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To: ms.smartest.person who wrote (1556)	7/8/2001 7:40:02 PM
From: ms.smartest.person	Respond to of 2248

MEDIA MANEUVERS: Vanity Fair Joins in on Bashing of Already Nicely Pummeled Web Analyst Meeker Yvette Kantrow 7/6/2001 11:11 Just when we thought we couldn't read another word about analysts and the bubble, Vanity Fair weighs in with its own high-gloss take on the topic. In its August issue, the very glossy monthly rehashes what seemingly everyone already knows -- that high-profile analysts who boosted Internet stocks were not only wrong but were often serving interests different from those of investors -- but tells the story from its own top-of-the-glitterati-heap, media-centric point of view. Written by Nina Munk, the thirtysomething daughter of Canadian magnate Peter Munk once celebrated for bringing ''brat attitude'' to Fortune magazine, the piece asserts that we all should have known analysts had become too ''inflated'' in April 1999 when The New Yorker -- Vanity Fair's slightly higher-browed Conde Nast sibling -- profiled Morgan Stanley's Mary Meeker. Sure, Meeker had already made it to the cover of Barron's, Munk tells us, but ''being in The New Yorker was different though; it established that research analysts had become celebrities of a sort known not only on Wall Street but also among people interested in John Updike's musings on pennies and nickels.'' In other words, Meeker's fame had reached the cultural elite -- a tipoff that it was about to end. Indeed, two years after the New Yorker piece, Meeker was over -- a fact Munk says was evidenced by a May cover story in Fortune that named the analyst ''the single most powerful symbol of how Wall Street can lead investors astray.'' About the same time, she points out, New York magazine media critic Michael Wolff observed that ''Meeker seems almost demented.'' Reading her Vanity Fair piece, you get the feeling that Munk agrees. The author tells us that ''despite the hopes expressed in her New Yorker profile, Meeker is not yet married with children. But in contrast to her colleagues, she's still bullish about Internet stocks.'' By stringing those sentences together, Munk seems to suggest that Meeker's Web optimism is so insane, it's scaring away her suitors. Now that's an interesting topic for Conde Nast's Glamour magazine to explore. Munk writes that she tried to talk to Meeker but her interview request was denied. Merrill Lynch & Co. media analyst Jessica Reif Cohen wasn't so lucky. Though Munk concedes that Reif Cohen ''hasn't been called out on any obvious conflicts of interest'' she takes a shot at her anyway, commenting on, of all things, her clothes. Reif Cohen shows up dressed ''as if it were still the 80s,'' Munk sniffs, donning an expensive suit and dripping with Cartier gold and jewels. But Munk should consider that it could have been worse -- she could have been sporting khakis and a polo as if it were still the late '90s. Fortune also kept the analyst story going this week, examining it from the Washington point of view, and patting itself on the back in the process. It asserts that its May story on Meeker spurred Rep. Richard Baker from Louisiana to call for congressional hearings on the role of analyst conflicts and the bubble. ''I found it highly disturbing that a top analyst showed no sense of responsibility to the individual investor,'' Fortune quotes Baker as saying. ''That story motivated me to pull the trigger.'' That may be so. But Baker's statement makes you wonder where he was last fall, when The New York Times' Gretchen Morgenson first started harping on analysts as if they were devils incarnate, or in December, when ABC News' John Stossel blasted Goldman, Sachs & Co.'s Anthony Noto for recommending Priceline and eBay on CNBC without revealing that his firm had underwritten the stocks. Still, Fortune uses his quote high in its piece, becoming the latest pub to spin the analyst-conflict story as if it were its own. What's interesting about all this for close readers is the fact driving most of these stories -- that analysts largley function as investment bankers who often push stocks their firms are underwriting -- has been an open secret on Wall Street for years. Breaking that story is akin to shouting the emperor has no clothes, which a handful of journalists have been doing for years. But until very recently, their shouts were either drowned out by more bullish colleagues or met with an editor's yawn. Now, however, people are losing money. And the media wants some credit for saving the day. Given that analyst conflicts were so widely known, no one -- not Morgenson or Stossel and certainly not Fortune or Vanity Fair -- can say they first revealed the sordid truth. What they can boast about is their clout -- Richard Baker reads Fortune! -- and their timing.

To: ms.smartest.person who wrote (1556)	7/8/2001 7:49:31 PM
From: ms.smartest.person	Read Replies (1) \| Respond to of 2248

Bond Preview: Despite Friday rally, bonds could coast into week end By Rachel Koning, CBS.MarketWatch.com Last Update: 6:32 PM ET July 6, 2001 NEW YORK (CBS.MW) -- The stock market's pain was the bond market's relief on Friday, but analysts aren't sure the joy will spread to next week's trade. Keep in mind, before Friday's rally Treasurys spent seven of the previous eight sessions in the red. Further, the economic calendar is light until key consumer spending data is due on Friday. The Treasury yield curve steepened significantly on Friday, the result of a weak June jobs report and a deep decline in the stock market -- the lowest level for the Dow in seven weeks and a 7 percent drop for the Nasdaq on the week. Debate has been stirred once again over whether or not the Federal Reserve has room to lower a key interest rate some more. The yield curve is a graph line plotted from a range of interest rates on Treasury securities. A steeper curve indicates a wider gap between yields on short-dated instruments, which are most sensitive to the Fed's short-term interest-rate policy, and longer-maturity issues. The spread, or difference in yield, between the 2-year note and the 30-year bond was as much as 160 basis points Friday, its widest margin since June 26 or the day before the Fed announced it latest interest-rate reduction. On that day, the Fed cut the federal funds rate by 25 basis points to 3.75 percent, having already chiseled away a full 2.5 percent in half-point increments since January. But odds for an August cut still teetering at 50-50, bond investors need more convincing the Fed will in fact pull the trigger, analysts said. The September fed fund futures contract is now pricing in a 52-percent chance of a 25-basis-point rate cut at the Aug. 21 FOMC meeting, up from about a 38-percent chance at Thursday's close. "As to longer term rates, while we continue to believe that the lows for this cycle were seen in late March, the belief in an economic rebound that pushed the 10-year yield from 5.11 percent two weeks ago to 5.42 percent [Thursday] is now being tested," First Union economists wrote in a research note. "The 5.36-percent yield at noon today could well move back to 5.20 percent or somewhat lower, especially if energy prices continue to sag," they said. Yields fall as prices rise because an investor is willing to take a smaller return just to own the desired security. Likewise, investors demand to be rewarded with more yield when they pay less for the less-popular investment. Key data next week are back loaded until Friday when retail sales and the producer price index are released. Read more in Economic Preview. "Friday's highlight will be June's retail sales, to see if consumers continue to ignore rising unemployment," the First Union team said. Spending on expensive items such as cars and homes during the past half year's economic slowdown is encouraging to those predicting a bounce later this year or early next. "The PPI for June, also reported on Friday, should see the initial benefits of declining energy prices." Investors also demand higher yields to compensate for higher inflation, which erodes the value of longer-dated issues in particular because they're exposed for a longer period of time. Corporate calendar Two larger multi-billion dollar corporate debt sales are expected some time next week, traders said: a $1 billion intermediate-term note sale from Equity Office Properties and a $2.5 billion two-part offering from Pacific Century Cyberworks. Both issues will come in the "junk" market, which earns higher returns to reward investors for holding debt with lower credit ratings. Junk bond mutual funds snapped a three-week exodus this week as a net $159 million of new cash flowed in, AMG Data Services reported. The funds had suffered $914 million of net outflows amid serious selling of telecommunications bonds. The inflow shows that sentiment in this sector of the bond market is improving. And, investors currently expect about 7.8 percentage points in risk premium where before they had demanded 7.9 percent over a much safer Treasury security, Merrill Lynch & Co. indexes show. The 3.9 percent return on junk bonds so far this year lags that seen for their safer investment-grade corporate securities counterparts of 5.5 percent, Merrill Lynch said. Rachel Koning is a reporter for CBS.MarketWatch.com.