Tuesday, January 14, 2003

Business digest

Case: Merger will look better in the future

Outgoing AOL Time Warner chairman Steve Case acknowledged Monday that the 2001 merger he helped orchestrate has not lived up to expectations, but he remains confident that the marriage of Time Warner and America Online will prove sound over the long run.

"There's no question that this merger so far has been a disappointment," he said in an appearance on CNBC. But "if you look out 10 to 15 years, I think people will look back and have a different view on this merger."

Mr. Case announced Sunday that he would resign his post at the media conglomerate in May, saying he had become a distraction.

Ousted O'Neill: Bush's plan will do little

Former Treasury Secretary Paul O'Neill said the president's plan to eliminate taxes on corporate dividends will do little or nothing to improve the nation's economy.

"I would not have done it," he said.

Speaking out for the first time since being forced from his post, Mr. O'Neill said some of the money from the president's $674 billion tax-cut plan would be better spent to shore up Social Security. But he credited Bush for fighting terrorism effectively and said the president hasn't gotten enough credit for highlighting education issues.

Mr. O'Neill made his remarks Friday while taping a public affairs program co-produced by the Pittsburgh Post-Gazette and KDKA-TV in Pittsburgh.

Three month T-bills lowest since 1958

Interest rates on short-term Treasury bills declined in Monday's auction with the three-month rate falling to the lowest level since 1958. The Treasury Department auctioned $16 billion in three-month bills at a discount rate of 1.180 percent. Another $15 billion in six-month bills was auctioned at a discount rate of 1.230 percent.

In a separate report, the Federal Reserve said Monday that the average yield for one-year Treasury bills, the most popular index for making changes in adjustable rate mortgages, rose to 1.41 percent last week from 1.38 percent.

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FAO Schwartz bankrupt
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