Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!americast.com!usa-post Newsgroups: usa-today.banks,americast.usa-today.banks From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: banks Thu, Sep 3 1992 Date: Thu, 3 Sep 92 04:19:20 EDT Message-ID: 09-03 0000 DECISIONLINE: Banking & Economy USA TODAY Update Sept. 3, 1992 Source: USA TODAY:Gannett National Information Network CALIFORNIA FINALLY HAS BUDGET: California Gov. Pete Wilson Thursday signed a $57 billion budget, breaking a historic 63-day period in which the Golden State payed debts with IOUS. A subdued Wilson said the budget was "difficult. ... It reflects the worst economic times since the Great Depression." Eleven billion dollars was cut from state programs, including $1 billion for public schools and community colleges. TUITION TO SOAR: Students in California were dealt a blow with the passage of the state's $57 billion budget Thursday. Tuition will increase 50% at community colleges, 40% at California State University and 25% at the University of California. The state's largest banks have begun cashing IOUs again after having stopped accepting them. OTS PROPOSES S&L RULES: The Office of Thrift Supervision Wednesday proposed new regulations for minimum capital for savings and loans. One rule would let banks count certain equity investments as risk-based capital. The second would allow thrifts to hold less capital against some loans for large apartment buildings. Both proposed rules will be subject to public comment for 30 days. J-P SHAREHOLDER BACKS CHANGES: A major Jefferson-Pilot Corp. shareholder has said she strongly supports and publicly endorses proposed changes in Securities and Exchange Commission rules. Louise Parsons favors changes that would make it easier for shareholders to communicate with each other. The rule changes also would let shareholders split proxy votes between management's director nominees and alternates. MONEY FUND YIELDS KEEP FALLING: Money fund yields may soon drop to below 3%. The average money fund yield slipped again this week from 3.03% to 3.01%, the lowest yield ever, according to IBC:Donoghue's Money Fund Report. Fund experts expect the average next week to slip below 3% - equal to the rate paid on a savings account in the 1950s. Three years of decline have accelerated since the Fed cut the key discount rate July 2. RATE CUT SPURRED PLUNGES: Since the Federal Reserve cut the key discount rate July 2 to 3% from 3.5%, money fund yields have been setting record lows. Yields on certificates of deposit have dropped half a percentage point or more since early July. The trend won't turn around this fall. "The foundation for lower yields is still with us," says Dean Witter money-market economist William Sullivan. AUCTION EXPERIMENT PLANNED: The U.S. Treasury will announce plans Thursday for an auction experiment in the aftermath of last year's Salomon Bros. scandal. The announcement will be made at 10 a.m. ET. The Treasury Wednesday provided no details about the experiment. FACTORY ORDERS SLUMP: Orders to U.S. factories slumped in July for the second time in three months, dragged down by a big drop in aircraft orders, the Commerce Department says. Orders fell 1.1% to a seasonally adjusted $242 billion, the biggest drop since December. Factory orders rose 2.4% in June but fell 0.9% in May. PERSONAL INCOME GROWTH SLOW: Personal incomes grew at its slowest pace in 30 years last year and failed to keep up with rising prices for the first time since 1982, the Commerce Department says. Income per capita rose a revised 2.4% to $19,092 last year after growing 5.3% in 1990 and 6.5% in 1989. Prices rose 4.4% last year, which means inflation-adjusted earnings actually fell in 1991. T-BONDS, T-BILLS FALL; OIL UP: The Dow Jones industrial average gained 24.05 points to 3290.31 Wednesday. The NASDAQ composite index climbed 5.64 points to 571.25. Yields on 30-year Treasury bonds fell to 7.37% from 7.38%. The discount rate on three-month Treasury bills fell to 3.14% from 3.15%. Comex gold fell $2.30 to $338.50 an ounce. Light sweet crude oil rose 5 cents to $21.69 a barrel on the N.Y. Merc. GOLD, SILVER FALL: Gold and silver prices dropped Wednesday. On the Commodity Exchange, gold bullion for current delivery settled at $338.50, down $2.30. Republic National Bank quoted a price of $338.70, off $2.20. Gold fell in London to $338.85 from $342.35. On the Comex, silver for current delivery settled at $3.692, down from $3.714. In London, silver fell to $3.71 a troy ounce, from $3.75. DOW JONES OPENS ON UPSWING: The Dow Jones average of 30 industrials opens at 3290.31 Thursday after closing up 24.05 Wednesday. The New York Stock Exchange composite opens at 230.01, up 0.99. The American Stock Exchange market value opens at 382.74, up 1.29. The NASDAQ OTC composite opens at 571.25, up 5.64. DOLLAR OPENS UP OVERSEAS: The dollar opens up on Thursday. It opens at 0.5008 British pounds, up from 0.5003; 4.7520 French francs, up from 4.7435; 1.3940 German marks, up from 1.3920; and 123.15 Japanese yen, up from 122.87. (As of 3 p.m. Wednesday. Source: First American Bank of New York.) 24-HOUR TELEPHONE INFORMATION: USA TODAY Money Hot Line. 95 cents a minute. 1-900-555-5555. Banking & Economy Editor: Beth Mann. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution purposes violates federal law. This article is copyright 1992 Gannett News Service. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM