BIZWATCH

By BERNARD BAUMOHL; JOHN GREENWALD

BROKE, AND LOVING IT

We're going to the poorhouse, with great confidence. That's the message being sent by a pair of seemingly conflicting indicators. The first, which is consumer debt, shows that Americans are deeper in hock than ever; the average household owes more than $52,000. Yet a widely watched index of consumer confidence issued by the Conference Board, a business research group, soared in August to a six-year high. It all makes perfect sense to board economist Delos Smith, who says, "People are using plastic to buy all sorts of things, and they feel good about it." But as that debt mounts, more than 1 million people are expected to wipe their slates clean in bankruptcy court this year.

DIAL W FOR WINDFALL

Employees at Peter Kiewit Sons, a construction giant in Omaha, Nebraska, build tunnels, off-shore drilling platforms and hydroelectric-power dams. A lot of these folks can now afford to have things built for them--say, a new house or a swimming pool. Some 1,000 Kiewit workers and retirees reaped an estimated $3.3 billion windfall last week when the long-distance phone company WorldCom agreed to acquire MFS Communications, a provider of local phone service, for about $12.4 billion in stock. The deal completes WorldCom's strategy of becoming a vertically integrated phone company that will challenge the Baby Bells and AT&T by bringing together local, long distance and Internet service.

What's the Kiewit connection? The employee-owned Kiewit began investing in its Omaha neighbor, MFS, in 1986, correctly anticipating the deregulation of the telecommunications industry. Kiewit then spun off its 40 million shares of MFS to employees last year. The biggest winner was Kiewit CEO Walter Scott Jr., whose 16 million shares of MFS were worth around $750 million as a result of the WorldCom merger.

There's a party-line payout too. Just three weeks before it was acquired, MFS paid the equivalent of $60 a share in stock to acquire UUNet, an Internet-access provider that went public in 1995 for $14 a share. When WorldCom snapped up MFS last week, the former UUNet shareholders also had plenty of reason to celebrate: they found themselves holding stock worth some $98 a share. That's a nice return for a company that earned just $469,000 last year.

TAKING AIM AT ADM

It has not been accused of a crime and was not even mentioned when three rival companies agreed to settle price-fixing charges last week. But the Justice Department clearly had its sights on Archer-Daniels-Midland, the politically powerful Illinois grain processor, when it accepted sweeping plea-bargain deals with three companies accused of fixing the price of the feed additive lysine. The companies--Ajinomoto and Kyowa Hakko Kogyo of Japan, and the U.S. arm of South Korea's Sewon--agreed to cooperate with prosecutors and pay a total of $20 million in fines to settle the case.

The testimony of the foreign executives could spell big trouble for ADM, which calls itself "supermarket to the world." Last year federal agents raided ADM looking for evidence of wrongdoing based on the undercover work of former executive Mark Whitacre, who had secretly taped meetings involving executives of all four companies. ADM has denied any wrongdoing and accused Whitacre of embezzling millions of dollars in company funds. But prosecutors reportedly plan to bring criminal charges against the company and Michael Andreas, an ADM executive vice president and the son of chairman Dwayne Andreas. The elder Andreas is close to Republican presidential candidate Bob Dole.

JOLTING JOE:

Need a brisk pick-me-up to get started in the morning? How about a fresh cuppa--water! That's caffeine-spiked spring water, as in Water Joe, a New Age beverage that has been catching on with students, stockbrokers and those who thirst for a buzz without coffee's bite or the sweetness of soft drinks. David Marcheschi, 29, a Chicago mortgage banker, dreamed up Water Joe while trying to stay awake in college. A 16.9-oz. bottle has the caffeine kick of 8 oz. of coffee. Marcheschi ships 400,000 bottles a week to 47 states, where they retail for about 99 [cents] apiece.

No one at Starbucks is losing any sleep over Water Joe, but it has gained a following since Marcheschi's Johnny Beverage company went to market last year. It's the most popular legal stimulant among the frenetic traders at the Chicago Board of Trade, who spend much of their day screaming at and jostling one another. To avoid messes, bottled water is the only drink allowed on the floor.

--By Bernard Baumohl and John Greenwald