European Stars and Stripes (Newspaper) - February 18, 1990, Darmstadt, Hesse                                Page 20 f the stars and stripes sunday february 18,1990 irnesto s guide by Bill Doyle q. Several months Iga i bought Zero Coupon Bond due id mature in 2009. At that time. I assumed i would not have to pay tax on the interest until the Bond matures. My reasoning was that i won t collect that interest until the Bond s maturity. Now. I am informed that i must report part of the Bond s original Issue discount on my annual in come tax re turns and pay tax each year. Does t this mean i will pay lax on the interest twice annually and when the Bond matures a. No. You la pay tax each year on a portion of the Doyle original Issue discount "o1d, Tor Short the amount or interest that accumulates on that Bond Dur ing the year Tor which you lie the income tax return. Here s hoping you live Long enough so that on your return Lor 2009. You la report Only did interest buildup that car q. My wife and i had a rather Large amount of Slock of questionable Quality. We discussed the Sale of this Stock with a broker on wednesday and instructed him to sell the Stock two Days later on Fri Day. For reasons not known to us the Sale was not  following monday that Stock s Price took a rapid decline. When we were Able to get out Betook a loss of More than 80 percent of the Price at which the Sale should have been  we have any recourse a. That depends on the Type of order you gave the broker. If you had placed a Market order it should have been executed. A Market order is an order to sell or buy at the most advantageous Price obtainable. Assuming the Stock trades on a Stock Exchange the Market order is filled As soon As it reaches the Exchange s trading floor. If the Slock trades inthe Over the counter National association of securities dealers automated quotation system the Market order is filled equally fast. However if you placed a limit  it very Well could have gone unfilled. A limit order is an order to sell or buy at a specified Price or belter. When a Stock docs i reach the Price you name in the limit order that order is not executed. There Are a couple of strange things about your letter. You Don t explain Why you placed an order on a wednesday to sell two Days later. And the 80 percent loss you mention could not have take place within a few Days even if the Black monday. Oct. 19. 1987, Stock Market crash was part of that time Span. I suspect you placed a limit order that could not be filled on that Friday and you sold at a lower Price sometime later it King fear bras Drexel sends Market Crown new Yoron Lvpl the Stock mar Ket headed into talk presidents Day holi Day monday with a weekly loss As investors absorbed the new of the largest bankruptcy filing Ever on a Street. The Dow Jones  fell 13.96 Friday to close at 2635.59 of floss of 12.61 Points on the week or about o. Cent. Among the broader Market averages the new York Stock Exchange composite Index fell 0.64 Points to close the week at183.75. Standard & poor s 500-Slock Index dropped 0.90 to 332.72. Declines led advances 1,009-837 among the 2,140 issues traded last  Board volume totalled 742,964,690 shares compared with 774,980,820 a week earlier and 785,683,640 a year ago. Analysts called it a classic Case of sell the Rumor buy the fact As the Market skidded almost 30 Points monday on combination of a weak Bond Market an talk on Wall Street that the Parent company of or excl Burnham Lambert int file for bankruptcy because of a Plum tin the Market for its High risk junk Bonds. The filing came tuesday Rual but the Dow industrials managed Small gain tuesday even As it  apparent that a filing was Timmin calf. On wednesday the Tarket held firm in the aftermath of  filing As investors tried to asses now widespread any damage to the financial system might be. But by Thui ongay prices rallied amid a sense of re Lithe demise of the former junk Bond powerhouse was not expected to have apr far ranging effects. Prices were just about even on the week at that Point but the Dow lost 13 Points Friday accounting for the week s drop. The expiration of february Stock Index futures and options known As double witching hour sparked a Laic Selling spree Friday As the Market woui1 Down for the presidents Day hold monday when it will be closed. Drexel was the focus All we. Or and began laying off several Rusland of its 5,300 employees  Bro pc vases picked Over the a chains of the Waltl acct firm. Relate Story Page 5. It  to Bow operating com Pany a  of the Pioneer in the use of  for financing giant corporate  lib the Barket acquitted it self Well inane face of Tomuel s downfall. The pm mint of the Refl Tecl was that it would thave a deep effect on a financial St Rydre or the Economy Sain acne sea technical research director Aff Cental i co. If it were otherwise the a act Raudt have broken wide  to scale said speculation Over the Dree. Bankruptcy was in the Market. It had been talked about and worried about for a number of  said the crumbling of or excl should go a Long ways in eliminating the evils produced by junk Bonds namely the High Levels of debt that push Compa Nies into dire financial  Don t think it Means the end of acquisitions or leveraged buyouts. I jus think the Market will turn its interest to equities rather than Bonds for future i  he said with companies issuing Stock to raise Money rather than Bonds. I think it s a plus for  will slow takeover activity though i think. One because it was overdone in the first place and two because the House that sponsored no longer around he said. Ouija analysts questioned How much of a my tar Drexel s undoing would be for Stock  All this docs is Hurt Public Confidence again said Don Hays director of invest ment strategy at wheat. First securities inc. In Richmond a. And fifth arc Sonc thing the Public does t need it s to have its Confidence Hurt any worse than it Al ready has  the trading floor last week. Growth fund of Spain which began trading thursday was the most Active nose Issue unchanged at 12ft.citicorp followed up 1% to 24%, As Banks rallied thursday to Lead the mar Ket. The sector benefited from several analysts recommendations. Reader s digest which also began trading thursday was third unchanged at 21  the Blue chips at to lost i to 39 /4, ism Rose 1 to 103 a Philip Morri lost 1 to 38 a and general electric fell /. To 62.telsewhcre in the banking sector Chase Msal Diatian jumped 2 to 30, Wells Fargo Soa Rewo a to 71, and Bank America surged 5vlo 28%.on  Slock Exchange the Macx Marks Yalu Index fell 2.02 to close Friday aw58.77. Declines led advances 416-376 to Wing the 990 issues traded.  volume a told 60.586,360 shares compared Wilh w493,220 traded a week earlier and 55,07515 traded in the same week a year ago.  led the amex a fives unchanged at i  National association of securities dealers Index edged up 0.17 to end the week at 429.01. Government takes Over Franklin savings Dallas not Federal regulators Friday took control of the Franklin Sav Ings association a Large and unorthodox savings institution based in Ottawa kan., with $11.4 billion in assets and close tics to Wall Street. It is now the largest savings unit in government hands. The office of Thrift supervision said Franklin s net Worth will fall to a negative $44.3 million after examiners Friday forced the institution to make several accounting  involved recording $ 119 million in losses from futures trading the savings unil had planned to write off Over seven years. The savings institution which reported $359.9 million in capital at the end of 1989, is also Likely to lose another $185 million on Zero Coupon Bonds it issued in 1984. The government said. The institution which lost Money from pc rations in four of the last five quart ers was unable to raise fresh capital and had Little Prospect for recovery1, said Marcadas a spokesman for the supervisory Agency in Washington. In its years of rapid growth. Franklin relied heavily on techniques designed to reduce the risk of loss from interest rate fluctuations. It changed course after suffering losses in 1981 and 1982, when High interest rates Hurt Many savings institutions thai made Loans primarily to Home buyers. Few of Franklin s current Assels in clude Home mortgages. The analysis that led Franklin to adopt the interest rate hedging techniques was developed by the institution with Wayne Angell now a Federal Reserve governor in Washington. 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