The Daily Spectrum from Saint George, Utah • 21

Money Section Saturday September 25, 2004 1 Business in Brief gf to8 rate On Tra Ksr and possibly crimp their privileges could get fresh momentum. "It gives an increased impetus to do something about them," said Bert By, a banking expert based in Alexandria. Va. Critics of Fannie Mae and Freddie Mac abound. Federal Reserve Chairman Alan Greenspan has warned that they could pose a threat to the U.S.

financial system if their ability to assume new debt was not restrained anteed by the government, they have special privileges notably the ability to borrow directly from the Treasury, which makes their borrowing rates lower than the norm. Regulators at the Office of Federal Housing Enterprise Oversight who investigated Fannie Mae's books said the problems they found, at least in one key area of accounting, were more serious, far more complex and wider in scope than those at rival Freddie Mac which was fined a record Federal officials: Problems surpass Freddie Mac's By MARCY GORDON Associated Press WASHINGTON The' fallout from allegations of serious accounting problems at Fannie Mae has rattled investors and could eventually bump up mortgage rates. Coming IS months after an accounting scandal erupted at $125 million in a settlement with the agency. The regulators have even raised "safety and soundness" concerns regarding Fannie Mae. Those were not an issue in the case of Freddie Mac.

With the OFHEO allegations and the disclosure of a Securities and Exchange Commission inquiry into Fannie Mae's accounting, earlier efforts by lawmakers and the Bush administration to tighten the government's reins over the two companies Fmne Mae Omct of Federal Homv ng Enterpmse Oversight: i httprfwww.ofheo.gov. the other huge government-sponsored mortgage financer, Freddie Mac, news of federal regulators' findings of pervasive earnings manipulation at Fannie Mae roiled Wall Street this week. Fredo Mac: httpJwww.freddiemaccom. 1 I Secumtes and Exchange Commission: httptfwww.sec.gov. The two companies, which buy home mortgages from banks and other lenders, supply trillions of dollars to the mortgage market to keep interest rates lower for home buyers.

Though not directly guar San Diego lacks retirement funds Stock indexes do mean something I A i i fa Hp5" P- ft sd a Pension fund shortfall totals $1.16 billion By ELLIOT SPAGAT Associated Press SAN DIEGO For 16 months, the whistleblower was ignored. Diann Ship-ione, a dissident trustee of the San Diego City Employees' Retirement Fund, penned opinion pieces in local newspapers, spoke at City Council and wrote the mayor, warning that the city pension fund was a ticking time bomb. Shipione, a 52-year-old stockbroker, labeled San Diego the "municipal Enron" in one editorial. But the mind-numbing accounting complexities she described made it easy to dismiss her as a misguided gadfly. The assistant city manager assured the City Council that she "omitted, slanted and misrepresented the facts." The tables turned one Friday night last September.

Paul Webber, an outside attorney who was handling a sewer bond sale for San Diego, came across a Shipione missive to City Hall and grew alarmed. He got on the phone with the city's assistant auditor and demanded answers. The $506 million bond sale set for the following Tuesday was shelved. Webber's hard-nosed questions sparked a series of events that have plunged the nation's seventh-largest city long hailed as a model of fiscal probity into fullblown scandal. The U.S.

Securities and Exchange and Commission and the Justice Department are investigating whether the city hid bad Lenny Ignelzl AP Diego. Shipione, a trustee of the San Diego City Employees' Retirement System, warned the city in May 2002 of problems in the city's pension fund. Diann Shipione, the whistleblower in San Diego's financial crisis, takes a break from the computer in her home to discuss the crisis on Monday in San Big ticket orders drop in August WASHINGTON Orders to U.S. factories for big-ticket goods dropped in August, largely weighed down by a sharp decline in demand for commercial airplanes. The Commerce Department reported Friday that orders for durable goods costly manufactured products expected to last at least three years declined by Oi percent, following a 1.8 percent advance in July.

The manufacturing picture, however, looked better when volatile transportation equipment, such as airplanes, was excluded: Orders rose by a solid 2.3 percent in August That compared with a flat reading for July and marked the biggest increase since March. Court challenges United pension cuts CHICAGO A federal bankruptcy judge ruled against United Airlines on Friday in a procedural dispute, siding with unions who said the company submitted unsubstantiated claims about how employees would be affected if their pension programs were terminated. While it won't halt United's controversial bid to shed its pension obligations, the ruling suggests that parent company UAL Corp. may have a rough time winning court approval to eliminate the programs. Judge Eugene Wedoff granted an emergency motion filed by United's machinists and flight attendants, striking late Thursday's 91-page filing from the record.

Federal scientists face consulting ban WASHINGTON Some 5,000 scientists at the National Institutes of Health may be banned from doing any consulting work with drug companies for at least a year, the latest fallout from a conflict-of-interest scandal. In a surprise move, the government's premier research agency announced the proposed moratorium in a memo to employees Friday. It still must be approved by top Bush administration officials before taking effect The issue doesn't affect scientists' official duties in turning basic research into health treatments, duties that often involve some work with industry. SEC investigates mutual fund report CHICAGO The Securities and Exchange Commission is investigating the investment research firm Morningstar -Inc. for failing to properly correct inaccurate data it published about a mutual fund, the company disclosed Friday.

Morningstar, which rates the performance of mutual funds, received a "Wells Notice" in May saying the SEC might bring a civil action against the company for violations of U.S. securities laws, spokeswoman Margaret Kirch Cohen said. Wire reports The Dow Jones Industrials the NASDAQ Composite Russell 2000 list of stock market indexes goes on and on. But how much attention should you pay to all these lists? Actually, if you know the basics of these indexes, you may be able to gain some insights that can help you make better investment choices. Some popular indexes By reading financial publications, you can find a broad listing of stock market indexes.

But here, in a nutshell, are a few of the more popular ones: Dow Jones Industrial Average The Dow Jones Industrial Average, composed of 30 leading companies, is often considered the one index that indicates the general state of the market. NASDAQ Composite Index The NASDAQ tracks the stocks on the National Association of Securities Dealers Automated Quotation System market. Because the NASDAQ includes many companies in the technology sector, this index can rise and fall quickly. This index tracks 500 companies in a variety of industries, including transportation, utilities, financial services and energy. Many money managers and pension plan administrators use the 500 as a benchmark for judging the overall performance of their fund against the stock market Russell 2000 This index measures the performance of 2,000 "small-cap" stocks (stocks of smaller companies just starting to grow).

Smaller companies are often newer and generally have less capital than the larger companies measured by the 500 and Dow Jones Industrial Average. Consequently, the Russell 2000 is more volatile than these indexes. Submitted by Richard Gilbert Edward Jones Using indexes wisely How can you use these indexes to help yourself become a better investor? For starters, you can employ an index as a "measuring stick" to compare the performance of the stocks you own against other stocks in the same general "universe." You can also benefit from looking at indexes from a historic perspective. By comparing today's market movements as illustrated by various indexes against similar movements from the past, you can become aware of important trends and what they've signified. Just go back a few years, to the late 1990s, when the technology-heavy NASDAQ soared, prior to falling hard in 2000.

Much of the run-up in that index was caused by unbridled investor enthusiasm in so-called "dot-com" companies. But their poor or non-existent earnings couldn't support their stock prices, which tumbled. If, at some point you saw a similar thing happening in the NASDAQ, you might want to review your technology holdings. Look beyond indexes As we've seen, stock market indexes can be useful but they can be "overused." When an index is down, for instance, investor sentiment can become unjustifiably bearish which could lead you to avoid investing in high-quality, undervalued companies. Remember, an index, no matter how large or well constructed, is not a substitute for the entire market or for your own good judg-.

ment Member SIPC A fine mess The city of San Diego's pension-fund shortfall grew from $41 .3 million In 1993 to $1.16 billion last year. Federal authorities are investigating whether "America's Finest City hid the bad news. 1993 -95 V7 '99 t1 D3 NOTE- Figures an sa of June 30 or each year daft stood at $1 .17 billion on Jan. 31,2004. SOURCE: San Diego City Employees' flebnament System Standard Poor's Ratings Services to take the rare step of suspending its rating on the city's debt Monday.

San Diego retirement ptan deficit eoo in! MO news, and the mayor is spending the final weeks of his re-election campaign denying that bankruptcy is near. "America's Finest City" is in a fine mess. Its unfunded pension liability the gap between the value of its pension assets and its obligation to retirees stood at $1.17 billion at the end of January. It faces an additional shortfall of $545 million for retiree medical benefits. The seaside city of 13 million people would need to double its pension contribution to $259 million next year or about one-tenth of its annual budget just to avoid falling further behind, said April Boring, who heads Mayor Dick Murphy's Pension Reform Committee.

That's more than three times what it spends on parks and Tri-Properties. The Casablanca Hotel Casino Golf and Spa, Virgin River Hotel and Casino, and the Oasis Hotel Casino Golf and Spa are the largest employers in the area," said Mesa View CEO Sue Conley. "Randy Black has been very concerned about his Mesquite hospital signs with casinos seven times what it gives libraries. Boling, who is also Murphy's campaign treasurer, isn't shying away from the b-word. She says the city will need to sell $600 million in bonds over three years and raise the retirement age to 62 from 55, among other things.

"If the city doesn't follow our recommendations, we will be headed toward bankruptcy," Boling said in an interview. "That is a fact" The city has turned into a Wall Street pariah, raising questions about an investor bailout. San Diego dumped its longtime auditor after errors were found in its fiscal 2002 report, and hired KPMG LLP five months ago. The delay in the still-unreleased 2003 audit led health deal employees' health care needs and has been delightful to work with." Tri-Properties employs more than 2,700 people. Mesa View also has active agreements with Beechstreet, which covers employees of the City of Mesquite, Anthem Blue Cross-Blue Shield, I I Closing Prices for Selected Stocks Edwardjones Servine Individual Investors Since 18-n Serving Individual Investors Since 1871 Universal Health Network, Preferred Provider Network, and the standard Medicare and Medicaid programs.

In addition, Mesa View is currently negotiating with the Moapa and Paiute tribes, Aetna, Cigna, Mutual Medical, Pacificare and Sierra Health. By BILL McCLURE Desert Valley Times MESQUITE Mesa View Regional Hospital signed a managed care agreement with Tri Properties on Sept 16. "This was a very important contract for us to finalize as Dow Jones Ind. Change 8.34 Closed 10,047.24 Nasdaq Change Closed 1,879.48 Standard Poors 500 Change 1.75 Closed 1,110.11 I A i fV Co. Deicription Price Change 52 wk H-l Co.

Description Pries Change S2 wk H-i Co. Description Price Change S2 wk H-L ABS ALBERTSONS INC 23.90 13 27.07-19.20 GO GANNETT CO INC 84.39 MSFT MICROSOFT CP ZU6 29.70-24.01 CORP 14.70 22.63-13.59 GE GENERALf LECCO 33.41 34.56-27 31 NOvl NOVELL INC 6.49 SRE SEMPRAENERGY 35.90 37.19-26.36 GM GENERAL MOTORS 41.36 0.17 65.55-40.01 PBG PEPSI BOTTLING 26.99 0.06 31.40-20.39 BAC BANKOFAMERICA 43.98 0.41 44.99-36.25 HD HOMEDEPOTINC 38.43 0.27 39.09-31.65 PEP PEPSICO INC 48.32 55.71-45.17 BRKB BERKSHIRE CLB 2,881.00 IBM INU BUS MACHINE 84.43 0.55 100.41-81.91 PFE PFIZERINC 29.56 38.87-29.90 BMY BRISTOLMYERSSQ 24.19 0.29 31.00-22.22 INTC INTEL CORP 20.10 34.60-19.69 QWEST COMMS 3.07 4.97-2.56 CITIGROUP 44.15 077 52.8443.00 LEG LEGGET PLATT 28.09 0.93 28.81-19.74 SPI SCOTTISH PWR 30.65 0.17 30.70-23.42 COSF COSTCO WHOLESAL 41.35 0.60 43.00-30.77 JBLU JETBLUE AIRWAYS 21.87 47.15-20.29 LFB LONGVIEW FIBRE 14.71 0.61 14.82-9.52 CSCO CISCO SYSTEMS 18.40 29.39-17.53 JNJ JOHNSONSJOHNSON56.55 58.80-48.10 SKYW SKYWESTINC 13.76 20.70-13.00 CVX CHEVRONTEXACO 52.83 0.51 53.64-35.35 Kfl KROGERCO 15.53 19.67-14.70 USB USBANCORP 28.59 30.00-23.75 KO COCACOLACO 39.99 53.50-39.95 LOW LOWES COMPANIES 53.66 0.39 60.42-45.90 UPS UNITED PARCEL 73.60 0.77 75.30-63.50 CVG CONVERGYSCP 12.77 20.80-12.30 MBG MANDALAY RESORT 68.70 0.20 72.65.38.11 WMT WALMART STORES 52.81 0.27 61.31-50.60 XOM EXXONMOBIL 47.83 0.07 49.62-35.05 MCD MCDONALDSCORP 27.60 0.46 29.98-22.92 DIS WALT DISNEY CO 23.46 0.20 28.41-19.78 F0RDM0T0RC0 13.80 17.34-10.65 MMM 3MC0MPANY 78.68 90.288.95 WFC WELLS FARGO CO 58.154 0.51 59.86-50.58 FDX FEDEXCORP 84.59 0.63 MRK 44.10 51.50-40.59 ZION ZIONS BANCORP 60.06 0.55 64.38-54.09 Call Today! ServiceMASTER of St. George $1 0 OFF I WW WssiU tt9 ServiceAMSTER Qwnt 7fu Aofm tim flvrvW eHrectSof carpet ri phflLSTevi'Lr ServiceMASTER of cedar city Cleantriqv '135-007-5321 www.servicemasterclean.com Room free Tbe service you deserve fVjpiectanti.