Gekko.

AS OFTEN happens after a merger announcement, the shares of Worldcom took a tumble after the announcement of the company's combination with MFS Communications. Worldcom is a long-distance phone company whose telephone salespeople do not interrupt you at dinnertime. It specializes in serving commercial users, and has been grabbing market share from its bigger competitors. MFS Communications operates local fiber-optic networks that compete with companies such as the Baby Bells, and owns UUNet, an Internet service provider.

I'd always thought of Worldcom as takeover fodder for one of the Bells when they went into the long-distance business. Now it seems that the merged company will be a power on its own.

What really drew my attention was when a friend of mine who's an insider with another major phone company told me he had been buying Worldcom shares after the merger announcement. I asked him why he was buying.

"They've got the phone company you'd want, because they've got the customers you want. Just the big users. They don't have the households, the public. Those customers are death to profits."

* In a way I'm surprised Dick Morris didn't become a hedge-fund manager after his recent career change. Were he on Wall Street, that's what would have happened. There's certainly a lot of room out there for new talent.

Jim Bianco of Arbor Trading tells me that the conductor on his Chicago commuter train has set up his own limited partnership, or hedge fund, with the usual profit participation for the conductor/manager. At this writing the fund has assets in the high five-digit range. The conductor recently sold out a winning position in K-Mart. "He seems to be a technical momentum player," Jim says. He showed me a list of his latest ideas on the back of a playing card, but they were mostly small NASDAQ stocks, the kind with four or five letters in the symbol, and I couldn't really give him any good advice.

Given that the conductor might have an information edge from overhearing conversations from his well-connected passengers, who are we to say he doesn't have a chance, But the playing card doesn't give me a lot of confidence. Maybe the field is getting a lime overcrowded.

* It now seems likely that the European Monetary Union will fail after its inauguration in 1999 rather than before. But that depends more than anything on the course of the French economy from now through the end of next year. If the French fail to pull out of their chronic, self-inflicted recession, then the budget deficit will remain too high even if the government is able to push through the most difficult spending cuts. Then Chancellor Kohl will have a hard time persuading his fellow countrymen to link their economy with a failed state-dominated economy as their own is gradually recovering.

As regular readers know, I, along with my fellow editors, am strongly opposed to EMU. To begin with, EMU is intended in part to be an anti-American union. French officials have been explicit about this; their German counterparts more diplomatic. But even from the point of view of European self-interest, EMU is bound to fail. It is a back-door attempt to save the failing Social Democratic welfare states by turning them into a superstate.

In the long run, the whole EMU project should be welcomed by the speculator community, because its failure will create all sorts of opportunities for betting against the official line.

Take for example the report out early this month from Goldman Sachs in London that the creation of the European Central Bank will lead to a selloff in gold and the dollar. "In essence the level of reserves necessary for the ECB and the national central banks to achieve the same cover as provided by existing reserves within the EU is significantly lower," was the Goldman line.

According to the plan, the ECB will have reserves of 50 billion ECU, or $40 billion, contributed by the member states. That leaves $35 billion to $60 billion in reserves, mostly dollars and gold, left in the hands of the national central banks. If you follow the Goldman thesis, this pile of assets will be of no use to the countries holding them, and will be dumped on the market.

Oh really? Now what if the EMU experiment fails, when the ECU turns out to be less stable than its predecessors, and then the national electorates realize they've been linked together in a high-unemployment, slow-growth system? As the EMU is unwound, the Europeans will have to re-establish their national currencies. Then those reserves of gold and dollars will turn out to be rather more useful than Goldman and its friends in Brussels conceive. If the EMU goes forward, that's a buy signal for gold and the dollar, because the European currency will not be as attractive as a reserve asset as the separate currencies are even now.

* It's too bad that shares of ValuJet are hard to borrow for short-selling, because I still don't think its prospects are terribly good. While the price continues to be propped up by speculators covering their short positions, think about this: VJet must dispose of much of its fleet of DC-9 aircraft. But it was VJets own purchases that kept up the prices of old "Nines." What kind of writeoff will they have to take? And what about the $240 million of debt the airline carries? VJet may not have either the cash flow or sufficient proceeds from asset sales to pay it down on time. I could be wrong. There might be an Easter bunny after all.