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To: James Strauss who wrote (6281)	6/8/2000 11:17:00 AM
From: dave stahly	Respond to of 13094

Thanks James, appreciate it. dave in indy

To: James Strauss who wrote (6281)	6/8/2000 11:46:00 AM
From: KevinThompson	Read Replies (1) \| Respond to of 13094

OT >> Seems the Justice Dept is looking for another "bad guy" to prosecute now that the Microsoft thing is in full bloom. Found this at NewsMax. Interesting last paragraph. Don't get me wrong, I think there are lots of crooks in the banking industry, especially the credit card biz. And certainly, I would sympathize with Microsoft's DOJ misfortune much more than I would support VISA/MasterCard's soon run-in, but the last paragraph is the kind of stuff that makes the hair on my neck stand up. Best Regards, KT ---------------------------------------- Adminstration's Next Target: Visa/MasterCard NewsMax.com Thursday, June 8, 2000 With the Microsoft monopoly case almost behind them, Justice Department trust busters are setting their sights on their next target: Visa/MasterCard. The Justice Department and the owners of the Visa and MasterCard companies will square off Monday in Manhattan?s federal courthouse in the first rounds of a knock-down-and-drag-out battle between the government and the banks that run both credit card giants. At issue is the perception that rather than being two separate companies, Visa and MasterCard are two peas in the same pod, and that since they have not competed in the credit card field in the full sense of the word, they are a monopoly that freezes out competitors such as American Express and Discover. The June 12 issue of Business Week explains the complicated structures of the two credit card companies. Both companies, which operate as nonprofit institutions, are controlled by a consortium of banks, savings and loans, other thrifts and credit unions that issue Visa and MasterCard credit cards. The magazine notes that the owners of both companies are almost identical. "Of the 7,000 financial institutions participating in the Visa joint venture, almost all are also involved in MasterCard," Business Week revealed. "Visa and MasterCard are not traditional companies," Business Week explained. As evidence of monopolistic practices, critics cite the case of an aborted ad campaign designed to lure customers to MasterCard the less widely accepted credit card at the expense of Visa and other competitors. The banks constituting the operating board of MasterCard killed the campaign because they did not want the two companies competing with each other. Justice sees this incident as a sign that there is too much interlocking between the two, and that, DOJ officials say, is monopolistic. Antitrust lawyers also allege that Visa and MasterCard, which between them control a whopping 75 percent of the credit card business, work together to push competitors around and have conspired to kill such new developments as the so-called smart card a next-generation card that would combine normal credit card functions with such other functions as providing card holders medical records, acting as library cards, serving as proof of identity, and paying road tolls, railroad fares and even subway fares. When MasterCard's executives planned to go into the smart card field, Visa again objected, and the MasterCard board killed the idea. But the government case suffers from a serious weakness: they cannot show that there is any real evidence that the consumer has been harmed by the alleged monopoly, usually a vital element in antitrust cases. Says George Mason University antitrust expert Ernest Gellhorn, "This definitely presses the outer reaches of antitrust law." But a flat-out antitrust attack may not be the Justice Department's real aim. Business Week's sources say that what DOJ really seeks is an end to the overlapping ownership of the two companies, as well as putting an end to rules that ban member banks from issuing American Express or Discover credit cards. This, DOJ says, will force the companies to compete with each other. But there is no evidence that such would be the case, says David Evans, a Visa economic consultant. Moreover, DOJ would impose its proposed new credit card universe without ever showing what was wrong with the present system. "To Justice there's the way the industry is organized, and there's the way they think it should be organized," Evans told Business Week. "And they say their way is better. End of story."

To: James Strauss who wrote (6281)	6/19/2000 11:44:00 AM
From: James Strauss	Respond to of 13094

The Economy Is Slowing, Yet Analysts Are Advising Caution... ********************************************************** Things are looking pretty good for an end to rate hikes... Quite a few analysts are advising caution... Why? Maybe they want to cool things down until the FED acts next Tuesday, or maybe they are buying time for the institutions to accumulate on the cheap right up to the FED meeting... Whatever the reason, it seems fishy to me... I'm long, given this favorable turn of events... See the article below... Jim McDonough Sees Signs Of Slowdown By Rex Nutting, CBS.MarketWatch.com Last Update: 9:19 AM ET Jun 19, 2000 NewsWatch Latest headlines LONDON (CBS.MW) -- A key Federal Reserve policymaker sees signs that the U.S. economy is slowing. In brief comments to reporters after a banking conference in London, New York Fed President William McDonough said the economy is beginning to heel to the Fed?s desires, according to wire service reports. "The economy, according to data which came out in the last two weeks, looks as if it is beginning to slow," he said.** Fed targeting 4% sustainable growth McDonough said the Federal Reserve is trying to slow the economy to a sustainable 4 percent annual growth rate. McDonough is the vice chairman of the Federal Open Market Committee, the group within the Federal Reserve that controls monetary policy. His views are considered to be close to those of Chairman Alan Greenspan. Both McDonough and Greenspan have embraced the idea that the economy has entered a new era of greater productivity, while warning that inflation still remains a threat to stability. The FOMC meets on June 27 and 28. Most Fed watchers now expect the FOMC to hold off on further rate hikes at the meeting after six rate hikes in the past 12 months. See Fed Forecast. Fed policymakers typically refrain from making any comments on monetary policy in the week before and after a meeting, so McDonough?s comments will likely be the final words to be heard before the meeting. Greenspan is scheduled to testify on commodity markets at a congressional hearing on Wednesday. See Washington Calendar