( S ( CC But ) ( NP-SBJ-1 ( NP ( NN service ) ) ( PP-LOC ( IN on ) ( NP ( DT the ) ( NN line ) ) ) ) ( VP ( VBZ is ) ( VP ( VBN expected ) ( S ( VP ( TO to ) ( VP ( VB resume ) ( PP-TMP ( IN by ) ( NP ( NP ( NN noon ) ) ( NP ( NN today ) ) ) ) ) ) ) ) ) )

But service on the line is expected to resume by noon today


( SINV ( S-TPC-1 ( NP-SBJ ( PRP We ) ) ( VP ( VBD had ) ( NP ( NP ( DT no ) ( JJ serious ) ( NN damage ) ) ( PP-LOC ( IN on ) ( NP ( DT the ) ( NN railroad ) ) ) ) ) ) ( VP ( VBD said ) ) ( NP-SBJ ( DT a ) ( NNP Southern ) ( NNP Pacific ) ( NN spokesman ) ) )

We had no serious damage on the railroad said a Southern Pacific spokesman


( S ( NP-SBJ ( PRP We ) ) ( VP ( VBP have ) ( NP ( NP ( DT no ) ( NN problem ) ) ( PP ( TO to ) ( NP ( PRP$ our ) ( NN freight ) ( NN service ) ) ) ) ( ADVP ( IN at ) ( DT all ) ) ( PP ( IN expect ) ( PP ( IN for ) ( NP ( DT the ) ( NN fact ) ( SBAR ( S ( NP-SBJ-1 ( NNS businesses ) ) ( VP ( VBP are ) ( VP ( VBN shut ) ( PRT ( RB down ) ) ) ) ) ) ) ) ) ) )

We have no problem to our freight service at all expect for the fact businesses are shut down


( S ( NP-SBJ ( NNP Amtrak ) ) ( VP ( VBD said ) ( SBAR ( S ( NP-SBJ ( PRP it ) ) ( VP ( VBD suspended ) ( NP ( NP ( NN train ) ( NN service ) ) ( PP ( IN into ) ( NP ( NP ( PRP$ its ) ( NNP Oakland ) ( NN station ) ) ( SBAR ( WHNP-1 ( WDT which ) ) ( S ( VP ( VBD sustained ) ( NP ( JJ heavy ) ( JJ structural ) ( NN damage ) ) ( PP-TMP ( IN during ) ( NP ( DT the ) ( NN quake ) ) ) ) ) ) ) ) ) ) ) ) ) )

Amtrak said it suspended train service into its Oakland station which sustained heavy structural damage during the quake


( S ( NP-SBJ ( DT The ) ( NN passenger ) ( NN railroad ) ) ( VP ( VBD said ) ( SBAR ( S ( NP-SBJ-1 ( PRP it ) ) ( VP ( VBD terminated ) ( NP ( NP ( DT some ) ( NNS runs ) ) ( PP-LOC ( IN in ) ( NP ( NNP Sacramento ) ) ) ) ( S-ADV ( VP ( VBG relying ) ( PP-CLR ( IN on ) ( NP-2 ( NNS buses ) ) ) ( S-CLR ( VP ( TO to ) ( VP ( VB ferry ) ( NP ( NNS passengers ) ) ( PP-DIR ( TO to ) ( NP ( DT the ) ( NNP Bay ) ( NN area ) ) ) ) ) ) ) ) ) ) ) ) )

The passenger railroad said it terminated some runs in Sacramento relying on buses to ferry passengers to the Bay area


( S ( NP-SBJ ( NNP Amtrak ) ) ( VP ( VBD said ) ( SBAR ( S ( NP-SBJ-1 ( PRP it ) ) ( VP ( VBD planned ) ( S ( VP ( TO to ) ( VP ( VB resume ) ( NP ( NP ( DT some ) ( NN train ) ( NNS operations ) ) ( PP-LOC ( TO to ) ( NP ( NNP Oakland ) ) ) ) ( NP-TMP ( JJ late ) ( NN yesterday ) ) ) ) ) ) ) ) ) )

Amtrak said it planned to resume some train operations to Oakland late yesterday


( S ( NP-SBJ ( NN Rail-transit ) ( NNS operations ) ) ( VP ( VBD suffered ) ( NP ( JJ little ) ( NN damage ) ) ( PP ( VBG according ) ( PP ( TO to ) ( NP ( NP ( NNP Albert ) ( NNP Engelken ) ) ( NP ( NP ( NN deputy ) ( NN executive ) ( NN director ) ) ( PP ( IN of ) ( NP ( NP ( DT the ) ( NNP American ) ( NNP Public ) ( NNP Transit ) ( NNP Association ) ) ( PP-LOC ( IN in ) ( NP ( NNP Washington ) ) ) ) ) ) ) ) ) ) )

Rail-transit operations suffered little damage according to Albert Engelken deputy executive director of the American Public Transit Association in Washington


( SINV ( S-TPC-1 ( NP-SBJ ( DT The ) ( NNP Bay ) ( NNP Area ) ( NNP Rapid ) ( NNP Transit ) ) ( VP ( VBD withstood ) ( NP ( DT the ) ( NN earthquake ) ) ( ADVP ( RB perfectly ) ) ) ) ( VP ( VBD said ) ) ( NP-SBJ-2 ( NNP Mr. ) ( NNP Engelken ) ) ( S-ADV ( VP ( VBG adding ) ( SBAR ( IN that ) ( S ( NP-SBJ-3 ( DT the ) ( NN rail ) ( NN system ) ) ( VP ( VBD was ) ( VP ( VBG running ) ( NP ( NP ( DT a ) ( JJ full ) ( NN fleet ) ) ( PP ( IN of ) ( NP ( CD 45 ) ( NNS trains ) ) ) ) ( PP-TMP ( IN during ) ( NP ( DT the ) ( NN day ) ) ) ( S-PRP ( VP ( TO to ) ( VP ( VB provide ) ( NP ( DT an ) ( NN alternative ) ) ( PP-CLR ( IN for ) ( NP ( NN highway ) ( NNS travelers ) ) ) ) ) ) ) ) ) ) ) ) )

The Bay Area Rapid Transit withstood the earthquake perfectly said Mr. Engelken adding that the rail system was running a full fleet of 45 trains during the day to provide an alternative for highway travelers


( S ( S-TPC-2 ( NP-SBJ-1 ( DT The ) ( NN highway ) ( NN system ) ) ( VP ( VBZ is ) ( VP ( VBN screwed ) ( PRT ( RP up ) ) ( PP ( IN by ) ( NP-LGS ( DT the ) ( NN earthquake ) ) ) ) ) ) ( NP-SBJ ( NNP Mr. ) ( NNP Engelken ) ) ( VP ( VBD said ) ) )

The highway system is screwed up by the earthquake Mr. Engelken said


( S ( NP-SBJ ( DT The ) ( NN transit ) ( NN system ) ) ( VP ( VBZ is ) ( SBAR-PRD ( WHADVP ( WRB how ) ) ( S ( NP-SBJ-1 ( NNS people ) ) ( VP ( VBP are ) ( VP ( VBG going ) ( S ( VP ( TO to ) ( VP ( VB be ) ( VP ( VBG getting ) ( ADVP-CLR ( RB around ) ) ) ) ) ) ) ) ) ) ) )

The transit system is how people are going to be getting around


( S ( NP-SBJ ( PRP He ) ) ( VP ( VBD added ) ( SBAR ( IN that ) ( S ( NP-SBJ ( NP ( NNP San ) ( NNP Francisco ) ( POS 's ) ) ( NN trolley ) ( NNS cars ) ( CC and ) ( NN trolley ) ( NNS buses ) ) ( VP ( VBD were ) ( ADVP ( RB also ) ) ( VP ( VBG running ) ( PP ( IN at ) ( NP ( JJ full ) ( NN service ) ( NNS levels ) ) ) ) ) ) ) ) )

He added that San Francisco 's trolley cars and trolley buses were also running at full service levels


( S ( SBAR-ADV ( IN Although ) ( S ( NP-SBJ ( NP ( NN air-traffic ) ( NNS delays ) ) ( PP-LOC ( IN in ) ( NP ( NNP San ) ( NNP Francisco ) ) ) ) ( VP ( VBD were ) ( ADJP-PRD ( JJ significant ) ) ( NP-TMP ( NN yesterday ) ) ) ) ) ( NP-SBJ-1 ( PRP they ) ) ( VP ( VBD did ) ( RB n't ) ( VP ( VB appear ) ( S ( VP ( TO to ) ( VP ( VB spread ) ( PP-DIR ( TO to ) ( NP ( JJ other ) ( NNS airports ) ) ) ) ) ) ) ) )

Although air-traffic delays in San Francisco were significant yesterday they did n't appear to spread to other airports


( S ( NP-SBJ ( DT The ) ( NN earthquake ) ) ( VP ( VP ( VBD shattered ) ( NP ( NP ( NNS windows ) ) ( PP-LOC ( IN at ) ( NP ( NP ( NNP San ) ( NNP Francisco ) ( NNP International ) ( POS 's ) ) ( NN air-traffic ) ( NN control ) ( NN tower ) ) ) ) ) ( CC and ) ( VP ( VBD rained ) ( NP ( NP ( NNS pieces ) ) ( PP ( IN of ) ( NP ( DT the ) ( NN ceiling ) ) ) ) ( ADVP-LOC-CLR ( RP down ) ( PP ( IN on ) ( NP ( NP ( NNS controllers ) ) ( SBAR ( WHNP-1 ( WHNP ( CD three ) ) ( WHPP ( IN of ) ( WHNP ( WP whom ) ) ) ) ( S ( VP ( VBD suffered ) ( NP ( JJ minor ) ( NNS injuries ) ) ) ) ) ) ) ) ) ) )

The earthquake shattered windows at San Francisco International 's air-traffic control tower and rained pieces of the ceiling down on controllers three of whom suffered minor injuries


( S ( S ( NP-SBJ-1 ( NP ( NNS Terminals ) ) ( PP-LOC ( IN at ) ( NP ( NNP San ) ( NNP Francisco ) ( NNP International ) ) ) ) ( ADVP ( RB also ) ) ( VP ( VBD were ) ( VP ( VBN damaged ) ) ) ) ( CC but ) ( S ( NP-SBJ ( NP ( DT the ) ( NN tower ) ) ( NP ( PRP itself ) ) ) ( VP ( VBD was ) ( ADJP-PRD ( JJ intact ) ) ) ) )

Terminals at San Francisco International also were damaged but the tower itself was intact


( S ( NP-TMP ( NNP Tuesday ) ( NN night ) ) ( NP-SBJ-1 ( NNS thousands ) ) ( VP ( VP ( VBD were ) ( VP ( VBN diverted ) ( PP-DIR ( TO to ) ( NP ( JJ other ) ( NNS airports ) ) ) ) ) ( CC and ) ( VP ( VBD had ) ( S ( VP ( TO to ) ( VP ( VB wait ) ( NP-TMP ( DT a ) ( NN day ) ) ( S-PRP-CLR ( VP ( TO to ) ( VP ( VB resume ) ( NP ( NN travel ) ) ) ) ) ) ) ) ) ) )

Tuesday night thousands were diverted to other airports and had to wait a day to resume travel


( S ( S-TPC-3 ( S ( NP-SBJ-2 ( NP ( NNS Runways ) ) ( PP-LOC ( IN at ) ( NP ( NNP San ) ( NNP Francisco ) ) ) ) ( VP ( VBD were ) ( RB n't ) ( VP ( VBN damaged ) ) ) ) ( CC but ) ( S ( NP-SBJ-1 ( NN traffic ) ) ( VP ( VBD was ) ( VP ( VBG being ) ( VP ( VBN limited ) ( NP-TMP ( NN yesterday ) ) ( PP-CLR ( TO to ) ( NP ( NP ( NP ( NP ( CD 27 ) ( NNS arrivals ) ) ( CC and ) ( NP ( CD 27 ) ( NNS departures ) ) ) ( NP-ADV ( DT an ) ( NN hour ) ) ) ( ADVP ( IN down ) ( PP ( IN from ) ( NP ( NP ( NP ( QP ( CD 33 ) ( TO to ) ( CD 45 ) ) ) ( NP-ADV ( DT an ) ( NN hour ) ) ) ( ADVP ( RB normally ) ) ) ) ) ) ) ( SBAR-PRP ( ADVP ( RB mainly ) ) ( IN because ) ( S ( NP-SBJ ( NP ( DT the ) ( NN noise ) ( NN level ) ) ( PP-LOC ( IN in ) ( NP ( DT the ) ( NN control ) ( NN tower ) ) ) ) ( VP ( VBD was ) ( ADJP-PRD ( JJ overwhelming ) ) ( PP ( IN without ) ( NP ( DT the ) ( NNS windows ) ) ) ) ) ) ) ) ) ) ) ( NP-SBJ ( DT an ) ( NNP FAA ) ( NN spokeswoman ) ) ( VP ( VBD said ) ) )

Runways at San Francisco were n't damaged but traffic was being limited yesterday to 27 arrivals and 27 departures an hour down from 33 to 45 an hour normally mainly because the noise level in the control tower was overwhelming without the windows an FAA spokeswoman said


( S ( SBAR-TMP ( IN While ) ( S ( NP-SBJ-1 ( DT the ) ( NN airport ) ) ( VP ( VBD was ) ( ADJP-PRD ( VBN closed ) ) ) ) ) ( NP-SBJ-2 ( NNS flights ) ) ( VP ( VBD were ) ( VP ( VBN diverted ) ( PP-DIR ( TO to ) ( NP ( NP ( NNS airports ) ) ( PP-LOC ( IN in ) ( NP ( NP ( NP ( NNP Sacramento ) ( CC and ) ( NNP Stockton ) ) ( NP ( NNP Calif. ) ) ) ( NP ( NP ( NP ( NNP Reno ) ) ( CC and ) ( NP ( NNP Las ) ( NNP Vegas ) ) ) ( NP ( NNP Nev. ) ) ) ( CC and ) ( NP ( NNP Los ) ( NNP Angeles ) ) ) ) ) ) ) ) )

While the airport was closed flights were diverted to airports in Sacramento and Stockton Calif. Reno and Las Vegas Nev. and Los Angeles


( S ( NP-SBJ ( NP ( NNP United ) ( NNPS Airlines ) ) ( NP ( NP ( DT the ) ( JJS largest ) ( NN carrier ) ) ( PP-LOC ( IN at ) ( NP ( NNP San ) ( NNP Francisco ) ) ) ) ) ( VP ( VBD was ) ( VP ( VBG operating ) ( NP ( NP ( QP ( RB only ) ( CD 50 ) ) ( NN % ) ) ( PP ( IN of ) ( NP ( NP ( PRP$ its ) ( JJ scheduled ) ( NN service ) ) ( PP ( IN in ) ( CC and ) ( IN out ) ( PP ( IN of ) ( NP ( DT the ) ( NN area ) ) ) ) ) ) ) ( PP-PRP ( IN because ) ( IN of ) ( NP ( NP ( NN damage ) ) ( PP ( TO to ) ( NP ( PRP$ its ) ( NN terminal ) ) ) ) ) ( SBAR ( WHNP-1 ( WDT which ) ) ( S ( PP ( IN in ) ( NP ( NN turn ) ) ) ( VP ( VBD was ) ( VP ( VBG causing ) ( NP ( NNS delays ) ) ( PP ( IN for ) ( NP ( NP ( NNS travelers ) ) ( VP ( VBD headed ) ( PP-DIR ( TO to ) ( NP ( DT the ) ( NNP Bay ) ( NN area ) ) ) ) ) ) ) ) ) ) ) ) )

United Airlines the largest carrier at San Francisco was operating only 50 % of its scheduled service in and out of the area because of damage to its terminal which in turn was causing delays for travelers headed to the Bay area


( S ( NP-SBJ ( DT A ) ( NNP United ) ( NN spokesman ) ) ( VP ( VBD said ) ( SBAR ( S ( NP-SBJ ( NP ( CD 14 ) ) ( PP ( IN of ) ( NP ( PRP$ its ) ( CD 21 ) ( NNS gates ) ) ) ) ( VP ( VBD were ) ( ADJP-PRD ( JJ unusable ) ) ( PP-PRP ( ADVP ( RB mainly ) ) ( IN because ) ( IN of ) ( NP ( NP ( NN water ) ( NN damage ) ) ( VP ( VBN caused ) ( SBAR-TMP ( WHADVP-2 ( WRB when ) ) ( S ( NP-SBJ-1 ( DT a ) ( NN sprinkler ) ( NN system ) ) ( VP ( VBD was ) ( VP ( VBN triggered ) ( PP ( IN by ) ( NP-LGS ( DT the ) ( NNS tremors ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

A United spokesman said 14 of its 21 gates were unusable mainly because of water damage caused when a sprinkler system was triggered by the tremors


( S ( S ( NP-SBJ ( DT The ) ( NNP United ) ( NN spokesman ) ) ( VP ( VBD said ) ( SBAR ( S ( NP-SBJ-1 ( NP ( NN none ) ) ( PP ( IN of ) ( NP ( PRP$ its ) ( NNS people ) ) ) ) ( VP ( VBD were ) ( VP ( VBN injured ) ( PP-LOC ( IN at ) ( NP ( DT the ) ( NN airport ) ) ) ) ) ) ) ) ) ( S ( PP ( IN in ) ( NP ( NN fact ) ) ) ( SBAR-TMP ( IN as ) ( S ( NP-SBJ-2 ( DT the ) ( NN airport ) ) ( VP ( VBD was ) ( VP ( VBG being ) ( VP ( VBN evacuated ) ( NP-TMP ( NNP Tuesday ) ( NN night ) ) ) ) ) ) ) ( NP-SBJ-3 ( CD two ) ( NNS babies ) ) ( VP ( VBD were ) ( VP ( VBN born ) ) ) ) )

The United spokesman said none of its people were injured at the airport in fact as the airport was being evacuated Tuesday night two babies were born


( S ( S ( NP-TMP ( NN Yesterday ) ) ( NP-SBJ ( DT the ) ( NNP United ) ( NN ticket ) ( NN counter ) ) ( VP ( VBD was ) ( ADJP-PRD ( JJ active ) ) ( PP ( IN with ) ( S-NOM ( NP-SBJ-1 ( NNS people ) ) ( VP ( VBG trying ) ( S ( VP ( TO to ) ( VP ( VB get ) ( NP ( NP ( NNS flights ) ) ( ADJP ( RB out ) ) ) ) ) ) ) ) ) ) ) ( CC but ) ( S ( NP-SBJ ( DT the ) ( NN airline ) ) ( VP ( VBD said ) ( SBAR ( S ( NP-SBJ ( NP ( NN demand ) ) ( PP ( IN for ) ( NP ( NP ( NNS seats ) ) ( PP-LOC ( IN into ) ( NP ( DT the ) ( NN city ) ) ) ) ) ) ( ADVP ( RB also ) ) ( VP ( VBD was ) ( ADJP-PRD ( JJ active ) ) ( PP ( IN with ) ( S-NOM ( NP-SBJ-2 ( NNS people ) ) ( VP ( VBG trying ) ( S ( VP ( TO to ) ( VP ( VB get ) ( ADVP-DIR ( RB there ) ) ( S-PRP ( VP ( TO to ) ( VP ( VB help ) ( NP ( NN family ) ( CC and ) ( NNS friends ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

Yesterday the United ticket counter was active with people trying to get flights out but the airline said demand for seats into the city also was active with people trying to get there to help family and friends


( S ( S-TPC-1 ( NP-SBJ ( NP ( DT The ) ( NNS airports ) ) ( PP-LOC ( IN in ) ( NP ( NP ( NNP San ) ( NNP Jose ) ) ( CC and ) ( NP ( NNP Oakland ) ) ) ) ) ( VP ( VBD were ) ( DT both ) ( ADJP-PRD ( RB fully ) ( JJ operational ) ) ( PP-TMP ( IN by ) ( NP ( NN noon ) ) ) ( NP-TMP ( NN yesterday ) ) ) ) ( NP-SBJ ( DT the ) ( NNP Federal ) ( NNP Aviation ) ( NNP Administration ) ) ( VP ( VBD said ) ) )

The airports in San Jose and Oakland were both fully operational by noon yesterday the Federal Aviation Administration said


( S ( PP ( IN In ) ( NP ( NP ( NNS terms ) ) ( PP ( IN of ) ( NP ( NNS diversions ) ) ) ) ) ( NP-SBJ ( NP ( NNP Denver ) ( POS 's ) ) ( NNP Stapleton ) ( NNP International ) ) ( VP ( MD may ) ( VP ( VB have ) ( VP ( VBN experienced ) ( NP ( NP ( DT the ) ( ADJP ( RBS most ) ( JJ far-flung ) ) ) ( S ( NP-SBJ-1 ( NP ( DT A ) ( NNP United ) ( NN flight ) ) ( PP ( IN from ) ( NP ( NNP Japan ) ) ) ) ( VP ( VBD was ) ( VP ( VBN rerouted ) ( ADVP-DIR ( RB there ) ) ) ) ) ) ) ) ) )

In terms of diversions Denver 's Stapleton International may have experienced the most far-flung A United flight from Japan was rerouted there


( S ( S-TPC-2 ( NP-SBJ ( PRP I ) ) ( VP ( VBP think ) ( SBAR ( S ( NP-SBJ ( DT that ) ) ( VP ( VBZ 's ) ( NP-PRD ( NP-1 ( NP ( DT the ) ( JJ first ) ( JJ nonstop ) ( JJ commercial ) ( NN passenger ) ( NN flight ) ) ( PP ( IN from ) ( NP ( NNP Japan ) ) ) ) ( SBAR ( S ( VP ( TO to ) ( VP ( VB land ) ( ADVP-LOC ( RB here ) ) ) ) ) ) ) ) ) ) ) ) ( NP-SBJ ( DT an ) ( NN airport ) ( NN spokesman ) ) ( VP ( VBD said ) ) )

I think that 's the first nonstop commercial passenger flight from Japan to land here an airport spokesman said


( S ( NP-SBJ ( DT A ) ( NNP Japan ) ( NNP Air ) ( NNPS Lines ) ( NN spokesman ) ) ( VP ( VBD said ) ( SBAR ( S ( S ( NP-SBJ-1 ( NP ( PRP$ its ) ( NNS flights ) ) ( PP ( PP ( IN into ) ) ( CC and ) ( PP ( IN out ) ( PP ( IN of ) ) ) ( NP-2 ( NNP San ) ( NNP Francisco ) ) ) ) ( VP ( VBD were ) ( RB n't ) ( VP ( VBN affected ) ) ) ) ( CC but ) ( S ( S-NOM-SBJ ( VP ( VBG getting ) ( NP ( NP ( NN information ) ) ( PP ( IN about ) ( NP ( PRP$ its ) ( NNS operations ) ) ) ) ) ) ( VP ( VBD was ) ( ADJP-PRD ( JJ difficult ) ) ) ) ) ) ) )

A Japan Air Lines spokesman said its flights into and out of San Francisco were n't affected but getting information about its operations was difficult


( S ( NP-SBJ-1 ( NP ( PRP$ Its ) ( NN telecommunications ) ( NN headquarters ) ) ( PP-LOC ( IN in ) ( NP ( NP ( NNP Burlingame ) ) ( NP ( NNP Calif. ) ) ) ) ) ( VP ( VBD had ) ( VP ( VBN been ) ( VP ( VBN knocked ) ( PRT ( RP out ) ) ( PP-TMP ( IN since ) ( NP ( DT the ) ( NN quake ) ) ) ) ) ) )

Its telecommunications headquarters in Burlingame Calif. had been knocked out since the quake


( S ( S-TPC-1 ( NP-SBJ ( PRP We ) ) ( VP ( VBP 're ) ( PP-LOC-PRD ( IN in ) ( NP ( DT the ) ( JJ dark ) ) ) ) ) ( NP-SBJ ( PRP he ) ) ( VP ( VBD said ) ) )

We 're in the dark he said


( S ( NP-SBJ-1 ( NP ( CD Two ) ( NNS rules ) ) ( PP-LOC ( IN in ) ( NP ( VBG pending ) ( JJ congressional ) ( NN legislation ) ) ) ) ( VP ( VBP threaten ) ( S ( VP ( TO to ) ( VP ( VB hinder ) ( NP ( JJ leveraged ) ( NNS buy-outs ) ) ( PP-MNR ( IN by ) ( S-NOM ( VP ( VBG raising ) ( NP ( NP ( DT the ) ( NN price ) ( NNS tags ) ) ( PP ( IN of ) ( NP ( JJ such ) ( NNS deals ) ) ) ) ( PP-EXT ( IN by ) ( NP ( QP ( RB as ) ( JJ much ) ( IN as ) ( CD 10 ) ) ( NN % ) ) ) ) ) ) ) ) ) ) )

Two rules in pending congressional legislation threaten to hinder leveraged buy-outs by raising the price tags of such deals by as much as 10 %


( S ( NP-SBJ ( NNP Wall ) ( NNP Street ) ) ( VP ( VBZ is ) ( VP ( VBG seething ) ( PP ( IN over ) ( NP ( NP ( DT the ) ( NNS rules ) ) ( SBAR ( WHNP-1 ( WDT which ) ) ( S ( VP ( MD would ) ( VP ( VB curtail ) ( NP ( NP ( DT the ) ( NN tax ) ( NN deductibility ) ) ( PP ( IN of ) ( NP ( NP ( NN debt ) ) ( VP ( VBN used ) ( PP-CLR ( IN in ) ( NP ( JJS most ) ( NNS LBOs ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

Wall Street is seething over the rules which would curtail the tax deductibility of debt used in most LBOs


( S ( S-TPC-2 ( NP-SBJ ( NP ( DT The ) ( NNS provisions ) ) ( PP-LOC ( IN in ) ( NP ( NP ( NN deficit-reduction ) ( NNS bills ) ) ( VP ( ADVP-TMP ( RB recently ) ) ( VBN passed ) ( PP ( IN by ) ( NP-LGS ( DT the ) ( NNP House ) ( CC and ) ( NNP Senate ) ) ) ) ) ) ) ( VP ( MD could ) ( VP ( ADVP ( RBR further ) ) ( VB cool ) ( NP ( NP ( DT the ) ( NN takeover ) ( NN boom ) ) ( SBAR ( WHNP-1 ( WDT that ) ) ( S ( VP ( VBZ has ) ( VP ( VBN been ) ( NP-PRD ( NP ( DT the ) ( VBG driving ) ( NN force ) ) ( PP-LOC ( IN behind ) ( NP ( NP ( DT the ) ( NN bull ) ( NN market ) ) ( PP-LOC ( IN in ) ( NP ( NNS stocks ) ) ) ) ) ( PP-TMP ( IN for ) ( NP ( NP ( RB much ) ) ( PP ( IN of ) ( NP ( DT the ) ( NNS 1980s ) ) ) ) ) ) ) ) ) ) ) ) ) ) ( NP-SBJ ( DT some ) ( NX ( NX ( NN tax ) ( NNS experts ) ) ( CC and ) ( NX ( NN investment ) ( NNS bankers ) ) ) ) ( VP ( VBP argue ) ) )

The provisions in deficit-reduction bills recently passed by the House and Senate could further cool the takeover boom that has been the driving force behind the bull market in stocks for much of the 1980s some tax experts and investment bankers argue


( S ( ADVP ( RB Indeed ) ) ( NP-SBJ-1 ( DT some ) ( NN investment ) ( NNS bankers ) ) ( VP ( VBP have ) ( ADVP-TMP ( RB already ) ) ( VP ( VBN started ) ( S ( VP ( NN restructuring ) ( NP ( NNS deals ) ) ( S-PRP ( VP ( TO to ) ( VP ( VB cope ) ( PP-CLR ( IN with ) ( NP ( DT the ) ( JJ expected ) ( NNS rules ) ) ) ) ) ) ) ) ) ) )

Indeed some investment bankers have already started restructuring deals to cope with the expected rules


( S ( NP-SBJ ( NNP Wall ) ( NNP Street ) ) ( VP ( VP ( VBZ has ) ( VP ( ADVP ( DT all ) ( CC but ) ) ( VBD conceded ) ( PP ( IN on ) ( NP ( DT the ) ( NN issue ) ) ) ) ) ( CC and ) ( VP ( VBZ is ) ( ADVP-TMP ( RB now ) ) ( VP ( VBG lobbying ) ( PP-CLR ( IN for ) ( NP ( NP ( DT the ) ( ADJP ( RBR less ) ( JJ onerous ) ) ( NNP Senate ) ( NN version ) ) ( PP ( IN of ) ( NP ( NP ( CD one ) ) ( PP ( IN of ) ( NP ( DT the ) ( NNS provisions ) ) ) ) ) ) ) ) ) ) )

Wall Street has all but conceded on the issue and is now lobbying for the less onerous Senate version of one of the provisions


( SINV ( PP-PRD-TPC-3 ( IN At ) ( NP ( NN issue ) ) ) ( VP ( VBZ is ) ) ( NP-SBJ ( NP ( DT the ) ( NN deductibility ) ) ( PP ( IN of ) ( NP ( NP ( JJ certain ) ( NN junk ) ( NNS bonds ) ) ( SBAR ( WHNP-2 ( WDT that ) ) ( S ( VP ( VBP are ) ( VP ( VBN used ) ( PP-LOC ( IN in ) ( NP ( JJS most ) ( NNS LBOs ) ) ) ) ) ) ) ) ) ) )

At issue is the deductibility of certain junk bonds that are used in most LBOs


( S ( NP-SBJ ( JJ Such ) ( JJ high-yield ) ( NN debt ) ) ( VP ( VBZ is ) ( ADJP-PRD ( JJ similar ) ( PP ( TO to ) ( NP ( DT a ) ( NN zero-coupon ) ( NN bond ) ) ) ) ( SBAR-ADV ( IN in ) ( IN that ) ( S ( NP-SBJ-1 ( PRP it ) ) ( VP ( VBZ is ) ( VP ( VBN sold ) ( PP ( IN at ) ( NP ( NP ( DT a ) ( NN discount ) ) ( PP ( TO to ) ( NP ( NN face ) ( NN value ) ) ) ) ) ( PP ( IN with ) ( S-NOM ( NP-SBJ-3 ( NN interest ) ) ( VP ( VP ( VBG accruing ) ) ( CONJP ( RB instead ) ( IN of ) ) ( VP ( VBG being ) ( VP ( VBN paid ) ( PP-DTV ( TO to ) ( NP ( DT the ) ( NN holder ) ) ) ) ) ) ) ) ) ) ) ) ) )

Such high-yield debt is similar to a zero-coupon bond in that it is sold at a discount to face value with interest accruing instead of being paid to the holder


( S ( PP-LOC ( IN Under ) ( NP ( JJ current ) ( NNS rules ) ) ) ( NP-SBJ ( DT that ) ( VBN accrued ) ( NN interest ) ) ( VP ( VBZ is ) ( ADJP-PRD ( JJ deductible ) ( PP ( IN by ) ( NP ( NP ( DT the ) ( NN company ) ) ( VP ( VBG issuing ) ( NP ( DT the ) ( NN debt ) ) ) ) ) ) ) )

Under current rules that accrued interest is deductible by the company issuing the debt


( S ( NP-SBJ ( NP ( DT The ) ( NNP House ) ( NN version ) ) ( PP ( IN of ) ( NP ( DT the ) ( NN legislation ) ) ) ) ( VP ( MD would ) ( VP ( VP ( VB kill ) ( NP ( DT that ) ( NN deduction ) ) ) ( CC and ) ( VP ( VB label ) ( NP ( DT any ) ( JJ such ) ( NN debt ) ) ( PP-CLR ( IN as ) ( NP ( NP ( NN equity ) ) ( SBAR ( WHNP-1 ( WDT which ) ) ( S ( VP ( VBZ is ) ( RB n't ) ( ADJP-PRD ( JJ deductible ) ) ) ) ) ) ) ) ) ) )

The House version of the legislation would kill that deduction and label any such debt as equity which is n't deductible


( S ( NP-SBJ ( DT The ) ( JJR less-rigorous ) ( NNP Senate ) ( NN version ) ) ( VP ( MD would ) ( VP ( VB defer ) ( NP ( DT the ) ( NN deductibility ) ) ( PP-TMP ( IN for ) ( NP ( QP ( RB roughly ) ( CD five ) ) ( NNS years ) ) ) ) ) )

The less-rigorous Senate version would defer the deductibility for roughly five years


( SINV ( S-TPC-1 ( NP-SBJ ( PRP You ) ) ( VP ( VBP see ) ( NP ( DT these ) ) ( PP-LOC ( IN in ) ( NP ( ADJP ( ADVP ( RB just ) ( IN about ) ) ( DT every ) ) ( NN LBO ) ) ) ) ) ( VP ( VBD said ) ) ( NP-SBJ ( NP ( NNP Robert ) ( NNP Willens ) ) ( NP ( NP ( JJ senior ) ( NN vice ) ( NN president ) ) ( PP ( IN in ) ( NP ( NP ( NN charge ) ) ( PP ( IN of ) ( NP ( NN tax ) ( NNS issues ) ) ) ) ) ( PP-LOC ( IN at ) ( NP ( NP ( NNP Shearson ) ( NNP Lehman ) ( NNP Hutton ) ( NNP Inc. ) ) ( PP-LOC ( IN in ) ( NP ( NNP New ) ( NNP York ) ) ) ) ) ) ) )

You see these in just about every LBO said Robert Willens senior vice president in charge of tax issues at Shearson Lehman Hutton Inc. in New York


( S ( NP-SBJ ( PRP It ) ) ( VP ( VBZ becomes ) ( NP-PRD ( NP ( DT a ) ( NN source ) ) ( PP ( IN of ) ( NP ( NN cash ) ) ) ( PP ( IN for ) ( NP ( NP ( DT the ) ( NN company ) ) ( VP ( VBG making ) ( NP ( DT the ) ( NN LBO ) ) ) ) ) ) ( SBAR-PRP ( IN because ) ( S ( NP-SBJ-1 ( PRP it ) ) ( VP ( VP ( VBZ gets ) ( NP ( DT a ) ( NN deduction ) ) ) ( CC and ) ( VP ( VBZ does ) ( RB n't ) ( VP ( VB have ) ( S ( VP ( TO to ) ( VP ( VB repay ) ( NP ( DT the ) ( NN debt ) ) ) ) ) ( PP-TMP ( IN for ) ( NP ( JJ several ) ( NNS years ) ) ) ) ) ) ) ) ) )

It becomes a source of cash for the company making the LBO because it gets a deduction and does n't have to repay the debt for several years


( S-1 ( ADVP ( RB Typically ) ) ( PRN ( NP-SBJ ( NNP Mr. ) ( NNP Willens ) ) ( VP ( VBZ estimates ) ) ) ( NP-SBJ ( NP ( DT this ) ( NN type ) ) ( PP ( IN of ) ( NP ( NN debt ) ) ) ) ( VP ( VBZ makes ) ( PRT ( RP up ) ) ( NP ( NP ( NP ( CD 15 ) ( NN % ) ) ( TO to ) ( NP ( CD 20 ) ( NN % ) ) ) ( PP ( IN of ) ( NP ( NP ( DT the ) ( NN financing ) ) ( PP ( IN for ) ( NP ( NNS LBOs ) ) ) ) ) ) ) )

Typically Mr. Willens estimates this type of debt makes up 15 % to 20 % of the financing for LBOs


( S ( NP-SBJ-1 ( NP ( DT These ) ( NNS types ) ) ( PP ( IN of ) ( NP ( NNS bonds ) ) ) ) ( VP ( VBP have ) ( VP ( VBN been ) ( VP ( VBN used ) ( PP-CLR ( IN in ) ( NP ( NP ( NNS buy-outs ) ) ( PP ( IN of ) ( NP ( NP ( NNS companies ) ) ( PP ( JJ such ) ( IN as ) ( NP ( NP ( NNP RJR ) ( NNP Nabisco ) ( NNP Inc. ) ) ( NP ( NNP Storer ) ( NNPS Communications ) ( NNP Inc. ) ) ( CC and ) ( NP ( NNP Kroger ) ( NNP Co ) ) ) ) ) ) ) ) ) ) ) )

These types of bonds have been used in buy-outs of companies such as RJR Nabisco Inc. Storer Communications Inc. and Kroger Co


( S ( NP-SBJ ( NP ( DT A ) ( JJ second ) ( NN provision ) ) ( VP ( VBN passed ) ( PP ( IN by ) ( NP-LGS ( DT the ) ( NNP Senate ) ( CC and ) ( NNP House ) ) ) ) ) ( VP ( MD would ) ( VP ( VB eliminate ) ( NP ( NP ( DT a ) ( NN rule ) ) ( VP ( VBG allowing ) ( S ( NP-SBJ ( NP ( NNS companies ) ) ( SBAR ( WHNP-1 ( IN that ) ) ( S ( VP ( NN post ) ( NP ( NP ( NNS losses ) ) ( VP ( VBG resulting ) ( PP-CLR ( IN from ) ( NP ( NN LBO ) ( NN debt ) ) ) ) ) ) ) ) ) ( VP ( TO to ) ( VP ( VB receive ) ( NP ( NP ( NNS refunds ) ) ( PP ( IN of ) ( NP ( NP ( NNS taxes ) ) ( VP ( VBN paid ) ( PP-TMP ( IN over ) ( NP ( DT the ) ( JJ previous ) ( CD three ) ( NNS years ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

A second provision passed by the Senate and House would eliminate a rule allowing companies that post losses resulting from LBO debt to receive refunds of taxes paid over the previous three years


( S ( PP ( IN For ) ( NP ( NN example ) ) ) ( SBAR-ADV ( IN if ) ( S ( NP-SBJ ( DT a ) ( NN company ) ) ( VP ( VBD posted ) ( NP ( NP ( DT a ) ( NN loss ) ) ( PP ( IN of ) ( NP ( QP ( CD 100 ) ( CD million ) ) ) ) ( PP ( IN from ) ( NP ( NN buy-out ) ( NN interest ) ( NNS payments ) ) ) ) ) ) ) ( NP-SBJ ( DT the ) ( VBG existing ) ( NN rule ) ) ( VP ( MD would ) ( VP ( VB allow ) ( S ( NP-SBJ-2 ( DT the ) ( NN concern ) ) ( VP ( TO to ) ( VP ( VB be ) ( ADJP-PRD ( JJ able ) ( S ( VP ( TO to ) ( VP ( VB receive ) ( NP ( DT a ) ( NN refund ) ) ( PP-CLR ( IN from ) ( NP ( NP ( DT the ) ( NN tax ) ) ( SBAR ( S ( NP-SBJ ( PRP it ) ) ( VP ( VBD paid ) ( PP-TMP ( PP ( PP ( IN from ) ( NP ( CD 1986 ) ) ) ( PP ( IN through ) ( NP ( CD 1989 ) ) ) ) ( SBAR ( WHADVP-3 ( WRB when ) ) ( S ( NP-SBJ ( PRP it ) ) ( VP ( MD may ) ( VP ( VB have ) ( VP ( VBN been ) ( NP-PRD ( DT a ) ( JJ profitable ) ( JJ public ) ( NN company ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

For example if a company posted a loss of 100 million from buy-out interest payments the existing rule would allow the concern to be able to receive a refund from the tax it paid from 1986 through 1989 when it may have been a profitable public company


( S ( CC But ) ( NP-SBJ-1 ( DT that ) ( NN rule ) ) ( VP ( VBZ is ) ( VP ( VBG being ) ( VP ( ADVP ( RB virtually ) ) ( VBN overlooked ) ( PP ( IN by ) ( NP-LGS ( NP ( NNP Wall ) ( NNP Street ) ) ( SBAR ( WHNP-2 ( WDT which ) ) ( S ( VP ( VBZ is ) ( VP ( VBG concentrating ) ( PP-CLR ( IN on ) ( S-NOM ( VP ( VBG coping ) ( PP-CLR ( IN with ) ( NP ( DT the ) ( NN deduction ) ( NN issue ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

But that rule is being virtually overlooked by Wall Street which is concentrating on coping with the deduction issue


( SINV ( S-TPC-2 ( NP-SBJ-1 ( NP ( NNS Prices ) ) ( PP ( IN for ) ( NP ( NNS LBOs ) ) ) ) ( VP ( VBP have ) ( S ( VP ( TO to ) ( VP ( VB come ) ( ADVP-DIR ( RB down ) ) ) ) ) ( SBAR-ADV ( IN if ) ( S ( NP-SBJ ( PRP you ) ) ( VP ( VBP do ) ( RB n't ) ( VP ( VB have ) ( NP ( DT that ) ( NN feature ) ) ) ) ) ) ) ) ( VP ( VBD argued ) ) ( NP-SBJ ( NP ( NNP Lawrence ) ( NNP Schloss ) ) ( NP ( NP ( NN managing ) ( NN director ) ) ( PP ( IN for ) ( NP ( NN merchant ) ( NN banking ) ) ) ( PP-LOC ( IN at ) ( NP ( NP ( NNP Donaldson ) ( NNP Lufkin ) ( CC & ) ( NNP Jenrette ) ( NNPS Securities ) ( NNP Corp. ) ) ( PP-LOC ( IN in ) ( NP ( NNP New ) ( NNP York ) ) ) ) ) ) ) )

Prices for LBOs have to come down if you do n't have that feature argued Lawrence Schloss managing director for merchant banking at Donaldson Lufkin & Jenrette Securities Corp. in New York


( S ( NP-SBJ ( JJ Several ) ( NNP Wall ) ( NNP Street ) ( NNS officials ) ) ( VP ( VBP say ) ( SBAR ( S ( NP-SBJ ( DT the ) ( VBN proposed ) ( NN legislation ) ) ( ADVP-TMP ( RB already ) ) ( VP ( VBZ is ) ( VP ( VBG having ) ( NP ( DT an ) ( NN impact ) ) ) ) ) ) ) )

Several Wall Street officials say the proposed legislation already is having an impact


( S ( NP-SBJ ( NP ( DT An ) ( NN investment ) ( NN group ) ) ( VP ( VBN led ) ( PP ( IN by ) ( NP-LGS ( NP ( NNP Chicago ) ( POS 's ) ) ( NNP Pritzker ) ( NN family ) ) ) ) ) ( ADVP-TMP ( RB recently ) ) ( VP ( VBD lowered ) ( NP ( NP ( DT a ) ( ADJP ( QP ( CD 3.35 ) ( CD billion ) ) ) ( NN bid ) ) ( PP ( IN for ) ( NP-LOC ( NP ( NNP American ) ( NNP Medical ) ( NNP International ) ) ( NP ( NP ( NNP Beverly ) ( NNPS Hills ) ) ( NP ( NNP Calif. ) ) ) ) ) ) ( PP-PRP ( IN because ) ( IN of ) ( NP ( NP ( DT the ) ( NN threat ) ) ( PP ( IN of ) ( NP ( DT the ) ( NN legislation ) ) ) ) ) ) )

An investment group led by Chicago 's Pritzker family recently lowered a 3.35 billion bid for American Medical International Beverly Hills Calif. because of the threat of the legislation


( S ( ADVP ( RB Moreover ) ) ( NP-SBJ ( NP ( CD one ) ( NN investment ) ( NN banker ) ) ( SBAR ( WHNP-1 ( WP who ) ) ( S ( VP ( VBD requested ) ( NP ( NN anonymity ) ) ) ) ) ) ( VP ( VBD said ) ( SBAR ( S ( NP-SBJ ( PRP$ his ) ( NN firm ) ) ( VP ( VBD did ) ( RB n't ) ( VP ( VB raise ) ( NP ( NP ( DT the ) ( NN ante ) ) ( PP ( IN for ) ( NP ( DT a ) ( NN target ) ( NN company ) ) ) ) ( NP-TMP ( RB earlier ) ( DT this ) ( NN month ) ) ( SBAR-TMP ( IN after ) ( S ( NP-SBJ ( DT a ) ( JJR stronger ) ( NN bid ) ) ( VP ( VBD emerged ) ( PP-DIR ( IN from ) ( NP ( NP ( DT a ) ( JJ public ) ( NN company ) ) ( SBAR ( WHNP-2 ( IN that ) ) ( S ( VP ( VBD was ) ( RB n't ) ( ADJP-PRD ( JJ concerned ) ( PP ( IN about ) ( NP ( DT the ) ( NN financing ) ( NN provision ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

Moreover one investment banker who requested anonymity said his firm did n't raise the ante for a target company earlier this month after a stronger bid emerged from a public company that was n't concerned about the financing provision


( S ( S-TPC-1 ( NP-SBJ ( PRP We ) ) ( VP ( MD would ) ( VP ( VB have ) ( VP ( VBN paid ) ( NP ( JJR more ) ) ( SBAR-ADV ( IN if ) ( S ( NP-SBJ ( PRP we ) ) ( VP ( VBD thought ) ( SBAR ( S ( NP-SBJ-2 ( DT that ) ( NN law ) ) ( VP ( VBD was ) ( RB n't ) ( VP ( VBG going ) ( S ( VP ( TO to ) ( VP ( VB pass ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ( NP-SBJ ( PRP he ) ) ( VP ( VBD said ) ) )

We would have paid more if we thought that law was n't going to pass he said


( S ( NP-SBJ ( CD One ) ( JJ possible ) ( NN solution ) ) ( PP ( IN for ) ( NP ( NNP Wall ) ( NNP Street ) ) ) ( VP ( VBZ is ) ( S-PRD ( VP ( TO to ) ( VP ( VP ( VB increase ) ( NP ( NP ( DT the ) ( NN equity ) ( NN part ) ) ( PP ( IN of ) ( NP ( DT the ) ( NN transaction ) ) ) ) ) ( VP ( PRN ( S-ADV ( NP-SBJ ( DT that ) ) ( VP ( VBZ is ) ) ) ) ( VB give ) ( NP ( NNS lenders ) ) ( NP ( NP ( DT a ) ( JJR bigger ) ( NN stake ) ) ( PP-LOC ( IN in ) ( NP ( DT the ) ( VBG surviving ) ( NN company ) ) ) ( PP ( RB rather ) ( IN than ) ( NP ( RB just ) ( NN interest ) ( NNS payments ) ) ) ) ) ) ) ) ) )

One possible solution for Wall Street is to increase the equity part of the transaction that is give lenders a bigger stake in the surviving company rather than just interest payments


( S ( NP-SBJ ( DT That ) ) ( VP ( MD would ) ( VP ( VB force ) ( S ( NP-SBJ-1 ( NP ( DT the ) ( NN buy-out ) ( NN firm ) ) ( CC and ) ( NP ( NP ( DT the ) ( NN target ) ( NN company ) ( POS 's ) ) ( NN management ) ) ) ( VP ( TO to ) ( S ( VP ( VB reduce ) ( NP ( NP ( PRP$ their ) ( NN level ) ) ( PP ( IN of ) ( NP ( NN ownership ) ) ) ) ) ) ) ) ) ) )

That would force the buy-out firm and the target company 's management to reduce their level of ownership


( SINV ( S-TPC-2 ( S ( NP-SBJ-1 ( NP ( DT The ) ( NNS pigs ) ) ( PP-LOC ( IN in ) ( NP ( DT the ) ( NN trough ) ) ) ) ( VP ( MD may ) ( VP ( VB have ) ( S ( VP ( TO to ) ( VP ( VB give ) ( NP ( NP ( DT a ) ( JJ little ) ( NN bit ) ) ( PP ( IN of ) ( NP ( DT the ) ( NN slop ) ) ) ) ( ADVP-CLR ( RB back ) ) ) ) ) ) ) ) ( CC and ) ( RB then ) ( S ( NP-SBJ ( DT the ) ( NN deal ) ) ( VP ( MD can ) ( VP ( VB go ) ( ADVP-CLR ( RB through ) ) ) ) ) ) ( VP ( VBD said ) ) ( NP-SBJ ( NP ( NNP Peter ) ( NNP C. ) ( NNP Canellos ) ) ( NP ( NP ( NN tax ) ( NN partner ) ) ( PP-LOC ( IN at ) ( NP ( NNP Wachtell ) ( NNP Lipton ) ( NNP Rosen ) ( CC & ) ( NNP Katz ) ) ) ) ) )

The pigs in the trough may have to give a little bit of the slop back and then the deal can go through said Peter C. Canellos tax partner at Wachtell Lipton Rosen & Katz


( S-3 ( NP-SBJ ( DT Another ) ( NN solution ) ) ( PRN ( SINV ( VP ( VBD said ) ) ( NP-SBJ ( NP ( DT a ) ( NN tax ) ( NN lawyer ) ) ( SBAR ( WHNP-1 ( WP who ) ) ( S ( VP ( VBD requested ) ( NP ( NN anonymity ) ) ) ) ) ) ) ) ( VP ( VBZ is ) ( SBAR-PRD ( IN for ) ( S ( NP-SBJ ( NNS firms ) ) ( VP ( TO to ) ( VP ( VB use ) ( NP ( NP ( JJ convertible ) ( NNS bonds ) ) ( SBAR ( WHNP-2 ( WDT that ) ) ( S ( VP ( VBP sell ) ( PP ( IN at ) ( NP ( DT a ) ( NN discount ) ) ) ) ) ) ) ) ) ) ) ) )

Another solution said a tax lawyer who requested anonymity is for firms to use convertible bonds that sell at a discount


( S ( SBAR-PRP ( IN Since ) ( S ( NP-SBJ ( PRP they ) ) ( VP ( VBP have ) ( NP ( DT a ) ( JJR lower ) ( NN interest ) ( NN rate ) ) ) ) ) ( NP-SBJ ( PRP they ) ) ( VP ( MD would ) ( RB n't ) ( VP ( VB fall ) ( PP-CLR ( IN under ) ( NP ( NP ( DT the ) ( NN junk-bond ) ( NN category ) ) ( SBAR ( WHNP-1 ( WDT that ) ) ( S ( VP ( MD would ) ( VP ( VB lose ) ( NP ( PRP$ its ) ( NN deductibility ) ) ) ) ) ) ) ) ) ) )

Since they have a lower interest rate they would n't fall under the junk-bond category that would lose its deductibility


( S ( NP-SBJ ( NP ( DT The ) ( NNP House ) ( NN version ) ) ( PP ( IN of ) ( NP ( DT the ) ( NN bill ) ) ) ) ( VP ( MD would ) ( VP ( VB make ) ( S ( NP-SBJ ( NN debt ) ) ( ADJP-PRD ( JJ non-deductible ) ) ( SBAR-ADV ( IN if ) ( S ( NP-SBJ ( PRP it ) ) ( VP ( VP ( VBZ pays ) ( NP ( NP ( CD five ) ( NN percentage ) ( NNS points ) ) ( PP ( IN above ) ( NP ( NNP Treasury ) ( NNS notes ) ) ) ) ) ( VP ( VBZ has ) ( NP ( ADVP ( IN at ) ( JJS least ) ) ( DT a ) ( JJ five-year ) ( NN maturity ) ) ) ( CC and ) ( VP ( VBZ does ) ( RB n't ) ( VP ( VB pay ) ( NP ( NN interest ) ) ( PP-TMP ( IN for ) ( NP ( NP ( QP ( IN at ) ( JJS least ) ( CD one ) ) ( NN year ) ) ( PP ( IN out ) ( PP ( IN of ) ( NP ( DT the ) ( JJ first ) ( CD five ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

The House version of the bill would make debt non-deductible if it pays five percentage points above Treasury notes has at least a five-year maturity and does n't pay interest for at least one year out of the first five


( S ( NP-SBJ ( DT The ) ( NN bill ) ) ( VP ( MD would ) ( ADVP-TMP ( RB then ) ) ( VP ( VB declare ) ( SBAR ( IN that ) ( S ( NP-SBJ ( DT the ) ( NN debt ) ) ( VP ( VP ( VBZ is ) ( NP-PRD ( NN equity ) ) ) ( CC and ) ( ADVP ( RB therefore ) ) ( VP ( VBZ is ) ( RB n't ) ( ADJP-PRD ( JJ deductible ) ) ) ) ) ) ) ) )

The bill would then declare that the debt is equity and therefore is n't deductible


( S ( NP-SBJ ( DT The ) ( NNP Senate ) ( NN bill ) ) ( VP ( MD would ) ( ADVP ( RB only ) ) ( VP ( VB deny ) ( NP ( DT the ) ( NN deduction ) ) ( SBAR-TMP ( IN until ) ( S ( NP-SBJ-1 ( NN interest ) ) ( VP ( VBZ is ) ( ADVP ( RB actually ) ) ( VP ( VBN paid ) ) ) ) ) ) ) )

The Senate bill would only deny the deduction until interest is actually paid


( S ( ADVP-TMP ( RB Currently ) ) ( SBAR ( RB even ) ( IN though ) ( S ( NP-SBJ ( DT the ) ( NN issuer ) ) ( VP ( VBZ does ) ( RB n't ) ( VP ( VB pay ) ( NP ( NN tax ) ) ) ) ) ) ( NP-SBJ-1 ( DT the ) ( NN debt ) ( NN holder ) ) ( VP ( VBZ is ) ( VP ( VBN taxed ) ( PP ( IN on ) ( NP ( DT the ) ( VBN accrued ) ( NN interest ) ) ) ) ) )

Currently even though the issuer does n't pay tax the debt holder is taxed on the accrued interest


( S ( CC But ) ( NP-SBJ ( DT those ) ( NNS holders ) ) ( VP ( VBP are ) ( ADVP-TMP ( RB often ) ) ( NP-PRD ( NP ( JJ foreign ) ( NNS investors ) ) ( CC and ) ( NP ( NP ( JJ tax-exempt ) ( NN pension ) ( NNS funds ) ) ( SBAR ( WHNP-1 ( WDT that ) ) ( S ( VP ( VBP do ) ( RB n't ) ( VP ( VB pay ) ( NP ( NNS taxes ) ) ( PP ( IN on ) ( NP ( PRP$ their ) ( NNS holdings ) ) ) ) ) ) ) ) ) ) )

But those holders are often foreign investors and tax-exempt pension funds that do n't pay taxes on their holdings


( S ( NP-SBJ ( DT The ) ( NNP Senate ) ) ( VP ( VBZ estimates ) ( SBAR ( IN that ) ( S ( NP-SBJ ( NP ( PRP$ its ) ( NN version ) ) ( PP ( IN of ) ( NP ( DT the ) ( NN provision ) ) ) ) ( VP ( MD would ) ( VP ( VP ( VB yield ) ( NP-1 ( QP ( CD 17 ) ( CD million ) ) ) ( NP-TMP ( DT the ) ( JJ first ) ( NN year ) ) ) ( CC and ) ( VP ( NP=1 ( NP ( DT a ) ( NN total ) ) ( PP ( IN of ) ( NP ( QP ( CD 409 ) ( CD million ) ) ) ) ) ( PP-TMP ( IN over ) ( NP ( CD five ) ( NNS years ) ) ) ) ) ) ) ) ) )

The Senate estimates that its version of the provision would yield 17 million the first year and a total of 409 million over five years


( S ( NP-SBJ ( DT The ) ( NNP House ) ( NN version ) ) ( VP ( MD would ) ( VP ( VB raise ) ( NP ( RB slightly ) ( JJR more ) ) ) ) )

The House version would raise slightly more


( S ( SBAR-ADV ( RB Even ) ( IN if ) ( S ( NP-SBJ ( NNP Wall ) ( NNP Street ) ) ( VP ( VBZ finds ) ( NP ( NP ( NNS ways ) ) ( PP ( IN around ) ( NP ( DT the ) ( JJ new ) ( NNS rules ) ) ) ) ) ) ) ( NP-SBJ ( DT a ) ( NNP Senate ) ( NN aide ) ) ( VP ( VBZ contends ) ( SBAR ( S ( NP-SBJ ( NNS LBOs ) ) ( VP ( MD will ) ( VP ( VB become ) ( ADJP-PRD ( RB somewhat ) ( RBR more ) ( JJ difficult ) ) ) ) ) ) ) )

Even if Wall Street finds ways around the new rules a Senate aide contends LBOs will become somewhat more difficult


( S ( S-TPC-1 ( NP-SBJ ( EX There ) ) ( VP ( VBZ 's ) ( NP-PRD ( DT no ) ( NN question ) ( SBAR ( S ( NP-SBJ ( PRP it ) ) ( VP ( MD will ) ( VP ( VB make ) ( S ( NP-SBJ ( NNS LBOs ) ) ( ADJP-PRD ( RBR more ) ( JJ expensive ) ) ) ) ) ) ) ) ) ) ( NP-SBJ ( PRP he ) ) ( VP ( VBD said ) ) )

There 's no question it will make LBOs more expensive he said


( S ( NP-SBJ ( DT The ) ( NN interest ) ( NN deduction ) ) ( VP ( VBD was ) ( NP-PRD ( NP ( DT the ) ( NN engine ) ) ( SBAR ( WHNP-1 ( WDT that ) ) ( S ( VP ( VBD made ) ( S ( NP-SBJ ( DT these ) ( NNS things ) ) ( ADJP-PRD ( RBR more ) ( JJ productive ) ) ) ) ) ) ) ) )

The interest deduction was the engine that made these things more productive


( S ( NP-SBJ ( NP ( NNP Diamond-Star ) ( NNPS Motors ) ( NNP Corp. ) ) ( NP ( NP ( DT a ) ( JJ joint ) ( NN venture ) ) ( PP ( IN of ) ( NP ( NP ( NNP Chrysler ) ( NNP Corp. ) ) ( CC and ) ( NP ( NNP Mitsubishi ) ( NNPS Motors ) ( NNP Corp. ) ) ) ) ) ) ( VP ( VBD said ) ( SBAR ( S ( NP-SBJ-1 ( PRP it ) ) ( VP ( MD will ) ( VP ( VB begin ) ( S ( VP ( VBG shipping ) ( NP ( NNP Mitsubishi ) ( NNP Eclipse ) ( NNS cars ) ) ( PP-DIR ( TO to ) ( NP ( NNP Japan ) ) ) ) ) ( NP-TMP ( JJ next ) ( NN week ) ) ( S-ADV ( VP ( VBG emulating ) ( NP ( NP ( JJ other ) ( JJ Japanese ) ( NN auto ) ( NNS ventures ) ) ( VP ( VBG shipping ) ( NP ( JJ U.S.-built ) ( NNS vehicles ) ) ( ADVP-DIR ( RB back ) ) ( PP-DIR ( TO to ) ( NP ( NNP Japan ) ) ) ) ) ) ) ) ) ) ) ) )

Diamond-Star Motors Corp. a joint venture of Chrysler Corp. and Mitsubishi Motors Corp. said it will begin shipping Mitsubishi Eclipse cars to Japan next week emulating other Japanese auto ventures shipping U.S.-built vehicles back to Japan


( S ( NP-SBJ ( NNP Diamond-Star ) ) ( VP ( VBD said ) ( SBAR ( S ( NP-SBJ ( PRP it ) ) ( VP ( MD will ) ( VP ( VB export ) ( NP ( QP ( IN about ) ( CD 1,500 ) ) ( NNP Eclipse ) ( NNS cars ) ) ( PP-DIR ( TO to ) ( NP ( NNP Japan ) ) ) ( PP-TMP ( IN by ) ( NP ( NP ( NN year ) ( POS 's ) ) ( NN end ) ) ) ) ) ) ) ) )

Diamond-Star said it will export about 1,500 Eclipse cars to Japan by year 's end


( S ( NP-SBJ ( NP ( NNP Honda ) ( NNP Motor ) ( NNP Co. ) ) ( NP ( NP-SBJ ( DT the ) ( JJ first ) ( JJ Japanese ) ( NN auto ) ( NN maker ) ) ( SBAR ( S ( VP ( TO to ) ( VP ( NN ship ) ( NP ( NNS cars ) ) ( PP-DIR ( TO to ) ( NP ( NNP Japan ) ) ) ( PP-DIR ( IN from ) ( NP ( DT the ) ( NNP U.S. ) ) ) ) ) ) ) ) ) ( VP ( VBZ is ) ( ADVP-TMP ( RB now ) ) ( VP ( VBG exporting ) ( NP ( NP ( QP ( JJR more ) ( IN than ) ( CD 5,000 ) ) ( NNP Accord ) ( NNP Coupes ) ) ( NP-ADV ( DT a ) ( NN year ) ) ) ( PP-DIR ( IN from ) ( NP ( PRP$ its ) ( NAC-LOC ( NNP Marysville ) ( NNP Ohio ) ) ( NN factory ) ) ) ) ) )

Honda Motor Co. the first Japanese auto maker to ship cars to Japan from the U.S. is now exporting more than 5,000 Accord Coupes a year from its Marysville Ohio factory


( S ( NP-SBJ ( NNP International ) ( NNP Business ) ( NNPS Machines ) ( NNP Corp. ) ) ( VP ( VBD said ) ( SBAR ( S ( NP-SBJ ( PRP$ its ) ( NN board ) ) ( VP ( VP ( VBD approved ) ( NP ( NP ( DT the ) ( NN purchase ) ) ( PP ( IN of ) ( NP ( NP ( QP ( CD 1 ) ( CD billion ) ) ) ( PP ( IN of ) ( NP ( PRP$ its ) ( JJ common ) ( NNS shares ) ) ) ) ) ) ) ( NP-ADV ( NP ( DT a ) ( NN move ) ) ( SBAR ( WHNP-1 ( WDT that ) ) ( S ( VP ( MD should ) ( VP ( VB help ) ( S ( VP ( VB support ) ( NP ( PRP$ its ) ( JJ battered ) ( NN stock ) ) ) ) ) ) ) ) ) ) ) ) ) )

International Business Machines Corp. said its board approved the purchase of 1 billion of its common shares a move that should help support its battered stock


( S ( SBAR-ADV ( RB Even ) ( IN as ) ( S ( NP-SBJ ( DT the ) ( NN stock ) ( NN market ) ) ( VP ( VBZ has ) ( ADVP ( RB generally ) ) ( VP ( VBN done ) ( ADVP-MNR ( RB well ) ) ( NP-TMP ( DT this ) ( NN year ) ) ) ) ) ) ( NP-SBJ ( NP ( NNP IBM ) ( POS 's ) ) ( NNS shares ) ) ( VP ( VBP have ) ( VP ( VBN slipped ) ( ADVP-MNR ( RB steadily ) ) ( PP-DIR ( IN from ) ( NP ( NP ( PRP$ its ) ( JJ 52-week ) ( NN high ) ) ( PP ( IN of ) ( NP ( CD 130.875 ) ) ) ) ) ) ) )

Even as the stock market has generally done well this year IBM 's shares have slipped steadily from its 52-week high of 130.875


( S ( NP-SBJ-2 ( NP ( NP ( NN Yesterday ) ( POS 's ) ) ( NN closing ) ( NN price ) ) ( PP ( IN of ) ( NP ( CD 101.75 ) ) ) ) ( S-ADV ( ADVP-PRD ( RB down ) ( NP ( CD 50 ) ( NNS cents ) ) ) ( PP-LOC ( IN in ) ( NP ( NP ( JJ composite ) ( NN trading ) ) ( PP-LOC ( IN on ) ( NP ( DT the ) ( NNP New ) ( NNP York ) ( NNP Stock ) ( NNP Exchange ) ) ) ) ) ) ( VP ( VBZ puts ) ( NP ( DT the ) ( NN stock ) ) ( PP-PUT ( IN at ) ( NP ( NP ( QP ( IN about ) ( CD 1 ) ( CD 1\/2 ) ( NNS times ) ) ( NN book ) ( NN value ) ) ( SBAR ( WHNP-1 ( WDT which ) ) ( S ( VP ( VBZ is ) ( ADJP-PRD ( ADJP ( RB as ) ( JJ low ) ) ( SBAR ( IN as ) ( S ( NP-SBJ ( PRP it ) ) ( VP ( VBZ has ) ( VP ( VBN sunk ) ( PP-TMP ( IN over ) ( NP ( DT the ) ( JJ past ) ( NN decade ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

Yesterday 's closing price of 101.75 down 50 cents in composite trading on the New York Stock Exchange puts the stock at about 1 1\/2 times book value which is as low as it has sunk over the past decade


( S ( NP-SBJ ( DT The ) ( NN announcement ) ) ( VP ( VBD came ) ( PP-TMP ( IN after ) ( NP ( NP ( DT the ) ( NN market ) ( POS 's ) ) ( NN close ) ) ) ) )

The announcement came after the market 's close


( S ( NP-SBJ ( NP ( DT The ) ( NN move ) ) ( PP ( IN by ) ( NP ( NNP IBM ) ) ) ) ( VP ( VBD was ) ( RB n't ) ( ADVP ( RB exactly ) ) ( NP-PRD ( DT a ) ( NN surprise ) ) ) )

The move by IBM was n't exactly a surprise


( S ( NP-SBJ-1 ( DT The ) ( NN company ) ) ( VP ( VBZ has ) ( VP ( VBN spent ) ( NP ( QP ( DT some ) ( CD 5 ) ( CD billion ) ) ) ( PP-TMP ( IN over ) ( NP ( DT the ) ( JJ past ) ( QP ( CD 3 ) ( CD 1\/2 ) ) ( NNS years ) ) ) ( S-PRP ( VP ( TO to ) ( VP ( VB buy ) ( ADVP-CLR ( RB back ) ) ( NP ( NP ( QP ( CD 42 ) ( CD million ) ) ( JJ common ) ( NNS shares ) ) ( CC or ) ( NP ( NP ( QP ( RB roughly ) ( CD 7 ) ) ( NN % ) ) ( PP ( IN of ) ( NP ( NP ( DT those ) ) ( ADJP ( JJ outstanding ) ) ) ) ) ) ) ) ) ) ) )

The company has spent some 5 billion over the past 3 1\/2 years to buy back 42 million common shares or roughly 7 % of those outstanding


( S ( PP ( IN In ) ( NP ( NN addition ) ) ) ( PP ( IN despite ) ( NP ( NP ( NNP IBM ) ( POS 's ) ) ( JJ well-publicized ) ( JJ recent ) ( NNS problems ) ) ) ( NP-SBJ ( DT the ) ( NN computer ) ( NN giant ) ) ( ADVP-TMP ( RB still ) ) ( VP ( VBZ generates ) ( NP ( NP ( JJ enormous ) ( NNS amounts ) ) ( PP ( IN of ) ( NP ( NN cash ) ) ) ) ) )

In addition despite IBM 's well-publicized recent problems the computer giant still generates enormous amounts of cash


( S ( PP-TMP ( RB As ) ( PP ( IN of ) ( NP ( NP ( DT the ) ( NN end ) ) ( PP ( IN of ) ( NP ( DT the ) ( JJ second ) ( NN quarter ) ) ) ) ) ) ( NP-SBJ ( PRP it ) ) ( VP ( VBD had ) ( NP ( NP ( QP ( CD 4.47 ) ( CD billion ) ) ) ( PP ( IN of ) ( NP ( NP ( NN cash ) ) ( CC and ) ( NP ( JJ marketable ) ( NNS securities ) ) ) ) ) ( PP-LOC-CLR ( IN on ) ( NP ( NN hand ) ) ) ) )

As of the end of the second quarter it had 4.47 billion of cash and marketable securities on hand


( S ( PP-PRP ( IN As ) ( NP ( DT a ) ( NN result ) ) ) ( NP-SBJ ( DT some ) ( NNS securities ) ( NNS analysts ) ) ( VP ( VBD had ) ( VP ( VBN predicted ) ( PP-TMP ( IN in ) ( NP ( JJ recent ) ( NNS days ) ) ) ( SBAR ( IN that ) ( S ( NP-SBJ ( NNP IBM ) ) ( VP ( MD would ) ( VP ( VB authorize ) ( NP ( JJ additional ) ( NNS purchases ) ) ) ) ) ) ) ) )

As a result some securities analysts had predicted in recent days that IBM would authorize additional purchases


( S ( PP-LOC ( IN In ) ( NP ( NP ( NNP Armonk ) ) ( NP ( NNP N.Y. ) ) ) ) ( NP-SBJ ( DT a ) ( NN spokesman ) ) ( VP ( VBD said ) ( SBAR ( IN that ) ( S ( SBAR-ADV ( IN although ) ( S ( NP-SBJ ( NNP IBM ) ) ( VP ( VBD did ) ( RB n't ) ( VP ( VB view ) ( NP ( PRP$ its ) ( NN spending ) ) ( PP-CLR ( IN as ) ( NP ( NP ( RB necessarily ) ( DT a ) ( NN way ) ) ( SBAR ( S ( VP ( TO to ) ( VP ( VB support ) ( NP ( DT the ) ( NN stock ) ) ) ) ) ) ) ) ) ) ) ) ( NP-SBJ ( PRP it ) ) ( VP ( VBD thought ) ( SBAR ( S ( NP-SBJ ( DT the ) ( NNS purchases ) ) ( VP ( VBD were ) ( NP-PRD ( NP ( DT a ) ( JJ good ) ( NN way ) ) ( SBAR ( S ( VP ( TO to ) ( VP ( VB improve ) ( NP ( NP ( JJ such ) ( JJ financial ) ( NNS measurements ) ) ( PP ( IN as ) ( NP ( NP ( JJ per-share ) ( NNS earnings ) ) ( CC and ) ( NP ( NP ( NN return ) ) ( PP ( IN on ) ( NP ( NN equity ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

In Armonk N.Y. a spokesman said that although IBM did n't view its spending as necessarily a way to support the stock it thought the purchases were a good way to improve such financial measurements as per-share earnings and return on equity


( S ( S-TPC-1 ( NP-SBJ ( PRP We ) ) ( VP ( VBP view ) ( NP ( PRP it ) ) ( PP-CLR ( IN as ) ( NP ( DT a ) ( JJ good ) ( JJ long-term ) ( NN investment ) ) ) ) ) ( NP-SBJ ( DT the ) ( NN spokesman ) ) ( VP ( VBD said ) ) )

We view it as a good long-term investment the spokesman said


( S ( PP-TMP ( IN In ) ( NP ( DT the ) ( JJ short ) ( NN term ) ) ) ( NP-SBJ-1 ( DT the ) ( NN move ) ) ( VP ( VBZ is ) ( ADJP-PRD ( JJ likely ) ( S ( VP ( TO to ) ( VP ( VB have ) ( NP ( JJ little ) ( NN effect ) ) ) ) ) ) ) )

In the short term the move is likely to have little effect


( S ( PP ( IN At ) ( NP ( NP ( NN yesterday ) ( POS 's ) ) ( NN closing ) ( NN price ) ) ) ( NP-SBJ ( QP ( CD 1 ) ( CD billion ) ) ) ( VP ( MD would ) ( VP ( VB buy ) ( ADVP-CLR ( RB back ) ) ( NP ( NP ( QP ( IN about ) ( CD 10 ) ( CD million ) ) ( NNS shares ) ) ( CC or ) ( NP ( NP ( QP ( JJR less ) ( IN than ) ( CD 2 ) ) ( NN % ) ) ( PP ( IN of ) ( NP ( NP ( DT the ) ( QP ( RB roughly ) ( CD 580 ) ( CD million ) ) ) ( ADJP ( JJ outstanding ) ) ) ) ) ) ) ) )

At yesterday 's closing price 1 billion would buy back about 10 million shares or less than 2 % of the roughly 580 million outstanding


( S ( PP ( IN In ) ( NP ( NN addition ) ) ) ( PP-TMP ( IN as ) ( PP ( IN of ) ( NP ( NNP Sept. ) ( CD 30 ) ) ) ) ( NP-SBJ ( DT the ) ( NN company ) ) ( ADVP-TMP ( RB still ) ) ( VP ( VBD had ) ( NP ( NN authorization ) ( S ( VP ( TO to ) ( VP ( VB buy ) ( NP ( NP ( QP ( CD 368 ) ( CD million ) ) ) ( PP ( IN of ) ( NP ( NN stock ) ) ) ) ) ) ) ) ( PP-LOC ( IN under ) ( NP ( DT a ) ( RB prior ) ( NN repurchase ) ( NN program ) ) ) ) )

In addition as of Sept. 30 the company still had authorization to buy 368 million of stock under a prior repurchase program


( S ( PP-TMP ( IN Over ) ( NP ( DT the ) ( JJ long ) ( NN term ) ) ) ( ADVP ( RB however ) ) ( NP-SBJ ( NP ( NP ( NNP IBM ) ( POS 's ) ) ( NN stock ) ( NNS repurchases ) ) ( PRN ( PP ( IN along ) ( PP ( IN with ) ( NP ( NP ( PRP$ its ) ( JJ hefty ) ( ADJP ( JJ 4.84-a-share ) ) ( JJ annual ) ( NN dividend ) ) ( CC and ) ( NP ( NP ( ADJP ( RB generally ) ( JJ loyal ) ) ( NN following ) ) ( PP-LOC ( IN among ) ( NP ( JJ large ) ( JJ institutional ) ( NNS investors ) ) ) ) ) ) ) ) ) ( VP ( VBP are ) ( VP ( VBG providing ) ( NP ( DT a ) ( NN floor ) ) ( PP ( IN for ) ( NP ( DT the ) ( NN stock ) ( NN price ) ) ) ) ) )

Over the long term however IBM 's stock repurchases along with its hefty 4.84-a-share annual dividend and generally loyal following among large institutional investors are providing a floor for the stock price


( S ( SBAR-ADV ( IN Although ) ( S ( NP-SBJ-1 ( NNP IBM ) ) ( NP-TMP ( JJ last ) ( NN year ) ) ( VP ( VP ( VBD produced ) ( NP ( NP ( PRP$ its ) ( JJ first ) ( JJ strong ) ( NNS results ) ) ( PP-TMP ( IN in ) ( NP ( CD four ) ( NNS years ) ) ) ) ) ( CC and ) ( VP ( VBD was ) ( VP ( VBN expected ) ( S ( VP ( TO to ) ( VP ( VB continue ) ( S ( VP ( TO to ) ( VP ( VB roll ) ) ) ) ( NP-TMP ( DT this ) ( NN year ) ) ) ) ) ) ) ) ) ) ( NP-SBJ-3 ( PRP it ) ) ( VP ( VBD began ) ( S ( VP ( VBG faltering ) ) ) ( ADVP-TMP ( ADVP ( RB as ) ( RB early ) ) ( PP ( IN as ) ( NP ( NNP January ) ) ) ) ) )

Although IBM last year produced its first strong results in four years and was expected to continue to roll this year it began faltering as early as January


( S ( ADVP ( RB First ) ) ( NP-SBJ-1 ( PRP it ) ) ( VP ( VBD had ) ( NP ( NP ( NN trouble ) ) ( S-NOM ( VP ( VBG manufacturing ) ( NP ( NP ( DT a ) ( NN chip ) ) ( PP ( IN for ) ( NP ( NP ( PRP$ its ) ( NNS mainframes ) ) ( NP ( NP ( NNP IBM ) ( POS 's ) ) ( JJ bread-and-butter ) ( NN business ) ) ) ) ) ) ) ) ) )

First it had trouble manufacturing a chip for its mainframes IBM 's bread-and-butter business


( S ( RB Then ) ( NP-SBJ-1 ( PRP it ) ) ( VP ( VBD had ) ( NP ( NP ( DT a ) ( NN series ) ) ( PP ( IN of ) ( NP ( JJR smaller ) ( NNS glitches ) ) ) ( PP ( VBG including ) ( NP ( NP ( NP ( NNS problems ) ) ( S-NOM ( VP ( VBG manufacturing ) ( NP ( JJ certain ) ( JJ personal ) ( NNS computers ) ) ) ) ) ( CC and ) ( NP ( NP ( DT the ) ( NN delay ) ) ( PP-LOC ( IN in ) ( NP ( NP ( DT the ) ( NN announcement ) ) ( PP ( IN of ) ( NP ( DT some ) ( JJ important ) ( NNS workstations ) ) ) ) ) ) ) ) ) ) )

Then it had a series of smaller glitches including problems manufacturing certain personal computers and the delay in the announcement of some important workstations


( S ( ADVP ( RB Finally ) ) ( NP-SBJ-2 ( NNP IBM ) ) ( VP ( VBD had ) ( S ( VP ( TO to ) ( VP ( VB delay ) ( NP ( NP ( DT the ) ( NN introduction ) ) ( PP ( IN of ) ( NP ( NP ( DT some ) ( JJ high-end ) ( NN disk ) ( NNS drives ) ) ( SBAR ( WHNP-1 ( WDT which ) ) ( S ( VP ( VBP account ) ( PP-CLR ( IN for ) ( NP ( NP ( CD 10 ) ( NN % ) ) ( PP ( IN of ) ( NP ( NP ( PRP$ its ) ( QP ( CD 60 ) ( CD billion ) ) ) ( PP ( IN of ) ( NP ( JJ annual ) ( NN revenue ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

Finally IBM had to delay the introduction of some high-end disk drives which account for 10 % of its 60 billion of annual revenue


( S ( S ( NP-SBJ ( NP ( NN None ) ) ( PP ( IN of ) ( NP ( DT the ) ( NNS problems ) ) ) ) ( VP ( VBZ is ) ( ADJP-PRD ( RB necessarily ) ( JJ fatal ) ) ) ) ( CC and ) ( S ( NP-SBJ ( PRP they ) ) ( VP ( VBP are ) ( RB n't ) ( DT all ) ( ADJP-PRD ( RB necessarily ) ( RB even ) ( JJ related ) ) ) ) )

None of the problems is necessarily fatal and they are n't all necessarily even related


( S ( NP-SBJ ( EX There ) ) ( VP ( VBP are ) ( ADVP ( RB also ) ) ( NP-PRD ( NP ( JJ other ) ( NNS factors ) ) ( PP ( IN at ) ( NP ( NN work ) ) ) ( SBAR ( WHNP-1 ( WDT that ) ) ( S ( VP ( VBP are ) ( PP-LOC-PRD ( IN outside ) ( NP ( NP ( NNP IBM ) ( POS 's ) ) ( NN control ) ) ) ) ) ) ( PP ( JJ such ) ( IN as ) ( NP ( NN currency ) ( NN exchange ) ( NNS rates ) ) ) ) ) )

There are also other factors at work that are outside IBM 's control such as currency exchange rates


( S ( NP-SBJ-4 ( NP ( DT The ) ( JJ strong ) ( NN dollar ) ) ( SBAR ( WHNP-2 ( WDT which ) ) ( S ( VP ( VBZ reduces ) ( NP ( NP ( DT the ) ( NN value ) ) ( PP ( IN of ) ( NP ( JJ overseas ) ( NNS earnings ) ( CC and ) ( NN revenue ) ) ) ) ( SBAR-TMP ( WHADVP-3 ( WRB when ) ) ( S ( NP-SBJ-1 ( PRP they ) ) ( VP ( VBP are ) ( VP ( VBN translated ) ( PP-CLR ( IN into ) ( NP ( NNS dollars ) ) ) ) ) ) ) ) ) ) ) ( VP ( VBZ is ) ( VP ( VBN expected ) ( S ( VP ( TO to ) ( VP ( VB knock ) ( NP ( QP ( CD 80 ) ( TO to ) ( CD 85 ) ) ( NNS cents ) ) ( PP-CLR ( IN off ) ( NP ( NP ( NP ( NNP IBM ) ( POS 's ) ) ( JJ per-share ) ( NNS earnings ) ) ( PP ( IN for ) ( NP ( DT the ) ( JJ full ) ( NN year ) ) ) ) ) ) ) ) ) ) )

The strong dollar which reduces the value of overseas earnings and revenue when they are translated into dollars is expected to knock 80 to 85 cents off IBM 's per-share earnings for the full year


( S ( PP ( IN Without ) ( NP ( DT that ) ( NN problem ) ) ) ( NP-SBJ ( NNP IBM ) ) ( VP ( MD might ) ( VP ( VB have ) ( VP ( VBN matched ) ( NP ( NP ( NP ( JJ last ) ( NN year ) ( POS 's ) ) ( NNS earnings ) ) ( PP ( IN of ) ( NP ( NP ( QP ( CD 5.81 ) ( CD billion ) ) ) ( CC or ) ( NP ( NP ( CD 9.80 ) ) ( NP-ADV ( DT a ) ( NN share ) ) ) ) ) ) ) ) ) )

Without that problem IBM might have matched last year 's earnings of 5.81 billion or 9.80 a share


( S ( ADVP ( RB Still ) ) ( NP-SBJ ( NNS investors ) ) ( VP ( MD will ) ( VP ( VB take ) ( NP ( DT some ) ( NN convincing ) ) ( SBAR-TMP ( IN before ) ( S ( NP-SBJ ( PRP they ) ) ( VP ( VBP get ) ( ADVP-CLR ( RB back ) ) ( PP-DIR ( IN into ) ( NP ( NP ( NNP IBM ) ( POS 's ) ) ( NN stock ) ) ) ( PP-MNR ( IN in ) ( NP ( DT a ) ( JJ big ) ( NN way ) ) ) ) ) ) ) ) )

Still investors will take some convincing before they get back into IBM 's stock in a big way


( S ( NP-SBJ ( NP ( NNP Steve ) ( NNP Milunovich ) ) ( NP ( NP ( DT a ) ( NNS securities ) ( NN analyst ) ) ( PP-LOC ( IN at ) ( NP ( NNP First ) ( NNP Boston ) ) ) ) ) ( VP ( VBD said ) ( SBAR ( IN that ) ( S ( SBAR-ADV ( IN while ) ( S ( NP-SBJ ( NNS investors ) ) ( VP ( VBD were ) ( VP ( VBG looking ) ( PP-CLR ( IN for ) ( NP ( NP ( DT an ) ( NN excuse ) ) ( SBAR ( S ( VP ( TO to ) ( VP ( VB buy ) ( NP ( NNP IBM ) ( VBZ shares ) ) ) ) ) ) ) ) ( ADVP-TMP ( NP ( DT a ) ( NN year ) ) ( RB ago ) ) ) ) ) ) ( NP-SBJ ( RB even ) ( DT the ) ( JJ big ) ( JJ institutional ) ( NNS investors ) ) ( VP ( VBP are ) ( VP ( VBG looking ) ( PP-CLR ( IN for ) ( NP ( NP ( DT a ) ( NN reason ) ) ( SBAR ( S ( VP ( TO to ) ( VP ( VB avoid ) ( NP ( DT the ) ( NN stock ) ) ) ) ) ) ) ) ( NP-TMP ( DT these ) ( NNS days ) ) ) ) ) ) ) )

Steve Milunovich a securities analyst at First Boston said that while investors were looking for an excuse to buy IBM shares a year ago even the big institutional investors are looking for a reason to avoid the stock these days


( S ( NP-SBJ ( NP ( JJ Natural ) ( NNS upheavals ) ) ( CC and ) ( ADVP ( RBS most ) ( RB particularly ) ) ( NP ( NNS earthquakes ) ) ) ( VP ( VBP are ) ( NP-PRD ( CONJP ( RB not ) ( JJ only ) ) ( NP ( NP ( JJ horrible ) ( NNS realities ) ) ( PP ( IN in ) ( CC and ) ( IN of ) ( NP ( PRP themselves ) ) ) ) ( CONJP ( CC but ) ( RB also ) ) ( NP ( NP ( NNS symbols ) ) ( SBAR ( WHPP-2 ( IN through ) ( WHNP ( WDT which ) ) ) ( S ( NP-SBJ-1 ( NP ( DT the ) ( NN state ) ) ( PP ( IN of ) ( NP ( DT a ) ( NN society ) ) ) ) ( VP ( MD can ) ( VP ( VB be ) ( VP ( VBN construed ) ) ) ) ) ) ) ) ) )

Natural upheavals and most particularly earthquakes are not only horrible realities in and of themselves but also symbols through which the state of a society can be construed


( S ( NP-SBJ ( NP ( DT The ) ( NN rubble ) ) ( PP-TMP ( IN after ) ( NP ( NP ( DT the ) ( JJ Armenian ) ( NN earthquake ) ) ( ADVP-TMP ( NP ( DT a ) ( NN year ) ) ( RB ago ) ) ) ) ) ( VP ( VBD disclosed ) ( ADVP-MNR ( RB quite ) ( RB literally ) ) ( NP ( NP ( DT a ) ( NN city ) ) ( SBAR ( WHNP-2 ( WP$ whose ) ( JJR larger ) ( NNS structures ) ) ( S ( VP ( VBD had ) ( VP ( VBN been ) ( VP ( VBN built ) ( PP ( IN with ) ( NP ( NN sand ) ) ) ) ) ) ) ) ) ) )

The rubble after the Armenian earthquake a year ago disclosed quite literally a city whose larger structures had been built with sand


( S ( NP-SBJ ( NP ( DT The ) ( NN extent ) ) ( PP ( IN of ) ( NP ( DT the ) ( NN disaster ) ) ) ) ( VP ( VBD stemmed ) ( PP-DIR ( IN from ) ( NP ( NP ( NNS years ) ) ( PP ( IN of ) ( NP ( NP ( NN chicanery ) ) ( CC and ) ( NP ( JJ bureaucratic ) ( NN indifference ) ) ) ) ) ) ) )

The extent of the disaster stemmed from years of chicanery and bureaucratic indifference


( S ( NP-SBJ ( NP ( DT The ) ( JJR larger ) ( NN parallel ) ) ( PP-TMP ( IN after ) ( NP ( NP ( DT the ) ( NN earthquake ) ) ( VP ( VBN centered ) ( ADVP-LOC-CLR ( RB south ) ( PP ( IN of ) ( NP ( NNP San ) ( NNP Francisco ) ) ) ) ) ) ) ) ( VP ( VBZ is ) ( ADVP ( RB surely ) ) ( PP-PRD ( IN with ) ( NP ( NP ( DT the ) ( NN state ) ) ( PP ( IN of ) ( NP ( DT the ) ( NNP U.S. ) ( NN economy ) ) ) ) ) ) )

The larger parallel after the earthquake centered south of San Francisco is surely with the state of the U.S. economy


( SQ ( VBD Did ) ( NP-SBJ ( NP ( DT the ) ( JJ stock-market ) ( NNS tremors ) ) ( PP ( IN of ) ( NP ( NP ( NNP Friday ) ) ( NP ( NNP Oct. ) ( CD 13 ) ) ) ) ) ( VP ( VB presage ) ( NP ( NP ( JJR larger ) ( NN fragility ) ) ( NP ( ADJP ( RB far ) ( JJR greater ) ) ( NNS upheavals ) ) ) ) )

Did the stock-market tremors of Friday Oct. 13 presage larger fragility far greater upheavals


( SQ ( VBP Are ) ( NP-SBJ ( NP ( DT the ) ( NN engineering ) ( CC and ) ( NN architecture ) ) ( PP ( IN of ) ( NP ( DT the ) ( NN economy ) ) ) ) ( ADJP-PRD ( ADJP ( RB as ) ( JJ vulnerable ) ) ( PP ( IN as ) ( NP ( NP ( DT the ) ( NNS spans ) ) ( PP ( IN of ) ( NP ( DT the ) ( NNP Bay ) ( NNP Bridge ) ) ) ) ) ) )

Are the engineering and architecture of the economy as vulnerable as the spans of the Bay Bridge


( S ( NP-SBJ ( NP ( DT The ) ( JJ eerie ) ( NN complacency ) ) ( PP ( IN of ) ( NP ( DT the ) ( JJ Reagan-Bush ) ( NN era ) ) ) ) ( VP ( VBZ has ) ( VP ( VBN produced ) ( NP ( NP ( JJ Panglossian ) ( NNS paeans ) ) ( PP ( IN about ) ( NP ( NP ( DT the ) ( JJ present ) ( NN perfection ) ) ( PP ( IN of ) ( NP ( NNP U.S. ) ( ADJP ( JJ economic ) ( CC and ) ( JJ social ) ) ( NNS arrangements ) ) ) ) ) ) ) ) )

The eerie complacency of the Reagan-Bush era has produced Panglossian paeans about the present perfection of U.S. economic and social arrangements


( S ( NP-SBJ ( NP ( DT A ) ( JJ licensed ) ( NN government ) ( NN intellectual ) ) ( NP ( NNP Francis ) ( NNP Fukuyama ) ) ) ( ADVP-TMP ( RB recently ) ) ( VP ( VBD announced ) ( PP-LOC ( IN in ) ( NP ( DT The ) ( NNP National ) ( NNP Interest ) ) ) ( SBAR ( IN that ) ( S ( NP-SBJ ( NN history ) ) ( VP ( VBZ is ) ( S ( ADVP-TPC-1 ( RB so ) ) ( VP ( TO to ) ( VP ( VB speak ) ) ) ) ( PP-LOC-PRD ( IN at ) ( NP ( DT an ) ( NN end ) ) ) ( SBAR-PRP ( IN since ) ( S ( NP-SBJ ( NP ( DT the ) ( NN course ) ) ( PP ( IN of ) ( NP ( JJ human ) ( NN progress ) ) ) ) ( VP ( VBZ has ) ( ADVP-TMP ( RB now ) ) ( VP ( VBN culminated ) ( PP-CLR ( IN in ) ( NP ( NP ( DT the ) ( JJ glorious ) ( JJ full ) ( NN stop ) ) ( PP ( IN of ) ( NP ( JJ American ) ( NN civilization ) ) ) ) ) ) ) ) ) ) ) ) ) )

A licensed government intellectual Francis Fukuyama recently announced in The National Interest that history is so to speak at an end since the course of human progress has now culminated in the glorious full stop of American civilization


( S ( NP-SBJ-1 ( PRP$ His ) ( NNS observations ) ) ( VP ( VBD were ) ( VP ( VBN taken ) ( ADVP-MNR ( RB seriously ) ) ) ) )

His observations were taken seriously


( S ( CC But ) ( NP-SBJ ( PRP we ) ) ( VP ( VBP are ) ( PP ( IN in ) ( NP ( NN reality ) ) ) ( VP ( VBG witnessing ) ( NP ( NP ( NP ( DT the ) ( VBG continuing ) ( NN decline ) ) ( PP ( IN of ) ( NP ( NP ( DT the ) ( JJ political ) ( NN economy ) ) ( PP ( IN of ) ( NP ( NN capitalism ) ) ) ) ) ) ( NP ( RB not ) ( ADVP ( RB so ) ( JJ much ) ) ( NP ( NP ( DT the ) ( NN end ) ) ( PP ( IN of ) ( NP ( NN history ) ) ) ) ( CC but ) ( NP ( NP ( DT the ) ( NN history ) ) ( PP ( IN of ) ( NP ( DT the ) ( NN end ) ) ) ) ) ) ) ) )

But we are in reality witnessing the continuing decline of the political economy of capitalism not so much the end of history but the history of the end


( S ( NP-SBJ ( NP ( DT The ) ( JJ financial ) ( NN equivalent ) ) ( PP ( IN of ) ( NP ( NP ( DT the ) ( NN sand ) ) ( VP ( VBN used ) ( PP ( IN by ) ( NP-LGS ( DT those ) ( JJ Armenian ) ( NNS contractors ) ) ) ) ) ) ) ( VP ( VBZ is ) ( NP-PRD ( NP ( NN junk ) ( NNS bonds ) ) ( CC and ) ( NP ( NP ( DT the ) ( JJ leveraged ) ( NNS buy-outs ) ) ( VP ( VBN associated ) ( PP ( IN with ) ( NP ( PRP them ) ) ) ) ) ) ) )

The financial equivalent of the sand used by those Armenian contractors is junk bonds and the leveraged buy-outs associated with them


( S ( S ( NP-SBJ-3 ( NNS Builders ) ) ( VP ( VBP get ) ( ADVP-CLR ( RB away ) ) ( PP-CLR ( IN with ) ( S-NOM ( VP ( VBG using ) ( NP-4 ( NN sand ) ) ) ) ) ) ) ( CC and ) ( S ( NP=3 ( NNS financiers ) ) ( NP=4 ( NN junk ) ) ) ( SBAR-TMP-2 ( WHADVP ( WRB when ) ) ( S ( NP-SBJ ( NN society ) ) ( VP ( VBZ decides ) ( SBAR ( S ( NP-SBJ ( NP ( PRP it ) ) ) ( VP ( VBZ 's ) ( ADJP-PRD ( ADJP ( JJ okay ) ) ( ADJP ( JJ necessary ) ) ( ADVP ( RB even ) ) ) ( S-1 ( VP ( TO to ) ( VP ( VB look ) ( NP-DIR ( DT the ) ( JJ other ) ( NN way ) ) ) ) ) ) ) ) ) ) ) )

Builders get away with using sand and financiers junk when society decides it 's okay necessary even to look the other way


( S ( CC And ) ( PP-TMP ( IN by ) ( NP ( DT the ) ( JJ early ) ( NNS 1980s ) ) ) ( NP-SBJ-2 ( NNP U.S. ) ( NNS capitalists ) ) ( VP ( VBD had ) ( NP ( NP ( JJ ample ) ( NN reason ) ) ( SBAR ( S ( VP ( VP ( TO to ) ( VP ( VB welcome ) ( NP ( NN junk ) ( NNS bonds ) ) ) ) ( VP ( TO to ) ( VP ( VB look ) ( NP-DIR ( DT the ) ( JJ other ) ( NN way ) ) ) ) ) ) ) ) ) )

And by the early 1980s U.S. capitalists had ample reason to welcome junk bonds to look the other way


( S ( PP-TMP ( IN By ) ( NP ( DT that ) ( NN time ) ) ) ( NP-SBJ ( PRP they ) ) ( VP ( VBD found ) ( NP ( NP ( ADJP ( RB extremely ) ( JJ low ) ) ( NN profit ) ( NNS rates ) ) ( PP ( IN from ) ( NP ( JJ non-financial ) ( JJ corporate ) ( NN investment ) ) ) ) ) )

By that time they found extremely low profit rates from non-financial corporate investment


( S ( NP-SBJ ( NN Government ) ( NNS statistics ) ) ( PP ( IN in ) ( NP ( NN fact ) ) ) ( VP ( VBP show ) ( SBAR ( IN that ) ( S ( NP-SBJ ( NP ( DT the ) ( NN profit ) ( NN rate ) ) ( PRN ( NP ( NP ( JJ net ) ( JJ pretax ) ( NNS profits ) ) ( VP ( VBN divided ) ( PP-CLR ( IN by ) ( NP ( NN capital ) ( NN stock ) ) ) ) ) ) ) ( VP ( VBD peaked ) ( PP-TMP ( IN in ) ( NP ( CD 1965 ) ) ) ( PP-CLR ( IN at ) ( NP ( CD 17.2 ) ( NN % ) ) ) ) ) ) ) )

Government statistics in fact show that the profit rate net pretax profits divided by capital stock peaked in 1965 at 17.2 %


( S ( S ( NP-SBJ ( DT That ) ( JJ same ) ( NN calculation ) ) ( VP ( VBD saw ) ( S ( NP-SBJ ( NN profit ) ( NNS rates ) ) ( VP ( VB fall ) ( PP-DIR ( TO to ) ( NP ( CD 4.6 ) ( NN % ) ) ) ( PP-TMP ( IN in ) ( NP ( NP ( DT the ) ( NN recession ) ( NN year ) ) ( NP ( CD 1982 ) ) ) ) ) ) ) ) ( CC and ) ( S ( NP-SBJ ( NP ( DT the ) ( JJ supposed ) ( NN miracle ) ) ( SBAR ( WHNP-1 ( WDT that ) ) ( S ( VP ( VBD followed ) ) ) ) ) ( VP ( VBZ has ) ( VP ( VBN seen ) ( S ( NP-SBJ ( DT the ) ( NN profit ) ( NN rate ) ) ( VP ( VB rise ) ( ADVP ( RB only ) ) ( PP-DIR ( TO to ) ( NP ( NP ( NP ( CD 8.1 ) ( NN % ) ) ( PP-TMP ( IN in ) ( NP ( CD 1986 ) ) ) ) ( CC and ) ( NP ( NP ( CD 8 ) ( NN % ) ) ( PP-TMP ( IN in ) ( NP ( CD 1987 ) ) ) ) ) ) ) ) ) ) ) )

That same calculation saw profit rates fall to 4.6 % in the recession year 1982 and the supposed miracle that followed has seen the profit rate rise only to 8.1 % in 1986 and 8 % in 1987


( SINV ( VP-TPC-1 ( VBG Corresponding ) ( PP-CLR ( TO to ) ( NP ( NP ( DT the ) ( NN fall ) ) ( PP-LOC ( IN in ) ( NP ( NN profit ) ( NNS rates ) ) ) ) ) ) ( VP ( VBD was ) ) ( PRN ( PP-TMP ( IN in ) ( NP ( DT the ) ( JJ early ) ( NNS 1980s ) ) ) ) ( NP-SBJ ( NP ( DT the ) ( NN drop ) ) ( PP-LOC ( IN in ) ( NP ( NP ( NP ( DT the ) ( NN number ) ) ( VP ( VBN arrived ) ( PP-CLR ( IN at ) ) ( SBAR-ADV ( IN if ) ( S ( NP-SBJ ( PRP you ) ) ( VP ( VBP divide ) ( NP ( NP ( DT the ) ( NN market ) ( NN value ) ) ( PP ( IN of ) ( NP ( NNS firms ) ) ) ) ( PP-CLR ( IN by ) ( NP ( NP ( DT the ) ( NN replacement ) ( NNS costs ) ) ( PP ( IN of ) ( NP ( PRP$ their ) ( NNS assets ) ) ) ) ) ) ) ) ) ) ( NP ( NP ( DT the ) ( JJ famous ) ( NNP Q ) ( NN ratio ) ) ( VP ( VBN associated ) ( PP-CLR ( IN with ) ( NP ( NNP Prof. ) ( NNP James ) ( NNP Tobin ) ) ) ) ) ) ) ) )

Corresponding to the fall in profit rates was in the early 1980s the drop in the number arrived at if you divide the market value of firms by the replacement costs of their assets the famous Q ratio associated with Prof. James Tobin


( S ( PP ( IN In ) ( NP ( NN theory ) ) ) ( NP-SBJ ( NP ( NP ( DT the ) ( NN value ) ) ( VP ( VBN attached ) ( PP-CLR ( TO to ) ( NP ( DT a ) ( NN firm ) ) ) ( PP ( IN by ) ( NP-LGS ( DT the ) ( NN market ) ) ) ) ) ( CC and ) ( NP ( NP ( DT the ) ( NN cost ) ) ( PP ( IN of ) ( S-NOM ( VP ( VBG replacing ) ( NP ( PRP$ its ) ( NNS assets ) ) ) ) ) ) ) ( VP ( MD should ) ( VP ( VB be ) ( NP-PRD ( DT the ) ( JJ same ) ) ) ) )

In theory the value attached to a firm by the market and the cost of replacing its assets should be the same


( S ( CC But ) ( PP ( IN of ) ( NP ( NN course ) ) ) ( NP-SBJ ( DT the ) ( NN market ) ) ( VP ( MD could ) ( VP ( VB decide ) ( SBAR ( IN that ) ( S ( NP-SBJ ( NP ( NP ( DT the ) ( NN firm ) ( POS 's ) ) ( NN capital ) ( NN stock ) ) ( PRN ( NP ( PRP$ its ) ( NNS assets ) ) ) ) ( VP ( VBZ means ) ( NP ( NN nothing ) ) ( SBAR-ADV ( IN if ) ( S ( NP-SBJ ( DT the ) ( NN firm ) ) ( VP ( VBZ is ) ( RB not ) ( VP ( VBG producing ) ( NP ( NNS profits ) ) ) ) ) ) ) ) ) ) ) )

But of course the market could decide that the firm 's capital stock its assets means nothing if the firm is not producing profits


( S ( NP-SBJ ( DT This ) ) ( VP ( VBZ is ) ( ADVP ( RB indeed ) ) ( SBAR-NOM-PRD ( WHNP-1 ( WP what ) ) ( S ( NP-SBJ ( DT the ) ( NN market ) ) ( VP ( VBD decided ) ) ) ) ) )

This is indeed what the market decided


( S ( PP-TMP ( IN By ) ( NP ( CD 1982 ) ) ) ( NP-SBJ ( DT the ) ( NN ratio ) ) ( VP ( VBD was ) ( NP-PRD ( CD 43.5 ) ( NN % ) ) ( S-ADV ( VP ( VBG meaning ) ( SBAR ( IN that ) ( S ( NP-SBJ ( DT the ) ( NN market ) ) ( VP ( VBD was ) ( VP ( VBG valuing ) ( NP ( NP ( NP ( DT every ) ( NN dollar ) ( POS 's ) ) ( NN worth ) ) ( PP ( IN of ) ( NP ( NP ( DT the ) ( JJ average ) ( NN firm ) ( POS 's ) ) ( NNS assets ) ) ) ) ( PP-CLR ( IN at ) ( NP ( CD 43 ) ( NNS cents ) ) ) ) ) ) ) ) ) ) )

By 1982 the ratio was 43.5 % meaning that the market was valuing every dollar 's worth of the average firm 's assets at 43 cents


( S ( PP ( IN From ) ( NP ( NP ( DT the ) ( NN history ) ) ( PP ( IN of ) ( NP ( NN capitalism ) ) ) ) ) ( NP-SBJ ( PRP we ) ) ( VP ( MD can ) ( VP ( VB take ) ( NP ( NP ( PRP it ) ) ) ( PP-CLR ( IN as ) ( NP ( DT a ) ( JJ sound ) ( NN bet ) ) ) ( SBAR-1 ( IN that ) ( S ( SBAR-ADV ( IN if ) ( S ( NP-SBJ ( NP ( PRP it ) ) ) ( VP ( VBZ takes ) ( NP ( QP ( RB only ) ( CD 43 ) ) ( NNS cents ) ) ( S-2 ( VP ( TO to ) ( VP ( VB buy ) ( NP ( NP ( NP ( DT a ) ( NN dollar ) ( POS 's ) ) ( NN worth ) ) ( PP ( IN of ) ( NP ( NP ( DT a ) ( NN firm ) ( POS 's ) ) ( NN capital ) ( NN stock ) ) ) ) ) ) ) ) ) ) ( NP-SBJ ( DT an ) ( JJ alert ) ( NN entrepreneur ) ) ( VP ( MD wo ) ( RB n't ) ( VP ( VB look ) ( NP-DIR ( DT the ) ( JJ other ) ( NN way ) ) ) ) ) ) ) ) )

From the history of capitalism we can take it as a sound bet that if it takes only 43 cents to buy a dollar 's worth of a firm 's capital stock an alert entrepreneur wo n't look the other way


( S ( NP-SBJ ( PRP$ His ) ( NN assumption ) ) ( VP ( VBZ is ) ( SBAR-PRD ( SBAR ( IN that ) ( S ( NP-SBJ ( DT the ) ( VBG underlying ) ( NN profitability ) ( NN rate ) ) ( VP ( MD will ) ( VP ( VB go ) ( ADVP-DIR ( RB up ) ) ) ) ) ) ( CC and ) ( SBAR ( S ( NP-SBJ-2 ( NP ( DT the ) ( NN capital ) ( NNS assets ) ) ( SBAR ( S ( NP-SBJ ( PRP he ) ) ( VP ( VBD bought ) ( PP ( IN on ) ( NP ( DT the ) ( NN cheap ) ) ) ) ) ) ) ( VP ( MD will ) ( ADVP-TMP ( RB soon ) ) ( VP ( VB be ) ( S ( VP ( VBG producing ) ( NP ( NNS profits ) ) ) ) ) ) ) ) ( S-ADV ( ADVP ( RB thus ) ) ( VP ( VBG restoring ) ( NP ( NP ( NP ( DT the ) ( NN market ) ( POS 's ) ) ( NN faith ) ) ( PP ( IN in ) ( NP ( PRP them ) ) ) ) ) ) ) ) )

His assumption is that the underlying profitability rate will go up and the capital assets he bought on the cheap will soon be producing profits thus restoring the market 's faith in them


( FRAG ( ADVP ( RB Hence ) ) ( NP ( DT the ) ( NN LBO ) ( NN craze ) ) )

Hence the LBO craze


( S ( CC But ) ( NP-SBJ ( RB here ) ) ( VP ( VBZ is ) ( SBAR-PRD ( SBAR ( WHADVP-1 ( WRB where ) ) ( S ( NP-SBJ ( DT the ) ( NN entrepreneur ) ) ( VP ( VBD made ) ( NP ( DT a ) ( ADJP ( RB very ) ( JJ risky ) ) ( NN bet ) ) ) ) ) ( CC and ) ( SBAR ( WHADVP-2 ( WRB where ) ) ( S ( NP-SBJ-3 ( NN society ) ) ( VP ( VBD was ) ( ADVP ( RB maybe ) ) ( ADJP-PRD ( JJ foolish ) ( S ( VP ( TO to ) ( VP ( VB look ) ( NP-DIR ( DT the ) ( JJ other ) ( NN way ) ) ) ) ) ) ) ) ) ) ) )

But here is where the entrepreneur made a very risky bet and where society was maybe foolish to look the other way


( S ( S ( NP-SBJ ( DT The ) ( NN profit ) ( NN rate ) ) ( VP ( VBZ is ) ( ADVP-TMP ( RB still ) ) ( ADJP-PRD ( JJ low ) ) ) ) ( CC and ) ( S ( NP-SBJ ( DT the ) ( NNP Q ) ( NN ratio ) ) ( VP ( VP ( VBD was ) ( NP-PRD-1 ( QP ( RB only ) ( CD 65 ) ) ( NN % ) ) ( PP-TMP-2 ( IN in ) ( NP ( CD 1987 ) ) ) ) ( CC and ) ( VP ( NP-PRD=1 ( CD 68.9 ) ( NN % ) ) ( PP-TMP=2 ( IN in ) ( NP ( CD 1988 ) ) ) ) ) ) )

The profit rate is still low and the Q ratio was only 65 % in 1987 and 68.9 % in 1988


( NP ( NP ( NN Result ) ) ( NP ( NP ( NP ( DT a ) ( NN landscape ) ) ( VP ( VBN littered ) ( PP-CLR ( IN with ) ( NP ( NNS lemons ) ) ) ) ) ( NP ( NP ( JJ huge ) ( NN debt ) ( NNS burdens ) ) ( VP ( VBG crushing ) ( ADVP-DIR ( RB down ) ) ( PP-LOC-CLR ( IN upon ) ( NP ( NP ( DT the ) ( NN arch ) ( CC and ) ( NNS spans ) ) ( PP ( IN of ) ( NP ( JJ corporate ) ( NNP America ) ) ) ) ) ) ) ) )

Result a landscape littered with lemons huge debt burdens crushing down upon the arch and spans of corporate America


( S ( NP-SBJ ( DT The ) ( VBG mounting ) ( NNS risks ) ) ( VP ( VBD did ) ( RB not ) ( VP ( VB go ) ( ADJP-PRD ( JJ unobserved ) ) ( PP-TMP ( RB even ) ( IN in ) ( NP ( DT the ) ( NNS mid-1980s ) ) ) ) ) )

The mounting risks did not go unobserved even in the mid-1980s


( S ( CC But ) ( NP-SBJ ( EX there ) ) ( VP ( VBD were ) ( NP-PRD ( NP ( RB enough ) ( NNS promoters ) ) ( VP ( VBG announcing ) ( NP ( NP ( NP ( DT the ) ( NN end ) ) ( PP ( IN of ) ( NP ( NN history ) ) ) ) ( PRN ( NP ( PP-LOC ( IN in ) ( NP ( DT this ) ( NN case ) ) ) ( NP ( NP ( NN suspension ) ) ( PP ( IN of ) ( NP ( NP ( JJ normal ) ( NNS laws ) ) ( PP ( IN of ) ( NP ( JJ economic ) ( NN gravity ) ) ) ) ) ) ) ) ) ) ( SBAR ( IN for ) ( S ( NP-SBJ-1 ( NN society ) ) ( VP ( TO to ) ( VP ( VB continue ) ( S ( VP ( VBG shielding ) ( NP ( PRP$ its ) ( NNS eyes ) ) ) ) ) ) ) ) ) ) )

But there were enough promoters announcing the end of history in this case suspension of normal laws of economic gravity for society to continue shielding its eyes


( S ( NP-SBJ-3 ( NN Mainstream ) ( NNS economists ) ( CC and ) ( NNS commentators ) ) ( S-ADV ( VP ( VP ( VBG craning ) ( NP ( PRP$ their ) ( NNS necks ) ) ( ADVP-DIR ( RB up ) ) ( PP-DIR ( IN at ) ( NP ( NP ( DT the ) ( JJ great ) ( NNS pyramids ) ) ( PP ( IN of ) ( NP ( NN junk ) ( NN financing ) ) ) ) ) ) ( VP ( VBG swiveling ) ( NP ( PRP$ their ) ( NNS heads ) ) ( S-PRP ( VP ( TO to ) ( VP ( VB watch ) ( NP ( NP ( DT the ) ( NN avalanche ) ) ( PP ( IN of ) ( NP ( JJ leveraged ) ( NNS buy-outs ) ) ) ) ) ) ) ) ) ) ( VP ( VBD claimed ) ( SBAR ( S ( NP-SBJ ( DT the ) ( NN end ) ( NN result ) ) ( VP ( MD would ) ( VP ( VB be ) ( NP-PRD ( NP ( DT a ) ( JJR leaner ) ( JJR meaner ) ( JJ corporate ) ( NNP America ) ) ( PP ( IN with ) ( UCP ( NP ( VBG soaring ) ( NN productivity ) ( CC and ) ( NNS profits ) ) ( CC and ) ( S ( NP-SBJ ( DT the ) ( JJR weaker ) ) ( VP ( VBN gone ) ( PP-DIR ( TO to ) ( NP ( DT the ) ( NN wall ) ) ) ) ) ) ) ) ) ) ) ) ) )

Mainstream economists and commentators craning their necks up at the great pyramids of junk financing swiveling their heads to watch the avalanche of leveraged buy-outs claimed the end result would be a leaner meaner corporate America with soaring productivity and profits and the weaker gone to the wall


( S ( CC But ) ( NP-SBJ ( DT this ) ) ( VP ( VBZ is ) ( RB not ) ( SBAR-PRD ( WHADVP-2 ( WRB where ) ) ( S ( NP-SBJ-1 ( NP ( DT the ) ( NNS rewards ) ) ( PP ( IN of ) ( NP ( NN junk ) ( NN financing ) ) ) ) ( VP ( VBD were ) ( VP ( VBN found ) ) ) ) ) ) )

But this is not where the rewards of junk financing were found


( S ( NP-SBJ ( DT The ) ( NNS beneficiaries ) ) ( VP ( VBD were ) ( NP-PRD ( NP ( DT those ) ( NNS financiers ) ) ( SBAR ( WHNP-1 ( WP$ whose ) ( NN icon ) ) ( S ( VP ( VBD was ) ( NP-PRD ( NP ( NP ( DT the ) ( NN topic ) ( NN figure ) ) ( PP ( IN of ) ( NP ( NNS '80s ) ( NN capitalism ) ) ) ) ( NP ( NP ( NP ( NNP Michael ) ( NNP Milken ) ( POS 's ) ) ( ADJP ( QP ( CD 517 ) ( CD million ) ) ) ( NN salary ) ) ( PP-TMP ( IN in ) ( NP ( CD one ) ( NN year ) ) ) ) ) ) ) ) ) ) )

The beneficiaries were those financiers whose icon was the topic figure of '80s capitalism Michael Milken 's 517 million salary in one year


( S ( NP-SBJ-2 ( NP ( NP ( JJ Left-stream ) ( NNS economists ) ) ( SBAR ( S ( NP-SBJ ( PRP I ) ) ( VP ( VBP associate ) ( PP-CLR ( IN with ) ) ) ) ) ) ( PRN ( NP ( NP ( NP ( NNS fellows ) ) ( PP-LOC ( IN in ) ( NP ( NP ( DT the ) ( NNP Union ) ) ( PP ( IN of ) ( NP ( NNP Radical ) ( NNP Political ) ( NNPS Economists ) ) ) ) ) ) ( ADVP ( RBS most ) ( RB particularly ) ) ( NP ( NP ( NNP Robert ) ( NNP Pollin ) ) ( PP ( IN of ) ( NP ( DT the ) ( NNS economics ) ( NN faculty ) ) ) ( PP-LOC ( IN at ) ( NP ( NP ( DT the ) ( NNP University ) ) ( PP ( IN of ) ( NP ( NNP California ) ) ) ( PP-LOC ( IN at ) ( NP ( NNP Riverside ) ) ) ) ) ) ) ) ) ( VP ( VBD were ) ( RB not ) ( VP ( VBN hypnotized ) ( PP-MNR ( IN in ) ( NP ( NP ( DT the ) ( NN manner ) ) ( PP ( IN of ) ( NP ( PRP$ their ) ( JJ pliant ) ( NNS colleagues ) ) ) ) ) ) ) )

Left-stream economists I associate with fellows in the Union of Radical Political Economists most particularly Robert Pollin of the economics faculty at the University of California at Riverside were not hypnotized in the manner of their pliant colleagues


( S ( ADVP-TMP ( DT All ) ( IN along ) ) ( NP-SBJ ( PRP they ) ) ( VP ( VBP have ) ( VP ( VBN been ) ( VP ( VP ( VBG noting ) ( NP ( DT the ) ( NNS tremors ) ) ) ( CC and ) ( VP ( VBG pointing ) ( PRT ( RP out ) ) ( NP ( DT the ) ( VBG underlying ) ( NNS realities ) ) ) ) ) ) )

All along they have been noting the tremors and pointing out the underlying realities


( S ( S ( NP-SBJ ( NN Profit ) ( NNS rates ) ) ( PP-TMP ( IN after ) ( NP ( DT the ) ( JJ great ) ( NN merger ) ( NN wave ) ) ) ( VP ( VBP are ) ( ADJP-PRD ( RB no ) ( JJR higher ) ) ) ) ( CC and ) ( S ( ADVP-TMP ( RB now ) ) ( NP-SBJ ( PRP we ) ) ( VP ( VBP have ) ( NP ( NP ( DT an ) ( ADJP ( RB extremely ) ( JJ high-interest ) ) ( NN burden ) ) ( ADJP ( JJ relative ) ( PP ( TO to ) ( NP ( NN cash ) ( NN flow ) ) ) ) ) ) ) )

Profit rates after the great merger wave are no higher and now we have an extremely high-interest burden relative to cash flow


( S ( NP-SBJ ( NP ( DT The ) ( NNS consequences ) ) ( PP ( IN of ) ( S-NOM ( VP ( VBG building ) ( NP ( NNS empires ) ) ( PP-CLR ( IN with ) ( NP ( NN sand ) ) ) ) ) ) ) ( VP ( VBP are ) ( VP ( VBG showing ) ( PRT ( RB up ) ) ) ) )

The consequences of building empires with sand are showing up


( S ( PP ( IN In ) ( NP ( NP ( NN contrast ) ) ( PP ( TO to ) ( NP ( NP ( JJ previous ) ( NNS estimates ) ) ( VP ( VBG reckoning ) ( NP ( NP ( DT the ) ( NN default ) ( NN rate ) ) ( PP ( IN on ) ( NP ( NN junk ) ( NNS bonds ) ) ) ) ( PP-CLR ( IN at ) ( NP ( NP ( CD 2 ) ( NN % ) ) ( CC or ) ( NP ( CD 3 ) ( NN % ) ) ) ) ) ) ) ) ) ( NP-SBJ ( NP ( DT a ) ( NNP Harvard ) ( NN study ) ) ( VP ( VP ( VBN published ) ( PP-TMP ( IN in ) ( NP ( NP ( NNP April ) ) ( PP ( IN of ) ( NP ( DT this ) ( NN year ) ) ) ) ) ) ( PRN ( CC and ) ( VP ( VBN discussed ) ( PP-LOC ( IN in ) ( NP ( NP ( DT a ) ( NN lead ) ( NN story ) ) ( PP-LOC ( IN in ) ( NP ( NP ( DT The ) ( NNP Wall ) ( NNP Street ) ( NNP Journal ) ) ( PP ( IN for ) ( NP ( NNP Sept. ) ( CD 18 ) ) ) ) ) ) ) ) ) ) ) ( VP ( VBD found ) ( SBAR ( S ( NP-SBJ ( NP ( DT the ) ( NN default ) ( NN rate ) ) ( PP ( IN on ) ( NP ( DT these ) ( NN junk ) ( NNS bonds ) ) ) ) ( VP ( VBZ is ) ( NP-PRD ( CD 34 ) ( NN % ) ) ) ) ) ) )

In contrast to previous estimates reckoning the default rate on junk bonds at 2 % or 3 % a Harvard study published in April of this year and discussed in a lead story in The Wall Street Journal for Sept. 18 found the default rate on these junk bonds is 34 %


( SBARQ ( WHNP-1 ( WP What ) ) ( SQ ( VP ( VBZ is ) ( NP-PRD ( NP ( DT the ) ( NN consequence ) ) ( PP ( IN of ) ( NP ( NP ( DT a ) ( JJ high-interest ) ( NN burden ) ) ( NP ( JJ high ) ( NN default ) ( NNS rates ) ) ( CC and ) ( NP ( JJ continued ) ( JJ low ) ( NN profitability ) ) ) ) ) ) ) )

What is the consequence of a high-interest burden high default rates and continued low profitability


( S ( NP-SBJ ( NNS Corporations ) ) ( VP ( VBP need ) ( NP ( NP ( NN liquidity ) ) ( PP ( IN in ) ( NP ( NP ( DT the ) ( NN form ) ) ( PP ( IN of ) ( NP ( VBN borrowed ) ( NNS funds ) ) ) ) ) ) ) )

Corporations need liquidity in the form of borrowed funds


( S ( PP ( IN Without ) ( NP ( NP ( NP ( NN liquidity ) ) ( PP ( IN from ) ( NP ( DT the ) ( NN junk-bond ) ( NN market ) ) ) ) ( CC or ) ( NP ( NP ( NN cash ) ( NN flow ) ) ( PP ( IN from ) ( NP ( NNS profits ) ) ) ) ) ) ( NP-SBJ ( PRP they ) ) ( VP ( VBP look ) ( PP-DIR ( TO to ) ( NP ( NP ( DT the ) ( NN government ) ) ( SBAR ( WHNP-1 ( WDT which ) ) ( S ( VP ( ADVP-MNR ( RB obediently ) ) ( VBZ assists ) ( NP ( NP ( DT the ) ( JJ natural ) ( NNS motions ) ) ( PP ( IN of ) ( NP ( DT the ) ( JJ capitalist ) ( NN economy ) ) ) ) ( PP ( IN with ) ( NP ( NP ( NN charity ) ) ( PP ( IN in ) ( NP ( NP ( DT the ) ( NN form ) ) ( PP ( IN of ) ( NP ( NP ( NP ( NNS cuts ) ) ( PP-LOC ( IN in ) ( NP ( DT the ) ( NNS capital-gains ) ( NN tax ) ( NN rate ) ) ) ) ( CC or ) ( NP ( NNS bailouts ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

Without liquidity from the junk-bond market or cash flow from profits they look to the government which obediently assists the natural motions of the capitalist economy with charity in the form of cuts in the capital-gains tax rate or bailouts


( S ( NP-SBJ ( DT The ) ( NN consequence ) ) ( VP ( MD can ) ( VP ( VB be ) ( NP-PRD ( NP ( NN inflation ) ) ( VP ( VBN brought ) ( PRT ( RP on ) ) ( PP-CLR ( IN as ) ( NP ( NP ( DT the ) ( NN effect ) ) ( PP ( IN of ) ( NP ( DT a ) ( JJ desperate ) ( NN bid ) ( S ( VP ( TO to ) ( VP ( VB avoid ) ( NP ( NP ( DT the ) ( JJ deflationary ) ( NN shock ) ) ( PP ( IN of ) ( NP ( DT a ) ( JJ sudden ) ( NN crash ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

The consequence can be inflation brought on as the effect of a desperate bid to avoid the deflationary shock of a sudden crash


( S ( NP-SBJ ( NP ( NNS Attacks ) ) ( PP ( IN on ) ( NP ( NN inflation ) ) ) ) ( VP ( VBN come ) ( PP-CLR ( IN with ) ( NP ( NP ( NP ( DT another ) ( NN strategy ) ) ( PP ( IN of ) ( NP ( NN capital ) ) ) ( PP ( IN of ) ( NP ( DT a ) ( ADJP ( RB very ) ( JJ traditional ) ) ( NN sort ) ) ) ) ( NP ( NP ( DT an ) ( NN assault ) ) ( PP ( IN on ) ( NP ( NNS wages ) ) ) ) ) ) ) )

Attacks on inflation come with another strategy of capital of a very traditional sort an assault on wages


( S ( NP-SBJ-2 ( NNP Mr. ) ( NNP Fukuyama ) ) ( S-ADV ( VP ( VBG peering ) ( PP ( IN through ) ( NP ( NNS binoculars ) ) ) ( PP-CLR ( IN at ) ( NP ( NP ( DT the ) ( NN end ) ) ( PP ( IN of ) ( NP ( NN history ) ) ) ) ) ) ) ( VP ( VBD said ) ( PP-LOC ( IN in ) ( NP ( PRP$ his ) ( NN essay ) ) ) ( SBAR ( IN that ) ( S ( NP-SBJ-1 ( DT the ) ( NN class ) ( NN issue ) ) ( VP ( VBZ has ) ( ADVP ( RB actually ) ) ( VP ( VBN been ) ( VP ( ADVP-MNR ( RB successfully ) ) ( VBN resolved ) ( PP-LOC ( IN in ) ( NP ( DT the ) ( NN West ) ) ) ) ) ) ) ) ) )

Mr. Fukuyama peering through binoculars at the end of history said in his essay that the class issue has actually been successfully resolved in the West


( S ( NP-SBJ ( NP ( DT the ) ( NN egalitarianism ) ) ( PP ( IN of ) ( NP ( JJ modern ) ( NNP America ) ) ) ) ( VP ( VBZ represents ) ( NP ( NP ( DT the ) ( JJ essential ) ( NN achievement ) ) ( PP ( IN of ) ( NP ( NP ( DT the ) ( JJ classless ) ( NN society ) ) ( VP ( VBN envisioned ) ( PP ( IN by ) ( NP-LGS ( NNP Marx ) ) ) ) ) ) ) ) )

the egalitarianism of modern America represents the essential achievement of the classless society envisioned by Marx


( S ( NP-SBJ-1 ( NNP Mr. ) ( NNP Fukuyama ) ) ( VP ( MD might ) ( VP ( VB want ) ( S ( VP ( TO to ) ( VP ( VB consult ) ( NP ( DT some ) ( JJ American ) ( NNS workers ) ) ( PP ( IN on ) ( NP ( NP ( DT the ) ( NN subject ) ) ( PP ( IN of ) ( NP ( NN class ) ( CC and ) ( NN egalitarianism ) ) ) ) ) ) ) ) ) ) )

Mr. Fukuyama might want to consult some American workers on the subject of class and egalitarianism


( S ( PP ( IN From ) ( NP ( NP ( PRP$ its ) ( NN peak ) ) ( PP-TMP ( IN in ) ( NP ( CD 1972 ) ) ) ( PP ( IN of ) ( NP ( CD 198.41 ) ) ) ) ) ( NP-SBJ ( DT the ) ( JJ average ) ( JJ American ) ( JJ weekly ) ( NN wage ) ) ( VP ( VBD had ) ( VP ( VBN fallen ) ( PP-DIR ( TO to ) ( NP ( CD 169.28 ) ) ) ( PP-TMP ( IN in ) ( NP ( CD 1987 ) ) ) ( S-ADV ( NP-SBJ-1 ( DT both ) ( NNS figures ) ) ( VP ( VBG being ) ( VP ( VBN expressed ) ( PP-CLR ( IN in ) ( NP ( CD 1977 ) ( NNS dollars ) ) ) ) ) ) ) ) )

From its peak in 1972 of 198.41 the average American weekly wage had fallen to 169.28 in 1987 both figures being expressed in 1977 dollars


( S ( PP ( IN In ) ( NP ( JJ other ) ( NNS words ) ) ) ( PP-TMP ( IN after ) ( NP ( NP ( DT the ) ( NN glory ) ( NN boom ) ) ( PP ( IN of ) ( NP ( DT the ) ( NNP Reagan ) ( NNS years ) ) ) ) ) ( NP-SBJ ( NNS wages ) ) ( VP ( VBD had ) ( VP ( VBN sunk ) ( PP-DIR ( IN from ) ( NP ( DT the ) ( ADJP ( JJ post ) ( NNP World ) ( NNP War ) ( NNP II ) ) ( NN peak ) ) ) ( PP-EXT ( IN by ) ( NP ( CD 16 ) ( NN % ) ) ) ( SBAR-TMP ( IN as ) ( S ( NP-SBJ-1 ( NNS capitalists ) ) ( S-ADV ( VP ( VBN helped ) ( PP ( IN by ) ( NP-LGS ( DT the ) ( NN government ) ) ) ) ) ( VP ( VP ( VBD turned ) ( PRT ( RP down ) ) ( NP ( DT the ) ( NNS screws ) ) ) ( CC or ) ( VP ( VBD went ) ( ADVP-DIR ( RB offshore ) ) ) ) ) ) ) ) )

In other words after the glory boom of the Reagan years wages had sunk from the post World War II peak by 16 % as capitalists helped by the government turned down the screws or went offshore


( S ( CC But ) ( NP-SBJ ( EX there ) ) ( VP ( VBP are ) ( NP-PRD ( NP ( NP ( NNS signs ) ) ( ADVP-TMP ( RB now ) ) ) ( PRN ( NP ( NP ( DT the ) ( NNS strikes ) ) ( PP ( IN by ) ( NP ( NP ( NNS miners ) ) ( NP ( NNP Boeing ) ( NNS workers ) ) ( NP ( NN telephone ) ( NNS workers ) ) ( FW etc. ) ) ) ) ) ( SBAR-2 ( IN that ) ( S ( NP-SBJ-1 ( NP ( DT this ) ( NN attack ) ) ( PP ( IN on ) ( NP ( NNS wages ) ) ) ) ( VP ( VBZ is ) ( VP ( VBG being ) ( VP ( ADVP-MNR ( RBR more ) ( RB fiercely ) ) ( VBN resisted ) ) ) ) ) ) ) ) )

But there are signs now the strikes by miners Boeing workers telephone workers etc. that this attack on wages is being more fiercely resisted


( S ( NP-SBJ ( DT These ) ) ( VP ( VBP are ) ( NP-PRD ( NP ( JJ long-term ) ( NNP Richter ) ( NNS readings ) ) ( PP ( IN on ) ( NP ( JJ American ) ( NN capitalism ) ) ) ) ) )

These are long-term Richter readings on American capitalism


( S ( NP-SBJ ( DT The ) ( JJ whole ) ( NN structure ) ) ( VP ( VBZ is ) ( ADJP-PRD ( RB extremely ) ( JJ shaky ) ) ) )

The whole structure is extremely shaky


( S ( NP-SBJ-3 ( NNS Governments ) ) ( VP ( VBP have ) ( VP ( VBN become ) ( ADJP-PRD ( JJ sophisticated ) ) ( PP ( IN in ) ( S-NOM ( VP ( VBG handling ) ( NP ( NP ( NNS moments ) ) ( PP ( IN of ) ( NP ( NP ( NN panic ) ) ( PRN ( NP ( NP ( DT a ) ( NN word ) ) ( SBAR ( S ( NP-SBJ ( DT the ) ( NNP London ) ( NNP Times ) ) ( VP ( VBD forbade ) ( S ( NP-SBJ ( PRP$ my ) ( NN father ) ) ( VP ( TO to ) ( VP ( VB use ) ) ) ) ( SBAR-TMP ( WHADVP-2 ( WRB when ) ) ( S ( NP-SBJ ( PRP he ) ) ( VP ( VBD was ) ( VP ( VBG reporting ) ( NP ( DT the ) ( NNP Wall ) ( NNP Street ) ( NN crash ) ) ( PP-TMP ( IN in ) ( NP ( CD 1929 ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

Governments have become sophisticated in handling moments of panic a word the London Times forbade my father to use when he was reporting the Wall Street crash in 1929


( S ( CC But ) ( NP-SBJ ( NN sophistication ) ) ( VP ( VBZ has ) ( NP ( PRP$ its ) ( NNS limits ) ) ) )

But sophistication has its limits


( S ( NP-SBJ ( DT The ) ( NNP S&L ) ( NN bailout ) ) ( VP ( MD could ) ( VP ( VB cost ) ( NP ( QP ( CD 300 ) ( CD billion ) ) ) ( S-ADV ( VP ( VBG computing ) ( NP ( NP ( NN interest ) ) ( PP ( IN on ) ( NP ( NP ( DT the ) ( NN government ) ( POS 's ) ) ( NNS loans ) ) ) ) ) ) ) ) )

The S&L bailout could cost 300 billion computing interest on the government 's loans


( S ( NP-SBJ ( DT These ) ) ( VP ( VBP are ) ( NP-PRD ( JJ real ) ( NNS costs ) ) ) )

These are real costs


( SBARQ ( WHPP-1 ( IN Under ) ( WHNP ( WP what ) ( NNS weights ) ) ) ( SQ ( MD will ) ( NP-SBJ ( DT the ) ( NNP Federal ) ( NNP Deposit ) ( NNP Insurance ) ( NNP Corporation ) ) ( VP ( VB totter ) ) ) )

Under what weights will the Federal Deposit Insurance Corporation totter


( S ( S ( NP-SBJ-3 ( NN Capitalism ) ) ( VP ( MD may ) ( ADVP-TMP ( RB now ) ) ( VP ( VB be ) ( VP ( VBN engineered ) ( S-CLR ( VP ( TO to ) ( VP ( VB withstand ) ( NP ( JJ sudden ) ( NNS shocks ) ) ) ) ) ) ) ) ) ( CC but ) ( S ( NP-SBJ ( EX there ) ) ( VP ( VBP are ) ( NP-PRD ( NP ( NN fault ) ( NNS lines ) ) ( PRN ( NP ( NP ( NP ( DT the ) ( NN crisis ) ) ( PP-LOC ( IN in ) ( NP ( NNS profits ) ) ) ) ( NP ( NP ( DT the ) ( NN assault ) ) ( PP ( IN on ) ( NP ( NNS wages ) ) ) ) ( NP ( NP ( DT the ) ( JJ structural ) ( NN inequity ) ) ( PP ( IN of ) ( NP ( DT the ) ( NN system ) ) ) ) ) ) ( SBAR ( WHNP-1 ( WDT that ) ) ( S ( VP ( VBP make ) ( NP ( NNS fools ) ) ( PP-CLR ( IN of ) ( NP ( NP ( DT those ) ) ( SBAR ( WHNP-2 ( WP who ) ) ( S ( VP ( VBP claim ) ( SBAR ( SBAR ( IN that ) ( S ( NP-SBJ ( DT the ) ( NN future ) ) ( VP ( VBZ is ) ( ADVP-LOC-PRD ( RB here ) ) ) ) ) ( CC and ) ( SBAR ( DT that ) ( S ( NP-SBJ ( NN history ) ) ( VP ( VBZ is ) ( ADVP-PRD ( RB over ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

Capitalism may now be engineered to withstand sudden shocks but there are fault lines the crisis in profits the assault on wages the structural inequity of the system that make fools of those who claim that the future is here and that history is over


( S ( NP-SBJ ( NNP Mr. ) ( NNP Cockburn ) ) ( VP ( VBZ is ) ( NP-PRD ( DT a ) ( NN columnist ) ) ( PP ( IN for ) ( NP ( NP ( DT The ) ( NNP Nation ) ) ( CC and ) ( NP ( NNP LA ) ( NNP Weekly ) ) ) ) ) )

Mr. Cockburn is a columnist for The Nation and LA Weekly


( FRAG ( NP ( NP ( CD Two ) ( NNS years ) ) ( PP ( IN of ) ( NP ( NN coddling ) ) ) ) ( PP ( IN down ) ( NP ( DT the ) ( NN drain ) ) ) )

Two years of coddling down the drain


( S ( NP-SBJ ( DT That ) ) ( VP ( VBZ 's ) ( NP-PRD ( NP ( DT the ) ( NN way ) ) ( SBAR ( S ( NP-SBJ ( NP ( DT a ) ( NN lot ) ) ( PP ( IN of ) ( NP ( NNS brokers ) ) ) ) ( VP ( VBP feel ) ( NP-TMP ( NN today ) ) ( PP-TMP ( IN on ) ( NP ( NP ( DT the ) ( JJ second ) ( NN anniversary ) ) ( PP ( IN of ) ( NP ( DT the ) ( CD 1987 ) ( NN stock-market ) ( NN crash ) ) ) ) ) ) ) ) ) ) )

That 's the way a lot of brokers feel today on the second anniversary of the 1987 stock-market crash


( S ( PP-TMP ( ADVP ( RB Ever ) ) ( IN since ) ( NP ( DT that ) ( JJ fearful ) ( NNP Black ) ( NNP Monday ) ) ) ( NP-SBJ-1 ( PRP they ) ) ( VP ( VBP 've ) ( VP ( VBN been ) ( VP ( ADVP-MNR ( RB tirelessly ) ) ( VBG wooing ) ( NP ( JJ wary ) ( JJ individual ) ( NNS investors ) ) ( S-ADV ( VP ( VBG trying ) ( S ( VP ( TO to ) ( VP ( VB convince ) ( NP ( PRP them ) ) ( SBAR ( SBAR ( IN that ) ( S ( NP-SBJ ( NNP Oct. ) ( CD 19 ) ( CD 1987 ) ) ( VP ( VBD was ) ( NP-PRD ( DT a ) ( NN fluke ) ) ) ) ) ( CC and ) ( SBAR ( IN that ) ( S ( NP-SBJ ( DT the ) ( NN stock ) ( NN market ) ) ( ADVP ( RB really ) ) ( VP ( VBZ is ) ( NP-PRD ( NP ( DT a ) ( JJ safe ) ( NN place ) ) ( SBAR ( IN for ) ( S ( NP-SBJ ( JJ average ) ( NNPS Americans ) ) ( VP ( TO to ) ( VP ( VB put ) ( NP ( PRP$ their ) ( JJ hard-earned ) ( NNS dollars ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

Ever since that fearful Black Monday they 've been tirelessly wooing wary individual investors trying to convince them that Oct. 19 1987 was a fluke and that the stock market really is a safe place for average Americans to put their hard-earned dollars


( S ( CC And ) ( PP-TMP ( IN until ) ( NP ( JJ last ) ( NNP Friday ) ) ) ( NP-SBJ ( PRP it ) ) ( VP ( VBD seemed ) ( SBAR ( S ( NP-SBJ-1 ( DT those ) ( NNS efforts ) ) ( VP ( VBD were ) ( VP ( VBG starting ) ( S ( VP ( TO to ) ( VP ( VB pay ) ( PRT ( RB off ) ) ) ) ) ) ) ) ) ) )

And until last Friday it seemed those efforts were starting to pay off


( SINV ( S-TPC-1 ( NP-SBJ ( NP ( DT Some ) ) ( PP ( IN of ) ( NP ( DT those ) ( NNS folks ) ) ) ) ( VP ( VBD were ) ( VP ( VBG coming ) ( ADVP-DIR ( RB back ) ) ) ) ) ( VP ( VBZ says ) ) ( NP-SBJ ( NP ( NNP Leslie ) ( NNP Quick ) ( NNP Jr. ) ) ( NP ( NN chairman ) ) ( PP ( IN of ) ( NP ( NN discount ) ( NNS brokers ) ( NNP Quick ) ( CC & ) ( NNP Reilly ) ( NNP Group ) ( NNP Inc ) ) ) ) )

Some of those folks were coming back says Leslie Quick Jr. chairman of discount brokers Quick & Reilly Group Inc


( S ( NP-SBJ ( PRP We ) ) ( VP ( VBD had ) ( VP ( VBN heard ) ( PP-CLR ( IN from ) ( NP ( NP ( NNS people ) ) ( SBAR ( WHNP-1 ( WP who ) ) ( S ( VP ( VBD had ) ( RB n't ) ( VP ( VBN been ) ( ADJP-PRD ( JJ active ) ) ( PP-TMP ( IN for ) ( NP ( DT a ) ( JJ long ) ( NN time ) ) ) ) ) ) ) ) ) ) ) )

We had heard from people who had n't been active for a long time


( SINV ( RB Then ) ( VP ( VBD came ) ) ( NP-SBJ ( NP ( NP ( DT the ) ( JJ frightening ) ( JJ 190-point ) ( NN plunge ) ) ( PP-LOC ( IN in ) ( NP ( DT the ) ( NNP Dow ) ( NNP Jones ) ( NNP Industrial ) ( NNP Average ) ) ) ) ( CC and ) ( NP ( NP ( DT a ) ( JJ new ) ( NN wave ) ) ( PP ( IN of ) ( NP ( NN stock-market ) ( NN volatility ) ) ) ) ) )

Then came the frightening 190-point plunge in the Dow Jones Industrial Average and a new wave of stock-market volatility


( S ( ADVP ( DT All ) ( PP ( IN of ) ( NP ( DT a ) ( JJ sudden ) ) ) ) ( NP-SBJ ( PRP it ) ) ( VP ( VBD was ) ( ADVP-PRD ( RB back ) ( PP ( TO to ) ( NP ( NN square ) ( CD one ) ) ) ) ) )

All of a sudden it was back to square one


( SINV ( S-TPC-2 ( NP-SBJ-1 ( PRP It ) ) ( VP ( VBZ 's ) ( VP ( VBG going ) ( S ( VP ( TO to ) ( VP ( VB set ) ( NP ( NNS things ) ) ( ADVP-CLR ( RB back ) ) ( PP-TMP ( IN for ) ( NP ( DT a ) ( NN period ) ) ) ( SBAR-PRP ( IN because ) ( S ( NP-SBJ ( PRP it ) ) ( VP ( VBZ reinforces ) ( NP ( NP ( DT the ) ( NN concern ) ) ( PP ( IN of ) ( NP ( NN volatility ) ) ) ) ) ) ) ) ) ) ) ) ) ( VP ( VBZ says ) ) ( NP-SBJ ( NP ( NNP Jeffrey ) ( NNP B. ) ( NNP Lane ) ) ( NP ( NP ( NN president ) ) ( PP ( IN of ) ( NP ( NNP Shearson ) ( NNP Lehman ) ( NNP Hutton ) ( NNP Inc ) ) ) ) ) )

It 's going to set things back for a period because it reinforces the concern of volatility says Jeffrey B. Lane president of Shearson Lehman Hutton Inc


( S ( S ( NP-SBJ ( PRP I ) ) ( VP ( VBP think ) ( SBAR ( S ( NP-SBJ ( PRP it ) ) ( VP ( MD will ) ( VP ( VB shake ) ( NP ( NN confidence ) ) ( NP-TMP ( ADJP ( CD one ) ( JJR more ) ) ( NN time ) ) ) ) ) ) ) ) ( CC and ) ( S ( NP-SBJ-1 ( NP ( DT a ) ( NN lot ) ) ( PP ( IN of ) ( NP ( DT this ) ( NN business ) ) ) ) ( VP ( VBZ is ) ( VP ( VBN based ) ( PP-LOC-CLR ( IN on ) ( NP ( NN client ) ( NN confidence ) ) ) ) ) ) )

I think it will shake confidence one more time and a lot of this business is based on client confidence


( S ( NP-SBJ ( NP ( NNS Brokers ) ) ( PP-LOC ( IN around ) ( NP ( DT the ) ( NN country ) ) ) ) ( VP ( VBP say ) ( SBAR ( S ( NP-SBJ ( NP ( DT the ) ( NN reaction ) ) ( PP ( IN from ) ( NP ( JJ individual ) ( NNS investors ) ) ) ) ( NP-TMP ( DT this ) ( NN week ) ) ( VP ( VBZ has ) ( VP ( VBN been ) ( ADJP-PRD ( RB almost ) ( JJ eerie ) ) ) ) ) ) ) )

Brokers around the country say the reaction from individual investors this week has been almost eerie


( S ( NP-SBJ ( NP ( NNS Customers ) ) ( CC and ) ( NP ( JJ potential ) ( NNS customers ) ) ) ( VP ( VBP are ) ( ADVP ( RB suddenly ) ) ( VP ( VBG complaining ) ( PP-CLR ( IN about ) ( NP ( DT the ) ( NN stock ) ( NN market ) ) ) ( PP-MNR ( IN in ) ( NP ( NP ( DT the ) ( JJ exact ) ( NN way ) ) ( SBAR ( S ( NP-SBJ ( PRP they ) ) ( VP ( VBD did ) ( PP-TMP ( IN in ) ( NP ( JJ post-crash ) ( CD 1987 ) ) ) ) ) ) ) ) ) ) )

Customers and potential customers are suddenly complaining about the stock market in the exact way they did in post-crash 1987


( SINV ( S-TPC-2 ( NP-SBJ ( NP ( DT The ) ( NNS kinds ) ) ( PP ( IN of ) ( NP ( NNS questions ) ) ) ( SBAR ( S ( NP-SBJ ( PRP you ) ) ( VP ( VBD had ) ( ADVP-TMP ( IN before ) ) ) ) ) ) ( VP ( VBP have ) ( VP ( VBN resurfaced ) ) ) ) ( VP ( VBZ says ) ) ( NP-SBJ ( NP ( NNP Raymond ) ( NN A. ) ( NN Chip ) ( NNP Mason ) ) ( NP ( NP ( NN chairman ) ) ( PP ( IN of ) ( NP ( NP ( JJ regional ) ( NN brokerage ) ( NN firm ) ( NNP Legg ) ( NNP Mason ) ( NNP Inc. ) ) ( NP-LOC ( NNP Baltimore ) ) ) ) ) ) )

The kinds of questions you had before have resurfaced says Raymond A. Chip Mason chairman of regional brokerage firm Legg Mason Inc. Baltimore


( S ( NP-SBJ ( PRP I ) ) ( VP ( MD can ) ( ADVP ( RB just ) ) ( VP ( VB tell ) ( SBAR ( S ( NP-SBJ ( DT the ) ( NNS questions ) ) ( VP ( VBP are ) ( ADVP ( RB right ) ( RB back ) ) ( SBAR-LOC-PRD ( WHADVP-2 ( WRB where ) ) ( S ( NP-SBJ ( PRP they ) ) ( VP ( VBD were ) ) ) ) ( UCP ( SBARQ ( WHNP-1 ( WP What ) ) ( SQ ( VP ( VBZ 's ) ( VP ( VBG going ) ( PRT ( RB on ) ) ) ) ) ) ( SQ ( MD Ca ) ( RB n't ) ( NP-SBJ-4 ( NN anything ) ) ( VP ( VB be ) ( VP ( VBN done ) ( PP-CLR ( IN about ) ( NP ( NN program ) ( NN trading ) ) ) ) ) ) ( SQ ( VBZ Does ) ( RB n't ) ( NP-SBJ ( DT the ) ( NN exchange ) ) ( VP ( VB understand ) ) ) ( SBARQ ( WHADVP-3 ( WRB Where ) ) ( SQ ( VBZ is ) ( NP-SBJ ( DT the ) ( NNP SEC ) ) ( PP ( IN on ) ( NP ( DT this ) ) ) ) ) ) ) ) ) ) ) )

I can just tell the questions are right back where they were What 's going on Ca n't anything be done about program trading Does n't the exchange understand Where is the SEC on this


( S ( NP-SBJ ( NNP Mr. ) ( NNP Mason ) ) ( VP ( VBZ says ) ( SBAR ( S ( NP-SBJ ( PRP he ) ) ( VP ( VBZ 's ) ( ADJP-PRD ( VBN convinced ) ( SBAR ( S ( NP-SBJ-2 ( DT the ) ( NN public ) ) ( ADVP-TMP ( RB still ) ) ( VP ( VBZ wants ) ( S ( VP ( TO to ) ( VP ( VB invest ) ( PP-CLR ( IN in ) ( NP ( JJ common ) ( NNS stocks ) ) ) ) ) ) ( SBAR-ADV ( RB even ) ( IN though ) ( S ( NP-SBJ ( PRP they ) ) ( VP ( VBP believe ) ( SBAR ( S ( NP-SBJ-1 ( DT the ) ( NN deck ) ) ( VP ( VBZ is ) ( VP ( VBN stacked ) ( PP ( IN against ) ( NP ( PRP them ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

Mr. Mason says he 's convinced the public still wants to invest in common stocks even though they believe the deck is stacked against them


( S ( CC But ) ( NP-SBJ ( DT these ) ( JJ wide ) ( NNS swings ) ) ( VP ( VBP scare ) ( NP ( PRP them ) ) ( PP-CLR ( TO to ) ( NP ( NN death ) ) ) ) )

But these wide swings scare them to death


( S ( NP-SBJ ( NP ( DT All ) ) ( PP ( IN of ) ( NP ( DT this ) ) ) ) ( VP ( VBZ is ) ( NP-PRD ( JJ bad ) ( NN news ) ) ( PP ( IN for ) ( NP ( NP ( DT the ) ( JJ big ) ( NN brokerage ) ( NNS firms ) ) ( PP ( JJ such ) ( IN as ) ( NP ( NP ( NNP Shearson ) ) ( CC and ) ( NP ( NNP Merrill ) ( NNP Lynch ) ( CC & ) ( NNP Co. ) ) ) ) ( SBAR ( WHNP-1 ( WDT that ) ) ( S ( VP ( VBP have ) ( NP ( JJ big ) ( ADJP ( JJ retail ) ( CC or ) ( JJ individual-investor ) ) ( NNS businesses ) ) ) ) ) ) ) ) )

All of this is bad news for the big brokerage firms such as Shearson and Merrill Lynch & Co. that have big retail or individual-investor businesses


( S ( PP-TMP ( IN After ) ( S-NOM ( VP ( VBG expanding ) ( ADVP-MNR ( RB rapidly ) ) ( PP-TMP ( IN during ) ( NP ( NP ( DT the ) ( NN bull-market ) ( NNS years ) ) ( PP-TMP ( IN up ) ( PP ( TO to ) ( NP ( DT the ) ( CD 1987 ) ( NN crash ) ) ) ) ) ) ) ) ) ( NP-SBJ-2 ( JJ retail ) ( NN brokerage ) ( NNS operations ) ) ( NP-TMP ( DT these ) ( NNS days ) ) ( VP ( VBP are ) ( VP ( VBG getting ) ( NP ( ADJP ( RB barely ) ( JJ enough ) ) ( NN business ) ( S ( VP ( TO to ) ( VP ( VB pay ) ( NP ( DT the ) ( NN overhead ) ) ) ) ) ) ) ) )

After expanding rapidly during the bull-market years up to the 1987 crash retail brokerage operations these days are getting barely enough business to pay the overhead


( S ( S-ADV ( ADJP-PRD ( JJ True ) ) ) ( NP-SBJ-2 ( NP ( DT the ) ( NN amount ) ) ( PP ( IN of ) ( NP ( NN money ) ) ) ( SBAR ( S ( NP-SBJ-3 ( NNS investors ) ) ( VP ( VBP are ) ( ADJP-PRD ( JJ willing ) ( S ( VP ( TO to ) ( VP ( VB entrust ) ( PP-CLR ( TO to ) ( NP ( PRP$ their ) ( NNS brokers ) ) ) ) ) ) ) ) ) ) ) ( VP ( VBZ has ) ( VP ( VBN been ) ( VP ( VBG growing ) ( ADVP-TMP ( RB lately ) ) ) ) ) )

True the amount of money investors are willing to entrust to their brokers has been growing lately


( S ( CC But ) ( NP-SBJ ( DT those ) ( NNS dollars ) ) ( VP ( VBP have ) ( VP ( VBN been ) ( VP ( VBG going ) ( PP-DIR ( IN into ) ( NP ( NP ( JJ such ) ( JJ safe ) ( NNS products ) ) ( PP ( IN as ) ( NP ( NP ( NN money ) ( NN market ) ( NNS funds ) ) ( SBAR ( WHNP-1 ( WDT which ) ) ( S ( VP ( VBP do ) ( RB n't ) ( VP ( VB generate ) ( NP ( RB much ) ) ( PP ( IN in ) ( NP ( NP ( DT the ) ( NN way ) ) ( PP ( IN of ) ( NP ( NP ( NNS commissions ) ) ( PP ( IN for ) ( NP ( DT the ) ( NN brokerage ) ( NNS firms ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

But those dollars have been going into such safe products as money market funds which do n't generate much in the way of commissions for the brokerage firms


( S ( PP-LOC ( IN At ) ( NP ( NN discount ) ( NN brokerage ) ( NNP Charles ) ( NNP Schwab ) ( CC & ) ( NNP Co. ) ) ) ( NP-SBJ ( JJ such ) ( JJ cash-equivalent ) ( NNS investments ) ) ( ADVP-TMP ( RB recently ) ) ( VP ( VBD accounted ) ( PP-CLR ( IN for ) ( NP ( NP ( DT a ) ( NN record ) ( QP ( CD 8 ) ( CD billion ) ) ) ( PP ( IN of ) ( NP ( NP ( NP ( DT the ) ( NN firm ) ( POS 's ) ) ( QP ( CD 25 ) ( CD billion ) ) ) ( PP ( IN of ) ( NP ( NP ( NN client ) ( POS 's ) ) ( NNS assets ) ) ) ) ) ) ) ) )

At discount brokerage Charles Schwab & Co. such cash-equivalent investments recently accounted for a record 8 billion of the firm 's 25 billion of client 's assets