(FORTUNE Magazine) – SPECIAL REPORT/ Cover Stories 32 THE 25 MOST FASCINATING BUSINESS PEOPLE OF 1988 Remarkable in all sorts of ways, the men -- and one woman -- on this list are above all bold, willing to take risks -- to go ahead and pull the trigger on the deals of their lives. One is dead. At least one is a criminal. Many have transformed industries -- even whole economies. 34 ROSS JOHNSON and HENRY KRAVIS became the biggest bidders in the wildest auction. 36 TOM STEPHENS, a self- described redneck from Arkansas, brought Manville out of purgatory. 37 BOBBY STEWART, drought doctor, works to keep America' s farmers from being burned. 37 DALE HANSON gets plenty of bang for his bucks managing California' s biggest pension fund. 40 BERNARD ARNAULT has bet the chateau that nothing makes money like deluxe brands. 41 JOSEPH ANTONINI, the Lee Iacocca of retailing, dresses up down- at- the- heels K mart. 41 JACQUES DELORS, who calls himself ''the most exotic politician in France,'' is leading Europe to 1992. 42 FRANCES LEAR used a $112 million divorce settlement to become a new magazine' s mercurial midwife. 43 HAMISH MAXWELL is shrewdly moving Philip Morris from tobacco to soup to nuts. 46 MICHAEL BOSKIN, a cat lover from Stanford, will mastermind the U. S. economy for President Bush. 47 ABEL AGANBEGYAN, the economic thinker behind Mikhail Gorbachev, is a committed optimist. 47 STEVEN EINHORN, Wall Street' s top strategist, may also be the Street' s top bear. 50 ROBERT BASS displays his Texas billions tastefully and does his deals quietly. 50 MICHAEL OVITZ, Hollywood Shogun, stars with the likes of Paul Newman and Robert Redford. 52 ROBERT MAXWELL, a powerhouse British press lord, lays siege to the U. S. 53 MICHAEL SMITH, America' s chief trade negotiator, tells Japan just where the beef is. 54 JAMES BAKER has managerial muscle, political aptitude, and close ties to an old friend in the White House. 54 ALAN BOND, Australia' s grand acquisitor with ''the attention span of a gnat,'' flits his way to a fortune. 58 SEIJI TSUTSUMI, a onetime student radical in Japan, created a retailing revolution. 59 CLIFFORD NOE, a. k. a. Dr. Noe, the convicted swindler, says he was just using junk bonds. 62 BILL MARRIOTT JR., a first- rate, second- generation CEO, knows cleanliness is next to godliness. 62 JOHN NEFF, Windsor Fund' s hugely successful portfolio manager, is a devoted discount shopper. 63 HUGH MCCOLL crossed the frontier into Texas and became a super- regional bank pioneer. 63 ADAM SMITH may have been dead for two centuries, but he' s still a living hero to consumers.

MONEY & MARKETS 66 LBOs: GREED, GOOD BUSINESS -- OR BOTH? The outcry reflects way too much hysteria and far too little understanding. Here' s how to think about buyouts. by John Paul Newport Jr.

69 'GREED REALLY TURNS ME OFF' Henry Kravis tells how he won RJR Nabisco and why Washington should leave LBOs alone.

72 'THEY CLEANED OUR CLOCK' Ross Johnson describes how charges of greed were shrewdly shifted from Wall Street to him.

75 WHERE ALL THE MONEY COMES FROM Cash for deals is flying in from everywhere. The corporate borrowing binge does not seem risky -- at least not yet. by Vivian Brownstein

SERVICES 82 WAS BREAKING UP AT& T A GOOD IDEA? On balance, yes. Five years later, the industry is thriving. by Kenneth Labich

MANAGING 89 THE NEW POWER IN BLACK & DECKER CEO Nolan Archibald and his whiz kids are making Japan take notice. by John Huey

TECHNOLOGY 99 500,000 PAGES ON ONE ERASABLE DISK Optical platters can do wonders for computer memory. by Mark Alpert

DEPARTMENTS 4 EDITOR' S DESK

6 INDEX

10 NEWS/ TRENDS OPEC' s cheaters, more turbulence at Texaco, still going with the wind at Tara, unbundled stocks, Pampers in the men' s room, Ross Perot in costume, and more.

19 FORTUNE FORECAST Attacking the budget and trade deficits now will bring years of prosperity, says a noted international economics expert. Doing nothing will invite stagflation -- or worse. by C. Fred Bergsten

25 PERSONAL INVESTING Good buys in bad times for interest- sensitive shares. by Joshua Mendes

Also: What to do if you own stock in a takeover target, hidden values for 1989, and Portfolio Talk with Ted Rosenberg.

96 COMPANIES TO WATCH Great Lakes Chemical Corp., Dyansen Corp., Medstat Systems Inc., and Regis Corp. by Julianne Slovak

104 LETTERS TO FORTUNE

107 OFFICE HOURS Portable phones and fax machines make staying in touch easier than ever. For an executive, this isn' t always a good thing. by Walter Kiechel III

111 KEEPING UP An abundance of poverty, windy moments in Washington, New York' s smart boys, and other matters. by Daniel Seligman