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TSC Weekender: Fed Conducts a Sturm und Drang Chorus, Bank One Gets Burned and After-Hours Trading Gets a Boost

Plus, a young Florida man puts his innocence on eBay's auction block.

Welcome to TSC Weekender, where all your dreams come true. Your desire for a quick wrap-up of the top three stories of the week? Just read on. A yearning for interesting and humorous goings-on? Click through on the sidebar. Information to make you a better trader? See The Trader's Tongue. This weekend we also have a return visit from writer Eugene Finerman, selling the one thing most companies can't do without: a scapegoat. Plus our regular coverage of the coming week worldwide, tax and options questions and the TV insider scoop in The Cutting Room. Send us your three wishes.

Fed Up

Do we even have to say it? The Fed announced a

you-know-what on Tuesday and its neutral bias. There's been plenty of talk about the

similarity between actions taken this week and those of June 30.


commentator James K. Galbraith believes the Fed was fighting practically

nonexistent inflation, to the detriment of the ordinary joe.

But all the

Sturm und Drang

basically brings us back full circle: looking at indicators (like the

Chicago Purchasing Managers

index on Tuesday, the

National Association of Purchasing Managers

index on Wednesday and the employment report on Friday) while the market dances the night away. And Greenspan is scrutinized as

closely, if with a bit more intelligence, as the

Sports Illustrated

annual calendar.

Tank One

Faster than you could say "try our low APR,"

Bank One's


credit card unit went from being the potential jewel in the big bank's fiscal crown to a

major drag on profits. Chicago-based Bank One's stock shed 23% of its value on Wednesday after its unexpected warning Tuesday evening of an at least $530 million shortfall in annual earnings due to problems in its

First USA

credit card business. Things didn't improve by week's end either; on Friday, the stock closed down 1/8, or 0.3%, at 42.

As with any corporate meltdown, there is plenty of

blame to go around. Bank One provided overinflated profit forecasts for its credit card unit and peeved customers by canceling a one-day grace period for payments, according to

The Chicago Tribune.

Bank officials also admitted that slow payment processing probably worsened customer attrition. Of course, they also trotted out that old nag -- "industrywide" difficulties -- to explain the shortfall.

It's true enough that credit card users aren't being nearly irresponsible enough for card issuers' tastes, with many consumers folding their high-interest card debt into mortgage refinancing, or (shudder) merely paying off their full balance every month. Bad debt, or "charge-off," rates are down -- and investors do appear to be getting nervous about the group. Bank One's competitors -- including

MBNA America






Capital One

(COF) - Get Free Report

-- also ended the week down. All in all, that old joke about how you keep an elephant from charging appears to apply to bank stocks as well.

The Late Showing

Now, small investors can interrupt cocktails to check on their trading, too. After-hours trading gained speed this week with two developments.


began offering clients of the


unit of

Morgan Stanley Dean Witter


and the


unit of

Mellon Bank


trading from 6 p.m. to 8 p.m. EDT on Wednesday.

And in a further move to facilitate the after-hours market, several ECNs, or electronic communications networks, are

discussing connecting their systems to boost liquidity and ensure clients get the best price on a trade.

Proponents say these setups allow the little guy to act like a

big cheese (institutional traders have long been able to buy and sell for their richest clients).

Still, concerns about after-hours trading rightly focus on liquidity, volatility and regulatory oversight, says Arthur Pacheco, president and chief executive of the


ECN and the former head of

Bear Stearns'

equity trading. "I don't think there's anything wrong with extended trading per se," he says. But when the there isn't enough liquidity and plenty of volatility, it's better left to the professionals.

Many companies seem to disagree. In July,

Datek Online

kicked off after-hours trading through the ECN


. This September,



will offer trading as late as 6:30 p.m. EDT through


. And

Wit Capital


has a similar plan for later this year in conjunction with America Online.

Coming soon: after-hours disappointment, after-hours pump and dump and after-hours bankruptcy.

Staff reporters Thomas Lepri and Carlton Wilkinson contributed to this article.

The Idiot Box will return next week.

The Idiot Box is where all your pesky little questions will be treated with kind condescension. As your fifth-grade teacher used to say, everybody else wants to know the answer, too. Please do send your queries.