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Strategies & Market Trends : ahhaha's ahs -- Ignore unavailable to you. Want to Upgrade?

To: ahhaha who wrote (676)	12/22/2000 1:17:39 AM
From: FR1	Read Replies (1) \| Respond to of 24758

Ahha - You might like this Dow Jones Wire. Armstrong is trying to "trade" the puts owed to C&C for cable customers. Perhaps reducing cable ownership to come into compliance with FTC? In another news release tonight, FTC said ATT must sell its stake in Time Warner because they did not reduce their cable ownership. It seems ATT needed to prove they have a plan to come into compliance by Thursday (today) and T only offered a plan that is contingent on a fed tax break. ATT says it disagrees with the FTC and will ignore the ruling because T feels it has until May to comply. ATT wants in a bad way to keep its ownership in AOL/TWX. ************************** AT&T Corp. is discussing the possibility of using cable-TV systems as payment for the $3.2 billion it could owe Cox Communications Inc. and Comcast Corp. as early as next month for their shares in Excite At Home Corp., people familiar with the matter told The Wall Street Journal. Under an agreement struck earlier this year, Cox (COX) and Comcast (CMCSA) can exercise "put" options anytime after Jan. 1 for their respective stakes in the Internet access company. Once the puts are exercised, AT&T (T) is then obliged to pay each company about $1.6 billion in cash or AT&T stock -- Cox and Comcast get to choose the form of payment -- for a combined tab of $3.2 billion. Unless, of course, AT&T can come up with another form of payment, which is what the talks on cable properties are now about. (A put is an option to sell a security at a specified price, usually within a limited period.) The Excite At Home (ATHM) deadline couldn't come at a worse time for AT&T, which is searching for ways to conserve cash. The telecommunications company just announced a shortfall in fourth-quarter revenue and plans to slash its quarterly dividend by 83%. In 4 p.m. composite trading on the New York Stock Exchange, AT&T shares were down $1.88 to $17.06, a new 52-week low. AT&T, in retrospect, dramatically overpaid for the puts back in March when it was eager to take control of Excite At Home to end clashes with the other cable partners, mainly Cox and Comcast. AT&T agreed to pay Cox and Comcast, which had helped found the service, $48 for each Excite At Home share. Since then, Home's stock price has fallen 91%, and at 4 p.m. yesterday in Nasdaq Stock Market trading, it was down 34 cents to $4 a share. That makes the current combined market value of the stakes about $240 million. Excite At Home (ATHM) provides Internet service through several cable companies, including AT&T, Cox and Comcast. As of the end of the third quarter, Excite At Home had 2.3 million homes as customers. Comcast currently has a 7.8% stake in the company, Cox has a 7.3% stake, and AT&T has a 23.8% stake. If all the puts are exercised, AT&T's stake would increase to about 40%; AT&T earlier this year assumed voting control of Excite At Home. AT&T has tried to interest Cox and Comcast in a large cache of former TCI systems in Iowa and Montana that it has had on the market for some time now. According to people familiar with the matter, AT&T has offered up the properties, which cover about 1.2 million customers -- and both companies have so far taken a pass. Copyright (c) 2000 Dow Jones & Company, Inc. All Rights Reserved

To: ahhaha who wrote (676)	12/26/2000 12:55:14 PM
From: ahhaha	Read Replies (2) \| Respond to of 24758

THE MONETARY POLICY REGIME SHIFT IN OCTOBER 1979 We find a different set of empirical regularities for post-October 1979 than we find for the pre-October 1979 period. It is useful to make a distinction between changes in the way the monetary policy decisions are made at Federal Open Market Committee (FOMC) meetings and changes in the way FOMC decisions are implemented by the Open Market Desk (Desk) at the Federal Reserve Bank of New York. In October 1979, both types of changes were made. After October 1979, the FOMC appeared to make policy decisions with more concern about deviations of inflation from the implied objective than they had before October 1979. The FOMC also changed the procedures the Desk used to implement the decision made at the meeting. FOMC Decision Making The FOMC sets the target for the policy instrument at FOMC meetings. This is a decision about where to locate the money supply function. The decision, both before and after the October 1979 policy change, was to supply reserves to lead to desired outcomes for inflation and output growth. Each decision was also expected to result in particular outcomes for the federal funds rate and the growth in the targeted monetary aggregates, particularly M1. A combination of theory, econometric models, and judgment went into these decisions. Before October 1979, monetary policy resulted in a high and variable outcome for inflation. After October 1979, the FOMC appeared to put relatively more weight on controlling money growth and inflation. Gavin and Kydland (1999) show that shifts of this sort would be expected to lead to significant shifts in the cyclical properties of nominal variables. This is the case whether or not the FOMC changes the way it implements the policy decision (its operating procedure). The Operating Procedures At the same time that it announced a new commitment to reducing money growth and inflation, the FOMC announced a change in the way the Desk would implement the decisions made at FOMC meetings. Prior to October 1979, the FOMC decided on a target for the federal funds rate the market interest rate on overnight lending between banks. The FOMC would direct the manager of the System Open Market Account to buy and sell securities to maintain the interest rate near the target level. At each FOMC meeting, the staff of the Board of Governors would present the committee with estimates of how much money growth to expect from the alternative federal funds target choices. During the inter-meeting period, surprises in the demand for reserves would be accommodated so that surprises in money demand showed up as variability in the quantity rather than the price of reserves. On October 6, 1979, Fed Chairman Paul Volcker announced that the procedure would be changed so that the manager of the Desk would be required to adjust the Fed’s portfolio of securities to achieve weekly targets for non-borrowed reserves, rather than the federal funds rate. The policy change led to a dramatic, tenfold increase in the volatility of the federal funds rate and a high correlation among changes in interest rates across the term structure and across national boundaries. The increased interest rate volatility caught the attention of the markets and the public. It probably helped Paul Volcker achieve credibility for the disinflation policy. Although inflation fell to around 4 percent at the end of 1982, M1 demand became more unstable, so the Fed shifted to borrowed reserves and returned to an operating procedure that was an indirect form of interest rate targeting. In Alan Greenspan’s first term as Fed Chairman (which began in 1987), the FOMC returned to an explicit interest rate targeting procedure. (the rest of article is a useless attempt to get scientific which only gets scientimistic) stls.frb.org