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To: GST who wrote (142761)	6/6/2002 2:31:36 PM
From: H James Morris	Respond to of 164684

I don't either. I was only the messenger. As you well know the first person to get shot is the messenger. Btw WASHINGTON (CBS.MW) -- Goldman Sachs Chairman Hank Paulson endorsed several proposed reforms Wednesday in the areas of corporate governance and accounting to restore investor confidence in the post-Enron environment. "In my lifetime, American business has never been under such scrutiny," Paulson said. "And to be blunt, much of it is deserved." In a wide-ranging speech at the National Press Club in Washington, Paulson called on the nation's chief executives to vouch for the authenticity of their companies' financial statements. He said top executives should be prohibited from selling their stock options over the short-term, and shareholders should approve all compensation plans for high-level executives and board members. The Securities and Exchange Commission is preparing regulations for CEOs to certify their financial statements, and the New York Stock Exchange is expected to back a rule Thursday that would let shareholders OK all equity-based compensation plans. Separately, the Nasdaq came out with a package of its own proposal for new corporate governance-related standards, which include requiring a majority of independent directors on corporate boards. In his speech, Paulson backed a similar proposal. Paulson also called for regulations that would force CEOs to disgorge profits from insider stock sales that occur 12 months prior to their company's bankruptcy filing. While Paulson said such reforms were needed because of widespread investor distrust of Corporate America, he cautioned that new regulations must strike the "right balance" and that companies are taking steps to correct their business practices to reassure investors. In addition, Paulson attributed some of the current corporate ills to the U.S. accounting system, which he said needs an overhaul. He urged the SEC to consider revamping the Financial Standards Accounting Board, the body that sets accounting standards for U.S. companies. Despite widespread concern that some Wall Street research analysts are touting stocks to gain lucrative investment banking business for their firms, Paulson acknowledged the industry's conflicts-of-interest debacle but said top-tier investment houses shouldn't spin off their research units. "Research should be and can be independent," he said. The problem "will be corrected." On another note, the Goldman Sachs (GS: news, chart, profile) chieftain said he expects merger activity to pick up again sometime in 2003.

To: GST who wrote (142761)	6/7/2002 12:53:58 PM
From: H James Morris	Read Replies (1) \| Respond to of 164684

It's nice to get the big picture every once in a while. That's what you get with Robert Broadfoot, a top analyst on what is happening in China these days. Broadfoot, the head of the Hong Kong-based Political and Economic Risk Consultancy, spoke here yesterday at a meeting sponsored by U.S. Bank. It attracted many of the bank's clients, large and small, thinking about doing business in China. Example? Alpha Technologies, a Bellingham maker of backup power generators for the cable industry. It's moving rapidly overseas with its products. Broadfoot is moderately pessimistic about China, forecasting that it will continue to grow but present difficult choices for companies wishing to penetrate the market. "China may not be for you," he said. China requires a company to be of some size, able to do its homework and be realistic about expectations, Broadfoot said. Leadership changes will not go as smoothly as many expect later this year, he said, although that does not mean unrest or problems. "China's leadership change will be no more unstable for China than our counting hanging chads in Florida." Quick quotes from Broadfoot: • "China will have to devalue its currency 30 to 40 percent sometime in the future, especially if the dollar continues to weaken. Something has got to give." • "If you bring a technology into China, you can expect to have it ripped off. The question is how you manage the issue." • "China is not for small companies. You are probably better off to export. But even if you stay in Seattle, you will feel an impact from the price power of China." • "You may not like the system, but it is stable." • "Minuses? The legal system is a nightmare. Regulations will change depending on who you talk to. More than 30 percent of the loans on the books at Chinese banks are nonperforming. Corruption is an example of where the central government has lost control." • Pessimistic? "I don't get paid for hunky-dory. I get paid to find out what could go wrong with all this."