Rob RennieChief Executive OfficertheSupplyChain.com Inc.Newport Beach, Calif.
Larry Ellison properly castigates Microsoft Corp. for its numerous sins, but then he immediately stumbles into the same trap that plagues all Microsoft products and their customers. Microsoft delivers monolithic software, containing huge and unnecessarily complex code, none of which can be completely understood by other vendors trying to make value-added products. The inestimably better way is to create and adhere to open industry standards at well-known interfaces. Without such standards, the World Wide Web would never have become anything more than a minor toy.
Steven PotuzakGilroy, Calif. Joseph Weber's commentary, "Caution: Single-stock futures ahead" (News: Analysis & Commentary, Feb. 26), presented an unbalanced examination of single-stock futures. Such futures will bring many potential growth opportunities to the global equity markets.
The benefits include new hedging opportunities, the ability to short stocks without paying stock borrowing costs, capital efficiency, and cost effectiveness. It will be important for market participants to review the risks and rewards prior to investing. We are confident that our regulators and exchanges will provide the required levels of customer protection and appropriate margin requirements.
Joseph MurphyChief Executive OfficerRefco Global FuturesNew York
Joseph Weber's inflammatory commentary is based on faulty premises and an obvious prejudice against offering individual investors a fair opportunity to benefit from the transparency and efficiency of exchange-traded derivative contracts as risk management tools.
The ban on single-stock futures was not related to risk. Instead, it was imposed because government regulators couldn't agree which [agency] should have oversight. Every major financial regulator--the Federal Reserve, Treasury Dept., Commodity Futures Trading Commission, and Securities & Exchange Commission--supported the legislation that permits single-stock futures. The ability of futures exchanges to trade single-stock futures was specifically tied to implementing all of the customer protection rules applicable to securities markets.
The relevant facts omitted are that (1) a 20% loss [the example cited] has the same effect on an investor whether he or she owns 100 shares of stock or a futures contract for 100 shares, and (2) the new law requires that single-stock futures be marketed, margined, and traded in the same manner as options on those stocks.
Scott GordonChairman of the BoardJames J. McNultyPresident and CEOChicago Mercantile ExchangeChicago Hedge funds are having a detrimental impact on the real economy, especially America's industrial base ("Hedge funds are hot again," Cover Story, Feb. 26). Instead of making productivity-enhancing investments in either manufacturing or services, unregulated capital gravitates toward monopolies or speculation.
Finance capital exacerbates the equilibrium problems between capitalist nations in order to profit from the discrepancies, increasing volatility in both the equity and currency markets. To place the global economy back on track to shared prosperity, these hedge funds need to be tightly regulated.
David ChiangHowell, N.J. "Low-skilled jobs: Do they have to move?" (Workplace, Feb. 26) is a testimony to how training and automation can make manufacturing in the U.S. competitive against low-wage Third World countries. However, it is beyond me why Congress might offer tax credits or other incentives to retain more manufacturing in the U.S.
Bill WaddellPalos Verdes, Calif. A really painless way to increase Social Security revenues has fortuitously come up ("A better way to use all that dough," News: Analysis & Commentary, Feb. 26). As part of his across-the-board income-tax cut, President Bush can include a provision to remove the $80,400 ceiling on covered FICA earnings. This way, Bush can still give a tax cut to upper-income people while simultaneously increasing their Social Security benefits and helping to safeguard the Social Security fund.
Niels H. NielsenPrinceton, N.J. While people may feel less stigmatized about filing for bankruptcy, the reason for the huge increase in filings can hardly be the result of less "stigma" ("Bankruptcy? So What?" Economic Trends, Feb. 19). Once people are massively in debt, they need an escape hatch, regardless of the stigma.
Bankruptcy is the escape. If the creditors don't want to write off so much debt, they can reduce the credit risk by requiring potential customers to file written loan applications for all types of debt, including credit cards.
Robert SingerHamden, Conn. In a recent study, we showed that the introduction of real-time pricing to the larger commercial and industrial customers can result in substantial improvements in the state's demand-supply balance ("Why the energy crunch needs tough love," News: Analysis & Commentary, Feb. 19). During peak hours, demand can be lowered by about 2.5%, resulting in a 24% drop in wholesale electricity prices. This solution is environmentally clean. It is also cheaper and faster than many of the supply-side solutions being advocated.
Ahmad FaruquiEconomistElectric Power Research InstitutePalo Alto, Calif. I'm responding to "Jobs: How long can services pick up the slack?" (News: Analysis & Commentary, Feb. 19). I have been out of work since July, 2000. My best advice to the 55-year-old factory worker--and others 50-plus--who want to bone up on computer skills so they can find new jobs: Find work instead as a janitor or security guard if you really need the money to pay your taxes or medical bills. Your past excellent proven employee record is of no value to the info-tech economy.
John W. HillmanValrico, Fla.