Search crews look for survivors yesterday among th
commuter trains that collided Tuesday in central Loi
BERLIN (AP) - The German government said
yesterday it had received assurances that Daimler-
£hrysler AG will keep its headquarters in Germany,
even as media stirred speculation the automaker may
flee across the Atlantic to escape the country's uncer-
tain tax future.
Finance Minister Hans Eichel was assured by the
air of the automaker's supervisory board, Hilmar
JKopper, that reports of a move are false, said govern-
ment spokesperson Charima Reinhardt.
But conjecture about a possible move gathered
steam in the media. Yesterday the mass-circulation
Bild newspaper quoted an unidentified Daimler-
Cfrysler manager as saying that co-chairman
Juergen Schrempp's "favorite is New York" and that
he wants a decision made by the beginning of next
Ithough the original report in the news magazine
ern focused on the desire to boost the company's
r'gging shares as a motive for moving, Bild and fiscal
experts said the uncertain tax picture in Germany may
be a bigger factor.
"Nobody knows what the future brings," said Ralph
1aruegelmann, an expert for fiscal policy at the
Institute of German Business.
Chancellor Gerhard Schroeder's government is in
thte middle of contentious debate on a $16.4 billion
austerity program aimed at trimming Germany's gen-
Los Angeles T imes
NEW YORK - The marathon bull Stre
market of the 1990s is approaching the
new millennium out of breath, low on r e
f4el and facing ever tougher competition. r
Through the third quarter ended Sept.
I the blue-chip Standard & Poor's regularity tI
0-stock index had struggled to a mere just as the
4.4 percent price gain year to date. most peopl
That figure improved with Monday's 1990s, so
market rally. Still, without a powerful stunned eve
fourth-quarter surge, the index's believers wit
unprecedented four-year streak of 20 Then why
percent-plus gains looks like it will end slowdown f
there. vious perio
For the average investor in domestic tumbled or
stock mutual funds, meanwhile, the The marl
reward for staying in the market been tied t
Gough the first nine months of this weaker doll
year was on par with the S&P index's bug fears, a
return - about 5 percent. Yet those
"While a gain is certainly better than a near as dire,
loss, some investors might wonder if the investors cc
risk posed by stocks was worth it. You default an
could have earned 3.6 percent so far this unraveling
:ear in a risk-free money market fund. fund, a rela
For Wall Street, talk that the now 9- and an econ
year-old bull market may finally be Brazil.
er has a familiar ring, of course. The The S&P
Wl's demise has been predicted with industrials t
5 1a E t
The Mvihgn Daiy -Thursday, October 7, 1999 - 7A
4 Death toll climbs in train collision..
Los Angeles Times
LONDON - Emergency crews managed to recov-
er two more bodies yesterday from the charred wreck-
age of Britain's worst postwar rail accident, but police
said scores of other passengers were still unaccount-
ed for and feared dead.
The confirmed death toll from Tuesday's collision
between two commuter trains in central London stood
at 28, with more than 150 people injured in the rush-
Forty-two other people "were seen to get on the
train by members of family or friends" and have not
been heard from since, said Andy Trotter, deputy
assistant commissioner of the Metropolitan Police.
Additionally, he said, there were reports of 100 more
who "may have" gotten on one of the two trains.
"I fear the total number of fatalities will be much
greater than it is now," Trotter said.
It was unclear how many more bodies could be
retrieved, however. Trotter said one of the first-class
AP PHOTO coaches had been reduced to "ashes and debris." That
car alone seated about 50 passengers.
"It is a very difficult and grim task for the rescue
workers. There was a seere fire in that carria e, and
the great devastation will present great chal'enges to
us to identify who was in there," Troter sid
Meanwhile, rail officials said the disaster occurred
when an outbound commuter train failed to stop at a
red crossing signal.
The investigation into the crash will focus on the
three-car Thames Trains outbound serv ice from
Paddington Station "following reports that it passed a
signal at danger" and crossed into the path of an
incoming express train from Cheltenham, according
to an official rail statement.
The statement from Railtrack, which runs the train
lines, and the two train companies involved in the
accident said the signals involved were "in full work-
ing order" and that the London-bound First Great
Western Train express from Cheltenham "was autho-
rized to proceed under green lights"
But while the rail companies seemed to emphasize
human error, the British media and union officials
stressed that eight other incidents had been linked to
the signal involved in Tuesday's crash - signal 109
- including one in February 1998 when an express
train from H leathrow Airport to Paddington Station
neaix collided with a Bristol-bound train.
uhe general secretary of the train drivers union said
his oranizat ion had asked that the signal be moved
because drivers were having trouble seeing it, but that
nothing had been done.
The rail companies'statement said that their inves-
tiation "will also examine the history of signal 109
including previous incidents where signals were
passed at danger at this location"
Tuesday's crash caime two years after another colli-
sion on the same stretch of railway at Southall, eight
miles away, which left seven people dead andlS0
lnvestigators combed through the wreckage of
Tuesday's crash for a missing "black box" from the
Thames train that they hoped would shed some light
on the accident.
The trains reportedly crashed at a combined speed
of about 150 mph and burst into flames. Several of the
cars were decimated, and debris from the wreck was
thrown as far as 60 yards away into neighboring back-
he wreckage of two
rs to stay in Germany
crous social welfare system and lowering budget
Stern reported this week that Schrempp is under
pressure for a possible move because of the company's
weaker share price since the merger with Chrysler
Corp. last year.
One reason cited for the decline is that U.S.
investors are less interested in Daimler-Chrysler
shares because - unlike the former Chrysler shares
- they are not included in the major U.S. stock index-
Schrempp is having the company study plans to
move its headquarters to the United States and create
a holding company in Zurich, Switzerland, as its
European base, the Stern report said.
Daimler-Chrysler has called reports on the move
"speculation," but the company has in the past joined
the chorus of business leaders to speak out against the
governments tax overhaul plan.
In March, chief financial officer Manfred Gentz
said in a letter to Schroeder that the tax plan would
force jobs out of Germany and discourage foreign
Bruegelmann said that as of now, companies in the
United States pay a 35 percent federal tax on business
income along with city and state taxes. He said a com-
pany in New York, for example, pays an overall tax
rate of 45.8 percent - and that is not expected to
change drastically anytime in the near future.
"Nobody knows what the
Institute of German Business fiscal policy expert
change drastically anytime in the near future.
In Germany under current law, companies must pay
Although government reforms as they are now writ-
ten call for lowering the tax rate to 38.75 percent, the
way income is defined could mean that companies
still end up paying more, he said.
"The danger of higher tax burdens (in the United
States) in the future is by far not as big as in
Germany," Bruegelmann said.
Schrempp had considered moving the company in
May 1998 during talks on the merger, but decided on
Stuttgart at the time. The former government of
Chancellor Helmut Kohl had guaranteed companies
that their tax burdens would not shift drastically.
But with Schroeder now in power and tax changes
imminent, everything is up in the air.
Even if the company were to move its headquarters,
the factories and subsidiaries remaining in Germany
still would be subject to business taxes, said
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taggers toward millennium
ak of 20 percent-plus
rns may end this year
hroughout the decade. But
U.S. economy has shocked
e with its resilience in the
too has the stock market
n some of its most ardent
th its upward momentum. '
y should the current market
eel any more final than pre-
ds in which stocks either
ket's woes this year have
to higher interest rates, a
ar and Year 2000 computer
mong other issues.
problems seem nowhere
as those of a year ago, when
onfronted a Russian bond
d currency collapse, the
of a major U.S. investment
pse of Asia's financial flu
nomic and political crisis in
500 and the Dow Jones
umbled almost 20 percent
in late summer 1998. This time, the
declines thus far have been about half
There are plenty of optimists who see
this as a mere hiccup in a continuing
bull market. New York money manager
David Alger believes that when many
investors see the strength in third-quar-
ter corporate earnings - a byproduct of
the robust economy - stocks will
He also sees the Dow, now at 10,401,
rising to 20,000 by 2004 as the flourish-
ing of the Internet and the efficiencies it
produces counteract inflationary pres-
sures from global economic growth.
But other Wall Street veterans say the
bull market is running out of many of
the things it needs to survive - espe-
cially at its current altitude.
"I feel strongly this is a bull market
that is very tired and has a long way to
go down from here," said John Rogers,
head of Ariel Capital Management in
Ironically, U.S. stocks' problems
stem in large part from the very global
economic recovery that many investors
had been hoping for.
What recovery brings, investors are
realizing, is competition for stocks. The
greatest competition comes from high-
er interest rates. The Federal Reserve
raised short-term rates twice last sum-
mer to keep pace with the economy.
The Fed opted to leave rates alone in
a meeting Tuesday, but there is a clear
consensus that the central bank isn't
likely to cut them any time soon. Nor is
the European Central Bank likely to
loosen credit any further.
Thus, stock markets will be deprived
of the tail wind from falling rates that
they enjoyed last fall.
Peter Anderson, chief investment
officer of American Express Financial
Advisors in Minneapolis, believes
interest rates are more likely to go high-
er than lower through the next year.
That will continue to weigh on
stocks, he said. "I thought we would get
a zero rate of return on the S&P for this
year, and I still think we may get that,
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