European Stars and Stripes (Newspaper) - September 16, 1990, Darmstadt, Hesse                                Sunday september 16, 1990 the stars and stripes a Page 13buck expected to stay Down after Brief rally the Dollar rallied Early last week but came tumbling Back to Earth at weeks end amid a string of economic reports showing slower retail sales rising inflation and sagging Industrial production in the United states. A the numbers were really pretty much As expected a said Julian Callow an International economist with Chase investment Bank London. Translation look for the Dollar to continue struggling on world markets. The weak . Economic picture could give the . Federal Reserve an Opportunity to Cut interest rates Between one Quarter and one half of a percentage Point perhaps within the next week Callow said adding that such a development would Hurt the Buck. The feds ability to ease rates has been complicated somewhat by the threat of inflation in the states primarily because of higher Oil prices. But Callow and several other analysts said they still see rates falling in the end. That scenario should hold True Callow said even though . Wholesale prices Rose by a whopping 1.3 percent in August the biggest increase in seven months. The key to when a reduction in interest rates actually takes place has a lot to do with the amount of Progress made by the Bush administration and Congress in working out a credible solution to americans budget deficit woes Callow added. But there a been a Good Deal of optimism among currency dealers Over the past several Days that a Compromise Between Congress and the White House May be achieved in that area in relatively Quick order. If that comes to pass there is virtually no one who doubts the fed will bring interest rates Down promptly. The fed funds rate which now stands at roughly 8 percent could drop by As much As 0.5 percent currency analysts said. The term a fed funds rate refers to the interest charged by Banks when they make Short term Loans to one another. Still More evidence to support a Cut in the interest rate came to Light last week when Federal Reserve Board chairman Alan Greenspan confirmed in Washington that rates will fall As soon As the Central Bank is presented with a budget deficit solution that seems realistic. A a there a not a great Deal that favors the Dollar at the moment and Greenspan a comments did no to do much to help a Callow said. On Friday afternoon the Dollar was trading at 1.567 Marks on the Frankfurt West Germany currency Exchange. The military rate for the weekend was set at 1.54 Marks based on a mid afternoon Price fixing a gain of 1 pfennig on the week. Few analysts though think the Dollar is on the Way up from there. One British Pound was Selling for $1.8875 late Friday 3 cents More than the rate that prevailed at midweek. Callow said the Dollar would be Hurt by lower . Interest rates because investors like to put their Money to work for the highest returns possible and today the Best yields can be found in Japan and West Germany. Rates in West Germany Are Likely to go up even higher Over the next six months or so As the government grapples with the Cost of financing unification with East Germany he said. David Cocker a currency analyst with chemical Bank in London said he Isnit convinced that the fed will Cut interest rates in the face of Middle East generated inflationary pressures. But he still does no to see any reason for the Dollar to Rise in value. A there was nothing in fridays economic data to help the Dollar a Cocker said. A obviously the . Economy is  retail sales in August fell by 0.6 percent in the states he said. And As further evidence of sagging american fortunes Cocker pointed to disappointing Industrial production data also released Friday. Industrial production slipped 0.2 percent in August and Cocker said most observers had expected no decline at All. The stare and stripes Dollar watch Randy Mcclain business news global funds the new trend for . Investors in 1990s by Chet Currier a business writer new York a As they try to Avail themselves of the Best growth opportunities Tor the 1990s, Many Mutual fund investors Pride themselves on taking an International approach. That a probably a smart idea Many financial advisers agree. But they add that global funds May be an even More promising Choice than their International counterparts. What a the difference Between the two in the terminology of the Mutual fund business a a International commonly describes a portfolio made up of securities from outside the United states. In a global fund by contrast managers mix together both american and foreign investments. Professional investors these Days have a Strong incentive to operate with a global approach since both stocks and interest bearing securities of Many National origins now Trade in what is fast becoming a continuous around the world marketplace. The profits of american businesses and the Levels of . Interest rates Are increasingly determined by events and trends that take place overseas. Many observers now argue that growth rates May be greater Over the next several years in Europe for example than they Are in the United states. A the lure of global investing is a hot fund theme in 1990,�?� notes the United Mutual fund selector an investment advisory service. A Given the trends of the �?T80s, the Odds favor an increasingly unified world marketplace in the �?T90s. Naturally this bodes Well for Mutual with the ability to capitalize upon business action wherever it  despite the current recession fears and Oil Price worries gripping most of the worlds Stock markets some analysts see dramatic opportunities in the years ahead. A facilitated by satellite telecommunications Money goods and services flow around the world with fewer restrictions than Ever before a observes Sheldon Jacobs publisher of the monthly letter the no Load fund investor. A with global markets integrated there will be unprecedented economies of scale not Only in manufacturing but in research materials sourcing and other  global funds have an Edge Over internationals some analysts argue because the United states stands a Good Chance of participating handsomely in the rewards of this growth. A America will fare of in this new world Quot Jacobs maintains. A a it a a myth that we Are in  the Mutual fund Industry has seized on these prospects to create More than two dozen global funds in recent years with Many More expected to be added. In a sampling of funds that Jacobs examined the portion of the portfolio devoted to . Holdings ranged from 14 percent to 61 percent. Since the people who run these funds have such differing views about where to allocate their assets it is Only logical that the results achieved will vary significantly from one global fund to another. Furthermore managers of these funds have to Cope not Only with questions of timing and Security selection but also with political risk and currency risk. The greater the number of choices to be made the greater the possibility that some individual decisions wont work out Well. Also the experts caution a global portfolio May not provide much Protection from any sort of worldwide economic or financial calamity. Concludes the United Mutual fund selector a even though a funds operation and philosophy Are worldwide in scope several other factors should be considered before jumping on Board. These factors include the costs to buy shares the performance record expense ratio and Quality of  state taxes complicate matters for citizens with Ira savings by Albert b. Crenshaw the Washington Post As Congress and other policy makers Ponder the questions of Why americans done to save and Why some seemingly Rich incentives have not had More Impact they might consider the individual retirement account. Designed As a vehicle for tax favored saving the Ira attracted a lot of Money but it is now in its third incarnation a fourth version is under consideration on Capitol Hill and workers and retirees May Well wonder whether the complexity is Worth the tax benefits. Retirees today May find that unless they have kept perfect records of every deductible and non deductible contribution Over their entire working lives they Are not going to be Able to Tell what part of their Ira distribution is taxable and what is not. And that a Only at the Federal level. Now an accounting professor at Drexel University in Philadelphia Points out another major headache a state taxes. Not Only does a Retiree need to have tracked the deductions he or she also needs to know what state the deductions were taken in. And if the worker now lives somewhere else he or she May be required to file non resident income tax returns and pay taxes in the state where the deductions were taken. In theory said professor Anthony Curatola this is perfectly fair. Almost All states allow some sort of Ira deduction. If you take advantage of it and then a were to move out of state they have Given you a tax Benefit and in taxing it they Are going Back after what that have a right to a Curatola said. So far he said Only 12 states tax  withdrawals by former residents but As budget crunches plague More and More states others May join in. What is fair in theory May not be quite so fair in practice. Curatola cited the Case of a new Jersey Man who worked in new York. New York taxes commuters so the Man deducted his Ira from his new York taxes. He then retired and found his distributions taxed by both new York and new Jersey. Most states allow deductions or credits for taxes paid in other states but claiming them adds yet another level of complexity. In addition non resident income tax forms in Many states Are very complicated. Curatola said some he looked at were a worse than my Federal  and if a worker moved several times he or she could end up filing in some none or All of the states he once lived in. The Ira Issue is not the Only one dogging retirees. Some states notably California tax pensions earned within their Borders even if the Retiree has Long since packed up and moved away. This has enraged retirees who have left California especially those who have moved to neighbouring Nevada which has no income tax. But it has been sustained in the courts. A what you re really talking about is the Power to tax income that has its source in that state a said Kathryn Jaques an accountant with the san Diego office of Arthur Andersen amp co. A pension is a deferred compensation for services that were performed somewhere sometime and the place where they were performed has Power to tax the compensation. President Bush a proposal for a family savings account would avoid Many of these problems. Under his plan contributions to the account would not be deductible but earnings in the account would not be taxed. But that  help All the iras and pensions already out their. To help them. Rep. Barbara Queano Vich r-nev., has introduced Federal legislation that would prevent states from taxing non residents pensions. That measure has made Little Progress to Date but if a few More states adopt californians tactics support could grow. And Many observers expect other states to get into the act before Long. Denis Harrington of the National association of retired Federal employees said a a lot of them Are looking at it. No doubt about it they re Licking their