AABR
Business Bulletin
I.
General
.
The
Gallery of Rogues is starting to fill: Anne Mulcahy (Xerox),,
Jon Rigas (Adelphia Communications),
Chuck Watson (Dynegy), ‘ Ken
Lay, Jeff Skilling and Andy Fastow (Enron),
Martin Gross (Rite Aid), Gary
Winnick (Global Crossing), (Samuel
Waksal (ImClone), Joe Nacchio (Qwest
Communications), Dennis Kozlowski (Tyco
Intl), Bernard Ebbers & Scott Sullivan (WorldCom),
(Joseph Barardino (Arthur Andersen),
, Martha Stewart (Living Omnimedia),.
What they did was supposed to happen
only in Third World countries. These white collar crooks have gotten off too
easily for too long. They should face jail terms. This is the only way to
restore the confidence of the American people in our financial institutions.
.
According
to S&P, five significant companies overstate profits the most: Raytheon may be reporting profits that are nearly 9,000% over its
core value real numbers; Perkin-Elmers
is 7,274% overstated; The Gap
1,047%; Apple Computer 1,003%; and Yahoo!
956%.
.
Five of
the above, e.g. WorldCom, Enron,
ImClone, Tyco & Adelphia have wiped out more than $365 billion of
investors’ money with little chance of ever recouping. They reveal a dirty
underbelly of corporate corruption, phony books, self-dealing boards, and
good old-fashioned lying.
.
Competition by cheating has become the modus operandi for many telecom
companies, e.g., AT&T, Sprint, MCI, Qwest, etc. Main complaints involve
services not rendered, false and misleading ads (5 cents a minute weekly or
weekend), slamming, switching phone services without customers’ consent,
among others. Do you understand the line items, e.g. fees, taxes,
surcharges, universal service fee (up to 12% of bill) in your phone bill?
They answer questions their lobbyist, US Telecom Assn. In Washington. This
is one of the abysmal failures in deregulation. We
are the losers who pay more for falling services.
II. Private Sector
.
All the
big issues facing the stock market are negative—The dollar is declining,
earning estimates keep getting revised lower, corporate malfeasance and
accounting scandals continue to erupt daily, and the Middle East is still a
tinderbox.
.
The
majority of corporate ethics officers polled by the Conference Board
predicted multiple ethics scandals, defined as those causing more than $200
million in lost shareholder value, during the coming year.
.
WorldCom has 20 million customers and 80,000 employees. The core of its business
is phone and date service to large corporate clients. Filing for bankruptcy
protection would cost it too many large corporate and Govt. clients that
don’t do business with companies in Chapter 11.
. AOL,
Microsoft & Yahoo have
labeled 93% of their pages with a content-assessment system. The sites said
that labels comply with the Internet Content Rating Assn.’s guidelines.
ICRA is a nonprofit organization trying to protect children from adult
content while respecting free speech.
II.
Federal Government
.
A good
example of lack of accountability in Congress is Sen. Phil Gramm (R-TX) who
is the leading opponent of accounting reforms. His wife (Wendy) was one of
the Enron directors who let the company get away with some of the most
egregious corporate conniving ever since. He is retiring from politics.
.
With the
failure of the House & Senate
to pass a single regular appropriations bill 6 months into the session,
Democrats and Republicans are taking turns blaming each other for the
impasse.
.
Imagine
working for a company that has little more than 500 employees, and has the
following statistics: 29 accused of spousal abuse, 7 arrested for fraud, 19
accused for writing bad checks, 117 directly or indirectly bankrupted at
least 2 businesses, 3 jailed for assault, 71 ineligible for credit card due
to bad credit, 8 arrested for shoplifting, 21 currently defendants in
lawsuits, and 84 arrested for DUI in the past year. What is this
organization? The 535-member US Congress, the same group that crank out
hundreds of new laws each year designed to get the rest of us in line.
III.
International
.
IDC Asia
Pacific said wireless spending in the Asia
Pacific region, excluding Japan, is expected to reach $75 billion by the
end of the year, up from $60 billion last year.
.
Salomon
Smith Barney is upbeat on the Asia telecom sector due to the ability of
carriers to generate strong free cash flow.
.
China’s consumer prices fell for the 3rd consecutive month last month
as companies slashed prices to survive restructuring and foreign
competition.
.
A
Chinese trade official has called on developed nations to do more to bridge
the “digital divide” saying high software prices were constraining the
development of poor countries.
.
The
number of bankruptcy petitions has leveled off as Hongkong’s
economy emerges from its severe recession in a generation.
.
Japan’s financial regulator ordered the nation’s largest bank (Mizuho Holdins
Inc) to improve its operations after determining that its recent massive
computer malfunction, which disrupted millions of individual and business
productions for weeks, reflected a failure of management.
.
Singapore Telecommunications said last week that it has launched an international
wholesale voice service, which is expected to earn revenues of $50 million
in is first year.
.
The Thai electronics sector, the second-worst performing sector in the
domestic market this year, is finding it tough to recover as uncertainty
dogs global technology stocks.
.
Chinese-run
wireless equipment maker UT Starcom says it has signed its first contract in
Vietnam for a local wireless
telephone system that it has made popular in China.
