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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (64882)	7/19/1999 10:02:00 PM
From: Stephen L. Smith	Read Replies (1) \| Respond to of 132070

New York Times Gretchen Morgenson: Market Watch Analysts slip into new role between firms, big investors The sorry state of Wall Street research is the subject of much buzz today among longtime investors. With more analysts than ever following companies - a 1999 study says there are 2,427, up 32 percent from 1997 - why are so many of their reports unoriginal, unenlightening, and unquestioning? Maybe these folks are too busy signing autographs from adoring fans to bother with dull financial statements. The fact is, analysts are the stars of the moment in the Wall Street firmament. They are to the 1990's what investment bankers were to the '80's. Gone are the days when analysts tolled in obscurity, crunching financial figures onto eye-glazing spreadsheets. Now they are front and center. And rich. "Top analysts are truly neck and neck with top investment bankers, because the two now go hand in hand," said Joan Zimmerman, principal of G.Z. Stephens, an executive search firm in New York. "The number of research analysts that had the capacity to bring in significant numbers of deals was very limited in the 1980's." A result, she said, is that compensation among top analysts has hit $10 million a year, while junior analysts are receiving, on average, $350,000 a year. Propelling many of these paychecks is a floot of stock issuance. Analysts play an increasingly important role in creating demand for a company's shares. Issuers ask potential underwriters not only how their stock will be priced but also who will support it after the deal is done. And so, Zimmerman said, the difference between a top analyst and an also-ran has become the ability to bring the top 100 investors to the table for a corporation issuing stock. Selling has always been part of an analyst's job. Now it is a major part. Consider the findings of a study of major investment research firms conducted by Tempest Consultants for the Reuters Group. For the study, in its third yeear, analysts were asked how they allocated their time. Since 1997, time spent on fundamental research has fallen from 47.58 percent to 39.89 percent. Next year, analysts expect to devote less time yet - 36.37 percent - to research. Time spent on company visits and ocntact also has dropped, from 17.21 percent to 15.21 percent. But time spent selling to institutional clients has risen to 23.22 percent from 22.11 percent. David Eidelman, a money manager at Eidelman, Finder & Harris in St. Lours, was head of research for a regional brokerage firm from 1968 to 1975. He said he spent three-quarters of his time as an analyst on fundamental research and company visits and 10 percent with institutional clients. Now, when a salesman calls, Eidelman said, "He says, 'Let me get the analyst on the phone with you." What analysts increasingly are selling today is not the ability to plumb a company's business and uncover investment gems or scams, but rather the ability to make investors buy the stocks they follow. Sure helps explain why so many analysts have been caught napping recently when earnings shortfalls or accounting gaffes come to light. It's another bull market phenomenon: Analysts are paid more and more money to do research that is less and less substantive. Maybe it should be called Research Lite: More spin, less filling.

To: Knighty Tin who wrote (64882)	7/20/1999 3:34:00 AM
From: Robert	Read Replies (1) \| Respond to of 132070

To MB and the thread: Please read this article pei-intl.com It simultaneously shocked me and scared the hell out of me. I would love to get everyone's thoughts on this. It could be the trigger for even worse problems in Asia. And the U.S. is not an island, contrary to what Dear Gabby, Joey Buttafuco and Ralph the Big Red Dog say. <g> What do you all think? TIA -- Robert

To: Knighty Tin who wrote (64882)	7/20/1999 8:48:00 AM
From: Freedom Fighter	Read Replies (3) \| Respond to of 132070

Mike, >>The key is whether the dollar and the bond holds.<< I read an article this week suggesting that Soros is taking a big position against the US dollar. Not that it means that much, but it is nice to have one of cowboys on our side of the analysis with real money. Wayne

To: Knighty Tin who wrote (64882)	7/20/1999 10:30:00 AM
From: Freedom Fighter	Read Replies (1) \| Respond to of 132070

Mike, Reports indicate the FED is buying dollars for YEN. The bubblemaster strikes again! (g)

To: Knighty Tin who wrote (64882)	7/20/1999 10:44:00 AM
From: DJessen33	Read Replies (3) \| Respond to of 132070

<The greenback, which fell to levels not witnessed in three months against the yen on Monday, lost further ground when it was reported that the U.S. trade deficit swelled to a record $21.3 billion in May, compared to expectations for a $19.0 billion deficit. But the Fed came into the market to sell yen and buy dollars on behalf of the Bank of Japan, producing a sudden spike in dollar/yen, which swept Treasurys off their lows. The huge trade gap means that gross domestic product figures will need to be downwardly revised, but continues to underscore the health of the U.S. economy compared to that of its trading partners.> cbs.marketwatch.com Can you please explain how a larger trade gap is evidence of a healthly economy? DJessen33