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 19 1992 Date: Mon, 19 Oct 92 04:38:13 EDT Message-ID: 10-19 0000 DECISIONLINE: Banking & Economy USA TODAY Update Oct. 19, 1992 Source: USA TODAY:Gannett National Information Network SILVERADO OWNER PLEADS GUILTY: The majority owner of the Silverado savings and loan pleaded guilty Friday to a felony charge of misapplying nearly $100,000 in the failed thrift's funds in 1986. Regulators estimate Silverado's 1988 failure debacle will cost taxpayers $1 billion. W. James Metz, 67, entered the plea before U.S. District Judge Jim Carrigan, who ordered a pre-sentence investigation. No sentencing date was set. SILVERADO CHAIRMAN ALSO CHARGED: Majority owner W. James Metz of Silverado savings and loan, who pleaded guilty Friday to misapplying funds, is the second Silverado official indicted by a federal grand jury investigating the thrift's collapse. Former Silverado chairman Michael Wise is accused of diverting part of a $1.45 million loan. Metz is expected to receive less than the maximum five years in prison and $250,000. TRADE DEFICIT WIDENS TO $9B: The trade deficit widened dramatically to $9 billion in August as exports suffered their biggest setback in five years, the government said Friday. In bad news for President Bush, another government report, from the Federal Reserve, said industrial production in September fell for the third month out of the past four as American factories continued to be battered by weak demand. EUROPE HURTS U.S. ECONOMY: August's sharp drop in U.S. exports could be followed by a worse decline in September. The problem: Economies in Europe are slowing. Aggravated by the recent currency crisis, consumer confidence has plunged. So consumers aren't buying and that is slashing overseas revenue for many U.S. companies - though the weak dollar has been boosting sales of products overseas by making U.S. goods cheaper. MORTGAGE RATES INCREASE: Interest rates on 30-year fixed-rate home mortgages rose to 8.06% this week, the Federal Home Loan Mortgage Corp. said Friday. The new rate, up from 8.01% the week before, was the highest since rates also averaged 8.06% during the week ended Aug. 7. On one-year, adjustable-rate mortgages, lenders were asking an average initial rate of 5.05%, up from 4.97% last week. REPEAT OF CRASH UNLIKELY: Monday is the fifth anniversary of the 1987 stock market crash. But while the market is not as much fun to play, a similar crash is unlikely. The long-term average gain for stocks is less than 11% - a better average for long-term investors than the yields being paid for other investments. And rules limiting computerized trading and halting trading in some cases make a one-day dive improbable. BANKERS EXPECT GOOD EARNINGS: The American Bankers Association's instant electronic survey at its convention in Boston shows 78% of bankers responding say they expect bank earnings to beat $1 in income for every $100 in assets, a standard once considered a benchmark of excellence. As interest rates have fallen, banks have cut the rates they charge borrowers more slowly than they've cut the rates they pay depositors. CHICAGO CAN TRADE WITH FRANCE: The Chicago Mercantile Exchange and the Marche a Terme International de France (MATIF), Friday were given regulatory approval to trade each other's contracts through the electronic trading system known as Globex. Globex is an after-hours automated global trading system developed by the Chicago Merc and Reuters Holding PLC. The Chicago Board of Trade is an equal partner. FDIC TAKES OVER BANK: The Federal Deposit Insurance Corp. Friday took over Universal Bank, based in Lanham, Md. The FDIC will pay off $25.1 million in deposits held in 1,500 accounts at the bank. It also will make an advance payment to unsecured creditors, including uninsured depositors. That last group equals 56% of uninsured claims. SECURITY SAVINGS & LOAN SEIZED: The Office of Thrift Supervision Friday seized the Security Savings & Loan Association in Jackson, Miss. The thrift with $275.1 million assets was earlier involved in a court fight with the federal office. The thrift had expanded in 1984 and 1985 by taking over assets from other thrifts, then fought to have $28.2 million counted as supervisory goodwill in determining its capital. LONG-TERM YIELDS RISE: The yield on 30-year Treasury bonds rose to 7.52% from 7.51% Friday. The discount rate on three-month Treasury bills dropped to 2.90% from 2.91%. The dollar rose against most major currencies. On the N.Y. Mercantile Exchange, platinum rose $1.60 to $360.60 an ounce. Light sweet crude oil dipped 5 cents to $22.28 an ounce. GOLD, SILVER BOTH RISE: Gold prices rose Friday. On the New York Commodity Exchange, gold bullion $342.40 a troy ounce, up $1.40 from Thursday. New York Republic National Bank said gold rose $1.20 an ounce to $342.20. Gold rose in London to $342.55 from $342.20 Thursday. On New York's Comex, silver bullion settled at $3.706 per troy ounce, up 2.1 cents. Silver rose in London to $3.74 from $3.73 Thursday. DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens at 3174.41 Monday after closing down 0.27 Friday. The New York Stock Exchange composite opens at 226.44, up 0.90. The American Stock Exchange market value opens at 367.33, up 1.70. The NASDAQ OTC composite opens at 582.61, up 3.97. 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