Path: bloom-picayune.mit.edu!enterpoop.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 24 1992 Date: Thu, 24 Sep 92 04:37:35 EDT Message-ID: Lines: 119 09-24 0000 DECISIONLINE: Banking & Economy USA TODAY Update Sept. 24, 1992 Source: USA TODAY:Gannett National Information Network THE ECONOMY IS FROZEN: Reports from around the nation show the economy is still stuck in low gear, the Federal Reserve says in its last look at the economy before the Nov. 3 presidential election. "The economy is stuck," says James Annable, chief economist at First National Bank of Chicago. As for the election, "it's really too late for anything to happen that will pick up the economy by then." REPORT SHOWS SLUGGISH GROWTH: In a Wednesday release that offered little aid to President Bush's re-election bid, Southern California retailers told the Fed sales fell in August and early September. Chicago-area manufacturers said business is growing only slowly. The report issued eight times a year by the Federal Reserve found only scattered gains in a few urban areas. DOLLAR HITS NEW LOW AGAINST YEN: The U.S. dollar plunged to a new low against the Japanese yen Wednesday as investors sought a safe haven from the turmoil in European currency markets and uncertainty in U.S. markets. The dollar opened higher but turned down after Treasury Undersecretary David Mulford said he wasn't very concerned about the dollar's decline against the yen. FRANCE RAISES INTEREST RATE: The Bank of France, France's central bank, boosted a key interest rate 2.5 percentage points to 13% Wednesday to attract international investors to the franc. Speculators had hoped to force France to devalue its currency, which would mean big profits for currency traders betting the franc would fall in value. But analysts say it will be hard for speculators to beat the franc. SHORT-TERM RATES MAY HOLD: Economists are saying that short-term rates now about 3% have at best another half percentage point to drop. Long-term rates may go back to mid-September lows. Generally, economists say the Federal Reserve has room for one more cut in the discount rate, which is the rate banks pay from the Fed. That rate is 3% and if it goes to 2.5% it would be the lowest since 1959. NEXT CUT WOULD BE OCT. 2: If the Fed makes one more cut in short-term interest rates, it will do so on or just after Oct. 2, the next release of jobless rates. To trigger the cut, the unemployment rate would have to go up from the current 7.6%, signaling a slowing economy and no hint of rising inflation. With long rates, the benchmark 30-year bond is on its way up - 7.48% Wednesday - after hitting 7.22% recently. BANKAMERICA TO ACQUIRE GIBRALTAR: BankAmerica, the USA's second-largest bank company, will double its presence in Texas by acquiring that state's largest thrift, First Gibraltar. BankAmerica said the deal would make it the fourth largest bank in Texas, based on deposits. BankAmerica will pay about $110 million for First Gibraltar's 130 branches and $7.5 billion in deposits. SHAREHOLDERS APPROVE MERGER: Affiliated Bankshares of Colorado Inc. said Wednesday that shareholders have approved the merger of the company with Banc One Corp. of Columbus, Ohio. Affiliated also said that the Board of Governors of the Federal Reserve System approved the proposed merger on Monday. It's expected to be consummated Nov. 2. AMEX FILES FOR CRITERIA: The American Stock Exchange Wednesday filed for approval with the Securities and Exchange Commission for a specific set of criteria to be used in the development of new industry indexes. If approved, the proposal would permit the Exchange to introduce options trading on industry-sector indices without further approval from the Commission. TREASURY BONDS ARE UP: The Dow Jones industrial average lost 6.22 points to 3320.83 Wednesday. The yield on 30-year Treasury bonds rose to 7.34% from 7.32%. The discount rate on three-month T-bills rose to 2.91% from 2.89%. Light sweet crude oil dipped 6 cents to $21.92 a barrel on the N.Y. Mercantile Exchange. GOLD, SILVER DECLINE: Gold prices were down Wednesday. On the New York Commodity Exchange, gold bullion for current delivery settled at $348.60 a troy ounce, down 20 cents from Tuesday. Republic National Bank said gold was unchanged at $348.60 an ounce. On New York's Comex, silver bullion for current delivery fell to $3.799 a troy ounce, down from $3.822 on Tuesday. In London silver slipped to $3.83 from $3.84. DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens at 3278.69 Thursday after closing down 2.16 Wednesday. The New York Stock Exchange composite opens at 229.42, down 0.06. The American Stock Exchange market value opens at 379.91, down 1.08. The NASDAQ OTC composite opens at 582.96, down 0.04. DOLLAR OPENS MIXED OVERSEAS: The dollar opens mixed on Thursday. It opens at 0.585 British pounds, down from 0.587; 5.103 French francs, up from 5.100; 1.498 German marks, up from 1.493; and 119.80 Japanese yen, down from 121.45. (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