRESOLUTION DIGITAL TECHNOLOGY XEROX'S PORTABLE COPIER COULD BE A HARD SELL MR HENDERSON NOTED THAT DANKA BUSINESS SYSTEMS INC OF ST PETERSBURG FLA PLANS TO SELL A 900 SIXPOUND MACHINE THAT COMBINES COPYING PRINTING FAXING AND DOCUMENTSCANNING CAPABILITIES IT ISN'T THAT HARD TO BUILD A MULTIFUNCTION MACHINE MR HENDERSON SAID IF YOU WANT TO GIVE ME A VIRTUAL OFFICE YOU NEED TO PROVIDE ME WITH MORE THAN A COPIER IN A SINGLE UNIT XEROX MISSED THE BOAT XEROX HOWEVER BELIEVES THAT PEOPLE WHO OWN SMALL BUSINESSES OR WORK FROM HOME WILL BUY THE MACHINE FOR ITS LOW PRICE AND CONVENIENCE FOR INSTANCE UNLIKE LARGER COPIERS THAT USE MESSY TONER XEROX'S MACHINE USES A SNAPIN CARTRIDGE THAT LASTS FOR ABOUT 20 COPIES THE MACHINE NEEDS LITTLE OR NO SERVICING THE COMPANY SAID ADDING THAT THE SHARPNESS OF COPIES IT PRODUCES RIVALS THOSE OF LARGER MACHINES THE MACHINE HOWEVER IS SLOW EACH COPY TAKES ABOUT A MINUTE TO EMERGE MR STERN SAID XEROX PLANS TO SHIP THE XNOTE IN THE FIRST QUARTER WITH FULL DISTRIBUTION BEGINNING IN THE SECOND QUARTER THE COMPANY COULD SELL BETWEEN 30000 AND 100000 UNITS IN 1994 MAINLY THROUGH RETAIL OUTLETS HE SAID ADDING THAT BECAUSE THIS IS A NEW MARKET IT'S DIFFICULT TO TAKE A SNAPSHOT OF WHAT IT'S LIKE 9401030016 940103 AMERICA WEST FIRES CONWAY FROM TOP POSTS THE ACTION ENDS STRUGGLE WITH CHAIRMAN FRANKE OVER CARRIER'S CONTROL BY BRIDGET O'BRIAN STAFF REPORTER OF THE WALL STREET JOURNAL A NEARLY YEARLONG POWER STRUGGLE OVER CONTROL OF AMERICA WEST AIRLINES ENDED WITH THE ABRUPT FIRING OF MICHAEL J CONWAY THE CARRIER'S PRESIDENT AND CHIEF EXECUTIVE OFFICER AND ONE OF ITS FOUNDERS MR CONWAY'S DEPARTURE WAS ANNOUNCED HOURS AFTER A BOARD MEETING FRIDAY IN AN INTERVIEW AMERICA WEST CHAIRMAN WILLIAM FRANKE WOULD SAY ONLY THAT MR CONWAY HAS LEFT THE EMPLOY OF THE COMPANY I THINK THERE WAS A MUTUAL UNDERSTANDING OF THE NEED FOR CHANGE BUT AN INTERVIEW WITH MR CONWAY YESTERDAY MADE CLEAR THAT THERE WAS NO SUCH SHARED VIEW THE 48YEAROLD EXECUTIVE SAID THAT HE DID NOT RESIGN AND THAT HE VOTED AGAINST THE BOARD'S ACTION HE WOULDN'T COMMENT MORE SPECIFICALLY BUT PEOPLE FAMILIAR WITH THE BOARD VOTE SAID MR CONWAY WAS SURPRISED WHEN HIS OUSTER WAS BROUGHT UP DURING THE MEETING AND THAT ONE OTHER DIRECTOR SAMUEL EICHENFIELD PRESIDENT AND CHIEF EXECUTIVE OF GFC FINANCIAL CORP OF PHOENIX SIDED WITH MR CONWAY MR EICHENFIELD COULDN'T BE REACHED MR CONWAY WILL REMAIN A DIRECTOR OF PHOENIXBASED AMERICA WEST WHICH IS OPERATING UNDER BANKRUPTCY COURT PROTECTION HE SAID HE WAS ASKED TO RESIGN FROM THE BOARD BUT REFUSED I STILL BELIEVE I CAN VERY MUCH PLAY A VALUABLE ROLE IN BRINGING A SUCCESSFUL PLAN OF REORGANIZATION ABOUT HE SAID MY COMMITMENT TO THE 11000 EMPLOYEES HAS NEVER BEEN GREATER THE 57YEAROLD MR FRANKE WHO HAD NO AIRLINE EXPERIENCE BEFORE JOINING AMERICA WEST IN 1992 BUT WAS KNOWN FOR TURNING AROUND TROUBLED COMPANIES SAID HE WILL ASSUME MR CONWAY'S DUTIES AS CHIEF EXECUTIVE OFFICER AS PRESIDENT MR CONWAY WILL BE SUCCEEDED BY A MAURICE MYERS 53 WHO WILL ALSO BECOME THE AIRLINE'S CHIEF OPERATING OFFICER A NEW POSITION MR MYERS HAS BEEN PRESIDENT AND CHIEF EXECUTIVE OF ALOHA AIRLINES INC OF HONOLULU SINCE 1985 MESSRS CONWAY AND FRANKE HAD BEEN AT LOGGERHEADS FOR MUCH OF THE PAST YEAR OVER HOW TO BEST STEER THE 10YEAROLD AIRLINE OUT OF BANKRUPTCY PROCEEDINGS INDEED MR FRANKE SOUGHT TO FIRE MR CONWAY LAST MAY BUT THE BOARD HEADED OFF THE MOVE BELIEVING IT WOULD BE TOO DISRUPTIVE MORE RECENTLY THE TWO MEN HAVE BEEN COMPETING TO SOLICIT INVESTORS FOR THE COMPANY TWO WEEKS AGO AN INVESTMENT GROUP LED BY THE PRITZKER FAMILY OF CHICAGO DROPPED ITS BID FOR AMERICA WEST THE GROUP CALLED AWA PARTNERS AND WHICH INCLUDED WERTHEIM SCHRODER & CO HAD BEEN RECRUITED BY MR CONWAY THE AIRLINE'S BOARD IN SEPTEMBER HAD REJECTED AWA PARTNERS' PROPOSED 150 MILLION BUYOUT WHICH INVOLVED BUYING OUT CERTAIN CREDITORS FOR 90 MILLION AND REPLACING CERTAIN BOARD MEMBERS THE BID ALSO CALLED FOR CUTTING AIRCRAFT LEASE RATES TO GPA GROUP PLC THE IRISH LEASING FIRM WHICH IS A MAJOR CREDITOR OF AMERICA WEST AND WHICH CONTROLS SEVERAL BOARD SEATS THE INVESTORS ALSO HAD PLANNED TO INJECT 60 MILLION IN FRESH EQUITY INTO THE COMPANY AWA PARTNERS WANTED TO SUBMIT ANOTHER FORMAL BID BUT A MEMBER OF THE PRITZKER GROUP LATER SAID IT COULDN'T PROCEED BECAUSE THE AIRLINE UNDER MR FRANKE'S DIRECTION DIDN'T GIVE IT THE FINANCIAL INFORMATION IT NEEDED WITHOUT THE PRITZKER PROPOSAL MOST OBSERVERS BELIEVED THAT MR CONWAY'S FUTURE AT THE AIRLINE WAS IN DOUBT LAST WEEK AMERICA WEST DISCLOSED IT HAD RECEIVED AN OFFER FROM MICHAEL STEINHARDT A NEW YORK MONEY MANAGER TO PUMP 250 MILLION INTO THE COMPANY AS PART OF A REORGANIZATION PLAN THE BID IS FOR CONTROL OF 80 OF THE COMPANY THE US BANKRUPTCY COURT OVERSEEING AMERICA WEST'S CASE HAS SET A FEB 10 DEADLINE FOR THE COMPANY TO ACCEPT BIDS OR PROPOSE ITS OWN PLAN TO EMERGE FROM CHAPTER 11 PROTECTION MR FRANKE SAID THERE ARE FOUR OR FIVE ACTIVE PARTICIPANTS OTHER THAN MR STEINHARDT 9401030015 940103 POLITICS & POLICY GOP LEADERS SEEK COUNSEL TO PROBE CLINTON INVESTMENT BY JOHN HARWOOD STAFF REPORTER OF THE WALL STREET JOURNAL WASHINGTON REPUBLICAN LEADERS IN CONGRESS TURNED UP THE POLITICAL HEAT ON PRESIDENT CLINTON BY CALLING FOR AN INDEPENDENT COUNSEL TO INVESTIGATE POSSIBLE LINKS BETWEEN THE PRESIDENT AND A FAILED ARKANSAS SAVINGS AND LOAN IN SEPARATE TELEVISION INTERVIEWS SENATE MINORITY LEADER ROBERT DOLE AND HOUSE GOP WHIP NEWT GINGRICH CALLED FOR ATTORNEY GENERAL JANET RENO TO APPOINT AN OUTSIDE COUNSEL TO EXAMINE THE INVESTMENT BY THE PRESIDENT AND HILLARY RODHAM CLINTON IN WHITEWATER DEVELOPMENT CORP WITH JAMES MCDOUGAL THE OWNER OF NOWDEFUNCT MADISON GUARANTY SAVINGS & LOAN THERE ARE DOZENS OF QUESTIONS THAT NEED TO BE ANSWERED MR DOLE ASSERTED ON NBC NEWS'S MEET THE PRESS ACCUSING MS RENO OF DRAGGING HER FEET ON THE MATTER FOR THE PRESIDENT'S SAKE AND FOR THE SAKE OF THE INTEGRITY OF THE ATTORNEY GENERAL'S OFFICE SHE SHOULD MOVE THE KANSAS REPUBLICAN SAID MR GINGRICH INTERVIEWED ON ABC NEWS'S THIS WEEK WITH DAVID BRINKLEY SAID THERE WERE TOO MANY IMPLICATIONS OF BREAKING THE LAW FOR THE ATTORNEY GENERAL NOT TO ACT IF THE CLINTONS ARE INNOCENT WHY DON'T THEY GO AHEAD AND AGREE TO AN INDEPENDENT COUNSEL TO CLEAR THEIR NAME THE GEORGIA REPUBLICAN ASKED THE WHITE HOUSE IMMEDIATELY REJECTED THE GOP DEMANDS THERE'S NO NEED AT THIS TIME FOR AN INDEPENDENT COUNSEL SENIOR PRESIDENTIAL ADVISER GEORGE STEPHANOPOULOS SAID ON THE ABC PROGRAM HE PREDICTED THAT A CURRENT JUSTICE DEPARTMENT INVESTIGATION WILL SHOW THAT NO LAWS WERE BROKEN AND ACCUSED REPUBLICANS OF SEEKING POLITICAL ADVANTAGE A JUSTICE DEPARTMENT SPOKESWOMAN REITERATED MS RENO'S PREVIOUS ASSERTIONS THAT THE DEPARTMENT'S INVESTIGATION IS SUFFICIENT MR CLINTON'S INVESTMENT WITH MR MCDOUGAL IN WHITEWATER AN OZARK MOUNTAIN REALESTATE PROJECT ON WHICH THE PRESIDENT SAYS HE LOST ABOUT 70000 WAS THE SUBJECT OF CONTROVERSY DURING THE 1992 PRESIDENTIAL CAMPAIGN BUT OFFICIAL INTEREST HAS INTENSIFIED SINCE THE DISCLOSURE THAT DOCUMENTS PERTAINING TO WHITEWATER WERE REMOVED FROM THE OFFICE OF VINCENT FOSTER THE FORMER DEPUTY WHITE HOUSE COUNSEL AND CLINTON FAMILY LAWYER SHORTLY AFTER MR FOSTER'S SUICIDE IN JULY THE PRESIDENT HAS VOLUNTEERED TO TURN OVER THE WHITEWATER FILES TO THE JUSTICE DEPARTMENT WHICH IS LOOKING AT THE INVESTMENT AS PART OF A BROADER CIVIL AND CRIMINAL INVESTIGATION INTO MADISON GUARANTY MS RENO SAYS THE INVESTIGATION IS BEING HANDLED BY CAREER DEPARTMENT PROSECUTORS AND THAT HER APPOINTMENT OF AN OUTSIDE COUNSEL WOULD INCREASE THE PERCEPTION OF POLITICAL INTERFERENCE NOT DIMINISH IT REP JIM LEACH R IOWA AND SOME OTHER REPUBLICANS HAVE PREVIOUSLY CALLED FOR AN INDEPENDENT COUNSEL SUGGESTING THE JUSTICE DEPARTMENT MIGHT BE USED TO SHIELD MR CLINTON FROM ACCOUNTABILITY BUT THE STATEMENTS BY GOP LEADERS ON THE ISSUE SUGGEST THAT AS MR GINGRICH PUT IT WHITEWATER DEVELOPMENT IS NOT GOING TO GO AWAY AS A POLITICAL IF NOT LEGAL DISTRACTION FUELING REPUBLICAN RHETORIC IS THE FACT THAT THE DEMOCRATIC CHAIRMEN OF THE HOUSE AND SENATE BANKING COMMITTEES HAVE DECLINED TO HOLD HEARINGS THE DEMOCRATS AREN'T GOING TO TOUCH THIS MR DOLE SAID THAT'S WHY WE NEED THE ATTORNEY GENERAL TO ACT THE PRESIDENT PROBABLY WILL BE CLEARED AND THIS WILL NOT BE AN ISSUE BUT LET'S GO AHEAD AND GET IT DONE 9401030014 940103 1993 YEAREND REVIEW OF MARKETS AND FINANCE REAL ESTATE INVESTMENT TRUSTS WASHINGTON REAL ESTATE ITSELF MIGHT NOT HAVE ENJOYED A VERY GOOD MARKET IN 1993 BUT REAL ESTATE INVESTMENT TRUSTS WERE A HIT WITH INVESTORS ACCORDING TO THE NATIONAL ASSOCIATION OF REAL ESTATE INVESTMENT TRUSTS THERE WERE 101 OFFERINGS OF SECURITIES BY REITS LAST YEAR THAT RAISED A TOTAL OF 1285 BILLION OF CAPITAL OF THAT TOTAL 40 WERE INITIAL PUBLIC OFFERINGS REPRESENTING 75 BILLION OF NEW CAPITAL AND 40 WERE SECONDARY EQUITY OFFERINGS FOR A TOTAL OF 33 BILLION THERE WERE 14 DEBT OFFERINGS TOTALING 13 BILLION AND SEVEN MORTGAGEBACKED OFFERINGS REPRESENTING 724 MILLION 9401030012 940103 LETTERS TO THE EDITOR I LOST THE ELECTION DON'T BLAME OTHERS I HAVE A HIGH REGARD FOR YOUR NEWSPAPER THUS I WAS SURPRISED WHEN YOUR NOV 30 EDITORIAL THE NEW MAYORS SOARED SOMEWHAT HIGHER THAN THE FACTS IN DISCUSSING MY LOSING CAMPAIGN AGAINST TOM FETZER IN THE RALEIGH NC MAYOR'S RACE FIRST YOU WROTE THAT I WAS BILL CLINTON'S 1992 STATE CAMPAIGN CHAIRMAN THAT'S FLAT WRONG REP DAN BLUE JEANNETTE HYDE AND THENATTORNEY GENERAL LACY THORNBURG HELD THOSE TITLES SECOND YOU COMPARE MR FETZER TO MR SCHUNDLER OF JERSEY CITY IN TOUTING FRESH CONSERVATIVE SOLUTIONS SUCH AS COMMUNITY BASED POLICING RALEIGH HAS HAD COMMUNITY BASED POLICING FOR ALMOST A YEAR I KNOW BECAUSE I HELPED INITIATE THE PROGRAM I DON'T KNOW MR SCHUNDLER BUT FROM WHAT I'VE READ ABOUT HIM I KNOW HE HAD A SOLID TRACK RECORD IN BUSINESS IF THAT'S TRUE THE MR FETZER IS NO MR SCHUNDLER MR FETZER SPENT MOST OF HIS ADULT LIFE IN THE EMPLOY OF JESSE HELMS'S CONGRESSIONAL CLUB AND IN GOVERNMENT WHICH LEADS TO THE THIRD CORRECTION YOU SAY THAT VOTERS REJECTED A RELENTLESSLY NEGATIVE CAMPAIGN ON THE CONTRARY A SLIM MAJORITY OF VOTERS BELIEVED MR FETZER'S RELENTLESSLY INACCURATE AND NEGATIVE CAMPAIGN AGAINST ME AND OTHER CANDIDATES FINALLY YOU CHARACTERIZE RALEIGH AS A LIBERAL DEMOCRATIC STRONGHOLD NEVER CARRIED BY A REPUBLICAN THAT TOO IS WRONG A REPUBLICAN SERVED ON THE 198991 CITY COUNCIL WITH ME I WELCOME THE MENTION IN YOUR NEWSPAPER BUT PLEASE DON'T DISTORT THE RECORD IN AN EFFORT TO DISCREDIT OUR GOOD CITY OR PRESIDENT CLINTON I LOST THE ELECTION ALL BY MYSELF YOU DID SPELL MY NAME CORRECTLY FOR THAT I AM GRATEFUL 9401030011 940103 AUTOS FAMILY SEDANS TO GET BIG PUSH AT AUTO SHOW BY DOUGLAS LAVIN STAFF REPORTER OF THE WALL STREET JOURNAL DETROIT WHEN THE NORTH AMERICAN INTERNATIONAL AUTO SHOW KICKS OFF HERE THIS WEEK SO TOO WILL A MULTIBILLIONDOLLAR CRUSADE BY THE BIG THREE AUTO MAKERS TO WIN BACK SKEPTICS LIKE JILL MANNING MS MANNING A 27YEAROLD ADMINISTRATIVE ASSISTANT IN ADVERTISING SALES RECENTLY SET OUT TO BUY A FOURDOOR FAMILY CAR AMERICAN IF POSSIBLE BUT AFTER RENTING A PONTIAC SUNBIRD SEDAN SHE WENT STRAIGHT TO THE NISSAN AND HONDA DEALERS THE SUNBIRD WAS SLUGGISH SHE SAYS ITS SEATS WERE UNCOMFORTABLE AND THE INTERIOR DESIGN WAS POOR YOU'RE LOOKING FOR WHERE THE LIGHTS ARE AND THEY'RE IN THIS REALLY WEIRD PLACE SHE SAYS IT SEEMS REALLY POORLY MADE YOU GET INTO A CIVIC OR AN ALTIMA AND YOU CAN SEE A REAL DIFFERENCE YOU SIT THERE AND YOU GO OH THIS IS NICE EXECUTIVES AT GENERAL MOTORS CORP FORD MOTOR CO AND CHRYSLER CORP KNOW WHAT MS MANNING IS TALKING ABOUT FOR YEARS MANY US FAMILY SEDANS WERE CLUNKY BORING AND CHEAP LOOKING SO THE US CAR COMPANIES ARE GOING TO USE THE BIGGEST US AUTO SHOW OF THE YEAR TO TOUT NEW MODELS AIMED AT PROVING THAT US CARS NOW HAVE IT ALL RELIABILITY MODERN TECHNOLOGY AND REFINED ENGINEERING LIKE THAT LONG ASSOCIATED WITH JAPANESE CARS TO CLOSE THE REFINEMENT GAP WITH JAPAN DETROIT HAS POURED BILLIONS INTO DEVELOPING NEW SOPHISTICATED MULTIVALVE ENGINES SMOOTHER TRANSMISSIONS AND TAUTER SUSPENSIONS BUT THE TOWN THAT INVENTED CHROME AND FINS ALSO WANTS TO SHOW THAT IT'S NOW PAYING ATTENTION TO SUCH DETAILS AS THE FEEL OF A TURN SIGNAL AND THE QUALITY OF THE PLASTIC ON THE HEATER KNOBS THE FRUITS OF THESE EFFORTS WILL BE UNVEILED THIS WEEK WHEN GM SHOWS ITS REDESIGNED CHEVROLET LUMINA SEDAN AND MONTE CARLO COUPE AND CHRYSLER REVEALS ITS NEW COMPETITOR TO THE HONDA ACCORD CODE NAMED THE J/A ALSO THIS WEEK CHRYSLER LAUNCHES ITS NEON WHICH WILL COMPETE WITH THE HONDA CIVIC AND GM'S SATURN COMPACTS LATER THIS YEAR WILL COME THE FORD CONTOUR AND MERCURY MYSTIQUE SEDANS REPLACEMENTS FOR THE DOWDY TEMPO AND TOPAZ WHICH CARRY ENGINES BASED ON THOSE IN THE FORD FALCON OF THE 1960S AND GM WILL INTRODUCE REPLACEMENTS FOR ITS 12YEAROLD CHEVROLET CAVALIER AND PONTIAC SUNBIRD COMPACTS ALL FOUR OF THESE CARS HAVE BEEN REDESIGNED WITH THE GOAL OF MATCHING JAPANESE STANDARDS FOR PRECISE ENGINEERING THE DETROIT AUTO SHOW PROMISES TO BE A GOOD VENUE FOR THE BIG THREE'S NEW MODELS BRINGING HUNDREDS OF AUTOMOTIVE JOURNALISTS FROM AROUND THE WORLD TO DETROIT WHERE AUTO MAKERS WILL USE THE MEDIA TO WHET THE APPETITES OF CONSUMERS HEADED FOR DEALERSHIPS CAR SALES PICKED UP IN 1993 AFTER SEVERAL YEARS OF SLUMPING AND ANALYSTS EXPECT THEM TO GROW AGAIN THIS YEAR THE REAL TEST WILL BE THE CARS DESPITE THE CONTINUING POPULARITY OF MINIVANS AND JEEPS FAMILY SEDANS STILL REPRESENT THE HEART OF THE CAR MARKET ABOUT 40 BUT UNTIL NOW DETROIT'S OFFERINGS IN THIS NICHE HAVE BEEN TO PUT IT POLITELY POOR CARS LIKE THE SUNBIRD THE TEMPO THE OLD CHEVY LUMINA OR THE DODGE SPIRIT WERE SO UNAPPEALING THAT EVEN THOUGH THEY ENJOYED A 2000 PRICE ADVANTAGE OVER THEIR JAPANESE RIVALS MOST CONSUMERS DEMANDED BIG REBATES TO TAKE ONE THERE'S A 1500 REBATE ON LEFTOVER '93 DODGE SPIRITS FOR EXAMPLE THE LAST OF CHRYSLER'S BOXY KCARS FIRST INTRODUCED IN 1980 EVEN WITH REDUCED PRICES THE BIG THREE SHIPPED AS MUCH AS 40 OF THEIR OLD GENERATION SEDANS TO BUYERS OF LAST RESORT RENTAL CAR FLEETS BUT JIM PERKINS THE GM VICE PRESIDENT IN CHARGE OF THE CHEVROLET SALES DIVISION SAYS HIS NEW LUMINA AND CAVALIER WILL BE DIFFERENT WE ARE TALKING ABOUT A GREAT LOOKING CAR YOU WOULDN'T BE EMBARRASSED TO PICK UP YOUR DATE IN HE SAYS MR PERKINS AND GM HAVE A LOT RIDING ON THIS THE CHEVY LUMINA HAS BEEN A SALES DISAPPOINTMENT SINCE ITS INTRODUCTION IN 1989 HODGEPODGE CONTROLS IN THE LUMINA ARE A JUMBLE CONSUMER REPORTS WROTE IN 1991 A YEAR AGO CONSUMER TEST GROUPS SAID THE REDESIGNED LUMINA'S CONTROLS WEREN'T UP TO SNUFF EITHER BUT THIS TIME MR PERKINS SAYS GM DECIDED TO LISTEN THE COMPANY MADE 120 CHANGES TO THE 1995 LUMINA THE CHANGES A RESULT OF WHAT GM CALLS HARMONY ANALYSIS INCLUDE A MORE EXPENSIVE SUSPENSION CHANGING THE WAY THE HEATER KNOBS FEEL AND THE WAY THE OUTSIDE DOOR HANDLE LOOKS THE CHANGES FORCED A COSTLY DELAY IN LAUNCHING THE CAR A CAR THAT COULD GIVE THE NEW LUMINA A RUN FOR ITS MONEY IS CHRYSLER'S NEW J/A MODEL WHICH WILL BOAST SOME OF CHRYSLER'S NEWEST TRANSMISSIONS AND HIGHTECH ENGINES SAYS ROBERT A LUTZ CHRYSLER'S PRESIDENT IT'S THE FEELING THAT THE CAR IS ALIVE IN YOUR HANDS AND IS AN EXTENSION OF YOUR OWN PSYCHOMOTOR SYSTEM SAYS MR LUTZ AS OPPOSED TO FEELING THAT IT IS SOMETHING UNCOUPLED FROM YOU THAT YOU HAVE TO GUIDE WHICH MEANS THAT YOU'RE STEERING AN APPLIANCE AROUND CHRYSLER HAS ALSO MADE EVERY EFFORT TO GIVE THE J/A CAR WHICH LOOKS A LOT LIKE THE ACCORD DISTINCTIVE FEATURES IT WILL HAVE A COMBINED AIR BAG AND HORN IN THE CENTER OF THE STEERING WHEEL SO NO ANCILLARY HORN BUTTONS ARE NEEDED AND REARSEAT HEATING AND COOLING VENTS NEITHER FEATURE IS ON THE ACCORD THOUGH BOTH ARE USUALLY FOUND ON LUXURY CARS DETROIT WAS SLOW TO REALIZE THAT YOU INTERFACE ALL YOUR TIME WITH A CAR ON THE INSIDE NOT THE OUTSIDE SAYS TREVOR CREED THE DESIGNER OF THE ORIGINAL FORD TAURUS WHO NOW HEADS CHRYSLER'S INTERIOR DESIGN TEAM A SIMILAR PHILOSOPHY WENT INTO CHRYSLER'S NEON THE REPLACEMENT FOR ITS BOXY SHADOW AND SUNDANCE COMPACTS CHRYSLER LAVISHED ATTENTION ON THE NEON'S INTERIOR GIVING IT A ROOMY REAR SEAT AND A SPORTYLOOKING STEERING WHEEL WITH AN ALMOSTHIDDEN AIR BAG THE NEON'S CONTROLS ARE PRECISE AND EASY TO USE AND STARTING AT ABOUT 9000 THE NEON WILL LOOK LIKE A BARGAIN COMPARED WITH TOYOTA COROLLAS WHICH NOW START AT MORE THAN 12000 PRICE IS THE REAL KEY TO DETROIT'S STRATEGY IN THE FAMILYSEDAN MARKET THANKS TO THE STRENGTH OF THE JAPANESE YEN AGAINST THE DOLLAR THE NEW CROP OF FAMILY CARS FROM DETROIT STILL SHOULD SELL FOR ABOUT 2000 LESS THAN THEIR JAPANESE RIVALS BUT NOW THEY SHOULD ALSO TURN A PROFIT LATER THIS YEAR GM WILL BRING OUT A REPLACEMENT FOR THE CAVALIER THAT LOOKS AS IF IT BELONGS ON THE AUTOBAHN ITS LINES ARE REMINISCENT OF GM'S GERMAN OPEL MODELS DESIGNED UNDER WAYNE CHERRY WHO IS NOW GM'S CHIEF DESIGNER IN DETROIT GM WON'T TALK ABOUT THE CAR EXCEPT TO SAY THAT LIKE THE NEON IT WILL OFFER A HIGHTECH MULTIVALVE ENGINE EFFICIENT DESIGN AND A ROOMY INTERIOR GM RECENTLY SIGNED AN AGREEMENT WITH TOYOTA TO EXPORT SOME 20000 OF THE CARS A YEAR FOR SALE UNDER TOYOTA'S BADGE IN JAPAN A DEAL THAT GM CITES AS PROOF THE NEW CAVALIER WILL MATCH THE MOST EXACTING QUALITY EXPECTATIONS BUT WITH ALL THAT MR PERKINS INDICATES THE NEW CAVALIER STILL WILL BE PRICED AT AROUND 10000 CHEVY'S MESSAGE FOR 1994 HE SAYS VALUE AND WE ARE GOING TO PROVE IT OVER AND OVER 9401030010 940103 MARKETING & MEDIA INFINITY ACQUISITION IS DELAYED AS FCC WEIGHS PROTESTS AGAINST HOWARD STERN BY DANIEL PEARL STAFF REPORTER OF THE WALL STREET JOURNAL WASHINGTON INFINITY BROADCASTING CORP MISSED A DEADLINE TO COMPLETE ITS PURCHASE OF A LOS ANGELES RADIO STATION AS THE FEDERAL COMMUNICATIONS COMMISSION WEIGHED INDECENCY COMPLAINTS AGAINST INFINITY PERSONALITY HOWARD STERN INFINITY OFFICIALS HAD ASKED THE FCC TO APPROVE QUICKLY ITS ACQUISITION OF KRTHFM FROM BEASLEY BROADCAST GROUP OF NAPLES FLA SAYING A DELAY COULD CAUSE INFINITY TO PAY MILLIONS OF DOLLARS IN PENALTIES BUT FCC COMMISSIONERS SAID THEY NEEDED TIME TO STUDY WHETHER THEY HAVE THE LEGAL AUTHORITY TO BLOCK SUCH RADIOLICENSE TRANSFERS BECAUSE OF MR STERN'S HISTORY OF INDECENCY VIOLATIONS IF THE FCC DECIDES TO DO SO IT COULD TIE UP NOT ONLY THE 110 MILLION KRTHFM DEAL BUT ALSO INFINITY'S PLANNED PURCHASE OF WASHINGTON RADIO STATIONS WPGCAM/FM FROM COOK INLET RADIO PARTNERS FOR ABOUT 60 MILLION INFINITY'S STOCK DROPPED 9 FRIDAY AFTER THE NEW YORK TIMES REPORTED THAT THE FCC WAS DELAYING THE DEALS AND THAT IT WAS POSSIBLE THAT THE COMMISSION WOULD BLOCK THE DEALS ALTOGETHER INFINITY'S STOCK CLOSED FRIDAY AT 3025 A SHARE DOWN 3 IN TRADING ON THE NASDAQ STOCK MARKET GEORGE G BEASLEY WHO CONTROLS BEASLEY BROADCAST GROUP CONFIRMED THAT THERE WAS A JAN 1 DEADLINE FOR CLOSING THE KRTHFM SALE BUT HE SAID I DON'T THINK THIS IS ANYTHING THAT WOULD JEOPARDIZE THE DEAL A MICHIGANBASED CITIZEN'S GROUP AMERICANS FOR RESPONSIBLE TELEVISION HAS PETITIONED THE FCC TO BLOCK THE LOS ANGELES DEAL WHILE A COALITION OF BLACK BUSINESSES IS SEEKING TO STOP THE WASHINGTON PURCHASE JAMES H QUELLO AN FCC COMMISSIONER WHO HAS BATTLED MR STERN FOR YEARS SAID FRIDAY HE'S CONCERNED TRANSFERRING THE LICENSES FOR INFINITY WOULD BE CONDONING HIS CONDUCT ESPECIALLY IN LIGHT OF TWO NEW COMPLAINTS THIS FALL ABOUT SCATOLOGICAL LANGUAGE ON MR STERN'S BROADCASTS STILL IT'S UNCLEAR THE FCC WILL TAKE MORE AGGRESSIVE ACTION AGAINST INFINITY THAN IT HAS IN THE PAST FCC COMMISSIONER ANDREW BARRETT FOR ONE SAID HE HASN'T DECIDED IF THE LATEST COMPLAINTS ARE VALID AND HE SAID HE WOULDN'T SUPPORT ANY ACTION THAT'S PUNITIVE IN OTHER WORDS BASED ON OFFENSES FOR WHICH INFINITY ALREADY HAS INCURRED MORE THAN 1 MILLION IN FINES IT CLEARLY SEEMED TO ME THE DECK MAY BE CLEAR HE SAID MOREOVER MR QUELLO SAID HE'S NOT SURE IT'S LEGAL FOR THE FCC TO BLOCK THE RADIOSTATION PURCHASES BECAUSE OF ANY FURTHER FINES INFINITY MAY INCUR REED HUNDT THE FCC'S NEW CHAIRMAN IS RECUSING HIMSELF BECAUSE HIS FORMER LAW FIRM LATHAM & WATKINS REPRESENTS BEASLEY THE FOURTH COMMISSIONER ERVIN DUGGAN DECLINED COMMENT FRIDAY INFINITY ENTERED THE AGREEMENT WITH BEASLEY THIS PAST JUNE AND WITH COOK IN OCTOBER ROY STEWART HEAD OF THE FCC'S MASSMEDIA BUREAU SAID AN UNOPPOSED LICENSE TRANSFER WOULD PROBABLY HAVE BEEN APPROVED BY NOW AFTER CONSULTING PRIVATELY WITH HIS COLLEAGUES MR QUELLO TOLD MR STEWART THE COMMISSIONERS WEREN'T READY TO CONSIDER THE MATTER MR STEWART SAID THAT COULD CHANGE IN A WEEK OR TWO BUT ADDED THAT HIS STAFF WOULD BE BUSY WITH CABLEREGULATION MATTERS THROUGH MUCH OF JANUARY IF IT GOES PAST A DEADLINE FOR THE SALE THE LESSON THERE IS DON'T VIOLATE OUR RULES MR QUELLO SAID 9401030008 940103 CHRYSLER CORP PLANS TO SHOW A MODEL OF FLYWHEEL' AUTO RACECAR PROTOTYPE MAY PUSH SEARCH FOR ELECTRIC VEHICLES IN A DIFFERENT DIRECTION BY OSCAR SURIS STAFF REPORTER OF THE WALL STREET JOURNAL DETROIT CHRYSLER CORP IS EXPECTED THIS WEEK TO UNVEIL A PROTOTYPE FOR A RACE CAR THAT WOULD BE PARTLY POWERED BY A MECHANICAL BATTERY THAT COULD SEND THE SEARCH FOR AN EFFICIENT ELECTRIC CAR IN A NEW DIRECTION THE TECHNOLOGY KNOWN AS FLYWHEELS IS EXPECTED TO BECOME A BUZZWORD AT THIS CITY'S ANNUAL NORTH AMERICAN INTERNATIONAL AUTO SHOW IT TAKES ITS NAME FROM THE SPINNING FLYWHEELS INSIDE THE MECHANICAL BATTERY WHICH CHRYSLER HOPES TO USE TO GENERATE AND STORE ENERGY FOR THE CAR'S GASTURBINE ENGINE IF CHRYSLER'S EXPERIMENT WITH FLYWHEELS WORKS THE MECHANICAL BATTERIES COULD ULTIMATELY BE USED TO POWER ELECTRIC CARS AUTOMAKERS HAVE LONG TRIED TO DEVELOP SUCH CARS BUT THE CHEMICALBASED BATTERIES THEY'VE TRIED SO FAR HAVE YET TO RIVAL GASOLINE IN THEIR ABILITY TO PROVIDE DRIVING RANGE FOR CARS WHEN IT UNVEILS ITS NONWORKING PROTOTYPE RACE CAR AT THE SHOW ON WEDNESDAY CHRYSLER IS EXPECTED TO ANNOUNCE ITS INTENTION TO MANUFACTURE THE CAR FOR THE PROFESSIONAL RACING CIRCUIT THE EXPERIMENT IS ALSO LIKELY TO TRIGGER A SPECULATIVE BOOM IN COMPANIES DABBLING IN FLYWHEEL TECHNOLOGY ALREADY CHRYSLER'S INTEREST IN FLYWHEELS HAS SENT THE STOCK OF TINY SATCON TECHNOLOGY INC SOARING AFTER WORD SPREAD OF THE COMPANY'S WORK WITH CHRYSLER A RIVAL FLYWHEELBATTERY PROMOTER PRIVATELY HELD AMERICAN FLYWHEEL SYSTEMS IS SO CONCERNED WITH ESTABLISHING ITS REPUTATION IN THE FIELD THAT IT PUT OUT A NEWS STATEMENT CLAIMING THAT CHRYSLER TRIED TO BAR IT FROM EXHIBITING AT THE DETROIT SHOW THE SHOW'S ORGANIZERS AND A CHRYSLER SPOKESMAN DENIED THAT ANY ATTEMPT WAS MADE TO KEEP AMERICAN FLYWHEEL OUT THE FUSS IS ODD THOUGH WHEN ONE CONSIDERS THAT EVEN CHRYSLER AND AMERICAN FLYWHEEL ADMIT NO ONE HAS YET TO PROVE THAT A CAR CAN BE BUILT THAT CAN RUN ON POWER GENERATED BY FLYWHEELS IN FACT CHRYSLER'S PROTOTYPE RACE CAR DOESN'T EVEN FUNCTION AS IS THE CASE WITH MANY OF THE CONCEPT CARS AT THE SHOW 9401030006 940103 LETTERS TO THE EDITOR CRIMINALIZING MEDICINE WITH REGARD TO BRADLEY A SMITH'S DEC 16 EDITORIALPAGE PIECE THE HEALTH POLICE ARE COMING WHERE WILL PATIENTS GO WHO DO NOT WISH TO REMAIN ON A WAITING LIST FOR LIFESAVING PROCEDURES SINCE PAYING OR BRIBING ONE'S DOCTOR WOULD BE ILLEGAL IT IS LIKELY THAT PATIENTS ABLE TO DO SO WOULD TRAVEL TO ANY COUNTRY WHERE FEEFORSERVICE PRIVATE PRACTICE OF MEDICINE IS STILL AVAILABLE PERHAPS THERE WILL BE NEW HOSPITALS JUST SOUTH OF THE BORDER OR IN THE CARIBBEAN OR EVEN A HOSPITAL SHIP IN INTERNATIONAL WATERS THE FREEDOM TO CONTRACT WITH ONE'S PHYSICIAN IS A RIGHT THAT SHOULD BE PROTECTED RATHER THAN SERVE AS THE BASIS OF PROSECUTION AS VON MISES WROTE A SOCIAL ORDER IS DOOMED IF THE ACTIONS WHICH ITS NORMAL FUNCTIONING REQUIRES ARE REJECTED BY THE STANDARDS OF MORALITY ARE DECLARED ILLEGAL BY THE LAWS OF THE COUNTRY AND ARE PROSECUTED AS CRIMINAL BY THE COURTS AND THE POLICE 9401030005 940103 1993 YEAREND REVIEW OF MARKETS AND FINANCE REVIEW OF GLOBAL EQUITY MARKETS WORLD'S STOCK MARKETS GET RAVE REVIEWS FOR THEIR 1993 PERFORMANCE A WALL STREET JOURNAL NEWS ROUNDUP HOW SWEET IT WAS WORLD EQUITY MARKETS IN 1993 WITH THE NOTABLE EXCEPTION OF TOKYO POSTED PERFORMANCES THE LIKES OF WHICH HADN'T BEEN SEEN FOR A DECADE EUROPEAN BOURSES ON AVERAGE SOARED 39 DRIVEN LARGELY BY EXPECTATIONS THAT STEADY CUTS IN INTEREST RATES WOULD ACTIVATE ECONOMIC RECOVERY IN 1994 MEXICAN STOCKS FINISHED IN RECORD TERRITORY WHILE CANADIAN ANALYSTS HAVE ONLY ONE QUESTION FOR 1994 CAN IT DUPLICATE 1993 EVEN THE TOKYO MARKET GAINED IN 1993 BUT ITS 29 GAIN STILL LEAVES IT MORE THAN 50 BELOW ITS 1989 PEAK OF 3891587 HERE IS A MARKETBYMARKET SUMMARY OF WORLD STOCKS THE COMING YEAR IN THE JAPANESE STOCK MARKET HAS ANALYSTS WONDERING IF THE BEAR WILL EVER GO BACK IN THE CAVE THE NIKKEI 225 STOCK AVERAGE CLOSED AT 1741724 ITS FIRST YEARLY GAIN AFTER THREE YEAS OF LOSSES FEW SEE THE NIKKEI REBOUNDING TO ANYWHERE NEAR ITS RECORD LEVEL IN THIS CENTURY LET ALONE THIS YEAR MORE THAN USUAL MARKET PARTICIPANTS SAY THE STOCK MARKET'S FATE IS TIED TO JAPAN'S ECONOMIC PERFORMANCE AND WITH JAPAN IN DIRE ECONOMIC STRAITS GOVERNMENT ACTION ON THE ECONOMY WILL CONTINUE TO BE A CRUCIAL FACTOR FOR STOCK PRICES IN A GOOD CASE THE NIKKEI WILL BE AT 20000 AT THE END OF 1994 SAYS SHOGO SEKIMURA FUND MANAGER AT MERRILL LYNCH CAPITAL MANAGEMENT IN A BAD CASE 14000 IT ALL DEPENDS ON THE ECONOMY AND THE POLITICAL SITUATION HE GIVES BOTH SCENARIOS EQUAL WEIGHT INDEED BEFORE THIS YEAR IS OVER THE NIKKEI MAY TOUCH BOTH EXTREMES IN 1993 AFTER ALL THE NIKKEI MOVED MORE THAN 3 ON MORE THAN A DOZEN TRADING DAYS BUT STILL ENDED THE YEAR WITH LITTLE OVERALL CHANGE THE CURRENT OUTLOOK FOR JAPAN'S ECONOMY AND THE NATION'S POLITICS HAS RARELY BEEN SO UNCERTAIN IN THE NATION'S HALF CENTURY OF POSTWAR HISTORY AND LIKE MARKETS ANYWHERE TOKYO HATES UNCERTAINTY THE BIG QUESTION ON INVESTORS' MINDS IS WHEN THE GRINDING ECONOMIC DOWNTURN WILL FINALLY HIT BOTTOM FOR MONTHS ALREADY INVESTORS HAVE HAD TO COPE WITH LOWER CORPORATE PROFIT PROJECTIONS POOR RETAIL SALES AND A NAGGING PESSIMISM IN THE BUSINESS COMMUNITY THAT'S EXPECTED TO TRANSLATE INTO ANOTHER YEAR OF DECLINING CORPORATE PROFITS ANALYSTS THINK NET PERSHARE EARNINGS OF LISTED JAPANESE COMPANIES WILL BE DOWN ABOUT 20 FOR THE YEAR ENDING MARCH 31 UNLESS THE GOVERNMENT TAKES FAST ACTION TO SPUR THE ECONOMY PERSHARE EARNINGS COULD BE DOWN AGAIN THE FOLLOWING FISCAL YEAR THEY SAY THOUGH PROBABLY ONLY 10 TO 15 MANY PEOPLE FIGURE THAT SEOUL'S STOCKS SHOULD KEEP RISING IN 1994 THAT'S THE EASY PART THE CHALLENGE WILL STILL BE FINDING A WAY TO JUMP ON THE BANDWAGON THE KOREA STOCK EXCHANGE COMPOSITE PRICE INDEX ENDED 1993 AT 86618A GAIN OF 28PUSHED IN LARGE PART BY REBOUNDING EXPORTS FALLING INTEREST RATES AND CONTINUAL EXPECTATIONS THAT REGULATORS WOULD SUDDENLY ALLOW FOREIGNERS TO POUR CASH INTO THE MARKET ALAS FOREIGN FUND MANAGERS SAY THEY STILL EXPECT THEIR DIRECT DEALINGS IN THE KOREA STOCK EXCHANGE TO BE HARSHLY LIMITED THIS YEAR COLLECTIVELY FOREIGNERS CAN OWN NO MORE THAN 10 OF A COMPANY'S LISTED EQUITY THERE'S TALK THAT SOMETIME NEXT YEAR THE MARKET WILL BE OPEN AN ADDITIONAL 4 TO 5 TO FOREIGNERS SAYS MATTHEW CHOI A FUND MANAGER FOR THORNTON MANAGEMENT ASIA LTD BUT ANALYSTS CAN ONLY GUESS WHEN SUCH A MOVE MIGHT OCCUR AND PREDICT THAT THE HIGHER LIMIT WOULD BE FILLED QUICKLY ANYWAY FOREIGN INVESTORS HAVE BEEN INADVERTENTLY CAUGHT IN THE THROES OF SEOUL'S CAMPAIGN AGAINST CORRUPTION IN AUGUST THE GOVERNMENT OUTLAWED THE COMMON PRACTICE OF HOLDING FINANCIAL ACCOUNTS UNDER PSEUDONYMS TO CUSHION THE COUNTRY'S FINANCIAL SYSTEM FROM A POTENTIAL WITHDRAWAL OF INVESTMENTS BY HOLDERS OF SUCH ACCOUNTS THE CENTRAL BANK BOOSTED MONEY SUPPLY IN THE YEAR'S SECOND HALF AS A RESULT OF THAT MONEY SUPPLY BULGE SAYS ROBIN HOW DIRECTOR OF COUNTY NATWEST INVESTMENT MANAGEMENT ASIA LTD THE KOREAN MONETARY AUTHORITIES COULDN'T COPE WITH AN INFLUX OF A FEW BILLION US DOLLARS THUS HE DOESN'T EXPECT FOREIGNOWNERSHIP LIMITS TO BE RAISED IN COMING MONTHS THE TSE COMPOSITE INDEX GAINED 29 TO 432143 IN 1993 AND MANY OF THE FACTORS THAT CONTRIBUTED TO THE RENEWED ENTHUSIASM FOR CANADIAN EQUITIES IN 1993 ARE STILL IN PLACE AT THE BEGINNING OF 1994 LOW INTEREST RATES TOP THE LIST THE BENCHMARK BANK OF CANADA BANK RATE FELL YEAR TO A 29YEAR LOW OF 411 AT THE END OF THE YEAR FROM 767 AT THE START OF 1993 SHRINKING RETURNS ON FIXEDINCOME INVESTMENTS SENT CANADIAN AND FOREIGN INVESTORS ALIKE FLOCKING TO EQUITIES MANY MARKET ANALYSTS AGREE THAT IN THE SHORT TO MEDIUM TERM THERE'S LITTLE RISK OF INTEREST RATES MOVING SHARPLY HIGHER ALTHOUGH THEIR DOWNWARD MOMENTUM MAY BE SLOWED THE RECESSION STILL LINGERS IN CANADA CHARACTERIZED BY DOUBLEDIGIT UNEMPLOYMENT AND DISAPPOINTING CORPORATE EARNINGS THE FEELING IS AND I AGREE THAT INTEREST RATES AT 4 LIMIT THE SIZE OF A POSSIBLE DOWNTURN IN WHAT HAS BECOME A RATHER OVERHEATED MARKET SAYS BOB BOAZ PORTFOLIO STRATEGIST AT DEACON BARCLAYS DE ZOETE WEDD LTD A TORONTO INVESTMENT DEALER MR BOAZ SAYS HE IS CONCERNED AT THE HEIGHTS REACHED BY CANADIAN STOCKS IN THE ABSENCE OF A STRONG RETURN TO PROFITABILITY ADDING THAT THE PERCEPTION THAT MANY STOCKS HAVE BECOME EXPENSIVE MAY CAUSE LARGE INSTITUTIONAL INVESTORS TO SHUN THE MARKET THIS YEAR THOSE VALUATIONS ARE HIGH AND THERE'S A LOT THAT COULD TAKE THE MARKET LOWER GOLD PRICES FALLING LOWER OIL PRICES HE SAYS BUT IN THE LONGER TERM BY LATE 1994 I LOOK FOR A NICE EARNINGS RECOVERY WHICH HE SAYS COULD PUSH THE TSE COMPOSITE INDEX UP AS HIGH AS 4800 OVERHANGING THE OPTIMISM OF ALL BUT A HANDFUL OF BULLS HOWEVER ARE WORRIES ABOUT SIGNS THAT CANADA'S STOCK MARKET MAY BE OVERHEATED AND SET FOR A SHARP CORRECTION THE UNUSUALLY HIGH NUMBERS OF INITIAL PUBLIC OFFERINGS IN 1993 IS A PRIME EXAMPLE MORE THAN 70 COMPANIES RAISED CAPITAL ON THE TORONTO STOCK EXCHANGE IN THE FIRST 11 MONTHS OF 1993 MORE THAN IN THE THREE PREVIOUS YEARS COMBINED ALL BUT A HANDFUL OF THE ISSUES WERE STRONG SUCCESSES AND ARE TRADING ABOVE THE ISSUE PRICE NORMALLY A SURGE OF NEW ISSUES IS THE MARKET'S LAST GASP BEFORE COLLAPSING SAYS MR BOAZ NORDIC MARKETS ROSE FROM THE ASHES OF EUROPE'S CURRENCY TURMOIL TO RANK AMONG THE WORLD'S BEST PERFORMERS IN 1993 FINNISH AND SWEDISH STOCKS IN PARTICULAR SURGED DESPITE SEVERE RECESSIONS THAT CONTINUED TO BATTER THEIR DOMESTIC ECONOMIES IN BUYING THAT WAS LARGELY DRIVEN BY PROSPECTS OF STRONG CORPORATE PROFIT RECOVERY THIS YEAR ALTHOUGH THE TURNAROUND FOR CORPORATE SCANDINAVIA IS LARGELY DISCOUNTED IN CURRENT STOCK PRICES ANALYSTS SAY FURTHER INTERESTRATE DECLINES COULD EXTEND THE RALLY THROUGH 1994 THE STOCKHOLM STOCK EXCHANGE'S AFFAERSVAERLDEN INDEX GAINED 53 TO 14028 THOUGH IT WEAKENED A BIT IN THE FINAL WEEKS OF THE YEAR AFTER REACHING A RECORD OF 14351 ON NOV 4 SINCE SWEDEN'S CENTRAL BANK SCRAPPED ITS FIXEDEXCHANGE RATE POLICY 14 MONTHS AGO THE KRONA HAS LOST MORE THAN 20 AGAINST THE DOLLAR AND DEUTSCHE MARK THAT DEPRECIATION WAS A HUGE WINDFALL FOR BIG EXPORTING COMPANIES THAT GENERATE AS MUCH AS 90 OF SALES AND DERIVE A LOT OF THEIR PROFITS OVERSEAS STOCKHOLM SECURITIES FIRM ALFRED BERG ESTIMATES THAT CORPORATE PROFITS JUMPED NEARLY 40 IN 1993 BUT COULD SPURT A WHOPPING 65 IN 1994 AS COMPANIES LIKE TELEFON AB LM ERICSSON AND AB VOLVO UNWIND CURRENCY HEDGING CONTRACTS AND FINALLY REAP FULL BENEFITS OF THE WEAK KRONA ON THEIR BOTTOM LINE THE GERMAN STOCK MARKET EXCEEDED INVESTORS' EXPECTATIONS IN 1993 WITH THE DAX INDEX CLIMBING MORE THAN 700 POINTS OR 47 THANKS LARGELY TO HOPE CREATED BY THE BUNDESBANK'S LOOSENING OF THE MONETARY REIGNS THE INDEX ENDED THE YEAR AT 226668 DESPITE A STUBBORN RECESSION AFFECTING THE DOMESTIC ECONOMY MARKET WATCHERS ARE OPTIMISTIC THE MARKET WILL CONTINUE TO CLIMB IN THE FIRST HALF OF 1994 I DON'T THINK THE DAX WILL TOP OUT UNTIL EARLY SUMMER SAYS AXEL LUTHER AN ANALYST AT BHF BANK IN FRANKFURT AFTER THAT WE MAY SEE SOME UNCERTAINTY BUT IN THE FIRST FIVE MONTHS WE'LL HAVE A DEPENDABLE MARKET ANALYSTS PREDICT THAT THE DAX COULD RISE AS HIGH AS 2350 BEFORE A CONSOLIDATION SETS IN THE SECOND HALF OF THE YEAR WON'T BE AS GOOD SAYS BARBARA SCHULZ AN INSTITUTIONAL ADVISER AT MERCK FINCK & CO IN DUSSELDORF WE'RE SKEPTICAL ABOUT THE TRANSITION FROM AN INTERESTRATE INDUCED MARKET TO AN EARNINGSDRIVEN MARKET ALSO NUMEROUS ELECTIONS IN THE LATTER HALF OF THE YEAR MAY LEAD TO INSECURITY ON THE MARKET SHE SAYS REFERRING TO THE SLEW OF GERMAN STATE AND FEDERAL ELECTIONS THE FRANKFURT MARKET'S RISE TO A HIGH OF 218728 ON DEC 13 FROM 154505 AT THE END OF 1992 SURPRISED MANY INVESTORS WHO HAD PREDICTED THAT GERMAN STOCKS WOULD UNDERPERFORM OTHER EUROPEAN MARKETS INDEED IN THE EARLY PART OF 1993 THE MARKET WAS RELATIVELY WEAK FOLLOWING A SLUGGISH PERIOD IN LATE 1992 BUT A SUCCESSION OF INTERESTRATE CUTS PUSHED THE MARKET UPWARD BEGINNING IN MAY ANALYSTS SAID INDEED ON THE BASIS OF SLOWING M3 AND LOWER INFLATION WHICH DROPPED BELOW 4 BY THE END OF THE YEAR THE BUNDESBANK PRESENTED THE MARKET WITH SEVEN CUTS IN INTEREST RATES LAST YEAR ALTHOUGH THE MOVES WERE SMALL AND GRADUAL GERMANY'S LOMBARD AND DISCOUNT RATES NOW STAND AT 6 3/4 AND 5 3/4 DOWN A FULL 2 3/4 AND 2 1/2 RESPECTIVELY FROM THE START OF 1993 FURTHER RATE CUTS ARE LIKELY TO COME IN THE EARLY PART OF 1994 BECAUSE THE BUNDESBANK CONCERNED WITH GUARDING ITS REPUTATION OF POLITICAL NEUTRALITY WOULD BE UNLIKELY TO TAKE ANY STEPS PRIOR TO NATIONAL GERMAN ELECTIONS IN THE FALL A STRONGER DOLLAR WHICH MAKES GERMAN STOCKS RELATIVELY CHEAP FOR US AND OTHER DOLLARBASED INVESTORS HELPED TO PROPEL FOREIGN INVESTMENT IN THE GERMAN MARKET TO ABOUT 20 IN 1993 AND MAY SPUR FURTHER GAINS THIS YEAR UK STOCKS SPENT MOST OF LAST YEAR IN THE KIND OF TRANSITION PHASE THAT THE REST OF EUROPE WILL ONLY BEGIN LATER THIS YEAR MANY OF THE INTERESTRATE CUTS THAT OCCURRED LAST YEAR WERE ALREADY ANTICIPATED AND FACTORED INTO 1992 PRICES THAT MADE 1993 A YEAR OF UNDERPERFORMANCE THE FTSE 100 INDEX CLOSED AT 34184 UP 20 A RESPECTABLE GAIN BUT JUST ABOUT HALF OF THE EUROPEAN AVERAGE NOW INVESTORS HAVE SHIFTED THEIR ATTENTION FROM WHETHER AN ECONOMIC RECOVERY WILL OCCUR TO WEIGHING JUST HOW STRONG IT WILL BE THE COUNTRY'S GROSS DOMESTIC PRODUCT IS EXPECTED TO GROW 25 IN 1994 GIVING IT ONE OF THE HIGHEST RATES IN EUROPE THAT IS STILL NOT MUCH FOR CORPORATIONS TO COUNT ON AND THEY WILL NEED TO CONTINUE THEIR COSTCUTTING PROGRAMS IF COMPANIES ARE TO PRODUCE THE KIND OF DOUBLEDIGIT PROFIT INCREASES THE MARKET HAS ALREADY ANTICIPATED ANALYSTS ARE NOW EXPECTING A KIND OF MODEST GROWTH LOW INFLATION AND LOW INTERESTRATE ENVIRONMENT MOST RECENTLY SEEN IN THE 1960S THAT IS GOOD NEWS FOR LONGTERM ECONOMIC HEALTH BUT IT WILL PROBABLY PREVENT MAJOR FIREWORKS ON THE EQUITY MARKET NEARLY ALL OF THE LONDON MARKET'S 1993 PERFORMANCE CAME IN THE LAST HALF OF THE YEAR AS ANALYSTS MADE SHARP REVISIONS OF THEIR EARNINGS FORECASTS IN THE MIDST OF CORRUPTION SCANDALS ARRESTS POLITICAL CHAOS RECESSION RISING UNEMPLOYMENT AND CORPORATE DEBACLES THE GOOD NEWS COMING FROM ITALY'S FINANCIAL MARKETS WAS SORELY NEED THE MILAN STOCK INDEX ROSE 36 TO 1356 AS TRADING VOLUMES SWELLED AVERAGE DAILY TRADING ON THE MILAN STOCK EXCHANGE MORE THAN DOUBLED BY NUMBER OF SHARES AND MARKET CAPITALIZATION GREW 52 THE FUTURE OF ITALY'S MARKETS ECONOMISTS SAY NOW HINGES ON TWO EVENTS PASSAGE OF THE 1994 BUDGET AND NATIONAL ELECTIONS EXPECTED TO BE SCHEDULED FOR AROUND MARCH INTEREST RATES DROPPED CONSIDERABLY IN 1993 IN LINE WITH THE GENERAL EUROPEAN TREND THE BANK OF ITALY NEARLY HALVED ITS OFFICIAL DISCOUNT RATE IN THE PAST FOUR MONTHS OF THE YEAR TO 8 NOW AND MARKET WATCHERS EXPECT CONTINUED ALBEIT MODEST DECLINES THE VIEW FROM DOWN UNDER IS STILL LOOKING UP THE ALL ORDINARIES SHARE INDEX THE BROADEST MARKET BAROMETER CLIMBED 40 DURING 1993 TO END THE YEAR AT 21736 PROPELLED BY YIELDHUNGRY INVESTORS WHO FAVORED EQUITIES OVER THE LOCAL BOND MARKET AND BANK DEPOSITS THE ANNOUNCEMENT IN LATE SEPTEMBER THAT SYDNEY WILL HOST THE SUMMER OLYMPICS IN THE YEAR 2000 ALSO HELPED TO BOOST SENTIMENT SOME WATCHERS CONTEND BUT ALL THE GOOD FEELING HASN'T BEEN ENOUGH TO PUSH THE MARKET BACK TO ITS HIGH OF 2305 IN SEPTEMBER 1987 JUST BEFORE WORLD STOCK MARKETS CRASHED STILL INVESTORS CAN EXPECT FURTHER GAINS ON THE AUSTRALIAN STOCK EXCHANGE IN 1994 THOUGH THEY AREN'T LIKELY TO SEE A REPEAT OF LAST YEAR'S LEAP THE MARKET TOOK OFF IN 1993 SAYS RUSSELL BARNES RESEARCH DIRECTOR AT ANZ MCCAUGHAN SECURITIES POWERED BY HIGHERTHANANTICIPATED EARNINGS LOWER INTEREST RATES COUPLED WITH TRIMMER WORK FORCES AND A REDUCTION IN CORPORATE TAX RATES FROM JULY 1 HELPED TO SEND AVERAGE PERSHARE EARNINGS UP AN ESTIMATED 175 IN THE YEAR JUST ENDED FOLLOWING THREE YEARS OF CONTRACTING COMPANY PROFITS IN THE YEAR AHEAD THOSE FACTORS ARE EXPECTED TO UNDERPIN THE MARKET FURTHER UNLIKE THE PREVIOUS YEAR REVENUES ARE LIKELY TO REBOUND ALL TOLD MR BARNES PREDICTS THAT THE ALL ORDINARIES WILL GAIN ABOUT 7 TO HIT 2300 BY MIDYEAR FOR THE FULL YEAR HE'S LOOKING FOR 2475 AND THINKS THAT FORECAST COULD BE CONSERVATIVE SENTIMENT ON THE BRUSSELS BOURSE WAS GUIDED BY A HIGHLY JITTERY BOND MARKET BREATHTAKING STUFF SAYS GENERALE BANK CHIEF INVESTMENT STRATEGIST WILLIAM DE VIJLDER AND AN IMPRESSIVE BULL RUN ON THE STOCK MARKET FUELED BY STEADY DECLINE IN INTEREST RATES THE BEL20 STOCK INDEX SURGED 31 IN 1993 WITH LAST YEAR'S POLITICAL UNCERTAINTY OUT OF THE WAY FOR NOW INVESTMENT STRATEGISTS SAY THERE'S SCOPE FOR MORE GAINS IN 1994 BUT NOT OF THE SORT SEEN IN THE PAST 12 MONTHS WITH INTEREST RATES FIRMLY ON A DOWNWARD PATH AND A RECESSION THAT LOOKS AS IF IT'S BOTTOMING OUT ANALYSTS SAY CORPORATE RESTRUCTURINGS COULD START PAYING OFF IN 1994 IN TERMS OF FATTER PROFITS AND HIGHER STOCK PRICES BUT PORTFOLIO MANAGERS WILL BE PICKIER AND LOOKING FOR PROFITTAKING OPPORTUNITIES INVESTORS ALSO SHOULD BE WELL AWARE THAT THE GROWING INFLUENCE OF FOREIGN INVESTORS ON SMALL EUROPEAN BOURSES LIKE BRUSSELS MEANS BETTER LIQUIDITY BUT ALSO MORE VOLATILITY THUS A GREATER DOWNSIDE RISK BETTY PESTIAUX HEAD OF RESEARCH AT BANQUE BRUXELLES LAMBERT SAYS INDUSTRIAL COMPANIES THAT HAVE PUT THEIR FINANCES IN ORDER SHOULD PROVIDE SOME NICE OPPORTUNITIES AS WELL AS RETAIL STOCKS THAT HAVE UNDERPERFORMED THE MARKET IN 1993 STILL SHE SOUNDS A NOTE OF CAUTION THE GREAT DANGER FOR 1994 WOULD BE THAT THE ECONOMIC UPTURN DOESN'T MATERIALIZE SAYS MS PESTIAUX PRICES ON THE MADRID STOCK EXCHANGE SURGED 51 IN 1993 TO 32277 FUELED BY TWO DEVALUATIONS OF THE PESETA AND A 475 PERCENTAGE POINT DROP IN THE BANK OF SPAIN'S BENCHMARK INTEREST RATE TO 9 ANALYSTS EXPECT THE CENTRAL BANK RATE TO FALL TO 7 IN 1994 BUT DISAGREE OVER WHETHER LOWER RATES WILL SPUR AN ECONOMIC RECOVERY THIS YEAR NONETHELESS INTEREST RATES ARE EXPECTED TO CONTINUE FALLING TENYEAR BOND YIELDS WHICH STARTED 1993 AT 125 FOR EXAMPLE HAVE FALLEN TO 835 AND ARE EXPECTED TO SINK TO ABOUT 8 ANALISTAS FINANCIEROS INTERNACIONALES SA A MADRID CONSULTANCY SAYS STOCK PRICES SHOULD RISE AS MUCH AS 10 TO 15 SPURRED ON BY HIGHER CORPORATE PROFITS EVEN IF THE OVERALL ECONOMY CONTRACTS 1 MORE IN 1994 FOR THE FRENCH MARKET 1993 WAS A YEAR THAT NEVER LIVED UP TO ITS PROMISE THE LONGEXPECTED RELAXATION OF CREDIT AND THE HEAVY SWITCHING INTO EQUITY FUNDS BY DOMESTIC INVESTORS WEREN'T AS PRONOUNCED AS MANY EXPERTS HAD EXPECTED AS A RESULT THE PARIS BOURSE ENDED THE YEAR WITH THE SMALLEST GAINS OF ANY MAJOR CONTINENTAL EXCHANGE WITH THE CAC40 INDEX FINISHING AT 226822 FOR A GAIN OF 22 NOW STRATEGISTS ARE COUNTING ON THE BUNDESBANK TO CONTINUE EASING MONETARY POLICY THROUGH 1994 IF THE GERMAN CENTRAL BANK CUTS AS EXPECTED THAT SHOULD PROVIDE THE NECESSARY MARGIN FOR FRANCE TO BRING RATES DOWN EVEN FURTHER AFTER THE SUBSTANTIAL CUTS IN THE SECOND HALF OF LAST YEAR WE THINK FRENCH RATES ARE GOING TO TRACK GERMAN RATES IN 1994 THE GOVERNMENT WON'T TAKE THE RISK OF PULLING FRENCH RATES BELOW GERMANY'S SAYS ANTOINE BRUNET CHIEF ECONOMIST AT CREDIT LYONNAIS IN PARIS MR BRUNET EXPECTS THREEMONTH RATES IN BOTH COUNTRIES TO DECLINE TO AROUND 5 BY JUNE AND TO REACH 4 BY THE END OF THE YEAR HE FORECASTS THAT 10YEAR BOND YIELDS IN BOTH COUNTRIES WILL DROP AT LEAST 1/2 PERCENTAGE POINT TO ABOUT 520 BY THE END OF THE YEAR AFTER THE FRANC'S HUMILIATING EVICTION IN AUGUST FROM ITS NARROW ERM BAND AGAINST THE MARK THE FRENCH CURRENCY HAD RECOVERED ALL LOST GROUND BY EARLY DECEMBER PARIS ECONOMISTS SAID THEY BELIEVED THE FRANC COULD HOLD THOSE LEVELS AGAINST THE MARK THROUGH THE COMING YEAR BUT WITHOUT RISING MUCH FURTHER STOCK MARKET ANALYSTS AREN'T UNIFORMLY SANGUINE ABOUT THE OUTLOOK FOR FRENCH EQUITIES POINTING OUT THAT ALTHOUGH THE MAIN PARIS STOCK INDEX DIDN'T KEEP PACE WITH OTHER EUROPEAN MARKETS AS THEY SOARED HIGHER IN 1993 THE MARKET IS NEVERTHELESS LOOKING HISTORICALLY EXPENSIVE AND SUSCEPTIBLE TO CORRECTION THE DUTCH STOCK MARKET HIT A HISTORICAL HIGH IN 1993 AFTER A CONSISTENTLY STRONG PERFORMANCE WHILE NEW PEAKS ARE LIKELY TO BE REACHED THIS YEAR A SOMEWHAT CALMER PACE IS PREDICTED BUOYED BY A STEEP DROP IN INTERESTRATES A DECLINE BOOSTED BY THE NETHERLANDS' LOW INFLATION AND STRONG CURRENCY THE AMSTERDAM BOURSE'S CBS GENERAL INDEX SURGED 42 TO 2808 IN A BULL RUN FUELED LARGELY BY FOREIGN INVESTORS INCLUDING US MUTUAL FUNDS THOUGH INVESTMENT STRATEGISTS SEE SOME SCOPE FOR FURTHER INTERESTDRIVEN GAINS THE TREND IS LIKELY TO DIMINISH BY AUTUMN FURTHER MARKET ADVANCES WILL DEPEND ON WHETHER CORPORATE EARNINGS WILL START BENEFITING FROM PAST RESTRUCTURING MEASURES AND FROM A LONGAWAITED REBOUND IN ECONOMIC ACTIVITY THE MARKET WILL HAVE TO MAKE THE TRANSITION TO AN EARNINGSDRIVING MARKET FROM ONE DRIVEN BY INTEREST RATES SAYS FRANK HOOGENDIJK HEAD OF STRATEGY AT MEESPIERSON NV IN AMSTERDAM THE STOCKS THAT WILL DO WELL IN THE COMING MONTHS WILL BE SIMILAR TO THOSE THAT DID WELL IN 1993 YIELD STOCKS AND FINANCIAL STOCKS HE PREDICTS STOCK PRICES COULD SUFFER A CORRECTION EARLY IN THE NEW YEAR AFTER SOARING THE LAST THREE MONTHS OF 1993 TAIWAN WATCHERS SAY THE TAIPEI WEIGHTED PRICE INDEX ENDED 1993 AT 607656 AN 80 GAIN THE RALLY TOOK OFF IN LATE NOVEMBER WHEN FOREIGN INVESTORS WHO HAD BEEN FOCUSING ON OTHER ASIAN MARKETS IN THE PRECEDING FEW MONTHS TURNED THEIR SIGHTS ON TAIWAN SHARES OF ELECTRONICS COMPANIES WERE FAVORITES AND THE INDUSTRY CAN LOOK FORWARD TO A PARTICULARLY BRIGHT 1994 SAYS CHARLOTTE LEE HEAD OF THE INTERNATIONAL DEPARTMENT AT CAPITAL SECURITIES CORP IN TAIPEI SHE PREDICTS RISING OVERSEAS DEMAND FOR TAIWANESE ELECTRONIC GOODS BUT FINANCIAL COMPANIES' STOCKS ALSO BIG RISERS IN 1993 HAVE DIMMER PROSPECTS THIS YEAR ANALYSTS FIGURE THAT COMPETITION AMONG BANKS WILL BE INTENSE AS 15 NEW ONES START OPENING BRANCHES THIS BRITISH COLONY SEEMS TO BE FLOATING INTO 1994 ON A FINANCIAL BUBBLE INVESTORS BRAG ABOUT KILLINGS MADE IN STOCKS PROPERTY AND OTHER ASSETS THEY CRAMMED INTO THEIR PORTFOLIOS DURING 1993 SUGGESTIONS THAT THIS YEAR MIGHT NOT BE SO EASY ARE ALMOST CONSIDERED IMPOLITE HONG KONG'S HANG SENG INDEX OF BLUE CHIP STOCKS ENDED 1993 AT 1188839 MORE THAN DOUBLE ITS LEVEL AT THE END OF 1992 THE GAIN WAS THE BEST IN ASIAN MARKETS IN ONE OF THE MOST FRANTIC PERIODS THE INDEX SOARED 24 FROM SEPT 30 WHEN US EMERGING MARKETS GURU BARTON BIGGS ISSUED HIS MAXIMUM BULLISH CALL ON STOCKS RELATED TO CHINA TO NOV 17 WHEN HE TOLD CLIENTS TO LIGHTEN UP ON HONG KONG SHARES INDEED ALL OF 1993 SHOWED THE POWER FOREIGN INVESTORS CAN UNLEASH WHEN THEY FIND A MATURE STOCK MARKET TIED TO A BOOMING ASIAN ECONOMY IN THIS CASE CHINA'S BUT CHINA ISN'T A SUREFIRE STRENGTH FOR HONG KONG IN 1994 ROARING URBAN INFLATION COULD PROMPT AUTHORITIES TO IMPOSE AN AUSTERITY PROGRAM WHICH COULD IN TURN HURT FOREIGN TRADE MEANWHILE SINOBRITISH RELATIONS ARE WORSENING AS HONG KONG'S CONSTITUTIONAL FUTURE REMAINS UNSETTLED SUCH CONCERNS HAVE LED MEESPIERSON SECURITIES ASIA LTD TO FORECAST GROSS DOMESTIC PRODUCT GROWTH OF 5 FOR HONG KONG THIS YEAR A TOUCH LOWER THAN ESTIMATES OF GDP GROWTH FOR 1993 THAT DOESN'T NECESSARILY MEAN A STUMBLING STOCK MARKET BY ITS OWN HISTORIC STANDARD THE HONG KONG MARKET IS LOOKING PRETTY EXPENSIVE CONCEDES ANDREW HALL RESEARCH DIRECTOR OF MORGAN GRENFELL ASIA SECURITIES HK LTD SO ARE MANY OTHERS THOUGH WHICH LACK THE ECONOMIC POTENTIAL OF CHINA THE LANGUISHING SWISS ECONOMY MAY NOT HAVE GROWN IN 1993 BUT THE COUNTRY'S FINANCIAL MARKETS CAN'T COMPLAIN BOTH STOCK AND BOND MARKETS ENJOYED A BOOM THE SWISS MARKET INDEX GAINED 40 TO 29576 NEW BOND ISSUES TOTALED AROUND 70 BILLION SWISS FRANCS 4722 BILLION COMPARED WITH AN AVERAGE OF ABOUT 45 BILLION FRANCS DURING THE PAST DECADE CAUTIOUS MARKET PARTICIPANTS WARN AGAINST EXPECTING A REPEAT OF 1993'S PERFORMANCE WHICH FOLLOWED A STRONG SHOWING IN 1992 NEVERTHELESS 1994 IS EXPECTED TO SHOW A MARKET FIRMLY IN THE BLACK FAVORING SWISS STOCKS SAYS HANS KAUFMANN HEAD OF RESEARCH AT BANK JULIUS BAER IS THE ENORMOUS AMOUNT OF PRIVATE AND INSTITUTIONAL INVESTORS LOOKING FOR A HOME FOR THEIR FUNDS WE HAVE RECORD HIGH LIQUIDITY IN SWITZERLAND ABOUT 210 BILLION FRANCS MR KAUFMANN SAYS THAT IS ABOUT 40 BILLION FRANCS MORE IN SAVINGS AVAILABLE FOR INVESTMENT THAN AT THE START OF 1993 ANALYSTS SAY SWISS COMPANIES WILL CONTINUE TO BOOST THEIR EARNINGS IN 1994 AFTER A DOUBLEDIGIT RISE IN 1993 PROFITS AND THAT WILL ATTRACT BOTH PRIVATE AND INSTITUTIONAL INVESTORS FOREIGN AND DOMESTIC GENEVABASED DARIER HENTSCH & CIE ESTIMATES THE EARNINGS GROWTH OF LISTED SWISS COMPANIES AT 21 FOR 1993 AND 16 FOR 1994 THE MEXICAN STOCK MARKET WAS LIFTED IN 1993 BY A WAVE OF ENTHUSIASM FOLLOWING THE APPROVAL OF THE NORTH AMERICAN FREE TRADE AGREEMENT THE MEXICAN BOLSA'S IPC INDEX CLOSED AT 260263 UP 48 STRATEGISTS EXPECT THE MARKET TO PERFORM WELL AGAIN IN 1994 WITH MANY FORECASTERS CALLING FOR GAINS OF AT LEAST 20 BARING SECURITIES LATIN AMERICA STRATEGIST TAMZIN HOBDAY EXPECTS PROFITS OF THE BOLSA'S LISTED COMPANIES TO GROW 17 IN 1994 WITH HELP FROM LOWER INTEREST RATES AND STRONGER ECONOMIC GROWTH MEXICAN TREASURY BILL RATES FELL INTO THE 10 RANGE TO THEIR LOWEST LEVELS EVER JUST BEFORE CHRISTMAS REDUCING FINANCING COSTS AND THUS BOOSTING PROFITS FOR MANY MEXICAN ENTERPRISES BARING EXPECTS THE MEXICAN ECONOMY TO REBOUND TO 3 GROWTH THIS YEAR FROM AROUND 1 LAST YEAR THANKS TO STRONGER GOVERNMENT SPENDING AND FOREIGN INVESTMENT MS HOBDAY SAYS INVESTORS WILL HAVE TO CHOOSE CAUTIOUSLY AMONG MEXICAN SHARES THIS YEAR IS NOT GOING TO BE THE YEAR OF THE SECTOR IT IS GOING TO BE THE YEAR OF COMPANIES WITH MANAGEMENTS AND PRODUCTS THAT CAN COMPETE IN AN INTERNATIONAL ENVIRONMENT FOREIGN BANKS SHOULD TAKE THEIR FIRST STEPS INTO MEXICO THIS YEAR FOR EXAMPLE POSING A SERIOUS CHALLENGE TO SOME MEXICAN FINANCIAL COMPANIES INTERNATIONAL COMPETITION ISN'T THE ONLY SHADOW OVER THE MARKET IF THE ECONOMY DOESN'T PICK UP FROM ITS VERY SLOW CURRENT PACE MEXICAN STOCK PRICES WOULD CLEARLY HAVE TO CONTRACT AND 1994 IS AN ELECTION YEAR FOR MEXICO THOUGH LUIS DONALDO COLOSIO THE CANDIDATE FOR THE RULING PARTY IS EXPECTED TO WIN EASILY INTERNATIONAL INVESTORS WILL NO DOUBT WATCH THE ELECTION CAUTIOUSLY 9401030004 940103 1993 YEAREND REVIEW OF MARKETS AND FINANCE TAXPAYERS MAY NEED TO MAKE ADJUSTMENTS FOR CHANGES IN LAWS THE CHANGES COULD AFFECT FOR EXAMPLE SOCIAL SECURITY RECIPIENTS WHO HAVE ABOVEAVERAGE PENSIONS OR SIGNIFICANT INCOME FROM WAGES OR SELFEMPLOYMENT BECAUSE OF THE NEW LAW THEY MAY BE LIABLE FOR MORE TAXES STARTING THIS YEAR AND AS RESULT MAY HAVE TO PAY MORE IN ADVANCE TOM OCHSENSCHLAGER OF ACCOUNTING FIRM GRANT THORNTON SAYS MANY WELLOFF BENEFICIARIES WILL HAVE TO INCREASE QUARTERLY TAX PAYMENTS BY 250 OR SO HE SAID MANY HIGH EARNERS ALSO WILL BE SURPRISED AT HOW THE HIGHER TAX RATES WHICH TOOK EFFECT RETROACTIVELY FOR ALL OF 1993 WILL AFFECT THE QUARTERLY PAYMENTS THEY MUST MAKE STARTING APRIL 15 THE HIGHER INCOMETAX RATES WHICH GENERALLY AFFECT ONLY COUPLES MAKING MORE THAN ABOUT 180000 AND SINGLE PEOPLE EARNING MORE THAN 140000 WERE ENACTED TOO LATE IN THE YEAR TO ADJUST WITHHOLDING DON ROBERTS AN INTERNAL REVENUE SERVICE SPOKESMAN NOTES THAT MOST LOW AND MIDDLEINCOME PEOPLE WHOSE 1994 EARNINGS ARE EXPECTED TO BE THE SAME AS IN 1993 WILL SEE THEIR WITHHOLDING DROP A BIT STARTING IN JANUARY BECAUSE OF AUTOMATIC INFLATION ADJUSTMENTS IN THE TAX SYSTEM MR ROBERTS SAYS ANY TAXPAYERS WHO FIND THAT THEY OWE MORE THAN A FEW HUNDRED DOLLARS SHOULD INCREASE THE AMOUNT WITHHELD FROM PAYCHECKS BY FILING A NEW W4 FORM WITH THE EMPLOYER GETTING MARRIED HAVING A BABY OR BUYING A HOME MAY NECESSITATE A SMALLER WITHHOLDING TAXPAYERS WHO HAVE SIGNIFICANT AMOUNTS OF INCOME NOT SUBJECT TO WITHHOLDING SUCH AS INTEREST AND DIVIDENDS AND THUS MUST MAKE QUARTERLY PAYMENTS OF ESTIMATED TAXES WILL FIND THE PROCESS SIMPLIFIED FOR 1994 TAXPAYERS WILL HAVE TWO CHOICES FOR PAYING IN ADVANCE AND AVOIDING A PENALTY FOR UNDERPAYMENT THEY CAN PAY AT LEAST 90 OF 1994 LIABILITY THROUGH WITHHOLDING OR QUARTERLY PAYMENTS OR THEY CAN PAY AT LEAST 100 OF 1993 LIABILITY IF 1993 INCOME WAS 150000 OR LESS THOSE ABOVE THAT LEVEL MUST PAY AT LEAST 110 OF 1993 LIABILITY 9401030003 940103 INTERNATIONAL RUSSIA BANS FOREIGNCASH PAYMENTS IN EFFORT TO BOLSTER RUBLE AND IMAGE BY CLAUDIA ROSETT STAFF REPORTER OF THE WALL STREET JOURNAL MOSCOW ADDING TO THE HURDLES OF RUSSIA'S HEAVILY REGULATED MARKETPLACE THE GOVERNMENT HERE KICKED OFF THE NEW YEAR WITH A BAN ON DOLLAR BANKNOTES AND OTHER FOREIGN CASH AS A MEANS OF PAYMENT INSIDE THE COUNTRY THE GOVERNMENT'S DECLARED AIM IS TO STABILIZE THE RUBLE AND RESTORE ITS PRIDE OF PLACE IN RUSSIAN COMMERCE DOLLARS MARKS AND OTHER HARD CURRENCIES HAVE INCREASINGLY COME INTO USE HERE SINCE 1991 AS A HEDGE AGAINST THE SHRINKING RUBLE WHICH OVER THE PAST YEAR HAS DROPPED TO ABOUT 1250 TO THE DOLLAR FROM 415 FOR SOME RUSSIANS THE NEW ALLRUBLE RULE BRINGS A BOOST TO SAGGING NATIONAL SPIRITS AT A MOSCOW SHOP SELLING IMPORTED GROCERIES FOR EXAMPLE ASSISTANT MANAGER LENA SEMYONOVA SAID SUNDAY IF WE LIVE IN RUSSIA THE RUSSIAN CURRENCY SHOULD BE THE ONE IN CIRCULATION AND BACK IN OCTOBER WHEN RUSSIA'S CENTRAL BANK FIRST ANNOUNCED THE POSTNEWYEAR BAN ON FOREIGN CASH PAYMENTS CENTRAL BANK DEPUTY CHAIRMEN DMITRY TULIN ARGUED THAT THIS MEASURE IS A VERY LOGICAL STEP IN THE STRENGTHENING OF OUR NATIONAL CURRENCY AND IN REMOVING FOREIGN CURRENCY FROM OUR COUNTRY BUT WESTERN ECONOMISTS SAY THIS PRIDE CARRIES A COST THE DOLLAR'S POPULARITY IN RUSSIA IS NOT A CAUSE OF THE RUBLE'S DECLINE BUT A RESULT OF RUSSIA'S APPETITE FOR SOME FORM OF RELIABLE MONEY AND THE RUBLE'S STRENGTH DEPENDS CHIEFLY ON WHETHER THE GOVERNMENT CAN BRING DOWN THE DOUBLEDIGIT MONTHLY INFLATION THAT HAS AFFLICTED POSTSOVIET RUSSIA AND MADE FOREIGN CASH A VITAL HEDGE FOR MANY ORDINARY RUSSIANS FORCING THESE PEOPLE TO USE RUBLES WON'T HELP THEM THRIVE BANNING DOLLAR CASH PAYMENTS IS MORE LIKELY TO INCREASE PRICES THAN TO STABILIZE ANYTHING LARGELY BECAUSE IT REQUIRES MORE ACCOUNTING WORK AND GREATER RISK STORES SELLING IMPORTED GOODS IN RUSSIA MANY OF WHICH PREVIOUSLY ASKED FOR CASH PAYMENTS IN DOLLARS MUST NOW START PAYING BANK COMMISSIONS TO CONVERT THEIR RUBLEIZED INCOME INTO THE DOLLARS NEEDED TO BUY GOODS ABROAD AT THE WORLD BANK'S MOSCOW OFFICE CHIEF ECONOMIST CHARLES BLITZER DESCRIBES THE NEW RULE AS A WINDFALL FOR BANKS DEALING IN FOREIGN EXCHANGE THOUGH IT'S TOO SOON TO MEASURE PRICE INCREASES IN RUSSIA'S HARDCURRENCY SHOPS MANY OF WHICH WERE CLOSED THIS WEEKEND DUE TO THE NEW YEAR'S HOLIDAY MR BLITZER ESTIMATES THAT THE EXTRA CHARGES FOR CURRENCY CONVERSION WILL GENERALLY COME TO ABOUT 6 A NUMBER OF SHOPS AROUND MOSCOW HAVE OPENED FOREIGNEXCHANGE WINDOWS NEAR THE CASH REGISTERS FOR CUSTOMER CONVENIENCE IN COMPLYING WITH THE RUBLE RULE BUT THIS CONVENIENCE MEANS ADDED TRANSACTION COSTS BOTH FOR BUYERS AND SELLERS BANKERS WILL BE THE ONES WHO WILL GAIN BY THIS SAYS A RUSSIAN EMPLOYEE AT ONE FORMER DOLLAR SHOP HERE FOR ORDINARY PEOPLE THIS EMPLOYEE ADDS THE LIVING STANDARD WILL FALL ALSO TO OPERATE UNDER THE FOREIGN CASHPAYMENT BAN BOTH BUYERS AND SELLERS WILL NEED TO HOLD LARGER RUBLE BALANCES IN A COUNTRY ALREADY FRAUGHT WITH FEROCIOUS POLITICAL FIGHTS AND A WAVERING AGENDA FOR ECONOMIC REFORM THIS FURTHER EXPOSES BUSINESS TO THE RISK OF A FALLING RUBLE TO MITIGATE THE NEW CASH RULE RUSSIA'S CENTRAL BANK WILL CONTINUE TO ALLOW HARDCURRENCY PAYMENTS BY CREDIT CARD AND RUSSIANS WILL BE ALLOWED TO HOLD CASH DOLLARS EVEN IF THEY AREN'T SUPPOSED TO USE THEM IN SHOPS THE GOVERNMENT FURTHER WATERED DOWN THE RULE LAST MONTH WITH A HANDFUL OF AMENDMENTS THAT MAINLY LET PEOPLE PAY FOREIGN CASH RATHER THAN RUBLES TO THE RUSSIAN GOVERNMENT FOR SPECIAL PURPOSES SUCH AS PAYING FINES CUSTOMS LEVIES AND INCOME TAXES