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 Mon, Oct 12 1992 Date: Mon, 12 Oct 92 04:44:58 EDT Message-ID: 10-12 0000 DECISIONLINE: Banking & Economy USA TODAY Update Oct. 12, 1992 Source: USA TODAY:Gannett National Information Network FED WON'T CUT INTEREST RATES: Federal Reserve Board Chairman Alan Greenspan says the central bank will not be swayed by election year politics in deciding whether to cut interest rates again. Greenspan held a rare press conference after addressing corporate executives at a meeting of the Business Council. Though Greenspan says the economy is very sluggish, he didn't indicate whether the Fed plans a rate cut soon. CARDS HAVE GENEROUS YIELDS: Savings and loans at death's door could once be counted on to pay top yields on certificates of deposit. Now, banks that primarily issue credit cards pay some of the top yields. Unlike savings & loans that died paying top yields in the late '80s, credit-card banks aren't luring cash to stay afloat. They're paying high yields because they're hungry for money to lend to customers. CREDIT-CARD BANKS CAN AFFORD IT: Credit-card banks pay their customers top yields; they can well afford to. Their health is robust and their business is booming, says Robert Heady, publisher of 100 Highest Yields, a newsletter that lists top-yielding certificates of deposit. When it comes to safety and generosity, few institutions can match that of credit-card banks. PROJECTIONS GET MORE GLOOMY: Many top economic forecasters are scaling back already weak projections for economic growth next year, a survey has found. The consensus of 52 economists, surveyed by the newsletter Blue Chip Economic Indicators this month, is that the economy will grow just 2.7% in 1993. The forecast has fallen by 0.1% each month since June, when it called for 3.1% growth. U.S., EUROPEAN DEAL LOOKS DIM: French officials say there is no agreement in sight on a bitter trade dispute between the USA and the European Community, although talks were to continue Monday in Brussels. Agriculture Secretary Edward Madigan says talks will go on aimed at breaking a deadlock in six years of talks on the General Agreement on Tariffs and Trade. The USA wants the EC to dump some farmers' subsidies. CHINA, USA FINALIZE TRADE DEAL: China and the USA have finalized an agreement to open China's markets to foreign goods, giving U.S. companies access to the huge Chinese market. U.S. Trade Representative Carla Hills warned in August the USA would impose tariffs of up to 100% on $3.9 billion worth of Chinese goods sold in the USA if China didn't move to open its markets by last Saturday's deadline. RALLY HELPS INSURANCE INDUSTRY: A powerful rally in the bond market helped the USA's life-insurance industry boost its strength and safety last year, a new analysis of the industry's 1991 financial records shows. Only 45 insurers had risky assets greater than their total net worth at the end of 1991. And junk bond holdings dropped sharply as insurers took advantage of falling interest rates to dump those bonds. MARKETS ARE SAGGING: Stock and bond markets are sagging, and some analysts say investors should stay on the sidelines, at least until after the election. The Dow fell 39 points to 3137 Friday. The Dow is now down 7% from its high of 3376, set Sept. 14. Bond prices also are down, pushing yields up. Stocks and bonds were hit last week as hopes that the Fed would cut short-term rates evaporated. INVESTORS LOOKING AT ELECTION: The Nov. 3 presidential election appears to be the key issue haunting Wall Street. "I can't see anything else to concentrate on," says analyst Kermit Claytor of MMS International. Candidates Bill Clinton, George Bush and Ross Perot had their first debate Sunday. But bond investors, off Monday for Columbus Day, appear to have decided that a Clinton victory is likely - and bad for bonds. INCUMBENT LOSS DROPS STOCKS: A study by management consultant Mitchell & Co. shows that stocks usually do worse in the first year of a new administration when the incumbent loses. The study tracked the performance of Standard & Poor's Composite index the six times an incumbent president lost since 1888. The average return shows a 7.2% loss. Key reason: Willingness to take hard-nosed action in a new term. TREASURY YIELDS INCREASE: The yield on 30-year Treasury bonds jumped to 7.52% from 7.44% Friday. The discount rate on three-month Treasury bills rose to 2.82% from 2.78%. The bond market is closed Monday for Columbus Day. The dollar was mostly higher. Platinum rose $2.40 to $357.90 an ounce. Light sweet crude oil rose 38 cents to $22.37 a barrel. GOLD, SILVER BOTH MIXED: Prices for precious metals drifted Friday. On the Commodity Exchange, gold bullion for current delivery added 50 cents to settle at $350.40 a troy ounce. But Republic National Bank said gold ended at $349.75, off 85 cents. Gold fell in London to $350.35 from $350.75. On the Comex, silver bullion for current delivery settled at $3.758, up from $3.732. In London: Unchanged at $3.78. DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens at 3136.58 Monday after closing down 39.45 Friday. The New York Stock Exchange composite opens at 222.11, down 2.58. The American Stock Exchange market value opens at 364.85, down 2.16. The NASDAQ OTC composite opens at 570.52, down 3.36. 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