Grzegorz Chrupała committed 59554d9 Draft

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+bin/Features.class: src/ bin/Pair.class
+	javac -classpath bin src/ -d bin
+bin/Pair.class: src/
+	javac -classpath bin src/ -d bin
+LDA word class induction
+This software implements the LDA word class induction method described
+in Grzegorz Chrupała, 2011, Efficient induction of probabilistic word classes with LDA, IJCNLP. 
+Java 1.6, Unix-like shell environment
+You can test the software on the example text included. In order to
+extract features with at least 3 occurrences and induce 50 and 100
+./bin/ extract-features example.txt 3 example-3
+./bin/ induce-word-classes example-3 50  example-3-50
+./bin/ induce-word-classes example-3 100 example-3-100
+In the output directories you will find the following files:
+wordtype-class-probs - Word class probabilities given word type
+      P(z|w_0). Zero probabilities are omitted
+feature-class-counts - Co-occurrence counts of word-classes and
+      features, i.e. unnormalized P(z|w_{-1}) and
+      P(z|w_{+1}). Previous word features are suffixed with '^L' and
+      next word features with '^R' 
+wordtype-counts - Word type counts
+From inside the package directory you can run the top-level
+script in bin/ It supports two actions, extracting features,
+and inducing word classes.
+./bin/ extract-features INPUT-TEXT MIN-OCCUR OUTPUT-DIR
+  INPUT-TEXT is the file containing tokenized space-separated text,
+  one sentence per line.  
+  MIN-OCCUR specifies the minimum number of
+  occurrences of a feature to be extracted. Features occurring less
+  frequently will be ignored.
+  OUTPUT-DIR is the directory where the files with extracted features 
+  will be stored
+./bin/ induce-word-classes INPUT-DIR NUM-CLASSES OUTPUT-DIR
+  INPUT_DIR is a directory created by the extract-features command
+  NUM-CLASSES is the number of classes to induce
+  OUTPUT-DIR is where the results will written
+This package relies on the Mallet toolkit, which is included.
+The scripts set the maximum Java heap to 2G. For large datasets you
+will need a larger heap. This can be changed in bin/ and in
+### Set Java heap memory here:
+LDA_ROOT_BIN=`dirname $0`
+JAVA_COMMAND="java -Xmx$MEMORY -ea -Djava.awt.headless=true -Dfile.encoding=UTF-8 -server -classpath $CP"
+case $CMD in 
+    "extract-features")
+	INPUT=$2
+	mkdir -p $OUTDIR	
+	echo "Extracting features"
+	cat $INPUT | $JAVA_COMMAND Features $INPUT $OUTDIR/wordtype-counts\
+             $CUTOFF > $OUTDIR/features
+	cut -f1 -d' ' $OUTDIR/wordtype-counts > $OUTDIR/vocab
+	;;
+    "induce-word-classes")
+	INDIR=$2
+	K=$3
+	if [ -z $5 ];
+	then SEED=42;
+	else SEED=$5;
+	fi
+	ALPHA=`echo "scale=4; 10 / $K" | bc`
+	BETA=0.01
+	mkdir -p $OUTDIR
+	paste $INDIR/vocab $INDIR/vocab $INDIR/features > $OUTDIR/dense
+	cp $INDIR/vocab          $OUTDIR/vocab
+	cp $INDIR/wordtype-counts          $OUTDIR/wordtype-counts
+	echo "Importing into mallet"
+  $JAVA_COMMAND --token-regex "\\S+"  --keep-sequence --preserve-case --label 0 --input $OUTDIR/dense --output $OUTDIR/mallet 
+	echo "Training LDA model"
+      --num-topics $K \
+	    --alpha $ALPHA --beta $BETA --input $OUTDIR/mallet \
+	    --output-doc-topics $OUTDIR/doc-topics \
+	    --word-topic-counts-file $OUTDIR/feature-class-counts \
+            --random-seed $SEED
+	echo "Postprocessing"
+	tail -n +2 $OUTDIR/doc-topics | cut -f3- | paste $OUTDIR/vocab - \
+	    | sort -k2  | sed 's/[0-9][0-9]* 0\.0 //g'\
+            > $OUTDIR/wordtype-class-probs
+	echo "Model saved in $OUTDIR"
+	;;
+    *)
+	echo "Unknown command " $CMD
+	exit 1
+Confidence in the pound is widely expected to take another sharp dive if trade figures for September , due for release tomorrow , fail to show a substantial improvement from July and August 's near-record deficits .
+Chancellor of the Exchequer Nigel Lawson 's restated commitment to a firm monetary policy has helped to prevent a freefall in sterling over the past week .
+But analysts reckon underlying support for sterling has been eroded by the chancellor 's failure to announce any new policy measures in his Mansion House speech last Thursday .
+This has increased the risk of the government being forced to increase base rates to 16 % from their current 15 % level to defend the pound , economists and foreign exchange market analysts say .
+`` The risks for sterling of a bad trade figure are very heavily on the down side , '' said Chris Dillow , senior U.K. economist at Nomura Research Institute .
+`` If there is another bad trade number , there could be an awful lot of pressure , '' noted Simon Briscoe , U.K. economist for Midland Montagu , a unit of Midland Bank PLC .
+Forecasts for the trade figures range widely , but few economists expect the data to show a very marked improvement from the # 2 billion -LRB- $ 3.2 billion -RRB- deficit in the current account reported for August .
+The August deficit and the # 2.2 billion gap registered in July are topped only by the # 2.3 billion deficit of October 1988 .
+Sanjay Joshi , European economist at Baring Brothers & Co. , said there is no sign that Britain 's manufacturing industry is transforming itself to boost exports .
+At the same time , he remains fairly pessimistic about the outlook for imports , given continued high consumer and capital goods inflows .
+He reckons the current account deficit will narrow to only # 1.8 billion in September .
+However , Mr. Dillow said he believes that a reduction in raw material stockbuilding by industry could lead to a sharp drop in imports .
+Combined with at least some rebound in exports after August 's unexpected decline , the deficit could narrow to as little as # 1.3 billion .
+Mr. Briscoe , who also forecasts a # 1.3 billion current account gap , warns that even if the trade figures are bullish for sterling , the currency wo n't advance much because investors will want to see further evidence of the turnaround before adjusting positions .
+Nevertheless , he noted , `` No one will want to go into the trade figures without a flat position '' in the pound .
+Meanwhile , overall evidence on the economy remains fairly clouded .
+In his Mansion House speech , Mr. Lawson warned that a further slowdown can be expected as the impact of the last rise in interest rates earlier this month takes effect .
+U.K. base rates are at their highest level in eight years .
+But consumer expenditure data released Friday do n't suggest that the U.K. economy is slowing that quickly .
+The figures show that spending rose 0.1 % in the third quarter from the second quarter and was up 3.8 % from a year ago .
+This compares with a 1.6 % rise in the second from the first quarter and a 5.4 % increase from the second quarter of 1988 .
+Mr. Dillow said the data show the economy `` is still quite strong , '' but suggestions that much of the spending went on services rather than consumer goods should reduce fears of more import rises .
+Certainly , the chancellor has made it clear that he is prepared to increase interest rates again if necessary to both ensure that a substantial slowdown does take place and that sterling does n't decline further .
+Thursday , he reminded his audience that the government `` can not allow the necessary rigor of monetary policy to be undermined by exchange rate weakness . ''
+Analysts agree there is little holding sterling firm at the moment other than Mr. Lawson 's promise that rates will be pushed higher if necessary .
+And , they warn , any further drop in the government 's popularity could swiftly make this promise sound hollow .
+Sterling was already showing some signs of a lack of confidence in Mr. Lawson 's promise Friday .
+In European trading it declined to $ 1.5890 and 2.9495 marks from $ 1.5940 and 2.9429 marks late Thursday .
+Economists suggested that if the pound falls much below 2.90 marks , the government will be forced to increase rates to 16 % , both to halt any further decline and ensure that the balance of monetary policy remains unchanged .
+Friday 's Market Activity
+The dollar posted gains in quiet trading as concerns about equities abated .
+Foreign exchange dealers said that the currency market has begun to distance itself from the volatile stock exchange , which has preoccupied the market since Oct. 13 , when the Dow Jones Industrial Average plunged more than 190 points .
+Currency analysts predict that in the coming week the foreign exchange market will shift its focus back to economic fundamentals , keeping a close eye out for any signs of monetary easing by U.S. Federal Reserve .
+Late in the New York trading day , the dollar was quoted at 1.8578 marks , up from 1.8470 marks late Thursday in New York .
+The U.S. currency was also changing hands at 142.43 yen , up from 141.70 yen in New York late Thursday .
+In Tokyo on Monday , the U.S. currency opened for trading at 141.95 yen , up from Friday 's Tokyo close of 141.35 yen .
+On the Commodity Exchange in New York , gold for current delivery settled at $ 367.30 an ounce , up 20 cents .
+Estimated volume was a light 2.4 million ounces .
+In early trading in Hong Kong Monday , gold was quoted at $ 366.50 an ounce .
+East Rock Partners Limited Partnership said it proposed to acquire A.P. Green Industries Inc. for $ 40 a share .
+In an Oct. 19 letter to A.P. Green 's board , East Rock said the offer is subject to the signing of a merger agreement by no later than Oct. 31 .
+The letter , attached to a filing with the Securities and Exchange Commission , said the approval is also contingent upon obtaining satisfactory financing .
+An A.P. Green official declined to comment on the filing .
+The $ 40-a-share proposal values the company at about $ 106.6 million .
+A.P. Green currently has 2,664,098 shares outstanding .
+Its stock closed at $ 38 , up $ 1.875 , in national over-the-counter trading .
+The company is a Mexico , Mo. , maker of refractory products .
+East Rock also said in the filing that it boosted its stake in A.P. Green to 8.7 % .
+It now holds 233,000 A.P. Green common shares , including 30,000 shares bought last Thursday for $ 35.50 to $ 36.50 a share .
+New York-based John Kuhns and Robert MacDonald control East Rock Partners Inc. , the sole general partner of East Rock Partners L.P .
+The sole limited partner of the partnership is Westwood Brick Lime Inc. , an indirect subsidiary of Westwood Group Inc .
+Both Westwood Brick and Westwood Group are based in Boston .
+Freight rates , declining for most of the decade because of competition spurred by deregulation , are bottoming out , turning upward and threatening to fuel inflation .
+Trucking , shipping and air-freight companies have announced rate increases , scheduled for this fall or early next year , reflecting higher costs and tightened demand for freight transport .
+Major shippers say they expect freight rates to rise at least as fast as inflation and maybe faster in the next few years .
+That 's a big change from recent years when freight haulage was a bright spot for U.S. productivity , helping to restrain inflation and make U.S. industry more competitive abroad .
+`` Demand has caught up with the supply of certain types of freight transportation , and rates are starting to move up '' at a rate `` close to or slightly more than the inflation rate , '' said Clifford Sayre , director of logistics at Du Pont Co .
+Shippers surveyed recently by Ohio State University said they expect their freight-transport , storage and distribution costs to rise about 4 % this year .
+Only 10 % of the 250 shippers polled expected their freight-transport costs to decrease , compared with 30 % who had looked to freight transport to reduce costs in past years .
+`` This is the first year since transportation deregulation in 1980 that we have had such a dramatic and broad-based upturn in perceived transportation rates , '' said Bernard LaLonde , a transportation logistics professor at Ohio State in Columbus .
+The deregulation of railroads and trucking companies that began in 1980 enabled shippers to bargain for transportation .
+Carriers could use their equipment more efficiently , leading to overcapacity they were eager to fill .
+Shippers cut about $ 35 billion from their annual , inter-city truck and rail costs , to about $ 150 billion , or about 6.4 % of gross national product , down from 8 % of GNP in 1981 .
+But with much of the inefficiency squeezed out of the freight-transport system , rising costs are likely to be reflected directly in higher freight rates .
+`` Shippers are saying ` the party 's over , ' '' said Mr. LaLonde .
+`` Shippers wo n't be able to look for transportation-cost savings as they have for the last eight or nine years .
+Transport rates wo n't be an opportunity for offsetting cost increases in other segments of the economy . ''
+Robert Delaney , a consultant at Arthur D. Little Inc. , Cambridge , Mass. , said `` We 've gotten all the benefits of deregulation in freight-cost reductions .
+Now we are starting to see real freight-rate increases as carriers replace equipment , pay higher fuel costs and pay more for labor .
+You 'll see carriers try to recoup some of the price cutting that occurred previously . ''
+Not everyone believes that the good times are over for shippers .
+`` There 's still a lot of pressure on rates in both rail and truck , '' said Gerard McCullough , lecturer in transportation at Massachusetts Institute of Technology .
+Less-than-truckload companies , which carry the freight of several shippers in each truck trailer , discounted away a 4.7 % rate increase implemented last April .
+The carriers were competing fiercely for market share .
+Railroad-rate increases are likely to be restrained by weakening rail-traffic levels and keen competition for freight from trucks .
+An official at Consolidated Freightways Inc. , a Menlo Park , Calif. , less-than-truckload carrier , said rate discounting in that industry has begun to `` stabilize . ''
+Consolidated Freightways plans to raise its rates 5.3 % late this year or early next year , and at least two competitors have announced similar increases .
+Truckers are `` trying to send signals that they need to stop the bloodletting , forget about market share and go for higher rates , '' said Michael Lloyd , an analyst at Salomon Bros .
+And `` shippers are getting the feeling that they have played one trucker off against another as much as they can , '' he said .
+Air-freight carriers raised their rates for U.S. products going across the Pacific to Asia by about 20 % earlier this month .
+And Japan Air Lines said it plans to boost its rates a further 25 % over the next two years .
+Such rate increases `` will increase the total cost of U.S. products and slow down the rate of increase of U.S. exports , '' said Richard Connors , a senior vice president of Yusen Air & Sea Service U.S.A. Inc. , the U.S. air-freight-forwarding subsidiary of Nippon Yusen Kaisha of Japan .
+Ship companies carrying bulk commodities , such as oil , grain , coal and iron ore , have been able to increase their rates in the last couple of years .
+Some bulk shipping rates have increased `` 3 % to 4 % in the past few months , '' said Salomon 's Mr. Lloyd .
+And ship lines carrying containers are also trying to raise their rates .
+Carriers boosted rates more than 10 % in the North Atlantic between the U.S. and Europe last September , hoping to partly restore rates to earlier levels .
+Ship lines operating in the Pacific plan to raise rates on containers carrying U.S. exports to Asia about 10 % , effective next April .
+MGM Grand Inc. said it filed a registration statement with the Securities and Exchange Commission for a public offering of six million common shares .
+The Beverly Hills , Calif.-based company said it would have 26.9 million common shares outstanding after the offering .
+The hotel and Gaming company said Merrill Lynch Capital Markets will lead the underwriters .
+Proceeds from the sale will be used for remodeling and refurbishing projects , as well as for the planned MGM Grand hotel\/casino and theme park .
+Bob Stone stewed over a letter from his manager putting him on probation for insubordination .
+Mr. Stone thought the discipline was unfair ; he believed that his manager wanted to get rid of him for personal reasons .
+Unable to persuade the manager to change his decision , he went to a `` company court '' for a hearing .
+At the scheduled time , Mr. Stone entered a conference room in a building near where he worked .
+After the three members of the court introduced themselves , the chairman of the panel said : `` Go ahead and tell us what happened .
+We may ask questions as you go along , or we may wait until the end . ''
+No lawyers or tape recorders were present .
+The only extra people were a couple of personnel specialists , one of whom knew Mr. Stone 's case intimately and would help fill in any facts needed to give the court the full picture .
+Over a cup of coffee , Mr. Stone told his story .
+He talked about 20 minutes .
+When he was through , the court members asked many questions , then the chairman said they would like to hear his manager 's side and talk to witnesses .
+The chairman promised Mr. Stone a decision within two weeks .
+Bob Stone is a fictional name , but the incident described is real .
+It happened at Northrop Corp. in Los Angeles .
+The court is called the Management Appeals Committee , or just `` MAC , '' and it is likely to hear a couple of dozen cases a year .
+Alter some details of this example and it could be taking place today at Federal Express in Memphis , the Defense and Underseas Systems divisions of Honeywell in Minneapolis , a General Electric plant in Columbia , Md. , or a number of other companies .
+These firms are pioneers in a significant new trend in the corporate world : the rise of what I call corporate due process .
+Although corporate due process is practiced today in few companies -- perhaps 40 to 60 -- it is one of the fastest developing trends in industry .
+In the coming decade a majority of people-oriented companies are likely to adopt it .
+Corporate due process appeals to management for a variety of reasons .
+It reduces lawsuits from disgruntled employees and ex-employees , with all that means for reduced legal costs and better public relations .
+It helps to keep out unions .
+It increases employee commitment to the company , with all that means for efficiency and quality control .
+What must your management team do to establish corporate due process ?
+Here are four key steps :
+1 . Make sure you have a strong personnel department .
+It must be able to handle most of the complaints that can not be solved in the trenches by managers and their subordinates , else the company court or adjudicators will be inundated with cases .
+At Polaroid , the Personnel Policy Planning Committee may hear only about 20 cases a year ; the rest of the many hundreds of complaints are resolved at earlier stages .
+At TWA , the System Board of Adjustment hears 50 to 75 cases a year , only a fraction of the complaints brought to personnel specialists .
+At Citicorp , the Problem Review Board may hear only 12 or so cases because of personnel 's skill in complaint-resolution .
+In a typical year , up to 20 % of the work force goes to personnel specialists with complaints of unfair treatment .
+In a large company that means many hundreds of complaints for personnel to handle .
+2 . Formally or informally , train all your managers and supervisors in the company 's due-process approach .
+See that they know company personnel policy backwards and forwards , for it is the `` law '' governing company courts and adjudicators .
+Coach them in handling complaints so that they can resolve problems immediately .
+In case managers and personnel specialists are unsuccessful and subordinates take their complaints to a company court or adjudicator , teach managers to accept reversals as a fact of business life , for in a good due-process system they are bound to happen .
+In the 15 companies I studied , reversal rates range on the average from 20 % to 40 % .
+3 . Decide whether you want a panel system or a single adjudicator .
+A panel system like that in the Bob Stone example enjoys such advantages as high credibility and , for the panelists , mutual support .
+An adjudicator system -- that is , an investigator who acts first as a fact-finder and then switches hats and arbitrates the facts -- has such advantages as speed , flexibility and maximum privacy .
+International Business Machines and Bank of America are among the companies using the single-adjudicator approach .
+4 . Make your due-process system visible .
+It wo n't do any good for anybody unless employees know about it .
+Most managements hesitate to go all out in advertising their due-process systems for fear of encouraging cranks and chronic soreheads to file complaints .
+On the other hand , they make sure at a minimum that their systems are described in their employee handbooks and talked up by personnel specialists .
+Smith-Kline Beecham goes further and sometimes features its grievance procedure in closed-circuit TV programs .
+Naturally , one of the best ways to guarantee visibility for your due-process system is for top management to support it .
+At IBM , the company 's Open Door system is sometimes the subject of memorandums from the chief executive .
+Federal Express goes further in this respect than any company I know of with both Frederick Smith and James Barksdale , chief executive and chief operating officer , respectively , sitting in on the Appeals Board almost every Tuesday to decide cases .
+Mr. Ewing is a consultant based in Winchester , Mass. , and author of `` Justice on the Job : Resolving Grievances in the Nonunion Workplace '' -LRB- Harvard Business School Press , 1989 -RRB- .
+Tokyo stocks closed higher in active trading Friday , marking the fourth consecutive daily gain since Monday 's sharp fall .
+London shares closed moderately lower in thin trading .
+At Tokyo , the Nikkei index of 225 selected issues was up 112.16 points to 35486.38 .
+The index advanced 266.66 points Thursday .
+In early trading in Tokyo Monday , the Nikkei index rose 101.98 points to 35588.36 .
+Friday 's volume on the First Section was estimated at one billion shares , up from 862 million Thursday .
+Winners outpaced losers , 572 to 368 , while 181 issues remained unchanged .
+With investors relieved at the overnight gain in New York stocks , small-lot buying orders streamed into the market from early morning , making traders believe the market was back to normal .
+The Nikkei , which reached as high as 35611.38 right after the opening , surrendered part of its early advance toward the end of the day because of profit-taking .
+`` Investors , especially dealers , do n't want to hold a position over the weekend , '' a trader at Dai-ichi Securities said , adding , though , that the trading mood remained positive through the afternoon session .
+The Tokyo Stock Price Index -LRB- Topix -RRB- of all issues listed in the First Section , which gained 22.78 points Thursday , was up 14.06 points , or 0.53 % , at 2679.72 .
+The Second Section index , which rose 15.72 points Thursday , was up 11.88 points , or 0.32 % , to close at 3717.46 .
+Volume in the second section was estimated at 30 million shares , up from 28 million Thursday .
+In turmoil caused by the previous Friday 's plunge in New York stocks , the Nikkei marked a sharp 647.33-point fall Monday .
+But the Nikkei fell an overall 1.8 % in value that day compared with Wall Street 's far sharper 6.9 % drop on Oct. 13 .
+The Tokyo market 's resiliency helped participants to regain confidence gradually as they spent more time on analyzing factors that caused the Friday plunge and realized these problems were unique to New York stocks and not directly related to Tokyo .
+The Nikkei continued to gain for the rest of the week , adding 1017.69 points in four days -- more than erasing Monday 's losses .
+But further major advances on the Nikkei are n't foreseen this week by market observers .
+Investors are still waiting to see how the U.S. government will decide on interest rates and how the dollar will be stabilized .
+Some high-priced issues made a comeback Friday .
+Pioneer surged 450 yen -LRB- $ 3.16 -RRB- to 6,050 yen -LRB- $ 42.60 -RRB- .
+Kyocera advanced 80 yen to 5,440 .
+Fanuc gained 100 to 7,580 .
+Breweries attracted investors because of their land property holdings that could figure in development or other plans , traders said .
+Sapporo gained 80 to 1,920 and Kirin added 60 to 2,070 .
+Housings , constructions and pharmaceuticals continued to be bought following Thursday 's gains because of strong earnings outlooks .
+Daiwa House gained 50 to 2,660 .
+Misawa Homes was up 20 at 2,960 .
+Kajima advanced 40 to 2,120 and Ohbayashi added 50 to 1,730 .
+Fujisawa added 80 to 2,010 and Mochida advanced 230 to 4,400 .
+London share prices were influenced largely by declines on Wall Street and weakness in the British pound .
+The key Financial Times-Stock Exchange 100-share index ended 10.2 points lower at 2179.1 , above its intraday low of 2176.9 , but off the day 's high of 2189 .
+The index finished 2.4 % under its close of 2233.9 the previous Friday , although it recouped some of the sharp losses staged early last week on the back of Wall Street 's fall .
+London was weak throughout Friday 's trading , however , on what dealers attributed to generally thin interest ahead of the weekend and this week 's potentially important U.K. trade figures for September .
+The FT-SE 100 largely remained within an 11-point range establshed within the first hour of trading before it eased to an intraday low late in the session when a flurry of program selling pushed Wall Street lower .
+The FT 30-share index closed 11.0 points lower at 1761.0 .
+Volume was extremely thin at 351.3 million shares , the lightest volume of the week and modestly under Thursday 's 387.4 million shares .
+Dealers said the day 's action was featureless outside some response to sterling 's early weakness against the mark , and fears that Wall Street might open lower after its strong leap forward Thursday .
+They added that market-makers were largely sidelined after aggressively supporting the market Thursday in their quest to cover internal shortages of FT-SE 100 shares .
+Interest may remain limited into tomorrow 's U.K. trade figures , which the market will be watching closely to see if there is any improvement after disappointing numbers in the previous two months .
+The key corporate news of the day was that British Airways decided to withdraw from a management-led bid for UAL Corp. , the parent of United Airlines .
+British Airways rose initially after announcing its withdrawal from the UAL deal .
+Dealers said they viewed the initial # 390-million -LRB- $ 622 million -RRB- outlay for a 15 % stake in the airline as a bit much .
+Its shares slid in late dealings to close a penny per share lower at 197 pence .
+The airline was the most active FT-SE 100 at 8.2 million shares traded .
+The next most active top-tier stock was B.A.T Industries , the target of Sir James Goldsmith 's # 13.4 billion bid .
+The company gained shareholder approval Thursday to restructure in a bid to fend off the hostile takeover .
+Sir James said Thursday night that his plans for the takeover had n't changed .
+B.A.T ended the day at 778 , down 5 , on turnover of 7.5 million shares .
+Dealers said it was hit by some profit-taking after gains since mid-week .
+In other active shares , Trusthouse Forte shed 10 to 294 on volume of 6.4 million shares after a Barclays De Zoete Wedd downgrading , while Hillsdown Holdings , a food products concern , was boosted 2 to 271 after it disclosed it would seek shareholder approval to begin share repurchases .
+Elsewhere in Europe , share prices closed higher in Stockholm , Brussels and Milan .
+Prices were lower in Frankfurt , Zurich , Paris and Amsterdam .
+South African gold stocks closed moderately lower .
+Share prices closed higher in Sydney , Taipei , Wellington , Manila , Hong Kong and Singapore and were lower in Seoul .
+Here are price trends on the world 's major stock markets , as calculated by Morgan Stanley Capital International Perspective , Geneva .
+To make them directly comparable , each index is based on the close of 1969 equaling 100 .
+The percentage change is since year-end .
+The U.S. is required to notify foreign dictators if it knows of coup plans likely to endanger their lives , government officials said .
+The notification policy was part of a set of guidelines on handling coups outlined in a secret 1988 exchange of letters between the Reagan administration and the Senate Intelligence Committee .
+The existence of the guidelines has become known since President Bush disclosed them privately to seven Republican senators at a White House meeting last Monday .
+Officials familiar with the meeting said Mr. Bush cited the policy as an example of the sort of congressional requirements the administration contends contribute to the failure of such covert actions as this month 's futile effort to oust Panamanian dictator Manuel Noriega .
+According to the officials , Mr. Bush even read to the senators selections from a highly classified letter from the committee to the White House discussing the guidelines .
+They said the president conceded the notification requirement did n't affect his decision to lend only minor support to this month 's Panama coup effort .
+No notification was ever considered , officials said , apparently because the U.S. did n't think the coup plotters intended to kill Mr. Noriega , but merely sought to imprison him .
+What 's more , both administration and congressional officials hint that the notification requirement is likely to be dropped from the guidelines on coup attempts that are being rewritten by the panel and the White House .
+The rewriting was launched at a meeting between Mr. Bush and intelligence committee leaders Oct. 12 , a few days before the meeting at which the president complained about the rules .
+However , the disclosure of the guidelines , first reported last night by NBC News , is already being interpreted on Capitol Hill as an unfair effort to pressure Congress .
+It has reopened the bitter wrangling between the White House and Congress over who is responsible for the failure to oust Mr. Noriega and , more broadly , for difficulties in carrying out covert activities abroad .
+A statement issued by the office of the committee chairman , Sen. David Boren -LRB- D. , Okla. -RRB- , charged that the disclosure is part of a continuing effort to shift the criticism for the failure of the recent coup attempt in Panama .
+The statement added , `` Someone has regrettably chosen to selectively summarize portions of highly classified correspondence between the two branches of government .
+Not only does this come close to a violation of law , it violates the trust we have all worked to develop . ''
+Sen. Boren said , `` It 's time to stop bickering and work together to develop a clear and appropriate policy to help the country in the future .
+I 've invited the president to send his suggestions to the committee . ''
+Republican Sen. William Cohen of Maine , the panel 's vice chairman , said of the disclosure that `` a text torn out of context is a pretext , and it is unfair for those in the White House who are leaking to present the evidence in a selective fashion . ''
+Sen. Boren said the committee could n't defend itself by making the documents public because that would violate classification rules .
+But the chairman and other committee members stressed that the notification guideline was n't imposed on the White House by a meddling Congress .
+Instead , both congressional and administration officials agreed , it grew out of talks about coup-planning in Panama that were initiated by the administration in July 1988 and stretched into last October .
+The guideline was n't a law , but a joint interpretation of how the U.S. might operate during foreign coups in light of the longstanding presidential order banning a U.S. role in assassinations .
+In fact , yesterday the administration and Congress were still differing on what had been agreed to .
+One administration official said notification was required even if the U.S. `` gets wind '' of somebody else 's coup plans that seem likely to endanger a dictator 's life .
+But a congressional source close to the panel said the rule only covered coup plans directly involving the U.S. .
+Although the notification guideline was n't carried out in this month 's coup attempt , some administration officials argue that it may have led to hesitation and uncertainty on the part of U.S. intelligence and military operatives in Panama .
+One senior administration official called the guideline `` outrageous '' and said it could make U.S. operatives reluctant to even listen to coup plans for fear they may get into legal trouble .
+The issue came to a head last year , officials recalled , partly because the Reagan administration had sought unsuccessfully to win committee approval of funding for new Panama coup efforts .
+In addition , both administration and congressional officials said the need for guidelines on coups and assassinations was partly spurred by a White House desire to avoid nasty overseas surprises during the election campaign .
+Though the assassination ban is a White House order that Congress never voted on , the intelligence committees can exercise influence over its interpretation .
+Last week , Central Intelligence Agency Director William Webster publicly called on Congress to provide new interpretations of the assassination order that would permit the U.S. more freedom to act in coups .
+The administration has reacted to criticism that it mishandled the latest coup attempt by seeking to blame Congress for restrictions the White House said have hampered its freedom of action .
+However , last week Mr. Webster 's two top CIA deputies said congressional curbs had n't hampered the spy agency 's role in the coup attempt in Panama .
+Nevertheless , the administration 's criticisms appeared to have made some headway with Sens. Boren and Cohen after their Oct. 12 meeting with the president .
+The three men agreed to rewrite the guidelines , without changing the basic assassination ban , to clear up any ambiguities that may have hampered U.S. encouragement of coups against anti-American leaders .
+The new argument over the notification guideline , however , could sour any atmosphere of cooperation that existed .
+Gerald F. Seib contributed to this article .
+-LRB- During its centennial year , The Wall Street Journal will report events of the past century that stand as milestones of American business history . -RRB-
+MUTUAL FUNDS ARRIVED IN THE U.S. during the Roaring Twenties -LRB- they had been in Britain for a century -RRB- , but they did n't boom until the money market fund was created in the 1970s .
+By 1980 , there were more than 100 such funds .
+Besides creating a vehicle for investors , money market funds also helped rewrite banking regulations .
+The idea was to let small investors , the backbone of the fund business , deal in the money market 's high short-term interest rates .
+This had been the exclusive province of those rich enough to use six-figure sums to get income that was figured beyond the third or fourth decimal place .
+The now-standard price of $ 1 a share came about by accident .
+An early fund had filed a registration with the Securities and Exchange Commission that included a fixed $ 1 price .
+It arrived just as the regulator handling such operations was retiring .
+His successor approved the $ 1 price in the process of clearing the backed-up papers on his desk .
+When Dreyfus started the first advertising-backed retail fund in February 1974 , it was priced at $ 10 a share -LRB- and reached $ 1 billion in assets in one year . -RRB-
+Dreyfus moved to the $ 1 price after the SEC set standards -- an average 120-day maturity of high-grade paper -- that are still the rule .
+Keeping the listed price at a dollar is primarily a convenience .
+Actually , the funds do fluctuate , but beyond the third decimal place .
+Rounding-off keeps them at $ 1 .
+Eventually , the money funds ' success forced relaxation of curbs on bank interest rates to allow banks to offer competing yields .
+The new instrument also introduced many to the industry -- 30 % of fund owners -LRB- there are more than 54 million accounts -RRB- started with a money fund .
+Today more than 470 money market funds have total assets exceeding $ 350 billion .
+-LRB- The companion tax-exempt funds add $ 71 billion . -RRB-
+Dreyfus alone has seen its money market funds grow from $ 1 billion in 1975 to closes to $ 15 billion today .
+Procter & Gamble Co. and Noxell Corp. said they received early termination of the waiting period under the Hart-Scott-Rodino Act regarding the proposed $ 1.4 billion merger of Noxell into P&G .
+Shareholders of Noxell , of Hunt Valley , Md. , will vote on the merger at a special meeting on Nov. 30 , the companies said .
+P&G , Cincinnati , agreed to exchange 0.272 share of its common stock for each share of Noxell common and Class B stock , a total of about 11 million P&G shares .
+The transaction would mark the entry of P&G into cosmetics .
+The company already markets a wide range of detergents , food , household and health-care products .
+Shareholders of Messerschmitt-Boelkow-Blohm G.m.b . H. postponed their formal endorsement of a merger with Daimler-Benz AG until another meeting on Nov. 17 .
+The owners of the defense and aerospace concern , which include three regional states , several industrial companies and banks , met Friday to discuss the final terms of the transaction , in which Daimler-Benz will acquire 50.01 % of
+But agreement aparently could n't be reached because of opposition from the states of Hamburg and Bremen , which are demanding more influence over the German Airbus operations and a better guarantee against job losses in the troubled Northern German region .
+The two states and the state of Bavaria still hold a majority in MBB , but their stake will fall to around 30 % after Daimler-Benz acquires its stake in the concern .
+Jeffrey E. Levin was named vice president and chief economist of this commodity futures and options exchange .
+He had been associate professor in the department of finance at Seton Hall University .
+SIERRA TUCSON Cos. said it completed its initial public offering of 2.5 million common shares , which raised $ 30 million .
+The Tucson , Ariz. , operator of addiction-treatment centers said proceeds will be used for expansion , to pay debt and for general corporate purposes .
+Oppenheimer & Co. was the lead underwriter .
+The government issues its first reading on third-quarter real gross national product this week in a report that is expected to disclose much tamer inflation .
+The consensus view on real GNP , the total value of the nation 's output of goods and services adjusted for inflation , calls for a 2.3 % gain , down from the second quarter 's 2.5 % , according to MMS International , a unit of McGraw-Hill Inc. , New York .
+But inflation , as measured by the GNP deflator in Thursday 's report , is expected to rise only 3.5 % , down from 4.6 % in the second quarter .
+`` Inflation could be a real surprise , '' said Samuel D. Kahan , chief financial economist at Kleinwort Benson Government Securities Inc. , in Chicago .
+`` If that gets people excited , it could serve as an impetus to the fixed-income markets to lower their rates , '' he added .
+The week 's other notable indicators include mid-October auto sales , September durable goods orders as well as September personal income , personal consumption and the saving rate .
+Most are expected to fall below previous-month levels .
+Many economists see even slower GNP growth for the remainder of the year , with some leaning more strongly toward a possible recession .
+In addition to softer production data , weaker housing starts and lower corporate profits currently in evidence , some analysts believe the two recent natural disasters -- Hurricane Hugo and the San Francisco earthquake -- will carry economic ramifications in the fourth quarter .
+The recent one-day , 190-point drop in the Dow Jones Industrial Average seems to be significant to economists mainly for its tacit comment on the poor quality of third-quarter profits now being reported .
+`` The stock market is sick because profits are crumbling , '' says Michael K. Evans , president of Evans Economics Inc. , Washington .
+The economy , he noted , moves the market , not vice versa .
+On the other hand , Mr. Evans expects the hurricane and the earthquake `` to take a hunk out of fourth-quarter GNP . ''
+His estimate of 3.3 % for third-quarter GNP is higher than the consensus largely because he believes current inventories are n't as low as official figures indicate .
+Demand , he believes , is being met from overhang rather than new production .
+By and large , economists believe the two natural catastrophes will limit economic damage to their regions .
+Edward J. Campbell , economist at Brown Brothers Harriman & Co. , New York , noted that large increases in construction activity along with government and private relief efforts could offset loss of production in those areas .
+Gary Ciminero , economist at Fleet\/Norstar Financial Group , Providence , R.I. , expects the deflator to rise 3.7 % , well below the second quarter 's 4.6 % , partly because of what he believes will be temporarily better price behavior .
+He expects real GNP growth of only 2.1 % for the quarter , noting a wider trade deficit , slower capital and government spending and the lower inventory figures .
+Sung Won Sohn , chief economist at Norwest Corp. , Minneapolis , holds that the recent stock-market volatility `` increases the possibility of economic recession and reinforces the bad news '' from recent trade deficit , employment and housing reports .
+The consensus calls for a 0.5 % increase in September personal income and a 0.3 % gain in consumption .
+In August , personal income rose 0.4 % and personal consumption increased 0.9 % .
+Charles Lieberman , managing director of financial markets reasearch at Manufacturers Hanover Securities Corp. , New York , said Hurrican Hugo shaved 0.1 % to 0.2 % from personal-income growth , because of greatly diminished rental income from tourism .
+Durable goods orders for September , due out tomorrow , are expected to show a slip of 1 % , compared with August 's 3.9 % increase .
+As usual , estimates on the fickle report are wide , running from a drop of 3.5 % to a gain of 1.6 % .
+HASTINGS MANUFACTURING Co. declared a regular quarterly dividend of 10 cents a share and an extra dividend of five cents a share on its common stock , payable Dec. 15 to shares of record Nov. 17 .
+This is the 11th consecutive quarter in which the company has paid shareholders an extra dividend of five cents .
+The Hastings , Mich. , concern makes piston rings , filters and fuel pumps .
+Vickers PLC , a United Kingdom defense and engineering company , said an investment unit controlled by New Zealand financier Ron Brierley raised its stake in the company Friday to 15.02 % from about 14.6 % Thursday and from 13.7 % the previous week .
+I.E.P. Securities Ltd. , a unit of Mr. Brierley 's Hong Kong-based Industrial Equity -LRB- Pacific -RRB- Ltd. , boosted its holdings in Vickers to 38.8 million shares .
+The latest purchase follows small increases in his holdings made over the past five months .
+In May , Mr. Brierley 's stake shrank to 8.7 % after ranging between 9 % and 11 % for much of the previous year .
+`` Ron Brierley clearly views our company as a good investment , '' a Vickers spokesman said .
+The spokesman refused to comment on speculation that Industrial Equity might use its interest as a platform to launch a hostile bid for the company .
+Vickers makes tanks for the U.K. army , Rolls Royce cars , and has marine and medical businesses .
+When Rune Andersson set out to revive flagging Swedish conglomerate Trelleborg AB in the early 1980s , he spurned the advice of trendy management consultants .
+`` All these consultants kept coming around telling us we should concentrate on high technology , electronics or biotechnology , and get out of mature basic industries , '' Mr. Andersson recalls .
+Yet under its 45-year-old president , Trelleborg moved aggressively into those unfashionable base industries -- first strengthening its existing rubber and plastics division , later adding mining as well as building and construction materials .
+It was a gutsy move for a little-known executive , fired after only two months as president of his previous company .
+But going against the grain has never bothered Mr. Andersson .
+Stroking his trademark white goatee during a recent interview , the diminutive Swede quips : `` It turned out to be lucky for us .
+If the whole market thinks what you 're doing is crazy you do n't have much competition . ''
+Mr. Andersson is anxious to strengthen Trelleborg 's balance sheet .
+Characteristically , he did n't waste much time getting started .
+On Tuesday , Trelleborg 's directors announced plans to spin off two big divisions -- minerals processing , and building and distribution -- as separately quoted companies on Stockholm 's Stock Exchange .
+At current market prices , the twin public offerings to be completed next year would add an estimated 2.5 billion Swedish kronor -LRB- $ 386 million -RRB- to Trelleborg 's coffers , analysts say .
+The board had also been expected to approve a SKr1.5 billion international offering of new Trelleborg shares .
+But that share issue -- intended to make Trelleborg better known among international investors -- was postponed until market conditions stabilize , people familiar with the situation say .
+Trelleborg 's internationally traded `` Bfree '' series stock plunged SKr29 -LRB- $ 4.48 -RRB- to SKr205 -LRB- $ 31.65 -RRB- in volatile trading Monday in Stockholm .
+Tuesday , the shares regained SKr20 , closing at SKr225 .
+Mr. Andersson says he is confident that taking parts of the company public will help erase the `` conglomerate stigma '' that has held down Trelleborg 's share price .
+Trelleborg plans to remain the dominant shareholder with stakes of slightly less than 50 % of both units .
+The spinoff should solve a problem for the parent .
+A family foundation set up by late founder Henry Dunker controls 59 % of Trelleborg 's voting shares outstanding .
+But the foundation bylaws require the entire Trelleborg stake to be sold in the open market if control drops below 50 % .
+That possibility had crept closer as repeated new share offerings to finance Trelleborg 's rapid growth steadily diluted the foundation 's holding .
+That growth is the result of Mr. Andersson 's shopping spree , during which he has bought and sold more than 100 companies during the past five years .
+Most of the new additions were barely profitable , if not outright loss makers .
+Applying prowess gained during earlier stints at appliance maker AB Electrolux , Mr. Andersson and a handful of loyal lieutenants aggressively stripped away dead wood -- and got quick results .
+The treatment turned Trelleborg into one of Scandinavia 's biggest and fastest-growing industrial concerns .
+Between 1985 and 1988 , sales multipled more than 10 times and pretax profit surged almost twelvefold .
+Many analysts expect Mr. Andersson , who owns 1.7 % of the company , to be named Trelleborg 's new chairman when Ernst Herslow steps down next year .
+But the promotion is n't likely to alter a management style Mr. Andersson describes as `` being the driving force leading the troops , not managing by sitting back with a cigar waiting for people to bring me ideas . ''
+Last month , in his boldest move yet , Mr. Andersson and Trelleborg joined forces with Canada 's Noranda Inc. in a joint $ 2 billion hostile takeover of another big Canadian mining concern , Falconbridge Ltd .
+Industry analysts suggest that the conquest of Falconbridge could vault Trelleborg from a regional Scandinavian success story to a world-class mining concern .
+`` Trelleborg is n't in the same league yet as mining giants such as RTZ Corp. or Anglo-American Corp. , '' says Mike Kurtanjek , a mining analyst at James Capel & Co. , London .
+`` But we certainly like what we 've seen so far . ''
+But Trelleborg still must clear some tough hurdles .
+Mr. Andersson acknowledges that the company 's mining division `` will be busy for a while digesting its recent expansion . ''
+Booming metals prices have fueled Trelleborg 's recent profit surge , raising mining 's share of pretax profit to 68 % this year from a big loss two years earlier .
+But analysts caution an expected fall in metal prices next year could slow profit growth .
+Mining is likely to remain Trelleborg 's main business .
+Analysts say its chances of success will likely hinge on how well Trelleborg manages to cooperate with Noranda in the Falconbridge venture .
+Noranda and Trelleborg each came close to winning Falconbridge alone before the successful joint bid .
+Some analysts say Noranda would prefer to break up Falconbridge , and that the Swedes -- relatively inexperienced in international mining operations -- could have problems holding their own with a much bigger partner like Noranda operating on its home turf .
+Mr. Andersson insists that Trelleborg and Noranda have n't discussed a Falconbridge break-up .
+Falconbridge , he says , will continue operating in its current form .
+`` We 'd be reluctant to accept 50-50 ownership in a manufacturing company .
+But such partnerships are common in mining , where there are n't problems or conflict of interest or risk of cheating by a partner , '' Trelleborg 's president says .
+Perhaps more important , both companies share Mr. Andersson 's belief in the coming renaissance of base industries .
+`` If the 1980s were a decade of consumption , the '90s will be the investment decade , '' Mr. Andersson says .
+`` The whole of Europe and the industrialized world is suffering from a breakdown in infrastructure investment , '' he says .
+`` That 's beginning to change .
+And investment is the key word for base metals , and most other businesses Trelleborg is in .
+Apple Computer Inc. posted improved fiscal fourth-quarter profit due largely to a $ 48 million gain on the sale of its stock in Adobe Systems Inc .
+Excluding the gain , the company registered a modest 4.6 % increase for the quarter ended Sept. 29 to $ 113 million , or 87 cents a share , from the year-earlier $ 107.9 million , or 84 cents a share .
+Proceeds of the Adobe sale brought net income in the quarter to $ 161.1 million , or $ 1.24 a share .
+Apple shares fell 75 cents in over-the-counter trading to close at $ 48 a share .
+Fiscal fourth-quarter sales grew about 18 % to $ 1.38 billion from $ 1.17 billion a year earlier .
+Without the Adobe gain , Apple 's full-year operating profit edged up 1.5 % to $ 406 million , or $ 3.16 a share , from $ 400.3 million , or $ 3.08 a share .
+Including the Adobe gain , full-year net was $ 454 million , or $ 3.53 a share .
+Sales for the year rose nearly 30 % to $ 5.28 billion from $ 4.07 billion a year earlier .
+John Sculley , chairman and chief executive officer , credited the Macintosh SE\/30 and IIcx computers , introduced in the winter , for the brightened sales performance .
+Mr. Sculley also indicated that sagging margins , which dogged the company through most of 1989 , began to turn up in the fourth quarter as chip prices eased .
+`` Adverse pressure on gross margins ... has subsided , '' Mr. Sculley said .
+Margins in the fiscal fourth quarter perked up , rising to 51 % from 49.2 % a year earlier .
+For all of fiscal 1989 , however , the average gross margin was 49 % , below the average 1988 gross margin of 51 % .
+Lower component costs -- especially for DRAMs , or dynamic random access memory chips -- were cited for the easing of margin pressure on the company , a spokeswoman said .
+Looking ahead to 1990 , Mr. Sculley predicted `` another year of significant revenue growth , '' along with improved profitability , as the recovery in gross margins continues into 1990 .
+Gary J. Schantz , 44 years old , was named president and chief operating officer .
+Polymerix makes lumber-like materials that it describes as `` plastic wood . ''
+The operating chief 's post is new .
+Martin Schrager , 51 , who had been president , was named vice chairman .
+He remains chief executive officer .
+Mr. Schantz was vice president and chief operating officer of the Acrylic division of Polycast Technology Corp .
+Separately , the board expanded to six members with the election of David L. Holewinski , a consultant .
+The company also said it privately placed stock and warrants in exchange for $ 750,000 .
+Terry L. Haines , formerly general manager of Canadian operations , was elected to the new position of vice president , North American sales , of this plastics concern .
+Also , Larry A. Kushkin , executive vice president , North American operations , was named head of the company 's international automotive operations , another new position .
+He remains an executive vice president , the company said , and his new position reflects `` the growing importance of the world automotive market as a market for A. Schulman 's high performance plastic materials . ''
+Gordon Trimmer will succeed Mr. Haines as manager of Canadian operations , and Mr. Kushkin 's former position is n't being filled at this time , the company said .
+General Electric Co. said it signed a contract with the developers of the Ocean State Power project for the second phase of an independent $ 400 million power plant , which is being built in Burrillville , R.I .
+GE , along with a division of Ebasco , a subsidiary of Enserch Corp. , have been building the first 250-megawatt phase of the project , which they expect to complete in late 1990 .
+The second portion will be completed the following year .
+GE 's Power Generation subsidiary will operate and maintain the plant upon its completion .
+The Environmental Protection Agency is getting a lot out of the Superfund program .
+Of the $ 4.4 billion spent so far on the program , 60 % is going for administrative costs , management and research , the Office of Technology Assessment just reported .
+Only 36 of 1,200 priority cleanup sites have been `` decontaminated . ''
+Over the next 50 years , $ 500 billion is earmarked for the program .
+At current allocations , that means EPA will be spending $ 300 billion on itself .
+It may not be toxic , but we know where one waste dump is .
+Chambers Development Co. said its Security Bureau Inc. unit purchased two security concerns in Florida that will add $ 2.1 million of annual revenue .
+Purchase of the businesses serving Miami , Fort Lauderdale and West Palm Beach , Fla. , is part of a plan by Chambers to expand in the growing security industry .
+Terms were n't disclosed .
+Basf AG said it moved its headquarters for Latin America to Mexico and the headquarters for the Asia\/Australia regional division to Singapore , effective Oct .
+The central offices for both regions were previously located in Ludwigshafen , Basf headquarters .
+The West German chemical concern called the moves a further step in the internationalization of its business activities .
+Both regions are the fastest-growing areas for Basf , the company said .
+David H. Eisenberg , 53 years old , was named president and chief operating officer of Imasco 's 500-store Peoples Drug Stores Inc. unit , based in Alexandria , Va .
+Mr. Eisenberg was senior executive vice president and chief operating officer .
+Imasco is a tobacco , retailing , restaurant and financial services concern .
+Lotus Development Corp. is in talks to sell its Signal stock-quote service to Infotechnology Inc. , the New York parent of Financial News Network , people familiar with the negotiations said .
+They said the price would be around $ 10 million .
+Signal , which has an estimated 10,000 subscribers and is profitable , provides stock quotes over an FM radio band that can be received by specially equipped personal computers .
+The computers will display stock prices selected by users .
+Lotus , Cambridge , Mass. , has been rumored to have the sale of the four-year-old unit under consideration for a year .
+The business is n't related to Lotus 's main businesses of making computer software and publishing information on compact disks .
+`` Please submit your offers , '' says Felipe Bince Jr .
+He surveys the prospective investors gathered in the board room of the Philippine government 's Asset Privatization Trust for the sale of a 36 % interest in the country 's largest paper mill .
+The agency expects the bids to be equivalent of more than $ 80 million .
+Not a peso is offered .
+Mr. Bince , the trust 's associate executive trustee , declares the bidding a failure .
+`` It 's getting harder to sell , '' he mutters as he leaves the room .
+Indeed . Recently , the trust failed to auction off the paper mill , a bank , an office building and a small cotton-ginning plant .
+Of the four , only the bank and the plant drew bids -- one apiece .
+In October 1987 , President Corazon Aquino vowed that her government would `` get out of business '' by selling all or part of the state 's holdings in the many companies taken over by the government during the 20-year rule of Ferdinand Marcos .
+Two years later , Mrs. Aquino 's promise remains largely unfulfilled .
+October is a critical month for the privatization program .
+Manila is offering several major assets for the first time and is trying to conclude sales already arranged .
+In addition , the government is scheduled to unveil plans for privatizing Philippine Airlines , the national carrier , an effort that lawyer and business columnist Rodolfo Romero calls `` the bellwether of privatization . ''
+All told , there are assets on the line valued at up to $ 1.03 billion .
+The privatization program is designed to rid the government of hundreds of assets and to raise critically needed funds .
+Much of the money from the sales is earmarked for a multibillion-dollar agrarian-reform program .
+But efforts have been thwarted by official indifference , bureaucratic resistance , a legal system that operates at a snail 's pace , political opposition and government misjudgments .
+Most recently , a lack of buyers has been added to the list .
+Rather than gathering momentum , the program is in danger of slowing even more as the government tackles several big assets .
+The axiom appears to be that the more valuable the asset , the harder the privatization process .
+`` You just do n't see a whole lot happening , '' says an international economist .
+To be sure , the program has n't completely stalled .
+The Asset Privatization Trust , the agency chiefly responsible for selling government-held properties , has recorded sales of more than $ 500 million since it began functioning in December 1986 .
+But its success has been largely in the sale of small , nonperforming companies , which are valued for their assets .
+Dealing with the sales this month could be particularly challenging because almost every problem that has hobbled the program in the past is popping up again .
+Ramon Garcia , the Asset Trust 's executive trustee , admits to what he calls `` temporary setbacks . ''
+In light of the poor results recently , he says , the agency is adopting an `` attitude of flexibility . ''
+October 's troubles began when the trust failed to sell a state-owned commercial bank , Associated Bank , for the minimum price of 671 million pesos -LRB- $ 31 million -RRB- .
+At the end of the month , the agency again will offer the bank .
+But instead of a minimum price , only a target price will be established .
+Bankers say , however , that the government may have difficulty selling the institution even without a floor price .
+The bank has a negative net worth , they say .
+In addition , special bidding rules give the bank 's former owner , Leonardo Ty , the right to match the highest bid .
+Mr. Ty lost control to the government in 1980 when a government bank made emergency loans to the cash-strapped institution .
+In 1983 , the loans were converted into equity , giving Manila 98 % of the bank , but with the understanding that Mr. Ty had repurchase rights .
+His ability to match any bid has scared off many potential buyers .
+Separately , the government will try again within a month to sell the 36 % stake in Paper Industries Corp. of the Philippines , or Picop , as the paper mill is known .
+The price will depend on how much Picop shares fetch on the local stock market .
+But according to bankers and stock analysts who have studied the paper mill , price is n't the only consideration .
+As it stands now , the government would continue to hold 45 % of Picop after the 36 % stake is sold .
+-LRB- About 7.5 % of Picop is publicly traded and other shareholders own the rest of the equity . -RRB-
+Potential buyers , mostly foreign companies , are reluctant to take a non-controlling stake in a company that , by the government 's own reckoning , needs some $ 100 million in new capital for rehabilitation .
+The prospect of buying into a cash-hungry company without getting management control persuaded at least three foreign buyers , including a member of the Elders group of Australia , to pull out of the bidding , the bankers and analysts say .
+Mr. Garcia acknowledges the problem and says the Asset Trust will study why the bidding failed and what changes the agency may be able to offer .
+Under government regulations , however , foreign ownership of Picop 's equity is limited to 40 % .
+Even though the government would retain the 45 % stake in Picop , critics have accused the trust of selling out to foreigners .
+A series of newspaper articles accused the trust of short-changing the government over the Picop sale .
+Mr. Garcia says he has been notified of congressional hearings on the Picop bidding and possible legislation covering the paper mill 's sale , both prompted by the criticism of the agency .
+The question of control could further hinder long-delayed plans for the government to divest itself of Philippine Airlines , in which it has a 99 % stake .
+The carrier has valuable trans-Pacific and Asian routes but it remains debt-laden and poorly managed .
+This maker of electronic measuring devices named two new directors , increasing board membership to nine .
+The new directors are Gordon M. Sprenger , president and chief executive officer of LifeSpan Inc. , and Peter S. Willmott , chairman and chief executive officer of Willmott Services Inc .
+Gerard E. Wood , 51 years old , was elected president , chief executive officer and a director of this minerals and materials company .
+He succeeds Harry A. Durney , 65 , who is retiring from active duty but remains a director and consultant .
+Mr. Wood has been president and chief executive of Steep Rock Resources Inc .
+Eagle Financial Corp. and Webster Financial Corp. , two Connecticut savings bank-holding companies , agreed to merge in a tax-free stock transaction .
+The new holding company , Webster\/Eagle Bancorp Inc. , will have about $ 1.2 billion of assets and 19 banking offices in Connecticut .
+Tangible capital will be about $ 115 million .
+The merger is subject to regulatory clearance and a definitive agreement .
+In the merger , each share of Webster , based in Waterbury , will be converted into one share of the new company .
+Each share of Eagle , based in Bristol , will become 0.95 share of Webster\/Eagle .
+In American Stock Exchange composite trading Friday , Eagle shares rose 12.5 cents to $ 11 .
+In national over-the-counter trading , Webster shares fell 25 cents to $ 12.375 .
+Webster has 3.5 million shares outstanding and Eagle 2.6 million .
+Their indicated market values thus are about $ 43.3 million and $ 28.6 million , respectively .
+Frank J. Pascale , chairman of Eagle , will be chairman of the new firm and James C. Smith , president and chief executive officer of Webster , will take those posts at Webster\/Eagle .
+Harold W. Smith Sr. , chairman of Webster , will become chairman emeritus and a director of the new company .
+Ralph T. Linsley , vice chairman of Eagle , will become vice chairman of Webster\/Eagle .
+The board will be made up of seven directors of each holding company .
+In an interview , James Smith said the banks ' `` markets are contiguous and their business philosophies are similar and conservative . ''
+Nonperforming loans will make up only about 0.5 % of the combined banks ' total loans outstanding , he said .
+At June 30 , Webster , which owns First Federal Savings & Loan Association of Waterbury , had assets of $ 699 million .
+Eagle , which controls Bristol Federal Savings Bank and First Federal Savings & Loan Association of Torrington , had assets of $ 469.6 million on that date .
+Guillermo Ortiz 's Sept. 15 Americas column , `` Mexico 's Been Bitten by the Privatization Bug , '' is a refreshingly clear statement of his government 's commitment to privatization , and must be welcomed as such by all Americans who wish his country well .
+The Mexico-United States Institute is glad to see such a high official as Mexico 's undersecretary of finance view his country 's reforms `` in the context of a larger , world-wide process '' of profound change toward free-market economics , especially in the statist countries .
+Having said that , we must caution against an apparent tendency to overstate the case .
+It is not quite true , for example , that the Mexican government has `` privatized '' Mexicana de Aviacion , as Mr. Ortiz claims .
+In the same sentence he contradicts himself when he reports that the government still retains 40 % of the total equity of the airline .
+How can a company be considered `` privatized '' if the state is so heavily represented in it ?
+-LRB- True , the Mexican government has granted `` control '' over the airline to a new private consortium , but its propensity to take back what it gives is too well known to permit one to be sanguine . -RRB-
+Regrettably , too , Mr. Ortiz resorts to the familiar `` numbers game '' when he boasts that `` fewer than 392 -LCB- state enterprises -RCB- currently remain in the public sector , '' down from the `` 1,155 public entities that existed in 1982 .
+'' But the enterprises still in state hands include the biggest and most economically powerful ones in Mexico ; indeed , they virtually constitute the economic infrastructure .
+I refer essentially to petroleum , electric power , banking and newsprint .
+Those enterprises , however , are not going to be privatized .
+They are officially considered `` strategic , '' and their privatization is prohibited by the Mexican Constitution .
+In language that sidesteps the issue , Mr. Ortiz writes , `` The divestiture of nonpriority and nonstrategic public enterprises is an essential element of President Carlos Salinas 's plan to modernize Mexico 's economy ... . ''
+Yet clearly , modernization must embrace its key industries before it can be said to have caught the `` privatization bug . ''
+The bottom line , however , is not economic but political reform .
+A long succession of Mexican presidents arbitrarily nationalized whatever industry they took a fancy to , without having to answer to the public .
+To guarantee that Mexicana de Aviacion and other companies will really be privatized , Mexico needs a pluri-party political system that will ensure democracy and hence accountability .
+Daniel James President Mexico-United States Institute
+The board of this Ponce , Puerto Rico concern voted to suspend payment of its quarterly of 11 cents a share for the third quarter .
+The third-largest thrift institution in Puerto Rico also said it expects a return to profitability in the third quarter when it reports operating results this week .
+Ponce Federal said the dividend was suspended in anticipation of more stringent capital requirements under the Financial Institutions Reform , Recovery , and Enforcement Act of 1989 .
+A labor-management group is preparing a revised buy-out bid for United Airlines parent UAL Corp. that would transfer majority ownership to employees while leaving some stock in public hands , according to people familiar with the group .
+The group has been discussing a proposal valued in a range of $ 225 to $ 240 a share , or $ 5.09 billion to $ 5.42 billion .
+But to avoid the risk of rejection , the group does n't plan to submit the plan formally at a UAL board meeting today .
+Instead , the group is raising the proposal informally to try to test the board 's reaction .
+People familiar with the company say the board is n't likely to give quick approval to any offer substantially below the $ 300-a-share , $ 6.79 billion buy-out bid that collapsed last week after banks would n't raise needed loans and after a key partner , British Airways PLC , dropped out .
+In composite trading Friday on the New York Stock Exchange , UAL closed at $ 168.50 a share , down $ 21.625 .
+But the pilots union , which has been pushing for a takeover since 1987 , appears to be pressing ahead with the revised bid to avoid further loss of momentum even though it has n't found a partner to replace British Air .
+Although the bidding group has n't had time to develop its latest idea fully or to discuss it with banks , it believes bank financing could be obtained .
+After the collapse of the last effort , the group does n't plan to make any formal proposal without binding commitments from banks covering the entire amount to be borrowed .
+Under the type of transaction being discussed , the pilot-management group would borrow several billion dollars from banks that could then be used to finance a cash payment to current holders .
+Those current holders would also receive minority interests in the new company .
+For example , the group could offer $ 200 a share in cash plus stock valued at $ 30 a share .
+UAL currently has 22.6 million shares , fully diluted .
+The new structure would be similar to a recapitalization in which holders get a special dividend yet retain a controlling ownership interest .
+The difference is that current holders would n't retain majority ownership or control .
+The failed takeover would have given UAL employees 75 % voting control of the nation 's second-largest airline , with management getting 10 % control and British Air 15 % .
+It was n't clear how the ownership would stack up under the new plan , but employees would keep more than 50 % .
+Management 's total could be reduced , and the public could get more than the 15 % control that had been earmarked for British Air .
+One option the board is likely to consider today is some sort of cooling-off period .
+Although the pilots are expected to continue to pursue the bid , UAL Chairman Stephen Wolf may be asked to withdraw from the buy-out effort , at least temporarily , and to return to running the company full time .
+The board could eventually come under some pressure to sell the company because its members can be ousted by a majority shareholder vote , particularly since one-third of UAL stock is held by takeover stock speculators who favor a sale .
+The labor-management buy-out group plans to keep its offer on the table in an apparent attempt to maintain its bargaining position with the board .
+However , the only outsider who has emerged to lead such a shareholder vote , Los Angeles investor Marvin Davis , who triggered the buy-out with a $ 5.4 billion bid in early August , is hanging back -- apparently to avoid being blamed for contributing to the deal 's collapse .
+Three top advisers to Mr. Davis visited New York late last week , at least in part to confer with executives at Citicorp .
+Mr. Davis had paid $ 6 million for Citicorp 's backing of his last bid .
+But Citicorp has lost some credibility because it also led the unsuccessful effort to gain bank loans for the labor-management group .
+On Friday , British Air issued a statement saying it `` does not intend to participate in any new deal for the acquisition of UAL in the foreseeable future . ''
+However , several people said that British Air might yet rejoin the bidding group and that the carrier made the statement to answer questions from British regulators about how it plans to use proceeds of a securities offering previously earmarked for the UAL buy-out .
+Also late last week , UAL flight attendants agreed to participate with the pilots in crafting a revised offer .
+But the machinists union , whose opposition helped scuttle the first buy-out bid , is likely to favor a recapitalization with a friendly third-party investor .
+One advantage the buy-out group intends to press with the board is that pilots have agreed to make $ 200 million in annual cost concessions to help finance a bid .
+Speculation has also arisen that the UAL executive most closely identified with the failure to gain bank financing , chief financial officer John Pope , may come under pressure to resign .
+However , people familiar with the buy-out group said Mr. Pope 's departure would weaken the airline 's management at a critical time .
+Despite the buy-out group 's failure to obtain financing , UAL remains obligated to pay $ 26.7 million in investment banking and legal fees to the group 's advisers , Lazard Freres & Co. , Salomon Brothers Inc. , and Paul Weiss Rifkind Wharton & Garrison .
+Whittle Communications Limited Partnership , Knoxville , Tenn. , will launch its first media property targeting Hispanic women .
+`` La Familia de Hoy , '' or `` Today 's Family , '' will debut this spring and will combine a national bimonthly magazine and TV programming .
+The television element of `` La Familia '' includes a series of two-minute informational features to air seven days a week on the Spanish-language Univision network , a unit of Univision Holdings Inc. , which is 80%-owned by Hallmark Cards Inc .
+The features will focus on `` parenting , family health and nutrition , and financial management , '' and will carry 30 seconds of advertising .
+The magazines , also ad-supported , will be distributed in more than 10,000 doctors ' offices , clinics , and health centers in Hispanic and largely Hispanic communities .
+WEIRTON STEEL Corp. said it completed a $ 300 million sale of 10-year notes , the final step in the 1984 buy-out of the company from National Steel Corp .
+The 10 7\/8 % notes were priced at 99.5 % to yield 10.958 % in an offering managed by Bear , Stearns & Co. , Shearson Lehman Hutton Inc. and Lazard Freres & Co. , the company said .
+Weirton , of Weirton , W. Va. , said $ 60.3 million of the proceeds were used to prepay the remaining amounts on the note outstanding to National Intergroup Inc. , the parent of National Steel .
+Remaining proceeds were used to pay other debt and to finance the company 's capital spending program .
+Lep Group PLC of Britain , which holds a 62.42 % stake in Profit Systems Inc. , said it is considering courses of action that could result in its having `` active control '' of the company .
+In a filing with the Securities and Exchange Commission , Lep Group said a possible course of action may include acquiring some or all of the Profit Systems shares it does n't already own .
+It noted , however , that it has n't determined any specific terms of a possible transaction .
+Lep Group and affiliates currently control 3,513,072 Profit Systems common shares , or 62.42 % , the filing said .
+Profit Systems , Valley Stream , N.Y. , is an air freight forwarding concern .
+U.S. official reserve assets rose $ 6.05 billion in September , to $ 68.42 billion , the Treasury Department said .
+The gain compared with a $ 1.10 billion decline in reserve assets in August to $ 62.36 billion , the department said .
+U.S. reserve assets consist of foreign currencies , gold , special drawing rights at the International Monetary Fund and the U.S. reserve position -- its ability to draw foreign currencies -- at the IMF .
+The nation 's holdings of foreign currencies increased $ 5.67 billion in September to $ 39.08 billion , while its gold reserves were virtually unchanged at $ 11.07 billion .
+U.S. holdings of IMF special drawing rights last month rose $ 247 million , to $ 9.49 billion , and its reserve position at the IMF increased $ 142 million , to $ 8.79 billion .
+Alusuisse of America Inc. plans to sell its Consolidated Aluminum Corp. subsidiary as part of its strategy to focus more on aluminum packaging in the U.S. .
+Alusuisse , of New York , declined to say how much it expects to get for the unit ; the company has hired First Boston Corp. to help identify bidders .
+Alusuisse is a subsidiary of Swiss Aluminium Ltd. , a Zurich , Switzerland , producer of aluminum , chemicals and packaging products .
+Consolidated , which had 1988 revenue of $ 400 million , makes aluminum sheet and foil products at its Hannibal , Ohio , and Jackson , Tenn. , rolling mills and recycles aluminum at a plant in Bens Run , W.Va .
+Manhattan National Corp. said Michael A. Conway , president and chief executive officer , was elected chief executive of the holding company 's two principal insurance subsidiaries .
+He succeeds Paul P. Aniskovich Jr. , who resigned to pursue other business interests , the company said .
+Mr. Conway , 42 years old , was elected chairman , president and chief executive of Manhattan Life Insurance Co. and president and chief executive of Manhattan National Life Insurance Co .
+Harry Rossi , 69 , chairman of the holding company , also remains chairman of Manhattan National Life Insurance Co .
+Mr. Conway was executive vice president and chief investment officer of Union Central Life Insurance Co. , of Cincinnati , in 1987 , when Union Central bought a 54 % interest in Manhattan National Corp .
+He resigned as an officer of Central Life to accept the Manhattan National presidency .
+Daniel J. Terra , a director of First Illinois Corp. , said that in August he reduced his stake in First Illinois to 26.48 % of the common shares outstanding .
+In a filing with the Securities and Exchange Commission , Mr. Terra said he sold 263,684 First Illinois common shares from Aug. 9 to Aug. 28 for $ 9.9375 to $ 10.5625 a share .
+As a result of the sales he holds 6,727,042 shares .
+Mr. Terra said in the filing that he sold the stock to decrease his position in the Evanston , Ill. , banking concern .
+He may sell more shares in the open market or in private transactions , but would n't rule out changing his intentions and buying shares , the filing said .
+SciMed Life Systems Inc. , Minneapolis , said a federal appeals court vacated an earlier summary judgment in its favor .
+A lower court in St. Paul had ruled in September 1988 that a heart catheter SciMed manufactures does n't infringe on a patent owned by Advanced Cardiovascular Systems , a unit of Eli Lilly & Co .
+SciMed said the appeals court remanded the case back to the district court for further proceedings .
+In national over-the-counter trading Friday , SciMed shares tumbled $ 2.75 to $ 43 .
+SciMed said it `` remains committed '' both to the `` vigorous defense '' of its position that the catheter does n't infringe the Lilly unit 's patent , and to the pursuit of its own counterclaims , which allege Lilly engaged in antitrust violations and other wrongful acts .
+A REVISED BID FOR UAL is being prepared by a labor-management group , sources said .
+The new proposal , which would transfer majority ownership of United Air 's parent to employees and leave some stock in public hands , would be valued at $ 225 to $ 240 a share , or as much as $ 5.42 billion .
+But UAL 's board is n't expected to give quick approval to any offer substantially below the $ 300-a-share bid that collapsed recently .
+Takeover stock speculators have incurred paper losses of over $ 700 million from the failed UAL offer , their worst loss ever on a single deal .
+Ford and Saab ended talks about a possible alliance after Ford concluded that the cost to modernize Saab 's car operations would outweigh the likely return .
+The collapse Friday prompted speculation that Ford would intensify its pursuit of Jaguar , which is negotiating a defensive alliance with GM .
+Stock prices edged up in quiet trading Friday .
+The Dow Jones industrials rose 5.94 , to 2689.14 , making the gain for the week a record 119.88 points , or 4.7 % .
+Most bond prices fell , but junk bonds and the dollar rose .
+New York City bonds were sold off by many investors last week amid political and economic uncertainty .
+More banks are being hurt by Arizona 's worsening real-estate slump .
+First Interstate Bancorp of Los Angeles said Friday it expects a $ 16 million quarterly loss , citing property-loan losses at its Arizona unit .
+OPEC 's ability to produce more oil than it can sell is starting to cast a shadow over world oil markets .
+OPEC officials worry that prices could collapse a few months from now if the group does n't adopt new quotas .
+Saatchi & Saatchi has attracted offers for some of its advertising units but has rejected them , sources said .
+The proposals , from suitors including Interpublic Group , come as the London-based ad giant struggles through its most difficult period ever .
+Qintex Australia suffered another setback Friday when its Los Angeles-based affiliate filed for Chapter 11 protection .
+Qintex 's $ 1.5 billion pact to buy MGM\/UA collapsed recently .
+Kodak entered the high-definition television market by unveiling a device that can convert conventional film into high-definition video .
+A handful of small U.S. firms are refusing to cede the HDTV-screen market to Japanese manufacturers .
+Freight rates are bottoming out and starting to rebound .
+Trucking , shipping and air-freight firms are all planning rate increases , reflecting higher costs and tightened demand .
+Texaco has purchased an oil-producing company in Texas for $ 476.5 million .
+It is Texaco 's first major acquisition since the legal battle with Pennzoil began over four years ago .
+Winnebago posted a widened quarterly loss and slashed its dividend in half , reflecting the deepening slowdown in recreational vehicle sales .
+Markets --
+Stocks :
+Volume 164,830,000 shares .
+Dow Jones industrials 2689.14 , up 5.94 ; transportation 1230.80 , off 32.71 ; utilities 215.48 , up 0.06 .
+Bonds :
+Shearson Lehman Hutton Treasury index 3392.49 , off
+Commodities :
+Dow Jones futures index 129.62 , off 0.51 ; spot index 131.34 , up 0.88 .
+Dollar :
+142.43 yen , up 0.73 ; 1.8578 marks , up 0.0108 .
+Inmac Corp. , a money-losing direct marketer of computer supplies and accessories , said directors suspended payment of its semiannual dividend as too great a drain on funds .
+The company paid five cents a share in April .
+The directors ' action , taken Oct. 10 but announced Friday , had little or no effect on the company 's stock , which stagnated at $ 4.75 in light over-the-counter trading .
+Inmac recently disclosed a $ 12.3 million write-off related to a corporate restructuring that resulted in the company 's posting a $ 6.4 million net loss for the year ended July 29 , compared with year-earlier profit of $ 9.7 million , or $ 1.02 a share .
+Sales rose 12 % to $ 249.5 million from $ 222.8 million .
+`` The board felt that the continued payment of our semiannual dividend was inconsistent with recent operating results , '' said Kenneth A. Eldred , president and chief executive officer .
+`` All our efforts are now focused on improving earnings to the point where we can fund additional new-country development , continue to invest in the business and reinstate the dividend , '' he added .
+The company offers more than 3,500 parts and supplies directly to microcomputer and minicomputer users through catalog sales .
+The Food and Drug Administration said American Home Products Corp. agreed to recall certain generic drugs that were produced by its Quantum Pharmics unit in Amityville , N.Y .
+Quantum stopped shipping the drugs last month , following a federal investigation regarding information the company supplied to obtain three drug approvals .
+The FDA requested the recall of Quantum 's mioxidil tablets , chlorazepate dipotassium tablets and meclofenamate sodium capsules because , it said , the size of the production runs submitted for testing to gain FDA approval was in each case misrepresented as much larger than it actually was .
+American Home Products , based in New York , agreed to recall four other products , trazadone , doxepin , diazepam and lorazapam , because of concerns about data submitted in their original approval applications before the FDA .
+No safety problems with the products are known , the FDA said .
+An FDA spokesperson said the drugs are still available under other brand names .
+Last month , American Home Products said it was suspending production and distribution of all 21 of Quantum 's generic drug products pending the completion of an exhaustive internal audit .
+It also temporarily closed Quantum , because of the internal investigation , as well as the FDA 's ongoing inquiry .
+In New York Stock Exchange composite trading , American Home Products rose 75 cents to $ 105 on Friday .
+Lyondell Petrochemical Co. said third-quarter net income fell 54 % , to $ 73 million , or 91 cents a share , from $ 160 million a year earlier .
+Year-earlier per-share results are n't applicable because the company went public in January .
+Revenue rose 7.7 % to $ 1.28 billion from $ 1.18 billion .
+The petrochemical maker said the biggest reason earnings declined was a loss of production time and the increased costs associated with a temporary maintenance closing and expansion of an olefins plant .
+Like other refiners , Lyondell 's margins for chemicals and gasoline were narrower .
+While the company said chemical margins continued to worsen this quarter , costs will be lower because the maintenance and expansions are complete .
+In New York Stock Exchange composite trading Friday , Lyondell was unchanged at $ 18.50 a share .
+Four former Cordis Corp. officials were acquitted of federal charges related to the Miami-based company 's sale of pacemakers , including conspiracy to hide pacemaker defects .
+Jurors in U.S. District Court in Miami cleared Harold Hershhenson , a former executive vice president ; John Pagones , a former vice president ; and Stephen Vadas and Dean Ciporkin , who had been engineers with Cordis .
+Earlier this year , Cordis , a maker of medical devices , agreed to plead guilty to felony and misdemeanor charges related to the pacemakers and to pay the government about $ 5.7 million in fines and other costs .
+Cordis sold its pacemaker operations two years ago to Telectronics Holding Ltd. of Australia .
+Management and unions representing 2,400 employees at Torstar Corp. 's Toronto Star reached a tentative contract agreement Friday , averting a strike by most employees of Canada 's largest daily newspaper .
+Members of the largest union , representing 1,700 workers , voted in favor of the pact yesterday .
+Four other unions have yet to vote , but their leadership also recommended approval .
+The pact proposes a 2 1\/2-year contract with a raise of 8 % in the first year , 7 % in the second and 4 % for the final six months .
+Amgen Inc. said its second-quarter earnings increased more than tenfold to $ 3.9 million , or 22 cents a share , due to increased sales of the company 's new antianemia drug for kidney patients .
+The Thousand Oaks , Calif.-based biotechnology company reported a 97 % increase in revenue to $ 42.5 million for the quarter ended Sept. 30 .
+In the year-ago period , Amgen reported net income of $ 320,000 , or two cents a share , on revenue of $ 21.5 million .
+For the six months , the company reported a more than sixfold increase in earnings to $ 4.7 million , or 26 cents a share , from $ 625,000 , or four cents a share a year ago .
+Revenue rose 77 % to $ 72.6 million , from last year 's $ 41 million .
+LEBANESE LAWMAKERS APPROVED a peace plan but Aoun rejected it .
+Lebanon 's Parliament passed the power-sharing accord to end the country 's 14-year-old conflict , but the Christian military leader wad the plan was `` full of ambiguities . ''
+The Arab League-sponsored pact , drafted during three weeks of talks at the Saudi Arabian resort of Taif , includes Syrian proposals for at least a partial troop pullout from Lebanon , and guarantees an equal number of seats for Moslems and Christians in the Parliament .
+The rejection by Aoun , who has demanded a total and immediate pull-out of Damascus 's 33,000 troops , puts the future of the agreement in doubt .
+NORTHERN CALIFORNIA BRACED for earthquake-related traffic jams .
+As rescuers pressed their efforts after finding a survivor in a collapsed freeway , the San Francisco Bay area girded for hundreds of thousands of commuters seeking to avoid routes ravaged by last Tuesday 's tremor .
+In Oakland , officials said the 57-year-old longshoreman who spent four days entombed in rubble was in critical condition with slight improvement .
+Estimates of damage in the area , visited Friday by Bush , topped $ 5 billion .
+The baseball commissioner announced that the third game of the World Series between the Giants and the Athletics would n't resume until Friday .
+THE U.S. . IS REQUIRED to notify foreign dictators of certain coup plans .
+Under guidelines included in an exchange of letters between the Reagan administration and the Senate Intelligence panel last year , the U.S. must inform foreign dictators of plans likely to endanger their lives .
+The existence of the policy became known after Bush disclosed it to seven GOP senators last week , citing the plan as an example of congressional requirements the administration contends contribute to the failure of covert actions , officials said .
+Bush conceded that the requirement did n't affect a decision to lend only minor support to this month 's failed effort to oust Panama 's Noriega , aides said .
+The shuttle Atlantis 's crew prepared to return to Earth today several hours earlier than planned to avoid high winds forecast at the landing site at Edwards Air Force Base , Calif .
+The five astronauts , who stowed gear and tested the spacecraft 's steering , said they were unconcerned about the touchy weather expected in the Mojave Desert .
+Commonwealth leaders issued a declaration giving South Africa six months to deliver on pledges to ease apartheid or face new reprisals .
+The 49-nation organization , meeting in Malaysia , called for tighter financial pressure immediately .
+Britain 's Prime Minister Thatcher alone dissented .
+East Germany 's leadership vowed swift action to ease travel to the West .
+Despite the pledge by the Communist rulers , tens of thousands of people across the country staged marches over the weekend to demand democratic freedoms .
+In Leipzig , more than 500 people met with local party officials to discuss internal changes .
+The Senate convicted federal Judge Alcee Hastings of Miami of eight impeachment articles , removing him from the bench .
+The chamber voted 69-26 Friday to convict the judge of perjury and bribery conspiracy .
+It marked the first time a U.S. official was impeached on charges of which a jury had acquitted him .
+Rep. Garcia and his wife were found guilty by a federal jury in New York of extorting $ 76,000 from Wedtech Corp. in return for official acts by the New York Democrat .
+The jury also convicted them of extortion in obtaining a $ 20,000 interest-free loan from an officer of the defunct defense contractor .
+Authorities in Honduras launched an investigation into the cause of Saturday 's crash of a Honduran jetliner that killed 132 of the 146 people aboard .
+The Boeing 727 , en route to Honduras from Costa Rica via Nicaragua , smashed into the hills outside Tegucigalpa as it approached the capital 's airport in high winds and low clouds .
+The U.S. and Israel have been holding what an aide to Prime Minister Shamir called intense telephone negotiations in an effort to bridge differences over Mideast peace moves .
+The Labor Party , meanwhile , threatened to support a parliamentary motion to topple the coalition unless Shamir showed flexibility on Arab-Israeli talks .
+Nicaragua 's Defense Ministry said a group of Contra rebels ambushed two trucks carrying troops in northern Nicaragua , killing 18 of the soldiers .
+The incident occurred Saturday night .
+The Sandinista government and the U.S.-backed insurgents agreed in March to suspend offensive operations , but there has been sporadic fighting .
+Scientists have isolated a molecule that may hold potential as a treatment for disruptions of the immune system , ranging from organ-transplant rejection , to allergies and asthma , Immunex Corp. said .
+The molecule is the mouse version of a protein called the interleukin-4 receptor , which directs the growth and function of white blood cells .
+Died : Alfred Hayes , 79 , former president of the Federal Reserve Bank of New York , Saturday , in New Canaan , Conn .
+Contel Corp. said third-quarter net income increased 16 % to $ 72 million , or 45 cents a share , from $ 62 million , or 39 cents a share , as a result of strong growth in telephone-access lines and long-distance minutes of use .
+The telecommunications company 's results included a one-time gain of $ 4 million , or two cents a share , from the sale of Contel Credit , a leasing and financial-services subsidiary .
+Revenue rose 8.3 % to $ 780 million from $ 720 million .
+Telephone-operations quarterly profit increased 9 % to $ 84 million from $ 77 million , while federal-systems earnings declined 33 % to $ 4 million from $ 6 million .
+Information systems posted a loss of $ 8 million , compared with a loss of $ 9 million a year earlier .
+Customer-access lines increased at an annualized rate of about 4 % and minutes of long-distance use rose about 12 % .
+A 10 % gain in operating profit in the quarter was offset by a 21 % boost in interest expense , reflecting higher consolidated borrowings and interest rates .
+In New York Stock Exchange composite trading , Contel closed at $ 33.75 a share , down .50 cents .
+In East Germany , where humor has long been the only way to express political criticism , they 're not laughing about their new leader Egon Krenz .
+Mr. Krenz is such a contradictory figure that nobody has even come up with any good jokes about him .
+`` You have to have clear feelings about someone before you can make jokes , '' says an East German mother of two who loves swapping political barbs with her friends .
+`` With Krenz , we just do n't know what to expect . ''
+Mr. Krenz does n't seem to be the knee-jerk hardliner many initially thought he was when the 52-year-old Politburo member was selected last week to succeed Erich Honecker .
+But he does n't appear to be ready to make broad changes either .
+According to East Germany 's ADN news agency , Mr. Krenz spoke to Soviet leader Mikhail Gorbachev by telephone over the weekend and acknowledged East Germany could learn from Moscow 's glasnost policies .
+Already last week , Mr. Krenz started overhauling East Germany 's heavily censored and notoriously boring news media .
+On Thursday , a day after he took office , East German television broke into regular programming to launch a talk show in which viewers call in questions for a panel of officials to answer .
+The regular nightly news program and daily newspapers are also getting a visible injection of Soviet-style glasnost .
+`` It was quite a shock , '' says a 43-year-old East German shopkeeper .
+`` For the first time in my life , I was n't sure whether I was listening to our news or West German television . ''
+Other changes , including easing restrictions on travel for East Germans , are expected .
+But whether such moves can win back the confidence of East Germans , who have taken to the streets by the thousands in recent weeks to demand democratic changes , depends largely on whether they feel they can trust Mr. Krenz .
+And that 's a problem .
+Mr. Krenz is not only closely identified with his mentor , Mr. Honecker , but also blamed for ordering violent police action against protesters this month and for praising China for sending tanks against student demonstrators .
+`` I hope he grows with the job , '' says Rainer Eppelmann , a Protestant pastor in East Berlin .
+`` The most important thing is that he have a chance . ''
+Although Mr. Krenz is dedicated to East Germany 's conservative vein of communism , there is much about his style that sets him apart from his party comrades .
+Unlike Mr. Honecker , who tended to lecture people about socialist values , Mr. Krenz enjoys asking questions .
+Indeed , one of his first actions as leader was to visit a gritty machine factory on the outskirts of Berlin and wander among the workers -- a la Gorbachev .
+He was later shown on television , fielding questions .
+At one point , he asked a worker whether he thought East Germans were fleeing the country because of restrictive travel policies .
+The worker 's tart reply : `` It 's more than just travel .
+People have a sense the government is ignoring the real problems in our society . ''
+The exchange was all the more remarkable in that authorities released television footage to Western news agencies .
+This same tendency toward openness impressed a group of visiting U.S. congressmen this spring .
+Rather than trying to `` lecture us , '' says one congressional aide who attended the two-hour meeting , Mr. Krenz `` wanted to listen . ''
+Rep. Ronnie Flippo -LRB- D. , Ala. -RRB- , one of the members of the delegation , says he was particularly impressed by Mr. Krenz 's ready admission that East Germany needed to change .
+`` He 's a very tough man , but one who 's also open to arguments , '' adds an aide to West German Chancellor Helmut Kohl .
+But there 's another side to Mr. Krenz .
+Born in a Baltic town in an area which is now part of Poland , he has dedicated his life to the party apparatus .
+He moved quickly through the ranks with the help of his patron , Mr. Honecker , and emerged as the heir apparent .
+Barbara Donovan , an expert on East Germany at Radio Free Europe in Munich , says Mr. Krenz may project a smooth image , but she doubts he 's a true reformer .
+Even if he is , she adds , he appears to have only limited room for maneuver within the Communist Party 's ruling Politburo .
+Against this background , the new East German leader must move quickly to shore up his government 's standing .
+The sudden growth of the opposition movement , together with the steady outflow of citizens escaping through Poland and Hungary , has plunged the country into its deepest political crisis since an anti-Soviet workers ' uprising in 1953 .
+`` He does n't have any honeymoon period , '' says a Western diplomat based in East Berlin .
+`` But if he 's sharp and quick , he has a chance . ''
+The diplomat adds that Mr. Krenz has several things going for him .
+The East German economy is strong compared with other East bloc nations .
+And his relative youth could help him project a more vibrant image , contrasting with the perception of Mr. Honecker as an out-of-touch old man .
+For average East Germans , Mr. Krenz remains a puzzle .
+`` Either he was n't being real in the past , or he is n't being real right now , '' says a 30-year-old East German doctor .
+`` Either way , I have a problem with how quickly he 's changed . ''
+The doctor was among dozens of people milling through East Berlin 's Gethsemane Church Saturday morning .
+The walls of the church are covered with leaflets , news clippings , and handwritten notes associated with the country 's political opposition .
+`` I have to come here to read the walls , '' says the doctor , `` because it 's information I still ca n't get through the newspapers . ''
+Meanwhile , East Germany 's growing openness may even allow the state-controlled news media to display a muted sense of humor .
+Television last week carried a new report on East Berlin 's main wallpaper factory and the need to boost production .
+East Germans remember a comment a few years ago by Kurt Hager , the government 's top ideologist , that just because a neighbor hangs new wallpaper , there 's no reason to change your own .
+His point was there is no reason for East Germany to copy Soviet-style changes .
+`` It 's hard to know whether it was intended to be funny , '' says the East Berlin shopkeeper , `` But everyone I know laughed about it .
+The list of laboratories claiming to be producing inexplicable amounts of heat from `` cold fusion '' experiments is slowly growing .
+But the experiments continue to be plagued by lack of firm evidence that the extra heat is coming from the fusing of hydrogen atoms .
+New experiments at some of the big national laboratories are still unable to find hints of nuclear fusion reactions , leaving only the finding of tritium in a Texas experiment to support University of Utah chemists ' claim of achieving hydrogen fusion at room temperatures .
+The latest developments in cold fusion research were presented in 24 reports delivered at the fall meeting here of the Electrochemical Society , the first scientific meeting in five months to hear formal reports on cold fusion experiments .
+The meeting offered stark evidence of a dramatic fall in scientific interest in cold fusion research .
+Of the 1,300 chemists registered for the society 's weeklong meeting , fewer than 200 sat through the day and a half of cold fusion presentations at week 's end .
+This was in contrast with the society 's meeting last May , at the height of the controversy , when more than 1,500 scientists , along with scores of reporters and TV crews , crowded into a Los Angeles hotel ballroom for a tumultuous special night session on the subject .
+Neither of the two chemists whose Utah experiments triggered the cold fusion uproar , Martin Fleischmann and B. Stanley Pons , were at the meeting .
+But some members of an ad hoc expert committee set up by the Department of Energy to evaluate the cold fusion research were in the audience .
+The committee is to recommend at the end of the month whether DOE should support cold fusion research .
+Most of the two dozen scientists taking the podium reported results with new , more sophisticated variations of the seemingly simple electrolysis-of-water experiments described last March by Messrs. Fleischmann and Pons .
+The experiments involve encircling a thin rod of palladium metal with a wire of platinum and plunging the two electrodes into `` heavy '' water in which the hydrogen atoms are a doubly heavy form known as deuterium .
+When an electric current is applied to the palladium and platinum electrodes , the heavy water did begin to break up , or dissociate .
+Ordinarily the electrolysis , or breakup , of the water would consume almost all of the electrical energy .
+But Messrs. Fleischmann and Pons said their experiments also produced large amounts of heat .
+The heat energy plus the energy consumed by the breakup of the water molecules added to far more energy coming out of the apparatus than electrical energy going in , they reported .
+Because they also detected tritium and indications of nuclear radiation , they asserted that the `` excess '' heat energy must be coming from energy released by the nuclear fusion of deuterium atoms inside the palladium rod .
+As of last weekend , a dozen labs also have reported measuring `` excess '' heat from similar electrolytic experiments , although amounts of such heat vary widely .
+One of the seven reports presented here of excess heat production was given by Richard A. Oriani , professor of chemical engineering at the University of Minnesota .
+Mr. Oriani said his skepticism of the Utah claims was initially confirmed when his first experiments last spring failed to produce results .
+But he then borrowed a palladium rod from chemists at Texas A&M who said they were getting excess heat .
+`` The results were fascinating , '' he said .
+On the fourth `` run '' with the borrowed rod , the experiment began producing excess heat .
+The experiment was stopped briefly to change an instrument .
+When it was restarted , heat output `` really took off '' and produced excess heat for several hours before dying down , he said .
+Typical of other experiments , Mr. Oriani said his experiment was `` very erratic . ''
+It would go along doing nothing but dissociating the heavy water and then at totally unpredictable times , it would begin producing excess heat for as long as 10 or 11 hours before quieting down .
+The excess heat was 15 % to 20 % more than the energy involved in the electrolysis of water .
+Mr. Oriani said the heat bursts were too large and too long to be explained by the sudden release of energy that might have slowly accumulated during the experiments ' quiescent times , as some scientists have suggested .
+`` There is a reality to the excess energy , '' he said .
+Other scientists said they also were getting sporadic bursts of excess heat lasting several hours at a time .
+The bursts often occur , they said , after they `` perturbed '' the experiments by raising or lowering the amount of electric current being applied , or switching the current off and on .
+One chemist privately suggested this hinted that some `` anomalous '' chemical reactions might be producing the heat .
+One reason questions surround the heat experiments is that they involve unusually meticulous measurements .
+Typically , the input energy ranges from a third of a watt to one watt and the excess energy is measured in tenths of a watt .
+One exception is a continuing experiment at Stanford University where as much as 10 watts of energy are being put into the electrolytic cells .
+A cell filled with heavy water is producing 1.0 to 1.5 watts more heat than an identical electrolytic cell filled with ordinary water next to it , reported Turgut M. Gur , an associate of materials scientist Robert A. Huggins , head of the Stanford experimental team .
+One of the few hints the excess heat might be produced by fusion came from brief remarks by chemist John Bockris of Texas A&M University .
+Mr. Bockris previously reported getting bursts of excess heat and of detecting increasing amounts of tritium forming in the heavy water .
+He said that within the past few days , he 's gotten evidence that there is a `` weak correlation '' between the time the heat bursts occur and the production of tritium .
+There is n't any way to continuously measure the amount of tritium in the heavy water , so it 's been difficult to tell whether the tritium formation is related to the heat bursts or some other phenomenon .
+Increasingly careful attempts to measure neutrons , which would be strong evidence of fusion reactions , continue to be negative .
+Messrs. Fleischmann and Pons initially reported indirect evidence of neutrons being produced in their experiment but later conceded the measurements were questionable .
+Researchers at Sandia National Laboratories in Albuquerque , N.M. , reported they went so far as to take a `` cold fusion '' experiment and three neutron detectors into a tunnel under 300 feet of granite to shield the detectors from cosmic rays .
+A number of times they detected neutrons in one , sometimes two , of the three detectors , but only once during 411 hours of the experiment did they detect a neutron burst in all three detectors -- and they think that was a spurious event .
+Shimson Gottesfeld of Los Alamos National Laboratory said researchers there detected a burst of neutrons from an early cold fusion experiment last April but decided not to announce it until they could confirm it .
+In subsequent experiments , one of two neutron detectors occasionally indicated a burst of neutrons but neutron bursts were never recorded in both detectors at the same time .
+They concluded the indications of neutrons stemmed from faults in the detectors rather than from the cold fusion experiment .
+At the Lawrence Berkeley Laboratory in California , new experiments indicated that the lithium added to the heavy water so it will conduct a current can produce previously unsuspected electrical effects on the surface of the palladium rod -- which Messrs. Fleischmann and Pons might have misinterpreted , reported Philip Ross from the California laboratory .
+Dow Jones & Co. announced Wall Street Journal advertising rates for 1990 .
+The rates , which take effect Jan. 2 , include a 4 % increase for national edition advertising .
+The Journal also will offer expanded volume and frequency discounts .
+The increase for national edition advertising is less than the inflation rate and compares with a 6.5 % increase in 1989 .
+`` Newsprint and postage prices this year have not gone up , '' said Peter R. Kann , president of Dow Jones .
+`` We have invested in improved editorial quality and expanded our quality audience without substantially increasing our costs .
+Fundamental fairness and a sense of responsibility lead us to share operating efficiencies with our customers . ''
+Advertising rates for the Eastern , Midwest , Western and Southwest editions will increase an average 5.5 % , and rates for localized advertising editions will increase 7.5 % .
+Rates for the Wall Street Journal Reports will remain unchanged .
+A one-time noncontract full-page advertisement in The Wall Street Journal national edition will cost $ 99,385 .
+Advertising rates for The Wall Street Journal\/Europe , published in Brussels and printed in the Netherlands and Switzerland , will increase 9 % .
+Rates for The Asian Wall Street Journal , published and printed in Hong Kong and also printed in Singapore and Tokyo , will rise 8 % .
+Rates for The Asian Wall Street Journal Weekly , published in New York for North American readers , will rise 6 % .
+Dow Jones also publishes Barron 's magazine , other periodicals and community newspapers and operates electronic business information services .
+It owns 67 % of Telerate Inc. , a leading supplier of computerized financial information on global markets .
+Reflecting the impact of lower semiconductor prices and cuts in defense spending , Texas Instruments Inc. said third-quarter net income fell 31 % and sales dropped slightly from a year earlier .
+Net fell to $ 65 million , or 67 cents a common share , from $ 93.7 million or $ 1.03 a share , a year ago .
+Sales fell 2.5 % to $ 1.54 billion from $ 1.58 billion .
+For the nine months , the electronics and defense concern had net of $ 255.8 million , or $ 2.70 a share , down 5.6 % from $ 271 million , or $ 3.01 a share , in the year-ago period .
+Sales were $ 4.66 billion , up 1.3 % from $ 4.6 billion .
+Jerry Junkins , chairman , president and chief executive officer , said sluggish consumer-electronics sales reduced demand for semiconductors .
+That , coupled with lower semiconductor prices and higher semiconductor-depreciation expense , contributed to the decline in sales and profit .
+In addition , cost increases related to fixed-price defense contracts and a $ 10 million charge to reduce the work force of Texas Instruments ' defense-electronics division also reduced net .
+However , the quarter results included $ 28 million in royalty income from patent licenses , up from $ 21 million in the year-earlier period .
+The nine months include $ 125 million of royalty income , up from $ 98 million last year .
+Mr. Junkins was n't optimistic about the short-term outlook , hinting that further workforce reductions may be needed .
+`` We expect near-term sluggishness in the electronics market , '' he said , `` and we will take ongoing cost-reduction actions as necessary to keep operations aligned with demand . ''
+Further , he said , an internal reorganization to combine several divisions into the Information Technology Group is expected to affect fourth-quarter results by an undisclosed amount .
+Lynch Corp. said its Lynch Telephone Corp. subsidiary completed the acquisition of Western New Mexico Telephone Co. for $ 20 million plus assumption of $ 24 million of debt .
+Western New Mexico Telephone , Silver City , had net income of $ 1.9 million on revenue of about $ 10 million last year .
+It is an independent phone company with a service area of 15,000 square miles in southwest New Mexico .
+It is also a partner in the wireline cellular franchise covering most of western New Mexico .
+The transaction represents Lynch 's entry into the telephone business .
+The company , which has interests in television , trucking services , and glass-making and food-processing equipment , said it plans to make other acquisitions in the telephone industry .
+Nelson Bunker Hunt 's attempted corner on silver a decade ago is still haunting the market in this metal .
+Silver , now trading around $ 5 an ounce , surged to an all-time peak of $ 50 an ounce in January 1980 from around $ 9 in mid-1979 .
+`` Mr. Hunt 's attempt to squeeze the silver market 10 years ago is still indirectly to blame for today 's market depression , '' says Lesley Edgar , managing director of Sharps Pixley Ltd. , London bullion brokers .
+While some 100 million ounces of silver once held by Mr. Hunt and Middle Eastern associates are n't hanging over the market anymore , the price surge of 1979-80 precipitated an expansion of mine production and scrap recovery and encouraged silver consumers to economize on silver use , Mr. Edgar says .
+Photographic developers , for example , bought equipment to recover silver from spent photographs , negatives and processing solutions .
+Meanwhile , the photographic industry , which accounts for 44 % of silver consumption , continues to look for substitutes .
+Japanese and U.S. photographic firms are beginning to produce electronic cameras and X-rays that do n't require silver , dealers say .
+Silver 's history of volatility is also discouraging investors , dealers say .
+Even in the present uncertain investment climate , investors are preferring `` quality assets '' such as Treasury bills and bonds to gold , silver and platinum , dealers say .
+Although prices rallied briefly following the tumble on world stock markets earlier this month and the related decline of the dollar , precious metals are out of favor for the moment because of high interest rates and a determination by industrial nations to curb inflation , dealers say .
+Silver , however is in a deeper slump than are gold and platinum .
+Some analysts contend that silver is cheap now that prices are languishing at levels last seen in the mid-1970s .
+`` Bargain hunters believe that silver offers the best value amongst precious metals , '' says Frederick R. Demler , analyst at Drexel Burnham Lambert Inc .
+A further decline in prices will lead to mine production cuts in the U.S. , he says .
+Scrap merchants are converting smaller quantities of metal into silver , while low prices are discouraging exports from India and the Soviet Union .
+Silver prices could also be boosted by strikes in leading producing nations Peru and Mexico , Mr. Demler says .
+Meanwhile , total fabrication demand for silver has risen six years in a row , he says .
+Japanese demand grew by 70 % in the first half of this year and the nation plans an issue of a silver commemorative coin that will require 4.5 million ounces .
+Compared with huge annual surpluses of more than 100 million ounces in the first half of the 1980s , world silver supplies and consumption are now nearly in balance , Mr. Demler says .
+Despite intermittent rallies in the past few years , improvements in the supply-demand balance have n't managed to push silver prices into a higher range .
+`` There 's just too much silver around , '' says Tom Butler , an analyst at Samuel Montagu & Co. , a London bullion house .
+A huge silver stockpile at exchanges , refiners , consuming industries and government warehouses of at least 617 million ounces is the market depressant , says Shearson Lehman Hutton Inc. in a report .
+This year alone , inventories at the Commodity Exchange of New York jumped `` by a staggering 46 million to 221 million ounces '' because of producer deliveries , de-stocking by fabricators and sales by disenchanted investors , says Rhona O'Connell , London-based precious metals analyst at Shearson Lehman Hutton .
+`` Silver production is also in an inexorable upward trend , '' Ms. O'Connell says .
+Moreover , while Asian and Middle Eastern investors hoard gold and help underpin its price , silver does n't have the same mystique , dealers say .
+Investors have gotten burned on silver so often that they are far more partial to gold , says Urs Seiler , senior vice president at Union Bank of Switzerland .
+Yet if gold prices improve , silver prices could rally sharply , he says .
+However , dealers caution that any increase would be $ 1 to $ 2 at most .
+Looking ahead to other commodity markets this week :
+Livestock and Meats
+Analysts expect the prices of live cattle futures contracts to rise in trading today in the wake of a government quarterly census that found fewer-than-expected cattle on feedlots .
+After the close of trading Friday , the Agriculture Department reported that feedlots in the 13 biggest ranch states held 8.06 million cattle on Oct. 1 , down 6 % from that date a year earlier .
+Most analysts had expected the government to report a 4 % decline .
+Feedlots fatten young cattle for slaughter , so a decline signals a tightening supply of beef .
+The government reported that the number of young cattle placed on feedlots during the quarter dropped 5 % compared with the year-earlier quarter .
+Many industry analysts had been projecting a 3 % decline in placements for the quarter .
+In the 1988 quarter , many farmers were forced to sell their cattle to feedlot operators because the drought dried out the pasture on their ranches .
+The number of cattle moving onto feedlots in the recent quarter was also lower because fattening cattle is less profitable .
+A shortage of young cattle has made them more expensive for feedlot operators to buy .
+The Agriculture Department also said that the number of fattened cattle slaughtered in the quarter dropped by 5 % from the 1988 quarter , which was in line with projections by analysts .
+Friday 's 44-cent-a-barrel price drop to $ 19.98 in the expiring November contract for West Texas Intermediate crude may well set the tone for trading this week in petroleum futures on the New York Mercantile Exchange .
+Most traders and analysts attributed the decline to technical factors associated with the contract 's going off the board .
+Others said that the drop continued the downward correction that 's been due in the petroleum pits and that such a trend could well continue in the next several trading sessions .
+Barring any petroleum-related news events , trading in the days ahead should further test recent projections by oil economists and other market watchers that strong fourth-quarter demand will keep prices firm .
+Copper prices fell sharply Friday afternoon .
+For example , copper for December delivery settled 4.5 cents lower at $ 1.2345 a pound .
+Pressure came from several developments including the settlement of two long-term strikes .
+On Friday , one analyst said , rank-and-file workers ratified a new labor agreement ending a three-month strike at the Highland Valley mine in British Columbia .
+In Mexico , the analyst added , employees at the Cananea mine , who have been out of work since late August when the mine was declared bankrupt by the government , accepted a 35 % cut in the 3,800-man work force .
+The mine is expected to return to production in about a week .
+On Friday , selling dominated the afternoon `` curb '' session in London , which takes place at noon EDT .
+The premium of cash copper to the three-month forward offerings narrowed , indicating weaker demand for cash copper .
+Long-term support for the December contract was believed to be at $ 1.25 a pound .
+A technical analyst said there were a number of stop-loss orders under that level that were touched off when the contract 's price fell below it .
+That brought in considerable fund selling , which continued until the close of trading .
+`` In general , it was a bearish close , '' said Ben Hanauer , a copper trader at Rudolph Wolff & Co. , a major commodities trading and brokerage firm .
+But whether this price break has implications for this week , he said , `` we will know more when the London Metal Exchange copper stock levels are released Monday morning . ''
+Another analyst said he expected LME inventories to be down by about 15,000 tons when the weekly report is issued .
+Bernard Savaiko , senior commodities analyst at PaineWebber Inc. , said that when traders saw the market was n't reacting positively to the forecasts of lower LME stocks , they perceived a bearish sign .
+He also noted that the Japanese , who had been buying at prices just above the $ 1.25 level , apparently pulled back from the market on Friday .
+Mr. Savaiko said he sees a possibility of the December contract dropping to $ 1.05 a pound .
+Hewlett-Packard Co. will announce today a software program that allows computers in a network to speed up computing tasks by sending the tasks to each other .
+Called Task Broker , the program acts something like an auctioneer among a group of computers wired together .
+If a machine has a big computing task , Task Broker asks other computers in the network for `` bids '' on the job .
+It then determines which machine is free to do the task most quickly and sends the task to that machine .
+Hewlett-Packard claims that the software allows a network to run three times as many tasks as conventional networks and will run each task twice as fast .
+The new Hewlett-Packard program , said analyst John McCarthy at Forrester Research Inc. , a computer-market research company , `` is a key building block as people move to this new model of distributed processing . ''
+In today 's computer networks , some machines often sit idle while others are overtaxed .
+With the Hewlett-Packard program , he said , `` You get more bang for the buck you 've spent on computers . ''
+The program , which will be shipped in January 1990 , runs on the Unix operating system .
+Hewlett-Packard will charge $ 5,000 for a license covering 10 users .
+The program now works on all Hewlett-Packard and Apollo workstations and on computers made by Multiflow Computer Inc. of Branford , Conn .
+Hewlett-Packard said it will sell versions later next year that run on Sun Microsystems Inc. and Digital Equipment Corp. machines .
+The Task Broker differs from other programs that spread computing tasks around a network .
+A previously available program called Network Computing System , developed by Hewlett-Packard 's Apollo division , for instance , takes a task and splits it up into parts , divvying up those parts to several computers in a network for simultaneous processing .
+But programs in individual computers must be revised in order to work with that system .
+Applications wo n't have to be rewritten to work with Task Broker , Hewlett-Packard said , and the user of a computer wo n't be able to tell that another machine is doing the work .
+The Task Broker `` turns that network into -- as far as the user is concerned -- one giant computer , '' said Bill Kay , general manager of Hewlett-Packard 's workstation group .
+Price wars between the fast-food giants are starting to clobber the fast-food little guys : the franchisees .
+`` When elephants start fighting , ants get killed , '' says Murray Riese , co-owner of National Restaurants , a New York franchisee for Pizza Hut , Roy Rogers and other chains .
+As hamburger and pizza outlets saturate one area after another , franchisers are struggling desperately for market share , slashing prices and stepping up costly promotions .
+The fight is putting a tight squeeze on profits of many , threatening to drive the smallest ones out of business and straining relations between the national fast-food chains and their franchisees .
+The chains `` used to offer discounts during winter when business was slow , but in the last year or so , discounting has become a 12-month thing , '' says Donald Harty , president of Charisma Group Inc. , a New York franchisee of Grand Metropolitan PLC 's Burger King chain .
+Though Charisma 's sales are up slightly this year , Mr. Harty says profits will be flat or lower .
+And Bill Konopnicki , a Safford , Ariz. , licensee of McDonald 's Corp. who is chairman of the company 's National Operators Advisory Board , says some fast-food outlets `` could be in serious trouble , based on the amount of discounting that seems to be going on . ''
+Until recently , the huge fast-food industry , with sales of about $ 60.1 billion last year , kept price-skirmishing to a minimum .
+But early this year , PepsiCo Inc. 's Taco Bell unit and Wendy 's International Inc. slashed prices and stepped up promotions , says John Rohs , an analyst for Wertheim Schroder & Co .
+That brought a chain reaction in the industry .
+The situation was further aggravated early this month , when McDonald 's set plans to heat up the discounting by offering coupons .
+It also decided to go national with pizza , which it has been test-marketing .
+Now , two-for-one deals on pizza are common ; so are 99-cent specials on sandwiches normally priced twice as high .
+The discounting , say fast-food operators , occurs on a scale and with a frequency they have n't seen before .
+The result is that some franchisees are running hard just to stay even , laying off middle managers and working harder to make less .
+Joe Mack , a district manager for Cormack Enterprises Inc. , a Burger King operator in Omaha , Neb. , says discounting is so prevalent that `` we have to serve 15 % to 20 % more customers '' to keep sales level .
+`` It 's almost as if you 're doing extra work to give away the food , '' he says .
+Alan D'Agosto , president of Panda 's Inc. , an operator of Arby 's restaurants in Omaha , says : `` All we 're doing is keeping the customers coming , but we are n't increasing sales . ''
+With fast-food outlets on every corner , he , like many , does n't think he has a choice in the price war : `` Our customers say that they wo n't go into a fast-food store unless they get a coupon . ''
+If the battle continues much longer , many fast-food businesses will close or merge , predicts Vincent Morrissey , who owns a string of Kentucky Fried Chicken stores in the Midwest .
+`` The industry is overbuilt , '' he says .
+`` Fast-food franchisers have managed to squeeze in stores into every corner available . ''
+The National Restaurant Association says quick-service restaurant units in the U.S. rose 14 % to 131,146 between 1983 and 1987 , the last year for which figures are available .
+With the market so crowded , says a spokesman for Wendy 's in Columbus , Ohio , `` If you 're doing well , you 're doing well at someone else 's expense . ''
+Simply put , there is n't enough business for every store to grow .
+According to Mr. Rohs , inflation-adjusted , same-store sales at company-owned Wendy 's units in the U.S. have trailed year-earlier levels throughout 1989 , except for August .
+`` McDonald 's has also been running negative all year , '' the analyst says .
+Spokesmen for Wendy 's and McDonald 's criticized Mr. Rohs 's calculations .
+Jack Greenberg , executive vice president and chief financial officer of McDonald 's , says the company does n't compute , much less disclose , inflation-adjusted , same-store sales .
+He adds that short-term comparisons `` can be very misleading because of differences in timing of marketing programs from year to year . ''
+Profit margins at company-owned McDonald 's outlets in the U.S. `` are holding up quite nicely , '' says Mr. Greenberg .
+Profits of franchisees have n't been higher since the mid-1970s , he adds .
+But Mr. Greenberg 's sanguine outlook is n't matched by many fast-food industry observers .
+Smaller chains and single-store operators will be the first to fail , many in the industry predict .
+Big franchise groups `` can ride out the storm a lot longer , '' says Mr. Harty , the Burger King operator in New York .
+The prolonged price pressures are driving a wedge between some franchisers and their franchisees .
+Mr. Morrissey , the Kentucky Fried Chicken franchisee , notes that most franchise owners must absorb increases in expenses without any cut in the royalties , or portion of sales , that they must pay franchisers .
+Franchisees ca n't be forced to go along with a franchiser 's discounting .
+But once a franchisee agrees to a promotional program , the franchiser can demand full participation to the very end , says Lew Rudnick , a principal of Rudnick & Wolfe , a Chicago law firm with franchise industry clients .
+He says courts have held that antitrust considerations are outweighed in such cases by the need to protect consumers from deceptive marketing .
+In any case , many franchisees , in order to stay on good terms with franchisers , routinely go along with promotions .
+Says Mr. Riese of National Restaurants : `` If you resisted on prices , maybe you would never get that telephone call about a new franchise .
+Companies listed below reported quarterly profit substantially different from the average of analysts ' estimates .
+The companies are followed by at least three analysts , and had a minimum five-cent change in actual earnings per share .
+Estimated and actual results involving losses are omitted .
+The percent difference compares actual profit with the 30-day estimate where at least three analysts have issues forecasts in the past 30 days .
+Otherwise , actual profit is compared with the 300-day estimate .
+Companies listed below reported quarterly profit substantially different from the average of analysts ' estimates .
+The companies are followed by at least three analysts , and had a minimum five-cent change in actual earnings per share .
+Estimated and actual results involving losses are omitted .
+The percent difference compares actual profit with the 30-day estimate where at least three analysts have issues forecasts in the past 30 days .
+Otherwise , actual profit is compared with the 300-day estimate .
+CalMat Co. said it completed a $ 32.8 million sale of assets from its Los Angeles area real estate portfolio for net income of $ 12 million .
+CalMat said the sale is part of its previously announced plan to sell much of its real estate holdings to focus on its core business of mining and producing asphalt , concrete , rock and sand .
+And you thought the only reason to save your canceled checks was to prepare for an IRS audit .
+Reggie Jackson , the retired baseball star , has found another use for them .
+Mr. Jackson , who won the nickname `` Mr. October '' for his World Series exploits , is selling some of his canceled checks to autograph collectors through a dealer for as much as $ 500 each .
+Dealers say the budding trade in Mr. Jackson 's canceled checks is unusual .
+`` I do n't know of any living ballplayer that 's ever done it , '' says Jack Smalling , a dealer in Ames , Iowa , and a recognized expert in the field of baseball autographs .
+An initial batch of Mr. Jackson 's checks was on sale at a baseball-card show held in San Francisco over Labor Day weekend .
+Mr. Jackson showed up at the affair to sign autographs for a fee as well .
+`` For someone who has everything else -- Reggie 's jersey , cap and cards -- his checks might be a nice addition , '' says William Vizas , owner of Bill 's Sports Collectibles in Denver , who examined the checks at the San Francisco card show .
+For years , the canceled checks of a small number of well-known baseball players have been bought and sold .
+But these players were dead .
+`` Maybe three years ago , there were a lot of -LCB- Ty -RCB- Cobbs in the hobby , and awhile back there were Babe Ruth checks , '' says Mr. Smalling .
+However , the thought of a living player selling his checks rubs some people the wrong way .
+`` Maybe I 'm a little stuffy , but I would n't sell them , '' sniffs Bob Machon , owner of Papa 's Sports Cards in Menlo Park , Calif .
+`` Who knows how much they 'll be worth 100 years from now ? ''
+And Mr. Smalling does n't believe they 're worth all that much now .
+`` I do n't think the checks are worth $ 15 apiece , '' he says .
+Why Mr. Jackson , who could n't be reached for comment , has made some of his checks available for sale is n't clear .
+He probably has n't done it for the cash .
+`` I would say he 's definitely not in need of money , '' says Matt Merola , an agent of Mr. Jackson 's based in New York .
+`` He has good investments . ''
+And Mr. Jackson probably has opened new checking accounts , too .
+Or at least he should .
+`` I assume those accounts are closed , '' says Mr. Smalling , referring to the accounts of the canceled checks .
+`` I do n't think he 'd want to give out his current account numbers .
+USX Corp. and its Japanese partner , Kobe Steel Ltd. , agreed to form a joint venture to build a new plant to produce hot-dipped galvanized sheet products , mainly for the automotive market .
+Terms were n't disclosed for the plant , which will have annual capacity of 600,000 tons .
+The move by the nation 's largest steelmaker follows a string of earlier announcements by other major steel companies .
+Bethlehem Steel Corp. , LTV Corp. and Armco Inc. all have plans to build additional lines for such coated corrosion-resistant steel .
+The surge in production , analysts say , raises questions about capacity outpacing demand .
+They note that most of the new plants will come on line in 1992 , when the current import trade restraint program ends , which could result in more imports .
+`` There 's too much capacity , '' contended Charles Bradford , an analyst with Merrill Lynch Capital Markets .
+`` I do n't think there 's anyone not building one . ''
+He does add , however , that transplanted Japanese car makers are boosting the levels of U.S.-made steel in their autos , instead of relying heavily on imported steel .
+That trend could increase demand for hot-dipped galvanized sheet .
+The hot-dipped galvanized segment is one of the fastest-growing and most profitable segments of the steel market , coveted by all major integrated steelmakers wanting to maintain an edge over smaller minimills and reconstructed mills -- those spun off to employees .
+Indeed , USX said it expects the market for coated sheet steel to reach 12 million tons annually by 1992 , compared with 10.2 million tons shipped in 1988 .
+For the first eight months of 1989 , analysts say shipments of hot-dipped galvanized steel increased about 8 % from a year earlier , while overall steel shipments were up only 2.4 % .
+USX and Kobe Steel hope to reach a definitive agreement establishing the 50-50 partnership by the end of the year , with construction tentatively slated for the spring of 1990 and production by 1992 .
+USX already has six lines in existing plants producing hot-dipped galvanized steel , but this marks the first so-called greenfield plant for such production .
+Moreover , it will boost by 50 % USX 's current hot-dipped capacity of 1,275,000 tons .
+The company said it does n't expect the new line 's capacity to adversely affect the company 's existing hot-dipped galvanizing lines .
+Steelmakers have also been adding capacity of so-called electrogalvanized steel , which is another way to make coated corrosion-resistant steel .
+One of the advantages of the hot-dipped process is that it allows the steel to be covered with a thicker coat of zinc more quickly .
+ONCE YOU MAKE UP your mind about an investment , the rest is easy , right ?
+You just call your broker and say `` buy '' or `` sell . ''
+Dream on .
+There are all sorts of ways to give buy and sell instructions to a broker -- and just as many ways to get burned if you do n't know what you 're doing .
+So here 's a rundown of the most common types of market orders permitted by the stock and commodity exchanges .
+Two things to keep in mind : Not all exchanges accept every type of order .
+And even when a specific order is acceptable to an exchange , a brokerage firm can refuse to enter it for a customer .
+Market Order : This is probably the most widely used order -- and the one most open to abuse by unscrupulous floor brokers , since it imposes no price restrictions .
+With a market order , an investor tells a broker to buy or sell `` at the market . ''
+It 's like saying , `` get me in now '' or `` get me out now . ''
+For example , if wheat is being offered at $ 4.065 and bid at $ 4.060 , a market order to buy would be filled at the higher price and a market order to sell at the lower price .
+A recent indictment alleges that some floor brokers at the two largest Chicago commodity exchanges used market orders to fill customers ' orders at unfavorable prices by arranging trades with fellow brokers .
+Profits realized from these trades would then be shared by the conspiring brokers .
+Limit Order : Limit orders are used when investors want to restrict the amount they will receive or pay for an investment .
+Investors do this by specifying a minimum price at which the investment may be sold or the maximum price that may be paid for it .
+Suppose an investor wants to sell a stock , but not for less than $ 55 .
+A limit order to sell could be entered at that price .
+One risk : Investors may regret the restriction if the stock reaches 54 and then falls .
+Unless the market goes at least one tick -LRB- the smallest price increment permitted -RRB- beyond the limit price , investors are n't assured of having their orders filled because there may not be sufficient trading volume to permit filling it at the specified price .
+Stop Order : Stop orders tell a floor broker to buy or sell an investment once the price reaches a certain level .
+Once the price reaches that level , a stop order turns into a market order , and the order is filled at whatever price the broker can get .
+Stop orders are sometimes called `` stop-loss '' orders because they are frequently used to protect profits or limit losses .
+While stop orders sound similar to limit orders , there is a difference : Sell stops must be entered at a price below the current market price and buy stops above .
+In contrast , sell limit orders must be placed above the market price and buy limit orders are placed below .
+The crash in October 1987 and last Friday 's sell-off painfully taught some investors exactly what stop orders will and wo n't do .
+An investor who may have placed a stop-loss order at $ 90 under a stock that was trading at $ 100 a share on the Friday before the crash was stunned to discover that the order was filled at $ 75 when the stock opened at that price on Monday .
+Stop-Limit Order : Stop-limit orders turn into limit orders when an investment trades at the price specified in the order .
+Unlike stop orders -- which are filled at the market price when the stop price is hit -- stop-limit orders demand that the trades be made only at the specified price .
+If it ca n't be made at that price , it does n't get filled .
+Investors who wish to be out of a position , without the risk of receiving a worse-than-expected price from a market order , may use this type of order to specify the price at which the order must be filled .
+But if the market moves quickly enough , it may be impossible for the broker to carry out the order because the investment has passed the specified price .
+Market-If-Touched Order : Market-if-touched orders are like stop orders in that they become market orders if a specified price is reached .
+However , unlike a buy-stop order , a buy market-if-touched order is entered at a price below the current price , while a sell market-if-touched order is entered at a price above it .
+As soon as the market trades at the specified price the floor broker will fill it at the best possible price .
+Fill-Or-Kill Order : The fill-or-kill order is one of several associated with the timing of trades .
+It instructs a broker to buy or sell an investment at the specified price or better .
+But if the investment ca n't be bought or sold immediately , the order is automatically canceled .
+Gregory Bessemer , who came in second in the stock division of the recently completed U.S. Trading Championship , says he uses fill-or-kill orders almost exclusively when trading options .
+`` I like to use them to feel out the market , '' he says .
+`` If they do n't fill it immediately , then I can start over at a new price or try again with the same price . ''
+Not-Held Order : This is another timing order .
+It is a market order that allows floor brokers to take more time to buy or sell an investment , if they think they can get a better price by waiting .
+Not-held orders , which are also known as `` disregard the tape '' orders , are always done at the customer 's risk .
+One-Cancels-The-Other Order : This is really two orders in one , generally for the same security or commodity , instructing floor brokers to fill whichever order they can first and then cancel the other order .
+In a fast-moving market , it prevents an investor from getting stuck with having made two trades on the same security .
+Specific-Time Order : This type of order couples many of the orders described above with instructions that the order must be carried out at or by a certain time .
+`` On the close '' can be added to many types of orders .
+For example , `` market-on-close orders '' must be filled during the last few minutes of trading for the day at a price that is within the official closing range of prices as determined by the exchange .
+`` Stop-close-only orders '' are stop orders that only become active during the closing minutes of trading .
+`` Day orders '' expire at the end of the day on which they are entered , `` good-till-canceled orders '' have no expiration date .
+Most brokers assume that all orders are day orders unless specified otherwise .
+On Oct. 19 , 1987 , some investors learned the consequences of entering `` good-til-canceled limit orders '' and then forgetting about them .
+They found they had bought stock from limit orders that they might have entered weeks or months earlier and had forgotten to cancel .
+It is always the responsibility of investors to keep track of the orders they have placed .
+Investors who change their mind about buying or selling after an order has been filled are , usually , stuck with the consequences .
+Mr. Angrist writes on the options and commodities markets for The Wall Street Journal .
+IN SIZING UP the risks of stock-market investments , there 's probably no starting place better than `` beta . ''
+But investors better not ignore its limitations , either .
+Beta is a handy gauge that measures the volatility of a stock or stock mutual fund .
+For any given move in the overall market , it suggests how steeply that particular issue might rise or fall .
+Beta figures are widely available and easy to interpret .
+The beta of the broad market , typically defined as the Standard & Poor 's 500-stock index , is always 1.0 .
+So a stock with a beta of 0.5 is half as volatile , one at 1.5 is 50 % more volatile , and so on .
+Cautious investors should generally go with stocks that have low betas .
+Go with high-beta stocks to get the biggest payoff from a bet on a bull market .
+Remember , though , that beta also has important limitations .
+`` Beta is only part of the risk in a stock , '' says William F. Sharpe , the Stanford University emeritus professor who developed the measure .
+`` There is risk that is not associated with market moves , and the beta does n't tell you the magnitude of that . ''
+In particular , beta does n't measure the company - and industry-specific risk associated with an individual stock .
+That `` business '' risk is very significant for an investor with only a few stocks , but it virtually disappears in a large and well-diversified portfolio .
+Beta is also a poor indicator of the risk in stock groups that march to their own drummer .
+In particular , the prices of gold and other precious-metals stocks shoot up and down , but the stocks tend to have low betas because their moves are not market-inspired .
+Concern that investors could misinterpret such readings led the American Association of Individual Investors to eliminate beta figures for precious-metals funds in the 1989 edition of its mutual-fund guide .
+`` Our fear was people would look just at the beta -LCB- of a gold fund -RCB- and say here is an investment with very low risk , '' says John Markese , director of research for the Chicago-based group .
+`` In reality it 's very volatile , but the movements are not because of market movements .
+READY TO REVIEW the riskiness of your investment portfolio ?
+First , a pop quiz .
+When you think of the words `` risk '' and `` investment , '' what 's the specific peril that comes to mind ?
+Pencils down .
+If you 're like most people , you said it 's a holding that goes completely sour -- maybe a bond that defaults or a stock whose value disappears in a bankruptcy proceeding .
+`` People tend to see risk primarily on that one dimension , '' says Timothy Kochis , national director of personal financial planning for accountants Deloitte , Haskins & Sells .
+But therein lies another aspect of investment risk : the hazard of shaping your portfolio to avoid one or more types of risk and being blind-sided by others .
+This is clearly not good news to all you people who sleep like babies every night , lulled by visions of your money sitting risk-free in six-month CDs .
+Risk wears many disguises , and investments that are low in one type of obvious risk can be distressingly high in other , less obvious kinds .
+U.S. Treasury bonds , for example , are supersafe when it comes to returning money at maturity .
+But their value as investments can be decimated by inflation , which erodes the purchasing power of bonds ' fixed-dollar interest payments .
+Risk is also a function of time .
+When financial professionals measure risk mathematically , they usually focus on the volatility of short-term returns .
+Stocks are much riskier than Treasury bills , for example , because the range in performance from the best years to the worst is much wider .
+That is usually measured by the standard deviation , or divergence , of annual results from the average return over time .
+But investors who are preoccupied with short-term fluctuations may be paying too little attention to another big risk -- not generating enough money to meet long-term financial and life-style goals .
+For instance , some investors have sworn off stocks since the 1987 market crash ; last Friday 's debacle only reinforced those feelings .
+But the stock market , despite some stomach-churning declines , has far outperformed other securities over extended periods .
+By retreating to the apparent security of , say , money-market funds , investors may not be earning enough investment return to pay for a comfortable retirement .
+`` That 's the biggest risk of all -- the risk of not meeting your objectives , '' says Steven B. Enright , a New York financial planner with Seidman Financial Services .
+As a result , financial advisers say they take several steps when evaluating the riskiness of clients ' portfolios .
+They estimate the return a person 's current portfolio is likely to generate over time , along with a standard deviation that suggests how much the return will vary year by year .
+They try to figure out the long-term results the person needs to meet major goals .
+And they eyeball types of risk that are not easily quantified .
+The portfolios of two hypothetical families , one a couple at retirement age and another a two-income couple at age 45 , illustrate several types of risk that investors need to consider .
+For instance , the insured municipal bonds that dominate the older couple 's portfolio were probably selected in large part for their low repayment risk .
+But they expose the holders to a lot of inflation risk and interest-rate risk .
+The younger couple 's stockholdings involve more risk than a diversified stock portfolio because the bulk of the money is in a single issue .
+Note that the younger couple 's portfolio has a higher expected annual return , 10.1 % vs. 8.8 % , as calculated by Seidman Financial Services , which is the financial-planning affiliate of BDO Seidman .
+That largely reflects the heavy stockholdings .
+But one price paid for the higher expected return is greater short-term volatility , as reflected in the higher standard deviation that Seidman estimates for the younger couple 's portfolio .
+-LRB- Here 's how to interpret a standard deviation figure : Take the expected return and add one standard deviation to it .
+Then take the expected return and subtract one standard deviation .
+In two of three years , the actual result should fall within that range if all the assumptions were accurate .
+Then add and subtract two standard deviations to get a wider range .
+There 's a 95 % probability any year 's result will fall in the range . -RRB-
+Of course , the greater volatility of the younger couple 's portfolio does n't necessarily mean those investments are riskier in terms of meeting the holders ' long-term goals .
+Indeed , the older couple 's portfolio could actually be riskier in that sense if the expected return wo n't generate enough dollars to meet their spending plans .
+`` They may feel emotionally secure now because they are not heavily in the stock market , '' says John H. Cammack , a financial planner with Alexandra Armstrong Advisors Inc. in Washington .
+`` But they may pay a price 10 or 20 years in the future . ''
+Ms. Slater reports on personal finance from The Wall Street Journal 's New York bureau .
+When it comes to investing , trying to weigh risk and reward can seem like throwing darts blindfolded : Investors do n't know the actual returns that securities will deliver , or the ups and downs that will occur along the way .
+Looking to the past can provide some clues .
+Over several decades , for instance , investors who put up with the stock market 's gyrations earned returns far in excess of those on bonds and `` cash '' investments like Treasury bills .
+But while history can suggest what is reasonable to expect there 's no guarantee that the past will repeat itself .
+For instance , some analysts believe bond returns and volatility have moved permanently closer to those of the stock market .
+And returns on cash investments may continue to exceed inflation by a wider margin than they did over the long-term past .
+Portfolio A : Retired couple , age 65 ; $ 400,000 portfolio .
+Portfolio B : Two-income couple , age 45 ; $ 150,000 portfolio .
+A letter from Senator John Kerry chides us today for implying that he had `` flip-flopped '' on Manuel Noriega .
+He correctly says he has been down on Noriega for some time , hence his criticism of administration mishandling of the attempted coup .
+Our October 12 editorial should have been more precise .
+It meant to convey our hope that the Senator and other members of the congressional left are broadening their dislike of Noriega to include other notorious Central American drug runners .
+The Sandinistas of Nicaragua , for example , also are part of the Castro-Medellin cartel nexus .
+In his letter and on the basis of his losing vote Tuesday against U.S. aid for the Nicaraguan opposition , Senator Kerry makes clear he has not made that intellectual leap .
+We were wrong .
+THROUGHOUT THE 1980s , investors have been looking for creative alternatives to traditional modes of financial planning .
+Capital has been democratized , and people want in .
+Too often , however , small investors are left with the same stale solutions that appealed to previous generations of fiduciary strategists .
+Now a startling new approach is available to building your financial portfolio without undue risk , without extensive planning and without hurting your life style one bit !
+This is particularly good news for those who hate risk , who are incapable of doing extensive amounts of planning and who refuse to see their life styles hurt in any way .
+You know who you are .
+My revolutionary system is also useful for those who have tried customary forms of growing their currency cushion .
+Like all Americans seeking chronic prosperity , I do find it necessary to plunge certain funds into conservative monetary tools , if only to assuage my father-in-law , who believes in such things .
+So throughout the decade I have maintained my share of individual retirement accounts and CDs , and tinkered with stocks , bonds and mutual funds , as well as preserving my necessary position in the residential real-estate market .
+Return on this fine portfolio has been modest when it has not been negative .
+Figure 1 demonstrates the performance of those businesses I 've invested in during this prosperous decade -LRB- see accompanying illustration -- WSJ Oct. 20 , 1989 -RRB- .
+Oil-related properties suffered a huge decline until I divested myself of all such stocks in 1985 , at which point the industry , while not lighting up any Christmas trees , began a slow recovery .
+Likewise , mutual funds remained relatively flat until I made what was , for me , a serious investment .
+By 1987 , these properties were in a tailspin , causing my broker at Pru-Bache to remark that she 'd `` never seen anything like it . ''
+Concerned for her state of mind , I dropped them -- and the market instantly began its steady climb back to health .
+Perhaps most dramatic was the performance of the metropolitan New York real-estate market , which was booming until I entered it in late 1988 , at which time it posted the first negative compound annual growth rate in years .
+Disgusted , I cast around for a different way to plan my asset distribution , and with hardly any heavy breathing the answer struck me : I was doing it already !
+We 've all got money to spend , some of it clearly disposable since we keep disposing of it .
+Bank it ?
+Not really !
+Sock it away in long-term instruments ?
+Nonsense !
+Daily living is the best possible investment !
+Your priorities may be different , but here in Figure 2 is where I 've chosen to build for the future : personal space ; automotive pursuits ; children 's toys ; gardening equipment , bulbs and shrubs ; and finally , entertainment , perhaps the best investment of all .
+All have paid off for me in double-digit annual growth and continue to provide significant potential .
+At least , according to my calculations .
+Personal space -LRB- Figure 3 -RRB- has grown 35 % annually over the course of the decade , a performance that would compare positively with an investment in , say , synthetic-leather products for the interiors of cold-weather vehicles , which my cousin got into and sort of regrets to this day .
+The assortment of expensive children 's toys that I have purchased wisely at a host of discount-toy brokerage firms -LRB- Figure 4 -RRB- has increased handsomely in total asset value far beyond any personal investment except , perhaps , for my record collection , whose worth , I think it 's safe to say , is incalculable .
+Continued investment in my 1984 subcompact has been part of my strategy -LRB- Figure 5 -RRB- , with present annual contributions now equaling more than 60 % of the car 's original value .
+According to my calculations , these outlays should have brought the value of my sedan to more than $ 22,000 on the open market -LRB- Figure 6 -RRB- , where I plan to offer it shortly .
+Expansion of my living space has produced an obvious need for maintenance and construction of suitable lawns , shrubs and bushes fitting to its suburban locale .
+I have thus committed sufficient personal outlay to ensure that my grounds and lodgings will never be short of greens and flowers .
+My initial stake in this blooming enterprise has grown tenfold , according to my conservative calculations .
+At the same time , my share in a wide variety of entertainment pursuits has given perhaps the most dramatic demonstration of the benefits of creative personal financial planning .
+Over the course of the decade , for instance , my return on investment in the area of poker alone -LRB- Figures 7A and 7B -RRB- has been most impressive , showing bodacious annual expansion with -- given the way my associates play -- no sign of abatement into the 1990s and beyond .
+With this personal strategy firmly in place , I look forward to years of fine life-style investments and increasing widespread leverage .
+My kids ' college education looms as perhaps the greatest future opportunity for spending , although I 'll probably have to cash in their toy portfolio to take advantage of it .
+But with every step I take , I 'm building wealth .
+You can , too , if you , like me , refuse to bite the bullet .
+So go out there and eat that debt .
+You 're right there in the mainstream of American business , building value on the back of insupportable expenditures .
+Henry Kravis , watch out !
+Mr. Schwartz is a business executive and writer in New York .
+WHEN JAMES SCHWARTZ was just a lad his father gave him a piece of career advice .
+`` He told me to choose an area where just by being mediocre I could be great , '' recalls Mr. Schwartz , now 40 .
+He tried management consulting , traded in turquoise for a while , and even managed professional wrestlers .
+Now he has settled into a career that fits the bill -- financial planning .
+It should be noted that Mr. Schwartz , who operates out of Englewood , Colo. , is a puckish sort who likes to give his colleagues the needle .
+But in this case the needle has a very sharp point .
+Though it 's probably safe to assume that the majority of financial planners are honest and even reasonably competent , the fact remains that , as one wag puts it , `` anybody who can fog a mirror '' can call himself a financial planner .
+Planners now influence the investment of several hundred billion dollars , but in effect they operate in the dark .
+There is no effective regulation of planners , no accepted standard for admission into their ranks -- a dog got into one trade group -- no way to assess their performance , no way even to know how many of them there are -LRB- estimates range from 60,000 to 450,000 -RRB- .
+All anyone need do is hang up a shingle and start planning .
+So it should come as no shock that the profession , if that 's what it is , has attracted a lot of people whose principal talents seem to be frittering away or flat-out stealing their clients ' money .
+Alarmed , state and federal authorities are trying to devise ways to certify and regulate planners .
+Industry groups and reputable planners who are members of them want comprehensive standards , too ; they 're tired of seeing practitioners depicted collectively in the business press as dumber than chimpanzees and greedier than a herd of swine .
+But reform has n't taken hold yet .
+`` The industry is still pretty much in its Wild West days , '' says Scott Stapf , director of investor education for the North American Securities Administrators Association .
+An admittedly limited survey by NASAA , whose members are state securities-law regulators , found that between 1986 and 1988 `` fraud and abuse '' by financial planners cost 22,000 investors $ 400 million .
+The rogues ' gallery of planners involved includes some convicted felons , a compulsive gambler or two , various businessmen who had planned their own previous ventures right into bankruptcy , and one man who scammed his wife 's grandmother .
+What 's more , the losses they and the others caused `` are just what we are stumbling over , '' says Mr. Stapf , adding that the majority of misdeeds probably go undetected .
+So do just about all the losses that could be attributed to the sheer incompetence of unqualified planners .
+Nobody can estimate the toll , but John Gargan , a Tampa , Fla. , planner and head of one trade group , the International Association of Registered Financial Planners , thinks the danger to investors from incompetence is `` humongous , '' far greater than that from crookery .
+His group , like others , wants minimum standards applied to all who call themselves financial planners .
+Surveying all this , some people now think the best planner might be no planner at all .
+For most investors `` the benefits just are n't worth the risks , '' says Barbara Roper , who follows financial-planning issues for the Consumer Federation of America , a consumer-advocacy organization based in Washington .
+She concedes that such a position is `` unfair '' to the thousands of conscientious and qualified people plying the trade , but as a consumer advocate she feels impelled to take it .
+She says her group used to give tips on selecting planners -- check educational and experience credentials , consult regulators and Better Business Bureaus -- but found that even some people who took these steps `` were still getting ripped off . ''
+The bad news , however , has n't been bad enough to kill the growing demand for financial planning .
+The Tax Reform Act of 1986 , which eliminated many tax shelters peddled by planners , and the stock market crash the next year did cause a sharp slump in such demand , and many planners had to make an unplanned exit from the business .
+But membership in the International Association of Financial Planners -LRB- IAFP -RRB- , the industry 's biggest trade group , is still nearly triple what it was in 1980 , and it 's believed that the ranks of planners who do n't belong to any group have soared as well .
+An estimated 10 million Americans are now using financial planners , and the pool of capital they influence is enormous .
+A survey of 54,000 of them conducted by the IAFP in April showed that these practitioners alone had controlled or guided the investment of $ 154 billion of their clients ' money in the previous 12 months .
+The sheer number of planners makes the business extremely difficult , if not impossible , to regulate .
+Even the minority of them who must register with the Securities and Exchange Commission as `` investment advisers '' -- people who are in the business of counseling others on the buying and selling of securities specifically -- have been enough to swamp the agency 's capacity .
+The SEC has only about 200 staffers assigned to keep tabs on investment advisers -- about the same as in 1980 -- even though the number of advisers has tripled to about 15,000 over the past decade .
+Currently , a registered investment adviser can expect an SEC audit only once every 12 years .
+A lot of bad things can happen in 12 years .
+`` It does n't take a rocket scientist to figure out our problem , '' says Kathryn McGrath , director of the SEC 's division of investment management .
+So the SEC has proposed to Congress that much of the job of oversight be turned over to an industry-funded , self-regulatory organization patterned on the National Association of Securities Dealers , which operates in the brokerage business .
+Such an organization could , among other things , set minimum standards for competence , ethics and finances and punish those investment advisers who broke the rules .
+The proposal has set off a lively debate within an industry that was far from united to begin with .
+Mr. Schwartz , the puckish planner from Englewood , Colo. , says that allowing the business to police itself would be `` like putting Dracula in charge of the blood bank . ''
+Mr. Gargan , the Tampa planner who heads one trade group , favors simply assessing the industry and giving the money to the SEC to hire more staff .
+-LRB- Mr. Gargan 's views are not greeted with wild enthusiasm over at the IAFP , the major industry organization .
+When the IAFP recently assembled other industry groups to discuss common standards that might be applied to planners , Mr. Gargan 's group was excluded .
+That may be because Mr. Gargan , smarting at what he considered slurs on his membership standards made by the rival group , enrolled his dog , Beauregard , as a member of the IAFP .
+Then he sent the pooch 's picture with the certificate of membership -- it was made out to `` Boris ` Bo ' Regaard '' -- to every newspaper he could think of . -RRB-
+The states have their own ideas about regulation and certification .
+NASAA , the organization of state securities regulators , is pushing for a model regulatory statute already adopted in eight states .
+It requires financial planners to register with states , pass competency tests and reveal to customers any conflicts of interest .
+The most common conflict involves compensation .
+NASAA estimates that nearly 90 % of planners receive some or all of their income from sales commissions on securities , insurance and other financial products they recommend .
+The issue : Is the planner putting his clients into the best investments , or the ones that garner the biggest commissions ?
+In 1986 the New York attorney general 's office got an order from a state court in Albany shutting down First Meridian Corp. , an Albany financial-planning firm that had invested $ 55 million on behalf of nearly 1,000 investors .
+In its notice of action , the attorney general said the company had promised to put clients into `` balanced '' investment portfolios ; instead , the attorney general alleged , the company consistently shoved unwary customers into high-risk investments in paintings , coins and Florida condos .
+Those investments paid big commissions to First Meridian , payments investors were never told about , the attorney general alleged .
+Investors were further assured that only those with a minimun net worth would be accepted .
+In practice , the attorney general alleged in an affidavit , if an investor had access to cash `` the chances of being turned down by First Meridian were about as probable as being rejected by the Book-of-the-Month Club . ''
+And , the attorney general added , First Meridian 's president , Roger V. Sala , portrayed himself as a `` financial expert '' when his qualifications largely consisted of a high-school diploma , work as a real-estate and insurance salesman , and a stint as supervisor at a highway toll booth .
+First Meridian and its officials are currently under investigation for possible criminal wrongdoing , according to a spokeswoman for the attorney general .
+Harry Manion , Mr. Sala 's attorney , says his client denies any wrongdoing and adds that the attorney general 's contentions about First Meridian 's business practices are incorrect .
+As for Mr. Sala 's qualifications , `` the snooty attorneys for the state of New York decided Mr. Sala was n't qualified because he did n't have a Harvard degree , '' says Mr. Manion .
+Civil suits against planners by clients seeking recovery of funds are increasingly common .
+Two such actions , both filed earlier this year in Georgia state court in Atlanta , could be particularly embarrassing to the industry : both name J. Chandler Peterson , an Atlanta financial planner who is a founder and past chairman of the IAFP , as defendant .
+One suit , filed by more than three dozen investors , charges that Mr. Peterson misused much of the $ 9.7 million put into a limited partnership that he operated and promoted , spending some of it to pay his own legal bills and to invest in other companies in which he had an interest .
+Those companies , in turn , paid Mr. Peterson commissions and fees , the suit alleges .
+The other suit was filed by two men in a dispute over $ 100,000 investments each says he made with Mr. Peterson as part of an effort to purchase the Bank of Scottsdale in Scottsdale , Ariz .
+One plaintiff , a doctor , testified in an affidavit that he also gave Mr. Peterson $ 50,000 to join a sort of investment club which essentially gave the physician `` the privilege of making additional investments '' with Mr. Peterson .
+In affidavits , each plaintiff claims Mr. Peterson promised the bank purchase would be completed by the end of 1988 or the money returned .
+Mr. Peterson took the plaintiffs ' and other investors ' money to a meeting of the bank 's directors .
+Wearing a business suit and western-style hat and boots , he opened up his briefcase and dumped $ 1 million in cash on a table in front of the directors , says Myron Diebel , the bank 's president .
+`` He said he wanted to show the color of his money , '' recalls Mr. Diebel .
+Bank officials , however , showed him the door , and the sale never came off .
+According to the suit , Mr. Peterson has yet to return the plaintiffs ' investment .
+They want it back .
+Mr. Peterson declines to comment on specific allegations in the two suits , saying he prefers to save such responses for court .
+But he does say that all of his activities have been `` entirely proper . ''
+On the suit by the limited partners , he says he is considering a defamation suit against the plaintiffs .
+The suit , he adds , `` is almost in the nature of a vendetta by a handful of disgruntled people . ''
+Rearding the suit over the bank bid , Mr. Peterson says it is filled with `` inflammatory language and half truths . ''
+He declines to go into specifics .
+Mr. Peterson says the suits against him are less a measure of his work than they are a `` sign of the times '' in which people generally are more prone to sue .
+`` I do n't know anybody in the industry who has n't experienced litigation , '' he says .
+Mr. Peterson also says he does n't consider himself a financial planner anymore .
+He now calls himself an `` investment banker . ''
+In many scams or alleged scams involving planners , it 's plain that only a modicum of common sense on the part of the investors would have kept them out of harm 's way .
+Using it , would n't a proessional hesitate to pay tens of thousands of dollars just for a chance to invest witha planner ?
+Other cases go to show that an old saw still applies : If it sounds too good to be true , it probably is .
+Certificates of deposit do n't pay 23 % a year , for example , but that did n't give pause to clients of one Alabama planner .
+Now they 're losers and he 's in jail in Mobile County .
+CDs yielding 40 % are even more implausible -- especially when the issuing `` bank '' in the Marshall Islands is merely a mail drop watched over by a local gas-station operator -- but investors fell for that one too .
+And the Colorado planner who promised to make some of his clients millionaires on investments of as litle as $ 100 ?
+Never mind .
+You already know the answer .
+Mr. Emshwiller is a staff reporter in The Wall Street Journal 's Los Angeles bureau .
+At the ritzy Fashion Island Shopping Center , the tanned and elegant ladies of this wealthy Southern California beach community disembark from their Mercedes-Benzes and BMWs for another day of exercising their credit cards .
+They root among the designer offerings at Neiman-Marcus and Bullocks Wilshire .
+They stroll through the marble-encased corridors of the Atrium Court .
+They graze at the Farmers Market , a combination gourmet food court and grocery store , while a pianist accompanies the noon fashion show with a selection of dreamy melodies .
+`` The beautiful look of wool , '' croons the show 's narrator , `` slightly Victorian in its influence ... . ''
+Meanwhile , in the squat office buildings that ring Fashion Island , the odds are good that someone is getting fleeced .
+Law-enforcement authorities say that at any given time , a host of fraudulent telemarketing operations mingle with the many legitimate businesses here .
+`` They seem to like these industrial parks , '' says Kacy McClelland , a postal inspector who specializes in mail fraud .
+`` We call them fraud farms . ''
+Welcome to that welter of contradictions known as Newport Beach .
+This city of more than 70,000 is known for sunshine , yachts and rich residents .
+It is also known as the fraud capital of the U.S. , dubbed by investigators and the media as the `` Cote de Fraud '' .
+How does a community famous for its high living end up as a haven for low-lifes ?
+Clearly , the existence of the former lures the latter .
+The places renowned for breeding bunco , like the Miami neighborhood known as the `` Maggot Mile '' and Las Vegas 's flashy strip of casinos , invariably offer fast cars , high rollers , glamorous women and lots of sunshine .
+You do n't hear much about unusual concentrations of fraud in Green Bay or Buffalo .
+Con men hate snow .
+Newport Beach fits the scam artists ' specifications perfectly .
+What more could a con man in search of the easy life ask for ?
+Nothing seems hard here .
+The breezes are soft , the waves lap gently and the palm trees sway lazily .
+Nightlife is plentiful .
+Moreover , ostentation is appreciated .
+The median price of homes is $ 547,000 ; more than 9,000 vessels fill what the chamber of commerce calls the nation 's largest pleasure-boat harbor .
+`` Blondes , cocaine and Corvettes , '' mutters Mr. McClelland .
+`` That 's what they 're after . ''
+The rich image of Newport Beach also helps lend the con artists ' operation an air of respectability .
+`` One reason they use Newport Beach is that it sounds swankier than most addresses , '' says David Katz , a U.S. attorney who , until recently , headed a multi-agency Southern California fraud task force .
+`` Newport Beach is known in Rhode Island for having a lot of rich people . ''
+No wonder all kinds of big-time scams have flourished here , from phony tax-sheltered Bible sales to crooked car dealers to bogus penny-stock traders .
+But above all , this is the national headquarters for boiler-room operators , those slick-talking snake-oil salesmen who use the telephone to extract money from the gullible and the greedy and then vanish .
+Because only a fraction of them are ever prosecuted , nobody really knows how much money bogus telemarketing operators really harvest .
+`` I 've heard that there is $ 40 billion taken in nationwide by boiler rooms every year , '' Mr. McClelland says .
+`` If that 's true , Orange County has to be at least 10 % of that . ''
+And most of the truly big scams in Orange County seem to originate in Newport Beach or one of the other well-heeled communities that surround this sliver-like city that hooks around a point of land on the California coast south of Los Angeles .
+In fact , sophisticated big-bucks boiler-room scams are known generically among law-enforcement types as `` Newport Beach '' operations .
+That contrasts with the penny-ante sales of things such as pen-and-pencil sets and office supplies that are known as `` Hollywood '' scams .
+Newport Beach telemarketers concentrate on precious metals and oil-leasing deals that typically cost thousands of dollars a shot .
+The investors range from elderly widows to affluent professionals .
+In one ingenious recent example of a Newport Beach boiler room , prospective investors in Capital Trust Inc. were allegedly told that their investment in precious metals was insured against losses `` caused by employees due to dishonesty , destruction or disappearance , '' according to an indictment handed up by a federal grand jury in Los Angeles last month .
+Thus falsely reassured , investors sent $ 11.4 million to the Newport Beach company , most of which was diverted to unauthorized uses , the indictment charges .
+Douglas Jones , an attorney representing Richard O. Kelly Sr. , the chairman and president of Capital Trust , says his client denies that there was any attempt to defraud investors .
+`` There were some business deals that went bad , '' Mr. Jones says , `` but no intent to defraud . ''
+Newport Beach operations differ from the Hollywood boiler rooms in style as well as in dollars .
+Traditionally , boiler rooms operate on the cheap , since few , if any , customers ever visit their offices .
+Indeed , the name derives from the tendency among telemarketing scammers to rent cheap basement space , near the boiler room .
+But , says Mr. Katz , the U.S. attorney , `` the interesting thing about Newport Beach operations is that they give themselves the indulgence of beautiful offices , with plush furnishings .
+When we go there , it 's quite different from these Hollywood places where the sandwiches are spread out on the table and the people are picking their noses . ''
+The Newport Beach operators also tend to indulge themselves privately .
+Investigators cite the case of Matthew Valentine , who is currently serving a six-year sentence at Lompoc Federal Prison for his role in Intech Investment Corp. , which promised investors returns of as much as 625 % on precious metals .
+Mr. Valentine , who pleaded guilty to five counts of fraud in federal court in Los Angeles , drove a leased Mercedes and lived in an expensive home on Lido Isle , an island in Newport 's harbor , according to investigators .
+With the $ 3 million received from investors , he took frequent junkets with friends to exotic locales and leased an expensive BMW for his girlfriend , whom he met at the shop where he got his custom-tailored suits .
+`` It 's amazing the amount of money that goes up their nose , out to the dog track or to the tables in Las Vegas , '' Mr. Katz says .
+All this talk of boiler rooms and fraud is unnerving to the city 's legitimate business element .
+Vincent M Ciavarella , regional manager of Property Management Systems , insists he does n't know of any bogus telemarketers operating in the 1.6 million square feet of office space around Fashion Island that his company leases for Irvine Co. , the owner and developer of the project .
+Mr. Ciavarella has rejected a few prospective tenants who provided `` incomplete '' financial information and acknowledges that illegitimate operators `` are not easily detectable .
+'' -LRB- Investigators stress that building owners are victims , too , since boiler rooms often leave without paying rent . -RRB-
+Richard Luehrs , president of the Newport Harbor Area Chamber of Commerce , calls boiler rooms a `` negative we wish we could get rid of . ''
+Actually , `` we do n't get much negative publicity about this , '' he insists , `` except for the press who write about it . ''
+Mr. Lancaster is deputy chief of The Wall Street Journal 's Dallas bureau .
+YOU WENT to college and thought you got an education .
+Now you discover that you never learned the most important lesson : How to send your kids to college .
+True , when you went to college , there was n't that much to learn .
+Stick some money in an interest-bearing account and watch it grow .
+Now , investment salesmen say it 's time to take some risks if you want the kind of returns that will buy your toddler a ticket to Prestige U. in 18 years .
+In short , throw away the passbook and go for the glory .
+The reason is cost .
+Nothing in the annals of tuition readied parents for the 1980s .
+Tuitions at private colleges rose 154 % in the 10 years ended in June of this year ; that 's twice the 77 % increase in consumer prices for the same period .
+A year at Harvard now goes for $ 19,395 .
+By 2007 , when this year 's newborns hit campus , a four-year Ivy League sheepskin will cost $ 300,000 , give or take a few pizzas-with-everything at exam time .
+Stanford , MIT and other utmosts will cost no less .
+So what 's a parent to do ?
+Some investment advisers are suggesting , in effect , a bet on a start-up investment pool -- maybe even on margin .
+Others prefer deep-discount zero-coupon bonds .
+Still others say , Why not take a chance on a high-octane growth fund ?
+`` You 're not going to make it in a 5 % bank account , '' says James Riepe , director of mutual funds at T. Rowe Price .
+To get the necessary growth , adds Murray Ruffel , a marketing official at the Financial Programs mutual-fund group , `` you need to go to the stock market . ''
+In other words , a little volatility never hurt .
+It never hurt anyone , that is , unless the growth funds do n't grow when you need them to .
+Or the zero-coupon bonds turn out not to have been discounted deeply enough to pay your kid 's tuition .
+That 's the dilemma for today 's parent .
+Although many experts are advising risk , no one has a good answer for you if the risk does n't pay off .
+Help may be on the way .
+The antitrust division of the Justice Department is investigating the oddly similar tuition charges and increases among the top schools .
+Fear of the price police could help cool things off in the 1990s .
+And then there 's always State U .
+But parents ' craving for a top-rated education for their children is growing like their taste for fancy wheels and vintage wine .
+Belatedly aware of public concern , lawmakers and financial middlemen are working overtime to create and sell college savings and investment schemes .
+Their message , explicit or implicit , is that a good college will cost so much by whenever you want it that the tried and true wo n't do anymore .
+Forget about Treasury bills or a money-market fund .
+The latest wave of marketing is instructive .
+Several outfits -- including the Financial Programs , Franklin , and T. Rowe Price mutual-fund groups and the Edward D. Jones brokerage house -- are advertising `` college planner '' tables and charts that tell you how much you need to put aside regularly .
+The calculations generally rely on an after-tax rate of return of 8 % annually -- a rate historically obtainable by the individual in only one place , the stock market .
+Most of the mailers are free , but Denver-based Financial Programs sells , for $ 15 , a version customized to the age of the child and the college of choice .
+The figures are shocking .
+To build a nest egg that would pay for Stanford when a current first-grader reaches college age , parents would need to set aside $ 773.94 a month -- for 12 years .
+They can cut this to $ 691.09 a month if the investing keeps up through college .
+And they can further reduce the monthly amount if they start saving earlier -- when mother and child come home from the hospital .
+Plugging a cheaper college into the formulas still does n't generate an installment most people can live with .
+Using a recent average private-school cost of about $ 12,500 a year , T. Rowe Price 's planner prescribes $ 450 monthly if the plan begins when the child is six .
+Since the formula assumes an 8 % before-tax return in a mutual fund , there would also be $ 16,500 in taxes to pay over the 12 years .
+Not everyone is so pessimistic .
+`` People are basically peddling a lot of fear , '' says Arthur Hauptman , a consultant to the American Council on Education in Washington .
+He takes issue with projections that do n't factor in students ' own contribution , which reduces most parents ' burden substantially .
+Still , he says , `` it 's no bad thing '' if all the marketing prods people into putting aside a little more .
+`` The situation you want to avoid is having somebody not save anything and hope they 'll be able to do it out of current income , '' he says .
+`` That 's crazy . ''
+His advice : Do n't panic .
+Parents , he says , should aim at whatever regular investment sum they can afford .
+Half the amount that the investment tables suggest might be a good goal , he adds .
+That way , parents will reduce borrowings and outlays from current income when the time comes to pay tuition .
+Mr. Hauptman reckons that the best investment choice is mutual funds because they are managed and over time have nearly kept up with the broad stock averages .
+He favors either an all-stock fund or a balanced fund that mixes both stocks and bonds .
+In their anxiety , however , parents and other student benefactors are flocking to new schemes .
+They have laid out about $ 1 billion for so-called baccalaureate zero-coupon municipal bonds -- so far offered by Connecticut , Illinois , Virginia and eight other states .
+And they have bought about $ 500 million in prepaid-tuition plans , offered in Michigan , Florida and Wyoming .
+The prepaid plans take payment today -- usually at current tuitions or at a slight discount -- for a promise that tuition will be covered tomorrow .
+The baccalaureate bonds -- tax-free , offered in small denominations and usually containing a provision that they wo n't be called before maturity -- seem to be tailor-made for college savers .
+Like other zeros , they pay all their interest at maturity , meaning that buyers can time things so that their bonds pay off just when Junior graduates from high school .
+Their compounding effect is also alluring .
+In June , Virginia sold bonds for $ 268.98 that will pay $ 1,000 in 2009 .
+But Richard Anderson , head of the Forum for College Financing Alternatives , at Columbia University , a research group partly financed by the federal government , says zeros are particularly ill-suited .
+Their price falls further than that of other bonds when inflation and interest rates kick up .
+That wo n't matter if they are held to maturity , but if , for any reason , the parents need to sell them before then , there could be a severe loss of principal .
+Had zeros been available in 1972 and had parents bought a face amount equal to four years ' tuition at the time , aiming for their children 's 1988 enrollment , they would have been left with only enough to pay for two years , Mr. Anderson figures .
+Most other bonds , however , would probably not have fared much better .
+The prepaid plans may be a good bet , provided the guarantee of future tuition is secure .
+Issuing states generally limit the guarantees to in-state institutions , however , and buyers get refunds without much interest if the children do n't attend the specified schools .
+Two private groups are seeking Securities and Exchange Commission approval for plans that could be more broadly transferable .
+Mr. Anderson wants the prestige colleges to sponsor such a plan .
+The issue here may be the soundness of the guarantee .
+Prepayments , much like mutual-fund purchases , are pooled for investment .
+Sponsors are naturally counting on their ability to keep ahead of tuition inflation with investment returns .
+But buyers are essentially betting on a start-up investment fund with no track record -- and some have been encouraged to borrow to do so .
+One problem is that the Internal Revenue Service has decided that the investment earnings and gains of the sponsors ' funds are taxable .
+The colleges , as educational institutions , had hoped that would n't be the case .
+Based on historical rates of return , Mr. Anderson reckons a 100 % stock portfolio , indexed to the market , would have kept up with tuition and taxes in the 20th century .
+But sponsors might not pick the stocks that will match the market .
+And they 're leaning more toward fixed income , whose returns after tax have trailed tuition increases .
+`` I 'm not sure they 're going to make it work , '' says Mr. Anderson .
+What happens if the sponsors do n't have the cash to pay the tuitions ?
+Florida and Wyoming have backed up their guarantees with the full faith and credit of the state governments , meaning that taxpayers will pick up any slack .
+Not so Michigan .
+Its plan is set up as an independent agency .
+The state says there 's no worry -- investment returns , combined with fees and the gains from unused plans , will provide all the cash it needs .
+Mr. Putka covers education from The Wall Street Journal 's Boston bureau .
+If you start saving for your child 's eduction on Jan. 1 , 1990 , here 's the monthly sum you will need to invest to pay for four years at Yale , Notre Dame and University of Minnesota .
+Figures assume a 7 % annual rise in tuition , fees , room and board and an 8 % annual investment return .
+Note : These figures are only for mandatory charges and do n't include books , transportation etc .
+\* For in-state students
+Source : PaineWebber Inc .
+AMONG THE CATFISH farmers in the watery delta land of Humphreys County , Miss. , Allen D. Tharp of Isola was one of the best known and most enterprising .
+He sold quarter-inch fingerlings to stock other farmers ' ponds , and he bought back one-pound-or-so food-fish that he `` live-hauled '' to market along with his own whiskery crop .
+And he nearly always bought and sold for cash .
+Along the way , Mr. Tharp omitted a total of $ 1.5 million from his receipts reported on federal tax returns for three years .
+The returns landed in the hands of an Internal Revenue Service criminal investigator , Samuel James Baker .
+Mr. Baker interviewed or wrote to hundreds of catfish farmers , live-haulers and processors throughout the South before coming up with detailed estimates of purchases and sales , in pounds and dollars , by Mr. Tharp and others .
+Unknown to Mr. Tharp , he had fouled his net on a special IRS project to catch catfish farmers and haulers inclined to cheat on their taxes .
+Confronted with the evidence , Mr. Tharp pleaded guilty to one charge of filing a false return and was fined $ 5,000 and sentenced to 18 months in prison .
+He also owes a lot of back taxes , interest and civil fraud penalties .
+A lot of taxpayers out there are n't as paranoid as one might think .
+Federal and state tax enforcers develop many group targets for investigation , on the basis of occupation , high income , type of income , or some other characteristic that may signal an opportunity or tendency to hide income or exaggerate deductions .
+Many professions long have seemed to be targets because of the exotic or ludicrous efforts of some members to offset high income with fake losses from phony tax shelters : dentists who invested in dubiously dubbed foreign films or airline pilots who raised racehorses on their days off .
+Mail-order ministers have been squelched .
+Now , television and radio evangelists are under scrutiny .
+The IRS recently won part of its long-running battle with the Church of Scientology over exemptions when the U.S. Supreme Court held that members ' payments to the church were n't deductible because the members received services in return .
+IRS statistics show that the more persistent hiders of income among sole proprietors of businesses include used-car dealers , entertainment producers , masons , roofers , and taxi owners .
+Small businesses in general account for almost 40 % of unreported personal income , the IRS has said .
+Once such abuses become so pervasive , the IRS builds another factor into its secret computer formula for selecting returns for audit and does n't need special projects for them .
+San Franciscans have a much higher incidence of audits than average because more of them score high under that formula , not because IRS agents envy their life styles .
+Many openings for mass cheating , such as questionable tax shelters and home offices , have gaped so broadly that Congress has passed stringent laws to close them .
+Deductions of charitable gifts of highly valued art now must be accompanied by appraisals .
+And laws requiring the reporting of more varieties of transactions have enabled the IRS to rely on computers to ferret out discrepancies with returns and to generate form-letter inquiries to taxpayers .
+Unreported alimony income can be spotted by computer because a payer of alimony -LRB- who gets a deduction -RRB- must report the former spouse 's Social Security number .
+Passport applicants now must give Social Security numbers , enabling the IRS to see whether Americans living abroad are filing required U.S. returns .
+But while IRS computers focus routinely on target groups like these , the agency has assigned many agents to special projects that need more personal attention .
+In most cases , the IRS says , these projects are local or regional , rather than national , and arise because auditors in an area detect some pattern of abuse among , say , factory workers claiming that having a multitude of dependents frees them from tax withholding or yacht owners deducting losses from sideline charter businesses .
+The national office currently has 21 noncriminal audit projects , according to Marshall V. Washburn , deputy assistant commissioner for examination .
+Auditors involved in noncriminal projects ca n't send anyone to jail , but they can make life miserable in other ways -- for one , by imposing some of the 150 different civil penalties for negligence , failure to file a return , and the like .
+The targeted audit groups include direct sellers -- people who sell cosmetics , housewares and other items door to door or at home parties -- and employers who label workers as independent contractors instead of employees , to avoid the employer share of payroll taxes .
+Other projects look for offenders among waiters who get cash tips , people who engage in large cash transactions , and people whose returns show they sold a home for a profit without reinvesting the capital gain in another home by the end of the same year ; the gain must be rolled over within two years to defer tax .
+And now that returns must show dependents ' Social Security numbers , the IRS wants to see which dependents show up on more than one return -- and which dependents turn out to be deceased .
+Impetus for the direct-seller project came from a congressional hearing some years back .
+It prompted an IRS study that found many sellers were concealing income and treating large amounts of nondeductible travel and other personal expenses as business costs , Mr. Washburn says .
+The study provided criteria for singling out returns of `` potentially noncompliant '' taxpayers who report low income and large expenses from a part-time business .
+The Tax Court recently denied business deductions by Mr. and Mrs. Peter S. Rubin of Cherry Hill , N.J. , who both were part-time distributors of Amway products in addition to their regular jobs as sales people in other fields .
+For 1984 , they reported gross income of $ 1,647 from Amway sales , offset by expenses totaling $ 16,746 -- including car costs of $ 6,805 and travel and entertainment costs of $ 5,088 .
+The Tax Court did n't believe that the Rubins , who earned $ 65,619 in their regular jobs , treated the sideline as a real business and derived `` merely incidental elements of recreation and other personal pleasure and benefits '' from it .
+The Direct Selling Association , a trade group , points out that its members , which include Amway Corp. , cooperate with the IRS to distribute tax-compliance material to sales people and are helping to prepare a public-service television program on the subject .
+The independent-contractor project , which began in 1988 , involves about 350 IRS agents .
+In the fiscal nine months ended June 30 , reports Raymond P. Keenan , assistant commissioner for collection , they examined about 13,000 employers , assessed more than $ 67 million in delinquent employment taxes , and reclassified about 56,000 workers as employees instead of self-employed contractors .
+The number of misclassified workers may be in the millions , mostly paid by small firms .
+Many workers , especially professionals , want to remain independent to avoid tax withholding and to continue to deduct many expenses that employees ca n't .
+But many others , who want to qualify for employee benefits and unemployment compensation , become tipsters for the IRS , says Jerry Lackey , who manages the IRS project 's force of nine agents in north and central Florida from Orlando .
+Firms that are paying employment taxes also provide leads to competitors that are n't , he says .
+In his area , Mr. Lackey continues , the miscreant employers most commonly are in construction -- doing framing , drywall , masonry and similar work .
+But a medical clinic with about 20 employees wrongly listed all of them -- including physicians and receptionists -- as independent contractors .
+The IRS assessed the clinic $ 350,000 in back payroll taxes .
+It assessed nearly $ 500,000 against a cruise-ship company that carried about 100 deckhands , cooks , bartenders , entertainers and other employees as self-employed independents .
+Revenue-short states also are becoming more aggressive pursuers of tax delinquents , and perhaps none tracks them down with more relish than does New York since it acquired an $ 80 million computer system in 1985 .
+The state 's tax enforcers have amassed data bases from other New York agencies that license or register professionals and businesses ; from exchange agreements with the IRS , 24 other states , and two Canadian provinces , and even from phonebook Yellow Pages .
+Thus armed for massive matching of documents by computer , they single out high-income groups , looking primarily for people who have n't filed New York income-tax returns .
+The state has combed through records relating to architects , stockbrokers , lawyers in the New York City area , construction workers from out of the state , and homeowners who claim to be residents of other states -- especially Florida , which has no personal income tax .
+Soon to feel the glare of attention are lawyers elsewhere in the state , doctors , dentists , and accountants , says Frederick G. Hicks , director of the tax-department division that develops the computer-matching programs .
+The department has collected over $ 6.5 million from brokers so far and recommended more than 30 of them for criminal prosecution .
+In the early stage of checking people with incomes exceeding $ 500,000 who were filing nonresident returns , it squeezed $ 7.5 million out of a man who was posing as a Florida resident .
+`` We think we can reclaim hundreds of millions of dollars just through the nonresident project , '' Mr. Hicks declares .
+Mr. Schmedel is editor of The Wall Street Journal 's Tax Report column .
+In finding `` good news '' in Berkeley 's new freshman admissions plan -LRB- `` The Privileged Class , '' editorial , Sept. 20 -RRB- , you 're reading the headline but not the story .
+The plan indeed raises from 40 % to 50 % the number of freshmen applicants admitted strictly by academic criteria .
+But that does n't mean `` half of the students attending Berkeley '' will be admitted this way .
+The plan is talking about applicants admitted , not students who enroll .
+Since the `` yield '' from this top slice of applicants is relatively low , boosting admits from 40 % to 50 % will boost registrants from about 31 % to 38 % of the class .
+In addition , perhaps 5 % of registrants will come from a new category consisting of applicants whose academic credentials `` narrowly missed '' gaining them admission in the first category .
+But against that combined increase of 12 % in students chosen by academic criteria , the plan eliminates a large category in which admissions now are based on grades , test scores and `` supplemental points '' for factors such as high-school curriculum , English-language proficiency and an essay .
+This category now accounts for about 19 % of admits and 22 % of registrants .
+The plan thus will decrease by 22 % , for a net loss of 10 % , the number of students admitted primarily by academic criteria .
+Who will take over these places ?
+The plan creates a new category of students from `` socioeconomically disadvantaged backgrounds , '' a concept not yet defined , and gives them about 10 % of the class .
+One of the plan 's authors has defended the `` socioeconomic disadvantage '' category as perhaps making more sense than the current affirmative-action preferences based on race .
+Perhaps it does .
+But the new category does not replace or reduce Berkeley 's broad racial preferences .
+Nor will students from racial-minority groups who are admitted through the new category be counted against the affirmative-action `` target '' for their group .
+The plan thus places a large new affirmative-action program , based on `` socioeconomic disadvantage , '' on top of the existing program based on race .
+The role of academic criteria in choosing Berkeley 's freshmen can only decline as a result .
+Stephen R. Barnett Professor of Law University of California Berkeley , Calif .
+FOR THOSE WHO DELIGHT in the misfortune of others , read on .
+This is a story about suckers .
+Most of us know a sucker .
+Many of us are suckers .
+But what we may not know is just what makes somebody a sucker .
+What makes people blurt out their credit-card numbers to a caller they 've never heard of ?
+Do they really believe that the number is just for verification and is simply a formality on the road to being a grand-prize winner ?
+What makes a person buy an oil well from some stranger knocking on the screen door ?
+Or an interest in a retirement community in Nevada that will knock your socks off , once it is built ?
+Because in the end , these people always wind up asking themselves the same question : `` How could I be so stupid ? ''
+There are , unfortunately , plenty of answers to that question -- and scam artists know all of them .
+`` These people are very skilled at finding out what makes a person tick , '' says Kent Neal , chief of the economic-crime unit of the Broward County State Attorney 's Office in Fort Lauderdale , Fla. , a major haven for boiler rooms .
+`` Once they size them up , then they know what buttons to push . ''
+John Blodgett agrees -- and he ought to know .
+He used to be a boiler-room salesman , peddling investments in oil and gas wells and rare coins .
+`` There 's a definite psychology of the sale and different personalities you pitch different ways , '' he says .
+The most obvious pitch , of course , is the lure of big returns .
+`` We 're all a little greedy .
+Everyone is vulnerable , '' says Charles Harper , associate regional administrator for the Securities and Exchange Commission in Miami .
+`` These guys prey on human frailties . ''
+While the promises of big profits ought to set off warning bells , they often do n't , in part because get-rich-quick tales have become embedded in American folklore .
+`` The overnight success story is part of our culture , and our society puts an emphasis on it with lotteries and Ed McMahon making millionaires out of people , '' says Michael Cunningham , an associate professor of psychology at the University of Kentucky in Louisville .
+`` Other people are making it overnight , and the rest who toil daily do n't want to miss that opportunity when it seems to come along . ''
+Adds Spencer Barasch , branch chief for enforcement at the SEC in Fort Worth , Texas : `` Why do people play the lottery when the odds are great against them ?
+People are shooting for a dream . ''
+Clearly , though , scam artists have to be a bit more subtle than simply promising millions ; the psychology of suckers is n't simply the psychology of the greedy .
+There 's also , for instance , the need to be part of the in-crowd .
+So one popular ploy is to make a prospective investor feel like an insider , joining an exclusive group that is about to make a killing .
+Between 1978 and 1987 , for instance , SH Oil in Winter Haven , Fla. , sold interests in oil wells to a very select group of local residents , while turning away numerous other eager investors .
+The owner of the company , Stephen Smith , who has since pleaded guilty to state and federal fraud charges , confided to investors that he had a secret agreement with Amoco Oil Co. and said the location of his wells was confidential , according to a civil suit filed in a Florida state court by the Florida comptroller 's office .
+Neither the Amoco agreement nor the wells existed , the suit alleged .
+Such schemes , says Tony Adamski , chief of the financial-crimes unit of the Federal Bureau of Investigation in Washington , D.C. , appeal to investors ' `` desire to believe this is really true and that they are part of a chosen group being given this opportunity . ''
+At times , salesmen may embellish the inside information with `` the notion that this is some slightly shady , slightly illegal investment the person is being included in , '' says Mr. Cunningham .
+In appealing to those with a bit of larceny in their hearts , the fraud artist can insist that a person keep an investment secret -- insulating himself from being discovered and keeping his victim from consulting with others .
+It also adds to the mystery of the venture .
+Mr. Blodgett , the boiler-room veteran , believes that for many investors , the get-rich-quick scams carry a longed-for element of excitement .
+`` Once people got into it , I was allowing them to live a dream , '' he says .
+He phoned them with updates on the investment , such as `` funny things that happened at the well that week , '' he says .
+`` You gave them some excitement that they did n't have in their lives . ''
+-LRB- Mr. Blodgett , who was convicted in Florida state court of selling unregistered securities and in California state court of unlawful use of the telephone to defraud and deceive , is now on probation .
+He says he has quit the business and is back in school , majoring in psychology with aspirations to go into industrial psychology . -RRB-
+For some investors , it 's the appearances that leave them deceived .
+`` The trappings of success go a long way -- wearing the right clothes , doing the right things , '' says Paul Andreassen , an associate professor of psychology at Harvard .
+Conservative appearances make people think it 's a conservative investment .
+`` People honestly lose money on risky investments that they did n't realize were a crapshoot , '' he says .
+Paul Wenz , a Phoenix , Ariz. , attorney , says a promise of unrealistic returns would have made him leery .
+But Mr. Wenz , who says he lost $ 43,000 in one precious-metals deal and $ 39,000 in another , says a salesman `` used a business-venture approach '' with him , sending investment literature , a contract limiting the firm 's liability , and an insurance policy .
+When he visited the company 's office , he says , it had `` all the trappings of legitimacy . ''
+Still others are stung by a desire to do both well and good , says Douglas Watson , commanding officer of the Los Angeles Police Department 's bunko-forgery division .
+Born-again Christians are the most visible targets of unscrupulous do-gooder investment pitches .
+But hardly the only ones : The scams promise -- among other things -- to help save the environment , feed starving families and prevent the disappearance of children .
+Psychologists say isolated people who do n't discuss their investments with others are particularly at risk for fraud .
+Scam artists seek out such people -- or try to make sure that their victims isolate themselves .
+For instance , salesmen may counter a man 's objection that he wants to discuss an investment with his wife by asking , `` Who wears the pants in your family ? ''
+Or an investor who wants his accountant 's advice may be told , `` You seem like a guy who can make up his own mind . ''
+Often con artists will try to disarm their victims by emphasizing similarities between them .
+William Lynes , a retired engineer from Lockheed Corp. , says he and his wife , Lily , warmed to the investment pitches of a penny-stock peddler from Stuart-James Co. in Atlanta after the broker told them he , too , had once worked with Lockheed .
+The Lyneses , of Powder Springs , Ga. , have filed suit in Georgia state court against Stuart James , alleging fraud .
+They are awaiting an arbitration proceeding .
+They say the broker took them out for lunch frequently .
+He urged them to refer their friends , who also lost money .
+-LRB- Donald Trinen , an attorney for the penny-brokerage firm , denies the fraud allegations and says the Lyneses were fully apprised that they were pursuing a high-risk investment . -RRB-
+`` It 's not uncommon for these guys to send pictures of themselves or their families to ingratiate themselves to their clients , '' says Terree Bowers , chief of the major-frauds section of the U.S. attorney 's office in Los Angeles .
+`` We 've seen cases where salesmen will affect the accent of the region of the country they are calling .
+Anything to make a sale . ''
+Experts say that whatever a person 's particular weak point , timing is crucial .
+People may be particularly vulnerable to flim-flam pitches when they are in the midst of a major upheaval in their lives .
+`` Sometimes when people are making big changes , retiring from their jobs , moving to a new area , they lose their bearings , '' says Maury Elvekrog , a licensed psychologist who is now an investment adviser and principal in Seger-Elvekrog Inc. , a Birmingham , Mich. , investment-counseling firm .
+`` They may be susceptible to some song and dance if it hits them at the right time . ''
+They are obviously also more susceptible when they need money - retirees , for instance , trying to bolster their fixed income or parents fretting over how to pay for a child 's college expenses .
+`` These people are n't necessarily stupid or naive .
+Almost all of us in comparable circumstances might be victimized in some way , '' says Jerald Jellison , a psychology professor at the University of Southern California in Los Angeles .
+Nick Cortese thinks that 's what happened to him .
+Mr. Cortese , a 33-year-old Delta Air Lines engineer , invested some $ 2,000 in penny stocks through a broker who promised quick returns .
+`` We were saving up to buy a house , and my wife was pregnant , '' says Mr. Cortese .
+`` It was just before the Christmas holidays , and I figured we could use some extra cash . ''
+The investment is worth about $ 130 today .
+`` Maybe it was just a vulnerable time , '' says Mr. Cortese .
+`` Maybe the next day or even an hour later , I would n't have done it . ''
+Ms. Brannigan is a staff reporter in The Wall Street Journal 's Atlanta bureau .
+Prices for seats on the New York Stock Exchange are recovering a bit after hitting a four-year low earlier this month .
+Two seats on the Big Board were sold yesterday for $ 455,000 , and then $ 500,000 .
+The previous sale was $ 436,000 on Oct. 17 ; the last time prices were that low was November 1985 , when a seat sold for $ 425,000 .
+Prices peaked at $ 1,150,000 in September 1987 .
+Seats are currently quoted at $ 430,000 bid and $ 525,000 asked .
+FOX HUNTING HAS been defined as the unspeakable in pursuit of the inedible , but at least it 's exercise .
+At least it has a little dash .
+Most of us have to spend our time on pursuits that afford neither , drab duties rather than pleasures .
+Like trying to buy life insurance , for instance , an endeavor notably lacking in dash .
+Call it the uninformed trudging after the incomprehensible .
+But sooner or later , most of us have to think about life insurance , just as we often have to think about having root-canal work .
+And my time has come .
+I 'm 33 , married , no children , and employed in writing stories like this one .
+In times past , life-insurance salesmen targeted heads of household , meaning men , but ours is a two-income family and accustomed to it .
+So if anything happened to me , I 'd want to leave behind enough so that my 33-year-old husband would be able to pay off the mortgage and some other debts -LRB- though not , I admit , enough to put any potential second wife in the lap of luxury -RRB- .
+Figuring that maybe $ 100,000 to $ 150,000 would do but having no idea of what kind of policy I wanted , I looked at the myriad products of a dozen companies -- and plunged into a jungle of gibberish .
+Over the past decade or two , while I was thinking about fox hunting , the insurance industry has spawned an incredible number of products , variations on products , and variations on the variations .
+Besides term life and whole life -LRB- the old standbys -RRB- , we now have universal life , universal variable life , flexible adjustable universal life , policies with persistency bonuses , policies festooned with exotic riders , living benefit policies , and on and on .
+What to do ?
+First , generalize .
+Shorn of all their riders , special provisions , and other bells and whistles , insurance policies can still be grouped under two broad categories : so-called pure insurance , which amasses no cash value in the policy and pays off only upon death , and permanent insurance , which provides not only a death benefit but also a cash value in the policy that can be used in various ways while the insured is still alive .
+If all you want is death-benefit coverage , pure insurance -- a term policy -- gives you maximum bang for your buck , within limits .
+It 's much cheaper than permanent insurance bought at the same age .
+But `` term '' means just that ; the policy is written for a specific time period only and must be renewed when it expires .
+It may also stipulate that the insured must pass another medical exam before renewal ; if you flunk -- which means you need insurance more than ever -- you may not be able to buy it .
+Even if you 're healthy and can renew , your premium will go up sharply because you 're that much older .
+So term insurance may not be as cheap as it looks .
+There are all sorts of variations on term insurance : policies structured to pay off your mortgage debt , term riders tacked on to permanent insurance , and many others .
+One variation that appealed to me at first was the `` Money Smart Term Life '' policy offered by Amex Life Insurance Co. , the American Express unit , to the parent company 's credit-card holders .
+Upon examination , however , I wondered whether the plan made a lot of sense .
+Amex said it would charge me $ 576 a year for $ 100,000 of coverage -- and would pay me back all the premiums I put in if I canceled the policy after 10 years .
+Sounds great -- or does it ?
+First , if I canceled , I 'd have no more insurance , a not insignificant consideration .
+Second , the $ 5,760 I 'd get back would be much diminished in purchasing power by 10 years of inflation ; Amex , not I , would get the benefit of the investment income on my money , income that would have exceeded the inflation rate and thus given the company a real profit .
+Third and most important , Amex would charge me a far higher premium than other reputable companies would on a straight term policy for the same amount ; I 'd be paying so heavily just to have the option of getting my premiums back that I 'd almost have to cancel to make the whole thing worthwhile .
+That would be all right with Amex , which could then lock in its investment profit , but it does n't add up to a `` smart money '' move for me .
+Which goes to show that the First Law applies in insurance as in anything else : There is no free lunch , there is only marketing .
+And the Second Law , unique to insurance ?
+If I die early , I win -- a hollow victory , since I ca n't enjoy it -- and if I live long , the insurer wins .
+Always .
+This is worth remembering when insurers and their salesmen try to sell you permanent insurance , the kind that amasses cash value .
+The word `` death '' can not be escaped entirely by the industry , but salesmen dodge it wherever possible or cloak it in euphemisms , preferring to talk about `` savings '' and `` investment '' instead .
+The implication is that your permanent-insurance policy is really some kind of CD or mutual-fund account with an added feature .
+That is gilding the lily .
+The fact is that as a savings or investment vehicle , insurance generally runs a poor second to any direct investment you might make in the same things the insurance company is putting your money into .
+That 's because you have to pay for the insurance portion of the policy and the effort required to sell and service the whole package .
+Again , no free lunch .
+This is reflected in a built-in mortality cost -- in effect , your share of the company 's estimated liability in paying off beneficiaries of people who had the effrontery to die while under its protection .
+And in most cases , a huge hunk of your premium in the initial year or two of the the policy is , in effect , paying the salesman 's commission as well ; investment returns on most policies are actually negative for several years , largely because of this .
+So view permanent insurance for what it is -- a compromise between pure insurance and direct investment .
+The simplest , most traditional form of permanent insurance is the straight whole life policy .
+You pay a set premium for a set amount of coverage , the company invests that premium in a portfolio of its choosing , and your cash value and dividends grow over the years .
+One newer wrinkle , so called single-premium life -LRB- you pay for the whole policy at once -RRB- , has been immensely popular in recent years for tax reasons ; the insured could extract cash value in the form of policy `` loans , '' and none of the proceeds were taxable even though they included gains on investment .
+Congress closed this loophole last year , or thought it did .
+However , Monarch Capital Corp. of Springfield , Mass. , has developed a `` combination plan '' of annuity and insurance coverage that it says does not violate the new regulations and that allows policy loans without tax consequences .
+But the percentage of your cash reserve that you can borrow tax-free is very small .
+I 'm not prepared in any case to put that much money into a policy immediately , so I look into the broad category called universal life .
+Hugely popular , it is far more flexible than straight whole life .
+I can adjust the amount of insurance I want against the amount going into investment ; I can pay more or less than the so-called target premium in a given year ; and I can even skip payments if my cash reserves are enough to cover the insurance portion of the policy .
+In looking at these and other policies , I learn to ask pointed questions about some of the assumptions built into `` policy illustrations '' -- the rows of numbers that show me the buildup of my cash values over the years .
+They commonly give two scenarios : One is based on interest rates that the company guarantees -LRB- usually 4 % to 4.5 % -RRB- and the other on the rate it is currently getting on investment , often 8.5 % or more .
+Projecting the latter over several decades , I find my cash buildup is impressive -- but can any high interest rate prevail for that long ?
+Not likely , I think .
+Also , some policy illustrations assume that mortality costs will decline or that I will get some sort of dividend bonus after the 10th year .
+These are not certain , either .
+Companies `` are n't comfortable playing these games , but they realize they 're under pressure to make their policies look good , '' says Timothy Pfiefer , an actuarial consultant at Tillinghast , a unit of Towers Perrin Co. , the big New York consulting firm .
+Another factor to consider : Some of the companies currently earning very high yields are doing so through substantial investment in junk bonds , and you know how nervous the market has been about those lately .
+There are seemingly endless twists to universal life , and it pays to ask questions about all of them .
+At a back-yard barbecue , for example , a friend boasts that she 'll only have to pay premiums on her John Hancock policy for seven years and that her death benefits will then be `` guaranteed . ''
+I call her agent , David Dominici .
+Yes , he says , premiums on such variable-rate coverage can be structured to `` vanish '' after a certain period -- but usually only if interest rates stay high enough to generate sufficient cash to cover the annual cost of insurance protection .
+If interest rates plunge , the insurer may be knocking on my door , asking for steeper premium payments to maintain the same amount of protection .
+I do n't like the sound of that .
+Some insurers have also started offering `` persistency bonuses , '' such as extra dividends or a marginally higher interest yield , if the policy is maintained for 10 years .
+But Glenn Daily , a New York-based financial consultant , warns that many of these bonuses are `` just fantasies , '' because most are n't guaranteed by the companies .
+And the feature is so new , he adds , that no insurer has yet established a track record for actually making such payments .
+So-called living-benefits provisions also merit a close inspection .
+Offered by insurers that include Security-Connecticut Life Insurance Co. , Jackson National Life Insurance Co. , and National Travelers Life Insurance Co. , these policy riders let me tap a portion of my death benefits while I 'm still alive .
+Some provisions would let me collect a percentage of the policy 's face value to pay for long-term care such as nursing-home stays ; others would allow payments for catastrophic illnesses and conditions such as cancer , heart attarcks , renal failure and kidney transplants .
+But the catastrophic events for which the policyholder can collect are narrowly defined , vary from policy to policy , and generally permit use of only a small fraction of the face amount of insurance .
+Also , financial planners advising on insurance say that to their knowledge there has not yet been a tax ruling exempting these advance payments from taxes .
+And considering the extra cost of such provisions , some figure that people interested in , say , paying for extended nursing-home care would be better off just buying a separate policy that provides it .
+I 'm more favorably impressed by `` no-load life , '' even though it turns out to be low-load life .
+Insureres selling these policies market them directly to the public or otherwise do n't use commissioned salesmen ; there is still a load -- annual administrative fees and initial `` setup '' charges -- but I figure that the lack of commission and of `` surrender fees '' for dropping the policy early still saves me a lot .
+I compared one universal policy for $ 130,000 face amount from such an insurer , American Life Insurance Corp. of Lincoln , Neb. , with a similar offering from Equitable Life Assurance Society of the U.S. , which operates through 11,000 commissioned salesmen .
+After one year I could walk away from the Ameritas policy with $ 792 , but Id get only $ 14 from the Equitable .
+The difference is magnified by time , too .
+At age 65 , when I 'd stop paying premiums , the Ameritas offering would have a projected cash value $ 14,000 higher than the other , even though the Equitable 's policy illustration assumed a fractionally higher interest rate .
+Did I buy it ?
+Well , not yet .
+I 'm thinking about using the $ 871 annual premium to finance a trip to Paris first .
+A person can do some heavy thinking about insurance there -- and shop for something more exciting while she 's doing it .
+Rorer Group Inc. will report that third-quarter profit rose more than 15 % from a year earlier , though the gain is wholly due to asset sales , Robert Cawthorn , chairman , president and chief executive officer , said .
+His projection indicates profit in the latest quarter of more than $ 17.4 million , or 55 cents a share , compared with $ 15.2 million , or 48 cents a share , a year ago .
+Mr. Cawthorn said in an interview that sales will show an increase from a year ago of `` somewhat less than 10 % . ''
+Through the first six months of 1989 , sales had grown about 12 % from the year-earlier period .
+Growth of 10 % would make sales for the latest quarter $ 269 million , compared with $ 244.6 million a year ago .
+Mr. Cawthorn said the profit growth in the latest quarter was due to the sale of two Rorer drugs .
+Asilone , an antacid , was sold to Boots PLC , London .
+Thrombinar , a drug used to stanch bleeding , was sold to Jones Medical Industries Inc. , St. Louis .
+He said Rorer sold the drugs for `` nice prices '' and will record a combined , pretax gain on the sales of $ 20 million .
+As the gain from the sales indicates , operating profit was `` significantly '' below the year-earlier level , Mr. Cawthorn said .
+Rorer in July had projected lower third-quarter operating profit but higher profit for all of 1989 .
+He said the company is still looking for `` a strong fourth quarter in all areas -- sales , operating income and net income . ''
+Mr. Cawthorn attributed the decline in third-quarter operating profit to the stronger dollar , which reduces the value of overseas profit when it is translated into dollars ; to accelerated buying of Rorer products in the second quarter because of a then-pending July 1 price increase , and to higher marketing expenses for Rorer 's Maalox antacid , whose sales and market share in the U.S. had slipped in the first half of 1989 .
+He said Rorer opted to sell Asilone and Thrombinar to raise revenue that would `` kick start '' its increased marketing efforts behind Maalox , still its top-selling product with about $ 215 million in world-wide sales in 1988 .
+`` We had underfunded Maalox for a year , '' he said , because the company was concentrating on research and development and promoting other drugs .
+He said Rorer will spend $ 15 million to $ 20 million more on Maalox advertising and promotion in the second half of 1989 than in the year-earlier period .
+A `` big chunk '' of that additional spending came in the third quarter , he said .
+Hoechst AG said it will stop producing fertilizer in 1990 because of continued losses and a bleak outlook .
+The West German chemical concern said it will close the last remaining fertilizer plant in Oberhausen in the fall of next year .
+Hoechst said the fertilizer market faces overcapacity in Western Europe , rising imports from East bloc countries and overseas , and declining demand .
+HomeFed Corp. said its main subsidiary , Home Federal Savings & Loan , converted from a federal savings and loan to a federal savings bank and changed its name to HomeFed Bank .
+The federal Office of Thrift Supervision approved the conversion last Friday , HomeFed said .
+The change in charter does n't alter the federal insurance of deposits , federal regulatory powers or company operations , a spokesman said .
+It was the second anniversary of the 1987 crash , but this time it was different .
+Stocks rallied on good earnings reports and on data that showed less inflation than expected .
+Blue chips led the march up in heavy trading .
+The Dow Jones Industrial Average rose 39.55 points to 2683.20 .
+The 30 industrials led the market higher from the opening bell as foreign buyers stepped in .
+By afternoon , the broader market joined the advance in full strength .
+Standard & Poor 's 500-stock Index rose 5.37 to 347.13 and the Nasdaq composite index jumped 7.52 to 470.80 .
+New York Stock Exchange volume swelled to 198,120,000 shares .
+The industrials were up about 60 points in the afternoon , but cautious investors took profits before the close .
+Traders said a variety of factors triggered the rally .
+The consumer price index rose 0.2 % in September , while many economists were looking for a 0.4 % increase .
+Stock-index arbitrage buy programs -- in which traders buy stock against offsetting positions in futures to lock in price differences -- helped the rally 's momentum .
+The euphoria was such that investors responded to good earnings reports of companies such as American Express , while ignoring the disappointing profits of companies such as Caterpillar , analysts said .
+Stock-index arbitrage trading was a minor influence in yesterday 's rally , traders said .
+Institutional buyers were the main force pushing blue chips higher .
+To the amazement of some traders , takeover stocks were climbing again .
+Hilton rose 2 7\/8 to 100 , for example .
+Last Friday , takeover traders spilled out of Hilton , knocking the stock down 21 1\/2 to 85 .
+Among other stocks involved in restructurings or rumored to be so : Holiday Corp. gained 1 7\/8 to 73 and Honeywell rose 2 7\/8 to 81 1\/2 .
+One floor trader noted in astonishment that nobody seemed to mind the news that British Airways is n't making a special effort to revive the UAL buy-out .
+The announcement of the buy-out 's troubles triggered the market 's nose dive a week ago .
+Takeover enthusiasm may have been renewed when an investor group disclosed yesterday that it had obtained all the financing required to complete its $ 1.6 billion leveraged buy-out of American Medical International .
+`` That 's put some oomph back into this market , '' said Peter VandenBerg , a vice president of equity trading at Shearson Lehman Hutton .
+But some traders thought there was less to the rally than met the eye .
+`` There is no strength behind this rally , '' asserted Chung Lew , head trader at Kleinwort Benson North America .
+`` It 's traders squaring positions .
+It 's not good ; the market is setting up for another fall . ''
+Indeed , many traders said that uncertainty about today 's monthly expiration of stocks-index futures and options , and options on individual stocks , prompted a lot of buying by speculative traders who were unwinding positions that were bets on declining stock prices .
+The number of outstanding contracts in the October Major Market Index jumped from 5,273 on Friday to 9,023 on Monday .
+The MMI is a 20-stock index that mimics the Dow Jones Industrial Average .
+Outstanding contracts are those that remain to be liquidated .
+By Wednesday , the outstanding October contracts amounted to 8,524 , representing about $ 1.13 billion in stock , noted Donald Selkin , head of stock-index futures research at Prudential-Bache Securities , who expects a volatile expiration today .
+`` There has been a tremendous increase '' in MMI positions , Mr. Selkin said .