European Stars And Stripes (Newspaper) - December 1, 1985, Darmstadt, Hesse                                Sunday december 1, 19b5 the stars and stripes Page 19 business news latest trend building up your debt by John Cunniff a business analyst new York never before Hus there been anything quite like n people who once worked hard to build up to Cir equity seem now to be just is intern on building up their debt. It is an enormous change As much so Cial As economic and it is occurring swiftly so swiftly that a generation that came through the great depression of the 1930s took on in Shock As their offspring Wallow in a sea of Loans. 1 he older generation believed you should secure your Home and they pitied the neighbor who had to take out a second mortgage because they knew nobody did that unless they were pressed to the Wall. Protectionism imperils West coast shipping Seattle Wash. Up the porn of Seattle s terminal 106 serves As a sort of Ellis Island for the real  my buddy and i Joe dolls thai eventually will find their Way under Christmas Trees All Over America. Millions of dollars Worth of dolls stuffed animals and other toys Are imported by Hasbro Bradley inc. Through Seattle from All Over the far East Hong Kong Taiwan Korea Singapore and China. It s a fact of life in the modern world of Commerce that american companies like Hasbro do much of their manufacturing overseas. The Pacific trading lanes have been booming in recent years As manufacturers chased cheaper labor rates and americans developed a taste for Cut rate goods from Asia. Trade Between the United states and Pacific rim nations has grown at an annual rate of 16 percent Over the past five years and has surpassed . Trade with any other Region of the world. Yet even As West coast boosters Are declaring this the Era of the Pacific there arc economic storm Clouds gathering on the Eastern horizon. The threat is protectionism. With the . Trade deficit approaching an estimated $150 billion this year several Hundred Bills have been introduced in Congress that would affect Trade. Since most of the Bills target products or companies from Asia no sector of the Economy stands to suffer More than those who make their living from Trade across the Pacific. Its very simple said Robert Long a Stock analyst who follows the shipping Industry for the Wall Street firm of first Boston. Trade restrictions would have a substantially negative effect on the shipping Industry the most negative effect of anything at the moment i could think of. There would be nothing  vet the threat of protectionist legislation is Only part of the Story. Even without a drop off in Trade that such legislation promises Competition has become fierce in the trans Pacific As steamship companies and ports fight for their share of the Mark. That is because even As the Trade traffic has grown shipping capacity has increased Ai an even faster Pace according to Industry experts. A Boston area management and consulting firm Temple Barker & Sloane that follows the maritime Industry is forecasting that while eastbound Container traffic in the Pacific will grow by less than 10 percent Between now and 1987, shipping capacity will increase by 42 percent. There s a real blood Bath going on out there said Jack Block the Seattle port commissioner who also works on the waterfront As a Longshoreman. Even before the current problems survival has not been easy in the american maritime  . Shipbuilders Many american steamship companies have found it difficult to keep costs Down sufficiently to remain competitive in the world Market. Despite an array of subsidies and tax Breaks dating Back to the 1930s, . Flagships now carry less than 10 percent of american imports and exports. The number of major american liner companies has dwindled to a handful. The younger pc Calion does t need any pressure to go after the loan. Instead they consider it smart to take the second , eagerly offered by lenders Anil use the Money for living. The ready explanation is that equity in a Home is Idle Money Money that can be put to use for furniture cars Educa Tion travel and maybe a personal computer. Let  House be your banker As they say. Something ithe sort is going on in the corporate world Loo where Many billions of dollars of equity arc disappearing to be replaced by Loans. That s what happens in leveraged buyouts for example. Uncle Sam of course is in the act. In fact he is the prime practitioner of Bor rowing reasoning that debt in t so bad if you have the Power to impose taxes to pay interest which Tiow is the fastest rising of All budget categories. Taking mat Cue. Much of the household borrowing now going on is based on the philosophy that incomes will Rise and allow Thi. Loans to be repaid. And some folks  inflation will allow them to repay in cheaper dollars. It in t unusual to hear a related View Point n which the Householder declares his intention of never paying Back the loan. If hey die Well they have insurance. Am if they Don to Well Well just sell the  Reading seme Lender s literature some of this  is justified. But others worry mostly because they Don t have the answers to some Basic questions first will incomes continue to Rise will there always be a Market for the House and will prices continue to Rise and then there s the matter of interest rates. They re Low now. According to Many borrowers a statement that causes some financial analysis to quiver in their to exits. Great depression generation looks on in Shock thai might be the perception icy say. But it in t the fact. The fact is that interest Rales arc extraordinarily High even now. In fact real interest rates that is with inflation subtracted arc around 4 percent of 5 per cent which is 30 percent to so percent higher than usual. The real interest on Many Bank cards is More than 15 percent. And Hutnic equity Loans or second mortgage Loans arc being offered at a Premium of seven percentage Points Over the inflation Rale. Those who know the recent history of interest consider those rates quite High and they add there s another Little twist that can have big big consequences. Today s Rales float they Point out. 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To 4 16 170 14 of to 063 370 to 4 1 18 150 month.,  investor s guide by William Doyle q. Can you shed some Light on the Sale of Stock acquired through dividend reinvestment plans i had thought the procedure would be similar to redeeming Mutual fund shares whereby you and in instructions to Cash in the shares and receive a Check within a week. Not so u seems with dividend reinvestment plans of individual companies. I sent notices to two companies in whose dividend reinvestment plans i have been enrolled. I instructed Ach to Send me a Stock certificate for the Ful shares in my account and to sell the fractional share in the account and Send me a Check. It s been several weeks now and All i be received is a notice from one of the companies that my request would be honoured within five Days of the next dividend payment Date. So it is i assume with the other company. A. Don t assume anything. Although All dividend re investment plans operate basically the same there Are details that can vary from one company s plan to another especially when you want to Seil your shares. Most companies appoint Banks As agents for their dividend reinvestment plans borne companies act As their own dividend reinvestment plan agents. To participate in a dividend reinvestment plan and use your dividends to buy additional shares you Deal with the plan s agent. The agent holds your shares. When you want to sell some or All or those shares you instruct the agent to do that Lor you. Also when you order out some or All of the shares so that you will receive a certificate you Contact the agent. With some of those plans the agent will act to sell your shares and or deliver your Stock certificate within a Day or two after receiving your instructions. With other plans your orders might not be carried out until he next dividend record Jat dividend payment Date or some other Date. Because Many companies pay dividends quarterly you might have to wait about three months. In every Case All details of a dividend reinvestment plan including the exact procedure for Selling shares and delivering certificates arc spelled out in the prospectus and other literature the Coni Pany sends to stockholders participating in its dividend reinvestment plan. Rather than assuming the two plans in which you arc enrolled operate exactly the same you should read the each plan s prospectus and learn each plan s details. Q. I be heard about Banks profiting from the float by sending out checks late and having the use of Money until the checks Are cashed. What do you think of my experience which has been bugging me Ever since it happened on april 18, i mailed the proper form to the Bank that is agent for a dividend reinvestment plan ordering the Sale of my shares. I did t receive the Check and confirmation slip until May 13. The confirmation slip listed the Trade Date As May i. The Check was dated May 8. Talk about buoyancy if your Bank does that with All its trans actions it won t need any Money of its own. A. You re overreacting. The Bank was not required to Send the Check until to a settlement Dale five business Days after the Trade Date. That was May 8, the Date of the Check which was a wednesday. May in on which you received the Check was a monday. Considering this nation s mail delivery you can t complain about that. It s impossible for me to name the exact Day the Trade Date on which your shares should have been sold. It might have been May i or it might have been an earlier Date. You la find the answer to that by studying the prospectus of that particular dividend reinvestment plan. Q. If i enrol in a dividend reinvestment plan what becomes of the excess dollars and cents in each dividend which Are insufficient to buy a full share a. That Money will buy a fraction of a share. In a dividend reinvestment plan you buy full and fractional shares usually to inc third or fourth Decimal place. Kane features columnist Doyle Welcome written questions but he can provide answers Only through he column. You can Orlle to him in care of the so frs and so repel. Apo 09211, . Forces