The Irish Independent reports that desperate first-time buyers are paying €120,000 in extra interest by taking out longer mortgage terms.
Figures compiled by the Irish Independent show the number of first-time buyers signing up to 40-year mortgages has quadrupled over the past year.
As a result the end repayments for thousands currently desperate to get on the property ladder, are much larger.
But they could easily save themselves €15,000 by paying as little as €50 extra a month.
Economists last night warned of the dangers of taking out long term mortgages.
And they urged thousands of first-time buyers, who do avail of 40-year home loans, to re-finance their mortgages after two years.
But new figures show this is of little concern to househunters struggling to buy their first home.
A basic €250,000 mortgage spread across 20 years incurs interest charges of €101,067 at current rates. That brings total repayments to €351,067.
In contrast, by spreading the repayments across 40 years the interest charges reach €222,094. Total repayments come to €472,094.
Those who opt to spread the loan burden across an additional 20 years end up paying an extra €121,027.
Figures from IFG mortgages show the numbers taking out 40-year terms has quadrupled in the past year alone.
In the first quarter of 2005, 3.4pc of buyers opted for a 40-year term. However, in the first quarter of the year this had jumped to 12.5pc. Shane Connole, head of sales with the IFG Group, said the long-term home loans are here to stay.
"In the cold light of day it allows the customer to qualify for more money and makes buying a home more affordable," he said.
But Dermot Jewell of the Consumers' Association long-term mortgages are fuelling the already-huge profits of the financial institutions.
"The banks are most certainly adding to their coffers, and very well too," he said.
"Some say it's a solution to a very difficult cost factor in Irish society but the other element is that you are in effect locking yourself in for the rest of your life. In fact the 40-year customer is almost renting."
He pointed out that even by refinancing after a number of years and cutting the term from 40 to 30 years, the burden on the customer is still massive.
The Irish Mortgage Corporation (IMC), which arranges in excess of €1bn in mortgages every year, show the numbers of first time buyers (FTBs) taking 20-year terms has dropped from 19pc in 2000 to just 2pc today.
Forty-year terms weren't available in 2000 but in 2005 3pc opted for them.
In the first quarter of 2006 this more than doubled to 7pc amongst their customers.
The 40-year terms are only available through Ulster Bank, First Active and Bank of Scotland while other lending institutions offer 35-year terms.
IIB Chief Economist Austin Hughes argued it made financial sense to opt for a longer term to be able to afford to buy.
"People are being realistic," he said. "There is a huge demand for property at the moment and people are saying it makes more sense to get in, not pay rent and see if their new property appreciates in value rather than wait and save."
Figures from the Bank of Ireland, who offer a maximum term of 35 years, show the same trend. There has been a more than 100pc increase in take-up of 35-year terms by FTBs.
An analysis of their customer base shows that by opting for a 35-year rather than 25-year term, FTBs reduced their monthly repayment by just €75 a month. This figure is based on a average national mortgage of €212,000.
Olive Moran, marketing manager with BoI, said the long-term consequences of a 35-year term are not of concern to most FTBs. Research also revealed there was low awareness but growing take-up of flexible mortgage options
The Irish Independent also reports that Irish -owned Quinlan Private has formed a new joint venture with American Golub & Company that will create one of the biggest property development groups in Central and Eastern Europe (CEE).
The new venture, called Quinlan Private Golub (QPG), has a multi-billion pipeline of projects in the residential, retail and office sectors. QPG is now backing one of the largest ever developments in CEE.
The development will be worth up to €1.8bn on a prime 200-acre site on the edge of Bratislava, the capital of the Slovak Republic.
Pipeline
This is just one of ten major residential sites in the QPG pipeline which are at various stages of development in fast-growing cities like Prague, Bratislava, Budapest and Warsaw.
At the same time QPG intends to become a major player in the emerging high-end retail sector in CEE, which is being driven by rising consumer spending.
The partners of QPG have either individually or together already built a number of major retail centres, including the Mall of Sofia - one of only two Western-style shopping complexes in Bulgaria - which is due to open this summer.
The group also has plans for quality office developments, of which there is also a shortage, as international investment rises, particularly in cities with populations of between 250,000 and 700,000.
Roger Dunlop has been appointed as chief executive of the new venture. Quinlan is chaired by accountant Derek Quinlan and Golub is chaired by legendary investor Gene Golub.
Mr Dunlop will lead a team of 73 experienced professionals, but this will rise to 100.
He was formerly managing director of Gleeson Homes - a major division of MJ Gleeson plc in the UK - and had previously worked extensively in CEE.
Mr Dunlop will work closely with Quinlan partner Peter Donnelly, who is responsible for all of the Irish group's CEE interests.
Quinlan Private first invested in Central Europe in 1998 when it successfully built the Four Seasons Hotel in Budapest.
Golub has been in CEE and Russia since the fall of the Berlin wall in 1989 and it has successfully built up a huge number of assets despite the sometimes difficult conditions.
Some of these assets have since been bought by clients of Quinlan Private, such as the Charles Square Centre in Prague.
Golub has previously worked closely with General Electric in the region. The new QPG venture, while standalone, is expected to maintain this favourable relationship.
Quinlan recently opened new offices in New York and London. There is huge demand in these cities for exposure to the yields of 9-10pc which are being achieved in CEE cities now.
The Irish Times reports that the pace of growth in Government revenue slowed significantly in April while income tax and Vat receipts continued to fall below expectations, the latest Exchequer figures show.
However, total tax revenues in the first four months of the year remain substantially higher than the same period of 2005, due to strong performance during the first quarter.
Exchequer receipts in the year to April rose to €12.8 billion, up 16 per cent on the same period of 2005 and exceeding budget-time expectations by almost 4 per cent.
But revenues for the month of April were just 3 per cent higher than April 2005, compared with an annual rise of 19 per cent in the year to March, and this implies that the momentum of revenue growth may be slowing.
Income tax and Vat revenues rose in the period by 10.6 and 11.6 per cent year-on-year respectively. But despite their strong growth, income tax and Vat receipts were €36 million and €96 million lower than forecast by the Government at the start of the year.
Vat receipts have significantly outperformed income tax in recent years, replacing them as the largest single source of tax revenues. Compared to €3.6 billion received in income taxes in the year to April, Vat receipts made € 4.4 billion.
Total receipts exceeded expectations by €418 million due to a continued surge in revenues related to the housing market.
Over €1 billion was received in stamp duties in the year to April, exceeding corporation tax receipts for the period. Government expectations were for €863 million to be received in this period. Stamp duty receipts in the same period of 2005 were €722 million.
Capital gains tax also beat expectations, reaching €789 million in the period compared to an expected €615 million and receipts in the same period last year of €486 million.
"April was the weakest month to date with tax revenue marginally underperforming target whereas it overshot significantly in earlier months. April was a shot across the bows of the economic bulls," Ulster Bank chief economist Pat McArdle said.
Mr McArdle added that SSIAs had caused Vat to perform below expectations and said that growth in income tax receipts could weaken in coming months. "There is no sign of advance spending of SSIA monies or if there is, this is not having any obvious impact."
Labour Party finance spokeswoman Joan Burton said the figures proved the Government was becoming too reliant on consumers and house buyers. "The Government is feeding off inflation by having some of the highest Vat rates in Europe." As a consequence, rising petrol prices and construction industry costs are directly fuelling huge increases in VAT receipts", Ms Burton said yesterday.
Fine Gael Deputy Leader and finance spokesman Richard Bruton said that the Government was failing to spend taxpayers money properly."As the Government continues to rake in revenue, the taxpayer is left waiting to see a bang for their buck".
The Irish Times also reports that the euro zone's improving jobs picture and worsening inflation prospects are raising the chance that the European Central Bank (ECB) will increase interest rates by a half a percentage point in June, latest trends in money markets suggest.
Financial markets yesterday reacted to data showing that unemployment in the euro zone had fallen in March to 8.1 per cent, its lowest level in more than four years. The EU's statistical agency Eurostat yesterday also released producer price inflation figures for March, showing energy prices continuing to affect inflation in the 12-member currency union.
Meanwhile, the Institute for the German Economy - a government-funded think-tank - yesterday upwardly revised its forecast for Germany's economic growth this year to 2 per cent, compared with a 1.5 per cent forecast in November.
"While the decline in euro-zone unemployment over the past year exaggerates the improvement in the region's labour market, there are now increasing and very welcome signs that the labour market could be starting to see genuine modest improvement," Howard Archer, chief European economist at Global Insight, said yesterday.
Although somewhat offset by recent euro strengthening, traders reacted by betting that the latest data would toughen the ECB's position on interest rates.
Following remarks by ECB president Jean-Claude Trichet last month, interest rates are expected to remain unchanged when the ECB governing council meets in Frankfurt today. But prices quoted yesterday for Euribor futures contracts of three months maturity imply that traders expect the ECB's key main refinancing rate to rise from 2.5 per cent to at least 2.75 per cent at the council's subsequent June meeting.
The price of this derivative moves inversely to expected future interest rates and the latest prices also imply that traders attach a one-in-four chance to rates rising by a half of a percentage point in June.
Prices quoted for longer-term Euribor contracts imply that interest rates will end the year three quarters of a percentage point higher than now.
The Irish Examiner reports that a €3.6 billion blueprint for the future of Irish agriculture, to be funded over seven years by the Government and the European Union, was launched yesterday by the Irish Farmers Association.
The document, covering the 2007-2013 National Development Plan period, lists 75 specific policy proposals. A major drive for improved competitiveness and structural reform in farming is a central element.
Launched by IFA president Padraig Walshe on his dairy farm near Durrow, Co Laois, it proposes specific measures to develop scale and improve efficiency in the main farming sectors.
Among these are a beef suckler herd maintenance programme and a €100 million three-year investment and restructuring plan for the dairy processing sector, led by Enterprise Ireland.
The beef programme is designed to support quality Irish beef production from grass on which 60,000 livestock farmers depend for their livelihood.
It would, according to the IFA, provide a payment equivalent to €100 per suckler beef cow and help sustain Ireland’s vital beef trade on premium EU consumer markets, worth over €1.5bn annually.
The goal of the dairy plan is to accelerate the development of a world class dairy processing industry by bringing together milk processors and the Irish Dairy Board to achieve greater co-operation, remove duplicated costs and undertake necessary investment and product development.
A national initiative on farm consolidation, including relief from capital gains tax and stamp duty, long-term land leasing incentives, a revitalised EU early retirement scheme, improved installation aid for young farmers and a new farm modernisation scheme are proposed.
Renewable energy from agriculture and forestry offers the potential of an alternative land use for farmers and a much-needed income source, according to the document.
Growing rape seed for biodiesel production is described as the most promising alternative for Irish tillage farmers, following the closure of the sugar beet industry.
Other proposals include a Government initiative on lifelong learning and capacity-building for the farming community, and regional and rural development measures, including the provision of an improved infrastructure such as broadband.
Mr Walshe called for an accelerated Government policy response and new investment to secure the competitiveness and future viability of the farming and food sector.
He said the sector provide 320,000 jobs or 20% of all non-public service employment. Food exports are worth over €7bn a year to the economy.
The Financial Times reports that Nasdaq, the US-based stock exchange, on Wednesday raised its stake in the London Stock Exchange to 18.7 per cent.
The move strengthened its position as the LSE’s biggest shareholder and raised the bar to a rival bid from the New York Stock Exchange.
It coincided with an announcement from the Paris-based Euronext which confirmed that it was no longer in discussions with the London exchange about a possible offer for the company.
Taken together, the two announcements suggest that the long-awaited consolidation of stock and derivatives exchanges is gathering pace at last.
Nasdaq is thought to have acquired the shares from Wellington Management at 1218p, setting a new floor for its offer should it bid for the London exchange within the next year. A bid at that price would value the LSE at around £3.1bn ($5.7bn).
The NYSE Group, which controls the New York Stock Exchange, made no comment on Wednesday. However, it is considering a role as a “white knight,” and is expected to start planning a bid within days. LSE shares closed up 26½p at 1244p in unusually heavy trading.
The NYSE has indicated its interest in acquiring the LSE but it needs to complete its own secondary offering – the final step in its conversion from a mutual exchange to a public company.
John Thain, NYSE chief executive, said last week that the offering – likely to be one of Wall Street’s biggest this year – could be priced as as soon as today, leaving the exchange free to bid.
Nasdaq this year bought a 14.9 per cent stake in the LSE, the maximum available to it at that time under the UK Takeover Code, at 1175p per share. The LSE had already rebuffed an offer from Nasdaq at 950p.
Euronext, meanwhile, urged its shareholders to vote against an amendment at its annual general meeting that approves, in principle, a merger between it and its larger rival, Deutsche Börse.
“While this is certainly a serious option, the supervisory and managing boards of Euronext firmly believe that they have a duty . . . to examine thoroughly all strategic options available to the company,” Euronext said.
It said that while it was pursuing these other options, none would be sufficiently advanced to be presented to shareholders at its annual meeting on May 23.
A significant group of Euronext shareholders are also investors in its Frankfurt-based rival and stand to benefit through improved profit margins from a combination of the two. Several shareholders believe that because the businesses of Euronext and Deutsche Börse are so similar, a link-up is the best option.
Euronext is thought to have opened exploratory talks with the NYSE. The latter has clearly set out its ambitions to expand into Europe.
Euronext also announced plans to return capital to shareholders of €3 per share in addition to the €1 per share ordinary dividend.
The FT also reports that directors and companies will be given much greater protection against litigation after the government on Wednesday bowed to business demands over a sweeping shake-up in company law.
The move to amend the company law bill is the latest government U-turn in a saga that has seen a stream of changes to contentious reporting rules that will force quoted companies to report annually on their prospects.
Ministers agreed to give directors a US-style “safe harbour” protection, shielding them from lawsuits over untrue or misleading statements in the new reports. Directors will be liable only if they have acted in bad faith or recklessly.
The government also acted to quell fears the bill would trigger mass litigation against companies. Lawyers warned that a right in the bill for minority shareholders to sue a director without board approval would unleash a flood of lawsuits.
The courts will be given powers to curb such claims. A two-stage process will require judges to dismiss “non-meritorious” claims early on without a company having to mount a detailed defence. The courts will also get an express power to punish undeserving litigants with cost orders.
Alun Michael, industry minister, defended Gordon Brown’s decision to scrap his department’s proposals for comprehensive annual narrative reports. The chancellor’s move to scrap the Operating and Financial Review triggered protests from unions and green lobby groups, followed by a legal action that forced the government to consult on the change.
Despite this consultation, the government had decided not to reinstate a statutory OFR because the burden imposed on business would not be justified, Mr Michael said. Instead, companies would have to produce a “business review” – a slimmed-down OFR – to comply with European law. But this report will no longer have to meet statutory reporting standards.
He denied the government approach had been shambolic, thanks to the Treasury’s overruling of the Department of Trade and Industry’s policy. “That’s entirely unfair,” he told the FT. “We’ve had an open and interactive consultative process . . . it’s been a continuous engagement with business for more than seven years.”
Business applauded the package of amendments to the bill. The CBI, the employers’ body, praised the government for “moving in the right direction”.
The CBI’s sole reservation is the amendment to directors’ duties, codified for the first time. Business has expressed alarm the new law will widen director obligations beyond shareholders to take in other interest groups.
■ Business also welcomed a move by the government to try to end a row over a bill designed to curb red tape. Amendments to the legislative and regulatory reform bill will limit the powers it gives ministers to axe and change laws to measures that “deliver better regulatory outcomes,” the Cabinet Office said.
The New York Times reports that some doctors hail it as a major breakthrough that offers hope to many of the nation's 37 million sinusitis sufferers. A new procedure opens the sinuses without invasive surgery, allowing patients to breathe easier and resume normal activity within a day.
The procedure, called balloon sinuplasty, can cost thousands of dollars and has been performed on about 500 patients since November 2004. It has received glowing coverage in local and national news media. Doctors like to tell patients they are the first in their area to offer the procedure.
But there is a problem: There is virtually no scientific evidence that the procedure, which involves inflating a small balloon in the sinus cavity, actually works.
Of the two studies conducted so far, one involved 6 cadavers and the other was based on only 10 patients — 8 of whom also had traditional sinus surgery, making it difficult to determine whether the system, made by Acclarent, a privately held company, really helped.
While those studies help show that it is possible to open a sinus with a balloon, they do not address whether sinuplasty provides lasting relief for sinusitis, a condition in which the sinuses become inflamed or infected.
The hype may be getting ahead of the science, say some leading sinus specialists, who concede that sinuplasty may hold promise. They see the rush to embrace balloon sinuplasty as an example of how the loose regulation of medical devices can enable procedures to be adopted more on the basis of astute marketing than clinical science.
Under the Food and Drug Administration rules governing medical devices, Acclarent was not required to demonstrate that its system was either safe or effective before the F.D.A. allowed it to go on the market last year. All Acclarent needed to show was that its device was essentially no different from other surgical tools already on the market. "This is clearly not ready for prime time," said Dr. Donald C. Lanza, a sinus doctor in St. Petersburg, Fla., and a past president of the American Rhinologic Society, the physician group for nose and sinus specialists. "It may help people, but it is investigational," said Dr. Lanza, who emphasized that he was not speaking on the society's behalf.
Acclarent, which has received $42.5 million in venture capital financing and is based in Menlo Park, Calif., has trained about 150 doctors in balloon sinuplasty. The company has also been successful in finding several high-profile specialists to serve as company consultants. The authors of the most recent study — the one involving 10 patients — were two doctors, one of whom, Dr. William E. Bolger, serves as a consultant and has options in the company. He did not return several phone calls seeking comment.
Acclarent says that more research is under way and that sinuplasty is intended to be simply another tool for doctors to use in sinus surgery and is not intended for all patients.
Until recently, the company's Web site said that clinical studies had shown the treatment to be "safe and effective." But after being questioned about the site's language, Acclarent modified it to say studies "indicate" that the treatment is safe and effective.
Acclarent says it bases its claims on the two completed studies, its other work on cadavers and the clinical experience of the doctors using the technology. Noting that the same technology has been used safely for years to open coronary arteries, the company says no serious complications have been reported by doctors using balloon sinuplasty.
"It is easy for the patient to be misled based on what is on Web sites and on what has been in the press or on the news," said Dr. David W. Kennedy, a specialist at the University of Pennsylvania Health System. Dr. Kennedy is chairman of a task force at a leading specialists' group, the American Academy of Otolaryngology — Head and Neck, to evaluate the role of balloon sinuplasty.
Dr. Kennedy pioneered the endoscopic sinus surgery in this country that is now the proven standard surgical treatment of sinusitis. Using a very thin tube, an endoscope, to view the sinuses, surgeons can operate through the nostril.
One sinus specialist, Dr. James A. Stankiewicz, says that many sinus patients do not need surgery at all and that the majority of sinus sufferers are unlikely to benefit. Dr. Stankiewicz is the chairman of otolaryngology, head and neck surgery at Loyola University Health System in Chicago, which took the unusual step of cautioning patients about the new procedure. While Dr. Stankiewicz is skeptical, he described sinuplasty as an "elegant" solution for some patients.
The hospital noted that Acclarent's system still involves surgery and, unlike the traditional approach, requires the use of radiation to enable doctors to see where to place the balloon.
Any sinus surgery — conventional or Acclarent's — is likely to cost thousands of dollars, although the procedures tend to be covered by insurance. For patients, the primary appeal of the Acclarent procedure, which is also administered through the nostril, seems to be the relative lack of trauma compared with standard surgery, which typically involves more pain and bleeding.
"It was wonderful," said Thomas O'Connell, who had undergone traditional surgery three times in the past before having balloon sinuplasty in late March. Although he received general anesthesia for the procedure, which was covered by his insurance, he said that by the next morning he could barely tell he had undergone surgery at all. And he says he continues to breathe much better than before the treatment.
As much as patients may prefer the less invasive approach, many sinus specialists say the true test for sinuplasty is whether it will prove to be effective over the long term at keeping the sinuses open. But doctors who are performing the procedure say it is an important innovation that the company has been responsible in promoting.
"I felt pretty comfortable starting to do it," said Dr. Jack Coleman, a sinus specialist in Smyrna, Tenn., who said he had operated on 30 or 40 patients since December. Rather than relying on published studies, he talked to Acclarent and other doctors.
Acclarent considers sinuplasty simply "a tool, just like a shaver," something a surgeon would use in operating on a patient, said Kevin Knight, a company spokesman.
A study following 115 patients for six months is near completion, Mr. Knight said. He added that many of the concerns stemmed from the fact that doctors in this field tended to be conservative and that a new technology like Acclarent's threatened to disrupt how they practice. "It's going to foment a lot of discussion," he said.
Doctors who use the Acclarent procedure say it may be best suited for patients with milder problems and those reluctant to undergo more extensive surgery. About 330,000 people get traditional sinus surgery a year, but an additional 600,000 are referred to a surgeon and never have an operation, the company said.
Sinuplasty, because it is so much less invasive, "is very appealing for patients," said Dr. Winston C. Vaughan, the director of the California Sinus Institute in Palo Alto and a paid consultant to Acclarent. He is involved in the study of 115 patients to be presented in September, he said, and the preliminary results "look extremely good."
Dr. Michael Friedman, who treated Mr. O'Connell, said that while the Acclarent treatment might not replace traditional surgery, "I don't think we should discount it."
Dr. Friedman, a professor at Rush University Medical Center and chairman of otolaryngology at Advocate Illinois Masonic Medical Center, is conducting a study of 90 patients, who will be followed for a year, to compare how they fare if they are treated with drugs only, with traditional surgery or with sinuplasty. He says that he has no financial ties to Acclarent, and that the company is not financing the research. Like other medical device companies, Acclarent also makes use of paid medical consultants. Dr. Vaughan, who disclosed his ties to the company at the start of an interview, said he was simply being paid for his time. Acclarent said that it paid its consultants $300 an hour, with none of them performing more than a few days of work for the company every few months.
Critics of Acclarent are perhaps more concerned about the pressure the company places on doctors who are eager to be trained in the technique. Sinus specialists who want training beyond a simple introduction to the technology must make an upfront commitment to buy $20,000 worth of Acclarent's equipment, including the catheters and balloons involved. Each system, which is disposed after a single use, costs about $1,200.
Dr. Jane E. Dillon, a physician in private practice outside Chicago, said an Acclarent sales representative tried to get her commitment to start using the system on her patients and to persuade her hospital to buy 10 of the devices before the company would train her. The representative said Acclarent "can't afford to train physicians who won't end up using their equipment," recalled Dr. Dillon, who said she told the representative she could not agree to those conditions.
In a written response to a reporter's question about that policy, the company said, "We can currently only work with physicians who want to move forward with the technology and have the ability to get this technology into the hospital or surgery center for them to use." Acclarent says doctors need to train on 10 patients to become proficient.
But even some doctors who have been trained say they have not yet found a patient for whom balloon sinuplasty makes the most sense. "We're all trying to figure out where this fits in the weaponry," said Dr. Brent A. Senior, a specialist at the University of North Carolina Medical School.
He says he is among the doctors who would like to see more research, given the times he has seen a new technology pushed by a manufacturer, receive enthusiastic media attention — only to fail to live up to the early hope.
Defense lawyers in the Enron trial called on two accounting specialists on Wednesday to refute prosecution claims that the company had falsified its books.
The NYT also reports that one accounting specialist told jurors yesterday that last-minute changes to quarterly earnings reports were routine at many companies, and were not an indication of accounting fraud.
Prosecutors had contended that the chief executive of Enron, Jeffrey K. Skilling, had ordered the changes to enhance the company's standing on Wall Street, but Walter Rush, an accounting expert hired by Mr. Skilling's defense team, said that changes "going on up to the very last second" were commonplace.
"It is universal," Mr. Rush said. "Every company goes through this."
Mr. Rush was the second accounting expert to take the stand, following Prof. Jerry Arnold of the University of Southern California, who testified for the Enron founder and former chief executive, Kenneth L. Lay, in the 14th week of their fraud trial.
The judge overseeing the trial, Judge Simeon T. Lake III of Federal District Court, said late Wednesday he wanted testimony and rebuttal witnesses finished no later than the end of next week, and he tentatively set the reading of his charge to the jury and the start of closing arguments for May 15.
With the trial in the home stretch, Mr. Lay's lead lawyer, Michael W. Ramsey, was returned to a hospital on Tuesday. Mr. Ramsey, 66, underwent a two-hour medical procedure six weeks ago to clear an artery with a stent and was recovering, but felt worse this week. He was absent during Mr. Lay's testimony earlier this week and last week.
The accounting specialists were called to refute the testimony of Mark Koenig, former head of investor relations at Enron, and others. Mr. Koenig testified that he believed that Enron executives were so bent on meeting or beating earnings expectations to keep analysts bullish that they made or knew of overnight changes to estimates.
Paula Rieker, Mr. Koenig's former top lieutenant, said Mr. Koenig told her Mr. Skilling ordered abrupt last-minute changes to two quarterly earnings reports to please analysts and investors.
Mr. Rush also disputed government contentions that Enron executives improperly moved parts of the company's retail operation into its highly profitable wholesale business unit in 2001 to hide financial problems under the guise of an accounting process called resegmentation.
Earlier Wednesday, Professor Arnold repeated his belief that Mr. Lay did not mislead investors about the company's financial health in the weeks before it filed for bankruptcy protection in December 2001.
Mr. Arnold said third-quarter 2001 financial statements cited by Mr. Lay in discussions with investors complied with Securities and Exchange Commission rules.
The government contends that Mr. Lay knew that many Enron assets were overvalued and that losses were coming and that he misrepresented this to the public.
Several former high-ranking Enron executives have testified that Mr. Lay misled investors when he said the losses were one-time events.
"I disagree with their interpretation," Mr. Arnold said.
