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March 11, 2003

Written by Bob Meyer, Editor of BarterNews

International Monetary Systems Agrees To Acquire BarterNet

Jim Briner's 1,400 Member Exchange Joining Forces With
Expansionary-Minded Consolidator

On Friday, March 7, International Monetary Systems (OTCBB: INLM) announced it had signed a definitive agreement to purchase the assets and the client base of BarterNet. The transaction is expected to be concluded within three weeks.

BarterNet serves more than 1,400 clients located in Sacramento, Stockton, Modesto, Fresno, and the East Bay area near Oakland. It is a strategic acquisition for IMS according to CEO Don Mardak. "This will certainly enhance the bartering activities of our present client bases in Sonoma County, Silicon Valley, and the Central Coast regions of California," he declared.

Jim Briner, Jr., COO of BarterNet, will continue to manage the California exchange as well as assume additional responsibilities at International Monetary Systems. For more information: www.internationalmonetary.com.


Disney Creates Own Currency...Disney Dream Reward Dollars

The Walt Disney Co. is following in the footsteps of what American Airlines instituted back in 1981, creating a currency of its own which will be used as a valuable marketing tool. Frequent flyer miles, the airlines currency, have become an indispensable part of the business.

Disney, in conjunction with Visa and Bank One, has introduced its first credit card that allows users to earn points--1% on all purchases. Points are redeemed for Disney Dream Reward Dollars and then can be traded for park tickets, food, cruises, hotels and most Disney merchandise.

The reward dollars, capped at $750 annually, can accrue for five years. And once redeemed must be spent within 12 months.


Media Purchases With Trade/Barter Modules Announced

Xraymedia.com (OTCBB:XRMD), a real-time negotiating technology provider to the media industry, is releasing LMM 3.0 on March 14. This new version will feature new media trade/barter modules, and will give all registered users of its Live Media Marketplace the ability to negotiate media purchases in real time using trade or barter items as well as cash.

Users will be able to select the number of items in each purchase, and allows them to negotiate and change values with cash or a cash/barter blend. (Users can input any percentage blend of cash or trade.)

The company anticipates these new trade modules will expedite discussions with various registered companies looking to use the LMM 3.0 technology under private label agreements to market to their client bases.


Housing Futures...Hedging A Housing Drop

With housing values having skyrocketed in some areas of the country, will there be a drastic correction in home values? Robert J. Shiller, a professor of economics at Yale University and author of Irrational Exuberance, contends that price drops of as much as 10% a year could happen in areas where local economies are struggling and home appreciation has been soaring.

Shiller is a proponent of "housing futures," a risk-management tool for homes that would be similar to the hedge asset vehicles found in today's financial markets. For a fee (around 2% of the home's value) a homeowner could purchase the right to sell a futures contract that would be at a price similar to comparable homes in a specific neighborhood.

When paying the upfront 2% premium, the owner buys the right to exercise the option for a defined period of time. If the owner sells and prices have dropped, they would receive the guaranteed price determined at the time the policy was written. (If the home prices rise, the owner is out the cost of the premium.)

This idea is now being tested in Syracuse (NY) by some of Shiller's Yale faculty members, who have just landed a $5-million federal grant to help launch the new "housing futures" program.

Federal Reserve chief, Alan Greenspan, recently noted (at a meeting of the Independent Community Bankers of America Conference) that he sees the housing boom losing steam in 2003, due to the fact that mortgage interest rates are no longer declining.

Greenspan didn't mention that today's low rates have encouraged people to buy "more house" than they can afford at higher rates. Nor, that homebuyers are also taking on more leverage...down payments have been shrinking and mortgage payments increasing as a share of income. Bottom-line: this leverage will come home to roost on insufficient cash flows when variable-rate mortgages go up, causing a possible glut of sales and foreclosures when owners can no longer afford their payments.


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Here And There. . .
  • Jeff Bezos, CEO of Amazon.com, told attendees at the Annual TED (technology, entertainment and design) Conference, regarding contemporary technologies, "I believe where we are now, in respect to where we will be, is that of the early 90-pound vacuum cleaner stage of the Internet."
  • Grant Thornton LLP, the country's fifth largest accounting firm with 585 offices in 110 countries, and nearly $2 billion in global revenues, announced that the firm favors the expensing of stock options.

    The company says now is the right time for the accounting profession to step up and really be committed to moving forward on expensing stock options, which will lead to better incentives for the employees and better returns for the shareholders.

  • Jupiter Research reports that 25% of airline tickets are now booked online. Not so with the cruise industry, where the traditional travel agent still accounts for 90% of the industry's bookings. (Agents derive commissions of 10% up to 16%.)

    Will the cruise industry follow the airline industry and go more online? The move in that direction seems to be underway, as online bookings have increased substantially. Two years ago 1.3% of cruises were booked online. This year that figure is expected to double--reaching 2.7%.

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Copyright BarterNews 2003. Redistribution of BarterNews content expressly prohibited without the prior written permission of BarterNews.