WEEK IN REVIEW

WHO DO YOU TRUST, ALAN OR WARREN?

Well, the Federal Reserve policymakers and Alan Greenspan, a smart man if there ever was one, decided not to raise the federal funds rate, a sign that they expect slower growth and a continued low rate of inflation. Meanwhile, Warren Buffett, another smart man, picked up silver like a scavenger after a Lone Ranger gunfight, an indication that he expects higher inflation.

Meanwhile, the market dithered most of the week after Monday, when Standard & Poor’s 500 stock index crossed 1000 for the first time and the Dow Jones Industrial Average zoomed past 8100 on a 201-point day.

Thanks to Mr. Buffett, spot silver, less than $5 an ounce in September, headed toward $8, the best price in a decade.

Also best in a decade is municipal bond quality, Moody’s Investors Service Inc. says. Things are so good that even cities can pay their bills.

It’s just fair play

Remember when the Japanese were buying up U.S. properties? The sandal is on the other foot now: GE Capital Services is talking about buying Toho Mutual Life Insurance Co., a Tokyo newspaper reported. Troubled Toho has a “very poor” credit rating, according to Moody’s Investors Service Inc. At least Rockefeller Center was making money when the Japanese paid too much for it.

MFS chief dies at 62

A. Keith Brodkin, chairman and chief executive of MFS Investment Management, died unexpectedly Monday of an embolism at the age of 62. He was in Brigham and Women’s Hospital in Boston, recovering from heart surgery. He joined Massachusetts Financial Services in 1970 as the company’s first fixed-income manager and became CEO in 1991. He is survived by his wife, Judy, and three children. Jeffrey Shames, president since 1993, is handling day-to-day

operations of the Sun Life of Canada affiliate.

Diversity, part-time

Merrill Lynch & Co., apparently nearing a settlement in a year-old sex discrimination suit brought by eight female brokers, has named Westina Matthews, 49, as top dog in the diversity departme
nt. Officially she’s first vice president and senior director of corporate responsibility. A Ph.D. in education from the University of Chicago and a former elementary school teacher who served for three years on the New York City Board of Education, she’s worked for Merrill since 1985. Her new gig is part-time – she’ll continue to run the company’s giveaway program as secretary of the Merrill Lynch Foundation – but the press release announcing her appointment uses “diversity” five times and “diverse” once on the first page alone. We get the idea.

Merrill also named a bunch of people to full-time jobs: E. Stanley O’Neil, 46, as executive vice president and chief financial officer; Thomas W. Davis, 44, executive vice president, corporate and institutional client group; Michael J.P. Marks, 56, executive chairman of Merrill Lynch Europe, Middle East and Africa; Joseph T. Willet, 46, chief operating officer of the Europe-Middle East-Africa group; and international specialist Christopher Reeves, 62, deputy chairman of Merrill Lynch International and a member of the office of the chairman of the parent company.

Perelman takeover

San Francisco thrift First Nationwide Holdings Inc., 80% owned by Revlon billionaire Ronald Perelman, agreed to take over Golden State Bancorp for $2.7 billion in stock. Shareholders of Golden State, parent of Glendale Federal Bank, would own more than 55%

of the combined company, which would be the country’s third-largest thrift, but Perelman and Gerald Ford (not that one), First Nationwide’s minority owner, would be kings of the hill.

Chestnuts in blossom

Goldman Sachs International, a subsidiary of you know who, has joined the Paris Bourse as a remote member. Thanks to the European Union, you don’t have to be in Paris to trade there. When does Goldman plan to start trading? You guessed it: April in Paris.

Who’s been working

on the railroad?

Railroad stocks have been a wreck lately, thanks to the Union Pacific-Southern Pacific traffic jam. So far off-t
rack, in fact, that Kansas City Southern Industries Inc. will keep its railroad and spin off its mutual funds, instead of the other way around. The fund companies, Janus Capital Corp. and Berger Associates Inc., both based in Denver, are highballing right along, of course.

Front-running?

Thomas E. Kelly, a fired commodities trader for John W. Henry & Co. in Boca Raton, Fla., was arrested along with commodities adviser Andrew Rhee on charges of using advance knowledge, or front-running, to make $2 million for themselves. They were awaiting

arraignment at press time.

A long reach

from Down Under

Worldwide consolidation continues, with Australia’s biggest money manager, life insurance company AMP Asset Management, making a kangaroo-sized hop to London to buy Henderson Plc for $626 million. Henderson was one of Britain’s last independent money managers, with about $33 billion under management or administration. A magazine named it the United Kingdom’s top manager of investment trusts for 1997.

Late January thaw

The last three days of January saw almost three times as much money go into U.S. mutual funds as in all the rest of the month, reported Trim Tabs Financial Services Inc. in Santa Rosa, Calif., $10.6 billion vs. $3.8 billion. Asia’s recovery is fingered as the reason.

Fund runners of ’97

Chicago’s Morningstar named its fund managers of the year in four categories: Mario Gabelli in domestic stocks, Helen Young Hayes of Idex Global and Janus’s Overseas and Worldwide funds in foreign stocks, David Baldt of Morgan Grenfell’s Fixed-Income and Municipal Bond funds in bonds and Safeco Resource Series Trust Growth’s Thomas M. Maguire in variable funds.

Bloomberg vs. Reuters, part 2

Reuters Holdings Plc and Bloomberg LP continue trying to write their names in the snow. A spokesman for Reuters in London acknowledged that a federal grand jury in New York is looking into whether its employees had persuaded a consultant, Cyberspace Research Associates Inc., to subscribe to Bloomberg News. When
the story broke, the probe was believed to involve hacking into the Bloomberg computer system. The spokesman said that if Reuters has “any proprietary information belonging to Bloomberg in its products, it intends to take remedial action.” Eponymous CEO Michael R. Bloomberg had no comment.

Bloomberg News contributed

to this report

closing quote

“The basic principles are the same, whether you’re trying to sell a can of peas or a mutual fund.”

– Bud Shapiro, consumer marketing chief of money manager

Institutional Capital Corp., on an influx of consumer

marketing executives into the financial services field Page 21