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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: IQBAL LATIF who wrote (24134)	3/7/1999 2:35:00 AM
From: IQBAL LATIF	Respond to of 50167

A thousand years scarce serve to form a state; an hour may lay it in the dust. -LORD BYRON The trade-offs of investing on line... By Penelope Patsuris y now most people have heard about the Internet trading meltdowns that have crippled so many investors in recent weeks. The biggest problem with online trading, however, isn't these well-publicized system outages, but the glitches and oversights--solutions to which are a long way off--that cost investors a lot of money every day. As the online brokerages scramble to upgrade their systems, trading sites will soon enough be able to accommodate the ever-growing number of traders who are logging on. The question of the moment though is, what happens to those traders after they enter a site? Often, they run into trouble. "I have one client who tried to cancel a market order hours before the stock started trading," says Jeffrey Feldman, a San Francisco securities lawyer. "She got a screen confirming the cancelation, but it hadn't been canceled. Then she learned she owned the shares, which plummeted, and lost $10,000 in 20 minutes." Another client of his was given a beta or test version of DLJ Direct's trading software, but wasn't informed that when DLJ upgraded the software her version was rendered useless. "She couldn't get through on the phone because DLJ happened to have a hot initial public offering (IPO) that day," he says. She lost $90,000. According to securities attorneys, online traders are routinely placing limit orders that are executed long after the share price has surpassed the requested limit. Other customers are receiving order confirmations only to learn that the trade didn't go through until much later, if not the next day, at a price very different from the time the order was confirmed. Often trades are put through on margin for thousands of dollars more than the margin "buying power" of a client's account, leaving portfolios wiped out and people in debt. -------------------------------------------------------------------------------- "That's a grand total of 40 brokers to handle ETrade's 600,000 accounts." -------------------------------------------------------------------------------- In order to protect themselves, investors must keep in mind what kind of recourse they do have should they find themselves in similar situations (See "Battling your e-broker"). First, it's important to understand that most of these problems occur because of software glitches and overloaded systems--nothing else can explain why orders that are confirmed never take place. Imagine an investor who puts in a limit order for a share at $80. Believing that the order has been executed, he tries to liquidate his position when the share reaches $85. Since there was no position, he has instead unwittingly sold short. Now imagine the stock hits $90. "These firms just don't have the capacity to take on the number of customers they're signing up," says Jeffrey Feldman. "And it's crazy because everywhere you look online brokerages are going full steam ahead to get them, offering free Internet access, no commissions and even incentives like depositing $75 in the accounts of customers who switch e-brokers." ETrade (EGRP) is currently named in two class-action suits by customers who have at times been unable to access the site. The first suit cites outages on Oct. 27 and 28, 1997, days when the market swung up 550 points and down 330 points respectively. The second suit is in reference to the more recent debacle, during the week of Feb. 1, 1999, when users were locked out for four hours over the course of three days. Both actions are going after the firm on grounds that it recklessly misrepresents its technical capacity with advertisements touting around-the-clock availability and trades that take less than a minute. In an apparent contradiction to these claims, ETrade's August 1997 prospectus actually states: "Heavy stress placed on the company's systems during peak trading times could cause the Company's systems to operate at unacceptably low speeds or fail altogether." There are blatant contradictions within ETrade's 15-page customer agreement; at one point it states that market orders are subject to immediate execution, only to later warn that the price at which an order executes may be different from the price the security is trading at when the order is entered.

To: IQBAL LATIF who wrote (24134)	3/7/1999 2:38:00 AM
From: IQBAL LATIF	Respond to of 50167

Check it Out........................... on T By Scott Burns Illustration by Rob Clayton You take your investing ideas where you find them, even if you have to pull them from a pile of restaurant receipts and phone bills Want to find some nice stocks? Look through your checkbook. This thought occurred to me as I went through the Burns family spending records for 1998 using the EasyAnswer Reports function in Quicken. What grabbed my attention was the number of take-out meals I had charged at Eatzi's, a wildly successful new "concept" eatery launched by Brinker International (NYSE: EAT; recent price, $26). In 1998, I charged $375.35 at Eatzi's, visiting at least 14 times. I spent still more buying their wonderful sandwiches, but the amount is discreetly hidden in cash so my wife will never know. In addition to the original Eatzi's in Dallas, the company has opened branches of this upscale take-out store in Atlanta, Houston, Manhattan, and Westbury, New York. The company Web site, www.brinker.com, trumpets plans to open more in the next year. I could talk about traffic and sales volume, but let's keep it simple: The Dallas Eatzi's is Fellini, but sanitary. Go through the door and you are met with a din of opera music and shouted announcements, while white-hatted cooks swarm about carrying trays of tournedos and steamed salmon. The servers are nearly lost in the crowd of people picking out sushi, bread, cheeses, desserts, or an array of prepared vegetables, salads, and meats. Visit a few times and you'll wonder what the kitchen in your home is for. Rooting around a little further in my Quicken files, I find that I was a regular at another Brinker restaurant, the Corner Bakery. I was also a regular at Chili's Grill & Bar, the centerpiece of the Brinker casual- dining empire. Chili's is a basic Southwestern-style hamburger place with an extended menu and a full bar. Brinker operates nearly 600 of them. I went there a lot when I first moved to Dallas, but stopped when the service turned slow and the food indifferent. Analysts blame the decline on high manager turnover and a lack of innovation in the menu. One restaurateur who knows the company well is less charitable: "They just won't spend the money. They're stuck on margins." Maybe they got over it. I rediscovered Chili's in 1998 when I had a quick lunch and tasted the new crushed-peppercorn hamburger with blue cheese. Now I'm an unrepentant peppercorn-hamburger addict. The Corner Bakery is another place I found myself returning to again and again. With a comfortable atmosphere, good coffee, and tasty offerings for breakfast, lunch, and dinner, these places could take business from every Starbucks in America. Recently, Brinker International shares carried an earnings multiple of 25-- modest in this market. Using the Research Wizard on Microsoft's Investor.com, I learned that the stock could appreciate by 20 percent by June 1999, if it maintained its earnings multiple and met the consensus earnings estimate; by June 2000, the stock would be up 38 percent if it fulfilled those conditions. But man does not invest in food alone-- my checkbook says so. Last year, I charged some $398 at Borders Books and Music, the flagship of Borders Group (NYSE: BGP, $19). More interesting, I didn't spend a dime at Barnes & Noble and haven't since 1996. I haven't made a purchase at Amazon.com since October 1997. It's all a matter of personal taste, but I prefer Borders. While I still admire-- and patronize-- independent bookstores like Garcia Street Books in Santa Fe, New Mexico, and Cody's Books in Berkeley, California, Borders has captured the bulk of my book-buying business because of its stores. They're big but cozy, and I can wander around looking for the book I know I want but can't name. What regularly amazes me is that the odds are I'll find what I'm looking for, no matter how obscure. And like small bookstores, Borders hires great people who go out of their way to help you find the book you want. Which makes me wonder a bit. In early January, Amazon.com shares split three-for-one and promptly zoomed to $160, putting the company's total market capitalization at a staggering $26 billion-- about six times the combined value of Borders and Barnes & Noble, and 61 times Amazon.com's annual sales (its annual profits are nonexistent and are expected to remain so for at least the next year). To put that $26 billion in some perspective, that same day the market valued General Motors at $52 billion and Ford at $79 billion. Borders, meanwhile, sells at less than one times sales and has an earnings multiple of 18. According to Investor.com's Research Wizard, the stock would rise to $55 a share by January 2000 if it sold at the higher multiple commanded by conventional booksellers-- almost a three- bagger in one year. Will it happen? I don't know. I am, however, willing to bet that Borders shares will more likely triple in the next year than Amazon.com's will and match the value of Ford. By the time you read this, I may have added Borders shares to my personal portfolio. And if I had solid brass cojones, I'd be short Amazon.com, too. I should also mention one company that isn't in my 1998 Quicken register but will be all over it in 1999: AT&T. This is not a prediction. It is a contract. Last summer, a friend whiled away an entire afternoon rhapsodizing about his new Nokia cell phone, with its long battery life and accompanying AT&T Digital One Rate plan. He loved that AT&T had eliminated roaming charges. With One Rate, which starts at $90 a month for 600 minutes, you just get on your phone and use it. No more ghastly surprises-- that half-hour call in Chicago or the long-distance call from L.A. to Kansas City. One monthly bill for a big bunch of minutes, geography be damned. And AT&T throws in a ten-cents-a-minute rate on long-distance calls from your land-line phone-- provided that your AT&T bill is separate from your Baby Bell bill-- and assigns you an 800 number to give out to your indigent children. One week after my friend's unsolicited endorsement, my brother-in-law visited. An oil executive who shuttles between drilling sites in Colombia and Canada, he needs a reliable phone with a long-life battery. So, naturally, he had the new Nokia and the AT&T Digital One Rate plan. At that, my wife and I stopped resisting and bought two new Nokias and signed up with AT&T. My trendy Motorola StarTAC, only a year old, sits unused on a shelf, a toy with an anxiety-provoking battery life. I loved playing Captain Kirk with it, but hated all those strandings on strange planets. About $2,500 that would have been spent on Southwestern Bell Wireless will show up in the 1999 Quicken register, destination AT&T. The company will have captured most of our voice communication, leaving Internet hookups and some local calls to the Baby Bells. And One Rate is hardly the only arrow in AT&T's quiver. With its purchase of Tele-Communications Inc., Ma Bell is making inroads in local calls and data transmission, and it's talking with Microsoft about buying the Microsoft Network. In short, it's time to stop worrying about AT&T's future and start worrying about the future of the Baby Bells. Once again jacking into Research Wizard on Investor.com, I see that AT&T shares (NYSE: T, $82) would rise by 20 percent by year-end if the company met its current earnings estimate and held on to its current earnings multiple. If it enjoyed the markedly higher multiples of its long-distance competitors, T could climb 651 percent. I don't expect that to happen-- T's rivals carry an average multiple of 152. But I am betting on a nice little pickup in T's price over the next few years. And now, if you'll excuse me, I have to ask my checkbook for more bright ideas. Contributing editor Scott Burns is the personal-finance columnist for the D

To: IQBAL LATIF who wrote (24134)	3/7/1999 3:03:00 AM
From: IQBAL LATIF	Read Replies (2) \| Respond to of 50167

The next global crisis? As financial crises calm, bahts may yield to bananas and beef in trade war Special Report - Trade: The next global crisis? March 5, 1999: 3:24 p.m. ET As I look into the psychology 'rallies and sell offs' of the market, following two reports are important in contextual terms to bring some real pressures for markets to test supports.. we can come back to test as low as 1192 even after testing 1330.... LONDON (CNNfn) - It's less than two years since the collapse of the Thai baht triggered a domino effect bringing chaos to the world's emerging economies. The next cataclysm, however, may begin not with bahts but with Airbuses, beef, or genetically-modified beets, not to mention steel or bananas. In the New World Disorder born of the "global economic crisis", commerce -- not currencies -- threatens to become the front line in a new international clash over what constitutes good mercantile behavior. So far, few signs suggest the divide may be bridged soon. As economic turmoil festers in large pockets of the world, the overarching fear in more affluent nations is that distressed regions will seize upon exports as an elixir to cure their ills. Global trade talk these days brims with pointed barbs about export "dumping" and the onus of "restrictive" import barriers. The assumption underlying the debate is that too many cheap imports are "bad" for an economy, a contention that consumer advocates tend to reject. Some experts, alarmed by weakening demand and global overcapacity in a slew of sectors, see a more virulent strain of economic contagion in the months ahead. "I fear the financial crisis of 1998 may become the trade crisis of 1999," William Daley, the U.S. Secretary of Commerce. intoned in a speech in New York earlier this month. Barbs from Brittan Sir Leon Brittan, the European Union's Trade Commissioner, went so far Friday as to accuse the U.S. of acting like a "rogue state" for slapping tariffs on a range of EU imports before the World Trade Organization had issued a final ruling in a brewing banana brouhaha. "I think it's an act of petulance and arrogance to say not only do we demand what we demand, but we insist on taking it before anybody has given an independent ruling that we're entitled to," Brittan told CNN. Perhaps nowhere is the sense of imminent danger more fervently felt than in the United States, which feels it has the most to lose from being expected to snap up products other countries sluff off. The U.S. economy grew at a surprising 6.1 percent annualized rate in the fourth quarter, its most rapid pace in more than a decade. Many officials see an omen in the disparity between America's economic resilience and the more sluggish growth scenario in the rest of the world. Today's transatlantic brickbats with Europe over bananas, some analysts believe, could flare into tomorrow's knock-down battles in sectors ranging from airlines to financial services. Not bearing a fair burden? Even where common ground exists, it is often based on mutual distrust of others. Both Europe and the United States bristle at the notion that Asia -- code word for 'Japan' -- may regard their markets as a sponge for their cheap unwanted products. The anxiety is evident in the mutual recriminations between Brussels and Washington about how the other side is not bearing its fair share of the "burden" in soaking up imports from Asia or Latin America. Daley's remark about a looming trade crisis may seem overdrawn. But viewed in the context of official laments that the U.S. is now "the importer of first and last resort," it suddenly seems less far-fetched. Naysayers look at the U.S. tussle with Japan over steel "dumping" and a widening rift with the Europeans over hormonally-treated beef, and see the incipient signs of "decoupling." That's a fancy way of saying that unless the rest of the world can get its economic act together and rectify trade imbalances, America may simply opt to go it alone in the economic arena. In reality, economists argue, a U.S. attempt to counter global weakness by balkanizing itself commercially -- or decoupling -- would be tantamount to cutting off its nose to spite its face. They note the Europeans are likely to feel similarly, despite grandstanding to the contrary. Graham Bishop, an adviser on the single European currency to Salomon Smith Barney, said his "gut instinct" is that there is little willingness on the part of the Europeans to touch off a trade war. "The solution to low growth in Europe," he added, "is not going to be exporting its way out of the problem." These days, Bishop noted, the euro-zone is so self-contained that exports amount to only 10 percent of GDP. In the time before the euro, that number was as high as 30 percent. A raft of dreary economic data Recent data suggest why European anxiety is cresting. Industrial production declined 0.2 percent across the 11-nation euro zone in December. In hard-hit Germany, the economic engine of Europe, storm clouds have been stacking up on the horizon for months. In the latest dollop of sour data, the German Chambers of Commerce and Industry on Tuesday lowered the growth forecast for 1999 to 1.5 percent from 2 percent. Meanwhile, the fledgling new currency, the euro, has mirrored the continental slump with a steady decline since its Jan. 3 launch. In recent days the currency has slipped below $1.09, hitting a lifetime low nearly 7 percent below its $1.17 launch level. "What both blocs (Europe and the United States) would like to see are ways of limiting cheap imports from less-developed countries into their countries," said Ian Harnett, a European strategist with BT Alex. Brown in London. But "with everybody squealing about Latin America and Asia, it's not politically correct to take a pot-shot." Many economists scoff at the notion of an export-driven growth strategy. They say consumer demand remains buoyant in many European nations, and point to developments suggesting Asia is getting serious about granting freer access to its markets and investment in infrastructure. Daley, in his New York speech, pointed out that U.S. exports to the rest of the world rose 4 percent in 1998 even as they plunged 14 percent, or $26 billion, to Asia. "That huge drop," he said, "accounted for about half the increase in our trade deficit, which I am unhappy to report set another record in 1998, the fifth year in a row." But Robert Subbaraman, a Tokyo-based regional economist with Lehman Brothers, said while volumes of exports across Asia have grown over the past year, weak prices have meant total values have decreased. Still, Subbaraman sees some potential for trouble. "The risk is that if the U.S. and EU slow down, the export-market pie is going to get smaller and smaller…and that's going to lead to protectionist policies," he said. Already, Subbaraman said, Indonesia's government has proposed a 40 percent levy on rice imports to help its cash-strapped rice farmers, while the Philippines recently hiked tariffs on chemicals. But he added: "I would say at this stage, the main trading bodies such as ASEAN (Association of South East Asian Nations) or APEC (Asia Pacific Economic Cooperation) realize a move towards trade protectionism would be a step backwards." Talk of trade war overblown Others believe talk of a full-blown trade crisis is overblown. Andrew Shipley, an economist with Schroder securities in Tokyo, said the wealth being generated by U.S. subsidiaries in Asia, such as General Motors in Japan, offsets the concerns about steel and other exports. "The view from Tokyo is that a strong dollar is desperately needed in the global economy," Shipley said. For 1998, Shipley said, Japan is expecting exports to drop 1.6 percent. "This is what the U.S. has wanted for years -- market access in Asia -- and if they blow this" because of trade, that would be a shame, Shipley said. Subbaraman agreed. "The U.S. can complain about all this, but the flip side is that sure, the U.S. is importing a lot more than they are exporting at the moment, but Asia could just as easily withdraw their investments in the U.S. They can say we (the U.S.) has to buy all of Asia's exports, they're not buying ours." --by staff writer Douglas Herbert