Reverse Spin: War, weather beat up U.S. economy

Quick! Somebody get a cane for this ailing economy.

The economy limped along in the first quarter, according to a Department of Commerce report released Friday.

Gross domestic product grew by a pitiful 1.6% in the first quarter, well below the 2.3% increase economists had been expecting. “In the first quarter, the economy was facing two major head winds: war and weather,” Steve East, chief economist at Friedman Billings Ramsey Group Inc. in Arlington, Va., said.

Still, the GDP figure was slightly better than the 1.4% rate of growth in the fourth quarter last year. Not surprisingly, the report drove the major market indexes lower Friday.

Arrivederci to a CEO

Parting is such sweet sorrow. Well, it sounds nice anyway.

Eighteen months after becoming chief executive at Pioneer Investment Management Inc. in Boston, Dan Geraci is leaving to become head of asset management at The Phoenix Cos. Inc. in Hartford, Conn.

UniCredito Italiano SpA, the Milan-based banking company that acquired Pioneer in 2000, isn’t replacing Mr. Geraci. Instead, the fund shop will be run by Dario Frigerio, chief of the Italian bank’s worldwide investment group, called Pioneer Global Asset Management SpA.

Hanging on

It doesn’t look like Alan Greenspan will be bagging groceries at the local supermarket anytime soon.

The 77-year-old chairman of the Federal Reserve Board Wednesday agreed to accept a fifth term as head of the central bank next year when his current term expires.

Unfortunately, time isn’t on Mr. Greenspan’s side – and we’re not talking about the number of candles on his birthday cake.

That’s because Mr. Greenspan’s term as a Fed governor ends Jan. 31, 2006, at which point, because of term limits, he would have to leave once a successor is announced.

Of course, if no successor is named, he could go on to become the longest-serving Fed chief ever.

Mr. Cleanup

Here’s a reason to avoid housekeeping. Frank Quattrone, a former investment banker at Credit Suisse First Boston Corp. in New York, was arrested Wednesday on charges that he obstructed justice by ordering colleagues to destroy evidence being sought by federal investigators.

Mr. Quattrone urged his underlings to “catch up on file cleanup” before investigators got too far along in their investigation.

“Today, it’s administrative housekeeping,” according to a December 2000 e-mail allegedly endorsed by Mr. Quattrone. “In January, it could be improper destruction of evidence.”

He was released on his own recognizance after appearing in Manhattan federal court.

“Frank Quattrone is innocent,” said his lawyer, John W. Keker. “He never obstructed justice.”

Dynamic duo

Looks like the plug may get pulled on a Wall Street power couple.

The Securities and Exchange Commission is getting ready to file a civil suit against Internet stock analyst Holly Becker and her husband, Michael Zimmerman, on insider trading charges, according to reports Wednesday.

Ms. Becker, who’s now on maternity leave from Lehman Brothers Inc. in New York, allegedly gave her hubby advance information on research and rating actions when she worked as an analyst at Citigroup Inc.’s Salomon Smith Barney Inc. brokerage unit in 1999. At that time, Mr. Zimmerman worked at hedge fund Omega Advisors.

The SEC plans to file civil charges against the pair in federal court this week.

Closing Quote

“I come across people all the time who have hundreds of millions of dollars but shouldn’t be allowed to cross the street by themselves.”

– James R. Hedges IV, president of LJH Global Investments LLC, on the issue of suitability in hedge fund investing. Page 25