Weekly interest and loan rates | Home values Northwest stock contest 2004 | Consumer affairs

Stephen Dunphy / Times staff columnist
Revived inflation the biggest concern for U.S. economy

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Economic conditions today are very different from those that produced the low-inflation bliss of the 1990s, Paulsen told his luncheon crowd: the dollar is weak, the federal budget is back in deficit, and interest rates have stayed unusually low for years.

The Federal Reserve was truly spooked last year by the threat of deflation, he said, and won't raise rates significantly until it's sure the recovery has caught hold. Even after the Fed steps on the brakes, he said, it will take at least a year for rate hikes to slow the economy appreciably.

The result: Not '70s-style runaway inflation, but enough to spook the bond market, eat into people's real incomes and close the door on the mortgage-refinancing boom.

Inflation's return will also expose the downside of debt for many people and businesses. In five years or so, Paulsen said, "There could be a consumer-lending recession in this country, and it could be really nasty."

Lest it go unnoticed, Jim Sinegal of Costco Wholesale got some well-deserved national recognition in an annual look at CEO pay in the New York Times in April. Sinegal was used as the example of a CEO with a modest pay package unlike some other CEOs' exorbitant pay.

Sinegal's base salary has not changed much in 10 years, the Times noted, and the terms of his employment contract "could fit on a cocktail napkin." He has declined a bonus the past three years and his combined salary, bonus and realized stock options total about $11 million over the last 10 years.

The other example used by the Times, Henry Silverman of Cendant, made $22.8 million in salary, bonus and options last year alone. Sinegal's position? He's made a fortune in the company and owns stock worth $112 million. That's enough.

Changes in the local PR community. MWW Group, 11th largest public-relations firm, has acquired the Silver Company and merged it into its MWW's Seattle office. Bob Silver, president, will join MWW as senior vice president and general manager of its Seattle office.
 
The Seattle office, formerly known locally as MWW/Savitt, has been renamed MWW Group. Silver was founded in 1991 and grew into one of the Northwest's top boutique PR firms. In 2002, Upside magazine recognized Silver as one of the year's top professionals. MWW group is based in East Rutherford, N.J.

The freighter business is taking off. Cargo Facts, an industry newsletter published by Seattle-based Air Cargo Management Group, said Boeing launched a 747-400 Special Freighter program with an order for six conversions from Hong Kong-based Cathay Pacific, but at least 13 additional orders now have been received.

Cargo Facts also said Dragonair, another Asian airline, has bought five 747-400s from Singapore Airlines and will convert them into freighters. Interestingly, the conversions come as the market for new factory-built 747-400 freighters remains strong. Boeing has a backlog for three 747-400 extended range freighters and 19 747-400 freighters.

Stephen H. Dunphy's columns appear Tuesdays-Fridays and Sundays. Phone: 206-464-2365. Fax: 206-382-8879. E-mail: sdunphy@seattletimes.com. More columns at www.seattletimes.com/columnists