[PEN-L:27408] 10/20/97 COMMENTARY: WORLDCOM: PAPER TIGER?

["Tom Walker" <timework@xxxxxxxxx>]

A blast from the past:

http://www.businessweek.com/1997/42/b3549101.htm

"Investment bankers have seen it all before. In the late 1980s, the funny
money du jour was not high-altitude stock but junk bonds and easy bank debt.
Eager commercial bankers and junk-bond buyers didn't look too closely at the
financial statements. The crest of that binge was Robert Campeau's purchase
of Federated Department Stores and the leveraged buyout of R.H. Macy & Co.
Both deals went belly-up. ''The stock market is showing the same kind of
craziness now that the banks and high-yield markets showed in the late
1980s,'' says the investment banker.

"Some skeptics also point to the excesses of the late 1960s, which were even
more similar to the late 1990s. Conglomerates such as Gulf & Western were
assembled by entrepreneurs buying low-multiple companies with high-multiple
stock. By 1969, the market cratered, along with many of the deals."


Tom Walker
604 255 4812