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The Gazette from Montreal, Quebec, Canada • 27

Publication:
The Gazettei
Location:
Montreal, Quebec, Canada
Issue Date:
Page:
27
Extracted Article Text (OCR)

THE GAZETTE. MONTREAL, TUESDAY, SEPTEMBER 24, 1996 brld Business investors soli i about lieler Feci will hike rates lodajg BLOOMBERG BUSINESS NEWS consumer prices climbed 0.1 per cent. Yesterday," the difference in yield was 58 basis points, 2 hasltj points less than Friday, An increase in the funds rate today the central bank's first attempt to slow inflation since February 1995, when the Fed completed year-long series of rate increases that doubled fHe target to 6 per cent. The ambiguous signals the economy is sendjto has some of the most veteran Fed watchers perplexed. "It's a 50-50 chance that they'll move," said Henry Kaufman, a money manager and econo-' mist.

Greenspan has demonstrated his reluctancejoi? raise interest rates, Kaufman said, by discuss the notion that the consumer price index oven states the actual pace of inflation. "The compelling argument for a Fed move fully there," he said. raising the fed funds target by a quarter of a percentage point. Changes in the Fed's overnight rates affect rates for borrowers from home buyers to the U.S. government itself.

It's also true that rates set in the bond market can force the Fed's hand. The December contract's rate, at 5.94 per cent, suggests certainty that the Fed will raise rates a quarter-point by mid-December. A move twice that big is viewed as unlikely Another window into the bond market's thinking is the gap between the funds target and one-year Treasury bill yields. It widened to 70 basis points as traders anticipated that the government's Sept. 6 job-market report would encourage a Fed rate increase.

The gap narrowed the following week, when the government said that wholesale prices excluding food and energy fell 0.1 per cent in August, when ung, who oversees $3.5 billion at Wilmington Trust Corp. in Wilmington, Delaware. "My vote is yes, they 're going to do it." Members of the Fed's policy-making Federal Open Market Committee will have two more conferences to consider the need for higher bank rates this year, on Nov. 13 and Dec. 17.

They also can authorize Chairman Alan Greenspan to move between meetings. Among the best barometers of expectations for the Fed's next move are contracts for 90-day Eurodollars, or dollar deposits, at banks outside the US. The March Eurodollar contract's rate, at 6.11 per cent, reflects expectations that three-month bank rates will rise to that level from the current 5,64 per cent. A similar increase in the Fed funds rate would make the target 5.75 per cent, up from 5.25 per cent now. Fed officials could go half that distance today, NEW YORK Just one thing is clear as Federal Reserve officials prepare to discuss whether to raise bank rates today, bond market analysts say: They're in for a big debate.

A "You could make a good argument on either side, and that will make for quite a horse race," said Perry Beaumont, a senior bond-market strategist at Smith Barney Inc. "The market couldn't be more at a cusp, more at the point of saying, 'It's a coin It's a view that investors share, judging from financial market indicators. Short-term interest rates reflect expectations that the Fed will raise rates before the end of the year. "If you polled 100 people in the market, my guess is 60 would say the Fed will raise rates and 40 would say they're not going to," said Eric Che Bonuses for Lloyd's execs! 'Perks' anger Names bankrupted by rescue of insurance market .1 1 a v. f.f ROBERT TYERMAN THE SUNDAY TELEGRAPH so being well compensated.

One hard-hit Name on the Gopda Walker syndicates said: "It is perks'for' the boys. Who decided this? They -should donate the money to bankrupt" Names and a lot of people without Marlboro billboard to come down BLOOMBERG BUSINESS NEWS WASHINGTON Philip Morris Inc. has agreed to pull a billboard for Marlboro cigarettes from Atlanta's Fulton County Stadium after the Justice Department charged the ad was an attempt to skirt the 1971 law that banned cigarette advertising on TV. The disputed billboard will be taken down following last night's game with the Montreal Expos, the Braves' final game of the regular season, the Justice Department said. The agreement guarantees that TV viewers won't see the billboard during the post-season.

The department said that a new Marlboro billboard in left-centre field at the Atlanta ballpark was visible during several Atlanta Braves telecasts. AP A peek at the MercedesSwatch mini a partly covered smart penny or a honte because of their decisions." But other Names' said most of the'' awards were rich-J, ly deserved. "Without themir we could have gqf' nothing atitf Lloyd's could ply be a bad ry," said one'' Name. "The action-group leaders mini-car, constructed by Mercedes and Swatch, drives on the new test track at Hambach, France. Production of the cars is to start in a year.

dollars Guyana rakes in phone-sex Rowland Chairman gets $850,000 Phone company shares revenue with U.S. chat lines MIKE MILLS WASHINGTON POST LONDON Many senior figures in Lloyd's of London and the heads of the most prominent action groups are to receive huge bonuses and payments for their role in rescuing the stricken insurance market. The bonuses, which have not been disclosed by Lloyd's, contrast with the $2.8 billion in extra payments that were demanded from the market's members. David Rowland, chairman of Lloyd's, is to receive a $850,000 bonus from the insurance market's central coffers for driving through the Lloyd's recovery program. The bonus, which almost doubles Rowland's salary of $960,000, was approved last week by the council of Lloyd's and the market's senior appointments committee, chaired by Sir Jeremy Morse, a former chairman of Lloyd's F3ank.

Rowland's bonus is one of a series of bonuses approved by the council. Ron Sandler, who has been chief executive of Lloyd's for only nine months, will receive $213,000 on top of his $533,000 salary and $139,000 pension contribution. Many Names, still nursing six-figure losses even after the settlement, resent the payments to Rowland, the first chairman of Lloyd's to be paid either a salary or bonus. The Names were not consulted about the decision: Leaders of Names action groups, which successfully sued their Lloyd's agents for negligence, have been granted $160 million by Lloyd's to cover their expenses. In addition, Michael Deeny, who led the Gooda Walker action group to triumph before joining the council of Lloyd's, is understood to be receiving more than $1.07 million.

Other action-group leaders, past and present, are al- Estimates differ as to what proportion of international audiotext calls involve sex. The London-based International Telemedia Association, an industry trade group, said only 35 per cent, while Jason Kowal of Telegeography a Washington market research firm, said the figure is more than 90 per cent. Whatever the split, Guyana now is tied with the WASHINGTON There's a boom in exports under way in the poor tropical country of Guyana. Rather, make that X-ports, of a product the world can't seem to get enough of forced Lloyd's1 to" compromise and saved many, though41 not all, members from ruin." Rowland has waived any increase in-his original salary since he became1 chairman in 1993, pending a resolutiorT 1 of the crisis. Before he became chairs man, he wrote the task-force reporjr which foreshadowed the introduction of corporate Capital and laid the fouh-dations of many of today's reforms.

It was Rowland's caressing, cajolirig and threatening of Names, underwrite ers, agents, insurance companies' lawyers and politicians on both sidesrof 2 the Atlantic that saw the rescue plan" through. The bonuses have awarded three weeks after the Brittshj1; government gave formal approval' tcf' Equitas, the $32-billion spin-off pany set up by Lloyd's to handle claims on policies written in 1992 and before? 'u Lloyd's reports support of nearly 95 per cent of Names for the recovery;" plan. Its financial recovery depart- ment is pursuing the forc the amounts still outstanding. S0UTHAMSTAR NETWORK Small countries profit from a system that splits revenue from overseas phone sex. This year, Guyana's lone telephone company could take in nearly $100 million from its burgeoning trade in specialized information services, such as telephone sex, as dialers in the United States and other countries place international calls to X-rated services in Guyana.

New technology often has unforeseen consequences. But few business trends are as strange as what has resulted from the increasing ease and reliability of international calling: Phone sex has gone global. Americans who dial up numbers for sexual talk with strangers might be reaching halfway around the world, often without realizing it. This has sent hundreds of millions of dollars flowing out of the United States and other industrial countries, experts said, and into phone-sex operations in places such as Guyana, the Philippines, Poland, the Netherlands-Antilles islands and the tiny African Netherlands Antilles as the world leader in a international market for all types of audio-text services, according to Telegeography. They are followed by the little-known nations of Niue in the South Pacific and Sao Tome.

The countries are playing to maximum effect an international payments system set up years ago that splits the cost of handling overseas calls. Charges that an American pays for dialing Guyana, or any other country, are shared with that person's U.S. long-distance company and the foreign phone company that routes the call. With chat lines, the small country's phone company turns around and shares a portion of that money with the operator of the sex lines. In Guyana's case, U.S.

long-distance companies pay Guyana Telephone Telegraph 85 cents a minute for calls they send into the country, one of the highest rates in the Caribbean. The Guyana phone company, in turn, pays about 50 cents of country of Sao Tome. For the smaller countries, phone CallS. these telephone services have become an impor- tant source of foreign exchange. Sun Life of Canada that money to the audiotext service provider.

Few Guyanese are employed as sex chatters, experts in the industry said. One reason might be that international services promise, but do not deliver, truly live conversations. A call to an advertised Guyana number connected to a six-minute recording promising "live" adult-oriented talk, only to refer the caller to a number in Niue, where a seven-minute recording ended with directions to dial a third number. The third number also was a recording. The total bill for the three calls: $71.33.

Mtmm I rnnrrfanrnrm ti ii AiJftm.iffli.ilil It's a huge business for Atlantic Tele-Network a U.S. company that bought 80 per cent of Guyana's national phone company, Guyana Telephone Telegraph, for $16.5 million in 1991. In 1992 it began making its circuits available to those offering "adult" chat, sports scores, weather, horoscopes and other audiotext services. ATN is incorporated in Delaware but has headquarters in the Virgin Islands, where it also operates that country's phone system. "When we bought the (Guyana) phone company, we planned to run it just like a regular old phone company," company spokesman Edwin Crouch said.

Then, he said, "audiotext found us," referring to the dozens of service providers in the United States and elsewhere that look for offshore places to handle calls. "We started marketing it and treating it as a serious business." In 1991, Guyana was receiving no audiotext calls from abroad. In 1995 it logged 102 million minutes of calling, according to ATN. That accounted for $91 million of Guyana Telephone Telegraph's total revenue of $131 million. The figures continue to grow: The count was 60 million minutes of international audiotext by the first half of this year.

Everythii PINPOINT new DESIGN effective sales IDENTIFY key decision ASSESS potential new CONDUCT market IMPLEMENT i OVGr k'6 programs. Danielle Dansereau Greta Cusworth Presenting SCOTT'S SEIEQORY the Directory on With little or no computer experience, you can target jour best prospects anywhere in and seconds later print out hot leads for your sales force. It's Fast It's Easy. TTtis is unquestionably the best lead resource arailable and a genuine time saver. Scott' High Quality Ftuhion Italian Imports at with: address, SIC code, product line, contact name and and much, muchmore, I Rom orrii us todiy foi (ktaiis on bow tea fin hiv( tie best kids it jroar I Sun Life Assurance Company of Canada announces the following appointments: Greta Cusworth, Vice-President, Group Marketing and Sales and Danielle Dansereau, Assistant Vice-President, Public Affairs and Communications.

Ms. Cusworth joined Sun Life in February, 1995 as Assistant President, Group Sales. In her new role, Ms. Cusworth will be responsible for the overall market development and sales function of Sun Life's Canadian Group Life and Health business. With annual Group Insurance premiums exceeding $1.4 billion, Sun Life is a leading provider of group Life insurance to small and large businesses in Canada serving 3 million Canadians under more than 6,500 group policies.

Ms. Dansereau joined Sun Life in 1994 as Director, Public Affairs, Quebec. In her new role, Ms. Dansereau will be responsible for public relations, media relations, communications and national advertising and sponsorship initiatives. Sun Life, which commenced business in 1871, is one of North America's most diversified financial services organizations with total assets under A management exceeding $130 billion.

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Pages Available:
2,182,212
Years Available:
1857-2024