"I won't answer their questions. I don't trust them." -- Whitewater felon Susan McDougal, refusing to testify before a grand jury and thus headed for jail on contempt chargesEDITED BY LARRY LIGHTReturn to top
WHY NO FULL-COURT PRESS ON THE FED
WITH THE FEDERAL RESERVE board mulling an interest-rate hike just six weeks before Election Day, you'd think the White House would be all over Fed Chairman Alan Greenspan to hold his fire. But you'd be wrong.
President Clinton's economic advisers believe a rate boost would come too late to slow the economy by Election Day and spark job anxiety. "There would be no impact for six months, and even then the effect would be small," says one Clinton economist.
Treasury Secretary Robert Rubin, who breakfasts with Greenspan once a week, does not see the need to jawbone him. "Greenspan wants to wait until after the election, but he may have to move if the economy remains strong," says a Rubin associate.
Clinton's political advisers aren't as sanguine about a Fed tightening. "Intellectually, they know a rate hike won't affect the election--we've told them enough times," says a White House economic adviser. "But they still don't want to see it happen. We're just hoping they keep their mouths shut."
The White House's lack of pressure on the Fed is far different than the situation four years ago. Facing a weak economy, the Bush Administration lambasted Greenspan for not cutting rates more.EDITED BY LARRY LIGHT By Owen UllmannReturn to top
BONDERMAN RIDES OFF WITH DUCATI
DAVID BONDERMAN, THE Texas financier who controls Continental Airlines, is about to ride off with one of Italy's legendary motorcycle makers, Ducati, say people close to the deal. Ducati makes some of the world's most celebrated motorcycles. Its bikes have won four World Superbike Championships this decade.
The $330 million deal, soon to be announced, involves $113 million in fresh equity; the rest is either new debt or buyer-refinanced old debt. This all gives Bonderman's Texas Pacific Group a 41% stake in Ducati, and partner investment bank Deutsche Morgan Grenfell 10%. The new money is partly for expanding Bologna production facilities. An upcoming goal: to take the company public in New York.
The current owner is debt-laden conglomerate Cagiva, led by brothers Claudio and Gianfranco Castiglioni (other holdings: hotels, foundries), who couldn't be reached for comment. Cagiva will retain 49% but can buy back 2% from Texas Pacific and DMG later--the conditions are unclear. Claudio stays chairman.
The Castiglionis bought Ducati in 1985 for $5 million. Last winter, they turned down what news reports called a $190 million-plus bid from Chicago financier Sam Zell, a Ducati rider.EDITED BY LARRY LIGHT By Lisa Sanders and John RossanReturn to top
DOLE STOCK: THAT SINKING FEELING
BOB DOLE STYLES HIMSELF A believer in the marketplace. Well, maybe except for one. The Iowa Electronic Market (IEM), where investors buy stock in political candidates, is very bearish on Dole.
As of Sept. 11, stock in President Clinton stood at 79.5 cents, with Dole at 20.4 cents and sinking. Ross Perot's stock barely registers, at less than a penny. Dole's stock has been in freefall since its 33.9 cents peak in the afterglow of the mid-August Republican National Convention.
The $186,875-cap market--an online project (http:// www.biz.uiowa.edu/iem/) of the University of Iowa business school--has 6,657 investors. You pay a portion of a dollar per candidate-share, with all three contenders' stock prices adding up to $1. The winning stock pays off a buck per share after Nov. 5, so your profit is the difference between that and what you paid.
Since its 1988 kickoff, the IEM has been an uncanny forecaster. In a separate Iowa investment, where you bet on the final popular vote, most of the money has Clinton besting Dole by 10 points. All's not lost for Republicans. There's a third investment vehicle for Congress. The big money here is on the GOP's keeping control of the House, although losing some seats, and gaining in the Senate.EDITED BY LARRY LIGHT By Richard S. DunhamReturn to top