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To: limtex who wrote (39186)	7/18/2001 9:49:27 AM
From: stockman_scott	Respond to of 65232

American Express to Slash Jobs Wednesday July 18, 9:06 am Eastern Time By Brian Kelleher <<NEW YORK (Reuters) - American Express Co. (NYSE:AXP - news) said on Wednesday it will slash up to 5,000 jobs, or 5.6 percent of staff, and take up to $1.2 billion in charges, the latest large financial services firm to fall victim to the slowing U.S. economy. American Express, which said it is already in the process of cutting 1,600 jobs in addition to the layoffs announced Wednesday, joins peers such as Merrill Lynch & Co. Inc. (NYSE:MER - news) and Morgan Stanley (NYSE:MWD - news) in cutting staff to deal with falling revenues and weak stock market and economic conditions. The New York-based firm, known for its ubiquitous green charge cards and travelers checks, said it expects second-quarter profits to fall 76 percent from the $740 million, or 54 cents a share, in the year-earlier quarter, including a $826 million charge for losses in its high-yield portfolio. About $403 million of the charge is to account for expected higher debt defaults on the firm's collateralized debt obligations (CDOs), a company spokesman said. The company expects defaults to continue through this year and 2002 and it has invested its cash flow in CDOs, so it has to take a write-down, he said. About $344 million of the charge is to shrink the size of its high-yield, or junk bond, portfolio, he said. Junk bonds are issued by companies with questionable credit strength and are deemed comparatively high risk by ratings agencies. After its adjustments, American Express said only about 7 percent of its portfolio will consist of high-yield investments, compared with the 10 to 12 percent level maintained since 1998. The remaining $79 million of the charge is to recognize losses in the value of other investments, the company said. American Express, which employs about 89,000 worldwide, also took a $182 million write-down for high-yield debt in April. Excluding losses in this portfolio, American Express said its expects to earn about $713 million in the quarter, or 53 cents a share, in line with Wall Street estimates of 53 cents a share, according to Thomson Financial/First Call. American Express will cut between 4,000 to 5,000 jobs in addition to 1,600 staff reductions that have been or are in the process of being implemented, the company said. To pay for restructuring charges and severance packages to employees who lose their jobs, American Express will take a third-quarter pretax charge of $310 million to $370 million. To save money, the company is cutting some technology jobs and outsourcing some data processing. It also will move some processing and service functions to the Internet and cut staff who used to perform these duties. The restructuring changes are expected to save $275 million to $300 million next year and $345 million to $370 million annually after 2002. The company, which said it believes the U.S. economy will remain weak into 2002, said it expects to ``significantly exceed'' its previously announced target of $500 million of expense savings during this year. No. 1 U.S. full-service brokerage Merrill on Tuesday said it has cut 5 percent of its staff this year to cope with falling revenues. Morgan Stanley, which owns the Discover credit card and has about 14,300 brokers, also has shed workers to deal with weak conditions. American Express shares closed at $38.78 in Tuesday trading on the New York Stock Exchange, below their 52-week high of $62.81. Its shares are down 29 percent this year, as slack spending by its corporate customers contributed to a 18-percent decline in first-quarter profits.>>

To: limtex who wrote (39186)	7/18/2001 10:34:59 AM
From: Jim Willie CB	Read Replies (1) \| Respond to of 65232

people will always get rich from the stock market that has been true for decades and will continue to be true I think what you mean is for a majority of people getting rich simultaneously from the stock market and I agree given that prices for stocks are determined on the margin (of willing buyers and sellers), if equilibrium is found at higher levels for a majority, you have a prescription for artificial wealth on a macro level, which breeds bigtime inflation historically whenever artificial high levels are experienced, artificial low levels soon follow in time we saw it in 2000 I expected a Post-Y2K Effect and shared opinions on that matter in Oct-Nov 1999 but I never expected it to be this bad personally I think the areas to get rich are ENERGY and WIRELESS the energy sector has lost much wind in the sails lately the wireless sector has run aground, with sails chewn by violent flutter both are viable nearterm and longterm I love both for 4-5 years / jw