11/07/01: One On One With Treasury Secretary Paul O'Neill

SUSIE GHARIB: Another attack on terrorism today: the US government once again cracked down on Osama bin Laden's money supply. Federal agents raided nine locations in four cities this morning: Boston, Minneapolis, Columbus, and Seattle. They seized evidence allegedly connected to two of bin Laden's financial networks, called Al Taqwa and Al-Barakat. The government also froze assets of nine organizations and two people. Treasury Secretary Paul O'Neill told "NIGHTLY BUSINESS REPORT's" Washington bureau chief Darren Gersh that the key to fighting terrorism is choking off the cash.

PAUL O'NEILL, TREASURY SECRETARY: I'm confident that we have interrupted what they consider to be their normal flow of funds. But I'm not going to be satisfied until their forces in the field melt away because they can't afford to pay them anymore because they don't have the money to pay them anymore.

GHARIB: The Treasury secretary's comments came as part of an exclusive and wide-ranging interview with "NIGHTLY BUSINESS REPORT" on the status of the economy. We'll have that full interview a bit later in the program. Paul?

GHARIB: Paul, returning now to today's developments on the financial battle against terrorism, Treasury Secretary Paul O'Neill says the focus of US action today was the Al-Barakat financial organization. In an exclusive interview with "NIGHTLY BUSINESS REPORT," Washington bureau chief Darren Gersh asked O'Neill how easy will it be for the terrorists to replace these financial networks.

O'NEILL: It's not easy to create an effective organization overnight to replace one that took 12 years to develop and involved operations in more than 40 countries, including several operations in the United States. These are not easy things to replace, especially if you're lurking in the shadows of illegality. So I would say what we did today is a significant action.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Given that hundreds of millions of dollars were flowing through these organizations and you blocked tens of millions of dollars, are you beginning to get a sense of the size of the overall organization's cash flow? Can you sort of say this is how big this organization was? We think we have an idea.

O'NEILL: I don't think we have enough information yet to draw a firm conclusion about how large this activity is in its totality. But with each new discovery of individual and organization, we're creating a map if you will of a spider web set of connections and it's growing every day.

GERSH: There has been a lot of reporting that bin Laden gets a lot of his funding from wealthy Saudi businessman. Have we been able to trace any of this money back to individual Saudi businessmen?

O'NEILL: Let me say we are looking at every allegation and every individual that's suspicious without regard to their nationality. I think it's significant that a lead was taken today in going after Al-Barakat by the people of Dubai where there seem to be a nexus of Al-Barakat operations, a hub of their financial operations and with regard to the Saudis, I would say as the president did earlier today in his remarks, they have responded to our request. I don't think there are any direct connections of Al-Barakat to Saudi Arabia. There are 40 countries and yes, maybe a minor connection, but I think the evidence is that terrorism is a worldwide threat, that there are many organizations, not just bin Laden's and Al Qaeda that have to be brought to the ground and we're going to do that.

GERSH: Let me ask you about our economy. You have a lot of experience in the auto sector. With the zero percent financing, there's a lot of concern that that's just sort of taking sales from the future. Do you think that that's sustainable and if it's not, what's going to happen to the economy?

O'NEILL: Well, I don't know if it's sustainable. From past evidence, one would have expected some increase in aggregate sales activity for automobiles but what happened is way beyond what anyone would have expected. And so I think we don't know the degree to which we're borrowing from the future. I had a meeting in this room this morning with eight or nine CEOs of major companies, including one of the auto companies. And we talked about this very issue. And what they're finding is that their inventories are very much in control. As a matter of fact, they're very much lower than they were at the beginning of 2001. Their sales have skyrocketed. They haven't added anything to production plans for the rest of the year and if things continue as they are, they're going to be short of product.

GERSH: Let's talk about the stimulus package. That's something that a lot of people and you are spending a lot of time on.

O'NEILL: Right.

GERSH: It's looking like that stimulus package might end up being something that's on the president's desk, kind of like a Christmas present, just in time for the holiday. Is that how long it's going to take, and if it takes that long, are we going to run into the old problem of fiscal stimulus came a little bit too late and the economy almost didn't need it by the time it got it into effect?

O'NEILL: I must say I worry a lot about that. The president first said in a very concrete way on October the 5th, which is now over a month ago, that he believed we needed a stimulus package on the order of $60 billion to $75 billion and that we needed it right away and we've already lost a twelfth of a year in discussion. And I'm very, very anxious that we get this done. I don't know why we can't get it done by the middle of November. But we're running out of days to accomplish it by then.

GERSH: Mr. Secretary, thank you.

O'NEILL: My pleasure. Thank you.

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by eMediaMillWorks. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. © 2001 Community Television Foundation of South Florida, Inc.

11/07/01: Japan's Concept Of Cars Goes High Tech

SUSIE GHARIB: The Tokyo Auto Show wrapped up today. The four day extravaganza showcased some of the most unusual cars ever to hit the road. But as Lucy Craft reports, some of the out of the box designs were so unusual they seemed to belong in a home builders exhibition.

LUCY CRAFT, NIGHTLY BUSINESS REPORT CORRESPONDENT: Wacky, outrageous and bizarre, just another day at the Tokyo Motor Show, where Japanese auto makers have refined the so-called concept car to a high art.

CHRIS RICHTER, AUTO ANALYST, HSBC SECURITIES: It's a little bit akin to having a meeting and brainstorming and throwing out every impractical idea that you might have.

CRAFT: How's this for impractical, a car with a tail that cries when it needs more gas or flashes red in anger when driven recklessly? In fact, Toyotas' ™ pet like Pod concept car, based on robotics technology from Sony (SNE), is a bundle of color-coded emotions aimed at keeping its owner amused as well as safe.

STEVE USHER, AUTO ANALYST, J.P. MORGAN: I think the Pod was a perfect example of sheer creativity. I don't think that Toyota or Sony have any immediate plans to commercialize the vehicle. The idea, though, is to say OK, this is where we can go. This is what can be done with a vehicle. How it ultimately manifests itself on a commercial offering is going to be a very different issue. But it's just, you know, testing the edge of the envelope.

CRAFT: Like replacing the steering wheel, brake and gas pedals with a single control, a drive by wire joy stick, or installing Internet connected consoles, allowing drivers and their passengers to surf for the weather, a restaurant reservation or an online game.

RICHTER: The idea was it's not necessarily to say this is the future, but sort of to pack into a car everything that might be the future and maybe start to get a little bit of gauge what bits of I.T. technology consumers really want in their car and what's merely decoration.

CRAFT: Some of the concepts on display seemed more like rec rooms on chassis, like Honda's (HMC) see through Unibox (ph), equipped with its own set of built in motorcycles. Or take the Zen from Isuzu. Forget the usual scuff resistant floor pads. This elongated car features delicate straw Tatami mat floors. Analysts say there's a cultural rationale driving these radical designs. While Americans see cars primarily as transportation, on Japan's overcrowded roads, cars and naturally evolved to become an extension of the living room.

MORGAN: It's important to remember that it's the Japanese, really, who have advanced ergonomics in vehicle interiors-cup holders, a very simple example-but really were pioneered by the Japanese, a very obvious idea, but an idea that had to come from people who spend an awful lot of time sitting in their car, not necessarily driving their car. And the idea that you want to make the interior of the car more multi functional and much more comfortable, I think, is an idea that by necessity has come out of the Japanese market.

CRAFT: Analysts say it's impossible to predict how badly the worldwide downturn will hurt car sales over the coming months but there's no uncertainty about the fate of these concept cars. Most of the high tech gizmos on display here, say observers, will never make it onto the road, destined to stay on the sci-fi dream list of their designers. Lucy Craft, NIGHTLY BUSINESS REPORT, Tokyo.

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by eMediaMillWorks. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. © 2001 Community Television Foundation of South Florida, Inc.

11/07/01: Howard Mah Of Ameristock Focused Value Fund Shares Some Stock Secrets

PAUL KANGAS: So far, 2001 is a year that most stock market investors would rather forget. But since launching last December, Ameristock Focused Value Fund has not only been able to beat the market, it's achieved a return well into the double digits. In fact, for the year through yesterday, Ameristock Focused Value D Fund was up more than 32 percent. That's a record exceeded by only a handful of funds. The fund's Co-Portfolio manager is Howard Mah, who joins us now from San Francisco. And Howard, welcome to NIGHTLY BUSINESS REPORT.

HOWARD MAH, AMERISTOCK FOCUSED VALUE FUND: Thanks for having me on, Paul.

KANGAS: First, there are quite a few value mutual funds out there, but what exactly do you focus on in your Focused Value Fund?

MAH: We focus on not having to really focus on any sector of the economy. Our focus is on holding 12 to 15 stocks that we like with the philosophy that holding a small number of good stocks with good up side potential is better than holding a large number that has little or no potential up side.

KANGAS: Now, I understand that your fund's holdings tend not to be household names. Tell us some of these stocks that you like and explain why you like them.

MAH: The first one is Media Arts, ticker symbol MDA. That's our favorite and our largest holding. They manufacture, design and market the home-based art work of Thomas Kincaid (ph), which is a very popular artist, currently trading a shade over $2, book value about $6. So there's a lot of up side potential there.

KANGAS: OK.

MAH: We also like Shopko Stores, symbol SKO. They operate up in the Midwest-Pacific Northwest.

KANGAS: Oh, yes. OK.

MAH: A discount retailer.

KANGAS: I know that one of Ameristock's key policy is to have low turnover, meaning that you tend to hang onto your stocks. But at what point would you sell some of your current holdings?

MAH: Our current holdings would be sold if they met our pre-designated sell price.

KANGAS: They get up to a certain price-earnings multiple and out you go, right?

MAH: When they get-that's correct. When they get to a certain multiple that we deem to be a fair market value then we just remove them from the portfolio.

KANGAS: Right. Now, looking ahead, do you see the economy and the stock market picking up any time soon?

MAH: Well, I was asked that question earlier this year and I said probably by the middle of next year but with the events of September 11 I think that's probably pushed back to the following year, 2003. I would look for it to pick up the first or second quarter of 2003.

KANGAS: OK, now looking into your own background, you were a tax consultant and financial adviser before becoming a money manager. In light of the success that you've had, any advice to the smaller investor at this stage?

MAH: My advice is for those investors sitting on the sideline, now is a good time to get back into the market. I'm certain we have reached a buying opportunity and there's certainly a lot of buying opportunities in the small and mid cap arena at this point in time.

KANGAS: OK, very good. Howard, thanks very much for being with us. My guest, Howard Mah, Co-Portfolio manager of the Ameristock Focused Value Fund.

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by eMediaMillWorks. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. © 2001 Community Television Foundation of South Florida, Inc.

11/07/01: Paul Kangas' Wall Street Wrap Up

PAUL KANGAS: It was a mixed opening on Wall Street today, with the Dow Industrial Average falling 28 ½ points by 10:00 a.m. on profit-taking pressures after it rose 267 points, or 2.9 percent, since the week began. The NASDAQ Index, however, posted a six-point gain at the outset as investors continued to look for high-tech bargains. The report of an unexpectedly strong 2.7 percent rise in third quarter US productivity helped the blue chips join the NASDAQ in positive territory as morning trading continued and a firm bond market reacting to low interests extended the gains into early afternoon. By 1:30 p.m., the Dow was up 31 points. NASDAQ up 25. Unimpressive market breadth and the desire by some traders to take some more profits caused a general downturn for the rest of the session. The Dow Industrial Average closed with a loss of 36 3/4 points at 9554.37 and the NASDAQ Index saw its gain trimmed to only 2.45, putting it at 1837.53.

Big board volume did move up a touch to 1.42 billion shares and about a 4 to 3 margin of down volume over up volume.

The Dow Transport Index up 16 1/3 points.

Utilities however, fell just over 3 points.

The Closing Tick just barely bullish at +146.

Standard & Poor's 500 down just over 3 points.

A 2 2/3 point drop in the 100.

The MidCap 400 edge up .15.

Bridge Futures Price Index gained 1.08.

A loss of 1.81 in the New York Composite.

A 5/100 loss in the Value Line.

Russell2000 was down nearly 2 points.

And the broadly based Wilshire 5000 lost almost 25 1/4 points.

The bond market, still riding high after yesterday's 1/2 percent rate cut, was further bolstered by news that third quarter US productivity rose 2.7 percent when only a 1.8 percent increase was expected.

This certainly helped lift tax-free and corporates to closing gains of 3/8 to 5/8 on average and it gave the Treasury market a strong close.

The 5-year notes up 9/32.

10-year notes up 20/32.

30-year bond up 1 2/32.

And the Lehman Brothers Long-Term Treasury Bond Index up 12.14.

The upward momentum of the previous four sessions kind of ran out today. The Dow ran into some profit taking, off 36 ¾ points, pretty mild, and actually 71 more issues higher than lower overall. 129 new yearly highs, only 37 new lows. Enron (ENE) topped the active list on a massive 72.4 million shares. The stock traded as low as $7 a share today and then it came back up rather nicely. The "Wall Street Journal" online says Dynegy (DYN) is talking to the company about making a $2 billion investment and that includes $1.5 billion from ChevronTexaco (CVX). And there was also a lot of talk after the market closed about an outright buyout bid.

Compaq Computer (CPQ) down $0.51. David Packard, one of the sons of a founder of Hewlett-Packard, came out against Hewlett's acquisition of Compaq today, just like the Hewlett family did yesterday.

AOL Time Warner (AOL) down $0.65.

EMC (EMC) fell $0.28.

And Qwest Communications (Q) also fell $0.28.

Hewlett-Packard (HWP) itself was off $0.63.

Lucent Technologies (LU) down $0.36.

American Tower (AMT) off another $1.04. Yesterday, it dropped $3.84 on a third quarter loss of $0.65 a share. Today, Lehman Brothers dropped its price target from $47 all the way down to $33. But that's a little after the fact it looks like, to me.

Nortel Networks (NT) was up $0.01.

And then Nokia (NOK) down $0.86, tenth in big board volume.

Aetna (AEF), the big insurance company, down $0.77. It traded as low as $28.80, though. The company had a third quarter loss of $0.34, excluding one time items. That's versus earnings of the previous year. The Street estimate was for a bigger loss, though, of $0.55.

British Airways (BAB) up $2.67. The CEO says the company's cash position is stronger than a lot of analysts have been thinking. International Game Technology (IGT) up $4.25. Yesterday it had higher fourth quarter earnings, $0.73 versus $0.66. Today Merrill

Lynch upgraded it from "accumulate" to "near term buy."

Polo Ralph Lauren (RL) up $1.01. Second quarter earnings higher, $0.52 versus $0.50, and the company reaffirmed its third quarter estimate in the range of $0.42 to $0.46. ABN Amro Brokerage repeated a "buy."

Symbol Technologies (SBL) up $1.15. ABN Amro there upgraded it from "hold" to "buy."

And Waste Management (WMI) up $1.63. Third quarter earnings higher, $0.36 versus $0.33 despite a seven percent drop in revenues. Standard & Poor's repeated an "accumulate" rating.

Lands' End (LE), the big catalog retailer, had a good day, up $6.41. Third quarter earnings $0.41, way up from $0.15 last year, and the Street estimate was only $0.18. Goldman Sachs upgraded the stock from "market perform" to "outperform."

AmeriCredit (ACF) up $2.30. It's involved in auto financing, of course, and the CFO today said the company had a very solid October.

Aquila (ILA) up $2.56. Utilicorp United (UCU) is going to back-buy back the 20 percent it doesn't already own for about two thirds of a share of its stock. Today that would be worth about $19.75 to Aquila shareholders.

Vesta Insurance (VTA) tumbling $5.83. Third quarter operating earnings only $0.04, down from the Street estimate of $0.26.

And Alpharma (ALO), the big international pharmaceutical, third quarter earnings lower, $0.35 versus last year's $0.45. The company sees a fourth quarter loss of $0.15. The Street was expecting earnings of $0.40.

And AON (AOC), this is another insurance company, down $4.21. Third quarter earnings lower, $0.37 versus $0.47, and the company says weakness in the stock market could be hurting the fourth quarter.

NASDAQ trading, a gain of nearly 2 ½ points. Volume just over two billion shares. 1640 up and 1889 on the down side.

QUALCOMM (QCOM) topped the active list. It closed up $0.38, although it traded as low as $51.19 after reporting after the close yesterday earnings below expectations by $0.02 at $0.23 a share.

Cisco (CSCO) was u