Reverse spin / The week in Review

The White House issued an election-year report predicting that the good times will roll on as far as the radio telescope can see.

Inflation and unemployment are low, productivity is high and “The fundamentals look very good,” said Council of Economic Advisers Chairman Martin Baily.

The report didn’t mention one cloud: a strike by 17,000 white-collar workers at Boeing Co., who apparently believe that some of the economy’s productivity gains should go into their bank accounts.

Au, shucks

Gold bugs came out of the woodwork into a gentle yellow glow as the commodity’s price hopped over the $300 hurdle. The rise was prompted by Canada’s second-biggest mine, cutting production by 2 million ounces.

Dot-what?

Reuters Group PLC, the business-and-other-news service that also runs a mutual fund, announced that it plans to pour $800 million into moving its affairs to the Internet. “Like a phoenix out of the ashes, Reuters has successfully reinvented itself as an Internet stock,” said London media analyst Simon Baker with typical British understatement. At any rate, its stock leaped 23%.

Strike three

Crime, as usual, is well ahead of the major markets, never taking a holiday. Broker Richard Scott of Alexandria, Va., pleaded guilty in Maryland to bilking millions of dollars from investors nationwide, including author Tom Clancy, whom he met at an Orioles baseball game. Mr. Scott faces 11 years in prison.

Up in the City That Never Sleeps, 21 execs at defunct Long Island brokerage Sterling Foster were indicted on charges involving bait-and-switch tactics for initial public offerings. Their trial is scheduled for September.

In non-criminal activity, Merrill Lynch & Co. Inc. settled with 14 agencies in California’s Orange County for $32.5 million, neither admitting nor denying fault in the bankruptcy debacle of 1994. Merrill had already settled with the county for $437.1 million and paid $2 million to the Securities and Exchange Commission in the case.

Rules hurt trade

The Orange County disaster involved interest rate futures, as you recall, a kind of derivative. In a nice bit of timing, Federal Reserve Board Chairman Alan Greenspan urged Congress to exempt the $80 trillion market in over-the-counter derivatives from regulation on the grounds that otherwise, evil foreigners will grab all the business.

Concurring were Treasury Secretary Lawrence Summers and William Rainer, chairman of the Commodity Futures Trading Commission, which would regulate swaps if they were to be regulated. David Brennan, chairman of the Chicago Board of Trade, which trades futures under Mr. Rainer’s ever-watchful eye, disagreed.

Policy statements

European storms battered American International Group Inc. in the fourth quarter, but not enough to keep it from posting 17% gains over the previous fall. That met analysts’ official number of 84 cents a share and was close enough to the whisper number of 86 that complaints were sotto voce.

Aetna Inc. turned in a 19.7% increase, just what the doctor ordered for the nation’s No. 1 managed care company, beating estimates of $1.10 a share by 8 cents.

Aon Corp., the world’s No. 2 insurance broker even though its name means “one” in Irish, disappointed even those who cut expectations from 53 cents a share to 6, coming in at a nickel. You can’t even call it a two-bit outfit any more.