Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!usa-post Newsgroups: usa-today.banks From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: banks Tue, Feb 18 1992 Date: Tue, 18 Feb 92 06:36:31 EST Message-ID: DECISIONLINE: Banking & Economy USA TODAY Update Feb. 18, 1992 Source: USA TODAY:Gannett National Information Network OPTIMISM INDEX SINKS: The National Federation of Independent Businesses reported Monday that its quarterly index of optimism among small business owners fell to its lowest level in a year in January. The NFIB said its optimism index stood at 98.2 in January, off 0.3 point and lowest since 92.6 in the last quarter of 1990. The index is based on a 1978 optimism level measured at 100 points. DEAL REACHED IN MILKEN SUITS: The Los Angeles Times reported Monday that a tentative $1.3 billion settlement has been reached by the principals in hundreds of lawsuits filed against junk-bond financier Michael Milken. He is currently serving a 10-year prison sentence handed down in 1990 after he pleaded guilty to securities violations. The settlement would have to be approved by U.S. District Judge Milton Pollack. ROSENBERG DISCUSSES MERGERS: BankAmerica Chairman Richard Rosenberg, speaking before an American Bankers Association convention, predicted Monday that mega-bank mergers will continue, and could be even larger in the future. Reasons: There are too many banks in the USA for the industry to be very profitable; and banks that need capital to meet international requirements are looking for stronger rivals to merge with. CRA FIGURES IN RULING: Community lending records have become a factor in the approval of bank mergers. The significance of the Community Reinvestment Act, which outlaws discrimination by banks in lending to low-income areas, came out last fall when the Federal Reserve blocked a merger between First Interstate BancSystem and Commerce BancShares because of the CRA lending record of a First Interstate branch. OIL PRICES PLUNGE: Oil prices fell sharply in overseas markets Monday after OPEC failed to agree on a big cut in oil production last weekend. London's benchmark North Sea Brent crude oil fell 71 cents to $17.72 a barrel and neared new lows during trading. The final agreement called for about 23 million barrels a day, down from 24.4 million barrels in January. RUSSIA HIRES GOLDMAN, SACHS: Russia said it hired Wall Street investment bank Goldman, Sachs & Co. to recruit foreign investors and watch over Russian business deals with the West. The move is a sign President Boris Yeltsin is stepping up efforts to revive the Russian economy through foreign investment. Goldman Sachs won the contract with Russia over three other firms. Officials didn't disclose terms of the agreement. AMBASSADOR HEADS FOR U.S.: Takakazu Kuriyama, Japan's new ambassador to the United States, said Monday he will do his part to reduce trade tensions that have been mounting since President Bush's visit to Japan. Kuriyama, 60, says he doesn't believe U.S. industry is uncompetitive, but he said he thinks a problem with U.S. workers is that they are much more apt to spend than to save money. WENDY'S HAS STRONG EARNINGS: Earnings for fast-food chain Wendy's International soared last quarter and last year. Fourth-quarter net income jumped 40% to $10.9 million, or 11 cents a share, from $7.8 million, or 8 cents a share, a year earlier. For the year, net income rose 31% to $51.3 million from $39.3 million in 1990. James Near, Wendy's chairman and CEO, says last year was Wendy's best since 1985. BREEDEN TO OUTLINE PROPOSALS: Helping small businesses raise money is the next target for Richard Breeden, head of the Securities and Exchange Commission. Tuesday, Breeden will outline proposals to ease regulations for small companies that can't now afford to raise money through public stock offerings. RATES HURT HOME LOANS: Lenders and real estate agents say the recent spike up in mortgage rates, following a sharp decline, has hurt demand for home loans and has kept more first-time buyers away. Barbara Reeves, owner of Re:Max Associates of Dallas, says they have seen a slowdown in almost all aspects of the business since the first week in February. Rates have risen since bottoming out in early January. MORTGAGE RATES RISE: Since hitting an 18-year low of 8.23% Jan. 10, fixed mortgage rates have risen half a percentage point in five weeks, to an average 8.73% last week. During the same period, the average rate on 15-year mortgages jumped more than half a percentage point to 8.36% from 7.79%. Adjustable-rate loans slipped to 5.78% from 5.79%, according to the Federal Home Loan Mortgage Corp. DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens Tuesday at 3245.97 after closing down 0.68 Friday. Markets were closed Monday due to President's Day. The New York Stock Exchange composite opens at 228.16, down 0.57. The American Stock Exchange market value opens at 414.27, down 1.00. The NASDAQ OTC composite opens at 636.43, down 2.67. 24-HOUR TELEPHONE INFORMATION: USA TODAY Money Hot Line. 95 cents a minute. 1-900-555-5555. Banking & Economy Editor: Jason P. Smith. (919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. 08:0002180000D0218 LEGA-R G Deal-reached-in-Milken-suits.......... A D0218 This article is copyright 1992 Gannett News Service. 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