John Schwartz

Jim Fox, 33, decided it was time to take the leap. The consultant at McKinsey & Co. had been helping companies move their operations into the online world for a few years.

Late last week, negotiators for the European Community averted a trade war with the United States-and broke a stalemate that has plagued trade talks for six years.

Last week at Comdex, the computer industry's biggest annual tribal gathering, Microsoft Corp. was BIG. The Redmond, Wash.-based software giant spent $2 million on the Las Vegas blowout--about a day's profits for the company, and roughly what cofounder William Gates III makes while, say, flossing.

"Hacker" used to be a pretty good word before those of us in the media got hold of it. It was a badge of honor for hard-core programmers. As a different breed emerged-those who break into computer systems-the media adopted a kind of outlaw-geek chic, and "hacker" became a dirty word, raising the specter of some pimply teenager launching nuclear missiles or fiddling with your credit rating.

Pens, for those not in the know, are the Next Big Thing in computers-at least that was the industry buzz last year. Instead of using keyboards and mice to run our machines, we would soon write directly onto the screen and see the words appear there, as if by magic.

You might think Elliott Hillback would be a little wary. It's been a rough year for biotech in the stock market. Industry shares took a pounding which knocked away a third of their value, and the upheaval left a string of crippled firms.

It isn't every day you get to play God. That is, unless you've just bought SimLife. Fire up this brand-new computer game and make a few friends -literally You start by selecting, say, camels from the games palette of animals, placing a bunch of them on an arid, computer-generated plain.

Robert Morgenthau puffs on a long Dunhill Montecruz, one of the two cigars he will allow himself today "to quiet my nerves." The Manhattan district attorney, who just turned 73, has issued a bundle of indictments in the case of now defunct Bank of Credit and Commerce International.

Even after 20 years, the turning points of Watergate--the Saturday Night Massacre, the "smoking gun" tape--retain a chilling resonance. NEWSWEEK'S Evan Thomas, John Schwartz, Anne Underwood, Clara Bingham and Shirlee Hoffman asked some key players for their most vivid recollections from that discordant time.

It's time for the faithful to converge again. This week some 25,000 customers of Digital Equipment Corp. will flock to Boston to check out the latest computer systems at the company's giant three-week trade show, DECworld.

The boardroom used to be such a genteel place. Companies drew directors from an exclusive club made up of captains of industry, retired politicians and academic window dressing-a recipe for rubber-stamp governance.

It sounded too good to be true, and of course it was. The half-page ad in PC Computing magazine offered a high-end computer system worth more than $20,000, boasting every conceivable bell and whistle-a zippy Intel 80486 microprocessor, a large-capacity hard-disk drive, huge color screen and even a color laser printer-for an astonishing $1,278.43.

Though the market for digital consumer products is only starting to take shape, the battlelines are drawn. Expect a struggle between computer firms trying to shrink their products Into consumer gizmos and electronics companies trying to make their appliances smarter.

Economics expert Kenny Rogers advises us that in life, like poker, you've got to know when to hold 'em and know when to fold 'em. Wallace Wilkinson sounds like a pretty good player.

Just 10 years ago, Bill Hayden was selling computer parts out of the back of his battered orange Chevette, cutting deals with customers in parking lots. "We were pretty desperate for sales," he says. "Boy, times have changed since then." If you're wondering why blue-chip computermakers like IBM are struggling, look no further than the modest offices of Hayden's CompuAdd, where bare-bones operations and turn-on-a-dime agility produce inexpensive PCs.

Ever since IBM computerized the world, it has been the great American monolith--a company so big that the Justice Department once threatened to break it apart with an antitrust suit. (The Reagan administration dropped it in 1982.) But Big Blue has been looking a bit pallid lately.

They are men of the world. In their time they had seen the scratchings on a few bathroom stalls, so they knew what sort of stuff solitary people might write for all the world to see.

Last week the lines went dead. Again. This is not a recording; it's just gotten so darned repetitive that it seems that way. Since the 1990 software meltdown that sent the AT&T system into paralysis, several smaller glitches have plagued the giant company.

Jason, a young man on the verge of adolescence, was touring Washington with his grandparents when he realized he had left his gym bag at the hotel. He got it back eventually, but it could have been a significant loss.

Lockheed wins a 'flyoff' to build a new fighter plane. But is it needed? Across the defense industry, the only sound was the discreet click of fingernails being bitten.

The Dow broke 3000 because it's anticipating a recovery. But it could stay stalled for months. It was there. Then it wasn't. Last week the stock market passed a milestone: the Dow Jones industrial average closed above the 3000-point barrier for the first time.

Joseph Wesbecker gained a kind of immortality in death. After his 1989 rampage in Louisville, Ky., he became a symbol: the best-known violent Prozac user.

At 33, the computer wunderkind has a slick new product and sales pitch to match. It may be the most exciting machine in years. But will it sell?