|
The ranks of older women are swelling with those who divorced and have not remarried. Among the nearly 12 million women in their late 50's and early 60's, for example, 14.4% were divorced as of 1998, the most recent Census Bureau number. That was up from 3.8% in 1965 and 9.9% in 1990. Widows, in contrast, declined to 13.2% in 1998 from 21.6% in 1965 and 17.2% in 1990. Retirement is financially easier for men. While most women in their 60's took time off to raise children - and younger women often still do - men worked through their adult lives, qualifying for larger pensions. Men's higher wages also gave them an edge. The median weekly wage of a woman working full time today is only 76% of a man's weekly median, the Labor Department reports - qualifying women for smaller pensions. And women are less likely to hold jobs that include company pensions than are men. Putting all these advantages together, men over the age of 65 average nearly $30,000 a year in income, double the average for women. Most older women are still married, the most likely avenue to sufficient income in old age. But even married women increasingly delay retirement. The satisfactions of a career keep many in the workplace, but so does the desire to build up retirement benefits to supplement the often less than adequate pensions of their husbands. Men's retirement income has been whittled down by layoffs, job changes, wage freezes, premature retirement and the gradual shift from pensions financed by companies to retirement income based on an employee's own savings in a 401(k)-style plan. As a result of the various pressures, the labor force participation rates of women in their early 60's - covering those holding jobs or hunting for them - rose to a record 40.1% last year from 32.6% in 1981, and there has been a similar steady rise among women in their late 60's. The proportion of older men in the labor force, in contrast, has fallen significantly the last 30 years, although recently it has inched up. A Policy Implication Divorced older women are particularly opposed to channeling some of the Social Security tax into private retirement accounts, on the ground that the diverted money in a man's private account would be out of reach of his former wife. Under current law, a divorced woman has rights to a share of her ex-husband's Social Security pension, if the marriage lasted at least 10 years.
Income from pension plans comprised an average of 12% of pretax operating income at the 158 companies in the S&P's 500-stock index that report pension income, according to the report. The study's conclusions raise concerns that earnings could be more vulnerable to market downturns, because investment returns and, in turn, pension earnings could be reduced. The potential for earnings management arises from increases in companies' expected rate of return on pension assets, which is typically around 8% to 10%, and is a key factor in determining how much pension income can be readily factored into earnings. Thirty-four companies, the analyst said, including IBM and Verizon, raised their expected return rates and thus helped their earnings without apparent justification, based on past performance. The 34 companies singled out by Ms. Adams increased their expected rates of return even though their actual pension returns for 2000 both failed to come up to the expected rate of return and declined from 1999's actual returns. Just this week, a separate report from Morgan Stanley questioned pension accounting at Qwest Communications, which had pension income in 2000 that was 2 1/2 times its total pretax operating earnings. Morgan Stanley suggested that Qwest was increasing its expected pension return rate in order to help earnings. Qwest has disputed the accuracy of the report.
Did the Fed inadvertently kill the cycle-free Goldilocks economy of the 1990s? `Interest rate changes have been accelerating at a dizzying pace,' says David Ranson, an economist at H.C. Wainwright & Co. Economics in Boston. `As a result, the economy is now going to swing from boom to bust and back again.' In many ways, the 1990s resembled the 1960s for the U.S. economy. To varying degrees, both periods boasted brisk growth, low inflation and significant equity market gains. What set the 1960s and 1990s apart was the absence of the business cycle. Another common thread between the two episodes was a lack of Fed activism, Ranson points out. A coincidence? In the six years between September 1992 and September 1998, the Fed altered short-term rates by a total of 400 basis points, resulting in an average of roughly 60 basis points per year. This period of relative Fed inactivity coincided with the longest and most prosperous U.S. expansion on record. The 1960s saw a similar period of passivity at the Fed. In the 2.75 years since September 1998, the central bank has changed rates by 500 basis points, an average of 180 basis points per year. Coincidence or not, the first decade of the new millennium is beginning to look a lot like the boom and bust cycles of the 1970s and 1980s. `That could be bad news for Wall Street and Main Street since the single best environment for economic growth and outstanding stock-market performance is interest rate stability,' says Kenneth Mayland, president of ClearView Economics in Pepper Pike, Ohio. The result could be more cyclical economic growth and stock performance with lower growth and returns than in the 1960s and 1990s. Historically, Ranson says, the Fed reversed the direction of its interest-rate policies once every two to three years, leading to a business cycle that repeated itself, on average, every five years. Recent developments suggest the process is taking place more quickly. At the rate the Fed is now reversing itself, the resulting cycle may operate at twice the frequency of the old one - a period of 2 1/2 years.
Then came stores that charged everyone the same no-haggling-allowed price. Now, technology is attacking that - and not just on the Internet. Faster computers, more sophisticated analysis and huge amounts of data that retailers are collecting allow grocers, drugstores, mortgage lenders, computer makers and other merchants to charge you a "special price" without exactly saying so. Just because technology makes this possible doesn't mean it will happen soon. Pricing managers across the economy were spooked by the uproar that followed Amazon.com's experiment last fall with charging different prices for the same DVD on the same day. Consumer worries about privacy limit retailers' willingness and, sometimes, ability to use data they've collected. And there will be losers: Consumers who are charged less won't complain; those charged more may. But smart merchants are relearning the tailor's savvy about the customer's perceptions. Amazon.com's biggest mistake was getting caught. Don't charge anyone more, consultants advise. Just charge some less. It sounds impossible, yet that's how coupons work, and that's what is happening as computers turn pricing from art to science. Pricing changed when airline deregulation in 1978 forced airlines to compete on price. At the time, air travel seemed a special case. The product is perishable; an empty seat can't be sold later. Prices were posted electronically and thus were easy to change. In 1985, American Airlines figured out how to adjust prices automatically to maximize revenue. A tourist who books a month in advance pays less than an executive who booked the day before. Other airlines, hotel chains and rental-car companies followed. Airlines weren't unique. Now Dell Computer charges one price on its Web site for small firms, another on a site for local government. EBay auctions set prices one buyer at a time. But the big action in pricing is off the Internet, and that's where most people shop. Until recently, big mortgage lenders offered every accepted applicant the same interest rate. Today, their computers draw increasingly fine distinctions and are programmed to offer higher-rate mortgages to slightly riskier applicants who otherwise would have been turned away. Computers make separating sterling risks from ordinary risks easy. The obstacle: Charging the best risks (read rich) a bit less and others a bit more is ugly. But it's probably inevitable. Grocery stores appear to be the model of one price for all. But even today, they post one price, charge another to shoppers willing to clip coupons and a third to those with frequent-shopper cards that allow stores to collect detailed data on buying habits. With help from sophisticated software, big chains use that data to boost revenue by raising some prices and cutting others. The next steps are already in sight. Pricing is moving from the product to the store to the individual consumer. Some chains automatically dispatch diaper coupons when a frequent shopper buys baby food but not diapers. Next: Once the computer notes that a regular customer stocks up on Progresso tomato sauce every time it goes on sale, the computer will simply offer the sales price automatically at the cash register whether it's on sale or not. Before long, the only person paying the posted price will be a stranger or a customer who prizes privacy so much she'll pay extra for it. Frequent-shopper card paranoia - Debbie Farmer, Cambell Reporter 10-6-99 Normally I'm not a paranoid person, but I'm not sure I like complete strangers knowing that the only fruit my family eats is the kind rolled up in a box and that I actually buy Spam. What if I'm sorted into a special bad- mommy group that they're studying for future side effects of processed mystery food? I imagine myself standing in the check-out line one day and, just as soon as the cashier swipes my club card through the register, an alarm goes off and several police officers resembling Martha Stewart surround my cart, seize all of my boxes of frozen waffles and Cheez Whiz, and declare me an unfit mother.
A team of four researchers from the BLS and the Bureau of Economic Affairs, led by Marilyn Manser, head of the Office of Productivity and Technology, has investigated Mr. Roach's hypothesis. It came up lacking. They carefully compared the official hours series (from manufacturers) with one they constructed from surveys of employees. Employees would not underreport their hours, even if their employers might. They concluded, "The official productivity estimates are biased trivially, if at all." The official measure of work hours comes mostly from the monthly survey of 400,000 establishments by the BLS. Employers report the number of hours for which they paid production workers in manufacturing and nonsupervisory workers in other industries. Because it lacks the data, the BLS assumes the hours of supervisors are the same as those of nonsupervisors outside manufacturing. Employers may not know, or care to know, how much their employees work off the clock. Moreover, supervisors' hours may have grown more quickly than those of nonsupervisors. Thus the researchers used employee reports of hours worked from the household survey to compute an alternative measure of productivity growth. Work hours are indeed higher when reported by employees. But the gap must be growing over time to affect the productivity growth rate. It is not. Roach said he found the results of the new study "counterintuitive" because he believes professional employees are increasingly working longer hours that are not recorded by either government survey. He pointed to Harris Poll data suggesting that workers typically work around 50 hours a week - substantially more than the 41-hour week found in the Current Population Survey - to bolster his argument that government statistics understate work hours. But the Harris Poll counts time spent keeping house, going to school and traveling to and from work as work time, which inflates the figures. Furthermore, the Harris Poll, just like the government data, finds no increase in work hours in the 1990's. Usually it is not newsworthy when government statistics turn out to be accurate; it is like reporting the number of planes that land safely. But productivity growth is ground zero in the debate over the new economy, as well as the main determinant of future prosperity.
Many companies have made such cuts since the mid-1990s. Some have frozen pension benefits or ended cost-of-living rises. Others have converted their regular pension plans to complex new structures with names like pension-equity plans and cash-balance plans. These steps save money by eliminating the sharp buildup of benefits in an employee's last few years. And the plans at many large companies are now overfunded and have no pension expense. In fact, many pension plans shower millions of dollars on the bottom line (thanks to a rule that lets a company count as income the amount by which investment returns on pension assets exceed a pension plan's current costs). The result is that while regular pensions are generally structured to replace 20% to 30% of a worker's final pay, many plans for top executives aim to replace 50% to as much as 100% of pay. Ironically, the expansion of executive retirement plans and the difficulty of spotting the related liabilities are largely the unintended outcomes of efforts to improve corporate disclosure, rein in growth of executive pay, and ensure that retirement plans don't favor the highly paid. In the late 1980s, Financial Accounting Standards Board, the accounting industry's rule-making body, implemented Financial Accounting Standard 87 with the goal of forcing companies to reveal their exposure to pension liabilities of any kind - those for union and salaried workers, as well as for supplemental plans for executives. FAS 87 doesn't require companies to break out the liabilities of different pension plans. At the time, separate executive plans were less common, and many regular plans were underfunded. Meanwhile, changes to tax law spurred the growth of special executive pensions. Congress in the 1980s set limits on how much annual pay could be taken into account when calculating benefits in regular pension plans. It's currently $170,000. The aim was to ensure that pensions, in order to enjoy tax-favored status, were open to employees at all income levels. The result: Many companies began setting up "excess" or "make-up" plans that let executives accumulate more than they would under regular retirement plans. Then, in 1994, another tax-law change barred employers from deducting anyone's salary and bonus in excess of $1 million. That further fueled growth in supplemental pensions. It also prompted companies to embrace incentive pay tied to company performance, which preserves the deductibility of the compensation, and plans that, like a giant 401(k), let executives defer huge chunks of their compensation. These changes meant that by the mid-1990s, big companies had incentives to funnel large amounts of executive compensation toward retirement plans. And they had the means to keep those moves largely hidden, since they didn't have to make a separate disclosure of the new executive plans. To this day, they are required only to file a letter to the Labor Department indicating the number of executive pension plans and the number of participants. Many companies don't even bother to do that. Examples Drugstore chain Rite Aid's liability for the regular pension plans - with more than 18,000 participants - stood at $65 million on March 3, the end of its latest fiscal year. Its liability for executive pensions, covering just a few dozen people, was $32 million. At May Department Stores, the liability for pensions covering 82,000 employees and retirees stood at $592 million at the end of 2000. and a $147 million liability for special plans that cover fewer than 1,000 executives.
Suppose you hold a portfolio of 80% stocks and 20% bonds and you plan on socking away $5,000 a year for the next 15 years. If stock market gains of the past 15 years continue (which averaged 16%, and bonds at 8.6%), you will amass almost $262,000. Earned 12.8% annually (the average over the last 50 years) and you would accumulate just under $200,000. With current high valuations, a conservative 9% gain is more likely figures T. Rowe Price. That result would leave you with just $153,000 after 15 years. That's over 40% less than the $262,000 average investors are expecting. 401(k) funding falls - Allen Schultz, WSJ 6-20 Across a wide range of industries, companies contributed less money to the 401(k) programs during 2000 than 1999, according to a review of dozens of companies' SEC filings. Lucent's 401(k) contribution expense fell to $228 million during 2000 from $318 million during 1999. The company reduced its guaranteed match on employee contributions to 50 cents on the dollar from 66 2/3 cents, while a new variable component would match as much as a full $1 contributed by an employee, "depending on the company's performance and the board's discretion." Kmart hasn't been building up pension benefits since 1996, when it froze their pension plan. But the company's 401(k) contribution expense fell to $73 million during 2000 from $94 million during 1999. Campbell Soup Co. has a matching contribution tied, in part, to achieving earnings targets, which it didn't reach during recent years. In 2000 the 401(k) expense fell to $10 million, down steadily from $13 million in 1998. The shift to variable benefits increase the risk employees face with their 401(k) programs. Other examples - Sears's matching-contribution cost, a fixed percentage of each worker's contribution, fell to $29 million in 2000 from $37 million in 1999. At Boeing and Bank of America savings-plan expenses have fallen because the number of employees has declined.
The study, by two finance professors, David Hirshleifer of Ohio State University and Tyler Shumway of the University of Michigan, is available at www.cob.ohio-state.edu/fin/dice/papers/ 2001/2001-3.pdf The professors arrived at their conclusions by studying 26 stock exchanges worldwide between 1982 and 1997. They found that sunshine's positive effect is not confined to one countr. They found it in virtually every market they studied. Furthermore, American is among a cluster of stock exchanges that are most influenced by the weather. Others in that group are markets in Brussels, Paris, Vienna and Helsinki, Finland. All of this may be fascinating, but how can the study make you a better investor? The study shows that our moods can have powerful effects on our interpretation of economic developments. Objectivity is rare among investors. To immunize yourself from your moods, use a mechanical investment strategy that dictates how to react in all possible circumstances - eliminating the need to make judgments in the face of new developments. And try to be disciplined enough to stick with the strategy, even in the face of inevitable emotional pulls to second-guess it.
As of Friday, a broad index of the dollar's value compared with the currencies of 38 countries - including the 12 that use the euro - stood 27% higher than it did at the beginning of 1997. The driving force behind the rise of the dollar has been the flood of foreign money into U.S. assets. Foreign investors have largely ignored this country's current economic difficulties because they believe the long-term outlook for profits, adjusted for risk, is higher here than in other countries. The Japanese economy is virtually dead in the water with little prospect for revival soon, and other East Asian nations' growth has sagged. European countries generally are in much better shape, but uncertainties abound. Investors question whether the ECB will be able to adequately manage growth in the nations that have adopted the euro. Nervousness about the upcoming transition to euro cash may have prompted some Europeans to park their money in dollars for safekeeping. Furthermore, most European countries face long-term structural problems, including overly rigid labor markets and seriously underfunded social welfare systems that could lead to higher taxes in the future, a prospect that deters some long-term investments. On Friday the euro was worth about 85 cents, 28% less than it was when the currency was introduced at the beginning of 1999. The Commerce Dept reported last week that foreign investors spent just more than $320 billion last year to acquire or establish U.S. businesses. Complementing that flow of direct investment was more than $450 billion worth of portfolio investment - that is, net purchases of stocks, bonds and other such long-term securities. And the portfolio flow has continued to soar this year - reaching $155 billion in the first three months of the year, by far the highest level in history. Almost $100 billion of that money came from Europe. The attraction for portfolio investments is that (1) U.S. financial markets are the largest and most liquid in the world, and (2) The rapid acceleration of productivity growth in the U.S. From the Bureau of Economic Analysis Report 6-6 The unprecedented levels of new investment spending in the last 3 years have coincided with soaring worldwide merger and acquisition activity and with strong growth of the U.S. economy, particularly when compared with that of many of the other major industrialized countries. In these three years, foreign direct investors' spending was boosted by a number of especially large acquisitions. These new investments tended to be in industries in which large companies predominate, industries such as petroleum (not disclosed), motor vehicles (2,700 mil), food manufacturing (not disclosed), computers and electronic products (43,945 mil), telecommunications (12,502 mil), and financial services (44,117 mil). Investors from Europe accounted for 75% of total investment spending during 1998 - 2000; up from 64% in 1995 - 97. Spending by British investors accounted for over a third of total investment spending. U.S. businesses that were newly acquired or established by foreign investors in 2000 employed 646,000 people. Foreign Investment Outlays (in millions), 1992-2000
Related: Gene Epstein, Barrons 6-18 An anonymous British journalist thought up the odd, but oddly appropriate 11-letter acronym, "BAFFLING SIP," to dub the members of the dubious euro union, beginning with "B" for Belgium, and ending with "P" for Portugal -- although now it requires an extra G, since Greece became the 12th member. As events unfolded, the new currency proved baffling indeed to the euro-bulls. It opened at $1.18. By the end of '99, its value had dropped to an even $1, by October 2000 to a low of 83 cents, and now is hovering at 85 cents. The dollar is at a 15-year high when measured against other major currencies, but a little more than 16 years ago, the dollar peaked at nearly 33% higher than today's comparatively tame level. That was shortly before the Plaza Accord, the subsequent oil-shock of '74, and the major recession that accompanied it, seriously hurt the dollar for years to come.
Few think the S&P 500's P/E has a lot of room to grow much higher than it is. That means that most of the gains in stock prices will have to be fueled by gains in earnings, and those could be modest at best for some years, analysts fear. "It is true that most of our major market indicators are bullish," Ned Davis told clients last week. But "valuations suggest only a limited bull market." (Note: The P/E just of the Nasdaq companies that have profits is at 28.3, above the past average of 24.1, Ned Davis says.)
Source: Ned Davis Research
Last week, Mr. Schwartz said, an investor could have bought 100 shares of the fund and a put option on the index with an exercise price of $130 that would not expire until December 2003. Together, they would have cost $14,053, before commissions. Losses would have been limited to $701 over 30 months and the potential gains would be unlimited.
Guaranteed funds make sense for investors near retirement, those wanting to preserve what they have with a shot at stock-market gains, or those who otherwise would shun stocks entirely. One Kemper guaranteed fund, now closed to new investors, has returned an average of 11.8% a year since it was created in 1990, a nice return in a risk-free investment. Most of these funds require reinvestment of all dividends and distributions to receive the full guarantee, which is often good only on set dates. And they often carry another feature: higher fees. The MainStay (guarantee) fund is just another index fund but charges fees of 0.92% a year, compared with 0.18% for Vanguard's S&P 500 fund. Even when the guarantee kicks in, investors at a minimum lose what they could have made buying Treasury securities, and the money is likely to be worth less after several years of inflation. Many of the guaranteed funds actually invest a big chunk of their portfolios in things other than stocks. For example, Kemper Target 2011 Fund invest roughly 40% to 65% of their assets in government zero-coupon bonds. The MainStay Equity Index Fund mostly buys stocks mirroring the S&P 500, but offers investors a 10-year guarantee from New York Life. If history is any guide, New York Life isn't taking any extraordinary risks in providing the guarantee, which critics say points up one of the flaws of the guaranteed funds. The S&P 500 has rarely turned in a negative performance over any 10-year period starting in January since 1926, according to Ibbotson Associates. Only during the Great Depression would a guaranteed fund have had to pay out at all, and then losses were less than 1%. Five-year losses are more common, but still infrequent. Funds aren't the only way to get a money-back guarantee. Several investment houses offer securities called principal-protected equity-linked notes, which essentially amount to a big IOU. Merrill calls its Market Index Target-Term Securities, or MITTS; Salomon Smith Barney bills its as Safety First Investments. Both promise investors their money back on a certain date, plus a set percentage of whatever returns are posted by a given index or set of stocks.
When businesses deduct the health care benefits they pay employees, it is a loss of revenue (approximately $70 billion a year) to the government. In effect, it is a government expenditure that subsidizes health insurance for the employed. The top 10% of earners receive 24% of employer-sponsored health insurance benefits. These programs favor the wealthy because the higher the tax bracket, the more valuable the deduction. The wealthy own bigger homes, so they get a larger mortgage deduction. The home mortgage interest deduction costs the federal government some $100 billion a year. The deductions for pension and IRA's are skewed even further toward the wealthy, with the top 20% of earners receiving two-thirds of the benefits. Several agencies estimate that tax expenditures now total $700 billion to $800 billion a year. When combined with traditional social programs, that makes true social spending in the U.S. about as large as it is anywhere compared with the size of the economy. The combined social programs and tax expenditures come to 24.5% of GPD each year in the U.S. In Sweden, which is widely criticized for running a welfare state, the equivalent social programs and tax expenditures are only 27% GDP. In Britain, they are 26%, and in the Netherlands 25%.
One sign of hope - the number of people participating in 401(k)-type plans is growing very rapidly. From about 7.5 million people with assets of less than $92 million in 1984, defined contribution plans had 30.8 million participants in 1996 with a cool $1 trillion in assets. And when you add in taxable savings, home equity, and other assets - median household wealth among 25 to 34 year-old workers with savings plans was $48,294 while the median level of debt was $59,000. Some 40 years later, when the workers are 55 to 64, median household wealth has risen to $123,000 and debt has declined to $32,200.
When Wall Street pros tally up the reasons to be bullish, high on the list is the expectation that people will soon begin to shift significant sums from short-term accounts to stocks rather than settle for dwindling yields. It's a logical assumption. But will it happen in the real world? Recent experience suggests not. Data show that most of the dollars placed in short-term accounts in the 1990s tended to stay there. Now, whether the stock market needs that cash to rally is another matter. Americans in the last decade found enough money to boost their short-term savings and pump record sums into stocks. It could happen again. Money market mutual fund assets now total $2.1 trillion. That compares with the $3.7 trillion investors have in stock mutual funds, according to ICI. The latest Federal Reserve data show that savings accounts at banks (money-market deposits) hold about $2 trillion. Small CDs (less than $100,000) at banks total about $1 trillion. By comparison, the U.S. stock market's total value is more than $12 trillion. A shift of just 10% of the $5.1 trillion in short-term accounts to the stock market would mean an injection of $500 billion. That would dwarf the record $140 billion in net new cash that stock funds took in during Q1-2000 - which helped power the Nasdaq surge that was the last hurrah of the 1990s bull market. But history isn't on the side of bulls who believe that cash is headed from short-term accounts. The last time short-term rates were this low - averaging under 4% for seven-day money market fund yields - was 1994, just as the Fed began raising interest rates after keeping them at rock-bottom levels in 1992 and 1993 amid slow economic growth. Money market funds had net cash outflows in 1992 and '93 of less than 3% of fund assets, ICI data show. Savers did pull a substantial sum from bank CDs in 1992 and 1993: Small-CD totals fell from $1.07 trillion at the end of 1991 to $782 billion by the end of 1993, a drop of 27%. Where did that CD money go? Because CD owners tend to be hard-core income-seekers, experts believe much of the CD outflow sought higher yields in Treasury, corporate and municipal bonds in the early '90s. Indeed, bond mutual funds took in a net $140 billion in new cash during 1992 and '93, ICI data show. At the same time, some CD owners may simply have opted to keep their savings liquid rather than lock it up at lousy yields. Although CD totals tumbled from 1991 to 1993, assets in bank savings accounts rose by $175 billion. As the Fed raised interest rates in 1994, money began to flow back into CDs and into money funds. In the late 1990s, as the stock market soared, it seemed inevitable that short-term accounts would be raided for Wall Street's benefit. Yet money market funds saw no net outflow of cash in the late '90s, ICI data show. Though individual investors contributed less to money funds in that period than to stock funds, there was no wholesale rush to cash out of short-term accounts in favor of stocks. Likewise, assets in bank short-term accounts continued to rocket during the late 1990s. If the Fed means to inflict pain on short-term savers, most may not yet be ready to cry uncle: Short-term yields may be paltry, but at least they're positive - whereas the average stock mutual fund still is down 4.8% this year.
Investors over 50 can contribute a further $500 a year into either type of IRA starting next year, and $1,000 a year over the cap starting in 2006, putting the total then at $5,000. These over-50 bonuses aren't indexed to inflation. The $10,500 a year limit for 401(k) plans will increase gradually until the maximum annual contribution reaches $15,000 in 2006; after that, the maximum increases only to account for inflation. Another significant change for 401(k) investors: As of next year, matching contributions made by an employer must become fully available to the account-holder more quickly. [Jane Bryant Quinn, Wash Post 6-10: You are always vested in your own contribution to a 401(k). But if your employer matches your contribution, you usually have to wait before those matching funds are fully yours. Under the new rules, employers have two choices: Vest you gradually in the money over your first six years at work. Or vest you in full after just three years, while giving you nothing if you leave earlier.] Current vesting rules specify five and seven years, respectively. The new, shorter vesting period should help workers who frequently change jobs. It also may encourage saving by workers who don't plan on staying at a job very long. From John McKinnon, WSJ 6-4: Pension provisions in the new tax package aimed at boosting retirement-savings rates for workers may actually aggravate the problem. By easing regulations that cover companywide retirement plans such as 401(k)s, the measure lets executives save more for themselves and even reduce contributions for lower-wage workers. Those rules require employers to contribute 3% of rank-and-file workers' pay into a company plan when executives benefit most (when the plan is 'top heavy'). The new law helps companies avoid being considered top heavy by nearly doubling the salary threshold for such employees to $130,000 from $70,000. Backers of the changes say Congress had to make the rules less restrictive in order to encourage small-business owners to start such plans. Starting in 2006, employers may offer what amounts to a Roth 401(k) - an employer-sponsored plan for investing after-tax dollars, which then grow tax free, much as in a Roth IRA. For a 15-page summary of the new legislation on the Web, go to www.house.gov/jct/x-50-01.pdf or Congress's Joint Committee on Taxation (Congress's Joint Committee on Taxation). (WSJ 5-30) For a thorough report on retirement plans, go to www.psca.org and click on the summary of H.R. 1836. (Hank Ezell, AJC 6-3) From David Johnston, NY Times 6-3: The bill also provides a tax credit to help couples earning less than $30,000 ($15,000 for singles, $22,500 for single parents) save for retirement: they will receive a credit of 50% of the amount they save, up to a $1,000 credit on $2,000. Those who make up to twice these amounts can receive a credit of 10% or 20% of what they save, but only if they owe income taxes, which the credit can reduce to zero. And this credit is good only for four years, 2002 through 2005. Tax Rate Reductions
From Tom Herman, WSJ 6-3: The existing 28%-39.6% rates each drop by one percentage point starting July 1. This effectively means that the top four rates for 2001 are 39.1%, 35.5%, 30.5% and 27.5%, says a new booklet by Deloitte & Touche. From Hank Ezell, AJC 6-3: The 15% bracket will not change, but Congress created a new 10% rate. It applies to the first $6,000 earned by single taxpayers, $10,000 for heads of household or $12,000 for married couples filing joint returns. Higher-income taxpayers will also benefit because they will no longer lose personal exemptions for themselves and their children, as well as itemized deductions like charitable gifts and mortgage interest payments, as their income rises. These benefits are currently taken away at the rate of $30 per $1,000 of additional income above a threshold of as little as $64,475, depending on one's family status. This rate will fall to $20 per $1,000 starting in 2006, to $10 in 2008, and will be eliminated in 2010. Increase of the Child Tax Credit
Millions of married couples pay more in taxes than they would if they were not married. The legislation helps them, but not until 2005, when it starts to phase in. For the tens of millions of couples in the 15% bracket, the marriage penalty will end that year. Millions of two-income couples who are in the higher brackets will continue to be penalized. The changes also mean that more couples will collect a marriage bonus, paying less in taxes than they would as singles because one spouse earns the bulk of the family income. And in many cases, that bonus will be larger. [From Hank Ezell, AJC 6-3: The new law increases the standard deduction for married couples filing joint returns and expands the 15 percent tax bracket for those couples. But this is one of the late arrivals: The changes are phased in, but they don't start until 2005.] Estate and Unified Credit Exemption Amount
Related: Jim McTague, Barrons 6-4 The full phase-out may be in effect for only 365 days. Blame that on a parliamentary procedure known as the Byrd rule that was put into effect by Senate Democrats in 1985 to fight President Reagan's agenda. The rule doesn't permit tax cuts outside a 10-year budget window. The rule can be waived with 60 Senate votes. GOP tax-cutters could only muster 58. Residents of New York and Washington: Move before you die. Provisions that ratchet down federal estate taxes actually raise tax rates in these states. This is because dollar-for-dollar federal tax credits to offset state death taxes decrease each year under the law. Forty-eight states take no more of a bite from an estate than the corresponding amount of the federal tax credit, so their levies automatically will dip. New York and Washington have fixed rates. [From David Johnston, NY Times 6-24: In the most extreme example, in 2004, on estates valued at more than $10.1 million, New Yorkers will pay 48% to the federal government and an additional 12% to the state, for a total of 60%, instead of the 55% total had the law not changed.] Revenues from estate and gift taxes, the Treasury reports, was $20.3 billion in the eight months through May, down from $20.6 billion a year earlier. (WSJ 6-27) The new legislation will create another headache because heirs will have to determine how much their inherited assets have increased in value, to calculate the capital gains taxes owed when the assets are sold. The new bill will allow $3 million of capital gains to pass tax-free to a spouse and $1.3 million to other heirs. Gains above these amounts will be subject to capital gains taxes. Related: Effect on Wills - David Cay Johnston, NY Times 6-24 People with estate plans or wills should ask a lawyer to review them to make sure they take best advantage of the new law. Most plans and wills do not need revisions, but wills that use a formula to divide assets among a surviving spouse and children may find that the changes in estate-tax exemptions and the repeal for the year 2010 will result in too much or too little going to the spouse. In 2010, the year of the repeal, people can pass along as much as $3 million of investment gains to a spouse and up to $1.3 million to other heirs without having to pay capital gains tax. For the maximum tax break, people should give spouses the top priority in receiving property that has grown significantly in value. In other words, specifically bequeath to your spouse that Exxon Mobil stock that you bought at a split-adjusted $1 a share, so that you get the maximum benefit. Until the estate tax is fully repealed in 2010, people should rely on their conventional IRAs as their first source for charitable giving, because the balance is subject to the estate tax and withdrawals are taxed as income. Donating these assets to charity avoids both income and estate taxes. Related: Jane Bryant Quinn, Wash Post 6-24 Rethink your will. Under current law, married couples can cut their estate taxes by leaving money to children in a bypass trust. The income from the trust goes to the surviving spouse for life. Typically, wills provide for these trusts to contain "the maximum allowed by law." Under the new law, however, the maximum could be as much as $3.5 million. You might not want that much to go to the children's trust. It might leave too little for your spouse. In this case, you should change your will. Perhaps you need a dollar cap on the size of the trust. Perhaps you don't need this trust at all. Related: Albert Crenshaw, Wash Post 6-3 The Treasury Department, eager to get rebate checks to the public as soon as possible to help stimulate the slowing economy, says it will give money to some people who don't owe any income taxes this year. The rebates are supposed to be for taxes owed on 2001 income. Since the government won't have 2001 tax returns until next year, it is using 2000 returns to decide who gets checks. That means people who owed taxes for last year, but might not owe any for this year, will get checks - and they will be allowed to keep them. Thus, people who have left the workforce, such as students, new parents, even people who died - will get what amounts to a $300 to $600 gift from the government. The Treasury expects to send about 98 million checks -- roughly 10 million a week over 10 weeks between July and September. Checks for deceased taxpayers will go to their survivors, officials said. Don't loose this number - Kathy Kristof, LA Times 6-7 The IRS will start sending checks in mid-July and continue through September. Your check will be sent based on the last two digits of your Social Security number, with the lowest numbers getting the first checks. What do I do if I haven't received a check by October? Unless you moved and failed to provide the post office with a change of address form, you should receive a check by the first week in October - at the latest. If you haven't, call the IRS at (800) TAX-1040.
Both the marriage penalty and the marriage bonus are caused by inequities in three areas of the tax code: tax brackets, the standard deduction and tax credits. Tax brackets U.S. income taxes are based on progressive rates, meaning the more you earn, the higher percentage you pay in taxes. However, the income thresholds that trigger higher tax brackets are never twice as high for married couples as they are for single taxpayers. Consequently, two singles with taxable income of $25,000 - or $50,000 total - each pay 15% of that in tax. But a married couple with a combined income of $50,000 would pay 28% on the portion of their income above $43,840--the income threshold at which tax brackets change for married couples filing jointly. Thus, the married couple pays $800 more in income tax on the $6,160 in taxable income than two single taxpayers with the same taxable income combined. To be specific, each single pays $3,750 in tax, or $7,500 combined. If they were married, they'd pay $8,300--an increase of $800. Standard deduction For two singles, the standard deduction is $4,550 each, or $9,100 - considerably more than the standard deduction for married couples - $7,600. Because deductions are used to shield income from taxation, that difference cost a married couple in the 15% tax bracket $225 this year. Tax credits Many tax credits and deductions are tied to income. If you earn more than set amounts, you lose your ability to claim them. Because the married thresholds frequently are more than twice the single thresholds, married couples lose out again. In fact, H&R Block's Schafer said, one of the most onerous income requirements affects low-income parents trying to qualify for the earned income tax credit, a break for the working poor. No taxpayer earning more than about $32,000 a year can qualify for the credit. However, the income test makes no distinction for marital status. The result: Low-income married couples with children lose the right to claim thousands of dollars in tax breaks. For instance, a married couple with two children and $40,000 in combined income - $20,000 from each parent - can't claim the earned income tax credit. However, if this couple split and each claimed one child as a dependent, each would get an earned income tax credit of $1,181 - or $2,362 total. Just the Facts 511 The FCC last year allocated 511 for traffic purposes in response to requests from the Department of Transportation and nonprofit organizations. Once the program is instituted nationwide, callers will be able to call 511 and get traffic information, no matter were they are in the United States, just as they can dial 911 for emergency assistance. (Washington Post 6-28) European savings Only a 11% of Western Europeans have more than 50,000 euros ($42,910) saved in financial assets. Only 19% of those 50 years old and older (traditionally the biggest savers) said they have more than 50,000 euros in financial assets. The surveys finding that only 6% of Germans and 7% of the French have savings and financial investments worth more than 50,000 euros may be too low due to a high rate of refusal to answer the question. Only 9% of U.K. adults have at least 25,000 pounds ($35,430 or 41,300 euros) in financial assets. A survey conducted last year by the American Savings Education Council, found that 23% of Americans have set aside at least $50,000 (58,250 euros) for their retirement. (WSJ 6-28) Insiders are bearish The volume of insider sales jumped in May, having dropped off substantially the prior two months, says Lon Gerber, director of research at Thomson Financial/Lancer Analytics, which compiles insider-trading data. In dollar terms, the sell-to-buy ratio in May was $34 sold for every dollar bought, the highest, or most bearish, since the firm began tracking the data in 1996, and twice as high as March and April, when the ratios were 14 to 1 and 16 to 1, respectively. According to Vickers Weekly Insider newsletter, the eight-week ratio of sales to purchases stands at 3.96 weekly transactions. By last week, that ratio jumped to 7.27 to 1. That is "a very bearish indication of [the insiders'] outlook for the market in the intermediate term," says David Coleman, the newsletter's editor. (WSJ 6-27) Reading the tea leaves Since World War II, manufacturing-and-trade sales (the measure of goods sold) have fallen at least 1.8%, as they have in recent months, on 10 other occasions, according to the Economic Cycle Research Institute. Each time in the past, the measure continued falling by at least two more percentage points, and with the single exception of the early 1950's and the Korean War, a recession ensued. Of the 20 times that employment has declined by at least as much as it has recently, a recession has followed (or had recently ended) 17 times, and all three exceptions happened before 1969. (NY Times 6-26) Spreads shrink, commissions rise The spread, the gap between the price that a seller receives for his shares and the price that a buyer pays, has fallen by almost half on the Nasdaq since April, to 4.1 cents a share. For the first time ever, spreads are now smaller on Nasdaq than on the NYSE, according to Nasdaq data released earlier this month. In addition to the spread, investors also face explicit costs in the form of commission fees charged by their retail brokers, which may rise as a result. Already, some online brokerage firms, hard hit by the collapse of the Nasdaq, are raising commissions and charging new fees. Datek Online said it would impose a $15 quarterly fee on investors who trade infrequently or have less than $5,000 in their accounts, while TD Waterhouse has raised fees on some trades to $15 from $12. Commissions that truly reflect trading costs, as opposed to the implicit costs of the spread, may help investors think twice before trading too much. (NY Times 6-24) Exchange funds "Exchange funds," sometimes known as swap funds, are special types of investment pools that effectively allow very wealthy investors to diversify their holdings without getting hit by capital-gains taxes. Typically, an investor swaps a large block of one stock he owns for shares in a diversified pool, in a tax-free transaction. Minimum investments usually start at $1 million or higher. (WSJ 6-20) Magazine data Last year was one of the worst for magazine newsstand sales. Revenue from newsstand sales declined 4%, to $4.43 billion. Unit sales dropped 10%, to 1.61 billion, and have dropped steadily since 1996. Only 35% of the magazines offered for sale on newsstands last year were actually sold, the rest were shredded. That sell-through rate has been steadily declining: in 1973, 65% of newsstand magazines sold, while 48% sold in 1988, according to the Magazine Publishers of America. In 2000 alone, more than 870 new magazines tried to find space on checkout racks and retail shelves. Already, 4,600 titles vie for that space, and the precious retail real estate is shrinking, not expanding. (NY Times 6-18) It's a small-cap world The Nasdaq 100, loaded with major technology stocks, is down 27.3% year to date. But the Nasdaq 12 - the dozen stocks dumped from the index in December when it was reshuffled--have gained an average of 25.3%. In part, that may reflect the 2001 corporate profit picture, which looks best for smaller companies. S&P small-cap 600 index members are expected to post earnings growth averaging 16% this year, Kaufman said, while S&P mid-cap 400 company earnings are projected to rise 9.5% over 2000. By contrast, earnings for the big-cap S&P 500 firms are expected to drop 8% this year. For the Nasdaq 100, earnings overall are expected to plunge 50% in 2001, according to Thomson Financial, as major tech firms have seen their prospects collapse. (LA Times 6-18) Platzreife To play golf in Germany, you are required to have a license, and getting one isn't a gimme. The license is known as a Platzreife - which combines the German words for "place" and "ripe," and indicates that a player is ripe enough to play a German course. The aspiring player has to drive five balls at least 110 yards within a corridor 75 yards wide, and demonstrate an ability to chip from 22 yards, putt from 11 yards and play 18 holes with no more than 108 strokes. The written test has 15 questions on golf rules, and another 15 on etiquette. Get more than six wrong and you miss the cut. The whole process, including lessons, can cost around 2,000 marks ($870). Without a Platzreife - or a handicap card from a foreign private club - it's just about impossible to get on a course. (WSJ 6-11) Smart Tags in XP [Note: On 6-27-01, after a wave of criticism, Microsoft announced that Smart Tags would not be part of XP 'this year'.] Even though Windows XP is still in development, I've already encountered one proposed feature (called Internet Explorer Smart Tags), in a beta version, that allows Microsoft's Internet Explorer - included in Windows XP - to turn any word on any Web site into a link to Microsoft's own Web sites and services, or to any other sites Microsoft favors. If you place your cursor on the underlined word, an icon appears, and if you click on the icon, a small window opens to display links to sites offering more information. Microsoft will provide a "meta tag" that site owners could use to bar Smart Tags from their sites. (Walter Mossberg, WSJ 6-7) XP Part 2 With Windows XP, Microsoft is replacing all icons in favor of a revamped, two-columned start button. On the right-hand side of the pull-up menu will be quick links to folders such as MyDocuments, MyPictures and MyMusic. In the left-hand column will be links to perhaps seven or eight separate programs. The top two programs will always be e-mail and the Internet; beneath them will be other frequently used links, which will change according to how often users call them up. (WSJ 6-6) XP Part 3 Microsoft is preparing to include both high-quality telephone and directory features in Windows XP. Weaving improved versions of features Microsoft already offers, like online video meeting software and Internet voice chat, Microsoft asserts that it will transform the very nature of the telephone. Internet telephony may offer Microsoft powerful new revenue potential from subscription services, like Caller ID and voice mail, in which it will begin to compete with traditional telecommunications companies. (NY Times 6-12) Employment update According to the initial estimate for May, nonfarm payroll employment shrank by 19,000. From March to May nonfarm payroll employment shrank by an average of 47,000 jobs per month. April is a notoriously untrustworthy month, and its 182,000 decline is the principal reason employment fell at all in the prior three months. Year-to-date, given January's huge downward revision and February's small upward revision, employment rose by an average of 17,000 jobs per month. Against a total of about 132.5 million jobs, that comes to a net addition of a mere 0.6% over the five months. (Gene Epstein, Barrons 6-4) S & (RI)P A recent study by two McKinsey & Co. specialists, Richard Foster and Sarah Kaplan, projected that no more than a third of the corporations in today's S&P's 500-stock index will survive another 25 years. Their estimate came from a study of 1,008 companies in 15 industries over a 40-year period. They found that of the companies making up the S&P 500 in 1957, only 74 remained on the list through 1997. They found that only "newly emerging" companies actually outperformed the S&P 500 during this period and only a handful of those outperformed it for more than a decade. Real success, in terms of price appreciation, is short-lived. (Fred Barbash, Wash Post 6-3) No 'lucky' months And according to a study by two finance professors, Josef Lakonishok of the University of Illinois and Seymour Smidt of Cornell, the evidence is quite weak for believing that any given month has a statistically significant probability of showing either gains or losses more than half the time. Among large-cap stocks since 1952, only one month has such a special status, and that is September, in which there is an above-average chance of a decline. (Mark Hulbert, NY Times 6-3) Fear in motion? Technology insiders sold shares of their own companies in April at 37 times the rate they were buying, according to Lancer Analytics. "It's almost like there's a fear that the rebound won't be a sustained one," says Kevin Schwenger, a research analyst at Lancer Analytics, a unit of Thomson Financial. Across all stocks, insider selling outpaced buying by about 16 to 1. Among the 40 components of the Dow Jones Internet Index, which climbed 33% in April, the rate of sales outpaced purchases by 7,309 times in April, vaulting from 1,418 the previous month. "When I go out and talk to these companies, they spend an hour telling me how great they are," says Richard Zandi, an analyst who covers Internet financial-services stocks at Deutsche Banc Alex. Brown. "So how is it that no one's buying?" (WSJ 6-1) Where the action is The days of IPOs quickly tripling are fading, but it still is possible to get big hits in an obscure corner of the bond world. Consider what happened when Digital Island, a battered provider of Web hosting, announced it was being taken over. DI's stock bounced a bit, but its convertible bonds more than quadrupled in a day. Why? The bonds have a provision, as do many convertible securities, that if the company was acquired for cash, the bonds would be paid off in full. DI's bonds were trading at about 20 cents on the dollar before the deal. Dozens of tech and telecoms sold convertible bonds during boom times and their value has fallen with their stock prices. These bonds, known as busted converts, constitute a near-record 40% of the convertible-bond market, according to Lehman Brothers. An investor who bought all the busted converts in the market would have a 27.1% year-to-date return, according to Morgan Stanley. (WSJ 5-31) Quick Stats Money-fund yields have tumbled to an average 3.6% from 6.1% since the start of the year, according to iMoneyNet. The Fed's sixth rate cut of the year will knock that down still further over the next month or so - potentially giving investors negative returns after factoring in inflation, which recently has been running at a 3.6% annual rate. (WSJ 6-29) Economists at Morgan Stanley expect world trade volumes to rise 4.3% in 2001, down from a 12.8% increase last year. This will be the steepest decline in growth on record. Global trade accounts for a growing portion of world GDP. Morgan Stanley estimates that the volume of world trade amounts to about one-quarter of world output, double the share that prevailed in the 1970's. (G Morgenson, NY Times 6-28) About 49 million American households own shares in funds. Roughly one-third pay taxes on the capital gains they receive in annual distributions, according to the ICI. The other investors, whose mutual funds are held in tax-sheltered accounts, do not incur taxes. Unsheltered, taxable mutual fund gains soared to $99 billion last year from $67 billion in 1999, according to the institute. The average diversified United States equity fund lost 2.97% of its value in 2000, according to Morningstar. But the SEC estimates that taxes knock off anywhere from 2.5 to 5.6 percentage points from annual fund returns. For some funds, the discrepancy is much larger. (NY Times 6-24) In the first half of the year, more than $36 billion has flowed into value funds, which seek low-priced stocks, compared with just $1 billion into growth stock funds, according to Strategic Insight, a fund research firm in New York. During the first half of last year, growth funds attracted $167 billion of new money, while investors pulled $46 billion from value funds, according to the firm.The average value fund gained 7.8% over the past year, while the average growth fund lost 23%. Bond funds attracted $38 billion during the first six months of the year after losing $40 billion during the same period of 2000. (Bloomberg via NY Times 6-24) A U.S. Trust (a New York wealth-management company) Survey conducted 151 telephone interviews of the top 1% of wealthiest Americans found that while affluent investors today have a slightly larger portion of their portfolios invested in stocks than they did five years ago (37% compared with 33%) the survey shows 23% of their assets are invested in bonds, 16% in cash equivalents, 10% in alternative investments and 9% in real estate. Some 92% of the respondents said their investment portfolios have declined in value since mid-2000 because of the downturn in the stock market. (WSJ 6-21) At mid-June the average of more than 7,700 stock funds tracked by Bloomberg showed an 8.4% decline since the start of the year. That left them sitting with a 13.8% loss over the last 12 months. (Chet Currier, Bloomberg 6-19) For the first time since March 1999, global-fund managers say they prefer the dollar to the euro, according to a new survey from Merrill Lynch. This represents a striking shift from just three months ago, when fund mangers favored the euro nearly six to one. (WSJ 6-14) About 77% of 2,600 workers defined success as finding a company where they wanted to work a long time, according to a survey by Randstad North America, an Atlanta employment firm. In a poll last year, 42% described committing to one employer as "foolish." (WSJ 6-12) The average size of newly constructed homes reached 2,305 square feet at the end of March, up from 2,265 last year, according to the National Association of Home Builders. The average home has grown steadily in size for more than 30 years; it is 53% larger today than in 1970, although the average family is 15% smaller. (Louis Uchitelleny, Times 6-10) More than 100 million acres of the world's most fertile farmland were planted with genetically modified crops last year, about 25 times as much as just four years earlier. Wind-blown pollen, commingled seeds and black-market plantings have further extended these products of biotechnology into the far corners of the global food supply - perhaps irreversibly. (NY Times 6-10) The latest theory about Mozart's untimely death in 1791, at age 35, suggests the culprit was likely trichinosis - usually caused by eating undercooked pork infested by the worm, and could explain all of Mozart's symptoms, which included fever, rash, limb pain and swelling. Verification of this is impossible. Mozart's grave was dug up about seven years after his death so it could be reused, and his remains were dispersed. (Nando 6-10) Among Allen Iverson's 16 tattoos: "loyalty" in Chinese; "strength" in Tibetan and praying hands between the initials of his mother and grandmother. His shoe line for Reebok - called The Answer, his nickname - has consistently been among the top two or three basketball sneakers, and the 76ers say Mr. Iverson's jersey is the league's top seller. (WSJ 6-8) According to a new report from Statistical Research, 72% of novice Web surfers and 65% of long-time Web surfers will leave Web sites that ask them to share personal data. In addition, more than one in five Internet users say they have provided sites with inaccurate personal data in order to gain entry to sites. (Newsbytes via EduPage, 6-7) The median U.S. stock portfolio manager working at a mutual-fund company expects to make a total of $436,500 this year, according to a study by executive-search firm Russell Reynolds and the AIMR. This is an increase of 35% in two years. In the two years since the survey of 1999, the average stock fund in the U.S. has managed about a 9% gain. (WSJ 6-7) The king of the online retailing jungle isn't Amazon.com, it's (another non-profit organization) the Federal Government. Driven by $3.3 billion in online sales of Treasury securities in 2000, it dwarfed most online retailers, including Amazon, which had net sales of $2.8 billion. (WSJ 6-5) The last time the government mailed rebates (in 1975) taxpayers quickly spent 25% to 40% of the money and saved the rest, for a while, according to several studies. At the time, households received $100 to $200, roughly similar to the current rebates in inflation-adjusted terms. By contrast, people usually spend nearly all of an increase in their take-home pay. In the early 1980's, after Reagan and Congress cut tax rates, consumers spent about 90% of their additional take-home pay on average, according to a recent study by Nicholas Souleles, a professor at the University of Pennsylvania. (NYT 6-5) Nationwide, the maximum severance offered by 168 employers to rank-and-file employees averaged 24 weeks of pay, compared with 30 weeks in 1997, says a survey by Manchester Inc., a career-management firm. Because employees also stay in jobs for shorter periods these days, tenure-based packages may not be as big. (WSJ 6-5) The nation's largest bond mutual fund, Pimco Total Return Fund, has been the top-selling mutual fund in the country this year, attracting $4.1 billion in net new assets through April, according to Financial Research Corp. This ended an 11-year streak in which a stock portfolio had led the pack of best-selling funds. Overall, investors added $21.4 billion to taxable bond funds in the first quarter, the strongest sales period for such bond funds since 1987, according to ICI. (WSJ 6-3) "We estimate that in three years, half the people using the Internet will not be using a PC. They'll be using it in kiosks, televisions, refrigerators, cell phones, and who knows what else," said IBM director of Internet technology and strategy Mike Nelson. (Dallas Morning News 5-31) Home Page Previous Factoid Top Sites |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||