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And You Can Take That to One of the 7 Remaining Banks

April 26, 1998|TOM PETRUNO

Just to show that the more things change, the more they really do stay the same--at least in financial markets and the world economy--the following news items have been beamed back from future editions of The Times:

* DATELINE: Gallitzin, Ohio, April 26, 2004: Reporters today surrounded the elm-shaded home of Miss Lillian Snavely, the 93-year-old pensioner who is believed to be the last American holdout from the stock market.

A rumor swept Wall Street on Tuesday that Snavely, who had insisted that she would never put a dime of her money in stocks, had finally capitulated and ordered a mutual fund prospectus from FidelVangRowePrice Investments, the fund giant formed several years ago by a merger of some of the industry's biggest players.

Snavely refused to come to the door of her modest home to talk with the media. But in a phone call with CNBCFOXCBSCNN-TV, the broadcaster formed several years ago by a merger of some of the industry's biggest players, the widow admitted she was mulling whether a "small" investment in the market might be appropriate, considering that her health was good and she could afford to be a "long-term investor."

She told the TV reporter that she had just read the best-selling book by the Beardstown Preschoolers, the great-grandchildren of the Beardstown (Ill.) Ladies, an investment club of older women who became famous in the mid-1990s first for beating the stock market, then for discovering that they didn't really beat the stock market, but only because the darn math was so tough.

The Beardstown Preschoolers' new book reveals where their great-grandmothers went wrong, details the victimization that the tots have endured because of their nanas' shame, and then presents the real, sure-fire path to profits in stocks in the new decade, with appropriate tiny footnotes indicating that probably none of the advice will work, in practice.

"The kids make a lot of sense, and I think that it stands to reason that if their elders made mistakes, the children have learned from those mistakes and are probably going to be better investors for it," Snavely said.

Still, she admitted that she had not yet written out a check to FidelVangRowePrice because, with the Dow Jones industrial average at 48,250, the market seemed "a bit high."

In Washington, Treasury Secretary Sanford Weill, who also chairs investment titan Citigroup in his spare time, applauded Snavely's cautious approach to the market. "She may be the last one in, but she's doing her homework, and that's got to be a positive for the market and for the economy," Weill said.

* DATELINE: Tokyo, June 6, 2005: Beleaguered Japan unveiled its 473rd fiscal stimulus program aimed at kick-starting the country's moribund economy, now in its 15th year of moribundness.

"We are confident that this program of tax cuts, land giveaways, stock options and free soft drink refills at participating 7-Eleven stores will instill a new confidence in Japanese consumers and business people," said newly elected Japanese Prime Minister Alberto Fujimori, the former president of Peru before he was set adrift on a reed raft by angry Peruvian farmers in 2003.

The Tokyo stock market reacted immediately to the new program, as the Nikkei-225 index gained a solid 2.6 points to 1,601.36. Although the market has collapsed to one-tenth the size it was in 1998, and although the Japanese economy now is smaller than that of the city of Pomona, Fujimori told his countrymen that "this time, we are truly serious about putting our house in order and making Japan again a global economic powerhouse."

At the White House, President Strom Thurmond said he was happy to see the latest program, but he advised Japan to "do more," or to consider a merger with a stronger Pacific Rim economy, such as Guam.

* DATELINE: Washington, Oct. 8, 2006: Federal Reserve Board Chairman-for-Life Alan Greenspan, in a speech to bankers here, warned that the Fed must remain vigilant about inflation and would not hesitate to raise interest rates at the first sign of pricing pressures in the economy.

His comments, however, triggered hysterical laughter in the conference hall, upon which Greenspan turned defensive. "Now listen up: Just because we haven't had inflation yet doesn't mean it's never coming back!" the Fed chief shouted over the din.

The central bank has kept its benchmark short-term interest rate, the federal funds rate, unchanged at 5.5% for the last nine years as inflation has remained virtually nonexistent in the economy, except in stock prices, executive salaries and the cost of hot dogs and beer at Murdoch Stadium.

Legislation introduced into Congress last week by a coalition of Republicans and Democrats would abolish the Federal Reserve. The bill's sponsors noted that Citigroup and Bank of America, two of the seven remaining U.S. banks, have long since taken over the Fed's lending function, and that the Internet took over the Fed's check-clearing duties four years ago.

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